text,sentiment
this growth is expected to accelerate further global expansion in demand for shariahcompliant financial products and services intensify,1
as integration increases national securities markets and financial infrastructures will become more and more intertwined,1
improving skills provides a way to do this because on the one hand it increases economic efficiency it creates new job opportunities and on the other hand it makes the economy more equitable by allowing as many people as possible to seize those opportunities,1
"in fact the bank has for many years taken a broad interest in the efficient
functioning of uk industry and especially in the provision of finance to industry",1
the sukuk market in particular has become an important avenue for international fund raising and investment activities that generate significant crossborder flows,1
in fact a cross country study found that a 10 increase in the share of electronic payments was correlated with a 5 increase in consumer spending1 this efficiency will also drive business innovation and promote greater transparency in transactions,1
"emes have contributed to th is development signifi cantly as they have 
become increasingly more connected to the global production monetary and financial systems",1
it paved the way for companies to build global supply chains  the integrative trade model,1
europes labour markets have been resilient so far and that is supporting domestic demand,1
"moreover to the extent that our actions are seen as supporting the 
recovery and providing some insurance against adverse shocks confidence in the medium 
term economic outlook should also increase making businesses and households more willing to invest hire and spend",1
what accounts for this circumstance and how can we boost both the level of trade in goods and services and intraregional trade among our economies thus helping to generate a virtuous cycle of growth,1
dairy products meat and tourism are supported by chinas move towards more consumptionled growth,1
third the kenyan banking sector is known for its leading role in an array of areas ranging from innovation to supporting broader societal good including in education health and the environment,1
and looking forward robust business investment improved labour productivity and strong immigration should help boost the economys productive capacity,1
since commencement of their business the new age private sector banks have been contributing increasingly to the credit needs of the economy,1
in addition innovation  both financial and technological  is a key policy priority and is at the heart of the citys future plans,1
"the striking growth of intra asian trade 
reflects the general trade orientation of the asian growth strategy but also in recent years the growing organisation of production proces ses across borders",1
a new configuration  a new regional valuechain  is taking shape across the region driven by three features of chinas economic transformation,1
robust private sector demand has been a key contributor with household consumption growing steadily for two years largely funded by a pickup in real incomes,1
furthermore he significantly helped to foster the development of the relationships between economists and economic historians of the bank and the italian and international academia,1
i believe that the topic of this conference is very good because it comes at a time when the banking sector has made great progress in improving the conditions for sustainable financing of the economy namely businesses,1
this has been ably supported by initiatives to ensure lastmile delivery of banking services through innovative banking channels like the bc model,1
the sound and stable condition of philippine banks has also been one of the anchors of the sustained robust performance of the domestic economy,1
moving forward islamic finance is expected to further accelerate its pace of global expansion having a more significant role in facilitating the intermediation of international financial flows,1
the bank of albania deems that the consolidation of the banking system is a welcomed development which will revitalize the banking activity will enhance the efficiency of the banking industry and will bolster development and innovative policies with regard to credit and payments,1
specifically unhampered mobility of capital goods and services would likelylead to more growth and employment in the region,1
the work of the committee apart fromconsolidating the projects so far undertaken will now be extended to the level ofthe private banking sector and of the development of financial and capitalmarkets in the common interest of the region as a whole,1
taken together these laws will help enhance the macroeconomic environment promote growth and improve investment prospects in the country,1
"supported by 
technological progress financial innovation has fostered the emergence of new financial products and services resulting in more complete financial markets",1
increase of albanian economy efficiency through further investments in infrastructure education and health encouraging the increase of participation in labour force and improvement of business management standards,1
"in terms of
financial technical and professional services which are increasingly taking centre stage in hong
kong s economy the nearterm outlook is even more encouraging",1
in this regard china plays a strategic role in the progression of infrastructure development in our region,1
this suggests that the economic expansion is likely to have firmed and broadened in the first few months of this year,1
amid the policy reform momentum the philippines is expected to graduate into an upper middleincome economy this year,1
"recently the government has announced 
concrete roadmaps which help bolster public confidence",1
"as evidenced the role of trade and financial links between enterprises in various countries has 
become more important over recent years",1
these developments have paved the way for new forms of economic partnerships and strategic alliances and advance further the regional integration process and its inter linkages with the rest of the world,1
asean is well positioned to advocate the greater use of regional currencies that will further enhance and deepen regional financial integration via use of regional currencies for trade settlement,1
"in practice to improve the banks function and role in mobilizing 
public funds current global bank development direction is innovative",1
moreover it is estimated that not only indias demographic trend would remain favourable for the next three decades but also remain better than other bric economies,1
"building market infrastructure
the hkma has played a major role in promoting market development with our strategy focusing on strengthening market infrastructure to support offshore rmb business",1
the theme of this conference halal  the catalyst for universal economic recovery spells out the potential for this multitrillion dollar industry to facilitate the rejuvenation of the global economy,1
real gdp growth averaged five percent since 1999 and there are indications that growth is getting more broadbased,1
"its technical and 
economic efficiency has permitted a convergence of individual institutional interests with those of the swiss financial centre",1
"in these circumstances economic activity in emerging 
economies has been recovering at a faster rate than anticipated in early spring contributing 
to the recovery of the global economy overall",1
the banking sector plays a key role in the economic development of this country,1
 italy is no exception over the last 20 years firms in the top decile of productivity distribution have accounted for roughly 50 per cent of total factor productivity growth in manufacturing and for more than 80 per cent in services,1
in the first halfyear we saw positive growth recorded in the agriculture and mining sectors construction sector as well as domesticmarket oriented manufacturing industries,1
mexicos tax collection has improved and it has also made notable progress with other structural reforms,1
in the long run export is stimulated in the way serbia has been doing it for years already  through stability building of export capacities and integration into global production and service chains,1
"against such background business fixed
investment has been increasing especially in the it and telecommunications fields",1
"the growth is manifesting itself in many ways 
all across the country innovation and entrepreneurship are in the air",1
the eea and wto agreements resulted in stronger competition and increased flows of goods and services labour and capital,1
there is an 86 percent increase in outbound shipments of manufactured goods,1
importantly domestic demand has firmed against the backdrop of improved private sector balance sheets which is the second key feature of the recovery,1
"our credit demand will see rapid expansion because of the investment needs 
of infrastructure the catch up of the manufacturing sector and most importantly because of the credit demand that financial inclusion will bring",1
more than 200 jobs have been created with the setting up of new innovation labs and the scheme has also supported the growth of young startups into technology players with a strong nexus to financial services31,1
the continued improvement of economic policy conditions in particular the strengthening of competition in the domestic industry is the key to a sustained high level of prosperity in switzerland,1
to this end policy dialogues  particularly those fostered during international forums  served to catalyze simultaneous fiscal stimulus packages across some of the largest advanced and emerging economies,1
"moreover danmarks nationalbanks increased statistical activity has been strengthened by 
the recent amendment of the statutory basis that allows danmarks nationalbank to collect statistical information independently for purpos es such as macroprudential work meaning 
the interplay between the real economy and the general health of the financial sector",1
ebrds involvement in two very important initiatives namely the local currency and local capital market initiative and the vienna initiative has been essential for romania and the region,1
not only the international trade in goods and services has expanded strongly,1
through provision of credit to businesses and consumers the banking system spurs productive economic activities,1
"and in recent years the capitalization of those higher expected profits has
boosted equity prices and contributed to a significant pickup in household spending on houses durable
goods and consumption more generally",1
"in the united states investment has been relatively strong and productivity 
growth has been robust",1
further several initiatives have been taken for the creation of enabling digital infrastructure at the ground level and accelerate the progress towards universalising digital payments in a convenient safe secure and affordable manner,1
furthermore our research has shown that it has also positively contributed to the expansion of islamic banking and financial services throughout the country and enabling more multiplier for future islamic financial development in the country,1
"the outlook for inflation in 2003  
the performance of the global economy is expected to improve further in the course of 2003 with 
world output currently forecast to grow by 25 percent up from an estimated 17 percent for 2002",1
over time shareholders and borrowers will both benefit from these larger buffers to the extent that they contribute to economic stability,1
banks report that our measures are contributing to more favourable terms and conditions on loans and are supporting credit creation,1
as we move into the final phase of the masterplan we are confident of the strength and resilience of the domestic financial sector to face greater competition and benefit from the liberalisation measures recently announced,1
"elements of this growing convergence have determined the pace and sequencing of 
the approach to universal banking in the recent years",1
this changing spending patterns in asia have already led to the rise of a modern retail sector across our region,1
"with stimulated spending activity and an increase in 
aggregate demand within the economy firms will boost their spending activity to a level 
consistent with a rise in sales",1
all in all it can be concluded that growth prospects in the world around us have improved,1
the philippines is in a bright spot with gdp growth averaging 66 percent in the last three years one of the highest growths in asia and the world,1
domestic private demand has also begun to pick up with some improvement in household and business sentiment,1
ireland hosts a large and internationally orientated marketbased finance sector that has grown rapidly in recent years,1
higher public investment is expected to have a favourable effect on aggregate demand and total productivity in the private sector and to create incentives for investment initiatives,1
"amid the trend of 
establishing the global division of labor that makes the most of development in information and telecommunications technology china has been growing at a pace that can be called as 
explosive and has become in part the worlds factory",1
"with regard to developments in economic activity in the euro area  the latest data confirm a
strengthening of growth in the course of the second half of 1999",1
"this is significant because banks are a 
more important part of our financial system than in many other countries and their relative strength means that total credit is continuing to grow in canada",1
"high 
export rates have made a remarkable contribution to growth in the past four years",1
we all know that freer international trade helps countries to more fully exploit the gains that come from increased specialization and greater productivity and competitiveness,1
i believe that this will also boost confidence in fiji as the system will bring us on par with developed countries,1
further forward guidance gained prominence in the reserve banks communication strategy to realise cooperative outcomes,1
"in 2004 the international development research centre idrc reflected on the success of 
the development of mauritius and its banking and financial sector",1
growth in this sector will have significant multiplier effects in generating employment and raising the standard of living of more of our people,1
there are various ways in which the industry can assist the local population such as innovative and creatively designed technical and industrial training that can assist in uplifting the job prospects of local talents,1
in parallel the capitalisation of the system remains at a good level above 18 by enabling this sector to continue the activity of financial intermediation,1
"these processes were enhanced in 2000 by the lisbonstrategy with its new strategic goal for the 
next decade that is to become the most competitive and dynamic knowledgebased economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion",1
it will emerge as the single most important factor driving sustainable top and bottomline growth in banking,1
the bank of albania has benefited largely from the cooperation with the fsvc,1
six years later the payment system reform was introduced along with the building of other central bank capacities including in the field of statistics financial market operations treasury operations and of course research as a significant support for the monetary decisionmaking,1
countries participating in this process have seen their domestic financial markets become more integrated with markets abroad,1
"the reorganisation of the banking sector will considerably enhance its contribution to the 
growth process once the economy begins to reco ver",1
as goods and capital markets continue to internationalise crossborder payments more than ever sit at the heart of global economic activity,1
productivity growth is a major determinant of long term growth,1
it helps enhance the efficiency and capability of the financial sector in serving the real economy and fuel highquality development of chinese economy,1
by increasing their familiarity with the rmb as an international transaction currency local financial institutions investors and firms are likely to be better placed to take advantage of these future opportunities as they arise,1
"stakeholders can help small firms to integrate in and reap more benefits from local and international value chains by facilitating the provision of business services among which 
continuous skills development is paramount",1
in addition creation of larger markets in the eac region will enable members to leverage their relative comparative advantages into one unified block of economic activity capable of offering more goods and services on the international market than its competitors,1
for the us we are expecting that growth will remain robust over the next few quarters leading to better utilisation of economic capacity,1
finally we have seen retail demand for green investments increase significantly in recent years,1
in ireland other businessrelated services also showed substantial growth,1
ireland spain and portugal for example have implemented a series of reforms they have become more competitive and their economies are recovering,1
the domestic demand driven nature of the boom particularly after 2002 generated a strong boomfuelled labour market,1
for these economies experts and policy makers had  in addition to financeled growth  a further dream ready that of growth through openness to international capital flows,1
for nearly a decade now the bank of albania has been committed to expanding and deepening financial literacy of the public focusing on the younger generation,1
ever since the single currency was introduced the integration of financial markets has advanced much faster in terms of integration in the field of payments,1
"the increase in direct transfers by business terminals has been particularly sharp while the growth rate
has been highest for new services  such telebanking and home banking",1
"and the global capital markets have assumed a role which is bearing fruit in the
disciplining of national policies",1
at the same time improving financing conditions triggered strong crossborder capital inflows into a number of countries and a surge in domestic demand and inflation,1
trade in intermediate goods and services as a result of the rising internationalisation of production processes has been a growing driver in this regard,1
for example technology has created new and significant opportunities for the development of the global economy which has been good news for financial centres such as hong kong,1
the connection between it use and internationalisation of trade and industry appears particularly strong with increasingly advanced networks of specialised subcontractors,1
"bis central bankers speeches 1
  real exports have grown rapidly of late growth has been strong among much of the 
emerging market world and growth prospects among our major trading partners is 
promising chart 10",1
"the essence of the new silk road is  to provide a route for such flows and promote 
greater financial integration for the benefit of a wider community",1
the marshall plans overseas technical assistance and productivity program was designed to boost productivity by training and the transfer of american industrial practices to western europe,1
the rise of the emerging economies will also be reflected in the reforms of the international financial institutions,1
this rapid growth has made emerging markets the main engine of world growth,1
indeed islamic finance as an integral part of the international financial system has the potential to contribute to global financial stability and to enhance the prospects for global growth,1
"the electric power and telecommunication industries which are critical to the operation of the
financial services industry are excellent examples of this achievement",1
"       
the performance of global economy attests to the ongoing improvement of economic activity",1
optimising trade with financial relations advancing the structural reforms setting strategic priorities formalising and introducing important and strategic sectors to the market based on ownership and use of land and other important natural resources of the albanian economy and utilisation of opportunities and potential offered under regional cooperation would rapidly increase the possibilities for doing business and investing yielding direct benefits for both countries,1
the integration of the global economy led to a massive transfer of knowledge between countries which greatly accelerated the economic development of the poorer nations,1
"and its momentum ha s been an important driver of the regions trade and 
economic growth",1
as intraafrica and regional trade continues to grow the maucas will play a key role in further facilitating the integration of our domestic payment infrastructure with regional payment systems,1
world trade is recovering and over the medium term is expected to expand as world economic activity gathers pace,1
"the tight discipline it exerts on
our economy is helping to propel improvements in productivity an important element in our currentrobust recovery",1
"overall esepa online services would come to the great benefit of corporate customers and 
consumers",1
with the advancement of it technologies new payment instruments are emerging and the participation of nonfinancial institutions in the payment services market is increasing,1
"as noted earlier financial integration and deepening can lead to a stronger market base for 
financial stability",1
"emerging countries citizens have reaped the benefit s of such rapid development with higher standards 
of living",1
the mission statement could be that the various locations increasingly function as a kind of digital financial centre of europe or digital city of europe,1
there is scope for further deepening of the financial sector and especially the banking industry and as a result this will lead to further financial inclusion,1
"bridging these two potential markets for developing islamic 
financial industry will also contribute to the increase of economic growth in respective regions",1
with us stock markets continually reaching historical highs and with a strong rebound in the housing market the positive wealth effects should help boost consumption and investment,1
"4 this 
trend is set to continue the globally integrated labour force is projected to double again by 2050",1
telecommunications banking and the retail sector have been flourishing in many countries,1
that is as more financial institutions offer fast payments and the reach of the system grows it provides greater value to both individuals and businesses,1
singapore is one of the leading financial centres in asia and plays an enhanced role in financing the regions growth,1
along with the services sector manufacturing and construction have emerged as potent drivers of output,1
labuan benefits from being centrally located in the asia pacific region a region that has been one of the fastest growing regions in the world,1
this has assumed strategic importance for thesustainability of the external sector in the face of growing cross border capital flows into theeconomy,1
for the financial servicessuppliers this will result in a significant intensification of competition emu will act as a catalystand encourage other trends such as disintermediation internationalisation technological change anda transformation of customer behaviour,1
in other words ifthe recent economic recovery continues for some time increased production will furtherimprove corporate profits and employment income which in turn are likely to lead to increasesin business fixed investment and personal consumption,1
"under asean economic community aec 
the regions prospects will be much enhanced by further integration efforts to foster freer 
international trade and more mobile movements of factors of production",1
financial integration has supported and underpinned the broader process of trade and economic convergence,1
ladies and gentlemen with a much broader set of policy instruments we hope that the bank can continue to promote the stability of the guilder thereby creating an environment conducive to more growth and prosperity,1
the introduction of financial literacy and education programmes for school children and adults alike has also been at the forefront of our work,1
"in asia trading ties 
have been further deepened along with the development of suppl y chains",1
given that the structures of our economies are similar this coordination has continued to enhance the effectiveness of policy as well as the convergence required,1
"in the current environment clear signs are now beginning to emerge that the recovery in the advanced 
economies is strengthening and that this is already positive for the region",1
when growth is balanced it is said that gdpincreases in accordance with its potential growth path,1
singapores highend manufacturing and modern services benefitted significantly from trade and investment links with these asian giants in addition to the unites states and the north euro area,1
industrys competitive position is favourableto an increasing extent export growth seems to be coming from rapidly expanding regions notleast asia,1
the exchange of assets in these flows is undertaken to a large extent to enable individuals and businesses to diversify their portfolios putting some of their eggs in the baskets of other rich countries,1
asean economies have however now reached that stage of development whereby greater regional financial integration can further unlock our growth potential,1
with the acceleration of its global integration it will provide the synergies and opportunities for the islamic financial industry to evolve into an important component of the international financial system that can contribute to enhance prospects for balanced global growth and an enhanced shared prosperity,1
our flexible exchange rate helped provide a boost to our nonresource industries including services and manufacturing,1
online retailing is an example of a sector where the impact has included higher productivity and investment to support the more digital service,1
savings banks and credit cooperatives in particular managed to bolster net interest income by increasing lending business volumes,1
this integrated approach has yielded the first results creating a financial environment that is more responsive to our policies being an additional guarantee for convergence with our price stability objective and maintaining the sustainability of economic growth,1
"it comprised in the main secured lending to 
households for housing driven by house prices rising consistently faster than earnings",1
the framework is the clearest and most comprehensivearticulation of the united states governments view of its role in the creation of the global informationinfrastructure as a vibrant international marketplace,1
"in mo st countries in the region tourism has played an 
important role in the expansion of the services sector and hence the economic growth",1
at the same time structural reforms have gathered pace and programme countries in particular have undertaken substantial reforms in order to make the economies more flexible and marketoriented,1
perhaps most important stakeholders overwhelmingly support the cra and its goals noting a significant increase in loans and investments in low and moderateincome communities since the laws enactment,1
more recently the bank has taken advantage of the rapid technological advances and widespread use of mobile money to accelerate the countrys migration to electronic payments so as to expand the scope of financial services to all and sundry,1
there has also been significant progress in implementing reform recommendations related to the longterm sustainability of public finances skills and lifelong learning and the business environment21 these reforms together with those that are still planned could yield sizeable growth benefits and improve competitiveness,1
first information technology it services and information technologyenabled services ites backed by entrepreneurial capabilities and innovative solutions have emerged as key strength of the indian economy over the years,1
banking in particular should provide critical intermediation services  the economic infrastructure that allows businesses to grow families to save and invest and standards of living to improve over generations for as broad a cross section of people as possible,1
"the past few years have been unusual ones 
providing ideal conditions for strong growth in emerging markets",1
ongoing innovations and technological advances support broader economic development and inclusive growth facilitate international payments and remittances and simplify and strengthen regulatory compliance and supervisory processes,1
diversity in the german banking system in turn is a pillar of the economy,1
this was also reflected in the labor market increased employment in the services industry and increased wages,1
and it has helped to build our understanding of how the financial system can better serve the real economy supporting both resilience and growth,1
a better integrated and sounder financial sector has also been able to transmit our policy impulses more evenly across the euro area,1
combined with digitalisation this engenders better and cheaper banking services for customers giving more people access to financial services,1
"this entailed a strong increase in demand which also stimulated exports in other countries  the united states acted as growth engine for the world 
economy",1
indeed the current recovery is showing considerable resilience which to a large extent reflects the fact that domestic demand is the primary driver of growth,1
by creating separate assessment areas for retail and community development activities we believe that banks would continue to place their community at the center of their retail lending and service activities while participating in meaningful community development opportunities that may have greater impact due to their broader reach,1
all these have given new immediacy to bsps long standing financial inclusion and digital transformation agenda for the financial sector,1
continued technological advance as well as further consolidation in thefinancial services industry is likely to lead to further specialization among regional federalreserve banks,1
there is an increasing number of theories and empirical papers linking development and the adoption of technologies to the role of institutions defined in a very broad way,1
as the economy continues to recover and the government is rolling out infrastructure projects to increase the capacity for future economic growth the financial sector will thrive and must stand ready to finance longterm projects to support this growth of the economy,1
"liberalisation of the international financial markets over 
the last few decades has enabled more efficient employment of capital from a global point of view",1
with a stable government at the centre pace of economic reforms in the areas of industry services international trade labour markets public sector management financial markets and competition are likely to improve further which would help improve commercial activity levels and productivity thereby help enhance the growth potential,1
the monetary and banking sector also contributed effectively to the economy by providing adequate liquidity to finance growing and accelerated activities,1
international wholesale banking has a critical role in facilitating these flows contributing to the efficient allocation of capital globally and so developing the world economy,1
the present snapshot is positive euro area growth is accelerating and is now up to speed with the united states or the united kingdom,1
"in many caribbean countries with the deepening of the financial sector more financial 
services especially credit is now provided to individuals and enterprises",1
over these years financial education and financial inclusion have increasingly held a significant place in our work in designing and implementing numerous educational projects,1
while trade and investment are definitely major aspects of regional connectivity the integration that has shaped the gms takes more diverse forms which profoundly influence each other including physical infrastructure peopletopeople and financial connectivity,1
in the household sector the employment and income situation has continued to improve steadily,1
"the banking industry of both countries has grown rapidly in recent years 
enjoying a stable financial health",1
the contribution of investment to growth has also been steadily rising,1
the contribution by the bank enhances institutional capacity in the economy as it serves the south african society through maintaining price and financial stability in the interest of balanced and sustainable growth,1
the report issued jointly by the two bodies describes the nature of credit reporting elements of a credit reporting system that is safe efficient and reliable,1
these trends are encouraging flows into the capital markets of emerging economies presenting new opportunities for wholesale banking and capital market related financial services,1
strong demand in the us has sustained growth in the world economy,1
the economy is set to continue growing very strongly through at least the first half of next year and i expect employment to keep growing,1
"the leading economic institutions and private research institutes state that we will 
probably continue to see a rather dynamic growth rate at a global level",1
"in brief there have been vigorous and determined efforts towards expansion of rural credit especially 
through rural banking",1
"as our economy continues to grow 
and per capita incomes increase demand for financial services from both the corporate 
sector and the general public will continue to grow rapidly",1
these initiatives reflect a tradition in our country of cooperation between the private and public sectors that is a major reason for the effectiveness efficiency and flexibility of our financial markets,1
"dear ladies and gentlemen
i hope that this project will deliver longterm results and will strengthen the regulatory and operational frameworks at the bank of albania an institution that makes substantial contribution to the sustainable economic development of albania",1
and we know that technological progress will continue unabated in europe,1
"financial integration will foster a more efficient allocation of resources increase competition reduce costs lead to higher trading activity and more transparent pricing and thereby raise 
the overall potential for stronger economic growth",1
expansion of banking activities across borders prior to the crisis has been a crucial feature of the globalization process that we have witnessed over the past decades,1
chambers of commerce abroad make a crucial contribution to the success of german enterprises in foreign markets,1
in the euro area financial integration also triggered an expansion in crossborder financial flows adding to the forces created by the waxing global financial cycle,1
"several economies within asia are now beginning to participate in these trends thus 
strengthening further economic and financial linkages between these two dynamic growth regions",1
"the size of merchandise as well as  services trade has been increasing steadily in 
recent years reflecting greater integration of the economy with the rest of the world",1
albertas economy has benefited from this strength as well as from higher oil prices both of which should boost investment and exports in energy and other commodities sectors,1
"global financial marketsin which many of you are involvedhave done a 
good job of matching international savings flows wi th investment opportunities",1
"this positioning of the industry is even more important in the context where the 
entire ecowas regional market may well come under a common currency regime and become a single economic space with free mobility of capital goods and services and labour",1
"the auckland accord is helping  
aucklands population is expected to grow markedly over the next 30 years",1
"over these past two decades the seacen cent re has become increasingly important in 
promoting better understanding of the financial monetary banking and economic development matters",1
the achievement of such targets would put us on par with other advanced countries and become as competitive as we transition into a high value added and high income economy,1
but once global economy is back on a recovery track our exports have started to grow strongly in particular in electronics electrical appliances and vehicles,1
a higher level of private investment would further improve our productive capacity and increase the potential for higher growth,1
in the united kingdom nonbank lenders have accounted for a greater share of credit extension to both the household and corporate sectors charts 24,1
they have supported price stability in particular by buoying domestic demand which is now the supporting pillar of the ongoing recovery,1
"this has largely resulted from the restructuring of the economy and improvement in the regulatory apparatus that has greatly facilitated domestic and foreign investment and thereby has helped enhance the efficiency and 
competitiveness of the economy",1
therefore the international community has set a range of initiatives to strengthen the international financial architecture,1
other channels through which free trade can raise overall efficiency include increased economies of scale due to larger markets aggregate productivity gains due a reallocation towards more productive firms and at the firm level productivity gains from higherquality imports,1
rapid technological innovation and greater economic integration have brought stronger growth and higher levels of productivity,1
"for example the recently 
introduced credit information sharing platform has enabled banks to extend mo re credit to 
productive sectors boosting wealth and employment creation",1
in the new economy both financial capital and talent have become more mobile,1
continuity plus plus first appreciates that there is an already strong foundation to support a fastgrowing economy and the opportunities it presents,1
globalisation has already helped to raise our living standards considerably,1
moreover investment and employment tendencies of firms have reached very high levels compared to previous years,1
financial institutions therefore remain the backbone of our financial system and their expansion is an indicator of increased confidence in our economy,1
today i will discuss three important aspects of the feds inclusion efforts that helps to inform policies and practices designed to advance financial access and capability access to a banking account the availability of responsible smalldollar lending products for short term financial needs and expanded reach of financial initiatives to indigenous and native communities to more effectively assist in providing access to the broader financial economy,1
in several parts of asia this was complemented by reforms towards greater market orientation and progressive liberalisation including adopting more flexible exchange rate regimes,1
norges bank is particularly focused on improving the common infrastructure for payment services which will provide a solid foundation for competition innovation and security in the payments market,1
the rapid increase in home prices in recent years also contributed to increased private consumption through the wealth effect,1
"third the norwegian business sector has been quick to adopt new technology and to reap 
the benefits",1
the steady opening up of goods and capital markets has led to the growing integration of countries around the globe,1
in addition research indicates that a strong central city is critical for the wellbeing of its suburbs meaning that a healthy and growing new york city economy is critically important to fairfield county,1
the intermediation role of the banking sector remains fundamental for the efficient use of capital and sustained growth,1
as we all know investments are fundamental to economic growth and development especially amid an increasingly integrated global economy,1
as a conduit of rural financing almost a third of your loans are granted to households,1
the values and principles that islamic finance carry have opened new pathways towards achieving economic prosperity while safeguarding the interest of the public,1
"the economic 
importance of education will only increase as technology advances and as the global economy 
becomes increasingly integrated and complex",1
the schemes help enhance hong kongs role as an international financial centre as financial institutions expand their presence here to be closer to their clients,1
the unprecedented mobilisation of the authorities in a complex and determined manner has largely ensured the proper functioning of markets and of the economic and social mechanisms,1
yet in recent years they have become increasingly important for the global economy reflecting the expansion of international trade especially ecommerce international tourism and business travel migrations and remittances,1
"the reform and modernisation of the financial system in china is an important cornerstone 
for the continuous rapid and stable economic development of our nation",1
further with stronger balance sheets the organised corporate sector is wellplaced to make new investments in emerging areas,1
"easier access to
global financial markets for individuals and corporations will lead to a more efficient allocation of
capital which in turn will promote economic growth and prosperity",1
in a broader perspective the bank of greece has recently adopted policies to embrace innovative projects and ideas through its newly established innovation hub and the activation of a regulatory sandbox,1
the sadc banking association is ideally positioned to work with the banking community and a close working relationship with the project team is similarly of paramount importance,1
"this has led to renewed growth in household consumption 
and there are prospects that household demand will continue to rise",1
rising asset prices andincreased household wealth are also contributing to the growth of private consumption,1
"this also contributes to high growth as more efficient financial markets help in allocating
funds to their best use",1
gdp growth has outpaced that of the eu and financial intermediation has rapidly improved,1
"these regulations have actually catalyzed in the deployment of a number of branchless 
banking initiatives that have a dual advantages first there is an enormous scope for 
expanding outreach especially in the hard toreach rural areas",1
according to estimates as a result of our actions euro area economic growth was boosted by 15 percentage points between 2015 and 2018,1
and once the sequence of stronger exports rising confidence increased investment and stronger productivity is launched it could well gain traction faster than expected,1
major financial institutions must quickly become competitive in the international financial market and regional financial institutions should provide new financial services to small firms which undertake or develop new businesses that contribute to the development of local economies,1
the organization for economiccooperation and development and other international organizations have expressed their belief that theexponential growth and diffusion of the internet is quickly making the promise of widespread electroniccommerce a reality,1
"one consequence of pricing in a single currency in all member countries will be to facilitate buyers 
of goods and services greatly in making price comparisons and competition within the eu will certainly become more active than it has been until now",1
"stronger capital positions also will allow banking institutions to participate in and 
support the rebound in lending that will accompany the strengthening of the us economy",1
the gdp growth in the rm in the first half of the year is 34 and is highly influenced by the positive contribution of reforms agenda,1
one of the most important changes has been the rapid growth of the nonbank sector,1
in addition completing the financial infrastructure no doubt has driven its growth and dynamism,1
"moreover the positive impact on domestic production of the
recovery of overseas economies especially of asian economies is likely to continue for some time
and have favorable effects on corporate profits and then on household income",1
"the widening globalization of market economies in recent years for example is 
integrating a growing share of previously local capacity into an operationally meaningful world total",1
"since the itrelated industries have a multinational 
structure involving emerging economies the growth in itrelated industries inevitably strengthened 
global economic linkages",1
the recovery in international trade of goods was also fast,1
"together with the rapid growth of productivity and earnings prices are going to rise quicker in the new 
member states",1
"moreover having highly trained human capital facilitates the 
assimilation of technological progress and innovative technology increasing the overall productivity of the economic system",1
private consumption is continuing to rise at a subdued but stable rate and itscomposition seems to be shifting in favour of durable goods cars in particular,1
with respect to the household sector financial liberalisation and innovation have generally facilitated borrowers access to standardised credit and thereby heightened the importance of asset prices in the households balance sheet,1
the traderelated cluster  manufacturing wholesale trade transport and storage  grew 43 and contributed 55 to overall gdp growth,1
"the provision of current account is one of the institutions key planks 
towards its long term vision of offering a broad range of services to its customers",1
thirdly the interactive dynamics of the banking industry and housing development is a further area that touches on both commercial and social interests of households,1
quite notably also there has been a resurgence in manufacturing in recent periods and domestic tourism has also been on the rise creating a broader base for economic growth,1
supported by rising incomes firm labour market conditions and a young demographic profile private consumption activity has moved towards incomesensitive goods and lifestyle services for which the retail banking sector should be wellpositioned to offer a wider range of innovative products and services to meet the requirements of increasingly more sophisticated consumers,1
their remittances have been a dependable source of strength for the philippine economy,1
first the composition of us activity will likely become more favourable to canadian growth,1
the banking systems resources expanded by 154 percent as of endaugust 2017,1
"these countries ent ry into the world market has also led to strong 
economic growth and high demand for oil and other commodities",1
"under this scenario us consumers would start to spend again acting as an engine of 
growth for transpacific trade",1
"however as the international 
economic climate improves this and the cyclical pattern for investment are expected to give impetus to industrial production in sweden",1
"to our pleasure the enhancement of analytical and modelling capacities of the albanian 
institutions has been widely recognized yielding a greater ownership in our medium run economic and financial development programs",1
both in tourism and in international business and financial services government and private interests are taking initiatives to enhance the quality and range of our offerings to explore new markets and to build the barbados brand as the basis for our competitiveness,1
investment in dwellings shows clear signs of a significant increase and exports of resources will continue to rise strongly,1
also the national economy which is the united states economy is looking buoyant now,1
as for the insurance sector continued growth was also witnessed in 2006,1
widening the atm network through shared resources will also benefit the public by having more convenient points of access to banking products and services,1
"the latest job market report for new york shows a continuation of the generally rising trend of employment in the state at a pace 
that roughly matches the nationwide growth rate",1
moreover as recent economic history and the development of global value chains have shown greater openness to trade is usually associated with faster economic growth,1
the insurance talent development framework jointly developed with the industry in particular focuses on expanding the talent pipeline for leadership positions,1
"such a financial sector is able to play an important role in mobilising 
talent and business linkages to strengthen research and development efforts and spur 
innovation in other economic sectors",1
"two factors in particular should provide 
a boost to the demand for uk goods and services",1
finally over time as financial markets grow across the continent one can equally expect to see increased crossborder portfolio and direct investment flows within subsaharan africa helping to facilitate regional economic and financial integration,1
in the last eight years lending activities of euro area banks in russia have more than doubled with the banking sector representing one quarter of this involvement,1
"domestic structur al reforms in the emerging economies are unlocking 
the pentup domestic demand and in turn enabling a greater realisation of the huge potential for 
growth",1
on the supply side growth was driven still by broadbased expansion of services and industry sectors supported largely by the strong numbers coming from financial intermediation public administration and defense compulsory social security trade and repair of motor vehicles and construction,1
many institutions offered online fast tracks which greatly enhanced service efficiency and effectiveness and supported rapid economic recovery,1
and the us economy has added more than 850000 net new private sector jobs since the first of the year,1
indeed thrift banks play a crucial positive role in the transformation of our countryside as areas of growth and development,1
also with the help of stronger external demand growth accelerated to an average annual rate of 34 between 20052008 compared with 05 in the preceding four years,1
the growth of innovative industries is now the principal engine of growth in employment and in productivity,1
the opening up of the financial sector to foreign participation adds to the sectors development as foreign financial institutions also promote competition and innovation and create the urgency for local institutions to upgrade capabilities,1
by region the us and european economies have continued to recover firmly mainly in the household sector particularly owing to an improvement in the employment and income situation,1
"internationally the globalization of banking has accelerated driven by improved
technology and the opening of economies in eastern europe asia latin america and otherregions",1
here in china however we shall remain even more committed to the new development philosophy and better leverage the role of finance in adjusting industrial structure optimizing income distribution and improving social welfare,1
at the same time the chinese enterprises are making good progress in their endeavor to invest and operate abroad,1
the development of both the economic and the financial systems supports the soundness of the domestic currency which in turn feeds back to economic and financial activity,1
perhaps because of this the region has developed a deep understanding of the importance of helping its people adapt through workforce development programs,1
by way of comparison the united states has traditionally been characterised by a very high degree of income and consumption smoothing across states,1
"in recent years demand has increased rapidly outsi de the euro area and the finnish export industry 
and the whole economy have benefited from the openne ss of the economy",1
"financial intermediation w hich has over the years consolidated its 
position as an emerging sector of the economy now contributes nearly 10 per cent to the gdp",1
the building society sector has of course been a very important part of this picture,1
"between early 1995 and late last year the value of residential real estate in 
the united states increased about 65 percenta substantial rise",1
we have also preserved the relative stability of the exchange rate this being one of the key contributions to overall macroeconomic stability of the country and business certainty,1
"the rising share of finance in the business output of the united states and other countries is a
measure of the economic value added from its ability to enhance the process of wealth creation",1
this is an essential driver of economic progress benefiting consumers businesses and the economy as a whole and will also provide a healthy ecosystem for financial services,1
this growth is spurred in part by the growing funding requirements in emerging market economies in particular in asia and the middle east in which there has been increased investment activity,1
the plan envisages small and expanding companies creating around 90 per cent of the new employment opportunities in the economy in the next 20 years,1
with the increasing use of rmb in trade and investment in the region it is expected that the use of rmb in infrastructure financing will continue to rise,1
in addition to the partial improvement both in tourism revenues and exports to russia in the normalization process we envisage that the recently released incentive packages will contribute to growth next year,1
in parallel with the abovementioned aspects of its work the bank of albania has paid attention and has worked to strengthen the development of the payment system improve the procedures and modalities for foreign reserve management improve communication with public deepen the research work expand and improve statistics increase financial literacy and financial inclusion collaborate with domestic and international institutions,1
the chinese economy has continued to see stable growth on the whole partly due to the effects of authorities measures to support economic activity,1
"there is therefore great scope for financial intermediaries in asia to play a key role 
in financing asias future growth channelling surpluses to meet the regions needs and facilitating closer integration  of trade and financial markets in the region",1
the acceleration of growth in the real sector has been reflected in the upward shift in the growth trajectory of nonfood credit extended by commercia l banks,1
"growth in asia has also remained strong with mutually reinforcing effects for 
regional economies including malaysia as regional integration continues to intensify",1
in addition the thai economy has benefited from expansion of investment in certain sectors notably those related to telecommunication and alternative energy,1
"this implies that there have been significant productivity gains including no doubt those
arising from the process of consolidation which has been evident among international banks withpresences in hong kong for some time and has now been spreading to the local banks",1
"second the international use of the euro and the role of the euro area in international cooperation are
likely to develop further in line with the relative position of the euro area in the world economy and
the institutional and political integration of eu member states",1
"about 2 years ago it began to become evident that demand and output growth in the economy as
a whole was picking up speed",1
in this framework public policies are focused on enhancing the competitiveness of our economy,1
"total output in the economy has now increased for 28 consecutive quarters 
an unprecedented period of positive growth",1
in shaping positive behaviour amongst industry players islamic finance can become a leading agent of change and bring about sustainable positive impacts to the economy and society,1
in these developments iceland is among other things drawing benefits from globalisation to strengthen the foundations of the economy,1
and in the national bank of romanias case its legacy is an important pillar of romanias modernisation,1
in this context we expect that in addition to supporting the growth of credit financing in general the kcgf portfolio is increasingly reflecting the growth of credit support for sectors with greater difficulties in accessing credit financing but which have potential to make a significant contribution to the economic development of the country,1
more flexible foreign exchange policies was also implemented to facilitate capital raising and investment by nonresidents to further accelerate the development of our domestic bond market,1
south african banking institutions also adopted their owninternal policies to provide for greater participation in the social upliftment programmes of thecountry,1
last year was marked by a vigorous recovery of our economy during which our financial sector proved particularly robust i,1
the rapid growth of mobile money in east africa is a phenomenon which has few precedents in the history of finance and banking and which has implications which are likely to prove profound for the financial sector for business for the general public and for public policy,1
in particular increased productivity ongoing restructuring and strong economic growth require the compilation and implementation of structural reforms to support domestic production and enhance its competitiveness in the national and international markets,1
"we hope this can be a starting point for a holistic future skills framework at the national level to unlock greater benefits and synergies for crosssector talent mobility and
continuous efforts are being made to raise the professionalism of the workforce through higher standards of professional programmes and qualifications for various career pathways",1
so the overall picture for the national economy is one of gradual improvement businesses are feeling better than they have for some time and they have increased their investment and hiring,1
"that in turn is contributing to the recovery in our own
economy particularly in manufacturing output growth and to the more encouraging news in recentsurveys",1
in the other direction an integrated global financial system increases the potential rewards to financial innovation in view of the importance of scale economies in the rollout of new technologies,1
at the same time market expansion and the associated increase in purchasing power induce new entry into the market which leads to more intensified competition and higher efficiency,1
the transformation of this region has been aided by its reputation as a desirable location in which to live and work,1
"the countrys trade activity continues to 
ensure the majority of sales and to record significant annual growth rates",1
emerging asia added nearly three billion to the worlds pool of labour as it integrated with the rest of the world over the last two decades thus hugely improving its comparative advantage,1
"on the back of the established regional cooperation agreement framework 
we enhanced cooperation with the mainland particularly the pearl river delta",1
"the intensification of crossborder financing and 
the growing complexity of financial structures has resulted in new international interlinkages which has increased the international interdependence",1
as among consumers business confidence has risen in lockstep with profits,1
it is our objective to build greater intermediation linkages between east asia south asia and the middle east which will in turn further expand interregional trade and cross border investment flows,1
this trend is reflected in increased household saving and growing home equity and we expect these trends to continue to help households rebuild their balance sheets over the near term thereby further increasing the household sectors resiliency to shocks,1
on the supply side the rise of the services sector has been one of the defining characteristics of the structural change in african economies,1
in this structural change finnish banks profited from these investments in changing their way to operate and they became forerunners in internetbanking,1
in particular recent telecoms and energy reforms seek to foment investment and competition in these sectors which may boost the efficiency of the economy,1
chinas gdp has been growing at an average annual rate of 97 percent and foreign trade 174 percent ranking the fourth and the third respectively in the world,1
the development of the chinese economy and its growing trade surplus have been spectacular,1
"banking systems and financial markets
with todays institutional arrangements the currencies of the leading countries provide the basis for
the multiplication of credit in international markets",1
through the payment systems banks are interconnected and channel liquidity to the financial sector and to the rest of the economy and thus contribute to the smooth economic development and to financial stability,1
these trends have contributed toward increasing the growth prospects for the region,1
in particular international mobility of capitalstrengthens the disciplines on policymakers to maintain sound and credible policiesimproves the efficiency of resource allocation and assists in economic development,1
sustained growth in consumption spending strong outturn in exports performance and increased public spending propelled broadbased expansion in the economy,1
the increase in lending capacity derived from the expected behavior of deposits and the evolution of public sector loans in banks portfolios is consistent with a private sector credit growth of around 30 percent,1
first it would reflect improved performance and expectations for the worlds largest economy,1
in particular banks in europe are more resilient and the banking union has advanced,1
by embracing and embarking on digital innovations it opens up new and ample opportunities for our industry players to reignite productivity growth and increase efficiency of processes,1
"the availability and the use of credit facilitates the exchange of goods and
services the production processes and the growing importance in all modern economies offinancial services",1
in any case it is evident that the mexican economy and in particular industrial production will continue to depend on the strength of us economic activity,1
asean has come a long way in fostering cooperation and collaboration to achieve current levels of development and integration,1
"but links to the global economy have also been strengthened by 
globalisation which has reinforced international linkages across the world economy as the global economic system has become more integrated and interdependent",1
the third factor productivity growth can be influenced in several ways by increasing competition facilitating investment encouraging enterprise and innovation and improving the workforces skills,1
"growth in china is expected to remain strong and contribute to pushing up 
growth in the global economy",1
this global growth has been rooted primarily in the economic strength of the united states and emerging asia,1
price stability contributes to the efficient allocation of resources in the real economy thereby supporting longterm growth,1
the bank of england has taken steps to extend the funding for lending scheme and within that has acted to provide a clear incentive to stimulate lending by banks to small firms,1
the resilience of the economy is evident in the australian labour market where the outlook has continued to improve,1
"in our case the expansion of the investment banking activities has taken the form of a number of 
acquisitions in foreign countries tightening the ties between switzerland and other financial centres",1
"the results the italian economy has achieved in the past five years are attributable
to the combined operation of fiscal and monetary policy and to wage moderation",1
"the synergies of key
technologies markedly elevated prospective rates of return on hightech investments led to a surge inbusiness capital spending and significantly increased the underlying growth rate of productivity",1
in recent years india has witnessed rapid progress in the financial services sector,1
the change in customer behaviour has been fast and fundamental in countries where banks have offered modern services to their clients,1
going forward we should continue to build on collaboration between authorities and the industry with the aim of enhancing the integration of posttrading infrastructures fostering innovation and efficiency and ultimately benefiting end users and the real economy,1
and the nature of the recovery in smaller economies such as south africa is shaped to an important degree by the speed and nature of the recovery in advanced economies,1
three quarters of this acceleration is expected to be driven by advanced economies with the us and the uk leading the pack,1
because financial stability is soimportant for household and business confidence the expansion of our economy will beinfluenced by how quickly global financial markets stabilize,1
with the development of the economy the central bank has adopted newer technologies improved its own infrastructure and continuously provided advanced infrastructure such as electronicbased wholesale rtgs systems,1
given the revival of the tourism sector and other economic sectors our outlook for economic growth is positive,1
canada has reached the phase of the economic cycle where investment usually takes over as the lead engine of growth and this capacitybuilding process becomes central,1
"at the root of this impressive expansion of economic activity has been a marked acceleration in the
productivity of our nations workforce",1
"to summarise the credit and foreign exchange markets play an important role in society by mediating
payments and savings both nationally and internationally",1
the surge of eurodenominated corporate debt for example has helped to finance the wave of mergers and acquisitions in the european corporate sector and shows how a larger and deeper single financial market can help to strengthen europes competitiveness,1
"in india for example our growth has been 
driven by domestic savings",1
the upswing is being driven by private investment and consumption supported by rising employment and an improved housing market,1
"together with the imf it also functions 
as an important anchor for the domestic and foreign economic units",1
"viewed at  the macro level housing finance generates 
economic growth via job creation entrepreneurship  and economic linkages to other sectors",1
incentives forthe purchase of consumer durables stimulated economic activity despite the further fiscaltightening and permitted annual growth estimated at about 15 per cent,1
"for investment the more persistent construction and infrastructure component  largely 
associated to the execution of mining and energy projects  suggests that it will remain strong in the coming quarters",1
"in addition more and more financial interaction is taking place within the financial sector 
itself financial assets held by the financial sector have increased by more than 100",1
in a process that can be expected to continue for decades emerging asia is rapidly urbanizing,1
there was a spirit of optimism which saw international capital flow in and asset prices  particularly land prices  increase,1
"asia s export
orientation has long been a key focal point of strength to which the recent recovery attests",1
greater efficiencies of electronic payment channels will also bring about an accelerated  velocity of payments increasing economic activities,1
most importantly it would appear that information technology is having a more widespread effect across all sectors of the economy,1
the islamic financial sector has made great strides over the recent decades,1
a wave of changes brought in by fintech have had a positive impact in terms of enhancing inclusion and further penetration of financial services,1
"with emerging signs of an early and stronger recovery in the domestic economy renewed 
optimism can be expected for more robust growth in the domestic mortgage market",1
as to economic relations we have seen a surge in twoway trade volumes and investment flows in particular because of china,1
therefore developments in the eu are directly and indirectly transmitted and play an important role in economic developments in albania,1
these areas will surely benefit from financial intermediation to sustain local economic growth and boost consumption and productivity,1
with the increased pace of the internationalisation of islamic finance this growth momentum is also taking place in several other jurisdictions,1
the economic growth of most of east asia has to date remained pretty solid as well,1
combined with high productivity growth this has resulted in high corporate earnings and solid growth in employment,1
for albania remittances represent a steady and considerable source of inflows which surpass foreign direct investments being thus a substantial source of financing economic growth in albania,1
to the extent that the new emu architecture will be able to eliminate economic uncertainty it may also contribute to economic growth in the euro area and beyond,1
all in all in the past few months the regions growth prospects have improved,1
similarly most advanced economies are currently enjoying the highest employment rates of the past three decades6 in addition digital automation can spur productivity as i will discuss shortly and itself tends to create new employment opportunities,1
in recent years global economic integration has accelerated on a multitude of fronts,1
ecommerce activity has boomed in recent years especially in the asian region because according to the asian development bank asias ecommerce transactions now makes up one quarter of global business in consumer markets,1
increasing interdependence owing to the rapid pace of globalization as well as the rising contribution of emerging economies to global growth is among the main factors behind the synchronous behavior of global economic activity,1
the increased degree of global integration and liberalization of capital movements would serve to be a dominant factor in encouraging cooperation amongst central banks in our region,1
we also saw the number of workers commuting to alberta double during this period rising to about 8 per cent of the provinces workforce,1
"what we have today is an economy driven by international commerce in se rvices principally tourism services with 
international business and financial services ibfs in second place",1
given the broadly stable savings rate increased labour income is translating into higher private consumption expenditure,1
"steady 
advances in transportation communication and information technologies underpinned by the more widespread adoption of freemarket economic policies are shrinking the globe and expanding the global economy",1
financial integration has in general two main benefits firstly increasing the potential for higher economic growth owing to a more efficient allocation of capital financial integration boosts the efficiency of the financial system,1
the dynamism and flexibility of the economy are expected to be enhanced,1
the revolution in information technology it is commonly taken as the initiating force behind the acceleration in productivity seen since 1995,1
in all the national indicators suggest a positive growth outlook for the housing sector over the next several quarters,1
further capital deepening and the potential for further productivity gains suggest that india could maintain rapid economic growth for a number of years,1
in this respect asean has made meaningful progress in the identification articulation and implementation of principles to advance financial and economic integration among its members,1
"finally by encouraging more efficient allocation of resources financial integration acts as a prerequisite for realising europes full economic potential that is raising the potential for 
stronger noninflationary economic growth as highlighted in the lisbon strategy",1
in a globalized and highly integrated world financial sector development is closely associated with cross border flows including foreign direct investment which is critical to developing economies,1
"as for the economic outlook if overseas economies continue to recover the stabilization of japans 
economy will become more secure as the increase in exports and production will underpin domestic private demand through the improvement in corporate profits",1
we expect this convenience of bank transfers to be enhanced through advances in information technology which will lead to further innovation via competition with other means of payment therefore allowing for the smooth operation of retail payment services to underpin business and household activities,1
in this context various sectors of the global economy are starting to become more aware of the roles they can play,1
economic activity grew benefitting from the eased financing conditions as well as the improved confidence and balance sheets of the real and financial sectors of the economy,1
with the recent launch of target instant payment settlement tips the eurosystem has laid the groundwork for innovative customerfriendly retail payment solutions that benefit everyone in europe,1
auto exports to this country in particular have posted a significant rise since february,1
fiscal stimulus could be enhanced if countries enjoying more fiscal space were to exploit it in a way that boosted aggregate demand domestically and in the area as a whole,1
during this time rochester has been going through a prolonged period of economic transformation and reinvention,1
this has recently been changing with a greater dynamism in construction and public works,1
today bahraini nationals account for over 70 of total financial sector employment which has continued to accelerate over the years,1
the vehicle industry has clearly benefitted under this climate and this has been further supported by favourable labour market conditions as reflected in growing numbers of newly registered members with the fiji national provident fund and job advertisements placed in the daily newspapers,1
the buoyancy of spanish exports has exceeded the increase in global trade,1
more specifically aggregate demand is expected to increase reflecting the positive intertemporal substitution effect of lower interest rates onto households and firms consumption and investment decisions,1
"with production picking up in the mostly exportoriented automotive industry a more 
palpable growth of the serbian economy of 3 could be expected in 2013",1
"given the wider range of economic activities th at impact and in turn are influenced by the 
presence of a safe and efficient retail payments infrastructure in the country developments in 
these systems can be harnessed to widen the scope of coverage of the services particularly 
in the context of financial inclusion",1
second the role of asia in the more efficient intermediation of funds mobilised in asia arising from the more pronounced regional financial integration,1
"singapore  a global city 
as for developments in singapore we have used the last 10 years to remake ourselves strengthen our competitiveness and expand our ec onomic space",1
the banking sector may serve as a catalyser to render the effect of such policies sustainable and benefit maximally from them in the form of expanded activity improved asset quality and enhanced income stability,1
secondly as with other sectors of the economy finance has synthesised considerably during periods of significant technological innovation,1
in the past our exchange rate acted as a valuable shock absorber helping to smooth the rebuilding of competitiveness that can only sustainably be attained through productivity growth,1
the sukuk market which is a high growth segment in islamic finance has an important role in supporting the growth of the green technology sector,1
the increased breadth and depth of the markets in turn benefits onshore members which will continue to be key players in our domestic markets,1
hence there is much value for the financial community to collaborate through greater standardization to facilitate interoperability and innovation to achieve greater economies of scale and network multiplier effects,1
"the beneficial effects of the policies are now being reflected in recent
encouraging developments in a number of the more important financial aggregates",1
this type of globalization supported economic activity financial development and international risk sharing,1
"greater integration between the united states and the rest of the world
the us economys integration with the rest of the world both in terms of trade and finance has risen substantially over the past 60 years",1
efforts will be made to accelerate the financial sector reform and innovation safeguard financial stability forestall financial risks and improve financial services and management to support the sound and sustained development of the economy and contribute to the realization of the chinese dream of great rejuvenation of the chinese nation,1
in particular the partnership will support our analysis of digital currenciesincluding central bank digital currencies help to improve our current payment systemwith a particular focus on making crossborder payments faster and less expensive and it will provide new tools to aid our supervision of the financial system,1
"it has also opened up and extended this potential to 2 bis review 602010
 developed economies to forge stronger financial linkages with the growth regions of asia and 
the middle east",1
in its role as the regulator the bank of albanias vision is to contribute to the future aiming to establish a highly adequate environment for boosting financial innovations and modernising the financial structure,1
this has not only resulted in significant expansion of the retail trade sector in the region but asia is increasingly becoming an important consumer in the global economy,1
possibilities for increased credit may contribute to higher demand for goods and services,1
the growth of aggregate demand will encourage the further increase of employment and a faster rise in wages,1
"the economic effects can be seen in a number of areas including strong growth  in business investment company profits share 
prices and imports",1
bycontrast an expansion of the financial sector that stems from growth of productivity is growththat offers benefits to all,1
"these will enable thailands productive sector to serve as the
main engine for economic growth in the future",1
finland is often seen as a forerunner in the development of retail payments certainly when it comes to digitalisation and its effects,1
the united states economy is experiencing the longest period of growth in its history and seems to be enjoying almost full employment,1
private consumption in particular hasbeen robust supported by growth in employment,1
the interlinkage of finance and information technology which is now known as fintech has played significant role in the evolution of finance,1
the sound and stable condition of philippine banks has also been one of the anchors of sustained performance of the domestic economy,1
job creation in the city has been particularly robust and employment in the city is now above its prerecession peak,1
"the overall impact of qe3 for canada is estimated to be modestly positive reflecting  its supportive implications 
for us and global activity and the resulting boost to commodity prices",1
continued structural reforms will tend to increase total factor productivity which has been a significant driving force behind growth in recent years,1
this achievement has been accompanied by economic performance in terms of growth per capita and job creation that compares positively with other large advanced economies,1
the capability of dematerialisation and clearing and settling a wide range of transactions according to international standards will also enhance the business environment which will in turn attract foreign investment,1
green capital markets would not only help the climate transition but also the digital transformation of our economy,1
this bodes well for the future since it underpins the significant momentum we expect to see in economic activity as the year progresses,1
and there are good reasons to expect that scarcity will materialise first and foremost in those market segments with a higher duration potentially helping to maximise the economic impact of our operations,1
"if this succeeds the competitive 
position of the swiss banking sector will be reinforced in the longterm as a result of increased safety reliability and credibility",1
"many of  the overseas firms active in the city are 
also active in providing services to parts of the uks real economy",1
moving on the nonbank financial sector continued to be an important source of financing for companies and thereby helped support the economic recovery,1
indeed financial integration did proceed apace with increasing capital flows among the memberstates of the euro area leading to increased interdependence between financial institutions and markets,1
also relative prices and net profit margins of tradables sectors have increased facilitating the rebalancing process of the greek economy towards tradable goods and services,1
these loans continued to be driven by lending to key sectors such as real estate activities financial and insurance activities electricity gas steam and air conditioning supply construction and information and communication,1
this has prompted a host of initiatives both domestically and globally aimed to strengthen the industry given the significant role financial institutions have to the broader interest of society and the overall economy,1
the region as a whole is an active hive of experimentation in digital financial services supported by favourable consumer demographics particularly the digitally savvy youth,1
"over the past few decades banking in most developed economies has become increasingly 
complex interwoven innovative and international",1
"supervision of banks 
in recent years partly reflecting the buoyant economy credit growth has been very high particularly in select segments and the asset prices have been accelerating",1
growing a retail base that is wellinformed will help us move closer to our goal of economic growth that is truly inclusive,1
us import volumes of durable goods are currently up by more than 50 relative to 2019  an unprecedented pace of expansion,1
"because the exchange rate link suits an
externally oriented entrepot economy it will continue to serve hong kong well in its expanding roleas a regional and international hub as china enters the wto",1
through active consumerism banking products and services will need to keep up with the expectations of consumers and this will inherently contribute towards improved banking products and services,1
therefore regulators and national authorities are beginning to acknowledge the fact that enabling a simplified framework for financial information data exchange has the potential to transform the financial systems and may lead to product innovation and better facilitation of financial services for customers and endusers,1
going forward in the current liberalised and globalised environment islamic finance is at the threshold of a new dimension in strengthening financial interlinkages between nations across the globe,1
through the measure the bank has been supporting firms and financial institutions efforts to utilize the accommodative financial conditions,1
"indeed the
stimulus from spending by canadian households and businesses has been growing recently in response
to high levels of confidence rising employment and relatively low interest rates",1
this follows recent enhancements to the sora methodology to broaden its market representativeness by capturing both brokered and bilateral interbank transactions,1
"in the services 
sector where trade has been growing and continues to grow our connection with the united 
states is even more important",1
beijing is home to numerous financial institutions and professionals and it witnessed the establishment of beijing stock exchange just recently so the city is well prepared to play a vital role in implementing national financial reform measures and strengthening international financial exchanges and cooperation,1
"financial  integration fosters financial development and the modernisation of 
the financial system and ultimately economic growth",1
it supports expansionary business activities and consumption spending effectively becoming a truly reliable pillar of economic growth,1
activity in the real estate market has had stronger sales as a counterpart for both housing and commercial use,1
the result of a more opened and transformed economy has led to a more interconnection that allows the gms countries to realize what used to be the farreaching prosperities,1
emerging countries such as china and india experienced rapid economic growth and entered the global trade system,1
"the 
asian economies have always been highly integrated  into the global economic and financial network",1
"the rapidly developing international financial system has clearly intensified competitive forces that
have enhanced standards of living throughout most of the world",1
as the banking industrys premier training arm baiphil plays an important role in providing required skill sets and competencies for modern banking,1
in 2017 real gdp growth peaked at 25 and shortterm economic indicators all point to a continued economic upswing,1
"while 
consumption has arguably played a critical role in the industrial countries growth momentum exports 
might have played a similar role in the emerging markets",1
the imf projects that emerging and developing asia will grow by an average of 63 pa,1
region north reported prospects of solid growth in most industries,1
i think a good example here is education which historically has been an important factor behind the growth in finlands economy,1
in our country too diverse opportunities in the banking sector reflecting significant macroeconomic growth potential could be utilized by niche banking by facilitating specialization thereby enhancing optimal use of resources,1
meanwhile the conditional easing of market access leads to the growing overall competence and competitiveness of marketbased credit information institutions which thus enables its development different from and complementary with the national financial credit information system database,1
this has created the premises for the banking sector to be more motivated to lend innovative in terms of products and more competitive in terms of cost,1
this increase in consumption and the greater need for investment will anchor the growing importance of domestic demand in asia,1
his leadership in economic policy in several key roles has been instrumental in solidifying the progress that mexico has made over the past two decades,1
facilitating the diffusion of new technologies to non frontier firms through trade openness participation in global value chains and the international mobility of skilled workers,1
"the improved  investment sentiment 
and business confidence as reflected in the increasing number of firms incurring capital expenditure 
suggests the prospects for buoyant manufacturing growth in 200506",1
and these retail electronic payments have grown by about 10 per year over the past decade,1
second globalisation has certainly helped to stimulate competition in domestic markets and to increase and diversify euro area trade linkages,1
"at the same time russia and the eu are neighbours and real and 
financial integration between the eu and russia is advancing rapidly also reflecting the growth we have seen in both economic areas ",1
since the crisis marketbased finance has grown significantly bringing new sources of credit and investment promoting financial openness and international capital flows and adding welcome diversity to the system,1
"with increasing crossborder flows of intermediate  goods capital and increasingly so labour prices 
will largely reflect growth and competition in the global economy",1
"its 
dynamic development in foreign trade for instance has been quite impressive too thus leading to a 
rising share in the volume of global trade",1
"2010 was a year of recovery and emes powered this by contributing to nearly three 
quarters of global growth in 2010",1
with the level of innovation and dynamism in our banking space there is no reason why we cannot aspire to be like those economies and grow our assets with strong banks and a strong policy drive to financial inclusion for financial development,1
strong economic growth demonstrates that germany is the member state that after ireland shows the highest increase in income per person since the beginning of the euro,1
"the performance in the external sector improved  with the continued expansion in international trade 
and growing global demand",1
today digital technologies are spreading rapidly throughout the canadian economy enabling growth in all kinds of industries,1
it has also been active on this front with a heightened role in the area of regional integration,1
they will impact the economy directly and through the stimulus generated in the european economy,1
the creation of a single financial and economic space will provide a more conducive domain for our development,1
today we can boast of a strong retail payments framework in the country comparable to that of any advanced country and perhaps even better than some of them in terms of the variety and efficiency,1
"our willing ness to trade freely with the world is 
indeed an essential source of our prosperity  and i think it is safe to say that the importance of trade 
for us will continue to grow",1
given its economic potential the government has accorded significant emphasis to developing and strengthening the sme sector to enhance its contribution to the economy,1
"b industrialization of emerging economies and development of itrelated industries 
against the background of the economic globalization in the 1990s emerging economies have 
industrialized rapidly and elevated their importance in the world economy",1
industrial production is showing growth of almost 6 percent and hightech more than double that,1
the region has experienced a longterm average annual growth of more than 5 much higher than the global average and this is expected to be sustained going forward,1
over the medium term the philippines is poised to become one that is stronger technology driven and much more inclusive,1
intraregional trade within asean has increased significantly to account for about 24 of the regions total trade exceeding aseans trade with the united states,1
the critical services are thereby maintained and the dis becomes a creditor in the administration and realisation of the rump,1
easier access to credit has been coupled with a consistent increase in firms demand for loans,1
the expansion of the it sector was one of the cornerstones of this new economy,1
the banking sector represents the main component of the financial system of kosovo so banks will play an important role in the transition towards the green economy,1
the enhanced stability and resilience of the current global islamic financial system is reinforced by its vibrant growth and its increasing internationalisation and integration into the international financial system,1
over past decades our economies have greatly benefited from the effects of financial liberalisation and financial innovation,1
in mostcountries consumer spending has rebounded and private investment has picked up,1
an era whereby all efforts for the promotion of financial literacy and education in cyprus are coordinated under the national strategy umbrella so as to enhance the wellbeing and prosperity of cypriot citizens and to support the financial resilience and sustainable economic growth in the country,1
"this along with the measures i mentioned earlier helps to explain why there has been such a
significant lift in the rate of growth of productivity over the last decade",1
"the enhanced intermediation during this decade has benefitted access to financing 
particularly for small and medium enterprises has also improved both in volume and efficiency",1
"over the past five  years global growth has been very strong and 
this growth has continued in recent months",1
"recent economic developments and prospects
in the second quarter of 2017 euro area real gdp expanded for the 17th consecutive quarter growing by 23 yearonyear and exceeding our expectations from earlier in the year",1
the association played a key role in that process which among other things is another testament to the excellent cooperation between the association and the bnb,1
bank lending remains upbeat and continues to flow into productive sectors such as real estate power and utilities manufacturing wholesale and retail trade and information and communication,1
the growth forecast of 31 per cent for 2015 is predicated on a more stable industrial relations environment and an improvement in the electricity supply situation with new generating capacity coming on stream early in 2015,1
"the international climate has
become more favourable following the 1998 crisis asia in particular has seen a recovery and in the
united states economic activity remained at a high level until the past few months",1
"the pace of recovery of 
the indian economy is widely expected to be faster than the developed nations",1
output growth has been gathering pace throughout 2014 and in the first half of 2015 and employment has been increasing,1
over the past three decades growth in chinese output per person has averaged roughly 9 percent a year putting per capita output about 13 times higher now than in 1980,1
among other achievements the uab has emerged as a key international and regional participant in developing policies that promote financial stability economic integration and sustainable development and prosperity,1
"we have 
also seen rising fdi activities both within the regional economies and with other regions",1
bank negara has also actively pursued initiatives to develop a viable regional cross currency market to support trade and investment by expanding the availability of multiple choices of currencies that businesses can use for trade and settlement,1
given this state and size digital money has played a key role in our agenda as a central bank,1
against this backdrop of negative to modest positive growth rates for the large economic powerhouses and major emdes indias economy is poised to grow at 76 with potential for even higher growth rates,1
as identified by the imf in the reo the increase in trade and financial integration have strengthened the propagation of growth shocks between regional partners,1
this helped china to post double digit growth rates for most of the past year,1
"3 putting aside the opening of new 
markets and to a certain extent the procurement of new supplies innovation goes hand in hand with new ideas",1
i will now expand on fiscal policy the government debt the importance of the 2021 budget and the utilization of the crisis to increase the level of productivity and to develop the financial world,1
the main economic and financial benefit which encourages the formation of such groups is the enhanced ability to achieve economies of scale and capture synergies across complementary financial services business lines,1
with the global economy now on the recovery path islamic finance offers enormous potential in supporting a more inclusive and sustainable economic growth,1
this result was driven mainly by favourable performance in the services sector particularly from wholesale retail transport and financial services,1
"the development of information technology and growth of it related investments
have probably been promoted by the stable economic environment and been an important driving
force behind the unparalleled upswing",1
in new south wales investor loan approvals have increased by about 90 per cent over the past two years,1
"the transformation and development of the financial system will ultimately contribute to
future prosperity",1
more recently work with granular data at industry and firm level has helped foster a greater understanding of the interaction between institutions and firm behaviour that ultimately lead to higher total factor productivity tfp growth and overall convergence,1
thanks to the strong support of the industry about 30 participating banks will provide more than 120 entrylevel job opportunities focusing on the three fastest growing areas namely fintech green and sustainable finance as well as the greater bay area business opportunities,1
"whilst asias fragmented 
industrialisation has led to a considerable strengthening of trade links within the region the 
transfer of capital knowledge and technologies that are crucial for strengthening industrial capabilities have also been enhanced",1
the cra has not only made more credit available in lowerincome areas but it has also helped to create a valuable community and economic development infrastructure,1
globalization has also enabled economies and businesses around the world to be more connected,1
this will include playing a more active role in technical assistance and serving as key repositories of specialist knowledge resource aggregators for strategic development projects and credible advisers to the government,1
in parallel with the evolution of the monetary policy the bank of albania in years has built on a modern and effective regulatory banking framework in line with the best international practices,1
these include the incentives for people to invest in more efficient technology to increase their skills and to organise efficient markets,1
it is worth noting that private sectorled initiatives are now becoming increasingly important drivers of the rmb markets development,1
"the increase
in direct investment will promote the reallocation of management resources technology transfer and
competition resulting in boosting both economies",1
"whats more large emerging economies like russia and brazil have generally enjoyed rapid 
growth during the past years partly because of  their prudent economic policies which have 
allowed them to utilize their catchup potential to the fullest",1
many individuals use the flexibility and enhanced connectivity of new technologyenabled platforms to pursue expanded opportunities,1
the bank has made substantial investment in it and its entire banking operations have now migrated to stateoftheart it platform enabling global connectivity,1
"the larger share of the services sector growth is current ly providing the synergy 
between services and manufacturing industry whic h is enhancing total factor productivity and 
competitiveness in both",1
for asia there is a growing consensus that growth is likely to solidify going forward,1
while these international comparisons point to an important margin for progress in our country national data also show a significant potential to promote productivity through improved management,1
the ongoing structural fiscal and financial sector policy reform should lead to a rebalancing of saving and investment over the mediumterm accompanied by a stronger demand for investment and therefore a higher natural rate of interest,1
our economy is also characterised bythe great significance of petroleum activities,1
financial advisers are wellplaced to provide lifelong financial planning support to malaysian individuals and households in an environment of a growing middle class segment with higher purchasing power,1
in services exchange between the two countries has been significant in tourism and finance,1
within the financial services industry the banking sector was one of the first to embrace rapid globalization and benefit significantly from it development,1
"a brief look back of past history of the macao economic development and change in industry 
we can perceive the pattern the two significant developments of macao financial industry 
were brought about by the rapid growth of the economy and prosperity",1
moreover business performance improved mainly for the manufacturing industry along with the recovery in overseas economies and this led to an expansion in production and exports,1
as business investment in germany is projected to pick up in 2014 and 2015 this rebalancing should continue,1
following the successful completion of the last economic adjustment programme in august 2018 the activation of the enhanced surveillance framework and with greece now subject to the improved institutional framework for economic governance in the european union and the euro area the greek economy is called upon to operate in a new economic policy context,1
"in the business sector manufacturing activity has been expanding and should be helped by 
the continuing strength of the recovery in the emerging market economies especially in asia",1
"effective regional and international 
collaboration can add significantly to enhance further the long term contribution of smes to the economy",1
"he said that
governments can have a profound effect on the growth of electronic commerce",1
"moreover many expect asia to develop even more into the engine of global 
economic growth",1
chinas participation in international trade in goods added several hundred million persons to the global workforce over a few years,1
chinese demand for these resources to construct firstworld standard cities has been extremely strong and has accounted for a large share of the increase in demand over the past several years,1
these measures should contribute to supporting the positive trend in private domestic and foreign investment in france,1
"banking in this country is in most areas highly competitive and the industry has proven itself
to be highly resilient",1
housing demand remains very strong and overall business investment is increasing at a solid pace,1
the growth has continued to gain scale with its geographical outreach now extending beyond muslim countries to the more established international financial centres and to other emerging economies,1
first it will expand the size of the market for domestic firms allowing them to realise economies of scale and become more efficient,1
in my own engagements with the industry over the years coordination and cooperation among financial institutions can become game changers for the industry,1
on the one hand growth has become more broadbased and with a much stronger contribution of domestic demand in other words more selfsustainable,1
we are now one of the fastest growing economies in asia with an annual gdp growth of more than 60 percent since 2012 notably exceeding the longterm average of 43 percent,1
together those importedresources were combined to generate growth and wealth at a rate that was probably similar tothat achieved by the asian tigers in the last decade or so,1
the ucb sector emerged financially stronger ever since rbi conceived the vision document for the sector in 2005,1
"another major structural change in italian banks business environment involves consumer 
protection which is considerably stronger today than in the past",1
"while
 
individual countries have embarked on their own strategies and achieved tremendous 
individual success today however as the world becomes more interdependent the 
development of asia has reached a new phase in which greater economic and financial 
integration will contribute to unlocking our potential in the global economy",1
"we have a clear 
vision that saudi arabia will represent an industrial hub among the regions countries leveraging off on its strategic location competitive supply of energy size of the local market ease of access to global markets and the growing partnerships between the public and private sectors",1
the gains are also extended to our ancillary service providers that were able to establish greater connections with the international market,1
the roles of the private and the government sectors in the development process were enhanced recording growth rates of 58 percent and 27 percent respectively,1
employment growth has also strengthened over recent months,1
most important foreign financial institutions promote competition and innovation providing the impetus for local institutions to upgrade their capabilities,1
with such an increase in exposure to the international economy trade and other current account flows along with capital flows the indian economy is entering uncharted territory although a healthy one from all accounts,1
communication with the public has become an integral part of our overall strategy,1
and with the build build build program ushering in the countrys golden age of infrastructure we have additional solid push for the economys productive capacity to expand further,1
productivity growth is directly related to capital formation which is in turn connected to saving,1
"they have in effect helped to finance and sustain theproductive private investment that has been key to capturing the benefits of the newer technologies
that in turn have boosted the longterm growth potential of the us economy",1
"it has allowed emerging economies to participate in its development 
thus increasing the potential to contribute to the rebalancing of global growth as financial 
flows not only provides support to domestic demand but also to greater trade and investment flows across borders",1
at the international level the development and expansion of islamic finance become important in strengthening financial and thus economic linkages between emerging economies,1
households and firms have benefited from part of the banking systems efficiency gains through more favourable rates on deposits and loans,1
"the banks involvement in enriching intellectual debate on matters pertaining to our core 
disciplines of economics banking and finance is well known",1
while growth has been mainly supported by private consumption in recent quarters there are encouraging signs that private investment is picking up as well,1
"transition economies of the region are lucrative market s they are growing substantially faster than 
traditional european markets and offer impressive prospects for high profits and significant growth",1
on the basis of maintaining a reasonably prudent balance between business development and risk management the local financial sector could reach new highs in the future while making greater contribution to appropriate economic diversification,1
the process of mergers and acquisitions has incorporated financial system of the region into the bigger european market,1
going forward structural reforms and improved financing and liquidity in the economy are expected to speed up the restructuring of the economy in favour of tradable goods and services,1
moreover if labor productivity of the economy as a whole improves and the longterm economic growth rate rises business fixed investment and private consumption are likely to be stimulated through rises in growth expectations and permanent income and prices are expected to rise with the improvement in the output gap,1
in this way the national bank maintains the vitality of the payment systems as one of the most important components of the financial and economic infrastructure,1
"today new regional interlinkages are emerging as asia 
expands further its trade and investment within the region a trend that has generated mutually reinforcing regional growth",1
"more recently in 
2006 it is estimated that the econo my grew by close to 6 marking the eighth consecutive year of 
positive real growth in output",1
for certain an appropriate islamic banking and finance framework would help ensure that the philippines financial system would truly be a more effective catalyst of broadbased and inclusive growth,1
the ebrds trade facilitation programme was developed precisely to facilitate international trade by providing guarantees to international commercial banks,1
and our service industries are also very externally orientedproviding financial and other services for the region in particular for the mainland of china,1
"by spurring 
domestic demand growth emerging market eco nomies could support global activity while 
enabling their own citizens to reap the full benefits of the remarkable increases in productivity and output they have achieved in recent years",1
"the greek banking system is clearly becoming more compact and efficient as 
conditions are being put in place to enable it to exploit synergies and economies of scale",1
"over recent years there have been a number of  important developments in the jse which 
contributed to its efficiency and global standing",1
as we pour in more investments in physical infrastructure under build build build and more soft investments in our young population to provide better health high quality education and skills development we can expect further accelerated growth in potential output,1
we are confident that with stronger industry stewardship we will be able to foster greater market dynamismwe are also seeing greater industry leadership in many areas,1
having said that the german economy would certainly profit from strengthening competition in the domestic market as well,1
with an efficient retail payments infrastructure we predict that various services will emerge in response to the rapidly evolving needs of financial consumers,1
in the business sector spending on nonresidential construction has been particularly robust,1
these reforms are mutually reinforcing as the transformation of the structure of the chinese economy is necessary to support its integration with the world economy and the international financial system,1
we have done rather well in all these markets and should be able to further deepen and broaden them given the exceptional opportunities emerging from the internationalisation of rmb and the latest belt and road initiative,1
national demand is playing a key role in this phase of recovery,1
"in light of these facts it is most likely that production will be further revitalized
strengthening the virtuous circle of the economy led by expanded private demand",1
asian economies and financial markets have experienced remarkable growth in the last two decades and will continue to be major contributors to global growth going forward,1
"financial integration which 
increases the efficiency and fosters the development  of the financial system helps to raise the 
economys potential for stronger noninflationary economic growth",1
"domesticallyoriented manufacturing and retail trade also report a 
solid rate of growth",1
this has also helped to ease financial conditions in many emerging market economies where capital flows have returned amid an improved global risk appetite,1
"productivity 
growth has been surprisingly strong  stronger than  in almost all of the other eu countries",1
asean economies however have now reached that stage of development in this decade whereby greater regional financial integration will raise further our growth potential,1
financial services providers fsps such as yourself can foster market growth by exploring the potential of this client base as well as new modes of delivering financial services,1
this is primarily being advanced under regional integration plans focusing in particular on asean,1
according to our regional network the market situation is also positive for corporate services,1
"regional financial institutions in particular are expected to play an active role in 
generating new businesses in their region",1
that is shown by the licensing of the first operator of the national payment system by cards which also plays the role of the local processor and we hope to have a direct impact on promoting the use of cards as a means of payment,1
foreign investment had contributed significantly towards the expansion of the countrys manufacturing sector the creation of employment and the birth of economic hubs,1
new large markets such as china india and the earlier planned economies in eastern europe are being rapidly integrated into the world economy,1
despite this euro area gdp growth was resilient in the second quarter of 2022 amid a boost from private consumption and a rebound in tourism,1
in parallel and quite independent of policy actions economic integration has also progressed in a more gradual but also more continuous process,1
in contrast private investment now appears to be rather resilient and business confidence points towards growth in manufacturing activity,1
the bank is looking to further expand these facilities with a greater focus on green activities that are aligned with the taxonomy going forward,1
but since 2012 improvements in deficit countries have been driven predominantly by robust growth in exports,1
these areas of knowledge are fundamental for informed decisionmaking contributing on its own to the enhancement of the portuguese social capital,1
this would be a positive development for the global economy as more engines of growth provide greater resilience,1
"responding to new demands the bundesbanks research data and service center
ladies and gentleman the demand for new and better statistics is not only reflected in the programme for this conference",1
regional capital markets in several of the east asian economies have expanded significantly in particular the bond market which has expanded by more than thirteenfold since 2001 with significant foreign participation,1
"moreover if industrialized countries can continue to foster such promising industries this will bring 
about an expanding equilibrium in the global economy through for example development of new markets and establishment of an efficient international division of labor",1
"as the guatemalan economy is more integrated with the global economy and as new 
investment opportunities arise due to a greater diversification of its production of goods and services we have experienced an increase of c apital flows from foreign direct investment",1
in the united states it does look as though productivity growth has improved in recent years,1
the increasingly pervasive use of technology in our financial sector will be another key driver of growth,1
if we succeed then the market for banking services expands deepens and strengthens the philippine banking industry in the process even as we help improve lives liberate millions of filipinos from poverty and bring prosperity to filipino homes,1
the positive performance of vaccination in europe has been reflecting on our economy through the tourism and external demand channels,1
and for the banking sector banks capital bases have been strengthened well above international standard while granting new subsidiary licenses for foreign banks will ensure that the future banking system stays competitive and vibrant,1
the region is fast becoming the anchor of growth and stability in the world economy,1
it is maintained that markets allow for the more efficient use of skills and resources to engage in activities with higher productivity,1
financial systems in emerging economies have and are expected to continue to play a significant role in the economy,1
at the same time the outlook for growth in the area of exports and domestic demand is now predicted to improve,1
making use of the results of these efforts the bank supports japans financial industry to take advantage of new information technologies,1
the savings ratio increased in the united states at the same time as domestic demand increased more rapidly in china as a result of a fiscal policy stimulation package,1
"this activity 
has been booming in europe  also as a consequence of abundant market liquidity  and has seen an increasing involvement of banks",1
the resumption in global growth and trade rebounding oil prices the recovery of global equity markets and the impact of fiscal stimulus are increasingly being felt,1
following the conclusion of the asean banking integration framework we are confident financial institutions in both countries will be able to collaborate towards realizing the objective of facilitating greater crossborder trade and investments,1
the commitment to better serve the sme segment would reinforce the critical role of the financial industry in supporting the governments development agenda in a wellfunctioning financial system,1
the continuous capacitybuilding of our staff as well as the enhancement of our policies and methodologies in these areas including capital market and fintech development will certainly support our primary objective of maintaining a stable monetary and financial system,1
"financial inclusion has now emerged as an important global agenda in ensuring sustainable 
longterm economic growth",1
chinese manufacturing goods are competing at higher and higher levels of sophistication and the effects are being felt all over europe and the rest of the world,1
the entire economy will then be involved in intensive investment andhigh productivity growth,1
benefits from open trade are evident in brazil5   following its dramatic trade reforms in the 1990s productivity growth in brazil increased,1
the company has become an important cog in our automotive industry which as a whole has contributed immensely to the fijian economy and continues to play an important role towards lifting our growth potential,1
"the sadc finance and investment sector is convinced that it has already laid the foundation for
macroeconomic convergence and integration",1
for thailand the share of exports to clmv countries to total exports volumes has risen steadily to be over 10 percent surpassing our exports to 27 eurozone countries combined,1
in the philippines household consumption remains a key growth driver of the economy,1
first the philippines is among the fastest growing and most resilient economies in the region,1
also business and professional services is a very important driver of growth in this area,1
"with growing financial integration in europe and more foreign direct 
investment flows income from wealth has also become more internationally diversified",1
the philippine economy in 2021 made significant strides in terms of recovery jumpstarting favorable prospects for 2022,1
export companies in our regional network report that new orders have increased and that production is expected to rise over the next six months,1
in setting up an overseas office in asia nps is affirming the longterm growth prospects for the region,1
based on these responses and other information we believe the banking industrysawareness level has improved substantially during 1997 and is reflected in the intensified projectmanagement planning budgeting and renovation efforts that have been initiated,1
"against this economic background i examine the performance of the indian banking sector 
over the last 12 years as finance is inexorably linked with economic progress",1
"the rba s liaison with tourism related businesses suggests that 
further increases in investment in this area are likely in coming years",1
the bot has already formulated action plans for all of these aforementioned initiatives and plan to accelerate implementation in tandem with asias growth and regional economic integration,1
one important factor behind developments in recent years has been the rapid growth in emerging market economies such as china,1
the setting up of the capitalization and resilience fund under the eu recovery and resilience facility will strengthen firms capitalization rebounding economic activity,1
"therefore creating employment 
opportunities in the manufacturing and services sectors has become important",1
easier credit conditions have fed into a domestic demandled recovery that has spread across countries and sectors,1
"here i will explain the 
developments in the unites states and emerging economies which have a particularly significant impact on japans economic activity and prices",1
in middleincome countries financial sector development has positive effects on economic growth,1
the longterm growth potential of the economy is determined by technological developments,1
this will allow integration of greek companies into global value chains increasing openness of the economy and improving both the quantity and quality of greek exports,1
with the expertise and capital support from international and regional organisations the public and private sectors can work together in developing purposeful risk transfer solutions for the region,1
in the context of a greater expansion of credits to the economy during the past two years particularly in real terms the net flow of credits to private enterprises has mainly consisted of medium and long term credits extended to finance investment,1
"the country papers besides reviewing financial sector developments br ought to the fore the diversity that prevails 
across countries",1
"for our purposes it would be expedient to focus on some of the economic aspects of the african
renaissance primarily prospects of africa s economic growth reconstruction and development
through enhanced intra and intercontinental trade",1
however over the years the regions economies and financial markets have grown significantly and become more integrated both within the region and globally,1
"it appears that the 
structural characteristics of the bestperforming industrialised economies namely more 
flexible labour markets greater competition in product markets and lower barriers to entry for new firms have been more receptive to the opportunities provided by new technologies",1
at the time the availability of new technologies and the widespread use of the internet were expected to lift the potential growth of the economy,1
through financial digitalization we expect a boost in economic growth and development as digitalization makes payments easier and quicker and helps improve working capital efficiency,1
"the growth in italian banks operations in foreign markets will be assisted by greater industrial and 
marketing penetration of italian firms in those markets",1
"all of that suggests a significant structural rise in demand for energy and resources has 
occurred as a result of the cumulative growth of the emerging world",1
this integration of rmb in their business decisions has in many instances served to strengthen their trade and investment links with china,1
in most countries higher inflation rates have gone hand in hand with stronger growth,1
"taken collectively they represent the foundations upon which we envision a 
thriving banking market that is responsive to the evolving needs of its public",1
the bsp expects more participation particularly by standalone thrift rural and cooperative banks once the necessary investment in technology is completed,1
"the accelerated synergies of the various technologies may be what have been
creating the apparent significant new profit opportunities that presumably lie at the root of therecent boom in hightech investment",1
indeed bank negara has long recognised the power of technology in driving the financial sector forward,1
in parallel riding on her rapid economic growth in the past decades mainland china now has a growing cluster of home grown mncs in a wide range of sectors,1
asia in this environment continues to be an important growth centre in the global economy,1
with the global trade outlook for 2023 overcast greater intraregional trade in south asia can enhance opportunities for growth and employment in the region,1
owing to the evident accelerated pace of economic adjustmentlargely a consequence of the technologyenhanced speed and volume of information flows we havequickened our pace of policy adjustment this year,1
alongside the european supervision and resolution authorities i already mentioned the completion of the banking union with a common deposit insurance programme would also greatly contribute to economic and financial resilience,1
output from this sector has expanded by more than 7 per cent every year for the past five years,1
apart from merchandise trade in goods and services this growing integration has taken the form of large scale crossborder merger and acquisition activities,1
financial integration is bringing about steadily rising crossborder financial flows and the accumulation of such inward and outward foreign direct investment fdi portfolio investment and financial derivatives,1
"in some respects the composition of last years output growth lays a sound foundation for 
continued economic recovery",1
a conducive payment ecosystem would not only enhance the nations efficiency and productivity but also create new opportunities and new sources of growth to position the economy as an attractive destination for global investors,1
as chinas substantial savings surplus continued to grow large amounts of savings were exported to the west,1
an allinclusive and modern economic zone it offers global firms competitive access to indias large and burgeoning demand for financial services,1
"measured real value added of the 
financial intermediation sector more than trebled between 1980 and 2008 while whole economy output doubled over the same period",1
studies showed that financial development corresponded strongly with economic growth8 politically there was a clear preference for financeled growth,1
"it is inevitable that this has resulted in juxtaposition and transposition of 
the two disciplines to foster innovation and benefit the two fields of finance mutually while prompting cross border flows and offering new perspectives on financial stability",1
domesticderegulation is increasingly in vogue in many countries and there is much greater openness aroundthe world to inward investment and foreign ownership,1
however employment in new jersey has only begun to expand during the past few months,1
"these improvements could be 
driven by two factors technological improvement which expands t he range of product ion possibilities 
and a catching up effect  as peer pressure amongst banks compels them to raise productivity levels",1
productivity has continued to develop very positively relative to the economic situation which is a good sign,1
and our factories were working more intensively too industrial production increased5¾ percent last year exceeding robust additions to capacity,1
"the increased saving has to a great extent been invested in us bonds which has pushed down long
term interest rates in the united states an further stimulated us household consumption",1
we should in addition strive to more effectively operate our bank intermediated lending support facility which has been greatly expanded to support the economic recovery and boost the growth potential,1
the number of projects in africa originating from south africa has increased by over 500 per cent in the past decade,1
"in the process the economy has become more diversified with new 
sources of growth",1
it means greater opportunities to move into new positions and it leads to higher employment security,1
the new bsp charter embodies a package of reforms that places central banking in the philippines at the forefront of modern central banking improves the bsps corporate viability and enhances its capacity to craft proactive policies amid rising interlinkages in the financial markets and the broader economy,1
3 a european mobilisation on private payment infrastructures thanks notably to the involvement of the major european banks in the european payments infrastructure epi project,1
this has reflected an upswing in industrial production and exports across a broad swathe of the global economy,1
operating on market principles this tool supports financial institutions lending to enterprises focusing on clean energy emission reduction and carbon reduction,1
with the developmentarising from advances in information and communications technology a new phase of growth hasemerged,1
improved competitiveness and the development of the oil industry facilitated the rapid integration of new technology by firms,1
brics economies have grown rapidly with their share of global gdp rising from 11 per cent in 1990 to almost 30 per cent in 2014,1
as new projects gain traction there will be increased regional flows of trade capital and people in the next five to ten years,1
at the same time industrial economies are moving more towards the export of servicesas a result of improvements in communications and information technology,1
ultimately these globalisation forces provide the scope for many economic benefits including more efficient resource allocation along with welfare gains from deepening specialisation cheaper products and greater product choice,1
"in the wake of extremely dynamic growth public budgets have grown considerably in all
developed countries over the past few decades",1
but with the recent high growth rates edging on 10 percent for india and steadily above for china the contribution to global growth has become pronounced,1
in particular the us financial systemthe epicenter of the crisishas been considerably strengthened,1
in this model the imf and the world bank are primarily responsible forcreating a sound environment for banking which is highly dependent on viable governmentpolicies,1
"developments in sweden 
the signals of a general recovery in sweden have also become more tangible",1
instead the citys job growth has been quite widespread in sectors outside of finance,1
"these 
developments have been particularly important to the recent intensification of the 
internationalisation of islamic finance which in turn contributes towards building bridges and 
forging greater linkages among a wider range of economies",1
new businesses that use digital technology have been emerging in a wide range of areas,1
"our previous expectation of 
a reacceleration of real gdp growth in the first months of 2006 has thus materialised confirming our 
assessment that economic growth is broadening and gradually becoming more sustained",1
growth has been higher not only in the developing world reflecting overall higher economic growth rates but also in europe and north america where it has been some four per cent annually,1
the new initiatives would pave the way to further innovation in the banking sector enhance the safety and efficiency of financial markets and underpin the real economy,1
within the hkmawe have in the last few months seen the completion of a major strategic consultancy studythat will help to guide the broad development of our banking sector into the next century,1
the consumption orientation of the economic system has however been underpinned by a very sophisticated import machinery evident in both the real sector and the financial sector,1
sound macroeconomic policies institutional improvements spurred by euaccession increased trade and financial integration with the eu contributed to a rapid catchingup,1
"in this
exercise performance indicators are being developed for monitoring performance over time drive thecapacity enhancement of the banking institutions",1
this is being reinforced by rising incomes in the region with per capita income almost trebling in this recent decade,1
in belarus some of the important work on the macroprudential framework was done during an eu twinning project dedicated to enhancing the potential of the national bank of the republic of belarus,1
reflecting its expanding role in the global economy and the international financial system the renminbi will assume greater strategic importance in facilitating the development of these new investment and financial linkages including meeting the greater demand for infrastructure spending,1
the rollout of infrastructure to previously disadvantaged communities ensured continued growth in the electricity gas and water sector since 1994,1
if you position yourselves against rural and coop banks one expects that they would have the advantage of being more entrenched with the community at a scale that is aligned with community needs,1
such mortgagerelated activities have helped consumers to maintain their expenditures have helped the overall economy to grow and have contributed significantly to the earnings of the banking system,1
this proposed legislation is expected to significantly improve the quality of internet services helping our digitalization efforts flourish,1
in the aviation industry for example our regional low cost carriers have significantly increased interconnectedness among asean countries,1
purchasing managers indices have recorded sharp improvements in many countries,1
"the rise in 
intraregional exports which accounts for 34 of the east asian regions exports in 2002 stemmed in part from the higher contribution of domestic demand which leveraged on the robust economic growth achieved by regional countries",1
while  previously  globalisation manifested itself in the form of trade and investment between the emerging and developed world emerging economies are now becoming more connected with each other within and across regions,1
with the single market we have a powerful engine of sustainable growth to underpin our living standards,1
it enabled strong influx of capital which underpinned their real and financial convergence,1
the common man would be empowered to take informed financial decisions and in the process the global financial marketplace would become a more stable arena,1
global economic growth was very dynamic in particular in emerging asia and with high growth rates in the new eu member states,1
"international trade is a major driver of gdp as our export is part of the 
global and increasingly integrated regional supply c hain",1
the nonbank financial sector and in particular the investment fund sector is playing an increasing role in the financial system through financial intermediation and links to the real economy,1
as its economic importance has grown china has taken on a larger role in global institutions,1
as the two countries diversify their respective technology bases and supply chains the development of important technologies such as semiconductors artificial intelligence and 5g telecommunications will increasingly bifurcate,1
"new technologies have altered business practices around the globe spurring international trade and
producing larger commercial firms with more efficient systems for information and control",1
such a context has had major consequences on the requirements for increasing the volume and structure of statistical data that will give a better picture of these global connections with a special emphasis on international investment position statistics as well as more detailed portfolio investment and direct investment statistics,1
in addition growth is strengthening in the united states and this augurs for caricom countries which are the major market for our non energy exports,1
"the accompanying creation of jobs will improve employment and income prospects contributing to a 
gradual recovery of private consumption",1
in line with the countrys domestic growth banks total loan portfolio grew by 173 percent and is diverse across industry sectors,1
as import and export volumes have been increasing rapidly the absolute effect ofexchange rate changes on aggregate demand and the contribution of the exchange rate channel tothe monetary transmission mechanism has been growing over time,1
the competitiveness of the domestic banks in terms of the gross interest margin has also improved,1
going forward a sharp uptick in investment led as also consumption led demand is expected in the economy,1
"meanwhile public works have been rising and net exports exports minus imports have
continued to grow due to an increase in exports",1
"its emphasis on the close link between financial transactions and economic activity has positioned islamic 
finance to be wellanchored to serve the real economy",1
this is where financial integration will play a critical role by opening new opportunities for trade and financial linkages and for our banking institutions to enhance their presence,1
the states economy  is industrially diverse resembling the nation,1
in part the pace accelerated also as a result of the favourable hydric situation,1
as alluded to earlier innovations as well as the entry of new banks and regional economic integration drive have combined to spur competition in the financial services industry,1
as efforts continue to sustainably rejuvenate the economy a great headway to embark on is to build stronger capacity and support in real and productive economic sectors,1
"the province has also been making important strides in building other sectors to diversify its economy 
and this bodes well for the future",1
"in the process banks would expand their loan base and the availability of financing
would enhance the growth prospects of the economy",1
this positive performance seems to be an outcome of reforms encompassing a range of measures that led to transformation spre ading over all the sectors of economy,1
"the regions current economic progress prosperity  and financial stability has now accorded us a new 
strategic window of opportunity to develop new value propositions to unleash the full potential 
accorded by the accelerating economic and financial integration process",1
the air transportation sector is also improving as new international routes are added,1
the presence of foreign institutional investors has strengthened the integration between the domestic and international capital markets,1
additionally german enterprises are competitive because they are excellently positioned in global markets and offer innovative products,1
we are bound to catch up progressively with the levels of labour productivity growth reached by the most successful industrial economies including the united states since the mid 1990s,1
the overall direction and potential of the global sukuk market are certainly well recognised particularly in its role in contributing towards greater economic development,1
in addition to the relatively favourable capacity level productivity growth has also been unexpectedly fast given the current economic climate,1
"the chilean economy 
the chilean economy has reaped the benefits of the dynamic world economy through a very significant termsoftrade improvement that accumulates 70 since 2002 and through a strengthening of markets for our exports",1
in addition transition effects might be more frontloaded as they are increasingly anticipated by markets producers and consumers which would be good news,1
"earnings power of financial institutions and a stronger capital position 
when the effective functioning of the financial system is finally restored major banks will enjoy strong 
international competitiveness and local banks will be able to provide new financial services for regional development",1
domestic financing through the banking sector significantly increased in 2014 with credit market recovering much faster compared to the previous years,1
with respect to final demand public investment orders have increased significantly,1
this economic prowess is also gradually translating itself into a greater presence in the financial sphere,1
in the area of traded services india remains a world leader in software exports and information technology it enabled services accounting for around 12 per cent of world software exports,1
as a former hanseatic city and an important trade fair location cologne represents cosmopolitanism and integration,1
the coordinated development of the financial market has been advanced,1
fourth the capital market will be supported to play a more positive role in a wider range of areas,1
"importantly the performance of public 
sector banks has converged with that of new private sector and foreign banks",1
as countries become increasingly integrated and interconnected against the backdrop of economic globalization their industrial and financial systems have closely linked to each other,1
the pace of global economic activity is becoming more balanced across the main economic regions,1
but their services as external auditors of financial institutions make direct contributions to the efficient functioning of financial markets which in turn allocate scarce resources to economic sectors and facilitate the process of economic development,1
strong economic growth has led to rising incomes across the country,1
specifically total deposits at all fdicinsured institutions increased by 22 percent when comparing deposit data from 2019 to 20201 small business lending also increased significantly,1
increasing volumes of trade and crossborder investment have raised the standard ofliving in many emerging countries at an astonishing rate,1
with greater recognition of the sukuk market as a competitive and attractive form of financing the global sukuk market is expected to continue its growth going forward,1
the services sector strengthened further in 2022q2 underpinned by the buoyancy in tourism with positive spill over effects to other areas of the economy,1
a positive development in the global economy that tentatively seems to be emerging is that growth is becoming more balanced and broadbased,1
the rise of the renminbi as an international currency would facilitate trade investment and financial activities that are commensurate with the continued growing importance of china in the global landscape,1
"globalisation the acceleration of international trade and the integration of china and other 
developing countries into the world economy has been an important underlying trend in the 
global economy and will probably remain so in the coming period",1
at the same time growth rates have become less dispersed across countries compared to the past which also suggests increased business cycle synchronisation within the euro area,1
"strong growth of the asian economies will drive 
the global growth",1
as early starters the nordic telecom equipment manufacturers were well positioned to respond to the growing demand,1
thanks to instant payments european market players can now become leaders in innovation based on european standards,1
from the viewpoint of bank indonesia universal banking embodies a hope that our banks can position themselves internationally within our banking industry structure,1
the uk economy has been deeply integrated into the european one in very diverse sectors,1
"translating technological advances into economic growth 
as has always been the case technological change and innovation are today in large part driving 
economic growth and the improvement of living standards",1
"the new spending patterns as incomes rise in the region will drive the modernisation of the 
retail sector across the region",1
"singapores economic restructuring philosophy  initiatives 
given this bracing environment singapore is at a turning point in our economic development",1
the developments of the banking sector have been reflected positively on the performance of the saudi economy,1
at the same time international cooperation has become crucial through international standards like the basle accord and more intensive bilateral cooperation between supervisors,1
linking borrowers and lenders across the middle east and asia will help to deepen trade and investment links between the two most dynamic regions and provide for a more efficient intermediation of savings,1
"this particularity had been one of the reasons for luxembourg to 
emerge as a financial activities center for europe",1
multilateral and international financial institutions have a historic opportunity to increase their catalytic role in emerging markets development fostering the adoption of these comprehensive approaches,1
"by pursuing exportled growth based on high levels of savings and investment enhanced levels of education and stable macroeconomic policies these economies achieved strong productivity growth and began to catch up rapidly with western economies and japan particularly in the 
manufacturing sector",1
"furthermore it is expected that the effects of the banks monetary easing measures will be fully felt when forwardlooking economic activity increases as structural reform progresses and efforts to strengthen the 
financial system bear fruit",1
across continents islamic finance is therefore having an increasing role in intermediating funds across borders and creating greater financial and economic interlinkages,1
moreover to support and facilitate economic activity the government has in recent years focused its funding on the development of infrastructure  particularly on roads and bridges and utilities  which will improve access and encourage msme activity,1
more generally the development of these instruments and techniques have led to greater credit availability to a more efficient allocation of risk and resources and to stronger financial markets,1
payments play a key role in the smooth functioning of the economy and this area has greatly evolved in the recent decades and in particular the last several years,1
us leadership in direct industrial investment in italy was strengthened during the 1950s,1
"these developments have contributed to its rapid expansion across the globe and islamic finance has now emerged as among the fastest segments in 
the financial services industry",1
"across the globe retail lending has been a 
spectacular innovation in the commercial banking sector in recent years",1
"in the process of globalization and its 
integration into the pearl river delta economy apart from meeting the demand locally the macao financial sector follows the trend upgrades itself by servicing the regional economy",1
and empirical research in fact supported the view that countries with larger banking systems also grow faster,1
over the years some of these professional services firms have developed a strong reputation for their technical excellence and have established an international presence,1
islamic financial institutions have become increasingly involved in structuring and financing development projects in the region,1
it is indicative of the potential gains of npl resolution for corporate investment aggregate productivity and longterm economic growth,1
along with the ministry of finance planning and economic development the bank has pioneered the economic reforms and provided the economic management which underlies the sustained growth of our economy over the last 25 years or so,1
the bank quickly moved towards greater openness in theprovision of data and timely economic information,1
this could in due course contribute towards the growth of the tourism and the retail sector in our economies,1
the positive movements in household savings contributed to the growth of the lending activity so according to the latest available data as of september 2017 loans increased by 43 on an annual basis with a solvency that is almost twice as high as the statutory levels and volume of liquidity that enables optimal daytoday operation,1
in the bronx employment grew even faster rising by more than 14 percent,1
"more robust consumer demand and 
strengthening business investment in the united states should augur well for canadian exports",1
while global insurance growth is expected to remain healthy and will continue to be driven by emerging economies over the next few years the quality of growth is equally important,1
in fact capacity utilisation in germany is yet perceptibly higher than that of the euro area as a whole employment is on maximumvalue and confidence is quite high for both consumer and enterprises,1
retail payments are increasingly becoming an important piece of the overall infrastructure that rightly warrants our developmental focus,1
there has been strong growth in deposit growth from households as well as businesses,1
in addition there is an active work programme within the east african community to promote the regional integration of capital markets,1
the growing inclusiveness of this economic expansion is partly due to the renewed vigour of small businesses which are a key engine of income creation in our economy,1
also relevant now is improving average growth prospects through a strategy underpinned by higher rates of savings and investments and increased international competitiveness,1
"in particular gains in markets outside the euro area have been large and there are 
early indications that the export specialisation of these countries has been shifting in a way that may support further structural export expansion",1
the cash pooling function of ctcs will enlarge hong kongs liquidity pool and strengthen hong kongs role as an international financial centre as ctcs are major users of financial services capital markets and professional services,1
the importance of the sector from a macroeconomic perspective is also reflected in a significant flow of bank credit to finance agricultural and allied activities relative to other sectors of the economy,1
"due to continuing globalization and 
financial innovation the interlinkages among economies and financial markets continue to strengthen",1
by organizing as a formal body participants can effectively identify and drive strategic initiatives to promote the efficiency and resilience of the system and promote the sustained growth of the industry,1
as businesses become more certain of the durability of the recovery i expect that they will become more willing to further expand productive capacity particularly with new business equipment and software,1
"recently the stimulus from spending by canadian households and businesses has also been
growing",1
in asia the growing significance of domestic demand the enhanced quality of the workforce and the more developed and resilient financial systems have all contributed to this  strong growth performance,1
for the central and southeastern europe during 2017 the economy is expected to grow faster driven by domestic factors and a slight and stable improvement of the economic situation in foreign trading partners,1
"financial integration enhances the smooth and effective transmission of monetary policy impulses 
throughout the euro area and via its effects on financial development and modernisation ultimately contributes to increasing the euro area potential for stronger lasting noninflationary economic growth",1
it is entirely consistent with that view of course that other sectors particularly the services sectors will grow more rapidly and continue to increase their share of total output,1
in this respect the bank of mauritius has played  and continues to play  an important role in the development of the payment ecosystem in mauritius,1
"overall the solid bridges that link the ecb with universities and research centres play a key role in
the continuous upgrading of our intellectual capabilities and in the deepening of our knowledge ofrelevant subjects",1
in processes of economic financial and trade integration the objective is to establish an efficient payments structure for intraregional transactions,1
"they show that in new york state and 
new york city activity has expanded at a relatively brisk pace since the beginning of the year",1
given the universal nature of the islamic banking licence the attention given to the capacity for innovation will become an important defining factor in the progress of islamic finance,1
but mas also works closely with the industry in a spirit of partnership to create a conducive business environment for them to operate in and grow singapore as a dynamic and purposeful international financial centre,1
going beyond the importance for the wellbeing of the individuals and the overall financial stability financial literacy can play an important role in increasing the domestic savings which is one of the key factors in speeding up the real convergence in the region,1
in the aggregate lending is increased leading to greater economic growth rising productivity and greater financial inclusion,1
financial market globalisation also leads as i mentioned initially to increased capital flows,1
"a number of international studies indicate that
a deregulated and wellfunctioning financial market clearly stimulates the development of factor
productivity",1
the tourism industry will be the key driver for economic recovery in the next two years,1
in doing so kof fulfils an important role for the snbs monetary policy and ultimately for the greater good of our country,1
"the remarkable economic boom in the united states has
undoubtedly made an important contribution to the strength of the recovery in the world",1
this growth performance is being underpinned by the sustained contributions of the services sector the recent rebound in manufacturing and favorable improvements in labor dynamics as we stand at the cusp of what the united nations calls the demographic sweet spot,1
on the domestic front we are also seeing the continued rapid expansion of the domestic financial services industry and the deepening of regional economic and financial integration,1
"with greater awareness and adoption in more financial centres islamic 
finance is poised to play a bigger and more central role in global finance",1
industrial turnover indices also indicate that external demand has a positive impact on industrial production,1
for asean financial institutions the prospect of regional financial integration will also serve to raise industry standards across the region,1
indeed the positive performance of the global stock markets reflected an anticipation of stronger future growth,1
"together with other 
emerging markets india is playing a crucial role in the process of globalisation of the world 
we live in",1
faster productivity growth would mean a higher standard of living foramericans in the future,1
"like 
many other countries we have benefitted greatly from economic and financial globalisation",1
digital transformation can strengthen competition and the supply of innovative products and services often across borders,1
"these developments signify the important role seen for 
these categories of financial institution in  new zealands financial infrastructure",1
thus like many other vibrant regions of the country the charlotte area has grown by developing a highpr oductivity service economy,1
the positive sentiments of both consumers and businesses are indicative of the broad support to the general direction of economic policies and this is expected to fuel the momentum of reforms moving forward,1
with acceleration of investment growth the real gdp grew 71 percent,1
the rebalancing of the economy towards the internationally tradable sectors was facilitated by increases in the relative prices and net profit margins of tradable goods and services,1
in particular we have witnessed the building of appropriate institutions increased trade integration with the euro area and improvements in the business environment,1
"the evidence
suggests that new technology often results in more growth in employment in innovating industries",1
and there has been more substantialevidence in recent months of strengthening domestic demand and output growth across the eurozone,1
the māori economy is growing becoming more diverse and is increasingly recognised as an area of opportunity in particular by reinvigorating long held connections to environmental sustainability and social cohesion,1
the european commission is projecting growth rates of 30 in 2017 and 2018 due to higher consumer spending and accelerating investment,1
with the globalization of the financial system and the growing crossborder integration of financial markets the role played by foreign financial institutions in japan has been quite significant,1
this will become even more important as international trade and investment linkages deepen such as through the growth of ecommerce,1
for the case of indonesia high growth in the past was substantially facilitatedby many adjustment measures in our economy particularly in the financial sector,1
in the preceding 1520 years the global economy was characterised by solid growth greater economic stability than earlier and by low and stable inflation,1
expanding trade and investment has been accompanied and supported by development of domestic service industries and enhanced connectivity in the service sector,1
"i hope the korean economy will become more advanced thanks to its restructuring and also
wish that its practical cooperative relationship with the eu may continue to deepen in the future",1
in the past we have seen a close relationship between global value chain growth and the share of imports in total output,1
"vast growth potential for sukuk  
the growing role of islamic finance in mobilising and channelling funds to productive investment activities across borders contributes to more efficient allocation of funds across borders and facilitates international trade and investment",1
"i wish to assure you that the opening of this branch will soon result in increased investment creation of jobs and a growth 
in profits for the bank",1
greater resilience has been evident in many segments of the financial markets,1
"consumption
the demand side of the swedish economy above all private sector demand has picked up properly in
recent years",1
theincrease in financial activity within each national market the expansion of credit and the developmentof intermediaries all made a decisive contribution to investment production and employment,1
"as for domestic demand 
reconstruction related demand including public investment has clearly started to increase",1
with its ascension to the wto in 2001 the increase in intraregional trade has been an important catalyst in driving growth in the asian region,1
"increased competitiveness and 
productivity gains have also been enabled by proactive technological deepening and flexible human resource management",1
these unconventional tools have in my view served to support a recovery in domestic demand and as a consequence global economic growth,1
in particular the region has taken the opportunity during our period of growth and stability within this decade to pursue regional financial integration,1
"labour inflows from the new eu member states still appear to be growing rapidly with the construction 
industry absorbing a particularly large share",1
"the rmbs role in facilitating intraregional trade and investment will only grow in 
the coming years",1
a robust and effective approach to supervision will underpin our aim of enhancing the standing and reputation of the central bank such that it is trusted by the pubic and respected by our peers and the wider reputation and longterm attractiveness of ireland as a financial services centre,1
"south africa attaches great value to the further development of its manufacturing
sector now responsible for 238 per cent of total gross domestic product",1
"the 
resilience of global economic growth which benefits from the robust economic activity in emerging market economies should support euro area exports",1
"in the long term the growth outlook of the greek economy is expected to improve

structural reforms in product and service markets will boost productivity competitiveness and private investment and
a better institutional environment  easier to do business more efficient public administration  will add to potential growth",1
the euro has undoubtedly become an important catalyst in promoting thefurther integration of product and capital markets of euro area economies,1
at this pace the philippines remained one of the fastest growing economies and the most resilient in asia and in the world,1
"in
the case of a sustained increase in productivity growth it is obvious that the longrun effects include a
higher sustainable rate of growth in output",1
it has boosted world trade opened up access to sources of global finance and facilitated the diffusion of farreaching technological advances in transportation communications and information processing,1
the overall impact for thailand is that exports are still expected to be our main engine of growth this year,1
"in fact most forecasts suggest that euro area real gdp growth will be above 3 in
2000 and 2001 reflecting both the favourable external environment and buoyant domestic demandthese expectations have just been underpinned by the first estimate by eurostat of real gdp
growth in the fourth quarter of 1999 which indicated that economic activity continued to expand at a
robust pace at the end of last year",1
"this growth is set to drive increasing trade in goods 
and services as  well as the flow of capital between the region and the world",1
at the same time the countrys sound stable and liquid banking system provided solid support to our economy in 2015 with bank lending continuing to grow in doubledigit rates with credit flowing particularly to the productive sectors,1
our ability in performingmacroeconomic operations has improved greatly and our achievements are recognisedinternationally,1
today the german economy is highly competitive with increasing domestic demand,1
therefore the regions competitiveness and growth potential are important to each country in the region,1
third as noted earlier the system has been set up to encourage the development of commercial overlays using the realtime payment capability to deliver valueadded services to consumers and businesses,1
indeed their entry into a currency union may well have fostered economic integration enhanced intraarea trade and with the increased interdependence raised the degree of synchronisation of the participating countries macroeconomic fluctuations,1
the survey also makes it possible for zambia to provide good quality economic data to fulfil her commitments to the international community consistent with international standards,1
our economy is the seventhlargest in the world and the regions growth continues to surpass that of advanced economies,1
"the relative 
contribution of the improvement in labour quality ha s also increased over time accounting for up to 
one fourth of euro area labour productivity growth since 2000",1
the manufacturing financial services construction and wholesale and retail trade sectors continue to maintain good momentum and prospects are promising going forward,1
it is apparent that fiscal consolidation in the indian context has led to acceleration of growth,1
"there has been increasing attention paid to many parts of the african continent which is expected to maintain a growth rate in excess of 5 per cent for the 
next few years",1
it stimulates and lubricates economic activity supports wealth creation for the whole of society and allows households and individuals to bring forward consumption and purchases that would be impossible without it  including critically the purchase of housing,1
for some time the global recovery has been underpinned by the performance in emerging markets with the expectation that the global growth momentum will gain traction as the pace of recovery in advanced countries picked up,1
"the imf the bank of engl and and private forecasters all 
predict faster growth in the advanced and global economies in 2014",1
"underlying
conditions for the recovery of private demand such as business fixed investment and householdconsumption have also continued to improve",1
for banks we teach them how to align with and benefit from our technological innovations such as the awardwinning electronic rediscounting,1
looking at developments in the global economy economic activity is picking up in both the advanced and emerging economies,1
exports and investment in machinery and equipment likewise supported economic growth over the past year,1
further economic growth of 70 to 80 percent over the medium term is expectedthe sustained economic growth is a product of two decades of structural reforms,1
through the provision of high quality training and education programmes catering specifically for the financial sector the bibf has helped create a talent pool for banks and other financial institutions to draw from,1
globally rising household income due to economic expansion has also led to higher consumption levels,1
over the recent years concerted efforts between the private and public sectors have resulted in a number of specific financial education initiatives being implemented,1
the gradual restoration of confidence and the easing of uncertainty are reflected in the evolution of several leading indicators of economic activity which improved considerably between september 2015 and january 2016,1
the ecbs measures to support economic development in the euro area are also likely to have a favourable impact on the swiss economy in the medium term,1
"as the us economy regains vigour it should also contribute to improved 
business and consumer confidence in canada",1
in serbia we have a healthy synergy of positive effects when real sector growth positively impacts loan demand higherquality bank clients and rising deposits,1
according to the world bank there has been an accelerated growth of internet access of more than 170 in global accessibility in the past ten years,1
the broadly favorable economic developments i sketched earlier have provided a solid background for financial sector developments in southeastern europe over the past few years,1
"together
with rising consumption and a favourable development of investment this provides conditions for
further rapid growth in sweden too",1
a better use of facilities resources and synergies increase financial efficiency and extend the sense of ownership of the university in the population at large,1
vigorous efforts have been devoted to financial inclusion with chinas inclusive financial indicator system formed and improved and the coverage expansion of basic financial services prioritized,1
the banking sectors adaptabilityshown by its rapid introduction into the system of new financial instruments has increased theavailable range of financing sources,1
"more fundamentally i believe that the trend in productivity has ratcheted up and this development has been 
the driving force behind the recent extraordinary productivity growth",1
financial services has a tremendous role in contributing towards a more equitable economic growth and a more sustainable development,1
meanwhile smaller foreign banks are expected to develop new strategies to grow and to increase participation in the domestic economic activity through expansion of the necessary skills and product development thereby enhancing their value addition in the economy,1
in the postcovid era digital banks will play a pivotal role in the growth and development of the economy,1
strengthening the linkages between industry and universities would enhance the socalled knowledge triangle and lead to the digital transformation of the economy an increase in the stock of knowledge and productive capital the development of outwardoriented sectors and more generally to a knowledge economy and society,1
importing the stabilityoriented policy that had long been conducted in the emus core countries helped to create better conditions for future growth,1
"in tandem with acceleration in the rate of investment in the economy there has been 
evidence of a pickup in productivity and efficiency of capital use",1
"the growth of asset management in italy
in italy the spread of asset management products has increased appreciably in recent
years approaching the levels achieved in the other leading countries",1
they will also support the alliances strategy and outreach plans to expand the membership network promote green finance market and product development and spearhead knowledge sharing and thought leadership activities,1
financial development goes hand in hand with financial integration,1
concurrently for the past several years emerging economies have been the prope lling force behind global economic growth,1
the global integration of national economies continues at a significant pace,1
in this respect enhanced powers for the european securities markets authority esma and better coordination with the national competent authorities will help strengthen the implementation and enforcement of rules,1
overseas filipino remittances and bpo sector revenues continue to drive our economy,1
in the euro area domestic demand has contributed to the recovery helping to create 114 million new jobs since mid2013,1
"the role of the
financial sector in mobilising and allocating resources both within national economies and across
geographic boundaries has expanded commensurately",1
these developments signify the key role of the sukuk market in facilitating the economic development process,1
this reflects the close and vibrant communities and networks within cities that can be drawn upon much more quickly and effectively to deliver solutions that will benefit the community,1
"exports is expected to be more diversified and grow stronger while the fast growing 
imports is in line with robust investment and consumption",1
and as usual the riksbank has been at the forefront of it with regard to both policy invention and implementation,1
there was higher investment and stronger private consumption in emerging market economies,1
the key building blocks are the strengthening of financial infrastructure such as the payments and settlement system the development of money and bond markets and in the implementation of financial reforms involving the deregulation and greater market orientation and liberalisation resulting in greater integration with the global financial system,1
"the economic and financial regional integration has also been reinforced by a higher level of 
regional cooperation",1
a more resilient euro area banking system has been able to respond to the impetus originated by our monetary policy and facilitate the recovery in credit we have witnessed so far,1
it is also key to enhancing the international competitiveness of chinas financial market as well as its capabilities to serve the real economy,1
eu cohesion policy and the european investment bank also support the economic recovery provided that administrative efficiency at the national level is strong enough to allow for the absorption of available funds for the most productive uses,1
the financial infrastructure of the banking sector was enhanced further in 2018,1
this contributes towards the overall objective of generating inclusive growth that enhances the prospects for job creation,1
"in 
the past 10 years the global economy has grown at an annual rate of 36",1
"overall this enables us to work 
to a greater extent towards achieving a sustainable development in both lending and economic development",1
"similarly technology 
development in transportation enabling faster speeds enables people to live at greater distances thus 
contributing to the expansion of city size",1
in a number of countriesin southeast asia the economic and financial conditions have improved,1
the asean integration framework that is geared toward creating an asean economic community means that for financial markets particularly for foreign exchange and securities transactions are expected to be more fluid,1
major progress has been made in a range of areas that are critical to longterm economic development not least of which was attaining a much more sustained level of macroeconomic stability across much of the region,1
as the productivity of the economy increased confidence in the future grew and this made both investors and credit institutions more willing to take risks,1
the bank exploited those synergies in august 2013 when recognising the greater availability of liquidity insurance provided through our facilities and banks improved capitalisation we reduced the required level of banks liquid asset holdings to help support lending to the real economy,1
with better access to finance growth opportunities could be better harnessed while the effectiveness of monetary policy transmission could also be strengthened,1
"these developments 
have been strongly influenced by the progress of international financial integration above all in europe",1
"the current economic conjuncture
the euro area recovery is gaining momentum broadening across sectors and countries",1
in our case these fdis in automotive and electronics have contributed primarily to our economic growth in regards to manufacturing,1
"industrial production has generally advanced solidly business investment in equipment and software continues to  rise briskly and us exports have grown 
at a robust pace",1
"the additional strength has been concentrated in the emerging countries 
with growth in china and india running at a pace of around 10 per cent in 2010",1
in parallel to our growing economic ties our financial institutions have also ventured into each financial systems further strengthening our financial and economic connectivity,1
"domestic struct ural reforms in the emerging economies are unlocking the pentup 
domestic demand and in turn enabling a greater realisation of the huge potential for growth",1
"these
developments are consistent with recently published forecasts which foresee an upturn in economicgrowth in the course of this year",1
india has indeed been very economical in use of capital and therefore the growth in productivity has been relatively high in india since the mid1990s,1
in leading organisations the successful integration of risk management with strategic and commercial decisionmaking is creating important competitive advantages that are likely to be sustained over the longer term,1
the global expansion of recent years has resulted in  strong growth in norwegian export industries,1
they recognised that when financial services are delivered in accordance with principles clients are enabled to use financial services well and provides the foundation for future business and expansion,1
add to this the dramatic increase in both trade and financial integration in the asian region,1
"the economic expansion also gains impetus from export performance which is 
estimated to improve in line with improved commodity price",1
"second many commodity producing countries es pecially in africa and latin america have 
benefited through better terms of trade and increased export earnings as well as increased 
economic activity by catering to the rising  demand from asia",1
"asias export
orientation has long been a key focal point of strength to which the recent recovery attests",1
"rmb business has become an important driving force 
behind business diversification of macao financial institutions and the healthy progress of the sector as a whole",1
"more positively the greater proportion of emergingmarket growth in the overall growth of the 
global economy should create new opportunities particularly by supporting commodity prices",1
"to be sure in recent years we have seen impressive advances in the degree of integration of 
international capital markets",1
"associated with and leading to the global integration of financial markets is
the trend of financial liberalization and increased competition",1
"macroeconomic measures have provided a positive environment that contributes to improving the 
enabling environment for businesses",1
this positive development in the tourism industry over the past four years is attributable to among other things an increase in our room capacity with the construction of new hotels increased airlift and more marketing efforts to promote curaçao as a tourist destination,1
the increased use of digital payments brought about by covid19 could fuel a rise in digital lending in the current decade as companies accumulate consumer data and enhance credit analytics,1
"conclusion
there are many signs that the swedish economy is growing more rapidly",1
productivity growth in turn has always been and will continue to be the primary source of increasing prosperity,1
"many in fact
argue that the pace of innovation will increase yet further in the next few years as financial markets
increasingly intertwine and facilitate the integration of the new technologies into the world economy",1
advanced economies together with large emerging economies are in a phase of full recovery underpinned mainly by the boost in aggregate demand,1
new horizons are also fast emerging following legislative and regulatory changes in several nontraditional markets that have now emerged as the fastest growing segment in the international financial system,1
given the dominant role of the banking system in financial intermediation within the regions economies the successful implementation of abif represents a key catalyst to drive deeper integration and enhance the regions growth potential,1
sales and trading revenues were bolstered by the acceleration of financial innovation,1
this not only played an integral role in enhancing the effectiveness of our monetary policy transmission it also encouraged a more marketoriented financial system,1
the recent changes are aimed at enabling financial markets to enhance allocational efficiency in the use of resources and thereby contribute to economic development,1
more generally the signalling effect of the app has been visible in solidifying business and consumer confidence underpinning a broadening economic recovery,1
"for
central and eastern european banks this overall development means that they will face a streamlined
competitive eu banking system well experienced in surviving in the competitive environment of theeuro area",1
the lower exchange rate is likely to help export volumes outside the resources sector and of late better trends have been observed in some services export categories including tourism and education,1
the banking and payments systems industry has made this a key priority in recent years,1
davao region is an emerging investment hub and is becoming a sustainable place for global business ,1
as mainland corporates continue to reach out and expand their trade and investment in the br region and elsewhere there will undoubtedly be wider use and acceptance of rmb as a currency for trade financing payment and store of value,1
"financial markets in the region are becoming pa rt of broader global developments which fuels 
financial integration liberalization and financial innovation",1
one key contribution has been lithuanias participation in the eu twinning projects aimed at promoting cooperation between public institutions in the eu and eastern partnership countries,1
the manufacturing sector alone had real fixed capital formation growth averaging 37 percent a year and grew by an annual average of about 40 per cent,1
" the movement of people within the region will become easier in support of activities such as
tourism intergovernmental services exchange of skills and the mobility of labour",1
that of the attractiveness of france and the paris financial centre today the richness of a financial ecosystem that boasts one of europes most impressive talent pools and lastly i believe the quality of the public regulators and the supervisor  the acpr,1
this results in a more efficient allocation of the resources available supportfor capital formation and better growth prospects especially for backward economies,1
emerging economies are well placed to enjoy strong and sustainable growth in the years to come therefore contributing to sustained global demand,1
"conclusion 
with the increasing levels of globalisation of the indian banking industry evolution of universal banks 
and bundling of financial services competition in the banking industry will intensify further",1
"as a result crossborder flows of goods services and capital are growing at a markedly faster pace 
than world production",1
furthermore to the extent that we live in a very competitive global economy nafta has meant that the north american region is better prepared to compete with the rest of the world,1
in the long term the parallel opening up of product markets and financial markets has proved to be an enduring model of success in germany,1
in contrast this tends to boost petroleum investment and household confidence in norway,1
"as trade integration within the euro area becomes stronger the region is also 
becoming more open to the outside world",1
digital economy has become a key driver of global economic recovery and development,1
the bsp has always been at the forefront of reforming the digital payment ecosystem which provides an important backbone of a digital economy,1
"in the meantime their wealth 
coupled with abundant funds accumulated in oilproducing countries has caused a significant increase in the international flow of funds",1
as for the outlook emerging economies as a whole are likely to gradually increase their growth rates as advanced economies particularly the united states have positive effects on them triggering a pickup in domestic demand,1
"not surprisingly the overall consolidation of infrastructure has been accompanied by increasing technical 
linkages and interdependence within and across markets",1
"the banking sector  is an example in which information technology infrastructures 
have had implications on the economic development of many nations across jurisdictions",1
fintechs are innovative financial technology firms with the capacity to provide a variety of financial services that can include enhanced benefits such as lower transaction costs a more efficient financial intermediation process and better access to financial services for a larger section of the society,1
it is equally significant for the east african region which increasingly is viewed as an attractive destination for business and investments,1
"since 1994 the african economies have on aggregate traded significantly
with the asian economies reflecting the vast potential benefit that african countries stand to gain from
a vigorous and sustained recovery in asian economies",1
these positive developments are supported by the broadbased growth of the global economy,1
the overall economy scored remarkable gdp growth of 262,1
the importance of financial markets has long been realized by the bank of thailand as being the crucial part of growth potential,1
through these bodies zambia is looking to leverage its own potential through projects such as the northsouth corridor under comesa which seeks to open up efficient transport routes for the flow of goods service and people from the south to the north of africa,1
"and the impact of our measures on euro area gdp is also estimated to be sizeable helping raise output by around 15 in the period from 2015187
the latest data show that these positive effects are only gaining in strength as our measures work their way through the economy",1
"by giving domestic firms access to 
new markets trade promotes efficient specialization permits economies of scale and increases the 
potential returns to innovation3 us firms increasingly seek to expand production and profits through 
new export opportunities indeed us exports grew about 9 percent in real that is inflationadjusted 
terms last year",1
markets in turn offer a richer menu of products and services that address the evolving broader needs of financial consumers,1
this will further strengthen the industry through stronger financial condition enhanced management and governance more synergies and economies of scale and wider market reach,1
chinas gdp grew by 07 percent in the first three quarters and is expected to achieve a positive growth for the whole year,1
in this regard ukraine will be on a par with countries where financial services and fintech are developing rapidly,1
over the last three years investment in the economy has generated on average 30000 new jobs net each year,1
in germany ulc growth relative to the euro area has accelerated strongly in recent years on the back of more robust wage growth and slowing productivity,1
accordingly our economy grew by 11 in 2021 posting a very strong growth performance compared to other countries,1
indeed financial innovation can render financial markets more efficient by rendering them more complete thereby allowing firms households and governments to interact in the market place facing lower transaction costs enhanced risk sharing instruments and contracting possibilities,1
it can also play an important role as a source of innovative technologies management and organisational skills and enhanced capabilities,1
as such businesses have started to rebuild inventories to levels that are more sustainable and consistent with underlying demand which has stabilized somewhat amidst easing financial conditions,1
"an efficient 
infrastructure development mainly for eac in terms of roads and railway interconnectivity has the potential to increase from 37 million tonnes in 2007 to over 16 million tonnes by 2030 at an annual rate of growth of 67 percent according to a study on the eac railways master plan",1
"investment consumption and export grew in a balanced manner domestic demand especially consumer demand became a stronger driving force for 
economic growth investment grew steadily and investment structure improved the national 
economy developed in the desired direction",1
"an expedient consolidation of the banking industry is also being encouraged through the combination 
of more stringent regulatory regime and international benchmarking of financial standards",1
improved disposable household incomes from lower taxes government financial support and remittance inflows from fijians abroad continue to underpin consumer spending,1
"the reconstruction phase is expected to begin in earnest in 2012 with residential and non
residential investment lifting growth sharply",1
the banks sports board a relatively recentinstitution has already impressive achievements to its credit and is bound to advance the course ofnational sports in the coming year also,1
"the contribution from firm dynamic processes to aggregate 
labour productivity growth and innovation also plays a major role in particular in hightech industries",1
most important it has accorded particularly high value to the applicationof advanced computer and telecommunications technologies to the generation of economic wealth,1
"first german enterprises profits 
rose sharply during the past ten years which made it significantly easier to build up capital",1
fifth the banking sector is sound and stable helping fuel growth of the economy through credit and other financial services,1
"i as to the first feature economic integration has been reflected in a marked increase in intra
euro area trade in goods and services",1
"the ex istence of agglomeration economies gives rise to 
continuing accretion of people in a settlement t hus promoting city growth",1
the ssm nonetheless increases the potential to reap economies of scale within the single market for instance by allowing banks to optimise their internal management of capital and liquidity,1
"the stable prices for many goods combined with strong disposable income 
growth means there is more disposable income to be spent on services in the cities and towns far from where the resources boom is taking place",1
and china has yet remained an important engine in support of the growth of the thai export sector,1
the bundesbanks role in this area will build on our expertise and experience as well as our nationwide presence,1
the introduction of the euro has been a strong catalyst for mergers and acquisitions in the euro area,1
"in addition toparticipating in the production of the joint spring and autumn reports by german economic research
institutes it also plays a major role for the financial markets in compiling economic analyses
particularly on account of its ifo business climate index",1
"the sector has continued to expand and we anticipate increased 
economic and investment activity in the period ahead",1
"this will al low for an efficient allocation of workers between 
sectors and firms as well as facilitate product innovation and the adoption of new technologies2 the 
last decades have seen an enormous increase in  the level of educational attainment of new 
generations in the euro area",1
in the banking sector it can reduce costs increase volumes and facilitate customised products similarly it requires banking and financial services to facilitate its growth,1
"thus market integration accelerates momentum for competition and in
turn stimulates momentum for reform in other areas of the economy and finance",1
a range of indicators have picked up in tandem with the strengthening of manufacturing and trade in the region and forwardlooking surveys reaffirm a continued mild improving trend into 2017,1
"introduction
globalisation of markets and competition has been a major driving force for the economic
development and policies of latin americas economies",1
"in addition us capital markets today have a 
decisive impact on developments around the globe",1
the committees recommendations aimed at improving the allocative and functional efficiency of the banking sector while putting in place a vibrant diversified competitive and efficient system,1
ongoing job gains should continue to support the growth of incomes and therefore consumer spending global economic growth should support further gains in us exports and favorable financial conditions coupled with the prospect of continued gains in domestic and foreign spending and the ongoing recovery in drilling activity should continue to support business investment,1
the freedup sources of capital were increasingly channeled to consumer credit both housing and nonhousing which was provided for the most part by the banks and has been characterized by a high rate of growth in recent years,1
in a world that is becoming more and more digitised technological advancement will be the key success factor,1
it also enhances further the ability to provide viable lending to businesses and households alike contributing to the efficient functioning of the real economy,1
stability which we have achieved and which we maintain encourages dynamic investmentbased growth and employment and wages are rising,1
"as i noted the growing importance of the innovative technology sector has spurred productivity 
growth",1
within the region domestic demand has generally been resilient and overall growth this year will receive additional support from the stronger performances of export industries,1
this increased household lending helped to heighten housing market vitality to stimulate consumption and to enhance banks profitability,1
"the bank of albania is confident that the financial market in albania has already created a 
complete physiognomy",1
"this may be associated with 
the establishment of region wide production and trade networks i n asia",1
and foreign direct investment will continue to be a significant source of knowledge and technology transfers as well as productivity improvement,1
the swedish innovation we celebrate today i believe is a vital part of the financial foundations that support the continuation of rising prosperity,1
indeed the accommodative policy stance of recent years has supported the recovery in part by providing increased incentives for households and businesses to take on the risk of potentially productive investments,1
in addition to clearing the extended use of electronic platforms also contributes to the resilience of the european repo market,1
the bank continues to believe that the reduction in our interest rates and rising disposable incomesbolstered by recent tax cuts should help to support the expansion of domestic demand in canada inthe second half of the year,1
also the use of the euro will rapidly develop worldwide inproportion to the external trade of the european union which already ranks first in the world,1
"while china will manage to sustain strong growth and to open further its internal market as part of the wto membership process we expect the trade and financial ties between china 
and the eu to grow even stronger",1
this is partly a consequence of the improved efficiency indicators associated with the consolidation and restructuring efforts made in the sector in recent years,1
"not only does greater development spur the deepening of capital markets to finance investment projects but deeper capital markets themselves may act as a spur for 
growth as they improve the efficiency of the financial intermediation process levine 2005",1
as all industrial countries are likely to experience similarforces cooperation is key to our continued success,1
the institutes efforts to support the professionalisation of the islamic financial services industry is part of a long journey that we embarked on some time ago forming a key step towards achieving a vision of an industry that is rich with talent,1
looking forward the bank of greece expects economic activity to pick up in the medium term with gdp growing above 20 in 2018 and 2019,1
"recent global economic developments and prospects 
the world economy has been expanding at a strong ra te over the past few years",1
in particular capital goods investment in 2006 grew by more than 10 and in recent quarters its rate of expansion has been around 13,1
for example the development of instant payments infrastructures has helped develop new markets for mobile p2p ecommerce or pointofsale payment solutions which may become a new standard of payments in some areas,1
"consolidation of the banking industry has been a prominent feature of many of the worlds leading
financial centres during the last decade",1
"over the last years private loan has improved considerably for 20052006 it recorded a cumulative growth of 175 per cent which is the highest growth recorded in the region and the 
bis review 1022007 1
 central and easteuropean countries",1
in recent years in accordance with innovation in information technology and rapid popularization of internet mobile phones and other digital outlets wideranging financial innovations which are often referred to as fintech have been taking place,1
commercial real estate cre is a major source of asset growth and in our geography real estate continues to be in high demand and continues to outperform certain parts of the country,1
"emerging economies in particular in the east asian region participated in this globalisation process 
and benefit ed from the enhanced trade activities",1
on the production side economic growth was propelled mainly by the robust performance of the services sectors,1
financial inclusion the provision of cost effective and quality financial services to all segments of society has been acknowledged as an important structural enabler for economic development and progress,1
with a view to further promoting innovations in financial services the reserve bank has announced an innovation hub with a focus on new capabilities in financial products and services that can help deepening financial inclusion and efficient banking services,1
we also must notice that economic prosperity has almost always been inextricably linked with international trade and commerce capital movements are recent phenomenon,1
in this connection the bsps initiatives to help develop and deepen the domestic capital market will present the banking sector and the sss with more opportunities for investment diversification,1
we have also replicated the success of the real estate investment trusts model for the infrastructure sector further adding to the diversity of our capital markets,1
research on the bank lending channel and the effectiveness of our credit easing programme is particularly welcome and was well represented at our workshop,1
we share economies where commerce is rapidly becoming digital and financial systems are evolving in response,1
the financial resources you have and the considerable space that exists for financing the economy show that financial efficiency in the banking activity could improve significantly,1
as i touched upon initially financial innovation and financial integration have led to explosive growth in the international movement of capital,1
the responses you gave and the information you provided underpinned enabling decisions that allowed the philippine economy grow by 64 percent in the first quarter of 2017,1
second at a microeconomic level germanys export performance supports both upstream producers and downstream producers in the rest of europe,1
one area where our help is frequently solicited is web design because our website has been recognized as the best in central banking,1
we should expect increased treasury activities taking place here bigger demand for a wide array of financial products and importantly more promising career prospects for the treasury practitioners including our younger aspiring professionals,1
during these last 50 years jpm singapore has grown to become an important node in the banks global network,1
as the financial integration accelerated crossborder banking activities also accelerated in the 1990s,1
consumer spending has been an important driver of growth and the most recent readings have been very positive,1
"market integration in the euro area has also brought about dynamic changes in the economic
infrastructure including transportation electric power telecommunications and finance",1
"accordingly demand for better public 
services recreation activities education and financial services is likely to grow further",1
this has ensured that financial intermediation continues to be effective in providing support to economic activity,1
as second district community banks grow in line with their national peers we are encouraged by the increased reliance on core funding and strong asset quality,1
"wealth is growing most rapidly in the asiapacific region accounting for more than half of the 
increase in global wealth last year",1
"intraregional trade activity is also rapidly increasing signifying the deepening of economic 
ties within the region",1
two components in the governments roles are particularly important to supporting the potential future growth of the economyinvestments in physical and in human capital,1
"together these efforts are expected to encourage more activity in the flow of funds 
with a pick up in cross border transactions both inter regional and intra regional",1
more fundamentally i believe that the trend in productivity growth has ratcheted up and this development has been the driving force behind the recent extraordinary productivity growth,1
"fueled by the strength 
of the global economy demand has emanated from new markets such as china india and 
russia",1
these initiatives will promote innovation increase productivity and facilitate the transition to a knowledgebased economy,1
the growth acceleration of the indian economy during 200308 is attributable to a host of factors,1
earlier the cohesiveness the sense of purpose and urgency of the g20 did indeed contribute to restoring confidence in the global financial system and the coordinated policy stimulus was an important catalyst for the ec onomic recovery,1
"in addition domestic demand has a more significant role in 
driving the growth",1
as a wellconnected international financial centre singapore can be the base for global players to tap into opportunities offered by a rising asia,1
in this respect eu financial groups will be instrumental factors for building bridges of cooperation among economies of the region and its transformation into a larger better integrated more competitive more profitable and prosperous economy eventually leading to a prosperous economic future through economic cooperation,1
our economic analysis suggests the following regarding growth incoming information clearly confirms that the euro area economy continues to expand at a pace significantly stronger than expected,1
as we move towards increasing this internationalisation of islamic finance and thus towards greater global financial integration it will contribute towards a global growth process and financial stability that will be mutually reinforcing,1
"credit to
the private sector also continued to expand rapidly in september 1999 at a rate in excess of 10",1
in fact hong kongs position as an intermediate trading hub for mainland chinas external trade has become more prominent over the past decades,1
"this has been reinforced by the 
strengthening of the domestic demand in the region",1
with its function as a cultural centre kbi libraries will become a place where cultural diversity and local wisdom is read stored studied and celebrated,1
"it can provide markets for exports allow traded goods industries to achieve more optimal economies of scale and strengthen competition in markets thereby 
stimulating productivity  growth",1
looking forward this initiative should help enhance financial connectivity and improve operational flexibility of businesses in the region,1
"information technology has brought us many new opportunities in particular 
mobility of people goods and ideas",1
in the last decades global economic growth financial innovation and financial globalisation have progressed hand in hand,1
"the significantdevelopment in the it areas has also raised the expected rate of growth for the us economy as a
whole",1
"indeed the dynamic effects of a common market are often described as the longrun consequences for the economic growth 
of member countries as a consequence of increased market size and exploitation of 
economies of scale increased competition learning by doing and increased investment",1
furthermore the continued growth momentum in the region has created demand for infrastructure,1
over the recent years the bank of albania has been working closely with prominent international partners such as the gtz in various projects which aim at enhancing and further consolidating the work of the bank in achieving our main objectives,1
"the previous trade 
linkages between the middle east and asian regions also has potential to strengthen being the two of the fastest growing regions in the global economy",1
stock prices rose further responding to the growing optimism about greater stability strengthening investment and faster productivity growth,1
much faster data transfer and the increasedtransparency of information in a knowledgebased society could enhance efficiency,1
"moreover spillovers from increased housing 
demand  such as wealth effects from higher house prices purchases of complementary goods such as furniture and appliances as well as strengthening bank balance sheets  have in the past provided a powerful additional impetus to the recovery",1
the increased competition in credit markets has in turn compressed rates driving lending and improving the macroeconomic picture,1
insurance markets have also grown in tandem with the economy,1
finally greater investment in rd and innovation by spanish firms would enhance their competitiveness and contribute to generate more growth through higher value added,1
the saudi banking system has played a vital role  in the enhancement of the national economy,1
"greater efficiency in turn has tended to support relatively higher wages in the sectors most exposed to international trade2
mexicos economic integration with the united states has been strengthened with the opening of the economy",1
"technological advancement enables a broader and inclusive banking sector and in 
the process is a key driver for the sustained and inclusive growth of the economy",1
in tandem with these changes we have seen the modernisation of the financial sector that has also become increasingly more diversified to meet the new requirements of the economy,1
exports of goods and services are expected to remain one of the growth drivers in 2015 with the global economic environment projected to improve as growth rates pick up both in the eu and the other markets and world trade strengthens,1
whereas european financial market integration is being given a special boost by the introduction of the euro international integration on the supply side is based on increasing cooperation with the worlds financial centres,1
consumer confidence and trust in a wellfunctioning market for financial services promotes financial stability growth efficiency and innovation over the long term1,1
the norwegian business sector experienced a long period of high productivity growth,1
in ten years now islamic finance has experienced accelerated growth and the financial landscape has undergone a major transformation with great progress achieved on many fronts,1
last year saw the introduction of three strategic initiatives that aspire to drive and support the transformation of our talent development infrastructure in an impactful manner,1
the latest growth of secured loans is the highest since the recovery begun in 2004 and it takes place in a context where automotive sales to the domestic market reached new record highs,1
economists classically think of globalisation as a process of market integration that leads to price convergence across markets for goods labour and services worldwide as well as to growing trade and financial flows,1
the largest employment gains are registered in the sectors that are key from the aspect of economic growth and development notably manufacturing sectors,1
"second a robust consumer credit market facilitates the growth of consumer durables industries eg computers autos and appliances in which new technologies mass production and economies of scale have historically created employment growth and new 
wealth",1
"also the bank of albania has been a productive partner in coordinating the economic policies of the country and in the performance of the agreement 
with the imf",1
"over many years 
the institute has played an important role in the intellectual and public policy life of our city and our country",1
the integration of digitisation strategies in the business model of our domestic players is already taking place with the recent launch of the investment account platform,1
by many measures nations and people are closer than ever in terms of trade investment information exchange and physical mobility,1
"in the second half of 1999 growth was recorded in nearly all the major sectors of the
economy",1
by contrast construction activity in other european countries has remained an important mainstay of economic growth,1
in particular the share of foreign banks in wholesale banking foreignexchange business and financial market activity increased significantly,1
"in countries with a
highly developed financial system we observe that a greater share of investment is allocated torelatively fast growing sectors",1
in the coming years economic activity in portugal is expected to continue to benefit from a relatively favourable economic and financial environment,1
the strong fiscal and monetary measures complemented by appropriate health interventions helped boost the countrys better than expected economic growth of 56 percent in 2021,1
china and some other emerging economies have subsequently rebounded strongly and during the second half of last year we saw growth resume albeit at a moderate pace in most of the advanced economies,1
global economic growth at market prices is now expected to be about 3½ this year and 4½ per cent in purchasing power parity terms,1
consensus forecasts for 2010 growth in the three main regions of the world economy have improved significantly over the last twelve months as chart 1 shows,1
"looking ahead to promote the consistent growth and structural intensification of asian trade 
i believe efforts must be stepped up for greater integration of the regional market",1
"in the past two decades financial innovation and liberalisation have made important 
contributions to the overall productivity of  our economies",1
with access to information communication and transportation technology and the advent of multinational companies production hubs proliferated at multiple locations leading to the emergence of global value chains,1
with the associated creation of value and employment the banking industry was transformed into a cornerstone of the swiss economy,1
the interactions ofdevelopments in both the financial and real economies have expanded crossborder asset holdingstrading and credit flows,1
"over the five years to 2008 a period of exceptional strength in the global 
economy the terms of trade rose by about 60 per cent equivalent to about 12 per cent of a years gdp  about 140 billion  in additional annual income",1
given the economys current position and its performance indicators it is expected to continue its strong and comprehensive growth in the coming years,1
looking forward we are confident that the ongoing economic expansion will continue to firm and broaden,1
in norway banks have made great headway in terms of digitalisation,1
our experience with free capital flows can help us ensure that in the future we harness their benefits and multilateral cooperation is key to achieving that,1
to this end the improvements in cost competitiveness of recent years provide considerable room for higher exports in goods and services in the near future,1
likewise growth and productivity of the financial services sector are important in their own right as a contribution to overall economic activity,1
"global economic recovery 
the global recovery which began in the second half of last year can be characterized as 
multispeed and policyled",1
"this has also begun to boost equity and credit 
markets since the spring of 2009 thus im proving banks earnings form brokering and 
proprietary trading",1
our prospects for economic growth are highly correlated with the prospects of our large trading partners,1
"the emergence of new financial centres in asia and the middle east 
and their increased connectivity has strengthened the foundations for intra and interregional linkages in trade and investments",1
"the energy sector growth facilitated a boom in  fiscal revenues and expenditures the latter 
providing the impetus for vibrant activity in the nonenergy sector",1
all told we estimate that half of the extra gdp growth achieved during the current recovery has been attributable to our policy with a material contribution from oil prices as well,1
thus the growth of the german economy is closely correlated with the growth of this to us important income flow,1
over the years the wharton community has very much recognised the potential of the asean region as a growing force in the global economy,1
greater trustworthiness will make it easier for the financial industry to perform its role in supporting economic activity and rising living standards,1
"the acceleration in economic growth during 1999 enabled the creation of 375000 dependent jobs in
market services",1
"going forward our trade geography should improv e as the recovery in advanced economies 
and particularly the united states gains momentum",1
this sector with a size of around 15 per cent of combined balance sheet of scheduled commercial banks scbs has been growing robustly in recent years providing an alternative source of funds to the commercial sector,1
with the further development of the private debt securities market financing of thedomestic economy is now more diversified,1
an increasing number of economies across both advanced and emerging markets are benefiting from the recovery,1
the islamic development bank has been pioneering and instrumental in the development of islamic finance and has been an inspiration in driving its progress and evolution,1
the stronger domestic demand and growth in the services and agriculture sectors have benefited the sme sector since the majority of the smes are operating in these sectors,1
reflecting these actions the albanian economy has made notable progress towards steady and longterm growth,1
the mexican economys current upturn is consolidating in a context of solidifying us growth,1
in recent years cooperation between supervisors has increased significantly on the back of new global and european standards for homehost cooperation,1
"and just a 
few months ago we only just started talking about a pickup in global growth driven mainly by robust demand in emerging markets",1
the digital revolution creates many opportunities for financial players as for consumers an increasing number of more accessible financial services more complete customer satisfaction,1
after three decades of high speed growth propelled by chinas rise to become the second largest economy and the largest trading nation all global mncs are expanding their presence in asia and the share of global revenues generated in asia continue to rise at a staggering speed,1
through training activities promotion of albania as a business destination and participation in discussions on the development policies it contributes in improving the business climate and model attracting foreign investments and strengthening the economic relationships between the united states of america and albania,1
"to day mainland china is already the second 
largest economy in the world and the single biggest contributor to the worlds economic 
expansion creating nearly onefifth of the worlds newly generated economic activities",1
"emerging economies have been steadily moving 
to the fore of the international scene",1
chinas economic growth at least as recorded by the official data is remarkable for its pace and consistency during the past decade,1
these measures have substantially contributed to increasing the share of credit to the private sector in total credit which rose by 24 percentage points from 313 to 553 over the last decade,1
very high levels of confidence in the business community saw robust growth from already high levels in capital spending,1
with the progressive move by china towards the internationalisation of their financial system in the years to come there will be increased interconnectedness of the chinese financial system with the rest of the region and the world and consequently a wider role of the renminbi as it continues to grow in importance in international trade and financing activity,1
the bank has also reorganised its supervisory functions because of our increased involvement with the retail sector and is putting increasing emphasis on consumer protection and education,1
business investment in recent years has risen to a very high level relative to gdp one of the highest among the developed economies graph 2,1
"south africas financial and trade links with africa 
have been increasing in recent years and the continent is fast becoming the major bis central bankers speeches 3
 destination for our manufactured exports",1
"to sum up financial systems provide an important contribution to productivity innovation 
and noninflationary economic growth in the long term",1
our working methods and process have become more agile and the bundesbank has taken important steps in the process of digitalisation,1
in addition to bringing business opportunities and profit to banks customers confidence and trust in banks are also the cornerstone for banking and financial stability,1
the setting of operational and technological standards aimed atexploiting network economies may well be easier,1
"moreover foreign direct
investment in sweden has multiplied and it is mainly direct investment from eu countries that hasincreased",1
"several subsectors that support 
the improvement of the jsx composite confirm the existence of diversification in the sources of wealth creation in the economy",1
marketbased finance has grown rapidly in recent years and has become a central part of the global order,1
in china substantial stimulus measures have boosted domestic demand  including consumer spending and infrastructure,1
" growth in the us is gaining momentum supported by consumer spending and the 
strengthening of the housing market",1
"this further underscores the econ omic integration of both the middle east and asian 
regions and further enhances linkages in the new silk road a manifestation of the thriving global 
islamic finance market",1
"while in pakistan there is an emergence 
of interdependence of the banking sector and capital markets globally regulatory frameworks allow a 
more systematic fostering of the financial sector interlinkages",1
some asian economies are also experiencing very strong rises in house prices reflecting the favourable economic and financial climate graph 10,1
furthermore by strengthening commercial ties promoting cultural understanding and deepening community relationships crossborder trade helps to nurture harmonious relations amongst countries in the region,1
the strong economic development in china and then india also helped to propel the region ahead,1
"we expect that the canadian economy will strengthen towards the end of 2003 partly thanks to a 
pickup in economic activity in the united states",1
fdi flowed mainly from the united kingdom and the united states into tourism principally the integrated resorts scheme,1
in positive pursuit of developing more financial services by our practitioners the banking sector was able to score an aggregate profit of mop417 billion for the first three quarters which was again a positive yearonyear growth,1
economies that are more open have generally seen more rapid growth both in incomes and in employment,1
"there are positive aspects of qqe on asian economies since economic recovery in japan is likely to encourag e imports from the region contributing to an 
expansion of regional aggregate demand",1
in these 25 years the bank of albania has served to the countrys economic and financial development supporting successfully the development of an efficient and stable financial system,1
while the world trade has on the average expanded by 9 percent over the period 20022006 asias trade with the middle east has increased on the average by 30 percent,1
in the digital economy of future data connectivity agreements among countries will become as important as todays free trade agreements,1
it also allowed the financial markets to facilitate the transmission of policies to support the economic recovery,1
through jc3 these complementary developments are being coordinated and integrated to build a credible foundation for the financial industry to support the transition efforts,1
"this is particularly true for the euro area economy where the outlook for growth has recently
improved contributing to more optimistic prospects at the global level",1
the sector has continued to grow and expand both locally and regionally to new markets within the east african region and beyond,1
this went hand in hand with the maintenance of the competitiveness of the french economy,1
"companies in korea and many other asian countries have become formidable
worldclass producers in a number of manufacturing sectors using advanced technologies but ina number of cases they permitted leverage to rise to levels that could only be sustained withcontinued very rapid growth",1
and given our highly educated population canada has the capacity to innovate in green technologieswhile the magnitude of the transition itself provides a strong motivation for such innovation,1
these contributed to improved business confidence and macroeconomic stability and growth that the economy enjoyed,1
"and the innovations in new  products and new processes which drive 
productivity growth are financed in part by bank lending",1
education and training is the most important factor driving economic and social development,1
"this development has helped foster the
investment boom that in recent years has contributed greatly to the strengthening of us productivity
and economic growth",1
with the continuing growth of the mainland economy and its increasing financial integration with global markets it is natural that rmb will be increasingly used in international transactions,1
"bis central bankers speeches 3
 graph 2 
 
 
compared with last time i showed you this it is pleasing that the us and the uk have 
recorded some solid growth and new zealand  one of australias closest trading partners  has been growing particularly well as the task of rebuilding much of their second largest city gets into full swing",1
"finance has become increasingly import ant in adjusting economic activities and in 
promoting social and economic development and more closely connected with peoples daily life",1
"japan and the regions recovery and growth 
daiwas increased focus in south asia attests to the dynamism of the region",1
"importantly growth was driven 
by a pick up in labour productivity and by faster employment growth",1
"the 
resulting rise in canadian incomes has also boosted demand by canadian households and 
businesses",1
nevertheless with overwhelming outpouring of international support including from guam and with growth momentum on our side our economy still expanded by 72 the second highest in asia next to china,1
thanks to openingup the chinese financial sector has become stronger and the domestic financial market has progressed by leaps and bounds,1
"as market players across continents participate in the expansion of inter
regional investment flows it has enhanced financial linkages among the major regions",1
balancesheet repair in japan was completed in the early 2000s supported by global economic upturns such as strong growth in the united states and in emerging economies,1
a big lift in productivity growth has a beneficial effect on many areas of the economy,1
i expect to see financial centres within the euro zone growing in size over the nextfew years,1
"we also know that the pace of 
global financial and economic integration will continue unabated",1
given the factors and stage of economic development this cooperation is expected to continue in the period ahead with italy remaining one of the main partners for the albanian economy in spite of dynamics in the composition of our trading partners,1
so defined institutions have long been recognised as key ingredients of stability and growth,1
with the gains of its policy initiatives over the years as its bedrock we are setting our sights on digital innovations,1
"in the world trade statistics according to 
which exports of goods and services have increased fivefold since 198020",1
once it begins operations in 2015 we hope to see a new wave of infrastructure financing that will enhance connectivity in the whole region,1
"concluding remarks
mexico has seen an incipient economic upturn this year driven by stronger external demand and higher domestic spending",1
this institutional development also has encouraged higher competition in the financial system leading to greater efficiency,1
the recent reform measures have facilitated greater linkages of the domestic market with the global markets,1
but it is a measure that should be conducive to recovery in the confidence of consumers and businesses in the medium term,1
moreover increased competition has provided a further stimulus for the introduction of structural reforms to enhance the efficiency and flexibility of the european economy,1
"related to these positive developments direct investment into japan has substantially increased in
recent years",1
since 2009 publicsector employment has grown by about 300 000 people,1
asia is seeing the payoffs from the financial reforms institutional development and the strengthening of the financial infrastructure,1
"strikingly the global recovery is being led by the asian emerging market countries of which 
club korea counts itself a member with the rapid growth of india and china and the 
consequent expansion of intraregional trade",1
i would say that this has become increasingly the case in recent years as the options for making domestic payments have increased particularly with the innovation of faster payments in which the uk has been a leader,1
these projections assume that the completion of the review in the first half of 2016 will from the second half of 2016 onwards bring about significant positive effects for the liquidity of the financial system reduce uncertainty and improve the economic climate with important implications for the evolution of key components of domestic demand,1
the endgame is expected to be more competitive product offerings that will draw more kenyans into the banking space,1
nonbank financial intermediation has experienced strong growth globally over the past decade as highlighted by previous central bank work in this area as well as by other national and international financial stability authorities,1
first several emerging economies  china in particular  have integrated in the global economy to an unprecedented degree,1
these and other structural reforms in the pipeline will continue to play a significant role in propelling the economy toward a balanced sustainable and inclusive growth,1
"according to research done by the international monetary fund imf world real gdp increased by around 50 percent over the last decade from 1996 to 2006 indicating a high 
growth rate",1
collectively this has contributed to a recovery in the euro area that is now largely driven by domestic demand,1
at the bundesbank we recently observe a growing interest in sustainable investment strategies within the public sector,1
moreover the accelerating use of newer technologies has markedly enhanced theflexibility of our productive facilities,1
on the demand side increased capital investments and public spending especially since the past year have complemented robust private consumption in stimulating economic activity,1
these economic reforms have been accompanied by financial and exchange rate reforms geared towards modernising the economy and financial system that is increasingly more integrated with the global economy,1
technology and innovation will continue to play a pivotal role in creating a business friendly atmosphere for the msmes,1
economic integration and the setting up of conglomerates will be encouragedefforts will also be made to promote the development and sale of residential property,1
"the main factors at play in the outlook for domestic demand suggest that business
and household spending should continue to grow",1
an expansion of the countrys domestic financial markets should allow for a more efficient allocation of capital which should benefit chinas longterm growth prospects,1
for many europe is a proxy for globalisation which has created prosperity as well as strong interconnections,1
this figure reflects not only the increase in stock prices but alsothe powerful drive towards securitisation of private companies throughout europe and in particularthe take off of the new markets network,1
" the asia pacific region in particular is forecast to have the highest projected 
compound annual growth rate of 114 percent for assets under management from 
20102015",1
this movement of economists throughout the organization has helped build a deep reservoir of human capital within the bank and has fostered close collaboration between research and other areas of the bank,1
"these statistics clearly reflect the countrys growing trade and 
financial integration with the rest of the world",1
the financial services sector is well placed to play a leading role in the smart nation project,1
an important part of the developments will be to facilitate a more inclusive arrangement that would allow for greater interface and interlinkages across jurisdictions in particular from emerging economies,1
technological innovation allows financial institutions to be part of a broader and more interconnected ecosystem based on the interaction and sharing of projects and information with multiple innovative companies,1
"in many 
countries the operations of foreign affiliates are now extremely important for domestic growth with rising sales value added employment and exports",1
"the city of shanghai is now 
busy in setting up all necessary financial architecture and facilities as it is on its way to be the onshore rmb centre",1
they have invested in many new technological platforms modern payment instruments cards by the renowned international brands,1
"the
number of employed in the health and care sector has more than doubled in 20 years",1
the significant improvement in funding conditions for smes is especially encouraging as these companies provide twothirds of total private sector employment in the euro area,1
these developments have dramatically boosted jobs and incomes in these industries with beneficial spillovers to manufacturing competitiveness more generally,1
the euro area is a bankbased economy loans are the main source of financing for companies and almost the only one for small and mediumsized enterprises,1
actually by improving the longterm prospects of tourism such reforms have already helped boost investment in highquality hotels for instance between 2009 and 2014 the number of fivestar hotels increased by 34 and the number of beds by 32,1
moreover domestically focused banks remain the driving force behind the strong domestic mortgage growth,1
"while the work of the industrial revitalization corporation a public entity is getting into full 
swing unassisted and voluntary actions on the part of the private sector are also growing more widespread",1
if we manage to strengthen financial stability through digital innovation this could make supervision and central banking more effective and more efficient,1
"these have major significance for developing a market for financial services and an economy 
well integrated into the global market",1
"the sint maarten economy is also expected to 
expand in 2010 as the economies in its main tourism markets are projected to recover",1
with small businesses as primary commercial customers regional and community banks have long been and will continue to be an element of strength in our economy,1
the increased global integration has strengthened the natural tendency towards concentrated provision of infrastructural services a tendency that is further accentuated in the context of the european single market,1
and with their increasing market share these companies could help diversify the sources of credit to the economy thus fostering investment and growth,1
islamic finance can contribute more towards the growth of the global halal economy by playing a greater role in international trade facilitation,1
economic expansion is driven by broadbased factors with the reemergence of the industry sector particularly manufacturing as another key growth driver,1
"industrial performance also improved considerably with a strong manufacturing growth for the second 
consecutive year",1
now economic data show that growth in canada is becoming more broadly based and selfsustaining,1
"moving forward we can also conclude that 
the longterm prospects of the tourism industry look promising",1
"by shifting trade from slowgrowing economies to fastgrowing ones canada can participate 
more fully in the global economic transformation that we are living through",1
"fdi and domestic investments have 
increased over the years and intraregion production networks have deepened",1
with these developments private sector credit is expected to gain momentum,1
countries participating in this process have seen their domestic financial markets become deeply integrated with markets abroad,1
"in this regard the rmb is clearly expected to 
play a greater role in international economic and financial activities",1
"learning from the experience gained from the outcomes of our fi initiatives over the
years the reserve bank has taken certain additional steps to provide greater impetus to the
process of financial inclusion",1
and the ecb is determined to continue playing its pivotal role in consolidating the upswing in the economic cycle,1
at the same time research shows that having a greater share of intangible assets is related to a greater ability to create and absorb new technology,1
firms in this region will gain greater market access to 630 million people that are generating economic region that is worth usd24 trillion,1
the current high growth phase of the indian economy is also coinciding with rising domestic saving rates,1
technology  the internet in particular  has proved indispensable for remote working commerce and education,1
for rural banks this is an impetus to boost operational efficiency expand product lines reach out to more markets increase diversity lower operating cost and simply rightsize the way you do business,1
in addition the more rapid rate of technological innovation so evident in the united states has boosted the pace at which our productive potential is expanding,1
on the one hand the improved support to agricultural production the improved roots network and the consolidated trade chain for the supply of the inputs in the market drive to the improvement of this sectors business,1
in 2015 economic activity could grow by close to 1 per cent faster than our july forecast indicated,1
recently imports have increased faster than exports and this indicates that the recovery in the economy is mainly driven by domestic demand,1
"research increasingly has shown the benefits of early childhood education 
and efforts to promote the lifelong acquisition of skills for both individuals and the economy as a whole",1
"today flexible exchange rates are the norm private capital flows dwarf imf resources financial markets are much more sophisticated and vastly more interconnected and major new players are 
integrating into the global economy",1
economic integration has also helped to establish a more competitive environment,1
the bundesbanks network of international representatives is in place to comprehensively observe economic developments and the expected evolution of financial markets from within key countries and regions,1
its continuing advances in the international financial landscape have recently been accompanied by several major efforts aimed at strengthening its international financial infrastructure,1
a growing economy provides you with the incentive to build your franchise and the stronger franchise provides opportunities for businesses to grow,1
in beijing the efforts to build the four centers have been accelerating and the ability to delivery four kinds of services has been improving,1
the most significant impact of it has been the manner in which it has facilitated financial transactions across the globe,1
and as a rule that is closely linked to the economic growth of the customers region of their home country,1
gradual deregulation and liberalization has also altered the financial landscape bringing with it improved performance and enhanced resilience,1
taken together the broadening of the recovery across countries and sectors suggests that it has not only gained momentum but importantly the recovery has gained robustness,1
there has been tremendous payoffs from the development of our financial system its restructuring rationalisation deregulation and subsequent liberalisation,1
"global developments
of course canada is a very open economy and its growth is supported by what is now a synchronous global expansion",1
growing international trade and investments are indications of increasing international division of work,1
"in the post2001 period the turkish economy grew by approximately 7 percent on a yearon
year basis and considerably increased its share in the world export market",1
it also appears that the exchange rate channel may have played a particularly important role recently in transmitting economic and financial developments across national borders,1
"against this background japans economy has been recovering moderately as a virtuous 
cycle among income and spending has been operating in both the household and corporate sectors",1
if more firms can use payment systems and for longer it could simplify payment processing expand the global settlement window and increase opportunities for new entrants to stimulate innovation for the benefit of consumers and businesses around the world,1
over a period of time we have witnessed contribution of the service sector go up significantly to around 57  of the gdp,1
increasing and improving physical infrastructures investing in knowledge and skills development favouring innovation through the adoption of new technologies and supporting the reallocation of resources between firms and sectors are all triggers than can help to revitalise our economies,1
on connectedness financial integration has a key role in supporting business opportunities in asean,1
in fact private consumption is the fastest growing component of spending with some of its categories such as durable consumption increasing at rates of 50 percent annually in the first quarter,1
"this swift adaptation to the reality of the singlecurrency was helped by the successful launch and operation of the target payment system which
has facilitated crossborder transactions between financial institutions across the euro area",1
integration of domestic markets with international financial markets has been facilitated by tremendous advancement in information and communications technology,1
"this skills deepening provided one foundation on which other sources of growth enriching 
capital  were built  for example intellectual capital the generation of ideas and innovation",1
the growth in crossborder trade and investments in asia has not only provided the impetus for the development of the domestic economies but also enabled the region to emerge as an important economic bloc,1
the increased odi have also resulted into greater macroeconomic cooperation between india and other countries transfer of technology and skill sharing of rd and promotion of brand india,1
reactivating national demand has taken on a decisive role in the recovery enabling the re balancing of the internal and external components of expenditure,1
the impact of education on growth may be related to innovation as well as the adoption of new technologies,1
at the same time rapid urbanisation is concentrating ever higher economic wealth in exposed areas,1
"this specification reflects the fundamental insight that price stability is conducive to sustainable 
economic growth job creation prosperity and social stability",1
as the brazilian economy became more open to the rest of the world and more market oriented annual economic growth rose from about 24 per cent in the early 2000s to 75 per cent by the end of the decade,1
as more build build build projects get completed the positive spillover effects on private construction would also contribute to economic growth,1
"but for thailand such basic services can help support the robust  growth of 
cross border trade and investments which are important for rural development  and 
income distribution",1
there are several factors attributed to indias high growth in the recent period  improved productivity growing entrepreneurial spirit and higher savings to name the most important,1
this has been underpinned by the strong domestic demand which has become a key driver of growth,1
with contributions from project managers in those countries to further improve the technologies the overall technological capacity of the developed countries was further promoted,1
byfacilitating trade finance providing funds for growing companies and integrating domestic financialsectors into the global capital market banks have played a key role in furthering the development ofthe latin american economies,1
africa has been increasingly better managed with the improvements in governance helping to promote an overall conducive environment to growth and development,1
this growth momentum is expected to continue in 2008 in line with the sustained growth of the malaysian economy,1
in 2016 for instance the contribution of capital investments to overall gdp growth even outstripped that of private consumption,1
we should certainly point out that the growth of the real economy is supported by and feeds into a banking industry whose strength is well documented,1
of interest to the bank is the growth of the current financial service providers to complement each other in provision of financial services to a large unbanked population of png,1
thus the geography and natural environment are just what is needed and fitting for our agenda in the next two days being proximate to and illuminating the economic potential for botswana and the region not least the attraction of tourists and employment potential but also enhanced regional trade,1
petroleum industry activity has also had a stabilising effect on the norwegian economy,1
trade among euro area countries has also risen strongly,1
"this has helped incomes to recover and has supported strong growth in consumption in recent years with per capita consumption moving back towards its precrisis peak2
the impact of the economic crisis in the south west region including cork and the subsequent recovery has been broadly similar to the national experience",1
that is growth accounting or an overview of the macrofinancial developments characterizing the philippines recent rise as one of the most dynamic economies in asia and the world,1
this collaboration has resulted in increased public awareness of the availability of financial products and services across the country therefore contributing to the increase in overall financial inclusion in zambia from 373 in 2009 to 694 in 2020,1
to conclude the indian economy is much more open and globalised now than ever before,1
the canadian and us economies remain highly integrated and there is every indication that our economic ties will re main strong,1
it is also likely that cross border banking will become even more important than it is today especially where institutional arrangements such as the east african common market enable services to be traded freely across borders,1
"the italian economy 
the italian economy is benefiting from the expansion of world trade",1
establishment of these hubs can help banks take advantage of hong kongs double tax agreements with all key economies in the region more importantly our citys growing status as a nexus between mainland china and the rest of the world means that hong kong will play an increasing role in providing risk management solutions for international investors going into china and increasingly chinese investors going global just like how we successfully facilitate those investments through our connect schemes,1
first they pool the resources of small investors together increasing their participation in financial markets which helps both inclusion and the efficient functioning of markets themselves as a result of larger volumes,1
as regards electronic payment instruments as a whole card payments have been on a strong and steady growth path with the number of card transactions in the european union having almost quadrupled in the last 15 years,1
"the bank can contribute positively to the promotion of more liquid and integrated carbon markets and help clients reap the gains that will result from an increased demand for environmental 
protection",1
economic engagement has been facilitated by geographic proximity as well as two decades of life with the north american free trade agreement nafta,1
third the increase of operational capacities for supplying cash to economy the guarantee for the uninterrupted functioning of the national payment system and the reduction costs on electronic payments in lek enabled the smooth functioning of the financial system,1
the country has created a stack of open apis and digital public goods which can be leveraged by the industry to innovate and promote financial and social inclusion,1
and these reforms are delivering results today in recent years gdp and employment have grown much faster in those countries,1
global economic integration has increased dramatically in recent decades,1
one was jersey city which is leveraging its proximity to new york city to attract residents and jobs,1
this region s influence in the world economy appears to be still growing as its capital base expands,1
"moreover an improvement in corporate profits will increase
household income and this in turn is expected to boost private consumption",1
the most recent assessments show that our economy has entered into a longterm recovery trajectory,1
since 1990 asean intraregional trade has grown from 18 to 24 of its total trade and intraregional investment activities have now quadrupled since 2000 from 4 to 17 of its total investment,1
"indeed in recent years the worlds major financial centres may if anything have become
more rather than less dominant as a result of the demonstrable benefits of colocation and critical
mass particularly in the context of the higher valueadded activities",1
"this has not only strengthened international financial interlinkages but has increased the potential for 
greater economic integration and shared prosperity",1
4 4 recent research has shown that this pace of new lending growth has brought activity in line with its structural determinants,1
overseas investment provides an important gateway for domestic businesses to enter the global marketplace and in recent times india has taken some significant steps to make its presence felt in the global arena,1
its strength has helped support the growth in incomes and household consumption that we have seen,1
in its provision of safe and efficient financial market infrastructure services the eurosystem plays an integral role in strengthening the international role of the euro,1
banks intermediation capacity is strengthening via the incipient improvement in their asset quality and increased profitability,1
"in a structurally transforming economy with rapid upward mobility like india credit demand 
will expand faster than gdp for several reasons",1
myanmars leadership in seeing this through was crucial and now abif represents the single most important agreement in strengthening the asean banking system driving deeper integration and enhancing the regions growth potential,1
as we have seen policy responses both at the global and the european level have been characterised by an increasing degree of coordination,1
the liberalisation of international trade in goods services and financial capital which is being accompanied by strong growth in the crosscountry movements of information ideas and people,1
with highquality economic analysis closely linked to scientific research kof swiss economic institute will continue to make a valuable contribution in future  to ensure an even better understanding of the swiss economy,1
"from a longer term perspective greater financial integration with the rest of the world is probably inevitable with china now 
becoming the fourth largest economy and the third largest trading nation",1
an improvement in business sentiment of manufacturing firms has become evident on a global basis mainly on the back of an increase in itrelated demand and of the progress observed in emerging economies in inventory adjustments of materials,1
restructuring and newtechnology may also have increased the longterm growth potential of the us economy,1
greater domestic and crossborder consolidation in the sector could also help enhance profitability and costefficiency while paving the way for a more integrated euro area banking sector,1
a fraction of this amount invested in hotel projects would produce an abundantly bigger sustained impact on our level of economic activities,1
two special central bank lending facilities have been introduced to promote technological innovation and inclusive elderly services,1
driving the rapid growth in fx activities of the regional currencies has been asias expanding share in global trade and investment flows,1
"during the past few months the prospects for the global economy have gradually improved and the
world economy appears to be heading towards a more balanced growth path",1
this would contribute towards enhanced safety and efficiency and facilitate economic growth through greater connection with global supply chains as well as enhance greater integration with regional markets,1
the concentration of these industries in parts of our region meant that those areas were poised to take advantage of this growth,1
"thirdly the economic development of the mainland has created excellent
conditions for the continuity and further strengthening of hong kongs prosperity and stabilityeconomic development in the mainland provides a strong support to hong kongs economicdevelopment",1
"in the business sector capital spending on equipment and software appears to have 
increased at a solid pace again in the first quarter",1
"in 
addition according to recent sentiment surveys consumers have become more upbeat recently and 
consumer spending has continued to advance",1
in 2005 total resources of the industry grew by a very respectable 133 percent,1
"emphasis on communication has also been boosted by central bankers becoming increasingly aware that effective communication facilitates the transmission of monetary policy decisions to the economy thereby making 
their jobs easier",1
in particular the years 2010 and 2011 recorded a substantial increase in selffinancing 714 percent and 241 percent respectively which contributed to the significant recovery of investments in the nonhydrocarbon sectors,1
it also reflects the banks desire to accelerate the development of the industry and promote its continuous renewal by making it easier for qualified individuals to offer their expertise and services thereby expanding access for the public to financial advice while continuously raising the bar in innovative solutions for those seeking advice,1
"by doing 
so the german economy has benefited from the dynamic global environment of the past few 
years",1
amongst the structural reforms you have the financial integration and the completion of the single financial market in the single currency area,1
particularly in the us and europe private household consumption has regained momentum,1
"the spanish economy
the expansion in the spanish economy extended into the third quarter of 2015 with spain notably one of the highestgrowth economies in the euro area",1
"progress has been encouraging creating the prospect of better informed policy making13
these are just two examples of a bigger programme of collaboration between the bank and technology innovators",1
"by partnering with other community stakeholders these institutions can help address existing community needs and la y the groundwork for stronger credit demand 
in the future",1
in doing this the bank assists in maintaining and improving competitiveness protecting the purchasing power of the currency and thus the living standards of all south africans,1
in doing so banks have contributed substantially to andbenefited enormously from the longest economic expansion in our nations history,1
"this growth is by and large attributed 
to the growth of our economy that increases opportunities for investment and demand for credit",1
alongside asias sustained economic development in the mediumterm financial services will be an important facilitator of growth as well as a growth engine in its own right,1
on the supply side there is much scope in asia to improve infrastructure technology and innovation the success of which will go a long way toward raising productivity and incomes even further,1
there is also potential for intra regional trade and financial flows to grow  in east asia,1
"the bank of albania has for long been vocal as regards the recovery of lending which will 
not only boost the economy and customers but also the banks themselves",1
the pandemic has further accelerated this process particularly in such areas as ecommerce contactless transactions through cards or ewallets and electronic money transfers in general instant versions of which will soon become possible in greece as well once we join tips the eurosystems target instant payment settlement market infrastructure service,1
this strong job growth is reinforcing the confidence of canadian consumers,1
in its national and international cooperation the bundesbank ismaking a major contribution to promoting preparatory work in the public and private sectors,1
"digital idekyc
the rapid technology advancement in the last decade has led to significant innovations in the financial sector",1
this has created a favourable environment and enhanced access in the financial sector as well as creating opportunities for the youth who are more versatile with technology,1
worldwide exports and imports have reached roughly 60 of global gdp1 and there has been a surge in global economic integration in recent decades,1
most recently us gross domestic product gdp increased at an annual rate of just over 3 percent in the first quarter similar to last years strong pace,1
today over 80 of the global gdp is generated in urban areas which are hubs of collaboration and progress innovation culture science productivity exchange of ideas goods and services and societal development,1
a safe reliable and efficient payment ecosystem will support the countrys economic growth competitiveness and productivity,1
the direct share of value added in the finance and insurance sector approximated 8 percent of us gross domestic produce gdp in recent years,1
in addition to this sweden has had a high level of household saving and a relatively strong increase in disposable incomes in recent years,1
the implementation of these new laws will coincide with a strengthening us economic recovery,1
indeedsome developing nations particularly in asia are establishing themselves as important suppliersof a wide range of internationally traded products including hightechnology manufacturedgoods,1
"benefiting from the favourable international 
environment the upswing in switzerland has gained a broader footing",1
"we are living in the era of the great globalization and the icc has been an invaluable voice 
championing the benefits  including enhanced economic growth prosperity and job creation  of increased economic and financial integration",1
the financial and construction sectors were the main contributors to economic growth in the first months of 2009,1
since the 1990s intraeu trade has risen in real terms even as emerging economies entered the global market14 trade has in turn supported productivity growth,1
"following a decade of 
significant economic and financial transformation asia has emerged as a major growth centre in the global economy",1
alongside this the financial systems of the advanced economies have been transformed through global financial flows while the technological frontier is driven by the global pace of innovation,1
islamic finance has become increasingly important in the global financial market registering exponential growth over the past few years,1
in particular the euimf programme endorsed the overall policy approach to banking while facilitating a more rapid and farreaching implementation of this strategy,1
annual growth in credit to euro area households increased in december to 20 and growth in credit to businesses rose to 23  the highest growth rates in more than four years,1
durable goods which advanced at an annualized rate of 14 percent were the strongest component of personal consumption in the second quarter,1
and the most efficient and wellrun financial institutions will be the ones who reap the most benefits from this new environment,1
"an
enormous amount has been achieved in improving the capacity of the financial system to contribute to
economic growth and development",1
"we believe that the banking sector is growing at a fast pace alongside deepening 
financial intermediation",1
most of the employment growth seen in canada since late 2014 has been in service industries that pay aboveaverage wages helping to support national income,1
another milestone is that the philippine banking system has become more streamlined financially inclusive and technologically responsive reaching out to more clients across the nation and addressing their changing needs,1
together with improving financial and nonfinancial sector balance sheets this has strengthened credit dynamics and supported domestic demand,1
"the
performance and competitiveness of the financial services industry are thus of key economic and socialimportance to both countries",1
"while the initial impact of these initiatives has been positive it has created a huge potential for expansion in banking business once the level of activity is scaled up and 
government social benefit transfers increasingly take place through the banking sector",1
the year 2006 was marked by robust and more balanced growth in global economic activity across virtually all regions,1
but most of its economies are developing into a class of frontier and emerging economies,1
with the contribution of all these favorable developments in economic aggregates the turkish economy has continued to integrate with the world and turkeys foreign trade volume has expanded by nearly 170 percent since 2001 reaching usd 196 billion on an annual basis by april 2006,1
"the financial centre robust and resilient
singapores financial centre has grown handsomely in recent years and is today regarded as one of the top five centres in the world",1
the individual economies are becoming increasingly integrated internationally,1
"financial education and financial literacy 
financial education has not only been integral to community development but has also begun to play 
a larger role in the broader consumer market",1
this hasjust as in earlier periods of internationalisation led to an accelerated global growth,1
"in particular longterm investments from europe and japan contributed to the continued
economic recovery in the united states",1
in the long run a stronger capital base can be expected to enhance banks loan origination capabilities,1
broadbased growth in employment has underpinned the recovery which has helped incomes recover and supported solid growth in consumer spending while domestic investment has also gained traction,1
"this adjustment appears to have intensified in recent years as
there has been an increase in merger activity an establishment of alliances and an introduction of newbis review 832000 6products and services often based on modern information technology",1
the level of chinese investment pouring into the country has also significantly increased while the chinese community in the country has continued to grow following the rising number of chinese investments in zambia,1
"more recently the 
increased pace of liberalisation in the islamic financial services industry has increased foreign presence and participation in our domestic islamic financial system",1
for more than a decade now banks have worked hard to sustain the momentum for achieving the objective of financial inclusion,1
the author traces our contribution to barbados economic diversification in particular our leadership in supporting the establishment of and later defending our international financial services sector highlights our support for businesses through the credit guarantee schemes and details the decisions on the creation of our currency,1
"in addition to an improved 
international allocation of capital internationally integrated markets are thought to provide a welcome 
discipline to domestic policymakers",1
"this favourable tax treatment of fore ign source income has acted as a catalyst in 
the expansion of the regional and international banking business of banks",1
this trend of liberalization is expected to continue whilst the banking and insurance sectors could possibly see further consolidation convergence and competition within the region,1
the domestic economic recovery has progressed well supported by greater dynamism across key sectors of the economy,1
"external sector reforms 
benefiting from a calibrated and sequenced strategy of liberalisation indias external sector 
has become more resilient",1
in recent years the bank has expanded both its branch network and its asset portfolio to take advantage of the robust growth in the business sector,1
"global financial 
conditions have since improved markedly and prospects for the world economy have brightened",1
indeed technological advancements are fuelling the pace of digitisation of the global economy which represents the greatest potential to drive transformational growth through changes in the economic structure of production,1
asean has emerged as a key global manufacturing region with extensive supply chains linking the individual economies and to china,1
"iceland has made great strides in economic management as indicated by the stability and favourable
economic developments that have characterised the economy for much of this decade",1
b our rate of growth of productivity has picked up compared with earlier decades,1
therefore from an historical perspective alone the bank has been closely involved in and has become an integral part of bahrains development as an international financial centre,1
their benefits in the form of stronger growth and more employment tend to be widely distributed across the population,1
in addition globalisation helps to intensify the exchange of investment capital for knowhow between regions,1
financial service providers that embrace fair dealings are likely to enhance their competitive advantage by building stronger and more lasting consumer relationships and enhancing their brand value,1
during the last few years state bank of pakistan has taken a number of steps to improve the efficiency of our domestic payment system,1
in the course of fulfilling their primary function of financial intermediation they are intricately connected with various other drivers propelling growth and stability in the real sector,1
as with most countries switzerland benefited greatly from globalisation and from opening up its economy,1
over the recent few years industrial output has shown synchronicity across geographies with trade being identified as the channel of comovement,1
as well household spending was boosted by the prosperity arising from strong demand for our natural resources and by improved terms of trade,1
business fixed investment has increased moderately as corporate profits have improved for example on a gdp basis it increased in the januarymarch quarter of 2014 for the fourth consecutive quarter and thus is growing at an accelerated pace,1
we welcome the strong lending growth that many community banks are experiencing which is fueling job creation and sustaining our economic expansion which in july will become the longest in us history,1
"the growth in asset management has contributed to financial deepening in the leading
industrial countries",1
these factors coupled with the further recovery of domestic demand will play a significant role in the further growth of economic activity during 2017,1
for many years the asian developing countries have beenheld up as one of the global economys shining success stories,1
in summary a wellfunctioning capital market will promote the realization of promising investment opportunities leading to faster growth in productivity and output,1
"but at the regional level large benefits to the regions longerterm growth and 
welfare can be gained by promoting closer integration of financial systems in the region 
through the development of the regions asset market the banking sector financial technology and financial infrastructure",1
"emerging countries citizens have reaped the benef its of such rapid development with higher 
standards of living",1
this means that for the second consecutive year euro area growth will be comparable to that of the united states,1
the integration of banks in europe has certainly had positive effects on growth and investment,1
the insight and wealth of practical experience from external partners over the next few days will further enhance our efforts to enable fintech to play a greater role in the development of the national payment system and other financial infrastructures improving sme access to credit fostering capital market development enhancing competition and innovation and promoting greater financial stability,1
"with rising incomes private consumption and investment 
activities have expanded significantly to become the major engine of growth in asia",1
the implication is clear a sustained expansion in our exports not only will represent new demand it will ignite the rebuilding phase of our business cycle which will create new supply,1
"in the 
process the economy has become more diversified with new sources of growth",1
in addition the reserve bank had provided the broad framework for many innovative technology based systems,1
"the canadian economy has been performing very well in recent years and the bank expects that it will
continue to do so",1
by cleaning up and repairing banks balance sheets the ecbs comprehensive assessment helps create the necessary conditions for resources again to flow to the productive economy,1
overall the measures have produced remarkable results with the quality and efficiency of the financial sector in serving the real economy continuously improving and money and credit growing reasonably,1
with participation of those institutions financial market entities can be further enriched financial product innovation further promoted and the financial market vitality further unleashed,1
i will describe how rtgs can help us maintain stability and promote innovation in the context of rapidly changing user needs and how collaboration between central banks and other public authorities the industry and the international community can deliver farreaching benefits,1
these conditions have led to increased optimism of global market participants and growth in capital inflow on the markets of emerging economies,1
"expanding our presence in tokyo 
reflects the importance of the japanese financial market and the growing influence of the region in the global economy",1
just as in the united states the global financial markets have long been characterised by favourable macroeconomic conditions and aggressive growth strategies among financial institutions,1
"over the longer run advanced economy 
policy actions that strengthen global growth and global trade will benefit the emes as well",1
with rapid economic growth in our country the foodconsumption will rise in an unprecedented fashion since we are over a billio n people,1
it has proved to be a strong and purposeful regional arrangement benefiting its members by optimizing the use of their foreign exchange resources,1
significantly this growth upturn is characterised by a synchronised expansion in both the advanced and emerging countries,1
the aspirations ofasia are also real an entrepreneurial approach to innovation competition and better standards ofliving for the rising urban population,1
yet europe is also experiencing rapid and major innovations  and that is bound to continue,1
no less important is our expectation in the future and forward looking strategies which most ofthe time play an important role in driving economic activities,1
the broadbased global expansion is providing impetus to euro area exports,1
today the investment needs of the economy especially long term investment in areas like infrastructure have increased,1
the pivot of the mainlands economic growth is expected to shift to domestic consumption innovation and efficiency enhancement as well as market opening,1
"this presents substantial opportunities for east asian insurers 
to support the growing trade activities",1
and our financial institutions have been a great ally in our efforts to promote singapore as an international financial centre,1
"in asia there are many indications that domestic 
demand has been a powerful driver of its recovery and that growth in this region is becoming more autonomous and less dependent on export demand from the western economies",1
at the same time costs related to corporate investment were reduced leading to a sharp rise in lending and creditdriven investment growth,1
"global finance 
allows for a better allocation of world resources enhancing the prospects for growth of all nations",1
and by boosting the productive capacity of the economy by supporting investment and capital formation a link is established between the supplyside and the longterm,1
"the employment and income generated by business spending on capital goods boosts consumer
spending and sets off another round of investment spending",1
this has helped the region to embark on a process of catchingup economically with the wealthier parts of the eu and to gradually improve their living standards,1
maltas investment promotion efforts meanwhile have been refocused to exploit the islands strategic location as a bridge between two continents as well as its potential to serve as a hub for international business in areas such as health care software development and education,1
both large and regional institutions have seen robust growth in commercial and industrial lending which supports sustainable job creation,1
over the past year and a half spending by canadianhouseholds on consumer goods and by businesses on investments in technology and newequipment has been the driving force in the economy,1
as the growth momentum gained strength domestic consumption started to pick up,1
"there is now a 
completed airport crossborder activity has intensified the climate is extraordinary and soon this town will turn into a city with modern infrastructure",1
the financial intermediaries in turn should keep participating actively in the development of these markets creating new ways of servicing an ever wider and more heterogeneous public,1
these developments increase households real disposable income which boosts the spending of established employees who are confident about their earnings prospects as well as new employees,1
"as we have witnessed so clearly in recent years the resulting enhanced growth of 
productivity will lift our standard of living",1
"with the belief that added transparency is translated into higher integrity and transparency 
the bank of albania has been paying an increasing attention to public education as well",1
"as more resources have been channeled 
to economic sectors driven by domestic demand domestic demand contributed 908 percent to economic growth in 2008 up 149 percentage points from 2005",1
those economic areas that are able to generate goodquality financial assets are going to be the winners in the global allocation of capital and financial services,1
"with the rapid growth in domestic demand reinforced by the 
vast productive investment opportunities within and across the emerging economies it is projected that the emerging world will account for 60 percent of total world output by 2030 higher by 20 percent from its current level",1
"economic developments
a strong upswing has characterised the icelandic economy in recent years",1
the acceleration in productivity owes importantly to new information technologies,1
increasingly african countries are accessing international capital markets and their ability and success in doing so has contributed towards the funding of massive infrastructure projects which i will touch on later,1
"finally in lisbon 2000 the european union set itself the goal to become
the most competitive and dynamic knowledgebased economy in the world inter alia by furtherliberalisation of network industries and an extension of benchmarking in new policy areas",1
"the role of the government has been to support the private sector through developing an environment for the private sector to undertake higher productivity activity with the actual production of goods and services is ultimately driven by 
the private sector",1
as we open a new chapter of global growth and development with the unfolding of a new decade islamic finance is in a position of strength to play a greater role in the global financial landscape,1
thanks to our crossborder infrastructure and logistics systems thailand has been the center for logistic distribution of goods and services in the region,1
freer world trade led at the same time to higher demand in the shipping freight market,1
progress in the euro area recovery has been mostly homegrown with a virtuous cycle increasingly taking hold between rising income and spending in both the corporate and the household sector,1
with the asean economy expected to grow steadily over the next decade following enhanced economic and financial integration the competition for talent will intensify,1
"this is not merely a short term objective but rather an important anchor 
for the regions economic recovery with significant effects on both the economies of the 
region and the banking groups which have declared their commitment to our region",1
the aec recognise this and calls for smes to play a greater role in contributing to the overall economic growth and development of asean as a region,1
this is having an impact on all areas of economic activity from production and working patterns to leisure,1
it is in this context that the brics are being regarded as an emerging global powerhouse,1
"first trade liberalization appears to have made it possible for 
multinational firms to institute highly efficient crossbo rder supply chains within their firms that seem to 
have allowed them to boost significantly the efficiency of their worldwide operations",1
in many cases the objectives of enhanced resilience and efficient financial intermediation are mutually reinforcing,1
in china it is intended that a corps of small and mediumsized private enterprises will provide new more qualitative growth and boost the innovative power and competitiveness of chinese enterprises,1
this has been accompanied by economic performance in terms of growth per capita and job creation that compares positively with other large advanced economies,1
the modern services clusterfinancial ict and professional services making up 30 of gdpwill continue to benefit from firm regional demand and ongoing digital transformation among corporates,1
this move has been aided by the use of nuclear energy and renewable energy sources and through participation in the nordic electricity market,1
"private insurance undertakings
as a consequence of solvency ii the greek private insurance market matured further in 2018 with improvements in governance structures and human resources",1
further with increased investment and a growing economy partly on account of price and financial system stability government revenue is more likely to rise therefore enabling the government to improve the provision of education and health services the two which are among the key tenets of poverty reduction,1
one of the key prongs of our developmental strategy is to attract more global and regional headquarter functions of the fis here to serve the broader asian region,1
italian banks have large market shares in the countries of eastern europe where lending is expanding rapidly,1
"the progress in 
the globalization of financial and economic activities since the 1990s has strengthened the financial and economic interaction between countries",1
and we need to understand how the financial sector can contribute effectively to the economy the actual mechanisms through which financial intermediation can serve the real economy of advanced nations,1
other initiatives are setting the stage for the philippines longterm development,1
with globalization and trade reforms countries are globally integrated and have trade linkages with each other,1
crossborder trade in the region is rapidly expanding and various initiatives are evolving for the continent,1
"japans economy has also basked in this movement toward recovery in overseas economies as 
evidenced by increased exports to east asian countries and the us",1
through its fintech innovation hub which has welcomed over 400 innovative players since 2016 the banque de france promotes active and open dialogue with all market stakeholders with the aim of building streamlined regulation for digital innovation,1
a rapid integration is also taking place in the euro area equity markets,1
"looking somewhat closely at the developments in overseas economies by region the us 
economy is lik ely to be a driving force for global growth for the time being",1
a common infrastructure for all payments has given norway an important competitive advantage provided economies of scale and facilitated interaction across the banking sector,1
"chinas share of global gdp has increased faster and its economy is much 
more open",1
given your extensive geographical presence you are indeed better placed to help advance inclusive growth efforts and attend to the financial service needs of our communities,1
merchandise exports grew 97 percent in usd terms highest in the past 6 years and was one of the main drivers of growth,1
the export sector has shown great capacity and has notably increased its presence and sales both in the euro area and in other markets,1
and foreign bank branches have utilised intragroup funding and wholesale deposits to compete in areas such as institutional lending,1
"savings and young people 
historically the capacity to save has always been a resource for the italian economy",1
"financial openingup in the new development pattern
chinas economy has shifted from highspeed growth to highquality development",1
alongside that the development of talent with forwardthinking capabilities would be instrumental in elevating the quality of financial services,1
"capitaldeepening has surged during the past seven years and innovations synergies and networking effects
have boosted significantly the growth of multifactor productivity",1
these partnerships have blossomed in an enabling policy and regulatory framework set out by the government regulators and other policy makers with the support of our development partners including the united kingdom,1
in italy too gdp growth resumed at a rapid pace in the first half of this year,1
effectively done it will increase the development financial institutions credibility reputation and potential as key players in advancing socioeconomic development,1
"as the recent imf world economic outlook points out china india 
and russia have together accounted for half of global growth over the past year and further 
strong expansion is also expected in other emerging markets and developing countries",1
thus to a great extent all countries have become linked by a common global market for capital in a way that we have never seen before,1
"as referred to earlier the world 
economy continues to expand with growth more balanced as regional economies gain momentum",1
house prices in germany have increased strongly over the past decade also mirroring global trends,1
the skilled labour force has contributed to a rapid diffusion of information and communication technologies thus contributing to favourable productivity developments,1
"the positive performance of the economy and of certain economic sectors  in particular 
trade and construction  has been propelled by the positive rates of domestic demand at home",1
large resources have been allocated for infrastructure measures and for the development of the third generation of mobile telephony which is estimated to lead to increased activity in future,1
in terms of physical infrastructure public policies can support both public and private investment so that firms can become more productive,1
in line with the bsps efforts toward digital transformation the new bsp complex will also use technological advancements to promote a digital lifestyle without taking away personal interactions within members of the community,1
"an
integrated global financial system has brought many advantages capital is mobilised and allocated
more efficiently the spread of technological advance is more rapid and disciplines over unsustainablepolicies are more effective",1
globalisation and technology have widened the distribution of income within most advanced economies including new zealand over the past three decades,1
the digitalization journey has since seen the roll out of various technology driven business solutions as the bank pursued its strategic objectives,1
according to official statistics economic growth in albania accelerated to 44 in 2018 h1 showing a broad base in terms of aggregate demand components and a diverse composition in terms of sectors contributing to growth,1
the scope and size of our financial sector has grown rapidly because of its abilityto facilitate the financing of products and services that are themselves valued highly in themarketplace,1
more importantly deepening the offshore rmb liquidity pool will enhance market efficiency and underpin the growth of offshore rmb activities strengthening hong kongs development as a leading offshore rmb hub and its unique role in the internationalisation of the rmb,1
recent political developments significantly enhanced the prospects for policy continuity in the euro area and there has been continued growth in euroarea employment and economic activity,1
"in many norwegian industries other countries markets and foreign capital have been used to create 
jobs and generate economic growth",1
structural reforms and largescale investments related to next generation eu should foster confidence in the capacity of euro area countries to generate sustained high growth,1
indeed new lending was seen to expand in 2014 and this has continued into the opening months of 2015,1
for one thing the crisis has once again underlined the risk of exaggerations on the real estate market,0
for monetary policymakers focussing on maintaining price stability the question of how to safeguard public finance is thus of particular concern,0
as a result the last ten years were something of a dry spell for the eus economy,0
"as a practical matter if layoffs and 
unemployment continue to rise both the fiscal and monetary stance may need to be revisited and the pace of inflation reduction may need to be reconsidered",0
the deficit in public finances increased considerably in sweden it was at worst 12 per cent of gdp in 1993 and the borrowing requirement amounted to almost 17 per cent,0
the lack of such instrument is not accidental it reflects the unwillingness of many european countries to consider the possibility that the taxpayers of country a may pay even temporarily for the crisis of a bank in country b,0
and ill touch upon the potential longerterm implications for european integration,0
"second i n the area of prudential regulation and supervision all european banks have the 
obligation to join deposit insurance andor financial services compensation schemes 
whereas according to the islamic jurisprudence prevailing  in various islamic countries 
islamic bank investment deposits which follow the profit and loss sharing principle cannot be covered by deposit guarantee schemes",0
the crisis played a role in this but also that the fiscal rules were repeatedly violated and the capital markets didnt sanction these breaches because the no bailout clause lacked credibility,0
"while a restructuring may seem like a way to 
postpone obligations its ramifications not just for the yield the market will demand of the 
particular state government issuer in the future but also for the yields on obligations of other 
state governments are large enoug h that such actions should continue to remain 
unthinkable",0
"it is clear to me that taking a pointintime approach to transactions or looking at them from a narrow 
micro perspective does not provide a sufficiently comprehensive pictur e of the underlying risks",0
for me given the current situation the hurdles for further measures are very high especially for broad purchase programmes,0
"smaller smes perhaps due to their lower bargaining power are in a more 
disadvantageous position with weaker receivable positions",0
"this uncertainty is largely connected to the 
emergency policy measures in greece and spain the deterioration in the global economic 
outlook and the loomi ng fiscal cliff in the us",0
"so the question is why was there such a sudden reversal in the second half of the year particularly
the december quarter",0
an important consideration affecting japanese and continental europeanbanks in particular appears to have been the search for return abroad in light of heightenedcompetition and shrinking margins at home,0
a second downside risk falls within the area of fiscal management,0
"this would be particularly true during a period when the economy is subject to supplyside 
shocks which are simultaneously exerting inflationary and recessionary influences",0
critics such as paul krugman and joseph stiglitz have charged that this consolidation has caused more harm than good as spending cuts and tax increases served to dampen already weakened aggregate demand even further,0
if consolidation programs have to be revised because of overly ambitious timetables or the failure to take into account macroeconomic effects investor confidence may dwindle,0
on the one hand it is difficult to measure these intangible assets but on the other hand one disregards a large part of the companies investments if one does not take them into account,0
these inflows however did not always reflect domestic economic fundamentals whilst the em outlook also became increasingly uncertain over the past four years,0
going forward the prospects are for only slow growth in maltas external demand,0
i think that we have to analyse the question of the regulatory treatment of sovereign exposures in order to sever the link between the banks and the sovereigns,0
"after all a loss in confidence can be completely rational illiquidity forces issuers to sell assets into distressed 
markets",0
"so it seems 
to me that the overall judgement that germany was the sick man of europe for structural reasons 
was not exactly the right diagnosis",0
"some of these issues are procyclicality herding 
behaviour likely adverse impact on emerging market economies",0
"we would subsequently have been compe lled to discontinue the exchange rate floor 
under even greater pressure with all the consequences for our balance sheet and the swiss economy that this would have implied",0
"however it is important to emphasize that the hungarian economy started facing difficulties earlier than the autumn of 2008 and that the tension had been building up below the surface for a while as illustrated by the continuous increase of external and government debt ratios 
and the increasing currency mismatches on household and to some extent on corporate 
balance sheets",0
"however in the 4 bis central bankers speeches
  context of indonesia relying solely on domestic demand has two significant 
implications",0
"c dsibs
as i alluded to earlier the possible designation of few banking groups as dsibs in india may be viewed by the market as an admission of the bank attaining a toobigtofail status",0
in the present setting of ongoing deleveraging of the nonfinancial private sector mounting regulatory pressure and narrow interest margins resizing of the industry was essential,0
"the authorities will naturally have to place
considerable emphasis on their own creditor position and thus reduce the emphasis placed on the
considerations mentioned above",0
the second risk is a related one in that these factors could have already unwound and inflation could turn out much higher than we expect over the course of 2018,0
the savings banks did not understand the risks either,0
if someone in finance explains something and it doesnt make sense and if when they repeat it still doesnt make sense its very likely that they dont understand it themselves which is quite often the case or that actually it doesnt add up,0
the economic slowdown in 1966 triggered a budget crisis,0
but then we would have run the risk of having to tighten monetary policy more sharply later to tackle the high level of inflation which would have increased the risk of a severe economic downturn,0
"although what i have just described is i believe the most plausible outcome 
macroeconomic projections are inherently uncertain and the economy remains vulnerable to unexpected developments",0
"i do not need to belabour the point about the debilitating and disruptive effects
which banking problems can have on economic and monetary management",0
i believe that the same logic can be applied to regulation it is true that it has costs that are sometimes very high but an absence of or insufficient regulation can have a much higher cost as the 2008 crisis demonstrated in the first place to the banking institutions themselves,0
nevertheless the market strains were serious as i have discussed and they posed risks to the broader economy,0
in the case of a public sector bank in which the shareholdercontroller of the central bank or the regulator is the sole or majority shareholder a question arises as to how the regulator whether the central bank or any other authority would focus on depositors interest as opposed to shareholders interest,0
"19 deterioration in the supply and demand 
balance in the economy as a whole as well as the fundamental weakness in consumption  
 except in the case of a small number of certain durable goods  are adding downward 
pressure on the price formation process",0
this led to losses for credit institutions especially for the banks as their loans are subordinated,0
in both these cases as indeed in the more recent cases like bear sterns and lehman brothers the problem was not with the derivatives but with the controls those banks failed to put in place,0
of course the fact that we have only one policy instrument means that we cannot independently try to manage those side effects without putting our inflation target in jeopardy,0
"but the mpc also saw upside risks to that projection stemming from the possibility 
that the current high level of inflation might become embedded in infl ation expectations so 
making inflation itself more persistent",0
"of course there is a poss ibility that a more lasting deflation 
could arise if consumers b ecome pessimistic",0
"the third factor
however seems to stem from the substantial and irreversible structural changes that the japanese
economy is currently experiencing",0
servicing of the additional debt related to bank restructuring is also a negative factor,0
in addition budget priorities and monetary policy objectives can be in conflict,0
the unique global backdrop as well as the economic outcomes in terms of growth and volatility that i have just shared with you presents a real dilemma and at times tension in emerging asia,0
"there also continue to be risks on the external f ront with the 
recent downward revisions in global growth",0
"several factors can explain the length and depth of the greek crisis
first the size and speed of fiscal consolidation were unprecedented",0
"critics have argued 
that these programs particularly those constructed during the asian crises have carried too many detailed conditions and have focused disproportionately on structural objectives rather than on the macroeconomic issues that are the imfs core mandate",0
in certain cases this occurred even when those counterparties did not provide any additional resources to absorb potential losseseither because they were very thinly capitalized or were affiliated with the banks in question,0
but the monetary environment of that period penalised borrowers and the situation at that time resulted in a deep economic recession,0
"in the case of greece for example the countrys problems 
were compounded by the statistical understatement of the budget deficit and debt",0
"if one looks at the latest imf update on world economic outlook weo jan 2013 the 
growth rates have been revised downwards though marginally to 35 for 2013 and 41 
for 2014 and it specifically notes that the euro area continues to pose a large downside risk 
to the world economy",0
nonetheless the proposition that the ecb should preemptively resolve financial stability issues with monetary policy tools at the expense of delivering on the mandate of price stability is both wrong and very hazardous,0
third soes in general are subject to negative subsidies from the government budget,0
"however i share some of alans considerations  on the limits and drawbacks of macroeconomic 
projections based on a constant interest rate assump tion",0
unfortunately investors placed excessive trust in rating agencies approach to structured credit as the new securities had little in common with corporate bonds,0
while the recruitments would be happening at the junior levels there would be a virtual vacuum at the middle and senior level for some time to come,0
at the same time significant weakness in one of these entities has the potential for severely adverse macroeconomic consequences,0
"if we were to give up on the inflation commitment the future adjustment of interest rates to rein in inflation would have to be much larger with adverse consequences on economic 
activity and relative prices in particular the exchange rate",0
consequently the ability of a central bank to achieve its targets for inflation will be undermined if it also has to finance government budget deficits,0
the moderating of financial savings of households from 121 per cent of gdp in 200910 to 97 per cent in 2001011 is an area of concern,0
"not only are creditors counterparties and investors less able to 
evaluate the capital strength of individual banks from what are supposed to be riskbased capital 
ratios but regulations and statutory requirements tied to capital ratios have less meaning as well",0
"if one sector in the economy is far too large 
the taxes from this sector can contribute significantly to the fiscal budget",0
moreover as the lehman case clearly demonstrates focusing on the direct effects of a default on aigs counterparties understates the risks to the financial system as a whole,0
however an even more important question is whether the missed target has also led to costs to the real economy,0
"loan portfolio worsening and credit risk management requirements were matched by hi gher provisions by banks which in turn 
contributed to worsened financial result",0
"turning to the external sector  this year the moderating net external demand would result 
from the anticipated slowdown of the global economy linked to the us economic and financial downturns through the international trade channel",0
even if the central bank were appropriately reluctant to increase moral hazard by stepping in for private funding when an institution is in fact insolvent the prospect of a rapid disorderly default could still motivate lolr lending,0
otherwise the single monetary policy of the euro area might not be suitable thereby bearing the risk of boombust cycles and high inflation volatility in the country concerned,0
hence both the private issuer of the asset and the bank itself would have to fail nearly simultaneously for the fed to take a loss,0
"the problem as things stand today is the persistence of the risk that the rapid disposal of negative
legacies will proceed in the absence of sufficient constructive moves strengthening the deflationarytone of the economy",0
"it is easy to imagine that this final mix of the two policy instruments is not optimal from the 
perspective of the economy as a whole",0
the necessity of the adjustment means that the measures only postpone it and presumably tend to make it all the more painful when it does occur,0
the inflation outcome a couple of years ahead will therefore have been affected by events that could not be predicted when the monetary policy decisions were made,0
this is an issue that the eurosystem will also have to further reflect on in the future,0
"it is also undeniable that budget consoli dation always means austerity insofar as it exerts a negative effect on economic 
activity in the short term",0
wildcat strike action spilled over to other parts of the platinum industry later moving to rest of the mining sector and to the transport and agricultural sectors resulting in a significant dent in global investor confidence in the country which contributed to sovereign credit ratings downgrades by all three major rating agencies and ultimately resulted in a further weakening in the exchange rate of the rand and higher borrowing costs for the country,0
in such a scenario a ccp would certainly hold highquality collateral but it may be unable to generate cash in the market in the very short time it has to manage a default,0
another example is the valuation of longterm flows of income or expenditure such as pension liabilities which are inherently difficult to predict,0
"in such cases looking thr ough the pass through could put us 
on a treadmill of accommodating higher inflation",0
"if one claims this one is also implying that central 
banks and governments do not have the possibility to choose the level of the inflation target 
but that this is something determined by structural conditions in the economy",0
similarly there are indications that global growth could be slowing down at the same time particularly in the united states,0
"yet from the perspective of society as a whole the creation of additional money would entail 
higher costs as the currency would be debased as a store of value and its exchange 
services in transactions wou ld be degraded",0
at present euro area banks continue to struggle with low profitability driven by both cyclical and structural factors,0
"buoyant consumer demand which in creased at an annualised rate of 8 per cent in the second quarter 
of this year has been posing a further risk to the inflation outlook",0
"more generally it is crucial to note that financial and banking issues cannot be looked at in isolation
without reference to other sadc concerns such as trade industrial and fiscal policies and political
factors too",0
"this effect is clearly evident this year the yield on 10year government bonds declined in the 
first half of the year from 56 percent in january to 43 percent in june but went back up to 46 percent in september when the government had to increase its borrowing because the 
deficit significantly exceeded the level originally planned",0
"even 
supposedly sophisticated investors did not understand the nature of the assets underlying these structured products",0
financial crises generally tend to be protracted affairssometimes inertia and denial on the part of the policy makers add to the duration of the crisis period,0
"rather what we have is a crisis related 
to the public finances of a number of euro area countries",0
it also means the macroprudential authority has no framework and tools for loosening regulatory policy to prevent the selfreinforcing deleveraging spirals that kick in in the downturn of the cycle,0
indeed the current crisis may be the most severe seen since the 1930s,0
"these policy choices are far more complicated than the more technical choices at the macro
economic level  and they are way beyond my area of competence",0
"that imbalance is i know a real concern up
here north of the border and it has more generally for some time been one of the most difficult issues
confronting us in conducting monetary policy",0
as present no one thinks that large and complex financial institutions could be resolved at all smoothly as the rescues of the past twelve months show,0
"this may be because of the fact that our august 2008 guidelines have 
not explicitly stated that such disclosures should be on a cumulative basis and our previous 
instruction was about dis closing accounts restructured during the year ",0
which differences are not wellfounded and hence potentially a sign of a dysfunctional market,0
"todate however the 
shareholders of locallyincorporated firms have been reluctant to enter into mergers perhaps because they fear that this will lead to a dilution of their control",0
"4 bis review 772008
 on top of that the traditional group of investors suppliers of liquidity for the banking sector 
have altered their investment strategies",0
to this can be added the vicious circle of negative effects for the real public and financial economies that i have already discussed,0
a main question for norwegian economic policy is therefore how to stabilise thenorwegian economy in the face of high fluctuating revenues from the petroleum sector,0
what i find more concerning is the decline in some household survey measures of longerterm inflation expectations,0
the losses on tsarist bonds may have also contributed to frances unwillingness to restructure german debt after the war,0
"capital flows net to edes more than halved from us  715 billion in 2007 to 
us  246 billion in 2008 as portfolio and banking flows turned negative",0
otherwise there is a risk of procyclicality since leverage constraints decline as asset prices rise,0
in my view this is one of the main challenges that european policymakers face today,0
if financial market economists did not see the dangers how were small investors and savers supposed to have been aware of the risks involved in some of their investments say lehman certificates,0
the third obstacle is the absence of a unified framework for restructuring banks leading to uncertainty and fears of a feedback loop between bank and sovereign weakness,0
how effective our macroprudential policies will be in solving financial stability issues and dealing with situations such as those described above is however still an open question,0
the reaction of many was to label structured notes as derivatives as well rather thanunderstanding that it was the underlying risk characteristics that had been poorly managed,0
however at the same time it did not prevent the large runup in credit and real estate prices and its subsequent painful and protracted bust suggesting that a more intrusive macroprudential policy may be necessary,0
for the long period in which these powers were lacking moral suasion took their place albeit with the objective limits this entailed,0
"the second crossroads is that in 
recent months the labour market situation has become much more serious than would have 
been anticipated given the state of the economy",0
europe is facing a number of challenges simultaneously in the economic sphere and beyond,0
"however the effect these considerations have actually had on monetary policy  the amount 
by which the repo rate has actuall y been set higher  has been exaggerated substantially",0
the third factor is the dislocation of the investor base for abs,0
this leads me to my second part has this suboptimal individual policy approach and joint policy coordination changed with the current crisis,0
"i suspect even more 
that germanys insistence on strict observance of ecb rules stems from a fear that 
any lenient interpretation will lead sooner rather than later to the total subordination 
of minority interests in the eurozone ie the interests of savers ie german 
interests",0
"in addition the global economic outlook had taken a distinct turn for the worse with the possibility of a further deterioration while inflation had 
become less of a concern in view of falling oil and commodity prices",0
nevertheless if the current downward pressure on prices remains albeit in the short term there is a risk that conversion of the deflationary mindset which has been progressing steadily so far might be delayed,0
"the macroeconomic impact of capital regulation could flow from the possibility that given the 
higher costs of mobilizing capital banks may either increase the interest rates on lending or 
ration the quantum of lending",0
on the one hand some market participants argued that such trading activity would always be detrimental to the client as it could move the market in a direction that is not to the clients advantage,0
the reason for these weak growth prospects is unfavourable demographic developments which will squeeze the potential labour force considerably in the coming years,0
"for me the crisis was instead the story of a system  with in built incentives for self harm  in 
its structure its leverage its governance the level and form of its remuneration its lack of competition",0
partly this reflects my assessment that uncertainty to the outlook has increased and that downside risks have crept up a topic to which i now turn,0
for most of us the current outlook for the uk economy is not a very attractive prospect,0
some of these challenges are macro in nature such as prohibitive economic and investment policies and poor infrastructure,0
"moreover the fallacy of composition brings about from 
time to time that individual actors all act rationally but in combination produce an irrational result such 
as spectators of a soccer match standing to get a be tter view as spectators of sport or theatre goers 
running for the exit in the event of a fire",0
the textbook policy choice would be to accommodate the temporary deviation from the inflation target and focus on the vatadjusted inflation developments  especially since the latter paint a quite different picture,0
"had the snb attempted to maintain the minimum exchange rate it would have 
lost control of its bal ance sheet and with it monetary conditions in switzerland because of 
the increasing magnitude of the interventions",0
second  and more fundamentally  allowing inflation to reanchor downwards comes with a high risk of credibility losses for the central bank and especially when the objective is not being met,0
attrition and lateral recruitments will further exacerbate this,0
but the shortterm gain of preserving financial stability comes at a great cost in the long term,0
"over the years reinsurance has come under the spotlight as a possible cause of 
intrasystem connectivity and risk but i have not yet seen a convincing demonstration of a 
major systemic issue for pure reinsurance of idiosyncratic diversifiable nonfinancial risks such as fire weather earthquake or liability",0
but capitalarbitrage also undermines the effectiveness of our capital rules and creates some economicdistortions,0
"this is a very dramatic assumption and it matters a lot because as we all know debt dynamics are extremely 
sensitive to forecasts about future growth",0
"this widening primarily 
reflected a fall in domestic saving as domestic expenditures became increasingly reliant on borrowing from abroad",0
"the enron case was important not only in quantitative terms but also and especially in qualitative terms witnessing a series of legally dubious practices which go beyond the strictly financial field conflicts of interest serious corporate governance shortcomings  
bis review 382002 7
 excessively adhoc accounting practices deviating from prudential principles and from what is a fair 
view of the real economic situation manipulation of information etc",0
furthermore there seem to be lingering market concerns in europe about legacy assets,0
"for example pension system reform is a kind of age nda that inevitably creates a conflict of interest 
among generations",0
this determined the specifics of the current situation  unfavourable developments in external conditions overlapped structural economic slowdown,0
second estimates of future agerelated costs themselves are surrounded by a high degree of uncertainty with risks tilted towards stronger increases than assumed in the baseline of the ageing report,0
"indeed i would argue that the tough love approach also would require the fed to deviate from the dual mandate that the congress has assigned it while assuming a role in influencing fiscal policy that the congress 
has not assigned it",0
on the other hand our dilemma  and we are not alone in thisdilemma within europe  points up the problem that would arise if the single european monetary policy  thesingle interest rates  does not meet the domestic monetary policy needs of all the euromember countries,0
perhaps the most difficult part of this shift in thinking was the recognition that efforts to manage the currency really did impose major costs on the domestic economy,0
over the mediumterm their capital ratios are likely to need to rise,0
i am also concerned about that as a euro area monetary policymaker given that sluggish business investment dampens the efficiency of accommodative monetary policy measures,0
this is particularly the case as we contemplate thetask of restructuring the mainlandrelated companies such as guangdong enterprises which arecurrently in financial difficulties,0
"bis review 46200 3 5
 6 bis review 462003
 the demographic changes will entail a loss in tax receipts due to fewer people in work while 
expenditure on pensions and healthcare will rise",0
for example heldtomaturity classification conceals profit or loss until maturity while trading classification charges profit or loss to financial statements in every accounting period,0
"for example it has been shown that the collapse of stock prices in october 1929 generated temporary uncertainty about future income which led consumers to forgo purchases of durable goods
3",0
now what happened was many years later in the 1980s i actually was involved with this because i was working at jp morgan at the time people started to say look if im a big commercial bank like jp morgan im losing all my customers who are going to the securities market,0
"unfortunately businessmen investors and economic policy makers often have to take
a view about possible future developments in these financial aggregates",0
"even after the series of downward revisions during the autumn the december assessment still
carried a downside risk of the international slowdown being even more pronounced andprolonged than expected",0
"those working on the bill at the ministry 
of finance at that time were probably in doubt as to whether any petroleum revenues would ever be saved and perhaps they also questioned the utility of such a fund",0
first in our opinion the fiscal policy has limited space for economic stimulus,0
"from the 
early 1990s the united states was facing severe financial headwinds",0
as a matter of fact external demand indicators have recently indicated a partial slowdown,0
"for economists who did not have the opportunity to observe the panic up close as i and most 
of my colleagues had the developments in this four week period must have been bewildering 
given how widely events on the ground and theory diverged15  
at the time and at times since some academic economists have questioned whether bank 
lending to nonfinancial corporations and individuals was really declining during this period in 
ways that posed a threat to the real economy",0
"some argue that if price s started falli ng corp orate p rofits would be squeezed due to the d ownward 
rigidity of nominal wages  and there would be a high probability of a deflationary spiral emergi ng",0
therefore we are facing the ereality in which eadministration has its liabilities towards eeconomy,0
if those market forces are driving financial firms toward centralized decisionmakingregarding risk pricing and other operational issues it will be difficult at best to implement adecentralized approach to prudential regulation however attractive its apparent simplicitysimilarly in the face of continual marketdriven innovations in banks risk measurement andmanagement systems regulatory approaches based on rigid onesizefitsall rules are likely tobecome quickly outdated ineffectual and worse potentially counterproductive,0
for the costs of financial crisis can be heavy  not only with regard to the amount and duration of real economic losses but also concerning the often considerable fiscal costs,0
the lingering concerns about their condition relate primarily to their low profitability an issue that has already lasted several years,0
but the constraints were significant  first and foremost the lack of trust among member states partly justified by the episodes which ignited the crisis fiscal misreporting and failures in financial supervision,0
"i turn now to the second factor namely the weakness in the australian economy in the second half of
2000 and its flowon effects to the first part of this year",0
"1 prominent examples of critiques of  the existing macroeconomic literatur e include p krugman 2009 how 
did economists get it so wrong new york times  2 september and wh",0
"first the recent upward trends in global prices of major food items have significant 
implications for the domestic agricultural sector and overall macroeconomic and financial 
stability",0
"why did policymakers tolerate for a while further increases in the output gap and why did they
subsequently become more concerned about the inflation risks from further increases in the output
gap",0
some of our prudential guidelines on key areas such as investment classification and valuation norms impairment recognition and loan loss provisioning as well as securitisation are indeed at variance with international accounting norms,0
"the outlook 
over the past few months the outlook for growth in the euro area has deteriorated steadily",0
"many commentators have raised a very valid concern t hat in the event of a secular decline in oil and 
gas prices drawdowns for stabilization could consume the entire fund over time",0
"when a shock hits and the correlation breaks do wn the hedge breaks down too with a double 
whammy to var and so for regulated firms to regulatory capital requirements through higher volatility and a higher measured exposure",0
all in all however desirable it may be from a prudential perspective it seems odd to discuss this proposal without considering its fiscal consequences,0
on the one handdownward pressures could materialise if import or producer prices were to fall further while on theother wage developments would become a matter of concern if wage increases were higher thanexpected,0
"when these flows turned into outflows as the economic environment deteriorated 
after 2008 these imbalances not only led to problems for the countries concerned but also 
produced contagion to other parts of the euro area",0
note though that the consumption share remains well below its value in the early 2000s,0
the fiscal gap has been mirrored in a widening current account deficit mainly reflecting the oil trade account,0
today i will discuss the conundrums that the economic policy in europe  mainly monetary and fiscal policy  face against this backdrop,0
i have already mentioned that earnings from maturity transformation will not be sufficient,0
i am concerned that developments in zimbabwe have tended to have an adverse effecton our markets in particular our currency and bond markets,0
"1 
however the economic implications of the crisis go far beyond the fiscal burdens",0
"basically this is very much a vicious circle if public finances run into difficulties the banks are put under strain  if the banks hold government bonds on their balance sheets for 
example",0
still it would be too simple to lay the challenges faced by monetary policy solely on the european supranational institutional framework national characteristics were in many ways inadequate too,0
"in addition the unconventional measures of the past few years have blurred the 
boundaries between monetary and fiscal policy in places",0
of course the risk inherent in this kind of policy response is that the increased fiscal commitments persist beyond the time they are required,0
"when the exchange rate ceased to be perceived as sustainable and the risk of an adjustment
grew the earlier capital inflows turned into massive outflows",0
a local issue in europe of course is brexit where there remains a lot of uncertainty and clearly if theres a nodeal brexit thats going to be a downside risk,0
the initial tremors of the euro area crisis occurred in greece in the fall of 2009 following news that the countrys fiscal deficit would be much higher than had been expected by the markets,0
now largely because of the lower oil prices but also because the global growth outlook has weakened these projections have been revised downwards to 17 by 2017,0
the implications of this fiscal scenario are far reaching,0
"14
the monitoring statistics referred to above are drawn in very large part from the onbalancesheet positions of a limited number of albeit important creditor institutions",0
"on the institutional side the eu fiscal framework which had been revised in 2005 was too weak and not 
implemented with sufficient rigour",0
"at a general lev el these cha nges were si gnifica nt be cause they 
offered the p romise of limiting the overall hedge fun ds could take on as well  as the dire ct credit  
exposure of firms to he dge funds",0
there are risks attached to the global economy which seems to be on the downside at least in the near term as regards both output growth and inflation,0
rather the puzzle is on the pricing side as prices have been higher relative to costs than expected,0
in the second case that is if the situation is rather one of a cyclical upswing then clearly credit growth will have to undershoot nominal gdp growth for many years in the future,0
however the economic expectations became confused in the second half of 2000,0
a look at durable goods consumption indicators reveals the steep fall in sales levels figure 9,0
"the arguments run asfollows
first it hampers efforts to broaden the investor base",0
"we can see this weak performance in a number of ways but ill use two 
particular metrics the unemployment rate and the employment population ratio",0
however for those banks with large client clearing volumes disallowing client initial margins to compensate for potential future exposure may inevitably create constraints on their leverage ratios,0
here by the way i am departing a bit from my selflimitation to prudential issues since consumer protection issues around alternative payments systems may be quite significant,0
"as a result the central b ank will face a difficult decision as to how far 
it is prepared to go",0
"responding to low inflation
from december 2011 onwards inflation in the euro area began a sustained downward drift reaching its trough in january 2015",0
in addition foreign exchange revenues from tourism have been dropping reflecting the weakening us canadian and european markets,0
"if the board of directors of a governmentcontrolled financial in stitution comprises only representatives of 
government there may be a tendency for the broader goals of government to override the 
commercial objectives of the bank and thereby depositors interest",0
"but with accelerating inflation in the economy as a whole theprice of such protection of the suffering sectors would have been tantamount to real exchange rate
appreciation which would in any event have damaged their competitive position",0
at the same time our weak currency also created pressure on the exchange rates of our neighbors causing the interest rate to be kept high for longer than necessary which in turn also fed into the nonperforming loan ratio,0
"it also amplified the crisis as ongoing deleveraging in 
the industry inevitably put downward pressure on financial markets and on the real economy",0
however i may point out that foodprices display a larger degree of volatility owing to their seasonal pattern,0
"graph 3 
 
 
 
on top of this investor demand for new issuance declined both internationally and domestically because of the brand damage to rmbs from the us in particular where poor lending and servicing practices saw a material deterioration in collateral performance",0
a lack of liquidity coupled with the erosion of capital due to losses on sovereign exposures eventually led to entire national banking systems being unable to access market funding,0
according to our surveys credit conditions tightened somewhat especially for small enterprises following the increase in banks funding costs and the deterioration in the economic outlook,0
"as long as fiscal policy is  on an unsustainable course with government 
debt ratios still rising the social costs of further delaying adjustment will exceed the costs to society of acting sooner",0
"on the other hand we all know t hat the banking system will also fa ce mounting operational challenges 
in the future",0
in short the general economic difficulties have placed central banking at a crossroad in relation to its principles policies and management,0
after a long series of unexpected drops in consumer price inflation in december the twelvemonth variation was negative in eleven countries and for the first time since october 2009 in the euro area as a whole,0
"what worries us is that consumer sentiment 
indicators in the united states have been declining since the middle of last year",0
           sixth political deliberations in the euro area also played their part in delaying the recovery of the greek economy,0
"not only do gover nments lack a suitable hedge for longevity 
risks but  due to national payasyougo sche mes  they already face a huge demographic 
burden which should not be exacerbated needlessly",0
"as a result the cost of justifying adjustments in monetary policy becomes quite high in the eyes of 
central bankers when such adjustments are ai med to deal with imbalances which appear in 
forms other than price indices",0
to me saying that the riksbank has no mandate to take these risks into account therefore appears rather odd,0
the debt reduction process which private households in the us are currently undergoing and the consolidation of government finances in several european countries in particular are dampening economic activity in the short term,0
this poses a particular problem in a currency union as the price of unsound budgetary policies may to some extent be passed on to all the other member states,0
with respect to aggregate demand the economy faced several important headwinds efforts by households and businesses to rebuild their balance sheets persistently tight credit conditions the extreme weakness of the housing sector the significant drag from fiscal policy in the years from 2011 to 2013 and the growth slowdown in europe and other parts of the world,0
in addition the fiscal position of these economies has deteriorated after several years of fiscal deficit,0
the main issue is the economic context of such events which is a rather difficult one we cannot deny that,0
one aspect that has been raised is this are banking rules procyclical,0
"the main difficulty however stems from  the deficiencies in the european institutional 
budgetary framework",0
complicating the outlook are the challenges faced by the chinese banking sector in particular the shadow banking sector which has the potential to reinforce the slowdown,0
"but it is also 
inappropriate from the standpoint of its impact on inflation at a time when this variable as 
2 bis review 442008
 you know is deteriorating sharply",0
"others argue that in this world of knowledgeintensive
industries accounting treatments do not accurately measure true economic earnings and therefore
measures of correct  stock valuations do not capture economic reality that market participants see",0
in pakistan however the situation under which the fiscal and monetary policies have to operate is fundamentally different and far more complicated,0
the other external risks we have been watchful of are the tepid recovery in europe the impact of abenomics and the growth story in china,0
besides the losses they may incur and thereby run into financial difficulties there is a risk of the stock market functioning less well because prices bolt from more fundamental levels,0
but they also have less formal procedures and internal controls simplybecause their staffing and operations are so much smaller,0
the situation in the field of fiscal policy is more complicated,0
nonetheless the mediumterm risks to the outlook are still disquieting,0
"in the short 
term europe is experiencing a recession and rising unemployment due in part to fiscal 2 bis central banke rs speeches  
 austerity and banking sector deleveraging",0
germanys fiscal situation is likely to deteriorate by around 03 to 04 of gdp in 2016 and 2017,0
demographic and economic changes along with the low interest rates that followed the financial crisis have upended the calculations that many canadians made in planning for retirement,0
"these problems are clearly visible if one compares the most recent calculation of the gdp 
gap in the september monetary policy update with the estimates made in real time",0
however looking only at the aggregate data for the euro area as a whole also has its limitations and average figures can conceal significant differences in performance,0
the trade balance in january 2012 also marked a record deficit,0
the greater risk lies in a large correction in asset prices that leaves investors with little or no equity in their investments at a time when the broader economy is under pressure,0
"some commentators on the earlier basel ii and basel ia proposals voiced concerns that 
adoption of a new capital framework for the largest and most complex us banking organizations could disadvantage other us banking organizations particularly the smaller banks",0
similarly cfms could be applied on capital outflows if the economy is stagnating fx exposures are high and reserve levels are inadequate,0
besides weak data series there is also the problem of coping with lags in monetary data,0
"some economists notably krugman have argued that the size of the stimulus should be much larger than what the models 
suggest simply because in depression economics the usual laws of economics do 
not apply",0
more fundamentally the impact on financial behaviour which is the ultimate goal cannot be measured straightforwardly since students may still be years away from important financial decisions,0
the third risk is that banks intermediation capacity may be hampered by their continued low profitability,0
in some cases the price dropped so much that the value of the collateral fell below the loan amount,0
"ii incomplete indexation of the tax system 
a second cost of anticipated inflation is the added inefficiencies that arise when an already 
distortionary tax system is incompletely indexed",0
"while it is true that those factors have been complexly intertwined broadly 
speaking the following can be pointed out",0
the current account deficit averaged 2 of gdp in the first halfof the 1990s worsening to 8 of gdp in the second,0
the discussion on external debt has driven market sentiment negatively as it is being touted as a source of vulnerability,0
the question is how much scope the relevant governments have for such actions before encountering the potential limits to credibility of their own balance sheets,0
and this comes at a time when profitability is already weak when the sector has to adjust to postcrisis deleveraging in the economy and when rapid changes are taking place in regulation,0
fourth deterioration is the fiscal position stemming from rising expenditures accentuated the twin deficit risks,0
extending maturities on the other hand would leave them on the hook and they could be still held liable if debt is restructured down the line,0
"on the one hand labour productivity remains 
around 8 below the level it would have reached had it followed its precrisis trend chart 9  implying a significant margin of spare capacity in the economy",0
finally on the external side upside risks stem from the possibility of further unexpected oil price rises,0
"let me close with a few comments on what i see as so me of the more important risks to the outlook for 
the us economy",0
"conclusion
currently the policy dilemma is one of trying to address the deterioration in the inflation outlook against the background of a weakening growth outlook",0
"indeed all of the banks felt this was 
going to be the c ase and they argued against being required to put up sufficient capital to 
meet an overall nama loss ratio equal to that of the first tranche",0
"in other words market participants may conclude that the public sector 
is on the wrong side of the  laffer curve  so that a further tightening of the fiscal stance 
would be counterproductive",0
primarily the euro area is faced with deflationary pressures associated with a series of economic shocks firstly the fall in oil prices as well as the overall decline in commodity prices secondly the slowdown in growth in emerging economies and chiefly china and lastly inadequate growth in the euro area with persistently high unemployment which curbs wage rises and weakens demand and price growth,0
in 2012 these imbalances intensified further reaching levels that pose a risk to the stability of the banking sector and hence to the swiss economy,0
"as i have alluded to before current generation economic models used at central banks were 
ill equipped to signal the mounting risks of a global recession",0
besides the nearterm risks around productivity growth are tilted to the downside,0
a further major complication is the future securitypolicy situation which is naturally hard to assess with traditional economic tools,0
"as a third point i would like to mention the balance sheet adjustments that have followed the share 
price bubble and which have been having an impact in the financial markets",0
"we need to pause to consider what inflation rates at this level do to fixed contracts like 
pensions savings and the salaries of persons with low bargaining power",0
"protection accorded to secured creditors as against unsecured creditors and depositors in case of banks in a sense goes against the basic model of banking which presupposes 
deposit mobilization by banks thereby requiring strict regulation",0
however one must bear in mind that this kind of volatility normally happens in times of crisis or in jurisdictions that have rather bad macroeconomic fiscal or monetary discipline,0
"lesson 6 inflation targeting is necessary but not sufficient 
a more fundamental question is whether the inflation targeting  regime itself needs to be re
thought",0
however should the ecb expand its qe program  which appears increasingly likely  and in so doing cause another round of euro depreciation this could be to the detriment of our exporters,0
well of course if it keeps doing that then the central bank fx reserves fall confidence in the currency will fall and we will have all sorts of problems that we have had historically,0
on the one hand if the equity cushion proves to be too thin the system might well fall over,0
granted these regulatory premia have cost implications but it would be costly to have yet another crisis,0
bubbles appear to emerge when investors either overestimate the sustainable rise in profits or unrealistically lower the rate of discount they apply to expected profits and dividends,0
but i fear it may produce rather poor monetary policy for several reasons,0
"another factor which led us to review our banking supervision arrangements was
a concern at the compliance costs and regulatory distortions which can be associated withconventional approaches to banking supervision",0
"these imbalances stand out as one of the most serious vulnerabilities faced by the domestic economy as they are t he main channels whereby the potential halt in 
external financing feeds through into exchange rate depreciation",0
on the other hand product designs inadequate to the needs of users also limit financial inclusion,0
when the credit losses increased there was uncertainty over where the losses would finally appear,0
perhaps they do and the issue is really one of incentives that lead to their ignoring this risk which i will turn to next,0
evidently the introduction of new prudential control measures entails an additional effort for banks at a time when the sluggishness of economic activity is exerting significant pressure on their margins,0
"at the turn of the second quarter of 2012 doubts arose once more about the 
viability of the southern european fiscal programmes",0
in particular the consequences of the sovereign debt problem in europe remain unforeseen,0
but how will you respond if their deficit exceeds 5 of gdp or even reaches 7 as some forecasts suggest,0
"without firm guidance on the goals of monetary policy market participants could lose their point of reference which could result in them adjusting their longerterm inflation expectations 
as a mere reflection of current circumstances rather than taking into account the ability of the 
central bank to achieve its goal over the medi um term",0
"however one set of costs  those 
directly or indirectly connected with closing bank accounts  hinder customer mobility and thus 
constitute in themselves an impediment to the fr ee working of the mechanisms of competition",0
what i do think might be worth considering however are disincentives for brown finance  but only via traditional instruments such as tax rules,0
asset prices may reach levels inconsistent with underlying fundamentals,0
"the second  challenge for european policy makers will be a possible major economic downturn which
 as economic history tells us  will sooner or later come",0
"such outcomes can be 
even more likely if loan products have complex repayment terms that are not fully understood or if the borrowers have unrealistic expectations of their future income or house prices",0
"but if at any point all nine members did so the centrifugal elements of our individualistic system could it seems to me 
lead to genuine cacophony",0
"this 
perspective raises the issue which i will return to later of whether the negative 
consequences of the decline in intermediation required both of these elements to be present",0
as a result it became necessary for them to either sell more assets to maintain adequate capitalization levels or to reduce their loan values,0
"thus assuming a growth rate of 15 
percent in 2009 the budget deficit is expected to reach about 3 percent of gdp based on the automatic stabilizers ie the expected drop in tax revenues resulting 
from the slowdown in growth on the one hand and a certain rise in government 
expenditure arising for example from an increase in unemployment on the other",0
therefore concerns of high inflation caused by deficit financing during 1960s gathered momentum during the 1970s,0
"it is a cause of concern for public policy because of the 
associated costs especially when a large part of the population has no hedge against inflation",0
"however this kind of loss induced regulatory and 
supervisory reform often leads to patchwork plumbing which in turn results in a vicious circle 
of further losses and more patchwork",0
however distributions will not be assured in the future either since our results will continue to be subject to considerable fluctuations,0
"il sole 24 ore  even accepting a period of deflation with all the possible social 
consequences this might have",0
"a supranational 
monetary policy has to coexist with fiscal policies which essentially12 remain at national responsibility",0
"10 the ghanaian economy was severely challenged in the first half of 2009 with rising 
inflation a depreciating currency loss of international reserves and weakening business and consumer confidence",0
business fixed investment will continue to decrease due mainly to thedecline in corporate profits and is likely to enter an adjustment phase,0
"viewed together with the negative experiences of the recent financial crisis it is thus tempting to assert that the financial sector has in fact grown out of 
proportion",0
with hindsight it is easy to see that the regulations have focused too little on liquidity risks,0
we also see an upside risk to this forecast with the main risks coming from the exchange rate for reasons elaborated on above and food prices,0
indeed figure 1 column 3 indicates that many mpc members have significantly negative coefficients on the output gap,0
what i would say is that there are substantial risks to real growth in the united kingdom but also as a knockon effect on the eurozone,0
"much more important are risk aversion in the markets limited access 
to foreign credit an uncertain operational environment and impaired corporate balance 
sheets",0
" for instance inflation may still be running high in case of procyclical fiscal and 
wage policies",0
"however one can argue that there is something wrong in the level of profits shown if the latent credit 
risk in the loan portfolio is not properly taken into account",0
whatever the outcomes resolution planning is thrown into sharp relief in view of the potential financial stability risks associated with the failure of larger established firms and the elevated likelihood of failure for smaller newlyformed monoline enterprises,0
"th ey look up on their asse ts as a substitute for saving s not only a merican 
citize ns are not saving m uch if at all even ce ntral governm ent is dissaving  witness the hig h budg et 
deficit",0
remittances are another important channel through which the us economic slowdown could manifest itself in the philippines,0
third by their very nature economic frameworks can onlybis review 1092000 4provide a summary description of the economy and thus do not incorporate all relevant information,0
thus hasty diagnosis and as i heard from many analysts simplistic comparisons among the various countries situations may lead to inappropriate policy recommendations,0
one cannot rule out the possibility that investors might reduce their holdings or perhaps no longer wish to own swedish mortgages through covered bonds when housing prices are falling heavily,0
"for instance if the risk of a financing gap had materialised at the 
highest level expected for 2009 then the depreciation pressures on the leu would most likely have generated a currency crisis with a negative impact on inflation and implicitly on leu
denominated financial assets of households",0
in this context the particular problems and the specificity of the viewpoints tend to take precedence over the vision of the whole,0
and this debate is currently obscuring the consensus on the longerterm effects of consolidation,0
there are several major issues but yes brexit is one of them,0
"the other aspect which causes serious 
concern is that the comprehension of these models remains confined to a small group of 
quants  and it becomes very difficult for the top management and boards to comprehend the 2 bis review 22010
 actual risk undertaken by the organisation",0
"while this is  true of all financial institutions the need is 
particularly great for those which are sharia compliant due to several issues that are specific 
to their business model",0
"at the same time too abrupt a depreciation would have generated a much larger share of non performing loans currently they stand at nearly 16 percent of total 
loans with the result of worsening  banking indicators",0
"vat receipts have continued to fall this year they were down by 102 per cent in 
2 bis review 272009
 the first quarter from a year earlier and by 121 per cent in the second quarter while 
consumption fell by 26 per cent",0
we felt this acutely during the financial crisis when market values of bank equity plunged while book values evolved only very slowly based on accounting measures of losses,0
as a result macroeconomic growth would be impeded,0
"but there are tendencies in the european union to think that bailouts would be 
considered if distortions of the economy are at stake",0
across all of these concerns the underlying factors may be either structural or cyclical,0
but it is also an economic issue and that is my concern,0
"bis review 1092008 3
 in addition it arrives at a conclusion that i have been claiming in discussions with my 
colleagues for some time far from being disco nnected financial stability objectives and the 
rest of the traditional monetary policy objectives are two sides of the same coin",0
if the central bank did not provide that liquidity a credit crunch would ensue and that would create a significant downdraft in the economyin effect a deflationary shock,0
on the other hand it is absolutely clear that neither the european financial stability facility efsf nor the other support programmes can do anything about the longterm problems,0
let me now turn to another concern that is often expressed around bond market liquidity namely that with the decline in intermediation by the banks the likelihood of market dislocation is higher,0
"the possibility i am airing is 
that another factor may be the size of a schemes discounted liabilities  and the prospective volatility of 
the associated funds net value relative to the sponsors underlying business and capitalisation",0
of course whenever financial stability risks are looming this represents a challenge above all to macroprudential policy,0
overall however risks to growth are primarily on the downside particularly because of the economic consequences of the war in ukraine,0
"those reasons 
most often relate to policy or institutional shortcomings",0
the governments of these economies have to deal with their own problems which are not negligible,0
"however in a slowdown as the impaired assets rise the specific provision requirements increase and the statistical provision 
becomes negative",0
"however when banks are trying to deleverage such additional reserves are more 
likely to be hoarded",0
"this 
corresponds to a situation in which the riksbank clearly and transparently announces an alternative repo rate path that it intends to follow and that affects market expectations and thus inflation and the real economy",0
"on the other hand it could also turn out that 
inflationary pressures build more quickly than assumed",0
"at present the european continent is being handicapped above all by the high degree
of official regulation and the manifold inflexibilities on the labour market",0
"as the federal open market committee noted at its last meeting uncertainties 
bis review 1402007 3
 about the economic outlook are unusually high right now",0
"3the imf s estimates for 1999 are 1 ½ altogetherbis review 1151999 2in the meantime the turbulence emanating from southeast asia which rapidly shook the financial
and foreign exchange markets one after another as well as the severe structural crisis in japan have
led to the emergence of new macroeconomic imbalances",0
"a big question mark hangs over japan as it remains unclear how the recently 
implemented stimulus packages will impact on the real sector",0
in addition the reform of the stability and growth pact sgp in 2005 has weakened the fiscal framework substantially,0
a particular case of operational burden of interest to this audience is the limitation on trading of assets in the ma portfolio,0
otherwise large real wage reductions might occur which are unnecessary and undesirable both from an economic and a social perspective,0
"the role of the repo rate path during the financial crisis 
when we began to make repo rate forecasts a few years ago i do  not believe anyone
 
expected a situation like the one we had when gdp fell by 5 per cent in 2009",0
"finally it is not clear that bankruptcy 
costs are relevant in the context of the tbtf problem where precisely those costs are never really incurred",0
on the other hand an illtimed exit or its premature expectation may also put some financial institutions at risk depending on their maturity mismatch,0
"on  the other hand regulations that are enacted for 
broader societal purposes but that the enterprise sees as of little benefit to its revenue growth can be viewed as an expensive mandate",0
in addition structural deficits have become rather large and public debt ratios have started to increase limiting the room for manoeuvre of automatic stabilisers,0
"as for the outlook of the chinese economy the growth rate is likely to remain downwardbiased owing to a sharp change in the demographic situation and the resultant fall in the 
potential growth rate ",0
however toward the end of 2007 at about the same time that the united states entered a recession the headwinds facing the asian economies appeared to strengthen,0
"let me make a note of some 
of the key categories 
 privatization revenue from the prior period has been spent and the 
likelihood of substantial future inflow of revenue on this account is 
diminishing 
  terms of borrowing in both domestic and international financial markets 
have already worsened  the price is not even asked 
  vat revenue will certainly dwindle as uncertainties rise and the purchasing 
power diminishes 
  the volume of contributions will also shrink",0
at the macroeconomic level several shocks interacted leading to a decline in credit demand and supply and evolving in some regions into a fullfledged sovereign debt crisis,0
"bis review 382009 3
 this brings me to the point that we as the central bank must be prepared to make unpopular 
decisions",0
on the one hand more restrictive fiscal policies are likely to hold back growth in europe,0
"the irb bank would find little attraction in lending to low rated borrowers 
because they would have to incur a capital c harge which would be higher than 8 while sa banks 
might be indifferent regarding their lending to such  borrowers because they anyhow would have to 
incur the capital charge of 8",0
however as noted in the most recent mpc statement the upward drift in core inflation in the absence of any obvious demand pressures would suggest that there may be emerging underlying pressures owing to lagged effects of the exchange rate depreciation as well as higher unit labour costs,0
i am however not going to delve deeper into this debate and would only focus on some of the imponderables which implementation of ifrs would throw up especially in the indian context,0
the situation went too far resulting in large balance of trade and government deficits which required tightening measures,0
longdated marktomarket assets would then lose value while funding costs would mount on the liability side,0
"fiscal deterioration was compounded in some countries by the size of blanket guarantees 
given to the banking sector",0
the biggest problems are institutional political and  perhaps most of all  societal they centre on fiscal policy decisions collective bargaining agreements and overall societal consensus,0
"around the period domestic concerns pertaining to high cad moderat ion in growth high fiscal deficit high inflation and policy uncertainty 
were some of the major concerns for foreign investors",0
this is the case not only because of concerns over the impact of monetary policy decisions in advanced countries but also given that an economic slowdown in emerging economies may potentially compromise a still fragile global recovery,0
"as ive just talked through though these 
future decisions have the potential to affect near term macroeconomic outcomes",0
"the cash flows to be expected of these claims are now discounted 
by an abnormally large risk factor",0
the question is of course the conditions under which we would decide to use that instrument because it is clear that the negative rates at some point have also side effects that start to become more important namely on the profitability of banks,0
"3  
international factors  
the sharp decline in global oil prices over the past year has had a large impact on headline 
inflation",0
the main risks i see to that outlook are from abroad,0
in most cases the impact becomes more pronounced as debt accumulates and may also lead to financial stability issues,0
in such a context fiscal discipline could indeed degenerate into a loose fiscal policy and the latter would in turn contaminate monetary policy,0
the loan imposed tough terms senior management was replaced and shareholders lost almost all of their investments,0
"there is the 
inexorable shift of global economic weight to asia the publicdebt problems in the north atlantic economies the multispeed nature of the australian economy the more conservative approach to spending and borrowing by australian households and the list goes on",0
the bigger concern is profitability which was already low,0
heterogeneity among the euro area countries regarding their fiscal situations poses an additional challenge as it increases fragmentation risk,0
the banks concern was that their recourse to the discount window if it became known might lead market participants to infer weakness  the socalled stigma problem,0
"with the crisis fiscal imbalances increased not so much because of a rise in expenditure but 
essentially through a massive loss in revenue",0
norges banks management results in 2008 were weak in both absolute and relative terms,0
but the weakening appears to have gone beyond this adjustmentreflecting a deterioration in shortterm profitability and cash flow,0
"however by itself the existence of substantial price discounts in distressed sales speaks 
only to the positive economics of fir e sales not the normative economics and hence is not 
sufficient to make a case for regulatory intervention",0
the stakes are high because the economic and social cost of the crisis has been large,0
"in any case the additional fiscal costs that governments have 
shouldered will be carried forward in terms of higher debt for years to come",0
"for instance inflation creates a wellestablished fiscal bias as tax bands may not be sufficiently
updated or because interest incomes are taxed whereas they incorporate a risk premium which does
not constitute an effective income in itself but rather compensates for the depreciation of financial
capital",0
"rather my point is just that the financial stability costs of asset purchases are likely to 
loom larger when term premiums are more negative and that this consideration belongs in the discussion",0
while andrew does acknowledge that such a policy may be considered excessively cautiousparticularly when the potential for inflation is remote he does however makes the point that the cost ofa financial crisis would be far greater than the output forgone by the policy action to constrain suchunsustainable growth,0
japan which is in manyrespects a unique case faces substantial fiscal consolidation,0
leverage however amplified the losses as house prices began to decline,0
"it is often difficult for 
investors to determine the underlying assets that ultimately provide the cash flow for these 
products  and therefore to determine their direct exposures",0
"indeed the largest deficit experienced over
that 25 year period relative to gdp was in the midseventies with another very large deficit in the
mideighties",0
if the size of the risky assets was sufficiently large compared with the size of the banks net capital the bank might fall into capital deficiency,0
"if on the 
other hand the measures are designed to be fairly broad based the more basic question of 
the appropriate role of monetary policy may be raised by those who are focused on reactive 
policies that  get in all the cracks  of the financial system not just the heavily regulated 
portion occupied by large financial firms",0
"one might think that only an economist would argue in these terms to worry that a capital 
gain on an asset that you own could actually make you worse off because of some vague 
notion of higher future housing costs especially for your children",0
but within this framework there are substantial national differences such as regarding the extent to which various stakeholders are protected in the event of an insolvency,0
in addition deposits fell substantially by some 117 billion a 49 decline between september 2009 and december 2015 in part because of depositors uncertainty about the macroeconomic environment and the prospects of greece within the euro area,0
"i would like to elaborate on a concept which is often forgotten by analysts especially those 
who look at the current situation from the perspective of emerging markets experiences in the past",0
the unease about the slowdown in china appears to have been further fuelled by various policy measures implemented by chinese authorities to restore confidence during the sharp selloff in their equity market as well as the unexpected devaluation of their currency which at the time seemed to have created even more policy uncertainty,0
the banking crisis in the early 1990s left sweden with a substantial fiscal deficit,0
"one of the greatest challenges for fiscal policy is demographic changes which will place a 
heavy burden on public finances in the future",0
"the third phase was the period may 2001 to june 2003 when the euro area found itself in a period of 
subdued economic growth following a number of global  shocks",0
the largest of these are the ramifications for the us economy of the continuing sovereign debt crisis in europe,0
"completing the euro areas institutional architecture  
in addition to the role of misguided or imprudent national policies the narrative of the crisis 
that i have just spelled out clearly points to some serious shortcomings  in the institutional 
architecture of the euro area",0
the bigger threat to price stability over the long run does not lie in relative price changes but rather in a loss of independence by central banks following a situation in which they have they ventured far into a political agenda with distributional consequences,0
"the publication of these minutes would indeed present some drawbacks  
 first governing council members may speak for the minutes when these are very detailed while 
when they are not detailed may not convey more information than a plain communiqué 
 second the publication of the minutes might also create more difficulties for moving from initial 
positions to new ones in the light of the arguments developed 
 finally and most importantly in the case of the eu ro area the analysis of the votes could be read and 
interpreted as reflecting national interests or preoccupations which would be misleading and could 
jeopardise both the independence of the members of the governing council and the credibility of our decisionmaking processes",0
"the adopted conclusions that refer to our country 
amongst other things state that generally the document suffers from a lack of reliable statistics 
impeding the analyses of the position of the countr y regarding the growth cycle which you would 
all agree has to do with the reliability  in such situation with inflation calculations particularly of the 
expected one",0
"5 in 
addition the complexity of the securities meant that it would be difficult to understand the risks even if an investor had access to all of the relevant mortgagelevel information",0
"16
when applying these approaches to the euro area it emerges that in comparison to the years prior to the crisis estimates of the equilibrium real rate have sharply declined during the crisis and have kept declining or remain in deep negative territory over the recent periods see chart above on estimates of the equilibrium real rate",0
external demand conditions are also expected to contribute to disinflation in 2008,0
it is even more problematic in the event of crisis resolution especially for crossborder institutions as has been seen in the specific case of a large and complex banking group,0
the question that comes today is that with the slowing of the economy because of international and geopolitical factors you get lower growth then you get also the negative effect of the rate situation on the intermediation margin,0
"a basic reason for the enhanced reg ulation faced by banks is the importance of 
protecting retail depositors in view of the deposit based funding structure of banks and the 
inherent maturity mismatch between short term deposit liabilities and long term illiquid assets 
such as loans to corporates and households",0
the question is if and when is it opportune to make recourse to that sort of instrument which is really an extreme sort of instrument,0
the israeli economy is presently confronting a very complex situation,0
i am oversimplifying the exercise as it also looked at other elements of the profit and loss account over the coming years,0
"given that the 
underlying current account surplus is in the region of 34 of gdp and that 
there are a lot of other debt repayments laying claims to it it is clear that if these amounts were to be released overnight we would be at risk of another currency crisis with potentially significant financial stability implications",0
"8 here after all is where the potential for negative 
externalities is the greatest while the marginal benefits accruing from scale and scope 
economies are hardest to discern",0
with these liquidity conditions initial asset price adjustments would be amplified triggering further redemptions and margin calls thereby fuelling such negative liquidity spirals,0
also awaiting the eu are the possibilities of major difficulties associated with the current greek crisis and later with a potential british exit,0
for that reason too safeguarding monetary stability isa perpetual challenge for the euro,0
the recent softening of the macroeconomic growth outlook and the associated lowforlonger interest rate environment are likely to weigh further on their profitability prospects,0
"the costs of anglo depended even more heavily on its nama haircuts given the relatively 
high fraction of its portfolio being transferred",0
moreover with the outlook exceptionally uncertain the optimal timing scale and composition of any fiscal package are unclear,0
"factors outside the control of bank management however are also importantly related to 
profitability particularly over the past several years",0
" the argument against holding reserves has centred on the opportunity cost of 
holding them and als o that the comfort they provide may encourage excessive risk 
taking and therefore become detrimental to macro stability",0
"on the other hand it is a waste of societys resources to 
expect them to also carry capital to cover unrealized losses that arise simply because market prices have 
become unhinged from economic fundamentals due to tr ansitory factors such as a breakdown in market 
liquidity",0
the pandemic has nevertheless further highlighted the limits of the current european arrangements which do not provide for a common fiscal capacity,0
"in my opinion as interest rates have reached virtually zero percent amid japans economy 
shouldering various structural problems and monetary policy has been hampered to a great extent it 
is not appropriate to adopt inflation targeting",0
it is obvious that the european economy is constantly being hit by macro shocks the war in ukraine and the energy crisis we are currently experiencing are just two of them,0
the second thing is a negative impact on real income due to the consumption tax hike,0
stepping back from the quarterly data there are other signs of adjustment,0
"13 in addition the higher haircuts forced 
the owners of the assets to come up with additional cash which typically meant that they were forced to sell assets",0
provocative question number 3 to what extent might the invocation of manual procedures in protracted outage scenarios exacerbate rather than assuage from a financial stability perspective,0
"a first objection is that equity is expensive  that the enhanced standard will force sifis to 
reduce their balance sheets because with higher capital ratios they cannot earn the rate of 
return that will be demanded by their investors",0
"and as long as that is the case the arguments for shifting losses completely to the 
european level do not appear to be compelling",0
for example the rbis annual report 199091 stated that the import cover of reserves shrank to 3 weeks of imports by the end of december 1990 and the emphasis on import cover constituted the primary concern say till 199394,0
"hence even countries such as ireland or spain that had impressive fiscal data before the crisis ran into 
deep trouble once the enormous implicit liabilities in their banking sectors became  apparent",0
inflationary pressures were however led by dev elopments in international oil and food prices,0
"the other concern was that share
prices had risen to levels which many felt were not sustainable in terms of reasonable expectations offuture corporate profits",0
above all however the turbulence has widened the range of uncertainty associated with the central scenario for the european economy that i have just described,0
"instead we have nearly the opposite significant retrenchment in the near term but no 
credible action over the long term with partisan divisions and significant uncertainty about 
what will happen next",0
from the perspective of potential customers practical reasons and cultural barriers exist as manifested by distrust in banks,0
here i would like to focus on one critical aspect of the discussion that monetary policy can affect financial stability only through its effects on household debt even though it affects a wide swath of the real economy,0
these loans make up more than 30 percent of community bank assets and have deteriorated sharply as fundamentals in property markets have weakened,0
banks ability to support their capitalization level through profitability will remain under pressure in the near future too,0
"establishing closer contacts with private creditors particularly at an early stage of a crisis raises difficult
issues thus it is not surprising that the interim committee has not pronounced on this point",0
"from a longerterm perspective a downside risk of concern is that the expected growth rate 
may fall much further than expected",0
the overall impact on earnings is thus difficult to quantify,0
"on the other 
hand the overestimation of deflation risks might sow the seeds of the next crisis",0
"consequently in the october 2011 
outlook report the banks forecasts were revised slightly downward from those made in july 2011",0
if that were to be sustained it would naturally be accompanied by a reduction in the search for yield and some increase in spreads which would tend to weigh on issuance,0
"had we not acted in 1996 the adjustment would have been more painful and the banks would
have had more serious problems with their loans",0
"weaker demand led in turn to stock adjustments and
thereby to a further downward effect on orders and production",0
"in addition to the long history of recurrent financial calamities which by itself is a challenging 
precedent there are other reasons for not holding overly optimistic expectations",0
"as you know the aging of the population in the united states will have significant effects on our fiscal 
situation",0
"a drop in deposits may lead to fx pressures with an impact 
on the external position and may affect fiscal accounts due to the impact on sustainability of 
4 bis review 142009
 the potential fiscal cost of a financial system bailout or domestic currency depreciation in the 
face of a currency mismatch",0
"one argument that i think also weighs heavily from a practician s point of view is the 
difficulties i foresee with regard to communicating a nominal gdp target",0
a bank wont benefit from deposits as such if on the other hand it cannot lend sufficiently as it then only bears the costs created by the deposits but makes no return,0
in europe it was wellknown in advance that monetary policy would not become a cureall and that problems like national fiscal overload were likely to emerge,0
on the other hand it is more or less obvious that the knowhow acquired by an auditor concerning the specific business financial and operational aspects of a company would be lost with each rotation,0
"thus the virtually global decline in margins in banking business is reflected
particularly clearly here",0
"a number of other one off factors have also been 
affecting inflation",0
the parameters according to which the analyst expresses hisher views are however not transparent,0
but even if longerterm interest rates in the euro area would rise in the tow line of us capital market rates this would imply a challenge for euro area banks,0
by contrast the costs of various macro prudentia l policy measures will be readily felt,0
"disinvestment the longterm risk 
the most important upside risk to the growth outlook is related to the generalised 
disinvestment situation that greece faces for a prolonged period",0
"fifth there is the personnel of the bank because they
know that either all or part of them will lose their jobs",0
"bis central bankers speeches 3
 first of all there are uncertainties regarding developments in overseas economies and 
international commodity prices",0
"declines in gdp were evident from the third quarter leading the economy to post a 07 fall in output at yearend in terms of its yearon
year rate",0
"in the us cre loans add up to more than 
20 percent of banks l oan portfolios while for example in german banks they only account for 
7 percent on average",0
a crosssectional comparison of riskadjusted returns with other industries is also sobering,0
on the other hand the more restrictive financial conditions in advanced economies in a medium run could eventually lead to lower external demand in the emerging economies,0
and thats particularly the case in a postdebt crisis environment like the one we face in the euro area today,0
"it is evident that the high and chronic inflationary environment which has persisted for decades has 
cost us very dearly not only in the economic field but also in the social field",0
more generally we saw that the lack of an adequate governance framework at the european level considerably narrowed the policy options available once the crisis hit,0
again let me stress that this is looking at the inherent risk of the sector and not taking into consideration of the control measures put in place by such sector,0
at that time there was also an increase in the current account deficit,0
"framework more difficult to apply with an executive board 
another circumstance that i perceive as complicating matters with regard to putting the 
theoretical approach into practice is the fact that there are six of us making the monetary 
policy decisions",0
as my colleague thomas jordan has explained economic and financial conditions for the swiss banking sector continue to be challenging,0
"the lack 
of economies of scale also increases the costs of islamic financial products and thus ultimately the cost to the consumer",0
demographic change will also place substantial burdens on social security systems and public finances,0
"the disinflationary trend is somewhat  of a concern in the euro area since the negative 
output gap had  deteriorated until recently and the unemployment rate remains at a high level",0
"this meant that the banks were vulnerable in two ways first to asset price bubbles bursting and
second to depreciations of the domestic currency",0
sweden had to pay a high price for its defence of the krona in the early 1990s and a return to a fixed exchange rate regime was not a realistic option at the time,0
"but i felt that the force of the 
economic downswing may easily make it necessary to reduce the interest rate more than is 
indicated in the new path",0
for example the european commission in its 2019 report for the european semester points out that greece faces excessive macroeconomic imbalances,0
"another apprehension that was raised during the public debate 
on the discussion paper was that it is not easy for supervisors to prevent or detect selfdealing because banks can hide related party lending behind complex company structures or through lending to suppliers of the promoters and their group companies",0
on the other hand external shocks have a greater impact on both domestic financial markets and the domestic economy,0
what i am saying is that from todays perspective it doesnt look like the cake is going to increase in size again over the short and medium term  in fact it will probably even shrink a little further,0
of course on the other side the german economy is very much depending on manufacturing as we know that manufacturing has been really hit by the international uncertainties related to protectionism and also the slowdown in china and also the uk,0
applying to small banks the same approach that is applied to large banks would not be proportionate as the costs in particular of complex prudential rules would be higher in comparison and the benefits would be smaller,0
the bottom line is that the risk is now greater that inflation expectations could deanchor and high inflation could become entrenched,0
"the imf has also identified a number of old and new risks including the threat of spill overs 
from the euro area periphery to core europe  exacerbated by continuing weakness among 
many european financial institutions a lack of clarity on exposures and weak sovereign 
balance sheets",0
"4 bis central bankers speeches
 to mention just a few the property rights  of stakeholders constitute a legally complex issue",0
i consider that budgetary plans recentlyexpressed in countries updated stability programmes are not very ambitious as tax cuts are notaccompanied by appropriate expenditure restraints,0
"this is because its monetary policy and its independence could be 
compromised",0
if policymakers in central banks and in governments had not learned from the policy mistakes made during the depression in the 1930s the crisis could have been even more destructive,0
from existing data it is clear that local government absorption of the state budget remains suboptimal,0
"4 of course on top of these potential
returns there was also a question of exchange rate expectations and we will return to this issuewhen we look at reasons for the volatility of flows",0
"however i would restrict myself to sharing my thoughts in terms of next issues and 
that too to the banking system which are somewhat already visible in the global financial 
firmament",0
the flip side of digital assets are however their inherent risks which as just demonstrated by the collapse of ftx can have farreaching implications for their very markets and eventually spill over to the regulated financial system through various types of exposures for conventional players,0
as i see it this waitandsee conclusion leaves one central question unanswered what exactly is it we should wait for,0
one of the reasons may be the fact that employers are less motivated to appoint to managerial positions women who are in such a life phase when it is likely that they will go on maternity leave and have small children,0
and ultimately it runs the risk of harming credibility with regard to the pursuit of price stability as this depends on both monetary policy clarity regarding its objectives and transparency regarding its limitations,0
in the latter case the economic slowdown already underway since mid2006 and the expected consequences of the credit crisis on economic activity over the medium term has led the us monetary authorities to change their monetary policy stance,0
in the particular case of internal models used to calculate regulatory capital requirements it could result in insufficient capital to protect policyholders,0
"to my mind the most important weaknesses in this regard  and they are not limited to 
iceland  are the following  
first too much attention was paid to risks in individual institutions while a comprehensive 
assessment of risk in the financial system as a whole was much less developed",0
however this outlook is presented with some overshadowing risks in the horizon both external and domestic including another ffr increase expected in the second half of 2016 the slowdown in the chinese economy the continuing decline in commodity prices and domestically rising volatile food inflation,0
a lack of modeling diversity would be especially concerning from a macroprudential perspective since it would mean that the entire industry would be capturing the same risks in the same waya form of collective blindness to new industry practices and products and emerging risk developments,0
"20  it should be noted that this effect only arises when th e impact of losses on the capital base is greater than the 
reduction in the value of markedtomarket assets on the balance sheet",0
"however if anything the static approach is more demanding for banks because it ignores the 
relative improvements they could engineer under stress by adjusting their balance sheets",0
turning to the domestic environment and the fiscal front in particular the possible implementation of council of state plenum rulings that earlier pensions cuts and the abolition of pensioners bonuses were unconstitutional poses the greatest fiscal risk in the immediate future,0
what the numbers show us is that underlying price pressures remain very high,0
"these instruments provide diversification but  unless the mortgages are fairly homogenous in 
nature it will be difficult for an individual investor to monitor the evolution of the underlying 
risk exposures at all precisely",0
the interpretations already mentioned would also imply that the public backstops for the purposes of the ssm comprehensive assessment announced last november if used would trigger putting the bank into formal resolution if the exemption i mentioned before would not apply,0
however the disappointing economic performance in the european union goes well beyond previous experiences,0
"now let me describe the macroeconomic scenario that we see as  the most likely for the 
coming quarters and its associated risks",0
" fourth in some cases a public sector deficit may be financed by a reduction in net foreign 
currency assets",0
"from the perspective of financial stability considerations let me briefly recall two specific 
examples  where the current accounting paradigm may be detrimental first the extent to 
which the application of fair value accounting may provide adverse incentives regarding 
management and investment decisions",0
"the same publication made the assessment that losses over the years to come could amount to over eur 200 billion of 
which eur 125 billion would derive from lo sses linked to government securities",0
the costs are particularly related to financial stability,0
the second factor is high uncertainty in the global commodity markets first of all the oil market,0
"though the trigger or the proximate cause for intense volatility witnessed in the domestic 
forex market during the period may august 2013 was the heightened concerns about the 
possibility of early qe tapering the more important c ause was the existence of such weak 
macro economic fundamentals",0
"lets first of all take a look at the banks over the longer term abnormally low or negative interest rates together with a very flat yield curve and negative term premia can have adverse effects3
those banks whose business depends heavily on maturity transformation and on depositbased refinancing are being hit particularly hard",0
a mere qualitative supervisory approach in particular when it is solely based on the individuality of the bank might be prone to misuse and justify generally lower rather than higher supervisory requirements,0
similarly it makes the still necessary process of balance sheet cleansing even harder for those financial intermediaries that have been unable to finish it or have put it off since the last crisis and still bear the scars in the form of legacy nonperforming loans,0
my impression is that the debate in sweden has to a large extent been coloured by the few existing quantifications of the costs of leaning against the wind and of the effects of monetary policy on the risks linked to household indebtedness,0
in europe the falls in both periods have been larger,0
"from the point of view of conventional privatesector accounting  which as i will discuss is not 
necessarily the correct standard in this case  the bojs balance sheet has become noticeably riskier 
in recent years",0
"in switzerland the main risks remain on the one hand the effects of the strong swiss franc on the export industry and on the other the danger of 
overheating in the real estate sector",0
"households responded to this change in their balance sheets by forgoing consumption which led in turn 
to a fall in output and employment
3 and put downward pressure on the price level",0
"at the same time it is also possible that the 
actual effect is zero or even that it would go in the opposite direction so that the debt ratio rises when the interest rate is raised",0
but even authorities such as finansinspektionen the ministry of finance and the riksbank lacked the overall view of the risks in the banking system required to predict and counteract the approaching crisis,0
this in turn has implicitly put on the table the return of toobigtofail with the ensuing moral hazard raising further bailout expectations,0
28 there is also a potential incentive problem arising from the separation of legal ownership from economic exposure  although this is at the moment a possible difficulty for the future,0
"i fully recognize however that such projections regarding overseas economies rest on 
considerable uncertainties including future developments in the european debt problem the 
outcome of the problem surrounding the fiscal cliff  in the united states and the likelihood of 
economic deceleration in china being prolonged further",0
"second explanation nonexistent macroprudential policies and deficient monetary policies
the second explanation for the financial crisis relates to the nonexistent macroprudential policies but in hindsight also to deficient monetary policies in the years leading up to the crisis",0
the outlook for us monetary policy moves and vulnerabilities in emerging markets add to the overall uncertainty as does the limited progress on the brexit discussion,0
"this conjecture is not only questionable from a theoretical viewpoint it is 
irrelevant from a practical perspective",0
as a result emerging economies as a group will probably be facing a weaker demand for their exports and thus further pressures on their external and fiscal balances,0
a far more serious destabilising factor for society as a whole would be an economic depression,0
"on the one hand banks still face significant challenges especially in terms of the ease and 
cost at which they can refinance maturing funding",0
"this is because while the ongoing reduction in the public service headcount 
may restrain growth in wage costs the impact of the slow pace of planned fiscal 
consolidation on the debt servicing burden and in the longer term of population ageing on 
the health and pensions budgets cannot be easily avoided",0
7  in greece it were public finances that placed a burden on the domestic banks,0
in december 2009 the bank issued an opinion concluding that the underlying net external position could be around 90 of gdp,0
"that would be a heavy 
political burden for the ssm to bear   especially if banks then had to be recapitalised or 
restructured following such write downs",0
however in 2008 it is observed that the downward pressure of the global recession and weak domestic demand conditions on the inflation has come to the forefront,0
"4 bis review 252008
 at the end of last month moodys investor service announced that the outlook for the credit 
ratings of two icelandic banks had been downgraded from stable to negative and that the 
outlook for the third bank remained negative",0
"at the same time however it is becoming clear that considerable pressure from balance
sheet adjustment which i mentioned as the first factor remains in the us and european economies",0
at those times market discipline is likely to be eroded,0
"6 however any depreciating trend of the euro would feed domestic inflation through a
rise in import prices and by undermining investors confidence would contribute to the buildingof risk premia into the euro yield curve",0
"on the demand side economic 
developments in this period show a moderated foreign demand and a sluggish domestic demand",0
"conclusion
the headwinds from high energy costs the deterioration of terms of trade and the adverse impact of high inflation on disposable income pose elevated risks to our mediumterm growth outlook",0
however it is very important to understand that the rating is not a given and we should take note of the points raised in that sp report in which they point out that there is a possibility that israels good rating will decrease should the economic crisis extend longer than expected or if there is a lack of fiscal convergence in the medium term and instability to a debt to gdp ratio around 80 percent,0
"many of these issues relate to the financial 
activity itself others are connected more with the surrounding economic environment",0
a particularly worrisome problem could be the fiscal consolidation that some countries will have to undertake in order to make their publicdebt paths sustainable,0
"at the monetary policy meeting a number of me mbers of the executive board stated that a 
possible future fall in house prices may have a negative impact on consumption in the future",0
"the macroeconomic picture for the next few quarters is marked by extraordinarily great 
uncertainty provoked mainly by the euroarea  public debt crisis",0
the deficit in turn heightens our vulnerability to shocks as we saw in may 2013 and again this month when we published the information that the current account deficit for the second quarter was 62 of gdp,0
"specifically these 4 bis central bankers speeches  
 are the headwinds coming from the housing market the fiscal situation and the european 
debt problem",0
"where those assets are opaque 
 as can be the case for example with a portfolio of conventional loans or with securities backed by many loans bundled together from vari ous originators  the incentive to withdraw 
funding increases particularly in periods of stress when the value of broadly held asset classes may be at risk of precipitous decline",0
these costs together with the expected adverse fiscal impact of population ageing pose considerable risks to future fiscal sustainability,0
"do the clouds on the international economic horizon threaten our economic
stability at home",0
"many critiques had pointed out and the technical staff in the bank had experienced that the bank could not succeed in its main task of taming inflation and bri nging about price stability if it was sa ddled with 
other tasks that would go against its main objective ",0
as a result profitability stemming from the maturity transformation business may come under renewed pressure  not least as retail household deposits tend to be bound at zero,0
"in general markets were 
commonly afraid that the euro could face long term structural problems the flight to safe investments was universal and the pressures on the swiss franc were substantial",0
"while in the 1980s money supply was 
rising uncontrollably in line with the monetization of the fiscal deficit in the past decade the strictures of the convertibility regime were neither consistent with  the economys flexibility nor with the fiscal 
behavior",0
"the continued weakness in bank profitability reflects a number of factors including both 
cyclical and structural challenges",0
one reason for the abandonment of mci was that it could be interpreted in an excessively mechanistic way when the exchange rate weakened mci tended to be used in a simplified manner as an argument for a higher interest rate and viceversa,0
"as a result the unc ertainty surrounding the assessment of economic 
and monetary conditions was inevitably higher with the paucity of statistics compounding the already significant challenges for analysis created by the behavioural changes associated 
with the regime change constituted by monetary union",0
"the crisis
from the summer of 2007 and above all following the lehman brothers debacle in september 2008 a crisis broke that generated the most severe global economic contraction since the great depression",0
"second the corporate
restructuring efforts of individual firms will expose the macro economy to downside pressures",0
"reflecting its early stage of development the proposal presents more questions than answers and
does not flesh out any of the three alternatives it presents",0
meanwhile business confidence weakened for q2 and q3 2021 primarily due to concerns on the surge of covid19 cases in march and april this year,0
in the other direction the downside risks that i have just discussed together with the stillhigh level of public debt call for a prudent approach that recognises the importance of building fiscal buffers during good times in order to enable more vigorous countercyclical fiscal interventions in the event of a future economic downturn,0
when those failures became evident investors lost confidence and crises ensued,0
"indeed the fundamental problem in economics for hayek is that of coordinating the plans of many
independent individuals",0
moreover investors may see additional injections of capital as a signal that the bank is in difficulties,0
looking forward failure by the authorities to proceed with tax administration reform and to accelerate the fight against tax evasion will unavoidably widen the fiscal gap  and imply the need for higher savings on the expenditure side,0
"although these developments at least partly reflect a transition to new normal 
balance sheet structures it is also possibly a sign that the pre crisis model of highly 
leveraged and interconnected banking may no longer attract investors",0
real gdp growth is now projected to be 11 in 2019 down by 06 percentage points from the december 2018 staff projections and 12 in 2020 down by 05 percentage points from the december projections,0
on the one hand some realworld factors may make the true decline in the equilibrium real interest rate larger than estimated in macroeconomic models,0
as a result confidence in the financial statements may be eroded,0
"besides this conflict with monetary policy objectives the role of being the lender of last resort may
also give rise to serious adverse developments in the banking sector if individual banks believe thatthey can rely on the central bank bailing them out in the event of liquidity problems thatencourages lax risk management or even deliberately overrisky behaviour  that is to say the abovementioned moral hazard",0
"looking forward the main source of uncertainty 
relates to the durability of current account developments notably in deficit economies and particularly when considering developments in oil prices and financial markets",0
if the ecb had not provided liquidity there would have been bailouts abrupt debt reduction and thus a deepening of the recession  and this would have made our mandate of ensuring price stability much more difficult,0
"ft a couple of other questions one is the banking union because in addition to all the 
questions that we ve just discussed these huge challenges for the eurozone and for the 
ecb now you re going to have to take on the extra responsibility of supervision of at the 
least the large banks in the eurozone",0
"losses on the rmbs portfolios in the 
securities borrowing program and credit default swap protection financial products had written on multisector cdos together accounted for approximately 19 billion of the 245 billion in losses announced by the company for the third quarter of 2008",0
"further the impact of macro prudential policies can be 
eroded if there is disintermediation outside the regulatory perimeter something which becomes more likely if interest rates are set at stimulatory levels",0
"financial stability on the other hand is significantly fuzzier as it deals with preventing the accumulation of systemic risks the buildup of asset price persistent misalignments that some call bubbles etc as a result it cannot be defined in a straightforward fashion with reference to in the extreme case a single indicator and ought 
therefore to be communicated and assessed in a more complex way",0
"the supposedly encompassing role of inflation forecasts 
let me now turn to a third lesson of the crisis that is the supposedly  encompassing role of 
inflation forecasts",0
"it is 
probably natural for politicians to feel uncomfort able giving the central bank increased independence 
as it unavoidably means that they give up some of  their decisionmaking powers and moreover in a 
field perceived to be central",0
"due to the lack of secondary market 
liquidity investors especially retailindividual investors end up paying large illiquidity premium when they try selling the illiquid off therun secu rities",0
"that is because alongside those downside risks to inflation there are also upside risks to inflation over the medium term
  and i am stressing 
medium term  stemming from the rise in commodity prices and the decline in sterlings 
exchange rate",0
be too restrictive giving rise to recessionary effects on the real economy,0
"on the other hand in that case fluctuations of 
inflation will more easily distort relative prices  and lead to more welfare losses",0
second the responsibility for deciding the time that resolution of a credit institution is warranted remains primarily a task for supervisors while the supervisory board also retains the right to declare a credit institution failing or likelytofail in some cases,0
evidently inflation expectations are not only backwardlooking suggesting that expectations are already stickier than they should be,0
the problem of an appreciating currency in the face of surging capital inflows poses a separate set of problems principal amongst which is loss of export competitiveness,0
leaders were facing not just a financial crisis but the possibility of a global economic depression of 1930s proportions,0
"4 bis review 1092009
 a scenario cannot be entirely ruled out where up side risks to price stability emerge while the 
problems in money markets persist",0
"this is particularly true for central banks as their primary mandate of ensuring price stability not only has to be 
internally reconciled with efforts to better ensure financial stability but is at the same time 
exposed to a crisis situation in which the line between monetary and fiscal policy is growing increasingly blurred",0
"the potential conflicts of interest in these respects were mitigated by the fact that theses had only a small number of members accentuating the financial risks that they each faced from afailure of the exchange to properly regulatebis review 142001 3more importantly the potential conflicts of interest made it necessary for the mas to take a heavy
hand in the affairs of the exchange",0
"in addition to these cyclical problems italian banks are faced with others of a more structural nature related to the relatively limited diversification of their 
sources of income and the high level of their costs",0
the fiscal position was suddenly deteriorating,0
if this was trueearnings growth might well have fallen back once the bonus effect had dropped out,0
in this case of course the resource situation is strained bottlenecks begin to arise in the economy,0
"the powerful external contractionary forces generated by the international crisis compounded the internal adjustment on which the spanish economy had embarked exacerbating the decline 
in domestic spending and employment",0
"based on this the future does not look promising from 
the point of view of financial stability",0
"of course a significant weakening of the global economy would result in lower commodity prices and generally lower underlying 
inflation pressures",0
"there are apprehensions about the impact of the basel iii capital measures on credit 
offtake as we ll as on investor interest in the banking system",0
the analysis of macroeconomic factors suggests that the contained consumer prices continue to reflect to a large extent the low demand in the economy and the negative output gap,0
"under such developments in the 
current and capital account of the balance of payments as well as due to 
generated unfavorable expectations of the economic agents the pressures in the foreign exchange markets become bigger",0
on the home front the challenges the spanish economy faces are enormous,0
the competitiveness of the greek economy is low,0
besides the disadvantages i just mentioned from not looking ahead a nominal gdp strategy has the drawback that the national accounts frequently have to be revised,0
"it can sometimes be difficult to explain major fluctuations by underlying economic fundamentals and in
such cases more psychological reasons are given such as expectations or herdlike behaviour",0
"this is a question that is still raised as one of 
the most i mportant ones in the international discussions on possible changes in the inflation
targeting framework although in many countries this has been overshadowed by the recent 
low inflation figures",0
the indicators declined moderately in 2020  when the impact of covid19 intensified  but turned upward in 2021 and have returned of late to prepandemic levels,0
"if anything the scant evidence available on earnings 
expectations point in the opposite direction",0
"highly leveraged investors were faced 
with a situation of falling asset prices",0
first as i noted neither the firms nor the regulators anticipated the possibility that investment banks would lose access to secured financing as bear stearns did,0
"as i have already stated these uncertainties stem to a great extent from the foreign market 
but a part of them stems from the albanian economy",0
the fact that it had been unable to exercise this independence in monetary policy for much of the postwar period was due to a practical impediment  it did not possess the instruments of monetary policy,0
"on the other hand the current operational targets quantitative limits on net assets of the 
bank of albania and the banking system or the socalled performance criteria which are 
part of todays decisionmaking might not be able to preserve their binding power after the expiration of the conditional agreement with the imf in 2008",0
"at the same time structural reforms are not easy or popular to implement especially during 
a slowdown or a recession",0
a solution for dealing with an ailing bank which takes into account only home countrys interests is definitely a suboptimal outcome from the perspective of a host country,0
in the case of south africa the effects could be even greater against the background of a currentaccount deficit of around 45 per cent of gdp,0
"at the same time because the treasury balance could not be invested to earn a return there is a cost in
terms of interest expense on those bonds issued against no revenue proceeds",0
importantly this vicious loop not only further impaired monetary transmission but it also had implications for the stance of monetary policy,0
" weak intrusiveness was a problem because supervisory rules such as basel 2 rely 
extensively on banks own risk valuati on management and governance",0
on the other hand the domestic economy is weak and policy tightening could aggravate such weakness,0
"the global economic crisis has 
forced the financial industry as a whole to reassess its growth prospects for the years ahead",0
"the last caveat is especially relevant in the present 
situation where although the banks have been provided with enough capital to allow for loan modifications in respect of loans that are clearly unaffordable unnecessary debt forgiveness could quickly erode that buffer placing a further burden on the government finances which they are in no condition to absorb",0
the lop sided nature of the economic model was not confined to the banking sector alone,0
moreover there are reputational issues too if large banks continue with standardized approaches,0
"in the context of the recent deceleration in the economy the intermediation role assumes even greater 
relevance",0
"we are also contending with the aftereffects of the boom in the late 1990s which 
eroded our competitiveness",0
"when looked at with these
refinements the current earningsprice ratios appear even more out of alignment with historical
experience",0
"7  at times cds indices appeared mispriced with implied probabilities of default clearly inconsistent with any 
plausible state of the global economy",0
"under the circumstances if the sluggishness in corporate profits is protracted or if asset prices continue to decline the 
capital strength of financial institutions may be reduced further and their lending attitudes 
may become more cautious thereby leading to a further deterioration in overseas economic conditions",0
"portfolio investments on the other hand which include the public sector recorded 
higher outflows in 2006 of usd 379 billion compar ed with usd 258 billion in  2005 while portfolio 
investments to emerging market economies decr eased slightly",0
"perhaps because many thought that march 2008 was the height of the crisis the 
overwhelming importance of this lesson coming out of the bear stearns episode did not translate into this gap in our regulatory framework being addressed with sufficient urgency",0
whereas the war caused gdp growth to be revised downwards a parallel impact is that it has also intensified the upside risks surrounding the inflation outlook especially in the near term,0
the central bank purchases are a reaction to the macroeconomic conjuncture at the time which itself has a direct influence on the yield structure,0
"if public finances get out of 
hand the central bank can come under overwhelming pressure to jump to fiscal policys rescue and in so doing can undermine its primary objective of price stability",0
to gauge the extent of such an impact it is useful to refer again to the ecb macroeconomic projections and recall that they are conditioned on a number of technical assumptions,0
this has already led analysts to cut bank profitability forecasts for 2022 due to increased provisioning expectations,0
this also compromises confidence in the governments longterm financial position,0
"on the other hand public sector insurance schemes jeopardise the sustainability 
of public finances as they transfer the risks to the taxpayer and distort incentives as 
mentioned above",0
as i have indicated in previous speeches this approach to forward guidance can backfire if the policy is misunderstood5 for example if the public hears that the policy rate will be lower for longer it may interpret this news as policymakers saying that they expect the economy to be weaker for longer,0
one risk in the outlook is that inflation expectations could become less wellanchored,0
"the partial irreversibility of investment means that there are more companies at the 
margin deciding whether to invest than those at the corresponding disinvestment margin",0
"yesterday spanish long 
term yields reached about 550 basis points above those of germany the figure for italy was 
more than 450 basis point s clearly these market conditions   relating to three of the four 
largest countries   are not what was envisaged by the delors committee way back then and 
are not consistent with the integrated monetary transmission called for in the treaty",0
the main source of these downside risks are geopolitical developments in many parts of the world,0
"this may be conceptually 
clear but in practice it is a hideously difficult distinction to have to translate into monetary decisions",0
in sum it seems that it was not only the general design of the mainstream precrisis models that made them inadequate for interpreting the crisis but also the fact that they relied on data mostly drawn from the time of the great moderation,0
"in fact such communication might be particularly 
important in the current circumstances becau se financial market participants have no history 
from which to judge the fomcs approach and anticipate its actions",0
the exit of a member country would inevitably lead economic actors to wonder who would be next with all the potential destabilising effects that such speculation could entail,0
liquiditystrained institutions found themselves forced to sell positions which placed additional downward pressure on asset prices thereby accelerating margin calls on leveraged actors and amplifying marktomarket losses for all holders of the assets,0
"the first is that estimates of structural unemployment are surrounded by considerable 
uncertainty in particular in real time",0
"admittedly the conceptual challenges in quantifying for instance liquidity risk are 
enormous",0
"beginning from the spring of 2010 cascading problems within the euro area weighed on 
global economic activity and heightened uncertainties",0
in addition the smp had unintended side effects such as a perceived preferred creditor status of the ecb vis àvis other creditors,0
the biggest challenge now is when and how to relax these measures when market conditions reverse,0
over this same period the euro area has also had internal imbalances to contend with,0
in the short run they are attractive to borrowers but expose them to a severe exchange rate risk with potential financial and reputational repercussions on the banks,0
"we arrived at a more sceptical assessment regarding the associated question of whether such a fan chart should also reflect a risk assessment that is whether  technically speaking 
 it should also be skewed",0
the second risk is the longterm fiscal position of the united states,0
second a concern from the regulatory perspective is that the losses of subsidiaries will impact the balance sheet of the bank and even jeopardize the interests of the depositors of banks,0
the relevance of financial education was at best limited,0
most importantly their effectiveness is put under question during a recession if this were to emerge in the near future,0
but it is too blunt a tool to address specific risks and imbalances and would be likely to generate large macroeconomic costs if it tried as many have argued6 in a nutshell the leaning versus cleaning debate has in my view focused too narrowly on monetary policy alone,0
of course the financial crisis had its cons equences for the real economy,0
state finances witnessed considerable deterioration in 200910 as is evident from key deficit indicators,0
on the one hand there is the question of whether and how financial stability concerns should enter the monetary policy decision process,0
the empirical debate is also still raging over the shortterm impact of such reforms on output especially at the lower bound11 and the optimal pace of supply side reforms has not been established empirically although recent euro area experience teaches us that gradualism can entrench disinflationary expectations in a much deeper way than a oneoff adjustment would have achieved12 neither is the optimal sequencing of structural reforms sufficiently well understood beyond the general concensus that such reforms should initally be more demand than supplyenhancing hence focused more on product than on labour markets at the outset in order not to add to a deflationary wageprice spiral,0
"tightening policy would
presumably cause the exchange rate to appreciate making the deficit larger but might also slowdomestic demand making the deficit smaller",0
"where forecasts turn out to be wrong even if for completely 
unforeseeable reasons the central banks credibility could be impaired",0
for example the existing sii approach to callable bonds may result in an unduly prudent outcome,0
"at the same time however it is acknowledged 
that financial imbalances can generate sizable macroeconomic costs at times of crisis when 
they can produce undesirable economic fluctuations ",0
"as i noted earlier these defensive reactions by providers of repo finance mean that 
the costs of fire sales are likely to be felt elsewhere in the financial system",0
a third factor may have been concerns that the relatively high interest rates offered by the icelandic banks might reflect underlying weakness,0
in addition the incentives of national supervisors were often not aligned with the european financial stability objective,0
"in an important sense a poorly capitalized bank generates negative 
externalities making the entire financial system less secure with costs to other financial 
market participants whereas the reverse is true of a wellcapitalized bank",0
second such a disorderly failure would also indirectly place significant negative strains on other financial firms due not only to direct credit exposures to the failed institution but also due to the fire sale dynamics that would ensue,0
at the same time the rapidly rising interest rates mean that the value of the assets we have purchased has fallen,0
however profitability levels in the industry remained relatively low in 2019 with the average roe coming out at 65,0
yes this is really a bit too strong statement as we all know explicitly or implicitly that the banking sector faces a trilemma  or an impossible trinity of a kind if you will,0
concerns have been raised by some in the industry that taken together the main elements of the new capital and liquidity regime can interact to have potentially serious and unwelcome unintended consequences particularly on market liquidity,0
also the functioning of the european monetary union caused headaches because of insufficient comprehensive preventive and supervisory procedures,0
i should note however that even then lowforlong policies did raise some financial stability concerns such as those related to reachforyield behavior,0
"however when the country faces a nationwide economic crisis a lot of companies would tend to 
suffer losses at the same time",0
then there is the problem that if the criterion for obtaining help is an earlier accumulation of large debts what would this signify to potential borrowers in general,0
"the 
expected future foreign price level is also exogenous for a small open economy",0
"if domestic interest rates 
are higher than those abroad monetary sterilization is expensive for the central bank and if in any case the exchange rate will eventually  have to appreciate against the currency in 
which the reserves are held there will also be potentially large capital losses on the reserves on that account",0
past experience suggests that host supervisors are most likely to ringfence assets when there is doubt that the local customers and counterparties of foreign banks will be adequately taken into account,0
"it is reasonable to ask why these negative presumptions are appropriate given my general 
view that the absence of both experience and consensus theory make a case bycase 
approach necessary",0
on the contrary in the face of coming demographic challenges costly stimulus measures could even backfire via negative confidence effects,0
"the problems of these banks in september 2008 implied a literally closing 
of the main fixed income markets",0
"however the long drawn global recessionary headwinds  and several 
domestic policy uncertainties began to gradually seep their way through into the macroeconomy compounding the policy challenges",0
i believe that it would have been very difficult to manage the expectations this would have created among households and on the credit and housing markets,0
at the same time the vulnerabilities of the german financial system to unexpected macroeconomic developments are growing further,0
"indeed several factors suggested that the 
situation was more worrying than past episodes of oil induced disinflation particularly the 
most re cent case in 2009 following the collapse of lehman brothers",0
moreover as i have already mentioned the structural constraints of the economy will be supplemented by factors of cyclical nature,0
as a result banks had to turn to the eurosystem whilst at the same time the volume of portuguese sovereign debt placed with domestic banks increased,0
globally the recovery began to falter in late 2011 with chinese growth slowing commodity prices falling and europe reentering recession territory,0
in the short term lower consumption and investment worsen the negative output gap and are deflationary,0
"hinting 
at the actual timing of the policy change is generally inadvisable",0
however strong headwinds in pushing through those reforms were to be expected,0
"i am not certain that it would definitely work in all circumstances eg if there were no buyers in prospect the state 
ends up running the group which could be quite a thing with a risk that staff and 
counterparties may drift away",0
"if central banks had slavishly 
followed friedmans kpercent rule for money growth during this period critics point out substantial 
economic instability would have been the likely result indeed most central banks have deemphasized money growth as a policy target or indicator in recent years",0
in this regard one cannot rule out the possibility that under the current policy commitment if financial markets increasingly view achieving the price stability target in about two years as difficult the bank will be obliged to extend or strengthen its monetary easing driven by such external factors even in a situation where it is judged that side effects outweigh positive effects on the economy,0
the difficulty of managing this special type of crisis coupled with what were in hindsight some errors in policy sequencing then noticeably exacerbated the fall in potential growth,0
in terms of risks to the outlook the most important remains the prospect of a large shift toward protectionist trade polices around the globe,0
but setting a policy horizon is intended to and does constrain policy responses,0
"despite their eminently cyclical nature these tensions also highlight structural shortcomings which
continue to beset the workings of the economy",0
it would have to be said that the experience of thelast decade would suggest that expectations are to a very large degree backwardlooking,0
this together with limited shareholder support is likely to have been the main driver of the failure of setanta in malta and enterprise insurance in gibraltar although only their local prudential supervisors are in a position to tell,0
"these risks occasionally 
manifested themselves during the past 20 year s  the asian crisis of 199798 and the impact 
of the us recession of 2001 on the indian it sector in 2001 are two illustrative examples",0
"the change in the composition of the stock of foreign liabilities has  had a noticeable impact 
on the net income deficit which is the part of the current account deficit that measures the net cost of servicing these liabilities",0
"china would now find it difficult to set in motion a big fiscal stimulus as its official government debt though 
only 27 per cent of gdp crosses 60 per cent if bank lending to local governments are 
included",0
the existence of a plurality of interests  of depositors bond holders customers employees shareholders and even managers themselves  inevitably mean there are conflicts,0
for one thing those solutions entailed the massive use of public resources which in our case would also raise questions of budgetary propriety,0
"it is a fair bet though that the historical 
loss experiences in these types of lending both di rectly and indirectly via business portfolios are 
probably not a good guide to the future",0
an ageing population will therefore weigh quite heavily on public finances,0
"the other concern 
which is often voiced is that the capital buffers on the back of much higher level of equity 
required in the capital structure as per basel iii would leave banks with s ubstantially lower 
return on equity roe and it would become difficult to retain investor interest rendering 
capital raising difficult",0
"similarly the growt h in net profits of scbs was also on a declining trend since 
2011 12 and turned negative in 2013 14",0
the darker scenario assumed that containment measures would extend into summer taking the economy in the second quarter as much as 30 percent below its level at the start of the year,0
although the targeted and actual ratios were significantly above regulatoryminimums these responses were disappointing indeed,0
unless the banks adapt to this new environment their longterm profitability might suffer,0
at the technical meetings that laid the ground for the brrd the ministry of economy and finance and the bank of italy argued without mustering the necessary support that an immediate and more importantly retroactive enforcement of the burdensharing mechanisms to 2015 and subsequently of the bailin could  in addition to a costlier and less plentiful supply of credit to the economy  have posed risks to financial stability also in relation to the treatment of creditors who had subscribed bank liabilities many years ago at a time when the possibility of losing the original investment was very remote,0
"in other words failing 
to meet its price stability mandate can also l ead the fomc over the medium and long term 
to substantial failure on its employment mandate",0
"10 
however if one goes this route another measurement challenge arises how if at all does monetary policy influence the evolution of the ratio",0
this recent focus on developments in china has understandably thrown the spotlight on the outlook for the chinese economy,0
"he holds the opinion that the consequences of the gold liberalization policy could be alarming especially in view of the fact that 
such imports of gold are unrelated to indias exports of jewellery",0
"more fundamentally the liabilities that matter in the 
long term for the federal budget are those associated with health care and pension costs",0
another implementation obstacle relates to uncertainty over potential output which risks nominal gdp targets delivering higher inflation without any benefit for real economic activity,0
the impact of sterlings 25 depreciation following the onset of the financial crisis on import prices was one factor that contributed to high inflation throughout 200812,0
"add to this the lower impulse coming from public investment associated with 
the recently announced fiscal adjustment",0
it is therefore fair to say that the initial restriction  only lending bonds against other psppeligible securities  was too penalising and is likely to have contributed to the growing specialness premium in the segment of the yield curve where the eurosystem was intervening most heavily last year,0
similarly recourse to the repo market which we know is inherently fragile6 will be constrained by the envisaged fsb rules on shadow banking,0
"the combination of low global growth domestic challenges further hampering the growth 
outlook rising wage settlements a weaker rand and higher current account deficit   makes 
for a very difficult combination of factors to consider when making policy decisions",0
the issue of misperception also remains with many nonmuslims deeming takaful as being only for muslims,0
admittedly more recently household consumption expenditure has come under pressure with growth rates exhibiting a declining trend since the second quarter of 2013,0
"although selling is tougher export 
volumes have adjusted less than the world average which is expected to fall around 10 percent this year while the baseline scenario of our latest  monetary policy report foresees 
that the volume of chilean exports will drop around 2 percent annually in the same period",0
"the real economy would also be 
stimulated directly by the fact that exporting and importcompeting sectors would be affected 
positively by the shortterm real depreciation  that would arise due to the shortterm 
sluggishness of the price level",0
the savings and loans crisis in the united states at the end of the 1980s and the spanish cajas crisis are striking examples of this,0
another issue thatmay be relevant here is the implication of a firm that has a balance sheet that looks like that of abank but does not have direct access to the lenderoflast resort,0
but at the same time there have also been changes on the asset side of their balance sheets with credit growth slowing significantly particularly lending to large businesses,0
"there are additional problems i would like to focus on because of prevailing primary law it is at least a questionable idea for the governing council to be able only to accept or reject 
decision making proposals from the supervisory board but to be unable to influence the 
proposals",0
we have also seen in the euro area however that fiscal policies can face their own dominance problem related to financial policies,0
"the first is the much greater inherent opacity of the balance sheet 
of banks it is difficult for outsiders to evaluate the quality of the assets which a bank holds 
and therefore its tr ue financial position",0
"quite the contrary the weight of such additional burden would turn back as a boomerang against the interests of our 
society and the bulgarian economy in general",0
"the asset cycle turned the weaknesses were 
exposed and investors suddenly lost confidence",0
the public sector is particularly difficult to measure and productivity growth here is therefore often assumed to be zero,0
when there is an imbalance in macroeconomic policies or when such policies are used as substitutes for structural reforms the longterm outcomes will always be suboptimal not least because of the distortions and imbalances that are created,0
"an important challenge in the period ahead as i see it will be to try to find an appropriate mix between regulation and supervision on the one hand and monetary policy on 
the other",0
"19 in addition 
empirical evidence suggests that risk premia rise in a nonlinear and disproportionate fashion 
with debt ratios20 finally the period after the lehman default in september 2008 illustrates 
that markets can react with larger increases in risk premia on government bonds when the fiscal situation is not deemed credible in the long run",0
the eventssince september 11 including a significantly expanded path for federal expenditures and the potentialfor further tax cuts have at least delayed such an outcome and have added significantly to theuncertainty about projections of future surpluses,0
also duisenberg had the view that the dutch welfare state could not be supported in the long run if budgetary policy would not change its course,0
"it is also clear that 
restructuring and recapitalising the savings banks is in the offing and this could also pose some risk",0
"we also assumed t hat as a result if actual prices start to 
increase that would affect inflation  expectations in a backward looking manner as well",0
"there is reason to believe that the high and fluctuating inflation in the 1970s and
1980s contributed to the weak state of investment and productivity",0
so it is on the one hand a question of how fast and how strong you act with the ultima ratio measure  that is naming a bank failing or likely to fail  and on the other hand when you act you infringe on the laws of the investors because a bailin means you expropriate,0
"34  in addition we cannot count on expectations remaining anchored if the federal reserve were to permit actual 
inflation to continue to run noticeably below its announced objective after the real economy has substantially 
recovered",0
it is also worth noting that selfinsurance via international reserve accumulation or fiscal funds seems not to be enough when confronted to the magnitude of the deleveraging process taking place at a global level,0
for years the problem of the sustainability of americas external imbalance has been emphasised especially in europe which feared the risk of a disorderly unwinding with destabilising effects on the financial markets,0
but if we postpone our efforts to resolve our economys structural vulnerabilities then it is likely that we will face a much more severe situation in the medium to long term,0
indeed over time if the valuation model is not relevant to the business model the business model itself is likely to change,0
they did not necessarily take the same decisions because they were not in the same situation as already pointed out,0
"for
instance the pressure to maintain prescribed capital ratios is sometimes argued to have undesirablemacroeconomic consequences",0
as you know there are many explanations for the crisis some observers like to focus on unsound fiscal policies and excessive sovereign debt others on competitiveness losses engineered by uncontrolled unit labour costs and others still see the crisis more as a traditional balance of payments crisis in a fully fixed exchange rate regime,0
at the other end of the spectrum would be a too prolonged downward departure of inflation andor inflation expectations from our projected baseline scenario for example due to the interaction between exchange rate developments and mediumterm inflation expectations as i explained earlier,0
a monetary policy that leans against the wind can entail costs in the form of lower demand and inflation in the short run,0
"but the key risk that has increased in recent months and poses the biggest threat to global 
economic prospects is the situation in europe",0
"what started out as a fiscal pr oblem in greece coupled with concerns over 
its ability to consolidate its finances and carry out economic reforms has spread to other european countries with doubts arising regarding their creditworthiness",0
the swiss economy is currently experiencing the most severe economic crisis since the midseventies,0
"one
manifestation of this is the market interest rates on instruments maturing after the fiscal yearendin march 1999 which are likely to remain high",0
"however a
bank that does not use a realistic measurement of potential future exposure to decide howmuch collateral to require can later find its collateral holdings to be grossly insufficient",0
"the consequences of such timidity are 
reflected in the sizeable downside risks which currently plague the global outlook",0
"looking at the endyear inflation in the main expenditures groups we see that the annual inflation 
remains below the target in clothing footwear  and communications groups whereas it goes beyond 
the target in all other groups",0
"as such europe currently faces a difficult situation as a 
result of the adverse feedback loop among the fi scal situation the financial system and 
economic activity",0
while valuation risk is relevant for individual investors monetary policymakers are concerned with macroeconomic risk,0
"the big picture  germany and the euro area
for nearly four years now the debt crisis has been the most relevant issue when debating financial stability in the euro area",0
"but the
hard question for us is could we  and should we  attempt to shelter internationallyexposed
businesses even if that were to mean putting our objective of sustained low inflation at risk",0
conversely foreign investment in government bonds decreased to k1279 billion from k1505 billion recorded in the third quarter due to net maturities,0
"however if banks must pay a substantial 
penalty rate to acquire the extra liquidity they may find it unprofitable to extend loans to the troubled sector",0
many countries including canada are again facing the sort of demographic challenges that hansen saw in the 1930s,0
"in 201112 
developments so far indicate that fiscal deficit target of 46 percent of gdp could be breached which will have implications for dome stic inflation",0
"the housing sector remains a 
source of very significant headwinds",0
thus neglecting sovereign risk is not only inconsistent both from an economic and a regulatory view it also produces sizeable sideeffects in other domains,0
the rise in energy prices has slashed living standards inflation has become more broadbased and next years economic outlook is marked by uncertainty,0
in other words an internal audit cannot solve all the risk management problems that primarily are the responsibility of the operational risk management and compliance teams,0
"common factors
falling commodity prices explain the lions share of the disinflation the euro area has experienced since the end of 2011",0
some scholars have for example linked the great inflation seen in the 1970s to policymakers misinterpretation of changes in the economys rate of productivity growth,0
the global financial crisis and the plummeting commodity prices on the international market have negatively affected government revenue,0
"consequently the fiscal balance and social security system sustainability are likely to 
deteriorate",0
"let me now turn to a key challenge that we are currently facing namely how emu deals with 
the current developments in financial markets",0
if these institutions areeurocentric only one asian no latin american representation the exclusion of emerging markets isjust as obvious,0
"part of the reason for that belief was that the 
authorities would understand that t he macroeconomic effects of failing to maintain the exchange rate 
peg  one on which the entire financial structure of the economy was dependent  would be disastrous",0
economies normally provide early warning signals ofexcessive credit extension such as rising inflation or unaffordable increases in imports or thewithdrawal of foreign funds from the country,0
in fact our two central banks recently faced some difficult issues revolving especially around some foreignowned banks,0
"information on the price expectations of businesses  who are after all the price setters in the first instance 
 as well as information on nominal wage expectations is particularly scarce",0
"there are thus several signs of a development that is worrying from the view of
financial stability",0
there are numerous consequences that are worth pondering from a stability perspective  think for instance of the threat of a rapid disruption of business models or systemic operational risks,0
and moreover the precrisis slowdown in potential growth coupled with the negative effects of the crisis on investment and private sector balance sheets appeared to have imbalanced saving and investment and depressed the real equilibrium interest rate to very low levels,0
"in this respect macroprudential policy can easily be misconstrued obscure polic y 
intentions and distort expectations",0
"last but not least current account deficit will 
moderate substantially although that would additionally lower budget revenues",0
in midseptember 2019 upward pressures emerged in funding markets as reserves dropped to about 14 trillion or 66 percent of gdp at that time,0
a second concern relates to the prospects for commodity prices particularly oil,0
evidently the unsound fiscal policies of one member state can have repercussions on the union as a whole,0
the spanish economy the italian economy doubts about the integrity of the euro the situation of the spanish banking industry was terrifying and contagion was spreading to the treasury,0
"on the other hand 
if the banks decided to deleverage mainly by shedding assets this could imply a sharp contraction of credit to the private sector",0
and the downturn is particularly pronounced in the banking sector,0
a more cautionary finding is that the size of bank balance sheets tends to forecast aggregate economic volatility,0
"however stricter control does not remove systemic deficiencies of financial resolution namely
 longtime presence in the market of undercapitalised banks under resolution up to 10 years
 high cost the current lending scheme provides for allocation of 16fold more resources than acquiring a share in the capital that also has indirect implications and aggravates structural liquidity surplus
 consolidation of banks under resolution is impossible as they have different turnaround managers appointed under bankruptcy proceedings
 insufficiency of financially sound turnaround managers
 higher dia debt burden
 long loan maturities
 and the last one is the abovementioned use of banks under resolution as a bad asset depot by turnaround managers",0
"the evolution of the public finances must be ca refully verified among other things owing to the 
uncertain outlook for some receipts that are an inte gral part of the budget for 2004 adopted at the end 
of last year",0
"moreover this will be an 
environment where there will already be considerable pressure on the public purse for the reasons i have just noted",0
managing excessive volatility is particularly pertinent for small and open economies as volatile currency fluctuations not only affect trade external debt servicing and cost of investment but also affect domestic business and consumer sentiments,0
"for example because asset managers are essentially  
unlevered leverage or capital based tools may be the wrong tool to tackle market failures",0
a well the next government is going to have a very large budgetary problem,0
moreover going back to a governing council decision already taken last december the number and frequency of longerterm refinancing operations is gradually being scaled back,0
"4 bis review 302008
 insufficient investors also need to know how to interpret it",0
"in a few extreme cases the shareholders of some institutions and the public at large suddenly realised looking at the balance sheet that on the left side nothing was right and on the 
right side nothing was left ",0
third since the outbreak of the pandemic stimulated by the ultraloose monetary policy valuations in international financial markets have been rising and deviating from the fundamentals of the real economy,0
"challenges to fiscal sustainability in nms remain nevertheless mainly arising out of the future dynamics of the welfare system combined with population ageing but these are hardly different from 
those being faced by euro area members",0
in the long term it is also negatively affected by weak demographics,0
"the main argument put forward by critics at that time  was that the governing 
council was not taking due account of the economic  environment and that the rate hike therefore 
came too early",0
"if this were to happen the projected surpluses even with current economic
assumptions would shrink appreciably and perhaps disappear",0
the most significant downside risks stem from the possibility of a greater slowdown in the world economy particularly in the euro zone japan and china and its impact on the united states,0
"as such 
liabilities originated in the private sector it was not properly understood that they would 
eventually migrate to government balance shee ts when they assumed systemic importance",0
the reality it must deal is that the fiscal position is going to remain constrained  is that what you are saying,0
so from this point of view it means they can operate as a standalone but due to parent bank strategies they are inhibited,0
"some people here on the continent who share this concern are inclined to argue that if a
europarticipating country were to find itself in this situation  and given that it would have nomacroeconomic way out for example through exchange rate adjustment or monetary relaxation orfiscal stimulus beyond the limits of the stability pact  it would then have an overwhelming incentive totake the sort of supplyside measures which have proved so difficult to implement hitherto",0
"in the near term scs  rcs may find it diffic ult to align their pricing to the 
expectations of the selling banks and the selling banks also may not have yet reconciled to a 
realistic sale price expectation for the assets that they want to offload resulting in the 
reduction in sales",0
"since this would ultimately affect the public finances of the 
states if it materialised it in turn increases concerns about the fiscal soundness of these countries creating a vicious circle",0
a comprehensive analysis of the implications of high energy prices for nearterm and mediumterm inflation dynamics should take into account four factors first the direct impact through the energy component of the hicp second the indirect impact since energy is an important input for many other components of the hicp such as food transportation goods and many consumer services third the potential for secondround effects on wages with due differentiation between a oneoff or catchup wage adjustment and a revision in inflation expectations that would have persistent effects on wage growth and fourth the macroeconomic impact with high energy prices operating through negative income and wealth effects while also affecting energysensitive production and investment plans,0
"denial at all levels in the 
banks persisted and absent sufficient information in the banks own systems to make firmly
based and defensible projections even the loss estimates embedded in the central banks first 2010 pcar were robustly challenged by some banks as being too tough",0
"in  such a case the saying prevent ra ther than recover b ears a significant 
importance considering the high costs accompan ying the financial crisis",0
"fiscal policy conduct 
has quite often not been in line with the pact macroeconomic policies have been too loose 
and peer pressure has been too weak",0
"in the case of liquidity the shortcomings of our analytical tools are magnified by the difficulty of 
measuring leverage or identifying potential concentr ations in the financial system",0
in this case i would see serious challenges for monetary policy management,0
"however an unpredictable and more 
expansionary fiscal policy than that implied by the guidelines would have resulted in greater uncertainty",0
"there was even an 
ongoing risk that low inflation might turn to deflation and further hamper growth",0
"moreover the usual dollar funding channels dried up to a cert ain extent because the suppliers themselves 
had an increasing need for dollars which in itself was partially due to mounting concerns 
about counterparty risk",0
on the other hand financial stability concerns can arise where credit extension is only indirectly involved as might be the case with certain bond funds or where credit is not involved at all as might be the case with firms writing large amounts of variable annuities with minimum return guarantees,0
"i am particularly concerned about the dramatic 
deterioration in public finances which will require  very ambitious fiscal consolidation efforts in 
the years to come",0
"last year for instance the expiration of textile quotas under the multifibre 
agreement raised concerns that rapidly growing impo rts of chinese textiles would put a severe strain 
on european textile manufacturers",0
however not only the composition of debt holders but also other characteristics of the public debt matter in such circumstances,0
this in turn could lead to an increase in unemployment as it did in the recession early in the 1980s,0
crucially then both hfts and etfs have a procyclical impact on market liquidity,0
"especially there were 
fears that the movements in the swedish krona the pound sterling and the us dollar  visàvis the euro would undermine the competitiveness of the finnish economy",0
a conceptually related problem with using fiscal policy as a stabilisation tool is that its need to pass through the political process inevitably decreases its predictability,0
the conclusion therefore is that constantly tinkering with our common fiscal rules while leaving governance of structural policies entirely at the national level makes little sense,0
" in the united states real gdp growth is expected to be weak through the first half 
of 2012 reflecting diminished household confidence tighter financial conditions and increased fiscal drag",0
"in a comparable crisis the government and the snb would once again face an impossible 
choice either they accept the devastating consequences of a big bank failure for the swiss economy or they take on the considerable fin ancial risk of stabilisation measures",0
"indeed the discussion on public  funds injection was not unsealed3 until japan experienced 
the so called dark november of 1997  at which point  the crisis became visible in the eyes of 
everyone",0
in addition the balance of payments bop crisis of 1991 led to sharp exchange rate devaluation which translated into increased costpush pressures on import sensitive products,0
the legislative decisionmaking process will be more difficult,0
from a welfare perspective however focus on an exante fixed horizon is problematic for a number of reasons,0
therefore the rise in pricesrelative to the external sector implies a loss of competitiveness for the economy,0
additional factors such as data errors and an insufficiently credible first reform package only exacerbated the problems,0
"we can only imagine what would be the situation if we still had fifteen different currencies with so many bilateral exchange rates potentially as volatile as other asset prices 
currently are",0
unbeknownst to the other participants one member in each group had been instructed to argue for the wrong answer within one of the question sets,0
a second source of impulses is the stillpatchy structural reformdependent growth paths of key trading partner asian economies particularly japan and china,0
australias exports to these countries appear to havealready fallen roughly in line with their falling imports,0
"if that connection is in operation then the question arises as to how long such cautious behaviour might continue  
and this is one of the uncertainties to which we point in the section on risks in the outlook 
chapter of the statement ",0
in the second half of 2014 however weakening demand and a series of negative surprises concerning the evolution of prices in the area began to pass through to mediumterm inflation expectations which showed growing risks of disanchoring,0
its clear that monetary authorities need to be concerned about financial instability which as the past two years have taught us can threaten price stability due to the recessionary consequences for the real economy,0
although option 4 seems to be a nobrainer the nash equilibrium answer is that both prisoners should betray each other,0
"finally i saw in some papers that romania would be downgraded because of its external 
liquidity position",0
but most importantly i have in mind the possibly stagflationary effects of climate change  we may have on hand both rising price levels and slowdown in economic activity,0
"the july monetary policy report included such 
an outline that shows how one can approach this question11 
the reasoning concludes that one can regard recent monetary policy as a trade off between 
target attainment in the coming years that is the period for which the riksbank normally 
makes forecasts and target attainment in the long run beyond the forecast horizon12 the 
idea is that a monetary policy that  solely focuses on target attainment a couple of years 
ahead could miss the fact that financial imbalances are building up that risk leading to very 
poor macroeconomic outcomes in the longer run",0
the swiss economy faces an exceptionally difficult year in 2009,0
by january it became clear that oil prices were likely to remain lower for longer resulting in a more substantial downward revision over the entire forecast period,0
surveys showthat industrial sentiment in particular has become far more gloomy,0
on the other hand if the definition is too general it will be impossible for parliament and others to evaluate how the central bank manages the task,0
i frequently hear from my business contacts that theyre holding off on making investments until the landscape is clearer,0
as mentioned earlier low productivity growth has certainly been a contributing factor as firms see fewer profitable investment opportunities,0
"bis review 182008 9
 hence while gross financial savings of the household sector have continued their upward 
trajectory in the recent few years households financial liabilities have also been increasing 
rapidly albeit from a low base",0
"nevertheless the shift in relative pricing noted earlier suggests that 
the assetbacked segment is and is likely to remain a smaller share of the market than it 
was prior to the crisis",0
it seems difficult to explain the case of japan in light of the conventional wisdom,0
these were accompanied by poor governance and risk management as well as inappropriate incentive structures especially related to compensation,0
"if 
that happens the task of urban policy makers and central bankers alike will become that much more difficult",0
"in india the adverse effects have so far been 
mainly in the equity markets because of reversal of portfolio equity flows and the 
concomitant effects on the domestic forex market and liquidity conditions",0
"exactly what you do not want to do when you are in a crisis 
because you want to act countercyclically",0
"however anecdotal evidence suggests that even in the bestcase 
scenarios borrowers given repayment plans redefault at a high rate especially when the 
arrears are large",0
"in the medium term such inflationinduced decreases in the real after
tax salary and in the real aftertax return on savings will lead to a diminished 
incentive to supply labour and capital which will ultimately curtail the economys longrun growth perspectives",0
"macro
economic policies in some areas have also s hown deficiencies in particular when they 
lacked a mediumterm orientation towards sustainability",0
"i have argued that we have to look beyond the individual bank to safeguard financial stability 
and what i was referring to was the systemic perspective",0
"at that time the whole cont ext in which our foreign policy operated turned 
upside down",0
"in the most severe cases if the fiscal adjustment is delayed liquidity risk turns 
into solvency risk as you know markets have learned to become more discriminating with 
regard to fiscal solvency than they have been for decades",0
"thus over the past couple of years 
a point estimate  a single number  has been more misleading than helpful in terms of 
understanding the range of loss possibilities",0
"if this were to be the case a lot more groups in the 
economy will experience downward pressure on their wages",0
but the challenges that lie before us are about more then that they are about the ability of the german economy to deal with structural shifts,0
i tell myself we could imagine situations in which the same narrative  invoking structural forces to justify a monetary policy stance that tolerates a sustained deviation from the objective for too long  leads to a symmetric durable scenario of uncomfortably low inflation which eventually feeds itself,0
i see three possibilities first they underestimated the potential for a nationwide decline in house prices second they relied on creditrating agency analyses that have proven to be inadequate or third they simply misunderstood the risk of these often very complex securities,0
then there is the issue of the timing of the appropriate exit strategies from the current policy stance,0
but there are in fact some reasons why the expected return may have become somewhat lower,0
"many firms engaged in hedging strategies where the risk magically disappeared from internal risk reports and c apital only to reappear as basis risk 
counterparty credit risk or illiquid positions that could not be sold",0
i how would the consolidation of accounts happen in situations where the parent entity is covered under ind as but the downstream subsidiaries are not,0
"if european policymakers decided to follow their american 
counterparts neglecting the different structure and shocks this would result in destabilising economic policies which would bring us to the high inflation and profligate fiscal policies of 
the 1970s",0
at a macroeconomic level ireland is especially exposed compared to other eu27 countries especially if there is a downward shift in the prospects for uk economic growth or a further sustained depreciation in the value of sterling,0
they may thus be tempted not to report evidence of any simmering malfeasances for fear of losing their business and third they may not fully endogenise the financial stability implications and may limit themselves to audit rules while discharging their duties,0
"of these i think the productivity challenge is the most fundamental in the long run and much of the 
fiscal sustainability issue hinges on that as well",0
what were portrayed as increases in equilibrium leverage ratios were in fact an accumulation of financial imbalances,0
this also applies to estonia where preliminary data suggest that the fiscal deficit for 2022 will be around 12 per cent of gdp,0
in other words the balance between liability and control has become lopsided,0
the loantodeposit ratio ltd a relevant financial stability indicator has fallen below 100 coming in at 913 in december 2014,0
as a result it would not have stopped the run on these deposits and if attempted might have bankrupted the government,0
"the recent 
european sovereign debt crisis fears of chinese slowdown and the fiscal cliff of the us 
are having an adverse impact on the already fragile global economy",0
would hav e to dent their profitability severely,0
"hence the downside misses with respect to 
inflation cumulate into a significantly lower price level",0
i actually happen to believe that banking in germany may become even more challenging,0
"irish financial affairs suffered setbacks in the 1950s 
and 1980s also which i would like to recall to you today",0
they are hidden below the balance sheet and even if there were above the line the valuation of the securities that back then up are not clear and therefore difficult to value,0
"however there are significant 
upside and downside risks to the outlook for inflation",0
"on the other hand there were already signs that the opposite picture with strained resource utilization and a risk of exce ssively high inflation would emerge in the 
slightly longer term",0
a central bank that focuses intently on asset prices looks as if it is trying to control too many elements of the economy,0
perhaps most importantly persistently low profitability can limit banks ability to generate capital organically,0
"first of all if it becomes revealed to the market that a 
financial institution is to be treated as a sifi this could in fact induce moral hazard",0
the reality is that too many large borrowers see the lender typically a bank as holding not a senior debt claim that overrides all other claims when the borrower gets into trouble but a claim junior to his equity claim,0
"these developments have to be seen partly
in the context of a oneoff base effect resulting from countryspecific increases in indirect taxes whichoccurred last year",0
farreachingeconomic restructuring meant that our econometric models were of little use,0
"the growing distress of cbp due to the wrong policy of defending the exchange 
rate at the expense of losing foreign reserves accumulation of losses in cbp rising foreign borrowings through unsustainable swaps and the depletion of networth of cbp were obvious to the auditors as early as 1985",0
"if this is the case monetary po licy may need to become more expansionary to 
attain the inflation target which in turn may fuel financial imbalances",0
"because accurate point forecasts are extraordinarily difficult to fashion we are forced also to consider
the probability distribution of possible economic outcomes",0
"in this regard i would argue that we still face old challenges
c heterogeneous agent macroeconomics and distributional effects of monetary policy
the third issue is related to monetary policy and inequality",0
the indian banking sector has also faced significant challenges,0
"several idiosyncratic factors are put forward to explain this 
uniqueness of our macroeconomic situation supply bottlenecks particularly in infrastructure bis central bankers speeches  5 
 sectoral imbalances rise in wages without a corresponding increase in produc tivity higher 
fiscal deficit and larger depreciation of the exchange rate than in the case of our peers",0
on this issue we need to take into account a few other dimensions arising from the exante treatment of uninsured creditors,0
think about how problematic the costbenefit calculus becomes if the only way we can achieve financial stability is to raise interest rates above the level where the forces of demand and supply in the real economy put them,0
my impression is that many women see these matters as personal problems,0
"had we waited for five of six weeks to give 
detailed explanations we would have been facing information and communication issues that would have been very difficult to solve",0
"these decisions even if individually rational are collectively damagi ng to our economic prospects  and are 
ultimately selfdefeating",0
"for example there may 
arise situations in which the taxpayers in one count ry may be faced with the prospect of essentially 
bailing out the depositors of a branch in another  country through their national deposit guarantee 
scheme",0
"fears of further weakening of the chinese economy its falling equity market and the 
depreciation of its currency loom large over global economic prospects",0
central bank communication in the current context has thus become even more challenging than the actual policy actions,0
"another related issue that banks and corporates have discussed with us is the non
availability of longterm hedging products to the corporates",0
the european commission in its report for the european semester of 2019 see european commission 2019 points out that greece faces excessive macroeconomic imbalances,0
"capitalization requirements and accounting regulations subsequently initiated a negative 
feedback loop which was intensified by adverse developments in the credit markets as institutions were required to mark their trading books to market",0
thespectrum of possible outcomes is broad for the truth of the matter is that this episode is uniquewe have no previous experiences to give us adequate guideposts,0
"this basic point was manifest in three important deficiencies of the prevailing regime the shortcomings of microprudential regulation the boundary problem and the relatively undeveloped nature 
of a macroprudential complement to conventional financial regulation",0
the permanent income hypothesis is fundamentally flawed in times of crisis because of uncertainty of future income,0
"however as i would be alluding to later the same 
has been due to structural changes in banks balance sheet",0
"however the increased risk buffer in 
the shape of higher capital requirements is no panacea",0
"the third ingredient the turbulence has revealed in relation to this type of product has been 
the lack of transparency both regarding the valuation models used and the degree of 
exposure assumed",0
"if this an alysis is correct then corporate leverage and the 
associated exposures around the finan cial system could be rather more  prominent as an issue over 
the next five years or so than it has been for a couple of decades",0
"at the same time the information from the second pillar of our strategy showed clear
downside risks to future price developments in april",0
waiving liquidity requirements and large exposure limits could increase the interconnectedness within the banking group and lead to possible contagion effects4 in a banking union which has no common deposit insurance scheme and where the single resolution fund srf still lacks a fiscal backstop,0
"the right hand panel which describes the situation in recent years after the great financial 
crisis shows that asian economi es are much closer to the regression line than they were in 
the 1990s",0
to take an extreme  and from my view point  totally unrealistic scenario  a 50 haircut on greece and 25 haircut on italy and spain would result in a 12 loss of core tier one capital,0
concerns about the governments longrun fiscal position may also constrain the flexibility of fiscal policy to respond to current economic conditions,0
from my point of view this is not a good equilibrium,0
"so unless
productivity accelerates further its disinflationary effect should continue to erode for a time",0
on the other hand higher slack implies a slower convergence of inflation towards our aim and such a long period of too low inflation can also pose specific challenges even beyond its underlying cause  the excess capacity,0
the implications of these shortcomings can easily spiral beyond control,0
nevertheless the future looks less rosy it appears that the financial crisis in the us and europe will become more severe,0
"this is due to a failure o f private issuers 
to account for the negative externalities that increased production of currency and the concomitant erosion in its value would have on those using it",0
on the one hand the persistent and progressive loosening of fiscal policy could bring us back into the longforgotten times of high deficits growing debt and liquidity difficulties of the budget,0
6 the early 1990s were indeed difficult times for the european monetary system several countries were forced to realign their exchange rate or to withdraw from the mechanism like for instance italy in 1992,0
how can the simultaneous burden of higher utility prices rising petroleumprices increase in prices of imported goods due to depreciating exchange rate and lowering of returnson national savings scheme be borne by a class whose household incomes are at a standstill,0
"it may seem that the target fulfilment of the cpif forecast is worse as it lies above 2 per cent 
towards the end of the forecast period",0
this in turn had a strong impact on an already severely weakened financial sector,0
"this is a very reasonable starting point as it is most likely that when structural reforms or macroeconomic adjustments that coul d help a country to regain solvency are not 
adopted this is not for lack of possibilities but because they are deemed undesirable  the sovereign debtor prefers not to take on all the burden of the required adjustment  or socially 
and politically unfeasible  the government may not be able to pass and enforce the 
consolidation package",0
"second the concern that governments in a monetary union have an even 
greater incentive to borrow because the costs of an unsound policy can be spread more widely",0
in hindsight it looks as if for a while confidence had turned into complacency,0
developments in the united states appeared particularly uncertain,0
at the same time the npl problem has deep structural reasons that were further amplified with the start of the financial and economic crisis,0
"what i am objecting to here is not that the forecasts are adjusted with assessments that take 
into account factors that affect the forecasts but are not captured in the usual models",0
"a consumer 
protection regime that relies on full disclosures  may mean very little to consumers that have 
neither the capacity to understand the disclosures nor the ability to exercise the appropriate choice between the products being offered",0
"not only did they face losses on their portfolios of structured credit but sources of funding on which they had become dependent particularly 
securitisation dried up",0
we couldnt rely on the exchange rate as an anchor because we didnt have the sort of domestic structural flexibility consistent with a pegged currency particularly given the nature and size of the external shocks which hit the australian economy,0
"in all of this the option of demesne management was infeasible for the king likely because it would have involved destabilising relations with the administrative class of sheriffs and other royal officials upon whom the kings political stability depended6
causes of the inflation
forget royal infighting wars or the whiff of revolution it is inflation that really sets the pulses of central bankers racing",0
as the political uncertainties persisted the repercussion on consumer and business confidence grew denting private consumption and investment,0
in addition remittances which make up a major source of trade deficit financing are down 67 yoy,0
"for instance the 
operational risk that is the risk of human error or failure of systems leading to financial loss 
was not at all addressed  as were the liquidity risk credit concentration risk interest rate risk in the banking book etc",0
"we saw that as the system came under stress market participants faced the 
prospect of unloading collateral at fire sale pri ces  in many cases exposing institutions to 
wrong way risks for which they were inadequately prepared",0
"the first is that the accumulation of economic slack due to the rece ssion may exacerbate downside risks to price 
developments which in turn may lead to outright deflation as monetary policy loses traction 
in stabilising output",0
"howeve r if legislation ta kes only 
these action s and do es not limit gse portfolio s we  run the risk of solidifying investors perceptio ns 
that the gses are in strum ents of the go vernme nt and that their deb t is equivalent  to governme nt debt",0
the most important thing is that the set of shocks which we included in the adverse scenario leads to a capital loss of 263 bln a very significant amount,0
"intuitively if the fed attempts to disinflate by raising the 
federal funds rate the disinflationary effect will be felt not only through the usual output gap channel but also through a direct restraint on longterm inflation expectations",0
"to an extent that may have been a manife station of a lingering reluctance to hold equity 
for a generation that had been chastened by the grea t depression asset preferences apparently were 
skewed in ways that could not be read ily attributed to objective differences  in the risks of holding credit 
and equity claims on businesses",0
the substantialpressure on the krone towards the end of october hardly reflected economic fundamentals innorway,0
we would experience lower global demand and weaker commodity prices,0
as the majority of the revenue losses caused by the economic downturn will accrue with a time lag to the business cycle the prospects for public finances in this year are even more dire with the public deficit expected to hit 5 of gdp,0
"it is worth noting that recent deposit insurance and depositor preference
legislation may increase these concerns by exposing uninsured creditors of banks to a greaterrisk of loss than in the past",0
many appear to lack a clear compass relative to fundamentals,0
"these weaknesses include the inability to deal 
with complexity arising from such mechanism as securtisation otc derivatives as well as the problem of procyclicality and systemic risk  associated with valuation and performance 
management issues",0
second macroeconomic imbalances often precede fiscal disequilibria,0
moving on to developments that are more recent and with reference to my earlier discussion on diverging monetary policies the key challenges that reserves managers have been facing since the latter part of 2013 have been around the ongoing uncertainties on the timing of the rise in us interest rates and the negative yields in europe,0
as such there is an undesirable impact on corporate treasurers in terms of financing cost and asset and liability management,0
"as a result it is said that regulatory authorities and market participants themselves faced difficulty understanding the size of the cds market and 
the whole structure of counterparty risk that the participants were exposed to via bilateral 
transaction",0
"by this criterion the two most important risks for euro area financial stability at the current juncture are first the possibility 
of concerns about the sustainability of public finances persisting or even increasing with an 
associated crowdingout of private investment  and second the possibility that adverse 
feedback between the financial sector and public finances continues",0
the measures taken to contain the pandemic coupled with the heightened uncertainties drove albanian economy to recession,0
greece experienced similar problems when its nominal gdp fell following the financial crisis,0
looking at the period before the crisis what looked like as a large output gap in 2003 turned out to be a very small one a few years later,0
since social initiatives as argued earlier were not integrated with business plans and were thought of as nonviable they were the first casualties,0
"in 
the article it was pointed out that  danmarks nationalbank and the chai rmanship wise men of the 
economic council did not have a comprehensive under standing of the pension system and that we 
were too partial in our analyses",0
"my out look for fiscal 201 7 as a whole  is that the average rate of core 
cpi inflation will decline somewhat and reach ar ound a little over 15 percent   slightly below 
my july assessment   mainly due to the effects of the decline in demand following the front 
loaded increase and a decline in real income",0
while this may appear to be a rudimentary feature of any governance arrangement it may be challenging in organisations that are large and have complex or opaque reporting lines resulting in boards and senior management that are too far removed from the issues on the ground,0
"a second concern i have is the consequences that  will follow when we combine our current 
fiscal projections with a highly accommodativ e monetary policy",0
"the global economic outlook 
deteriorated and uncertainty on the financial markets was compounded by the us budget 
dispute",0
these challenges intensified in the latter part of 2008 as the global economic environment weakened further,0
if this does not happen obviously the restructuring task that we would have would be much greater than that facing us at present,0
fourth should a generalised deflation pressure prevail nominal rigidities in the economy and particularly in labour markets could inhibit the needed relative price adjustments,0
in hindsight the degree of ignorance isso great as to border on the comic,0
these considerations have led eiopa to recently publish an opinion setting out its concerns on the prudential implications of a sustained period of low interest rates,0
"2 bis review 272003
 the adverse effects of deflation go beyond financial markets",0
if the publication of libor were to become untenable because the number of transactions that underlie it declined further then untangling the outstanding libor contracts would entail a legal mess that could endanger our financial stability,0
this is largely a result of cyclical factors such as persistent macroeconomic weakness despite the recent improvement subdued credit demand amidst deleveraging by households and firms alike and low interest rates which exert considerable pressure on financial margins,0
the second implication is that outsourcing of production processes has become less profitable,0
it is well known that international comparisons of productivity growth started to paint a bleak picture of the euro area countries in the middle of the 1990s,0
it can be perilous for an economy if investors come to believe that the outlook for inflation is coming under political influence,0
the global economic outlook has weakened considerably and financial market volatility has increased owing in particular to the ongoing european sovereign debt crisis,0
eventuallyhowever the stagflation that marked the 1970s caused both the objective of policy and itsimplementation to be reassessed,0
the distribution of costs is a politically sensitive issue not least in terms of whether legacy assets are to be included in the equation,0
three years ago the federal reserves decision to curtail the quantitative easing policy quite unexpected for the market became such a black swan,0
"if the market were to form the view that the government 
deficit was increasingly structural and hard to correct and if the new zealand government were forced to consolidate faster this could generate a contractionary effect on consumption which would be difficult to counter with monetary policy",0
of course besides competitiveness problems the crisis also had fiscal causes,0
"in almost all the recent crises the economic policy errors seem to have been the same
gb7 a long period of fixed exchange rates followed by a loss of external competitiveness a rise
in interest rates a considerable setback in growth rates and a devaluation of currencies
gb7 an increase in inflation rates
gb7 and increasing budget deficits",0
also the negative momentum introduced by energy prices comes at a point in time where the nonenergy factors are also drifting down,0
another important source of instability was the large volume of bilateral otc derivatives positions outstanding among the major firms and the right of a firm to immediately close out such positions if their counterparty became insolvent,0
however similar to thearguments regarding consolidation of the banking industry concern is sometimes expressed thatsmall business borrowers may receive less credit from these larger more complex financialinstitutions,0
the changes are not very large but to datevarious indicators including the continued undervaluation of the krona do point in the samedirection,0
"but the main problem currently confronting the spanish economy is the fall in all confidence indicators in recent months exacerbated in recent weeks by the 
management of the latest banking crisis",0
"the corollary of such a step is the possibility that the bank 
might incur a capital loss",0
"the relatively high current 
deficit around 76 percent of gdp is another argument in this regard",0
"if the risk retention requirements combined with accounting standards governing the 
treatment of offbalancesheet entities make it impossible for firms to reduce the balance 
sheet through securitization and if at the same time leverage ratios limit balance sheet growth we could be faced with substantially less credit availability",0
the truth of the matter is that given the lack of historical precedents on what the impact of a major economy departing from a zero lower bound environment is market analysts and policy makers do not have much of a choice other than learning in real time,0
"in canada a series of factors coalesced including the lack of a credible nominal anchor for 
monetary policy inefficient production large and chronic fiscal deficits and structural 
rigidities in labour markets",0
however net export dynamics will not be able to fully offset the reduction in consumer and investment activity during two coming years,0
"the budget is being debated this year in a national and international economic context 
beset by difficulties",0
the greatest concern arises from the possibility of the deceleration in overseas economies,0
on the negative side there was a worry that responsibility for supervision even of banks could unbalance the bank and distract it from its monetary role,0
"many investors assumed that the credit ratings 
covered all of the risks despite the fact that they really only focussed on the credit risk and ignored the liquidity risk which can often be substantial for structured products",0
"earnings are 
obviously following the same trend as in 2007 and reflect the persistent effects of the risks 
associated with the subprime crisis with valuation losses on assets and higher riskrelated costs",0
so over time the misalignment of liability and control that was entailed in the constitutional setup of the euro area from its very beginning has become even worse,0
moreover besides the task of predicting and responding to the changes in us policy we are faced with added difficulties of swiftly identifying the effects and undertaking responses when the socalled g4 the us the eurozone japan and the uk which had coordinated in their qe policies so far all change their policy stances in different directions,0
"if we do not undertake ambitious labour 
reform the spanish economy will enter a tough and complicated period in which not only will 
growth be lower than it would be with extens ive reform but moreover its impact on public 
finances will be extremely negative making it difficult to achieve the targets set in the stability plan",0
"under the 
circumstances the central bank was faced with  a serious dilemma in terms of the newly
adopted monetary policy regime",0
if this situation were to persist for a long time the low level of net profitability would inevitably weigh on their financial situation,0
at the same time i am aware that our recommendation may disproportionately penalise wellcapitalised lenders and those set up as nonjoint stock companies,0
the downward slope of the curve arises basically becauseof the presence of money illusion and expected inflation deviating from actual inflation,0
"however when assessing such proposals it should be noted that the main procyclical factor 
may not be the level of the haircuts or margins but the level of market prices for collateral which can be irrationally high in a boom and correspondingly low amidst fire sales in a crisis",0
"on the other the weakening of the euro has put swiss producers in a bind versus their 
european competitors and presented problems for switzerlands monetary policymakers",0
it is above all this envisaged sanction  so it seems to me  which meets withconsiderable reservations on the part of many institutions and supervisory authorities,0
in the slightly longer term questions also remain about the outlook for global trade at large a factor that has a substantial impact on an export dependent country such as sweden,0
"these are termed quasi
fiscal costs in the literat ure since the costs to the central bank are passed on to the sovereign through 
a lower transfer of profits",0
this is likely due to a more backwardlooking approach in the formation of expectations and to the considerable weight of the most volatile components of inflation in the consumption basket of the less welloff households,0
"from the critics we 
receive disinterested advice on how to undo the euro which not only overlooks the political vision that inspired it but also the impossibility of avoiding a debacle of incalculable dimensions if the fungibility of bank money is threatened in a part of the euro area no matter 
how small",0
"policy challenges from population ageing
fiscal policy
population ageing will have a deep impact on public finances in the euro area for decades to come",0
when this happens this could have adverse consequences on our price and financial stability objectives and ultimately on the countrys growth momentum,0
"alongside this there has been a deterioration in perceptions of overall sterling secured 
market function over the past year or so which participants note has coincided with pressure to reduce balance sheet size due to regulatory reporting requirements  in particular the 
leverage rat io chart 4",0
"13  these temporary impairments flow through another liability account called accumulated other 
comprehensive income and affect earnings under genera lly accepted accounting prin ciples only if the gains 
or losses are realized by selling a security",0
these global risks have now shifted even further to the downside with last weeks referendum on the united kingdoms status in the european union,0
second the banking supervisor may want to send an unviable bank into resolution which has large amounts of outstanding central bank borrowings,0
the strength of the swiss currency is a considerable challenge for our exportoriented economy,0
the challenges for the central bank are of a multidimensional nature macroeconomic institutional and operational,0
"finally it can exacerbate the impact of conflicts of interest and perverse incentives that exist both at the 
top and at lower management levels",0
"as it has often 
been observed elections entice institutions to forestall business plans opting instead to wait and see before charting their business future",0
"without these steps the slump in the labor market and the broader economy 
surely would have been even deeper and more prolonged and the low wage and price 
inflation we are still experiencing might have turned into outright defl ation",0
"it is surely the case that the consolidation efforts and the 
structural reforms are far from easy to implement entailing many hardships on the greek economy and the population",0
"the dip in 
the index however appears to have been primarily driven by panic and uncertainty 
among foreign investors rather than the change in macroeconomic fundamentals of the listed companies",0
on the other hand publicpolicy will have to confront genuine and significant problems when these become clear and are notselfcorrecting,0
"bis review 1372010 3
 including the accumulation of financial imbalances being overlooked",0
the first risk is that cheap funding allows banks to backload the deleveraging of their balance sheets and encourage socalled evergreening practices which in turn may prolong macroeconomic stagnation,0
one reason for this lack of scrutiny was that fx transactions were sometimes regarded as ancillary to the core business notwithstanding their potential impact on returns,0
inflation ran well below our target last year held down by the transitory effects of declines in crude oil prices and also in the prices of nonoil imports,0
"the question that i am concerned with is whether  regional savings will be adequate for meeting this 
demand as they have been in the last decade",0
if trend growth is lower and we cant or dont want to do anything about that then expectations about future incomes tax bases and so on will have to be reconfigured,0
"iii shortterm policy challenges and responses
the main challenge of course is low and declining inflation with inflation expectations in the euro area drifting downward at short to mediumterm horizons",0
"seventh the nominal effective lending rate of the banking system which remained 
higher in the 1990s have declined significantly in the 2000s",0
initial margin haircutting may also be considered as comprehensive but on the other hand it could increase the potential for contagion risk,0
future expected profitability may also suffer if banks react to lower overall returns by extending riskier loans which in turn may sour,0
"the lagging share of national income accruing to workers
a second adverse development in recent years has been the apparent reduction in the share of overall national income that accrues to workers",0
"let me briefly add that europe is not the only source of risk as there are eg major fiscal challenges in us which could come to a head early 
next year",0
"second and more fundamentally i worry that this binary approach to monetary policy 
credibility  credible or not credible anc hored or deanchored  misses the key risk to 
inflation expectations",0
the july consumer confidence index fell by 07 per cent to 436 per cent and the proposed increase in the sales taxation is expected to act as a drag on growth,0
the us and lehman were the center of the crisis in 2008 now it is more about europe and sovereign debt,0
"in view of the economic situation prevailing in switzerland at that 
time there was the risk of a pronounced deflationary trend in particular if the swiss franc 
were to appreciate further",0
related to this what do we do when inflation expectations diverge from our own forecasts which already have inflation expectations incorporated into them,0
"personally i saw an evident risk that the slowdown in the united states could become more 
prolonged than was assumed in the forecast",0
"on the demand side it seems more difficult to generate growth in spending in an economy 
where households are already carrying significant debt",0
"as i noted earlier clicos recent financial operations and the reasons for the emergence of 
very sizable statutory fund deficit in 2008 are still very unclear",0
"calculations by the ministry of 
economic and business affairs indicate that t he increased pension contributions have had a full 
impact on total savings",0
"however the cpi also has a wellknown disadvantage which in my opinion 
makes it less appropriate as a direct operational target for monetary policy",0
"finally i should emphasise that while the proposals may have an internal economic logic 
the reality may be far more complicated",0
"at the beginning of the 1990s sweden underwent the deepest economic crisis since the 
depression of the 1930s",0
there are certainly other factors at play as well but savings and investment decisions are at the heart of the issue,0
"it seems that these us bankers are fearful that a 
strategy of loan modification could prove more costly to the lender if it resulted in numerous 
borrowers opting for the offered modification even though they actually could afford to return to the original payment schedule",0
these uncertainties have proven to be more persistent than expected and this is clearly impacting on the euro area,0
"2 
in the worstcase scenario one might worry that the interaction of deflation the shortterm nominal 
interest rate and aggregate demand could conceivably touch off a destabilizing dynamic",0
"for all of us the ongoing integration of
europe is an abiding challenge",0
"canadas deteriorating competitiveness 
canadas current account balance has declined substantially in recent years reaching a 
deficit of 43 per cent in the third quarter of last year  the largest deficit in 20 years chart 10",0
compared with past episodes deleveraging has in fact be come even more challenging,0
"without this policy measure the extreme over valuation of the swiss franc and its volatility 
would probably have persisted",0
in earlier upward phases in the 1970s and 1980s a tightening of economic policy often came too late,0
"having regard for the experience of mmfs during the financial crisis and more 
importantly for the low risk appetite of mmf investors for capital losses the central bank s 
view is that a mandatory switch from constant net asset value to variable net asset value 
does not adequately address the fundamental problem of whether  an investor run on a 
money market fund may take place   though we would acknowledge it  may affect the 
dynamic of that run",0
what we can say now is that what we observe is that domestic factors of inflation starting with wage costs and then also price decisions are not responding the way we would expect in view of what are the more common estimates of this slack,0
in addition it seems undeniable that consumerconfidence has weakened somewhat,0
 how do we deal with the ramifications of high volatility on the yields of pension savings,0
the resulting declines in asset prices can trigger margin calls on other investors who themselves may need to delever by selling their own holdings adding to the fire saleinduced price impact on these and potentially other assets,0
second on top of some of these scarring effects the deflationary shock from lower energy prices does seem to be having some effect on pay,0
"on the other hand the absence of active stabilisation efforts by the executive branch and the
congress might increase their frustration about the stabilisation policies pursued by the federal11 bis review 942000reserve  or perhaps more likely at the perceived failure of the federal reserve to pursue full
employment aggressively enough  and increase efforts at political interference with the conduct of
monetary policy",0
"some of these large failures reflected insufficiently controlled over expansion others a 
process of senescence leaving the company prone to bankruptcy as soon as the next economic downturn came along",0
"at the same time the ap funds new investment regulations and investments in the
premium pension scheme have led to substantial outflows",0
at all events in the foreseeable future itwill probably lack the regional base in asia itself which the euro is likely to have in europe,0
from an employers point of view high and variable inflation made it extremely difficult to do the hard math required to run a business,0
or the needed fiscal adjustments could come as a rapid and much more painful response to a looming or actual fiscal crisis in an environment of rising interest rates collapsing confidence and asset values and a slowing economy,0
with the crisis originating almost entirely in foreign markets and hitting the export sector very strongly a large domestic fiscal stimulus would have missed the target,0
"challenges for european banks
let me start with a challenge i have already mentioned the pending divorce of the uk and the eu",0
"however these additional scenario components capture direct loss es to which any 
firm engaged in material trading activity is exposed",0
in other cases financial products were so novel that the industry itself did not fully envision how and thru which channels the risks would materialize,0
"fifth the banks need to examine the operational issues related to the bc model such 
as cash handling",0
marketbased measures of longerterm breakevens have declined significantly since mid2014 and stand near alltime lows,0
"in this case the exchange 
rate tends to depreciate again out of line with fundamentals exacerbating inflationary pressures and also hurting the government and corporates who have external debt obligations",0
"8 thats not a favorable longerterm forecast all the more so because it is importantly 
the result of demographic changes that have been expected for decades",0
last weeks indications were that expectations have started to decline,0
in a stagnating economy savers complain about low returns while borrowers complain about too restrictive credit conditions,0
"budget deficit amounted to all 799 billion 
in 2009 reflecting at the same time the accelerated increase of budget expenditure and slowdown of fiscal revenues",0
oldage dependency ratios are rising putting more pressure on public finances,0
small and medium sized enterprises smes are especially hardhit given the smaller buffers they have,0
as i have discussed at length elsewhere i see serious problems with such an approach8 it risks gambling with central banks credibility at a time when credibility is paramount,0
"indeed we would face the problem i just mentioned whether the target inflation rate were 4 to 5 or
2 to 3",0
double gearing results in the overstatement of capital and can also lead to regulatory arbitrage,0
investment and productivity estimates are also becoming more problematic,0
on the one hand a fixed program size is straightforward to communicate on the other hand a program of fixed size cannot so easily adapt to changes in the economic outlook and the consequent changes in the need for policy accommodation,0
worldwide economic events like the financial crisis such as the great depression of the 1930s and stagflation in the 1970s often have a profound effect on both macroeconomic thinking and practical policy,0
those reasons most often relate to policy or institutional shortcomings,0
but from another perspective we have less experience operating with unconventional monetary policy we have been in this regime for a long time and this creates more potential uncertainties,0
"when this reform was put on table for debate and discussions some people expressed profound 
worries about the timing to introduce it citi ng unsound domestic economic fundamentals and the 
inherent big risks",0
"iv also on friday 1 august the canadian rating agency dbrs cut the rating of banco espírito santo sa and indicated the possibility of further rating cuts
v the evidence of control failure and harmful mismanagement in the bank has aggravated uncertainty about the balance sheet of banco espírito santo sa making unfeasible a private capitalisation solution in the short run",0
"indeed what 
started as financial crisis in the usa has trans formed itself into an economic crisis that is 
having dire consequences in real sectors of the world economy",0
this in turn put redemption pressure on mutual funds mfs and further along the chain on nonbanking financial companies nbfcs for whom mfs were a significant source of funding,0
the median measure averaged about 4½ per cent over the decade which shows a persistent error in this measure of expectations of the kind which is not supposed to occur in economics,0
and this is something we supervisors are not very keen on not least because we have already seen significant market volatility,0
in addition the perceived inability of monetary policy to keep inflation close to the objective may fuel pessimistic expectations a point to which i shall return,0
"it is true that in a period of high and potentially rising inflation a depreciating currency adds to the
confusion about what is happening to relative prices and contributes to an attitude that any cost
increases can be passed on",0
had there been one the northern rock recovery plan should have challenged the management and the board on how its business model could adapt to and survive the closure of its key funding markets given the sheer scale of its dependence on securitisation,0
"in general if we look back to the mid 2007 it can be reasonably seen that the crisis emerged 
in the debt market particularly with regard to its derivative product which reached its peak in september 2008 when lehman brothers collapsed",0
yes there are many savers who are concerned about their pension plans because interest rates are simply not going up,0
the risks to the projection are judged to be symmetric and primarily relate to trends in the international financial and commodity markets and the spillover effect of global oil prices on the prices of petroleum products at home,0
however the resistance to surrendering national sovereignty on banking supervision proved too strong in an environment where serious banking crises were not expected and  even more importantly  the crossborder effects of banking problems were seriously underestimated,0
"finally there are also studies which imply that the fiscal multiplier might be smaller when 
public debt ratios are high and the sustainability of public finances is in doubt",0
the trend at the end of the year appears to have been downward againimports did not decline until the second half of the year prices fell significantly,0
compared with national financial stability measures monetary policy is a rather blunt weapon,0
in addition a number of recent and proposed changes in accounting standards will intersect with the regulatory changes in ways that cannot yet be predicted,0
"the issue s that confront  us at the se meetings a re all too fa miliar and t his may suggest that 
we are not trying hard enough on the policy front in dealing with these issues o ver time ",0
under the current setup when bank solvency is put into question the looming restructuring implies a heavy financial burden for the sovereign which increases doubt over the creditworthiness of this particular state,0
beyond the physical distance to the physical financial services locations there is also the opportunity cost of time spent away by women from important responsibilities,0
"in aggregate these companies reported a fourth quarter net loss of 427 billion  versus a 255 billion thirdquarter loss  due mainly to elevated loanloss provisions very large goodw ill impairment charges and a continuation of 
heavy trading asset writedowns",0
such assessments are further complicated by the fact that there have been a number of important structural changes in the mortgage markets,0
as a euro participant however sweden would be in the same boat as other member states as regards many of what appear to be likely supply shocks for instance oil price fluctuations,0
"the first significant lesson from our consumer te sting was that there are some disclosures that 
consumers just do not find useful",0
had we still been dependent on foreign exchange swaps with us dollars conducting monetary policy under the given conditions would have been eminently more difficult,0
"in this regard it is worth noting the obvious the policy coordination mentioned in the joint statement does not indicate  monetization  that is the 
central bank s financing o f the government s fiscal deficit",0
but we should mention another two factors bearing down on profitability,0
"if however the costs of 
bad decisions are not entirely borne by the economic agent significant distortions are introduced leading to misallocation of resources",0
"this is particularly likely to be the case when the 
transmission of monetary policy is hampered by persistent structural rigidities as it is the 
case in large parts of the euro area today",0
"speed of structural reform
the second point concerns the speed of structural reformin this regard economists abroad have voiced concern that if various structural reforms are
implemented simultaneously there would be a substantial deflationary impact on the economy in the
short run and the deflationary gap in japans economy which is already suffering from lack ofdemand might become wider",0
"frankly it would be difficult to make a binary distinction between micro prudential and 
macro prudential policies  ultimately all macro risks translate into micro risks for financial institutions",0
"the future of emu governance
the past few years have been challenging for the conduct of our monetary policy in view of the environment of financial fragmentation which brings me to the topic of the foundation of our economic and monetary union",0
both have focussed extensively on the impact of covid19 on the irish economy and the macrofinancial environment as well as the risks to the outlook,0
"policymakers and observers did not fully appreciate the extent to which diverging fundamentals between different economies could feed through to the banking 
system",0
"the lower level of the primary surplus in 1996 with a shortfall of around 20
trillion lire compared with last septembers estimates will have repercussions on the results in1997 these will also be affected by the cyclical slowdown that started at the beginning of 1996and became more pronounced in the last part of the year",0
"these trends in exports are essentially due to cyclical factors including 
for example the sluggishness in emerging economies such as the asean countries",0
"the 
disadvantage is that more instruments may mean more unintended consequences through 
what is often called regulatory leakage",0
"i will focus in particular on the latest round of nonstandard 
measures  the threeyear refinancing operations which were conducted in december and february",0
its decisions would have little or no impact on the real economy and the impact itself would become increasingly difficult to predict,0
such financial imbalances come to the surface only once the economic environment starts deteriorating,0
last but not least i would like to come back to a point i mentioned earlier on today which is directly related to financial regulation sovereign exposures on banks balance sheets still represent a channel for the dangerous sovereignbank nexus which acted as an accelerant in the euroarea crises,0
this uniformity of monetary policy should not be overstated at the current juncture however as almost all euro area economies still have a negative output gap,0
while it may seem counterintuitive to increase interest rates when growth is weakening the bank has been facing a policy dilemma in the face of this weaker growth being accompanied by rising inflation risks over this period mainly in the form of rising food prices and currency depreciation,0
"the concern however remains on 
account of the possibility of mis selling",0
placing that cash as unsecured deposits would represent wrongway risk for ccps as the collapse of a significant financial institution would create significant market volatility at the same time as potentially the loss of some of the unsecured deposits,0
then as those symptoms price pressuresin goods and labour markets and increasing external deficits  could no longer be contained themacroeconomic policy levers were thrown into reverse,0
however for the euro area at least the information available at the current juncture  not least the monetary data at both the areawide and global levels  points to upside risks to price stability,0
"rather cost push shocks provide a source of inflation which 
is important for monetary policymakers to know but  which is not mirrored by the natural rate of 
interest",0
for instance the monetary and fiscal policy tightening which took place in japan in 1997 has been considered by some as a case of premature exit responsible for the japanese recession of 199899,0
this is because all of these matters somehow interfere with the economic and political sphere of national states  which unsurprisingly want to retain their influence,0
"the us household savings ratio in recent years went through two phases before the mid
1990s it ranged between 710 after 1997 it declined remarkably with pronounced twin deficits especially trade deficit",0
"the third reason for this failure even when against the odds the financial regulator has 
rightly adopted a contrarian outlook is that it may not be in a position to force this contrarian 
outlook on the economy",0
"if futu re policy actions over a fairly long time horizon 
depend on projections about the future paths of many exogenous variables that are inevitably 
characterised by uncertainty as well as on variou s shocks that by definiti on cannot be anticipated 
and more importantly when there is  considerable uncertainty about ce rtain structural or behavioural 
parameters of the economy then prov iding explicit guidance on the future policy rates conditional on 
the underlying projections and assumptions gener ally involves risks that can undermine the 
usefulness of providing more information on the central banks policy intentions",0
in the financial stability the scenario is rather more exaggerated,0
at times both profitability and activity have been quite low,0
i must here stress that should this not be done companies would face difficulties in servicing their financial obligations thus adversely impacting the banking sector,0
in particular these headwinds relate to the continued need for public and private sector deleveraging as well as the persistent weaknesses in labour and housing markets in some advanced economies,0
"what i have just said about the need to develop a european perspective has
implications for monetary and economic analysis ",0
as the amc would be in an equally difficult legal position as the originating banks the synergies it could reap would be very moderate,0
"historically a devaluation of the krona has been necessary at the climax of a crisis and on 
several occasions during the 1970s and 1980s crises were caused by the fixed exchange rate in combination with cost developments leading to a cost crisis",0
"we think back to the 1970s when 
our failure to appreciate the changing structure of the economy led to overstimulative policy and eventually to stagflation",0
more importantly german society is feeling the effects of radical demographic change which will take its toll on the countrys growth prospects,0
not only are these outside of the control of domestic policy makers their path over the shorttomedium term is uncertain,0
"last september the fomc decided to implement the  maturity 
extension program  which affected the maturity composition of our treasury holdings as 
shown in the right panel",0
it is highly likely however that the euro willaccentuate challenges that are already present,0
an important consideration is that economic slack is a multidimensional concept that is not directly observable and choices must be made on how to estimate or measure it,0
and perhaps more importantly the distributional effects of not acting to defend our mandate would have been severe,0
the pressure on foreign exchange earnings will be amplified by the shortfall in export earnings in other sectors as well such as textile and fish products,0
the first factor is that the gfc period involved more than one crisis,0
the reason i have dealt with the propositions relating to trade and capital flows is to bring out the point that there is no universally acceptable policy prescription relating to either,0
"10
the underlying causes of the sovereign debt crisis were considerable macroeconomic imbalances in euro area member states too much borrowing too much unproductive spending the loss of price competitiveness a lack of structural reform",0
"lenders also become more cautious both because they see the weaker ec onomic circumstances as increasing the risk 
on loans particularly as collateral values decline and because they typically begin to 
experience a noticeable increase in bad loans",0
"underestimation of the quantity of risk 
but in my view an even more astounding aspect was the generalised underappreciation of 
the quantity of risk borne by market participants",0
in essence those that are sceptical about the new currency have two concerns first they are worried that the changeover might lead to price increases second they are afraid that their country might lose part of its identity,0
"of course the united states is not exempt from concerns about the potential longterm 
effects of an unsustainable fiscal path",0
"when a huge block of government guaranteed banking debt matured in september the 
banks required much more central bank refinancing not surprisingly the ecb also began to 
focus on the irish outlook with increased concern",0
but the current regime does not explicitly integrate capital and liquidity stress testing at the firm level nor does it attempt to assess the probability or impact of a firesale of banking sector assets,0
"the macroeconomic situation was made even more difficult by a significant 
decline in canadas terms of trade the ratio of export prices to import prices during the  
1984 87 period driven mainly by a significant drop in global oil prices chart 5 which made 
the process of fiscal consolidation doubly challenging",0
asset values might plunge writedowns would erode equity,0
"among a number of reasons why pricetobook 
ratios are this low is that investors are still expecting hidden losses to appear",0
"this turned out to be the fatal flaw in the whole setup although we now know that these banks were also undercapitalised which 
might have done them in at a later stage",0
during the recession and immediately after the losses in wealth may have put upward pressure on labor force participation the persistently weak labor market may have subsequently contributed to more retirements and thus put downward pressure on participation,0
"of course 
this criterion although subordinate only adds to the difficult of the framework to fend off the 
accusation of having multiple objectives hidden behind a single denomination of inflation targeting 
without the transparency of disclosing the exact criteria that may justify a temporary deviation from the 
main target",0
"the implications were that the resources base of such banks was weak and volatile 
rendering their operations highly vulnerable to swings in government revenue arising from 
the uncertainties of the international oil market",0
evidently governance issues in the fund are si milar and equally challenging,0
in other words high longevity risk would translate into high political risk pension promises might not be honoured as the intergenerational pact on which they rest might prove socially and economically unsustainable as well as intrinsically unfair,0
similarly concerning are trends in real gross domestic expenditure which declined at an annualised rate of 13 per cent in the first quarter,0
currently risks to the mediumterm economic outlook seem to be tilted on the downside,0
some central banks have a dual mandate and therefore have to focus more directly on cyclical growth whereas others such as in our case have a single mandate,0
and you have then there for instance the shocks admitted on sovereign bonds imply a loss of 28 billion for the banks in the exercise that administrative costs and other expenses imply a drop in profits and in capital of 865 billion,0
"these are in turn manifestations of a bigger problem the premature welfare state which is weighing heavily on potential growth 
on the one hand and is a source of a chronic fiscal imbalance on the other",0
on the one hand the advent of the crisis forced commercial banks to come knocking to the door of their lender of last resort,0
"many of these issues have the 
potential to affect financial stability and are of intere st not only to the supervisors but to our central 
bank and finance ministry members",0
however the outlook remains subject to large downside risks as the potential for new variants of covid19 remains high,0
"when this capital inflow disappeared in the second quarter
of 1996 a painful downward adjustment in the economy became inevitable",0
for one thing the municipalitys credit rating could fall because it takes on another large credit commitment which would lead to higher loan costs for both the municipality and the housing company,0
"spurred by these events financial markets have now also focussed on some more major 
g7 sovereign risks in particular in the uk us and japan where demographic ageing adds 
pressure to major government funding burdens",0
in addition macroeconomic imbalances would continue to grow possibly setting the stage for another crisis,0
admittedly there were pressures in 20112012 stemming directly from temporary doubts over the sustainability of the euro area,0
to a large extent these provisions still related to securitised loans although the share of loan impairments had started to grow,0
"in asia too the 1997 financial crisis was also partially reflective of 
large external resource flows earlier that suddenly got reversed as was the latin american debt crisis of the 1980s",0
"the main preconditions were a number of slowly emerging 
disequilibriums on the real side of the economy accompanied by suboptimal behavior and regulation in the financial sector",0
"q was it the case then that the markets underestimated the political will of the european 
union",0
not only for inducing concerns in matters of supporting further government debt and delaying structural reforms but also because they are said to create market distortions,0
because subordinated debt holders have downside risk but virtually noupside potential subordinated debt holders tend to be risk averse in much the same way as isthe fdic,0
these adjustments then spread to affect employment and income conditions in the household sector and recently they have been exerting downward pressure on private consumption,0
"the continuing fiscal disarray may also lead the public 
to believe that the governments only nearterm strategy is to monetize the debt",0
of course the flip side of this reactionfunction incompleteness is that it becomes harder for the committee to precisely communicate its future intentions to the market  in part because these future intentions have not yet been fully fleshed out,0
"an additional
challenge here is that institutions outside the supervisory umbrella  such as hedge funds  tend to
grow significantly",0
together with this the monetary policy committees decisions are misunderstood from time to time,0
"as many central bankers have pointed out todays cryptoassets do not satisfactorily offer the qualities expected of a currency and cannot be considered as such

first their value fluctuates enormously preventing them from being used as units of account",0
"there also continue to be risks on the external front with the 
recent downward revisions in global growth",0
but they have more misgivings than they once might have had about attempts to meet inflation andor unemployment mandates that ignore the financial implications of the interest rate settings thought necessary to reach those goals,0
the insurance industry will encounter significant headwinds in the years ahead,0
over recent months the risks to price stability in the medium term have clearly continued to increase,0
"however this was not the entire story  surveillance instruments were lacking altogether as 
regards the buildup of competitiveness losses and of macroeconomic imbalances which 
have made any solution to fiscal problems even more challenging",0
"above all problems are raised by the markedpreferential tax treatment of profits retained in enterprises which cannot be justified on
macroeconomic grounds",0
on foreign reserves i did mention earlier that our reserve levels had started to fall rapidly since last year with the onset of the global crisis,0
the profitable us banks are in any case leaving european banks further behind,0
cn the figures were bad and i must say that they probably makes our own forecast of a decline of growth of 06 per cent during the first quarter maybe a little bit optimistic,0
in such a situ ation the task of monetary policy be comes very difficult,0
"a closer look at these 
situations indicates that management had essentially put this process on autopilot",0
some of this widening can be explained by rising concerns about canadas economic outlook due to the impact here of a possible recession in the united states,0
not only downward risks to global growth trade and investment have risen the spill over effects on emerging markets due to increase in global interest rates could also be profound,0
"bis review 132006 5
 had the harder sell as an economist would say we might expect diminishing marginal returns to 
inflation reduction",0
since every model is different the boxticking approach would only undermine a critical review of a banks model,0
"2 bis review 1342010
 these examples show that in developed countries the economic policy measures necessary 
to maintain the confidence of the markets tend to be taken only when markets are on the 
brink or in the middle of a crisis",0
normally this will lead to an appreciation of the krone with a further reduction in earnings and employment,0
for example the european commission projects a contraction of 9 in 2020 for the greek economy in its summer forecast revised downwards from 97 in its spring forecasts,0
"of course these vulnerabilities were compounded by 
i a weak legislative and regulatory infrastructure in which clf the parent holding 
company was not subject to formal regulation 
ii poor internal governance and 
iii insufficient regional regulatory collaboration",0
"the factors impacting the banks  capital position are numerous and of course are closely 
related to the previous challenges that i ve outlined",0
the goods account surplus will narrow in scale as import growth outstrips that of exports and the services income and transfers account will move more deeply into the red owing to sharply increased overseas travel payments,0
"for a bank with longmaturity illiquid assets these differences in valuation convention could 
have a material impact on solvency",0
reducedprospects for the return to capital would not only affect investment directly but could also affectconsumption as stock prices adjusted to a less optimistic view of earnings prospects,0
critics such as university of bonn economist martin hell wig however assert that material risks are not captured at all by the risk weighting,0
the circumstances informing the decision to reduce the bank deposit rate to its current level actually consisted of a macroeconomic framework that has since changed,0
"both upside and downside risks currently coexist in the us economy surrounding the inflation 
situation and the economic growth rate respectively",0
in contrast further widening of the fiscal deficit would bring about a higher public debt and deterioration in external liquidity,0
it is noteworthy that supervisory assessments of risks to the earnings and balance sheets of major financial institutions have like those of many private analysts placed increasing emphasis on exposure to public fines and private litigation losses,0
"so in times of crisis the apparently greater monetary policy freedom with a higher inflation 
rate would be illusory",0
"this will be particularly hard to judge given that for at least a year the year
ended figure for the cpi will be obscured by the onceoff lift due to the gst and then the effects of
the abolition of wholesale sales tax",0
over the longer term we estimate that these shortfalls could grow to about 40 per cent and 30 per cent of respective gdp,0
but we see here that the more nebulous concept of confidence at timesdominates the fundamentals,0
there were also distorted incentives for traders and fund managers to take excessive risks because of myopic and asymmetric remuneration contracts,0
however it would mean an overburdening of monetary policy if the responsibility fornoninflationary growth and for the single currency were left to that policy field alone,0
market participants have been concerned about the euro area crisis the fiscal cliff in the united states and the possibility of a hard landing in china,0
it is nonetheless conceivable that in the shortterm monetary policy might have undesirable distributional effects through financial channels,0
in any case as monetary policy normalises higher interest rates are going to put pressure on debt service costs diminishing the fiscal policy room to adapt its macroeconomic stabilisation stance,0
in the documents concerning the relevant eu state aid procedure the difficulties being experienced by the institution were explicitly attributed to and i quote politically motivated investment,0
bank profitability is also a concern,0
so while a downgrade in our foreign currency rating would increase the cost of our access to foreign currency debt markets and would be seen as a serious setback the impact of losing the local currency investment grade would be far worse,0
for instance the current account shows that exports of banking commissions have diminished markedly since the financial crisis,0
in addition it is particularly difficult to predict the turning points in the cycle,0
"lest you get the wrong impression i do think that the emes have a valid complaint but in my 
view it has less to do with monetary policy than with the incompleteness of the policy 
response in the mature economies in a range of other dimensions i alluded to earlier",0
"the consequences of that crisis would have extended far beyond the
boundaries of the sectors directly concerned",0
consequently unsecured investors are inclined to demand compensation for their more junior position in the debt hierarchy  in effect driving a bigger wedge between secured and unsecured funding costs,0
"could it be that somebody has 
turned them down  which i doubt does not want to list them  which is also highly unlikely 
as they represent a good investment or is unable to list them  which is most likely",0
"what i would most like to stress here is that the two factors   the consumption tax hike and 
the substantial decline in oil prices   only temporally have a downward impact on inflation",0
return prospects are lower and risks are higher,0
"the other major lagg ing economy is japan and the outlook is perhaps a bit more difficult to 
assess following the announcement of significant monetary and fiscal stimulus packages",0
second these concerns interacted with an incomplete institutional framework in a selfreinforcing way,0
"the process will be slower the less clear or 
more misaligned the incentives are from economic and social policy",0
a particularly ripe area for fresh thought in my view concerns modeling revenues and noncredit expensessocalled preprovision net revenue or ppnran area that is notoriously difficult to assess,0
"not only would that be tragic for millions  of 
people but it also would generate chronic shortfalls in the nation s potential output and fiscal 
capacity",0
let me briefly summarise where we stand now in terms of risk focus the liquidity problems have been dampened while credit risks and feared loan losses are increasingly in the limelight as economic prospects have deteriorated,0
however as i will elaborate on shortly my view is that there also are many negative aspects to yield curve control,0
also in such situations the government needs to have a strong negotiating position against the shareholders,0
for instance in the ecb 2008 spring forecast the euro area gdp growth was projected to fall from 27 in 2007 to 18 in 2008 and 15 in 2009,0
"first the revenue we derive 
from our reserves portfolio which is the only source of revenue for the central bank came 
tumbling down",0
"but i also think there are 
good reasons to think that the recession and particularly the impact of the financial crisis 
may have dampened underlying productivity growth in recent years",0
"gdp and inflation  limited forecasting ability one year ahead none at two and three 
years ahead 
the monetary policy reports and updates include for instance four standard figures that 
show the uncertainty of the forecasts",0
"even so it remains the case that monetary policy was 
loosened very aggressively at a time when inflation was persistently above target in the near 
certain knowledge that not doing so would lead to a deeper and potentially much more 
painful recession",0
" however there is a fourth type of developments which poses problems for the 
economies concerned",0
the corridor discussions related to a figure of about 16 billion of unguaranteed bonds of which the two goneconcern banks accounted at stage for less than a third,0
the saga of icelands experience during the great financial crisis had two separate but interrelated substories,0
"it would be 
preferable if some of these monies were redirected to necessities such as education welfare etc and 
thirdly the high burden of debttogdp exposes the economy to possible external shocks",0
"there is another line of argument which is that the monetary policy of the eurosystem focuses too
closely on cyclical developments",0
for many decades there was a sense at the board that the public wasnt interested or willing to dive into the complexities of monetary policy,0
i have already said on several occasions before that for me the scf document is perhaps too general,0
"as a 
result net interest earnings would fall due to the increase in interest cost",0
it must be understood that the macroeconomic policies do play a very limited role in flow of funds to specific sectors,0
"  
a good reason to resist the temptation to give up fiscal discipline is its implications for financial
markets
 the first and most immediate effect of increased deficit is an increase in the interest rate on
government instruments to finance the deficit",0
a first complication that globally operating financial institutions are facing as a consequence of the globalization relates to corporate governance and especially head office oversight,0
"but
the impact of these measures in an environment of stagnant incomes declining investment for pastseveral years and limited fiscal space was quite severe on domestic economic agents",0
we have been highlighting this risk to the outlook for the past two years,0
china is no exception in this respect and may currently be confronted with significant domestic financial challenges,0
"thirdly the lack of local directors mitigates against the incentive effects of the full force of legal
sanctions",0
"the 
monetary policy appropriate for the united states is increasingly inappropriate for the vast majority of emes and vice versa",0
"conversely weak government finances can destabilise banks 
 directly through their exposure to sovereign bonds and indirectly through worsening 
macroeconomic conditions",0
"in the case of this country these adverse international influences really began to affect us just
as overall demand was already weakening in response to the earlier monetary and incidentallyfiscal tightening",0
"however the basic message 
 that failure by the current generation to address the economic implications of aging will impose significant costs on future 
generations  is the same",0
"in addition 
large gross capital inflows raise concerns from a financial stability perspective an issue to which i will turn next",0
"their 
directors fretted about the signal that limited liability sent to depositors",0
"the deficit in public finances in the euro area is calculated by the imf to correspond to 
around 4 per cent of gdp this year",0
the analysis of the latest statistical data points to a further decline in the annual inflation rate which followed a lowerthanforecasted path and ran below the lower bound of the variation band of the flat target due to the steeper drop in volatile prices and to the increasingly weak inflation on external markets overlapping the lingering negative output gap and the ongoing downward adjustment in inflation expectations,0
"estimates from marketmakers indicate that the
krone is expected to weaken against the euro over the next three to twelve months",0
on the other hand the impact of inflation on the expenditure will be lagged including that stemming from the rise in interest rates,0
it goes without saying that the greater sensitivity of balance sheets to market fluctuations resulting from fair value accounting obviously has an impact on financial stability,0
"on the one hand the system found itself in a difficult liquidity situation while on 
the other hand businesses found it difficult to access markets",0
but the question always loomed in the background who would bear the credit risk if a gse became insolvent and could not perform,0
"purchase of govern ment bonds and confidence in currency 
finally in relation to the banks decision to increase  the purchase of the jgbs we 
sometimes receive concern that the banks massive purchase of government bonds  is fiscal 
mone tization by a central bank and eventually confidence in currency will not be maintained 
let me touch on t hat point",0
"the winters review
10 conducted into the banks 
published liquidity facilities highlighted the risk of these facilities becoming stigmatised  usage 
being taken as a signal of fundamental solvency problems",0
"meanwhile private consumption remained w eak due to the change in the consumption 
structure associated with the further aging of the population the low growth in domestic 
employment reflecting the transfer of production bases overseas and the ensuing sluggish 
growth in household income",0
"in these instances of regulatory reforms being pursued only in the 
united states there are not likely to be obvious answers to the resulting international 
complexities",0
"in this context the question 
of simultaneous balance of the inte rnal and external sector s becomes a major issue if the flexibilities in 
the economy are less than adequate",0
"the foreseeable 
decline in employment also appears to suggest social security contributions will be more 
modest than budgeted",0
" there were fundamental modelling issues which resulted in incorrect estimation of 
riskiness and default correlations of the underlying assets",0
"the underlying question was now how strong the adverse feedback loop would be between the rapidly deteriorating real 
economy and the condition of the banking sector",0
"the concept of a national balance sheet of course raises several tricky questions relating to private 
sector foreign assets offsetting liabilities and the extent to which their foreign exchange exposures fully capture vulnerability",0
"on closer inspe ction however one se es that the specifica tions of these models 
typically ignore important factors be aring on the inflation out look",0
"protectionist and beggarthyneighbour policies would have certainly aggravated the crisis as they notoriously did in the 1930s and yet somehow it could have been expected in such dire circumstances and given the political 
difficulties associated to them",0
as i have already mentioned the growth outlook for germany took an especially significant hit,0
"thus in early 1999 it did
not appear that m3 growth revealed upside risks to price stability in particular as nonmonetary
indicators pointed to increased downside risks for future price developments",0
however continued growth at the current pace would at some point raiseconcerns about financial stability,0
in a low interest rate environment a much lower investment income cannot compensate underwriting losses to nearly the same extent,0
"on the flip side however capital flows are known to be procyclical and they 
complicate macroeconomic management",0
in the context of such a high financial integration preserving the banking supervisory powers at national level would only entail suboptimal results due to the limited access to information on parent banks and the lack of a crossborder perspective,0
some recent studies have suggested that the encumbrance ratios of banking systems within europe may lie anywhere between 3 and 40 of their liabilities,0
but in my view one of the most important is the fact that incanada we started adjusting later and as a result we were further behind,0
"26 therefore macroprudential supervision is unlikely to tackle the issue of an 
oversized financial industry while microprudential regulation can have a more direct impact",0
if they are not in a position to do that not only will theyencounter difficulties themselves but other countries of the emu area will too,0
"nor do the traditional consumer protection issues relating to the sales 
process apply directly  these are not relevant to the fund or funds service provider per se but 
are picked up elsewhere in terms of the regulatory  framework applying to investment firms 
and intermediaries",0
the ensuing few weeks during which the greek authorities had no choice but to curtail access to the banking system have been extremely difficult and surely quite damaging for the greek economy,0
"in light of international policy coordination we need to bear in mind that if an 
individual country pursues domestic econom ic policies without considering negative 
externalities it is highly likely that the country will fall into a prisoners dilemma trap and that the world economy will reach a suboptimal multilocal equilibrium",0
"many participants stepped back from the market particularly because of 
concerns about the viability of their counterparty to any transaction",0
this in turn affected negatively the net worth and profitability of banks which held such assets in their portfolios,0
in my understanding if the bank continues with the current pace of jgb purchases it inevitably will have difficulty in continuing to make such purchases,0
in the june report it was foreseen that the transitory effects would have a downwardimpact on inflation during 1998 of as much as 12 percentage points in the september report this figurewas adjusted upwards to 13 percentage points,0
"another issue also emanating from the corporate governance perspective arises from the fact that while in the case of most enterprises the shareholder gets the prime place among 
various stakeholders in the case of a bank the protection of depositors interest is the 
central area of focus",0
at the same time downside risks to growth have increased,0
"the important empirical issue here is the lags in policy interacting with the
uncertainty of forecasts",0
according to the most recent statistical data which are from december 2019 official hicp inflation harmonised index of consumer prices slide 3 is equally sluggish at around 13,0
since the onset of the crisis fiscal tightening has faced strong headwinds,0
but as the ecb rightly points out in its current economic bulletin the commissions proposal suffers from a number of shortcomings,0
it should be noted that the comprehensive package of nonstandard measures is highly expansionary,0
"whist this may reflect what many insurers tell us   that they only want to grow in segments 
that they believe are adequately priced another interpretati on is that some insurers are being 
overly optimistic on risks for which they have no or limited historical claims data and which 
previous risk carriers have declined as they no longer believe them to be adequately priced",0
the loan imposed tough terms in addition senior management was replaced and shareholders lost almost all of their investments,0
for example it will suffer losses fromreduced foreign exchange trading and transfer revenues,0
on the other hand some changes drive prices away  from fundamentals,0
in the latter case the message to employees is that constraints on practices or products may be selfimposed as well as external,0
but it is difficult for anyone to predicthow serious the problems will in fact turn out to be,0
on the other hand the króna depreciated more than expected and inflation has proven more persistent,0
"real federal government spending has also declined on net  since the 
third quarter of last year and the future course of federal fiscal policies remains quite uncertain as i will discuss shortly",0
"but as  guarantors those decisio ns affect the risk run by sponsors who in 
principle could make adjustments to their own bal ance sheet if they regarded trustee choices as 
suboptimal",0
on the whole it seems tome that the question of adjusting fiscal policies to the ecbs monetary policy will be a majorissue,0
"indeed especially in the current crisis which is driven by 
balance sheet problems more than operating account problems delaying the financial 
restructuring is likely  to threaten jobs in the distressed company itself as well as imposing 
indirect costs on those dependent on other companies",0
prospects for both the euro area and the japaneseeconomy seem to have worsened if anything at least for the coming year,0
he may also find it difficult to manage the risks in his business for instance in relation to trades in a foreign currency,0
"24  
concluding remarks 
what makes trend productivity developments particularly difficult to factor in is the fact that 
they are extremely hard to gauge in real time and subject to recurring changes",0
"a key challenge i n japan is that  with deflation having taken hold since the second half of the 
1990s people s inflation  expectations  have declined and deflationary expectations have 
become entrenched",0
"were the recovery in wage growth not to materialise and inflation to linger far below the 2 
target for longer than currently embodied i n the mpcs forecast it would be a very 
undesirable outcome",0
"since these institutions have systemic relevance prudential measures 
applied will a lso have consequences on the stability of the financial system as a whole",0
"the riksbank has therefore needed to focus m ore and more 
on its main task to maintain confidence in the inflation target while the scope for taking other 
issues into consideration has become more and more limited",0
"this 
is partly because resource utilisation appears to have been higher in sweden than in other countries during the economic downturn and above all because it has been expressed in rising costs primarily payroll expenses",0
"bis review 1242006 1
 also the issue of high and fragile public debt structure along with high budget deficits has 
considerable impact on dollarization",0
"the renewed weakness of the japanese
economy coming at a time when macro policy options are limited is putting additional pressure on thejapanese banking and financial system",0
in case of public sector banks the ownership structure itself may change with government bringing down its stake in these banks,0
"6 a question that might be raised is whether there is a 
queue of sound and profitable projects that have to wait because of an excessively tight fiscal policy",0
"on top of that i would say also that you have to accept that when there is a very powerful oil and commodity shock it has nece ssarily an impact on the cycle  and to embark on excessively 
proactive policies to avoid these fluctuations in the business cycle could create future 
problems in the years to come",0
the banking sector remains sensitive to the exchange rate risk through the segment of unhedged loans in foreign currency,0
however inflationary pressures also pose a genuine risk,0
"therefore expost negotiations on burden 
sharing lead to underprovision of recapitalization in contrast an exante burdensharing 
mechanism might encourage moral hazard",0
i have discussed about the crossroads at which we stand and the dilemmas we face in so far as the foreign exchange management framework is concerned,0
these critics claim that european monetary policy is not sufficiently transparent and therefore sends out misleading signals especially regarding the future course of key interest rates,0
this perception in turn has its roots in a shortrun cyclical perspective,0
in turn  so runs the argument  a central banks ability to react to a severe crisis is also limited,0
for one thing that disregards the economic management problemsderiving from the timelags involved in monetary policy,0
"the
resultant losses in income led to labour income becoming continuously less important as a source of
savings within private income budgets",0
the recessions effects on state governments have been substantial,0
another striking feature of the three defunct banks under reference is specific management weakness particularly in the lending area a frequent initial cause of financial distress known even to the most stupid external auditor of banks,0
"however a closer look at the 
developments that underlie the changes in current account deficits shows that the reductions 
are still largely cyclical as they have been driven mainly by sharply falling imports rather than 
increasing export market shares",0
nevertheless the end of 2022 is proving a really challenging one mainly due to the huge shock on commodity prices of energy oil and gas in particular,0
"it can be argued thatbis review 542001 3index funds distort the price of the targeted indexes and that as a result the indices might end up
creating rather than measuring performance",0
in my remarks today i will attempt to relate the above mentioned issues to three sets of interrelated but at times conflicting considerations i national vs international considerations ii political vs economic considerations,0
"it may be argued that the bank should disregard the possibility of future inflation at such a time when
japans economy is plagued by the risk of deflation",0
however group strategies by foreign parents which are asking strengthening the capital ratios at the consolidated level impose limits for asset growth in the largest banks in the system,0
talf loans are leveraged  haircuts against the aaarated collateral average about 10 the loan terms are three or five years and the loans are nonrecourse which means that if the economy performs very badly and the securities fall sharply in value an investor can put the collateral that secures its talf loan back to the fed only losing the collateral haircut,0
the past five years may very well be comparable in significance to the depression of the 1930s or the stagflation of the 1970s,0
clearly the situation that we have faced in the past couple of years  a combination of slowing real economic growth and accelerating price pressures  is not one that central banks particularly enjoy dealing with,0
"however its importance has been 
reinforced by the dynamics of the most recent crisis in which a problem initially regarded as 
manageable  the subprime crisis  gradually developed into the worst financial crisis since the great depression involving financial instruments built on mortgages and after the lehman bankruptcy which revealed interactions  among financial institutions to be much 
stronger than policymakers must have thought at the time",0
there have been several hints  in the declining pricetobook ratios of bank equity as i had observed in an oped piece for the mint in september 2013 and in the incisive research reports of banking sector analysts  that many assets parked by banks under the corporate debt restructuring cell were severely stressed,0
inadequate financial disclosures on the other hand could penalize wellmanaged firms if marketparticipants are unable to assess fundamental financial strength,0
"nevertheless as we also mentioned in said release any potential downward adjustments to the mpr will be similar in size and frequency to our historical patterns which are far from what we have been 
witnessing in the last quarter",0
"other macroeconomic imbalances particularly divergences in competitiveness were also 
allowed to develop over a number of years prior to the crisis",0
third the same logic applies to the firb2 a less comprehensive internal model in which certain loss ratios are already stipulated by regulation,0
however if the hypothesis does turn out to be realistic the zero lower bound will recur and the shortcomings of the inflation targeting regime under those conditions may lead to a renewed search for alternatives,0
for all these reasons and as i have said on several occasions11 seeing rebalancing as all about cutting costs  which is what policymakers often think of as competitiveness  is misguided,0
crucially the central bank may then after all not be able to stick to its declared collateral policy just as the bank suspected,0
the need for financial consolidation added force to the downturn in the norwegian economy at the end of the 1980s and the beginning of the 1990s,0
in addition to global risks the swiss economy also faces uncertainty at home,0
"bis review 1572010 7
 the japanese economy is facing a number of di fficult challenges as indicated by the 
declining trend of gdp growth rate",0
vigilance is required because if longterm expectations shift away from the target it can be very difficult to reanchor them,0
"in fact financial institutions themselves seem to have had at some point little knowledge about their 
own situation and the assumptions underlying their own disclosures have not always been fully transparent",0
"however their recovery is likely to be anemic at least for the time being given the recent 
weakness shown in economic indicators of the us and european economies amid greater uncertainty regarding iraqrelated developments",0
"the fact that moodys announced 
a change in its outlook for the banks credit ratings was no help",0
the prospect of large declines in property prices presents significant balance sheet risks for households businesses and lenders,0
"as a result many 
countries already entered the crisis with weak  fiscal positions which amplified the fiscal 
deterioration",0
"of the economic challenges the continuing high inflation was particularly worrisome 
due to its impact on fixed income earners savers investors and the poor",0
recently the rapid increase in energy prices the natural disaster in japan and the once again heightened sovereign debt crisis have all casted a shadow over the global economic prospects,0
during the 1970s and 1980s the monetization of the fiscal deficit as reflected in the height of the bar showing the growth in net rbi credit to government was clearly a contributor to inflationary pressures in the economy,0
however the sovereign crisis spilled over to the banking system generating a general crisis of confidence which intensified the contraction of gdp and worsened the debt dynamics,0
the truth is that should weak longterm growth expectations indeed become selffulfilling then we would also see signs of hysteresis in the natural rate of interest which economists frequently call rstar,0
"in italy some are afraid a swift debt reduction  275 points 
each year in our case under the current commission proposals  would be too heavy for the country",0
the governments finance bill operates with a government budget deficit of 3 per cent of gdp next year and a deficit of 05 per cent of gdp on the structural balance,0
the banks concern was that their recourse to the discount window if it somehow became known would lead market participants to infer weakness  the socalled stigma problem,0
"many of the 
proposed solutions would involve some surrender of national policy sovereignty which would not be palatable for member states",0
"the
economic costs of waiting too long to change the direction of monetary policy can be high ifimbalances have grown great and the fall in production is large",0
because leverage requirements do not take into account the fact that sfts are collateralized transactions leverage requirements have the potential to impose higher charges on sft assets,0
"when global situation turned stressful the viability of these overseas entities impact 
domestic balance sheets",0
"12 bis central bankers  speeches  
 if by any chance such massive purchase of the jgbs is interpreted apart from the necessity 
in mone tary policy cond uct as aiming  at fiscal monetization confidence in the bank could 
be eroded considerably and longterm interest rates could rise subs tantially",0
most salient not least for sweden has been the impact of the fiscal and financial situation in the euro area over the past few years,0
"it is clear that the root causes of the adverse scenario were associated with substantial 
losses in competitiveness lack of fiscal sustainability and financial risks in national banking 
sectors",0
what was more surprising in the second winter the business fell even further,0
"this may result in additional tax liabilities and hence higher issuance costs for sukuk 
when compared with conventional bonds under the existing tax regime",0
the problem stems from the fact that this framework does not support the notion of provisions on the basis of expected losses with the result that the recognition of losses is frequently delayed,0
"furthermore it is conceivable 
that in the presence of deep macroeconomic weakness expansionary policies might exacerbate the loss of confidence",0
"it is of course true that the irish banks like those in other 
stressed countries have been drawing heavily on ecb refinancing facil ities during the crisis 
especially following the huge outflow of funds that occurred in early 2009 and again in the 
last few months of 2010",0
"as factors behind this gyration many point to the deterioration of the fiscal balance and the hedging activity of investors in mortgage securities in addition to changing views about the 
economic outlook",0
it doesnt capture this balance sheet channel though where the exchange rate depreciation hurts so much,0
second it must recognize that there are multiple macroeconomic targets and hence potential tradeoffs output stabilization and inflation for example,0
on the other hand the loss of the lender of last resort function by the national central banks implies high and protracted  fiscal costs in the case of financial crises,0
"two routes for a central bank 
any central bank with an explicit target is faced with a choice that in its most extreme form looks 
something like this either aim to keep inflation continuously on target or admit that there will be 
deviations that may last for quite some time",0
"on the contrary when facing demand shocks the inflation targeting regimes are particularly 
useful and that is the scenario we are seeing today",0
"17 
a third reflection is that when it comes to the risks of a development of this type the critics 
have not been very clear in my view",0
"why was it so hard to anticipate what would happen if there were losses on large numbers of bonds insured by m onoline insurers which had relatively small 
amounts of capital",0
"in the end 
budgetary adjust ments without structural refor ms would inevitably be counterproductive",0
however significant risks to the upside stand out among them further exchange rate depreciation stemming from financial market volatility additional pressure on noncore inflation and significant hikes to minimum wages,0
"the norwegian economy had experienced a
turnaround with a risk of a deflationary recession",0
even today the sector is facing strong headwinds from the third major challenge  the lowinterestrate environment  which is eroding the profitability of interestfocused business models,0
"the only thing 
that strikes me as predictable under such an approach would be that market access would be harmed across the board",0
"these are essential in a relationship between customers and intermediaries where 
unavoidable information asymmetries make it impossible for the investor to monitor independently the work of the intermediary",0
in addition to the interest rate level the asset purchase programme of the ecb is also an issue,0
so there are limits to this strategy for the pension and insurance fund industry as a whole,0
let me also touch upon governance issues in private sector banks pvbs which originate from altogether different set of concerns,0
"it is significant to note that such inefficiencies can extend to the central banks monetary operations and liquidity estimates as floating acu balances cannot 
be treated as part of the international reserves of member central banks",0
"23 if so then the average level of the nominal federal funds rate down 
the road might turn out to be only 2 percent implying that asset purchases and forward 
guidance might have to be pushed to extremes to compensate24 moreover relying too 
heavily on these nontraditional tools could have unintended consequences",0
international difficulties remain in this field and the disclosure of further losses related to complex structured products cannot be ruled out,0
"meanwhile we think that the fall in inflation expectations have contributed to the 
decline in market rates as well",0
second a large fiscal deficit had opened up and had to be financed domestically as the sovereign was cut off from foreign markets,0
"as a result it appeared as though the banks 
plans to meet their funding needs through retail deposits would be at best difficult to carry out",0
these misalignments have also become visible in  terms of deviations from price stability,0
at the moment it also looks as if the brexit negotiations are going to be a drawnout very longterm process  progress so far has been quite disappointing,0
"from a supervisory perspective the 
problem is all the more acute since the growing reli ance on credit risk transfer instruments tends to 
make it harder to assess the type and degree of ri sk that banks actually bear when for example they 
arrange complex transactions",0
if such pessimism were to persist we would risk that low investment and high unemployment enter a feedback loop increasing the likelihood of the economy settling into a form of underemployment equilibrium,0
"here although the macroeconomic forecast for 2012 
may be realistic there are risks of slippage in projected revenue",0
"nevertheless the saudi economy is facing a number of challenges the most important of 
which is the increasing rate of inflation",0
the result has been that the debt crisis has lingered longer than anticipated and ultimately spread from peripheral europe to other countries within the euro zone,0
"creditors  especially if 
they are households rather than sophisticated financial market participants  may not even 
factor in the implications of higher leverage fo r the possibility of default",0
"either thesplit would need to heal rapidly or more likely some highprofile departures from the board would
ensue",0
7 another complicating factor that may make regulators shy away from pushing for new equity issues in the midst of a crisis is the lack of a government backstop,0
of course the question now is what do you do with those reserves now that times are getting challenging,0
in the first three quarters of 2008 their profitability suffered further due to the unfavourable financial market conditions and increasingly by rising credit costs ie,0
"on the contrary these clauses which have now been done away with in most european countries lessen the ability of firms to compete and 
keep creating jobs generate inflation which affects those not protected by similar provisions 
and in short hinder adaptation to the external shock",0
5 see borio c and h zhu 2012 capital regulation risktaking and monetary policy a missing link in the transmission mechanism,0
in this hypothetical scenario the policymaker has something of a tightrope to walk,0
in times of widespread distress many counterparties may have to sell assets simultaneously to post margin,0
"the sustained decline in net 
national savings in the united states is the necessar y counterpart to the rise  in the current account 
deficit",0
this could ultimately result in a lower amount of capital in the system as a whole which might not be a very welcome prospect specia lly from the supervisory perspective,0
however the crises of the last few years have also pushed monetary policy into uncharted territory,0
"8 this is also true for the funded component of pension wealth as us 
surveys tend to find that employees are very poorly aware of the characteristics of 
the plan they are enrolled in eg",0
what should be noted however is that the imf expects greater economic scarring among emerging and developing economies as deeper mediumterm gdp losses are estimated for these economies especially for emerging asia excluding china,0
with regard now to inflation and growth the september 2015 ecb staff macroeconomic projections show a more mixed result,0
"indeed if the 2009 debt is eventually revised to 120 or 122 as is considered possible by eurostat these projections will have 
to be revised unfavourably",0
b what is more with regard to the challenges we currently face these deflationary pressures create the risk of an unanchoring of expectations which would make it harder for us to achieve our 2 target again,0
of course when we are already below target as we are today we care more about downside risks than upside ones,0
"if monetary policy in the period ahead will be less effective it may be that fiscal policy in 
general may have to play a greater part in a wider stabilisation policy role than has been the case in recent decades",0
"supply shocks accompanied by demand 
pressures such as high fiscal deficit reflected in high money supply growth further accentuated inflationary pressures",0
"if this is so then a protracted period of disappointingly slow growth seems in 
prospect for a num ber of these economies",0
in portugal for example this convergence came to a halt as early as 2003,0
thus if the public begins to think that the fiscal authority is behaving irresponsibly that belief will push upward on the price level,0
severe cases can be found in the auto steel and airline industries where longterm business structure issues make the recent businesscycle effects on pension plans more acute,0
but this is not the case at present as banking activity levels are still low and precisely this is the second source of pressure on the income statement,0
corporates will also suffer in the end through higher longer term borrowing costs because of these unnecessary biddings,0
such external events include changes in fundamentals like the terms of trade or international financial market conditions which alter rational perceptions of agents as to future cash flows,0
bank management may also delay such a move because they may be prone to overoptimism about the outlook for their firm or the economy,0
if the consequences of an unsustainable national economic policy can be shifted onto others  for example through bailouts or via the conduit of a common central bank balance sheet  the incentives for prudent policymaking will be stunted,0
many commentators have argued that accounting st andards contributed to procyclicality,0
but if the countrys overall foreign accounts are negative the situation is very different,0
"some 
countries at the euro areas periphery greece ireland and portugal find themselves in a 
critical economic situation",0
and of course in the precrisis period there was no quantitative liquidity regulation to include in a casebook,0
however while the role of financial conditions in the transmission process has remained as relevant as ever the task of steering them in line with domestic macroeconomic policy objectives has become more challenging in view of the manifold dislocations in financial markets that have arisen since the crisis and the proximity of standard policy instruments to their lower bound,0
"the budget deficit was determined by the slow increase in fiscal revenues and expenditure s revenues increased by 18 yoy due 
to decelerated economic activity",0
but in the case of financial intermediaries these problems can be incredibly fastmoving including runs on funding that can quickly place the very survival of the firm in doubt,0
"the current situation of 
subdued bank lending and outlook for growth in the euro area is a case in point ",0
"however the risk is that foreign investors will leave the swedish market if problems 
arise as the swedish krona is a small currency",0
compared with the december 2018 eurosystem staff macroeconomic projections the outlook for real gdp growth has been revised down substantially in 2019 and slightly in 2020,0
the current account deficit is large and will also contract more slow ly than the bank would have desired,0
however the transmission of the monetary stimulus in the economy continues to suffer from low riskappetite structural weaknesses in the albanian economy and unfavourable developments in the external economy,0
"beyond these quantitative considerations the use of these complex 
products also indicates significant shortcomings in the more qualitative facet of risk 
management",0
"thu s examination  
resou rces can be depl oyed more strate gically be cause the data will allo w the agen cies to determin e 
in adva nce which lende rs and  loan  products may require  more scrutiny",0
ii what would be the position when an account of one of the subsidiaries has to be drawn up under ind as but that is not the case for the parent entity say an nbfc holding company,0
more recently we have been confronted with a situation of successive downward revisions of our expected inflation path,0
"so the situation is difficult to assess and i grant that the judgements our executive board has had to
make in connection with the present inflation report have been more difficult than usual",0
the consequence might have been a new credit crisis and the impairment of our monetary policy and therefore of our ability to maintain price stability,0
"nonetheless the increasing doubts about the chinese financial system and 
the perception that the us monetar y policy will soon implement its adjustments   a still 
uncertain development   have tended to reverse these trajectories in recent weeks",0
"risk is an inherent part of financial 
investment but i would regard it as particularly detrimental if the volatility in global stock prices were to 
result in small savers in particular distrusting equity investment",0
"there are other challenges facing the european economy and these are associated with 
public finances and sovereign financial health",0
the economic situation is clearly reflected in smes assessment regarding the deterioration in the availability of external financing,0
"nevertheless an 
adverse feedback loop among the fiscal balance the financial system and economic activity 
continues to operate in europe particularly peripheral countries and the effects have 
recently started to spill o ver to core countries as well",0
another issue is the actual path of the exchange rate in recent years and theconclusions it warrants,0
but at the same time the public finances problems in several european countries have led to a number of fiscal tightening packages which will subdue domestic demand in the coming period,0
first of all there are several areas of financial integration where reforms have stalled,0
"if the actions dont follow the words when 
necessary then simi lar policy statements in future will be less effective",0
"moreover 
looking at the long term we have to bear in mind that political economy mechanisms bias fiscal policy towards incurring deficits",0
"the outcome data and indicators the riksbank has received since the 
6 bis review 1492008
 monetary policy meeting in september clearly pointed to a severe deterioration in economic 
activity both in sweden and abroad",0
"to the extent that that the degree of subordination required by investors is greater than it was 
previously the overall profitability of the issue will be lower",0
"that spread will largely 
reflect compensation for credit and other non liquidity risks as well as that part of the liquidity 
risk which the bank is not insuring   the bank s haircut",0
it seems to me that it is deliberationsof this type that the riksbank will face at the coming monetary policy meetings,0
"the adverse developments mainly in greeces fiscal aggregates together with the 
blows to market confidence ultimately took their toll on the banking system",0
it seems like the adverse impact of these factors has already started materialising placing further downside risk to our current forecast,0
"because they were focusing on the balance sheets of the regulated banking institutions 
observers wrongly underestimated the actual degree of leverage in the financial system as a whole  i mean all the leverage generated not only by the activities of commercial banks but also by highly leveraged institutions sivs conduits lbofinanced firms etc that is the leverage of all institutions that implicitly or not was predicated on backup credit lines being 
provided by regulated institutions in times of stress",0
"all in all 
the current economic and in particular the structur al uncertainties are resulting in a greater range of 
possible economic scenarios and thus also in an in crease in the range of expectations regarding our 
future monetary policy",0
"first the burden of corporate 
management of the bank as well as of equity infusion in the future will fall on the bank and 
that may stretch its managerial competence and financial capacity",0
the associated decline in net interest income by far the most important source of income for german banks has considerably squeezed their margins,0
consequently any changes to this approach  as currently discussed  have much stronger implications for european banks than for their counterparts elsewhere,0
"one possibility is that the labour market is still feeling the 
effects of the period of belowtrend growth in late 2004 and 2005",0
these exceptionally unfavourable global economic and financial conditions are making our own already very difficult domestic economic si tuation worse,0
returning to panel 9 it is notable how much uncertainty there is about the size of the balance sheet even in the nozerolowerbound scenario shown on the left,0
these are dif ficult times not only for you as investors but also for us as central banks,0
"one sense in 
which this solution was ad hoc was that policymakers could not be sure that a willing acquirer 
would be found in the case of distress in the future but another perhaps more important 
sense is that the rules of the game were not clearly established in advance",0
the accountability of recently created european institutions is a good example in this regard where we must ask ourselves if the intrinsic goal of preserving financial stability is being superseded by a strict autoprotective instinct that triggers another interpretation of their mandate,0
with falling share prices and less optimism among households thegrowth of private consumption becomes more subdued,0
"this may not be an appropriate solution as it may make it difficult for the long 
to chalk out his strategy when he remains unclear till the settlement date as to whether he is going to get the cash or the physical securities",0
and thirdly macro prudential concerns are increasingly on the radar screen of regulation and supervision,0
"this 
was due to risk aversion increasing in the course of the year and the effectively higher risk level which both depressed share prices",0
"the risk in runoff here  and there is a risk that needs examination  is that 
nearterm claims are paid out to the detriment of unidentified farterm claims thereby creating an inequality through a form of time subordination",0
and as they distrusted the riskweighted numbers they wrote down the value of the equity to reach the numbers i mentioned earlier,0
"there is ample room for debate about the 
appropriate size and role for the government in the longer term but  in the absence of adequate demand from the private sector  a subst antial fiscal consolidation in the shorter 
term could add to the headwinds facing economic growth and hiring",0
looking ahead in particular solvency issues in the real economy may become more prominent this autumn,0
"the argument goes that since the 
inflationary impact of easy monetary policies is difficult to see real time the fed risks going overboard with monetary easing thereby jeopardizing future price stability",0
"in this 
case budgetary consolidation would actually trigger a downward spiral",0
if government were to undertake such commitments and future oil revenues are too low to fully finance them the fiscal position would be unsustainable the government would face a fiscal crisis,0
"in the spring of the year 2000 
expectations in the market shifted for a variety of reasons one of them being concerns about the 
current account deficit",0
higher interest rates contribute in isolation to krone appreciation and to lower profitability in the internationally exposed sector,0
"one might even ask if they have in some cases an interest in pushing the market in the same 
direction that it has already moved in contributing to the procyclicality and the phenomena of distorting prices",0
"the demandside factors include the significant moderation in industrial activity over the past few months the substantial correction in international 
commodity and raw material prices and the still elevated bank lending rates",0
the gdp figure for q4 last year suggests that a falloff has already begun,0
"as we have seen this year a failure in terms of surveillance can quickly result in a crisis in a member country which  no matt er how small the country  spills over to the 
rest of the area via crossborder holdings of that countrys sovereign debt and more general 
confidence effects",0
of course there is a risk too that inflation expectations themselves could fallindeed i would note that longerdated tips breakevens have recently dropped to the lower end of their postcrisis range,0
in the former case when the primary worry is aum runs on the part of investors there is at least in principle a natural regulatory fix one could impose exit fees on openend funds that are related to the illiquidity of the funds assets in an effort to make departing investors more fully internalize the costs that they impose on those who stay behind,0
robo advisors might exacerbate financial volatility and procyclicality if the assets under management reach a significant level which is not yet the case,0
"it cannot be excluded that corporate sector credit quality could deteri orate somewhat in the future 
especially if the macroeconomic environment turns out less benign than currently foreseen",0
durable and investment goods meanwhile are the ones subject to this wait and see strategy and by their own nature their purchase can be postponed,0
"the 
legal experts at the ministry had to give way to the young economists",0
"still it remains to be seen how profitability in 2008 will be affected adver sely by further valuation losses increased 
funding costs slowing credit growths declining noninterest income",0
another lesson from the recent research literature is that the private sector does not understand completely changes in the way monetary policy is conducted,0
the euro area bank index fell by around 40 between august 2015 and august 2016 for example,0
"what will be different in our case is that in case of serious trouble the dividing line
between liquidity support and capital injection would be rather blurred or these operations may eventake place simultaneously after writing down capital of the troubled institution",0
thesharp rise in energy costs pressed down on profit margins still further in the fourth quarter,0
however since midapril the government bond markets have suffered substantial losses with yields on tenyear german government bonds for instance rising within a very short period from about 01 to most recently 08,0
the capital markets have not always performed this function in the past an insight which also became clear during the crisis,0
another problem is that typically analysts dont look beyond a horizon of five years,0
disappointingly that negative episode we have also discussed when investment life insurance policies were being sold through banks was followed by the sales of complex structured products,0
"second on the cyclical front the sustained momentum in the swiss mortgage and real 
estate market over several years has already led to imbalances that pose a risk to financial stability and ultimately the swiss economy",0
"it could also tempt us to scale back or
postpone painful restructuring initiatives",0
automatically extending maturities however would leave them on the hook and they could be held liable in the event of a debt restructuring later on,0
"turning back to banks the standard market shares of financial intermediation reported in 
figures 8 and 9 neglect their offbalancesheet activities",0
"however a common deposit guarantee scheme 
can be equally important fears about the ability of individual sovereigns to backstop national 
deposit guarantee schemes have led to large intra euro area retail deposit flows during the 
current crisis significantly impacting on f unding costs of banks in stressed sovereigns",0
therefore there is substantial uncertainty over the future accumulation of the monetary base in a situation where financial institutions already hold huge amounts of excess reserves at  the bank,0
on the exchange market the strength of the swiss franc has been an additional factor creating further difficulties for our export sector,0
moreover the metrics for determining gsib status are heavily weighted toward the kind of interconnectedness features that pose macroprudential risks,0
"the first was that when the value of the banks  assets fell depositors had to bear the brunt of 
losses after the equity holders",0
"however the way prudential regulation is done 
in practice raises two interrelated problems",0
and as we will explain we will miss the inflation target because the high inflation is due to what we call supply shocks which is not our accountability,0
in the united states at the federal level the end of the payroll tax cut the sequestration the squeeze on discretionary spending from budget caps and the declines in defense spending have all curtailed economic growth,0
in any case when downturns occur high leverage is usually an amplifying factor,0
these considerations lead to theconclusion that it does not make sense to harmonise the payrate policies within europe,0
"in the current situation expansionary fiscal policy could easily strengthen cyclical 
trends rather than smoothing them as it did in the boom years before the financial crisis",0
for example outside of the banking system we have only limited information on leverage and maturity transformation rather than precise estimates for all types of nonbank entities,0
but if the economy takes an unexpected turn for the worse monetary policymakers dont have much wiggle room at the moment,0
"last years task was not just a question of assessing future losses under a speculative stress 
scenario instead we were still trying to evaluate the losses already embedded in the existing portfolio resulting from the property price collapse that had already occurred especially for development property",0
the 3month annualized change in average hourly earnings41 percent in decemberis running below the 12month rate and is thus a signal of ongoing moderation,0
germanys longrun outlook like japans is also being clouded by demographic developments and their negative implications for potential growth,0
for the first this manifests itself as risk and rentseeking by the equity minority at the potential expense of the majority,0
in the same vein the economic outlook implied by the bund curve seems to look only marginally better,0
mr praet economic sentiment indicators have recently fallen steeply and markets are increasingly nervous,0
following a 52 decrease in q1 with respect to the previous quarter spanish gdp fell by 185 in q2 when the restrictions linked to the state of alert were at their height,0
ultimately however it will mean that some banks will have to adapt their business models to operate profitably in the long term,0
"on the domestic side a continued need to repair balance sheets in various sectors will affect 
the outlook as it did in 2009",0
when the extra yearlongpiece of the inside lag is added on it is hard to escape the conclusion that fiscal policy should be usedfor stabilization purposes only in the deepest and longest of recessions,0
the economic downturn in the euro area in 2001 also presented challenges for fiscal policy,0
"the real economy has entered a recession since 2009 as gdp contracted by 2 
last year mainly on account of a sharp drop in investment but also because of falls in private consumption and exports",0
"i do not know of course where the stock market will go tomorrow much less in the longer 
run thats really my whole point",0
they could also face reduced us dollar funding if there are large capital outflows from asean,0
this may give rise to considerablechallenges in terms of the governments and the stortings norwegian parliament ability andwill to maintain a firm fiscal stance,0
clearly the euro zone faced serious distress and our institutional framework had not proven credible nor effective  market reactions showed this quite unmistakably,0
"looking forward the government may need to consider additional revenueraising measures or cuts in spending in the medium term to address spending pressures related to an ageing population the need to invest in critical infrastructure such as housing and in meeting climate change targets and the potential falloff in corporate tax revenue10         
assessing the appropriate level of public debt which is already highly time and countryspecific becomes even more complicated when factoring in longerterm considerations",0
"22  we intervened in the foreign exchange market for the first time in nearly ten years when the exchange rate 
appreciated very rapidly in march 2008 at a time when it was already clear that we were likely to go into a 
recession",0
"from a conceptual standpoint these provisions reflect the fact that in banking systems risks tend to build up during cyclical 
upturns which has to do with the procyclicality characterising the participants in financial systems",0
"therefore i 
think it is clear that even mild deflation if  it continues for a prolonged period will have a large 
impact on the medium  to long term decision making of economic entities",0
the causes of low profitability are for the most part structural and hence require structural solutions,0
the fundamental problem with this arrangement was that these hybrid debt instruments often only absorbed losses when the bank entered either a formal resolution or insolvency process,0
"in the 
wake of falling stock prices profits in asset management are declining as well",0
however given that in the 1970s and 1980s portugal was not part of a monetary union and had full monetary autonomy the symptoms of the crisis and the policy prescriptions at the time had some important differences when compared to the 2011 crisis,0
this means that the private sector would need to act as intermediaries in that system and a direct account approach would not be contemplated,0
however unlike the various risks discussed by the new capital accord holding additional capital to cover compliance risks will not act as a mitigating factor,0
"there are significant risks and policy challenges in the 
horizon for the finnish economy",0
"bis central bankers speeches 15
 nationally and if they were to try to take into account the spillover effects of their policy 
abroad this would mean having to set aside the national objectives at least temporarily",0
"indeed a commitment to ex ante coordination between fiscal and monetary policies 
may blur the responsibilities of the various authorities at the expense of accountability and 
may ultimately reduce their incentives to pursue their objectives",0
while the shortterm economic impact of the crisis is substantial and requires ample monetary policy support the longerterm outlook is much less certain,0
im not making a call about how long this is going to take because youve talked about downside risks but its also the case that everyones really bad at forecasting,0
"this is particularly true when the institutional framework is incomplete in other respects as is 
the case in europe today",0
on the other hand national authorities may sometimes be biased towards inaction,0
"one year on the fiscal results for 2008 and the projections available  which point to a 
budget defi cit approaching 10 of gdp in 2010 and to a public debt ratio that might exceed 
the threshold of 60 of gdp  augur a drastic change in outlook with the possibilities of 
fiscal policy boosting spending having been exhausted",0
disintermediation however could intensify the problems of narrow profit margins,0
this finding is even more pronounced if we take into account the fact that the lei study is based on the assumption of constant return on equity roe thus potentially underestimating the longterm benefits of higher capital and liquidity requirements,0
second it is easy to see that the relationship is nonlinear and that the term premium has become less responsive at lower free float levels,0
"with the apparent cyclical slowdown in economic growth in the euro area the
balance of risks to future price stability moved significantly to the downside",0
there were also some structural legacy issues in the exposures to power sector discoms which adversely impacted lending to the sector,0
if that were to occur the inevitable conclusion will be reached that your firms are too big and complex to manage effectively,0
"on the other hand the rise in unemployment 
which lags the contraction in activity may affect household consumption",0
it is easy to see that if fiscal policy is loosened during an expansion or tightened during a recession the burden on the central bank to stabilise the economy increases mechanically,0
while such disengagement may be rational from the perspective of an individual participant it is destructive to the collective market function,0
"in addition to general issues involving the reinvestment of cash collateral aig s securities lending 
program had more specific and fundamental flaws that go beyond the concerns  discussed here",0
"a final regulatory issue is raised by another gm response to their expectation that equity 
returns for nfbs will be lower than for traditional banks",0
"in indonesia on the other hand corporates borrowed offshore directly in foreign currency and their such unhedged market exposure both currency and interest rate in turn created credit risk for 
domestic banks that also extended from domestic currency loans",0
for banks these losses reduce their capital base decreasing hence their supply of loans to the economy,0
"sometimes this is because the transmission of intentions leaves something to be desired and other
times because observers pass the expression of such intentions through the prism of their prejudices",0
"bis review 1202007 9
 last but not least 
if there is one major lesson recent market developments have clearly shown it is the 
shortcoming of a prudential framework which sidelines the central bank",0
therefore a number of countries had to curtail the operation of the automatic stabilisers and some had to run budget deficits above 3 of gdp which triggered the related excessive deficit procedures,0
the other alternative scenario  concerns a risk of higher domestic inflation,0
"if this implies that market expectations of implicit public guarantees shift to the less regulated 
shadow banking sector then the fundamental problem has not been solved",0
"bank support measures and fiscal stimulus 
at present the european economy is experiencing a mutually reinforcing interaction between on the one hand the weakening of economic activity and rising unemployment and on the other hand the deleveraging of banks balance sheets and the persisting bank stresses in some bank funding markets",0
"however in view of the severe economic problems in the early 1990s with
inflation expectations based on our historical record and a massive budget deficit it took timefor the new direction of economic policy to acquire credibility",0
"hence it is very difficult for us in serbia to take any measures that would 
complement those taken abroad",0
what was interpreted as a cyclical problem was fundamentally a structural problem,0
"highend life insur ance sales would have decreased significantly 4 bis review 732010
 and remaining sales would have been vulnerable to adverse selection",0
the unexpectedly large shock of the crisis brought up these institutional weaknesses of the euro the enforceability of the stability and growth pact and imbalances with fixed exchange rate in the private sector,0
"some see a deleveraging 
process going on higher nonperforming loans and the fiscal situation on the government side makes it difficult to recapitalize the state owned banks",0
"nevertheless it is also a fact that the control over the current account balance could not 
neither it is done only through the monetary policy measures which without any doubt puts the central 
bank in a delicate position when the external position  is deteriorated since the current account is a 
function of the interactions between the private sect or entities decisions and the decisions of the 
economic policy decisionmakers",0
3 indeed it is quite clear that cryptoassets undergoing technical and economic trials bring about not only opportunities to improve our payment systems but also material risks which on the contrary might weaken them if unaddressed both from an efficiency perspective and a safety perspective through the introduction of new sources of fragmentation instability and fraud,0
such a statistical treatment has hardly been implemented in practice and the situation seems to remain the same in the future,0
headwinds have also emerged  this time from the external side  as a result of weakening global economic activity,0
"examples are the slowdown in international economic activity which becam e evident during the second half of 2011 and the 
fall in inflation at the end of 2013 and the beginning of 2014",0
"the relative increase in prices and an overall slowdown in economic activities will also affect 
the profitability of clients businesses thus constraining their household incomes",0
"admittedly 2011 is still going to be a difficult year for spanish banks with their net interest 
margins under pressure owing to the higher marginal cost of funding and to rather flat 
business volumes and with the need to continue making loan loss provisions to write down assets",0
"in particular the 
geopolitical and international economic uncertainties surrounding these projections have increased",0
"politis for the cyprus economy several organisations imf european commission etc list 
as major threats its big government sector its current account deficit and the projection for its mid term pension and health costs",0
the profitability of these banks might suffer,0
a related source of concern for policymakers is about managing inflation,0
this has been partly the result of external factors commodity price declines and tighter financial conditions particularly important among them which have put pressure on both external and fiscal accounts,0
the profit from refinancing was unattractive relative to the risk of being forced to repurchase the loan,0
"in this situation
the possibility that norway would enter a recession of a type that would further reduce confidence inthe krone was considered a definite risk",0
it was this balance sheet structure that in the end made these two banks extraordinarily vulnerable to a sudden withdrawal of liquidity in the wholesale funding market and which ultimately led to their demise,0
without such convergence the monetary policy stance of the ecb is likely to be inappropriate for the country and it may face a risk of excessive output volatility leading potentially to a series of boombust cycles as the country lacks important tools to stabilise economic conditions at home,0
second did the dynamics of margin models lead to unnecessary procyclicality and amplification of the liquidity stress,0
"these costs often reflect inefficiencies in the operati ons of the banking system which very often are 
passed on to consumers",0
"c the signs of a gradual shift towards shortterm funding of the efsf are a 
worrying signal",0
in part the depth of the 199091 recession was due to international factors such aslowerthanexpected growth in the united states and an unexpectedly sharp decline in rawmaterials prices,0
giving loans to finance such activities then it would obviously be of concern for us not only from the point of view of the risk management as a supervisor but also in the view of our role to support financial stability and in view of our functioning because we conduct monetary policy through banking system so we need a sound banking system,0
"the suspension of debt payments by the russian
government in midaugust followed by the problems in the us hedge fund longterm capitalmanagement that came to light at the end of september contributed to the markedly more nervousmood",0
"first if the european situation were to deteriorate then the euro area would face even more 
serious fiscal and economic challenges",0
"malaysia  also have issues with the basel iii approac h to the proposed cash flow 
assumptions particularly as they relate to institutional savings schemes",0
"higher than initially projected 
salary increases have also contributed to the decline in pension plan surpluses",0
therefore in my remarks today i have outlined some of the key macroeconomic and systemic issues the domestic economy faces as well as the significant tail risks,0
by contrast mediumsized institutions such as those that cover industries are big enough to inflict costs on the economy but not big enough to experience those costs themselves  the costs are pushed onto others,0
it should also not be surprising that the ensuing depreciationswere extremely large because that seems to be a common pattern,0
"1 the uncertainty surrounding this 
outlook is particularly high at the current juncture and generally downside risks from the financial market tensions prevail",0
at the individual country level various internal imbalances were also accumulating such as financial imbalances increased fiscal deficits and widening gaps in output between the service and the manufacturing sectors,0
in fact many individual supervisory findings are often symptoms of deeper cultural issues at a firm,0
the ssm is hampered by the eu treaty which limits decision making authority at the ecb to the governing council and the executive board,0
"admittedly the economic difficulties such as high unemployment and low growth that we 
face are most serious",0
in my opinion the recent methodological changes imposing stricter rating caps above the rating of the sovereign in particular for emu countries amount to treating crisis times as structural changes making the new methodologies based again on extreme assumptions,0
"that commitment could easily run into sands of 
political compulsions if a country perceives that it is losing comparative advantage or if the costs of globalization are seen to exceed the benefits",0
"third purchases of assets in markets under stress implies a financial risk  for the 
eurosystems balance sheet which may eventually lead to fiscal transfers",0
more recently we have seen huge losses at the amaranth hedge fund,0
"this has not only revealed insufficient policy discipline and cooperation but also the lack of an effective mechanism to influence macroeconomic and structural policies in key countries where those appeared unsustainable from the standpoint 
of global economic and financial stability",0
this issue was a topic of debate at the bundesbank long before monetary union was even established and this issue was again raised during the financial crisis,0
"or as mr hellwig put it  given these negative externalities from banks using debt rather 
than equity there is no reason to refrain from requiring banks to have more capital on the 
grounds that equity is expensive and the regulation would raise banks cost of capital",0
"for this reason i will speak in terms of 
standard macroeconomic variables bearing in mind that this is certainly not the full story",0
so the downside risks to the economy have increased substantially,0
as i have mentioned and illustrated above a lack of coordination leads to national responses which can generate negative externalities,0
"challenges and opportunities for the european banking sector
almost ten years have elapsed since the turn of the financial cycle",0
for this reason considering the whole from the viewpoint of one of the parts is necessarily simplistic and biased,0
and most often in view of the national inflation rate ireland is beingcited as an example2 bis review 752001well then what exactly is meant by convergence,0
"it would be overly pessimistic to have as ones central case that the headwinds currently 
affecting the economy will persist for decades to come",0
this in turn has contributed towards sustained reinsurance outflows which have an impact on the countrys long term current account balances,0
"this raises the policymaking dilemma which one might call micro macro schizophrenia the 
tension between the micro prudential imperative to require more capital more quickly and 
macro prudential concerns over the implications for pro cyclicality and sovereign debt 
sustainability",0
"first the authorities lose monetary 
policy as an instrument to steer the economy limiting the available policy mix to correcting macroeconomic disequilibria",0
"clearly these adverse developments have affect ed many sovereign wealth funds swfs in 
the same way as they have affected other investors",0
"bis review 752008 5
 of slide 11  is a consequence of possible further valuation losses increased funding costs 
as well as declining noninterest income from securitisation and capital market activities",0
in the currentdiscussion for instance there is some criticism of the lowinflation target,0
"more importantly thai banks al so do not have investment in us gse 
securities",0
hence the large exposure regime which caps investments in a single debtor has to be applied correspondingly to sovereigns as well,0
"the ecb responds to the price stability symptoms of the crisis not 
to its fiscal and structural root causes",0
this would be problematic anywhere but it is more so in a monetary union as the common monetary policy can only aim at price stability for the euro area as a whole,0
"in particular the united states has been facing both fiscal and structural 
headwinds amidst weakened economic prospects",0
"fourth the current account balance  is an important summary indicator that may 
signal losses of competitiveness and emerging imbalances",0
however at the same time i am of course prepared to reassess my view of the direction of monetary policy if the external conditions should change significantly as they did in september 2008,0
mere announcements are not in themselves enough of course and have to be backed up by credible policy actions and in countries where chronically weak demand is already accompanied by flat or falling prices not all of these actions will necessarily be in the realm of monetary policy,0
while in earlier years the larger part of inflationary and output fluctuations originated abroad today they are related with macroeconomic developments at home,0
"in particular as regards 
the consolidation strategy and given that the tax burden is already high in many countries 
the fiscal adjustment will have to be primarily expenditurebased",0
looking forward we face as a nation a number of very important policy questions,0
looking beyond cyclical challenges euro area banks profitability prospects are further hindered by ongoing structural problems,0
"two important 
outcomes in information asymmetry are the moral hazard problems from the borrowers and 
adverse selection from the banks",0
"conclusion 
in conclusion i believe that the crisis has exposed a couple of shortcomings in the monetary 
policy paradigm policy frameworks are insufficient ly medium termoriented and the role of 
monetary variables in this context is underappreciated",0
suppose then that the g7 group faces the prospect of softer growth in 2008 due at least in part to these financial factors,0
in managing the crisis european policymakers faced an unprecedented set of circumstances,0
on one hand the guideline on collateralfree loans has led banks to at times devise ways of denying credit to the msmes borrowers while on the other extreme the provision for credit guarantee has potential to cause deterioration in quality of credit appraisal and due diligence consequently straining the resources of the cgtmse,0
a visible expression of these imbalances are divergences in current account positions,0
the historical record of su ch approaches does not offer much encouragement,0
it also posed a risk to financial stability through the reduction in income that it implied,0
to sum up though secular forces are certainly at play in the euro area the current situation is also explained by cyclical factors linked to the financial cycle which have in turn been exacerbated by institutional failings,0
a bleaker outlook is in the offing with the impact of the crisis trickling down to the real and external sectors affecting trade investment and consumer demand,0
otherwise investors may become fearful of inflation and concerned about the sustainability of public finances,0
"the objections are not convincing 
but of course there are also some potential problems when a central bank presents its own forecast of the interest rate path",0
putting aside the tall order of gauging the economic fallout of a brexit decision there is naturally another question which arises from a european angle and for me personally as a central banker  given that a leave vote might spark a turbulent market response how far will europes banking and financial system remain stable and continue to function properly,0
looking ahead the most recent eurosystem staff projections published in december show a decline in the outlook for the euro area with more persistent inflation and weaker growth,0
"admittedly a few years back the challenges of managing the above conflicts in the 
then prevailing context seemed to weigh in favour of separation of debt management from 
the central bank",0
"21  following the ambiguity aversion analogy the bias  may stem because we are able to characterise in 
probabilistic terms the implications of a shift in bank  capital requirements which have a long history of 
regulation while we lack this ability for other new or  relatively untested map pol icy instruments see eg",0
of course large contractions in fiscal policy are particularly difficult to offset if interest rates have already been reduced to very low levels,0
"given this new scenario which i will thoroughly address in a few moments one can see that any action towards forcing the trend of this m onetary aggregate to comply with expectations 
but under very different international conditions would have been more detrimental than 
beneficial for the economy as a whole",0
"late exits on the 
other hand can entail the risk of distorting competition creating moral hazard risks that come 
with downside protection  including the possibility of excessive risktaking  as well as 
exacerbating risks for public finances",0
second and more importantly it needs to be realised that the alternate cost of borrowing for the sector would be much higher than the median rate of 1214  which the msme borrowers currently pay,0
"13 
if the riksbank had done so this could have led to more serious problems when the time came to phase out the support measures",0
these weaknesses included first a backwardlooking approach that focused on the financial institutions historic data,0
"all of these have resul ted in considerable uncertainty about the 
impact of such measures the longevity and extent of the measures and the timing and 
impact of scaling back such measures as and when they are finally unwound",0
"but in 
another situation the reverse could have been true  had the icelanders made these investments during the swedish banking crisis in the 1990s the swedish holdings would have contributed to 
weakening the icelandic economy",0
the second reason for the deeper than expected economic contraction was that the greek economy is relatively closed,0
"in the event inventorysales ratios rose only moderately but relative
to desired levels at least as inferred from their downtrend over the past decade these ratios impliedthat considerable imbalances had emerged",0
"at the same time economic analysis identified a number of upside risks to price stability which were perceived to 
prevail over other potentially dampening factors on prices",0
"did 
companies  counsel get involved did they perform poor ly or did managem ent ign ore their advice",0
"if the in flation risk p remium averag es 50 basis points for 
example then breakeven inflation will overstate t he markets true expectati on of inflation by half a  
percenta ge point a sub stantial amount",0
"these developments not only led to an undershooting of our inflation projections for endyear 2007 but also necessitated an upward 
revision in our medium term forecasts
",0
first the decline in these forward inflation compensation measures has been highly correlated with the fall in oil prices  a pattern that is hard to explain,0
the combination of larger balance sheets and unexpected losses also resulted in a decline in the capital ratios of a number of institutions,0
an important source of initially inappropriate fiscal targets may have been poor forecasts,0
"having said this i would like to point out as i did in the discussion at our most recent 
monetary policy meeting that it might very well be the case that the signs of stabilisation i 
mentioned then were delusive",0
"what 
makes this case interesting in the light of todays topic is that in the supreme courts assessments of vital national interests there is no discussion of what the nations interests 
are in the short term versus the long term",0
"finally i will outline that in addition to this the european sovereign debt crisis poses a much more fundamental question how can central banks fulfil their mandate if risks to macr oeconomic and financial stability emanate from 
unsound public finances and structural economic weaknesses yet policymakers do not 
succeed in putting these deficiencies right",0
"first the balance
 of risks around the central projection and second the 
general level  of uncertainty",0
or that the financial consequences of particular decisions were more adverse for the decision maker or more generally the markets than anticipated,0
however there are distinctive features of islamic finance that put it at a disadvantage if we were to just apply the conventional regulatory framework,0
first there is a risk that domestic private consumption will weaken because of a continuous decline in real disposable income and a potential deterioration in household sentiment,0
"if a government 
wants to increase certain expenditure when the route to deficitfinancing is blocked it has to weigh the 
benefits of such expenditure against the cost of increasing taxes or decreasing other expenditure",0
on the con side there are concerns regarding the structural changes it would imply for the banking sector the possibility of having pronounced digital bank runs and the risk of a structurally longer central bank balance sheet and hence a more pronounced allocative role for central banks,0
"as i mentioned earlier regulators and other stakeholders place great reliance on the audit 
opinion  and basic auditing principles require that these opinions are qualified  when for 
example 
 a company is insolvent  with insufficient assets to support the companys 
liabilities or 
 the accounting system is so untidy  that the auditors cannot reasonably be 
expected to arrive at an informed judgment of the companys health or 
 when the balance sheet clearly omits some of the contractual obligations of 
the company   such as outstanding policy claims in the case of insurance 
companies",0
"however as i indicated earlier one of the implications of a lowinflation 
environment is that policy is more likely to be constrained by the fact that nominal interest rates cannot be reduced below zero",0
the prolonged recession also poses challenges for small businesses,0
"the long period 
the piecemeal approach followed in recent months  risks losing sight of the longterm goal",0
"4 bis central bankers speeches  
 integration pursuing national financial policies will generally not lead to financial stability 
because national policies seek to benefit national welf are while not taking into account 
externalities of their supervisory practices on other countries",0
"changing it on tactical grounds would be 
opportunistic and would harm the credibility of the central bank",0
"nevertheless the external value of the euro may only play a role in the ecb s
decisions insofar as it affects the general rate of price increases via import prices",0
the present problem is that banks allow excessively high leverage thus leaving out any possibility that the borrower can be made to deal with emergencies,0
"indeed the reality is that traditional bank 
accounting practices were not really geared to deal with i assets that are so uncertain and 
longlived ii an economy that has tanked so deep iii future economic prospects that are so uncertain",0
a more fundamental policy question  one that has not yet been fully thought through  is whether the policy rate itself should lean into the wind for financial stability purposes,0
in 1930s the great depression was significantly amplified by bank runs,0
"from a fiscal policy perspective the challenge that  arises relates to the management of windfall 
revenues",0
the issue of equal concern however is the more disproportionate impact these developments will have on the poorer economies,0
if we look back to 2007 problems had started to crystallise and accelerated in 2008 particularly post lehmans as market participants retreated towards safe assets,0
for example in recent times the australian parent banks have been on negative outlook and separately apra has placed restrictions on the ability of the parent banks to give credit support to their international subsidiaries,0
in many euro area countries the investment climate is too unfavourable,0
and while it may not technically be a secondary effect of monetary policy because its causes are structural i am concerned by the banking sectors low profitability,0
"conversely there are other areas 
where regulatory action would at best generate small benefits and in the worst case might actually be counterproductive",0
"not only is this situation costly and inefficient for banks and their
customers but it also has become increasingly difficult for supervisors to assess the residual capital
adequacy of lcbos as relatively low risk assets have been removed from the banking book",0
also output will probably remain below secular trends given the fact these countries need to continue fiscal consolidation measures in the wake of past expansionary cyclical postures and given increasing longterm government obligations,0
the concern is that monetary policy may be more often forced to adopt nonstandard policy measures,0
"the current account balance is an important summary indicator that may 
signal emerging imbalances and losses of competitiveness",0
"back then there were significant structural 
weaknesses in the economy which greatly increased the countrys vulnerability  to external shocks",0
if the banking sector is too large the national taxpayer will be unable to bear the costs,0
"when these points are taken into account the possibility cannot be ruled out that longterm 
interest rates which at present are hovering at around 1 percent could start to rise for whatever reason and the consequent increase in the interest burden could exert inordinate pressure on public finances",0
"in other words one of the broader issues is regulatory safeguards 
in place with regard to investors of a kind that may not necessarily assure regulatory comfort 
to the host country",0
"on the other hand there could be the
perception of a conflict of interest",0
"further the legal require ments on the country of operation are also 
not fully taken into consideration",0
this decoupling of banking system deposit liabilities andnominal gdp became so pronounced during the first half of the 1990s that the federal openmarket committee downgraded the status of m2 as a policy variable,0
"but there are a number of reasons to believe that using it 
mechanically would result in too tight of a monetary policy setting",0
"and it is not only public policy that tends to overvalue national interest and 
undervalue international interests but also the market mechanism seems to produce a similar 
outcome",0
"however if you try to elaborate this stylised 
and imperfect world for instance by introducing transaction costs uncertainties regarding the true 
economic model or game theory considerations the conclusion is different",0
"the main reasons for the financial constraints 
faced by smes are quite generic and high on the list  is the perception that smes are historically a 
high risk group lacking in financial discipline and unable to provide trustworthy financial track records",0
in the first place policy decisions have not always been correctly understood by the public,0
first and foremost there has been a slowdown in domestic investment caused by both the abatement of global mining investment cycle and other specific developments,0
the driving forces behind this were a budget deficit that amounted to 26 per cent of gdp in 2005 and a large an d growing deficit in household saving,0
rather like others many were myopic about the risks in the system,0
as regards the adjustment of capital the issues are considerably more complex,0
while the provisions against unstable fiscal positions proved to be insufficient the institutional framework took no account of other macroeconomic imbalances,0
"these include institution specific factors 
such as limited operational capacity or the lack of adequate management experience",0
gsibs on the other hand have more complex activities are more interconnected and pose a far greater risk to financial stability should they fail,0
on the other hand the current economic upturn faces several challenges including those associated with less favorable external conditions,0
"the government has a direct interest in an efficient insolvency and resolution framework  
so the stakes are still high for the government in a banking crisis",0
"then i will di scuss two  
uncertainties regardi ng that outlook  that have garnered att ention lately  namely the possi bility that the  
labor m arket will co ntinue to unde rperform and th e possibility that financial stress in the ho usehold 
sector may cause the ex pansi on to falter",0
"in the medium term i am concerned about the recent disinflationary trends and possible 
declines in potential growth rates both in the united states and europe",0
perhaps this task is especially urgent for the euro area because uncertainty regarding the health of banks aggravates the negative effects of economic imbalances and divergence in the area,0
this can happen especially if an fis governance and culture fall short and appropriate due diligence is overlooked in lieu of business motivations,0
"current circumstances remain demanding wi th economic financial and fiscal issues deeply 
intertwined with challenges at the political level in many countries and in the supranational european sphere",0
 a third related factor is insufficient macroeconomic discipline,0
but if on the other hand the lack of domestic andor external confidence wereto persist this could act as a drag on economic development for a long period,0
the balance of risks surrounding this projection is mostly on the down side,0
"but would countries be prepared to tolerate the loss of fiscal independence and the 
overturning of national insolvency laws that this model would entail especially if it required governments to commit to recompense the agency for unlimited amounts in the future",0
however profitability challenges over the short to medium term have become more acute,0
"mistrust of depositors comes from the fear that 
due to possible devaluation followed by inflationary transmission effects saving in denars 
would be insufficiently compensated if interest rates on savings deposits in denars  come too 
close to the interest rates on deposits in euros",0
"during this adjustment process a vicious cycle took hold with worsening economic conditions increasing nonperforming assets declining prices and yen 
appreciation mutually reinforcing each other",0
"if the developments that are judged to be unbalanced are actually justified by the 
fundamental driving forces then a higher interest rate would curb growth unnecessarily",0
the deterioration in the macroeconomic environment and the slide of the gdp growth rate into negative territory raised the debttogdp ratio to unsustainable levels despite the fiscal consolidation and caused debtservicing problems for households and businesses,0
"once market participants have concern about fiscal discipline controlli ng 
long term interest rates will become difficult even for the bank",0
"in addition for fiscal 2017 the downside risk is greater because there is considerable 
uncertainty  at present related to subsequent declines in demand and in real income after the 
planned consumption tax hike",0
"the resulting declines in asset prices trigger margin calls on other investors who may then need to delever by selling 
their own holdings accelerating the fire sale of these and potentially other assets",0
as i will explain in the next section the problems in europe are unlikely to be resolved in the short term,0
"however other components of the policy establishment have mandates that may indirectly 
impinge on inflation",0
the countrys sovereign rating can fall as a result with inevitable impacts on the real economy,0
the situation is difficult to assess and the appraisals our executive boardhas to make are more difficult than usual,0
its credibility would also be weakened if the basel framework which is based on the lessons from the last financial crisis were to be called into question at the national implementation stage,0
"the exercise i have presented is pretty simple and it surely overlooks many relevant aspects 
especially the dynamics that might allow us to analyze the loss of confidence",0
however i expect this assessment to become more difficult for monetary policymakers in the future,0
"the december quarter cpi followed the pattern set in the september quarter in showing a
level of inflation well below our expectation and implied that our forecasts for inflation would need to
be revised downwards",0
in my view it is particularlycritical that the central bank not be directly responsible for financing government budgetdeficits such a responsibility can over time compromise the financial integrity of the centralbank and thereby public confidence in it,0
we would not have had the dailymovements as under the present system but the pressure would have built up and when the dambroke as it assuredly would have the crisis would have been worse,0
"it became apparent that the health of the national banking sector was often closely intertwined with the health of the local sovereign funding problems in the 
banking sector and weak fiscal positions mutually reinforced each other",0
it is rather so that the actual features of risk incurred by the banking system in each country were considered in an evenhanded and balanced way even when they were so specific as in the dta case as to make it difficult sometimes for us to explain and for others to understand them,0
a further complication is that the effects on inflation and the real economy move in different directions,0
"however the downward trend is clearly evident from the evolution of core pce inflation which excludes the volatile 
prices of food and energy",0
throughout this period of now about 3 years all forecasts and market expectations systematically underestimated the downward forces on prices and thus overestimated forthcoming inflation,0
these risks have materialised in the last 12 months and have led to significant losses for the snb,0
in such cases the forecasts for inflation and the real economy are of course not the best forecasts,0
"one of these monetary policy crisis 
measures is the snbs stabilisation fund stabfund which i shall deal with later",0
this kind of situation can occur particularly if many market participants have pollyannaish expectations about the future development of debt sustainability and do not adequately take into account the possibility of prices falling and interest rates rising,0
when imbalances are regional or sectoral in nature however interest rate policy would seem too blunt a tool,0
since 2014 the nawru here i present european commission estimates has been systematically revised downwards,0
economic overheating and risinginflation were in fact a recurrent problem in the 1970s and 80s,0
it could for instance materialise during downturns when the macroprudential regulator may want to release equity buffers in order to avoid a credit crunch whereas the microprudential regulator may be reluctant to let that happen owing to the need to preserve the safety and soundness of individual institutions,0
"for example held
tomaturity classification conceals profit or loss until maturity while trading classification charges profit or loss to financial statements in every accounting period",0
"4 challenges for economic education
the apparent obviousness of needing to incorporate the new inflationary environment into educational content is matched only by the difficulty of implementing this in the short term",0
it has also been argued that accounting standards designed to reflect observable facts and limit the role of judgement as to future possibilities and risks further contributed to procyclicality in credit provision and pricing,0
however it might be hazardous to continue accommodative policy after the economy recovers since it might trigger the risks of high inflation and bubbles in the financial market,0
the outcomes and confidence indicators in recent months emphasise the weak developments,0
but losses too would consolidate into the bank parent and such losses would falldirectly on the safety net and ultimately the taxpayer,0
"the sceptics believed the economic stability of finland was likely to suffer if economic 
development were too asymmetric visàvis the core countries",0
"three basic comments to illustrate that 
first the proliferation of offbalance sheet structures involved in maturity transformation was 
another factor impinging on assets",0
"a vivid illustration will come in july when our 
one year long term operation expires and our balance sheet will contract by a third",0
it can easily happen that discussions of bank regulations not least at the eu level can be considered difficult to understand,0
the essence of the argument as i see it is that it is asserted by supporters of lets call it the big equity school that we cannot value large banks adequately because they are too complex and opaque cannot supervise them effectively and cannot resolve them we must resort to an approach which requires a sizeable shift in the balance of their funding away from value certain deposits contracts towards loss absorbing equity type contracts,0
a second  risk arises due to falling liability margins in an environment of low interest rates,0
the main downside risk continues to come from the united states where clear weakness remains in the housing sector,0
"another problem with using monetary policy to influence household indebtedness is that this 
also has an impact on the exchange rate",0
"at present 
a major problem is the lack of confidence on the part of households firms savers and investors who feel that fiscal policies are not sound and sustainable",0
"the 
current pattern of us activity with its weakness in the housing and auto sectors is proving 
particularly challenging for our businesses",0
one of the main ones being that if senior debt ranks alongside liabilities that are less reliably loss absorbing such as sight or other shortterm deposits and derivatives then such debt cannot meet condition four above without bailing in instruments that fail condition three,0
"then there are other external factors like fall in commodity 
prices dumping by china etc",0
europe is facing a serious demographic problem,0
"a variant of this practice is the policy loans that are encouraged by political authorities who
for whatever reason are unwilling to make direct budgetary provision for expenditures",0
"in the past the analysis on these issues would hav e typically concentrated on the return 
aspects and portfolio management considerations with only limited space for riskrelated 
considerations in the exposition the latter usually consisting of some simple references to 
the tracking error of certain assets against the benchmark portfolios",0
the ecb was faced with interrelated key challenges namely extreme risk aversion and nonlinear dynamics deleveraging fragmentation and a weak economic environment,0
furthermore determining ones own supervisory policies has proven illusory,0
"although the actual accounting provisions taken by 
the banks on this portfolio are small the central bank has insisted that allowance be made 
for much higher loan losses",0
"on the other 
hand the risk of slower growth in the wo rld economy has increased",0
first of all because of the minor role of the banks under resolution in the total banking sector,0
"setting a target for the size of the federal reserves balance sheet as in a qe 
regime could thus have the perverse effect of forcing the fed to tighten the terms and 
availability of its lending at times when market conditions were worsening and vice versa",0
for example thailand indonesia and korea ran current account deficits of 80 34 and 50 percent of gdp respectively in 1996,0
"unfortunately the absence of a credible fiscal consolidation program this year halted the further 
restructuring of the public finances and even caused it to backtrack in certain areas",0
lane im quite reluctant to  again because it goes back to everyones opinion about how much debt is going through the mix between sovereign and nonsovereign elements with the programme,0
this is about different dynamics with the twoyear moving correlation between marketbased and household expectations dropping from 08 in the summer of last year to below 03 in june the lowest level in nearly nine years,0
"of course he faced evidence of the failure of the largescale econometric models that had been used 
in the 1950s to 1970s and that were later subject to  strong criticism",0
"but as many analysts have stressed these estimates represent a midrange of possible
outcomes for the economy and the budget and actual budgetary results could deviate quite
significantly from current expectations",0
for instance few outsiders will want to lend if they believe they will be subordinated to promoter interests in bad times,0
"because this is a heavily regulated sector regulatory 
design failures o r possibly even system design failures could equally well be the source of 
inefficient outcomes",0
"this longexpected demographic fact has now arrived and it has challenging implications for our potential growth and also for our fiscal policy4
the unexpected part of the growth slowdown reflects weak productivity growth rather than lower labor supply",0
when demand is weak structural reforms can result in higher shortterm adjustment costs as for example people losing their jobs take longer to find new ones,0
on the other hand investments imply a longterm outlook whereas high and volatile inflation or fragile financial sector hampers longterm planning,0
"some large 
stateowned enterprises also face problems in taxable salary depreciation of fixed assets and others 
that i just mentioned such as rd expenditure advertisement expenditure risk provisioning and loss 
writeoff etc",0
"looking back at the history of central banking 
raising excessively low inflation expectations through policy is a big challenge",0
but we must not forget that the processes in question are transitional and involve high oneoff costs and greater compliance expenses in the long term,0
especially given that the one member who voted against tapering in september and the one who voted against it in december were not the same person all members are seen to have made decisions different from in the past,0
once the liability of a banks shareholders was increasingly limited the emphasis shifted to the banks creditors including its depositors,0
"the ecbs monetary policy
for several quarters now inflation in the euro area has been on a continuous downward trend",0
this in turn would prevent the necessary easing of monetary policy stance as well as eventually lead into permanently too low inflation expectations compared to our definition of price stability,0
at the same time the inevitable procyclicality of the deficit rules makes them hard to implement especially in recessions and therefore less credible in the first place,0
it will also have to be made clear how the minimum requirement for own funds and eligible liabilities mrel will apply to small and mediumsized banks which as a result of the abovementioned expansion would be destined for resolution,0
the second point is that the economic reality in the near future will not be simple,0
aside from the risk of bankruptcy theres also a question of fairness it is a burden thats passed on to future generations,0
however that judgement now looks woefully optimistic compared to the degree of passthrough we think has occurred which is closer to 100,0
"i can certainly envision that in times of crisis the financial implosion of a large intermediary could
exacerbate the situation",0
on the one hand the actions needed to restore market liquidity may blur monetary policy signals on the other decisions on interest rates could be interpreted as revealing information unknown to the market thus exacerbating tensions,0
an often unacknowledged secret is that in most macroeconomic accounts the household sector is treated as a residual for lack of comprehensive information,0
"there are tho ugh as i have just explained reasons to take into 
account the impact of these factors on the real eco nomy and inflation even in a longer perspective 
and under different designs of monetary policy",0
"raising capital in such circumstances may 
not be accepted by shareholders as it may send a negative signal to the markets and lead to 
a drop in share prices",0
a dispute at that point with the commission or indeed before the european court of justice would not only have led to grave uncertainty for the stability of the system with even more serious consequences for the banks involved and for investors but under the current accounting rules would also have required the banks concerned to set aside an amount to cover the cost of a potentially negative outcome with risks for business continuity,0
"a simplistic account of the financial sector ma y have had other adverse implications for the 
conduct of monetary policy in recent years",0
"under these circumstances fear and disengagement
on the part of investors holding net long positions often lead to simultaneous declines in the values of
private obligations as investors no longer realistically differentiate among degrees of risk and
liquidity and to increases in the values of riskless government securities",0
"in the case of banking institutions this could ent ail an assessment of wher e pressure points might 
arise under the new business models if risk appetites were to reverse and liquidity conditions to 
deteriorate",0
there are also downside risks on the fiscal front associated with ongoing court rulings on pension cuts which could weigh on debt sustainability,0
there are even more reasons for not doing so in a monetary union such as the euro area,0
with respect to domestic economy the prolonged political stalemate has weighed considerably on confidence exacerbating the already fragile economy,0
"your fourth quarter results have 
shown massive losses due to mark to market mtm  losses on your gsec portfolio",0
in the meantime the ecb is facing a different set of economic conditions including slower growth lower inflation and higher economic and political uncertainty,0
"there is clearly such a relationship though other spec ial factors have also been at play here including 
the large fiscal deficit",0
"of course it is not the case that japanese financial institutions themselves have not been 
doing anything to cope with such low profitability",0
ft is there is a danger particularly on the structural reform that you get this political backlash because you hear it from politicians the ecb lectures us about structural reform but were not allowed to talk about monetary policy or exchange rate policy,0
on the other hand public investment has been declining since the second half of 2009,0
"it is clear that fiscal 
consolidation is a major challenge for most of the new member states",0
"for these reasons the reality is that central banks can affect only future inflation or an 
inflation forecast   not actual inflation as dr svensson pointed out",0
a key point to me is that a costbenefit analysis similar to that which ive just discussed here suggests that the case for explicit forward guidance is much less compelling today than it was in the years that immediately followed the 2008 financial crisis,0
consequently creditworthy households and businesses face greater difficulty in sourcing new funds thus further reducing their consumption and investment resulting in lower economic activity,0
for example in the case of the czech republic if the worst comes to the worst we can revoke the licence of a major bank take its liabilities onto the government balance sheet and sell its viable business as we have done in the past without increasing our government debttogdp ratio above two or three hundred per cent provoking a sovereign debt crisis and starting the vicious circle known to many european economies,0
"perhaps what the crisis has done is to act as a catalyst to bring forward a set of pressures for longterm budgetary reform that were bound 
to emerge anyway",0
"finally it also seems improbable to me that any country should be willing or able to expand 
its safety net or to expose its taxpayers to  the undefined risks of protecting everlarger and 
more complex banking organizations",0
"i thought this risk looked quite significant in august when  as the 
governor said at the time  the committee saw a 50 50 risk that consumer price inflation would rise 
above 3 this winter",0
"in addition investors attributed higher credit risk 
premiums due to increasing concerns about fiscal sustainability in view of the rapidly growing 
budget",0
"equally excessive public expenditure  which had ultimately to be financed
through higher taxation  imposed burdens on the private sector which weakened its capacity to
generate employment and income and wealth",0
"on the 
other hand the political authorities often do not understand how the financial markets work they deeply despise them but at the same time depend on them to finance their budgets",0
it is this tightening that is accentuating the downside risks for the economy as a whole,0
if for example the banks balancesheet is less than transparent potential investors or creditors seeing the nominally high10 percent capital but not recognizing that the economic risk capital allocation should inpercentage terms be much higher could direct an inappropriately high level of scarce resourcestoward the bank,0
"a lower capital base entails limited participation in the 
financing  of investments in addition to increased vulnerability of the banking 
industry",0
not only are bond term premia depressed due to quantitative easing both here and abroad but the low inflation environment is also likely a contributing factor,0
"an equally important source of the recession was several years of overexpansionary monetary 
policy that squandered the feds credibility regarding inflation with the ultimate result that the 
economic impact of the oil producers actions was significantly larger than it had to be",0
"on the one hand markets do not understand why the governments of european countries are slow to adopt the necessary measures to solve 
problems postponing decisions and creating uncertainty about their actual intentions",0
"a second commonly used measure of aggregate hourly labor compensation the employment cost index has  its own set of drawbacks as a measure of 
marginal cost",0
"if all these facets are taken into account monetary growth is well below the quoted figure and cannot
therefore be described as expansionary",0
from a socially optimal perspective green investments may also be underfinanced if market participants make investment decisions based on excessively short horizons,0
as discussed above there are clear tail risk scenarios that could induce a reversal in the level of corporation tax revenues,0
in such a scenario the swedish economy could experience a more pronouncedslowdown,0
"but i suspect 
that we have to dive down into the data to get a more disaggregated picture than we as 
macroeconomic policymakers usually need",0
on the domestic front the countrys inflation environment is confronted by a confluence of supplyside factors,0
"in the meantime 
people s inflation expectations declined and the recognition that prices will not increase  
 namely deflationary expectations  became entrenched",0
"this is 
because in very simple terms the primary driver of losses in their model was in fact negative equity and therefore the future shape of housing prices rather than as i have explained is the case so far the question of affordability and therefore projections about income and employment",0
"the same applies to importers as well when they are handicapped by incomplete 
pass through of the increase in their input cost",0
"the fact 
that this becomes irrational and can substantially increase the total cost of winding up the 
bank becomes a problem that cannot be resolved",0
"nonetheless the challenges that lie ahead after the financial crisis and the economic 
downturn that accompanied it have not diminished",0
at the same time rising business leverage added to financial fragility,0
ultimately this led to a reassessment of sovereign risk and investors lost confidence in the public finances of some countries particularly at the periphery of the euro area,0
the issues around foreign exchange fx benchmarks serve to illustrate one of the important challenges discussed in the review  the difficulty of managing the potential conflicts of interest associated with the traditional marketmaker model,0
a related concern is the impending vacuum likely to be created in the public sector banks especially in the middle management level due to largescale retirement of officers in next 23 years,0
banks could not fully absorb and offset the effects of the pullback in investor participation  or the run  on this nonbank system in part because they themselves had sponsored many of these offbalancesheet vehicl es,0
an additional fly in the ointment if you will is the recently released downward revision for gdp growth covering last year and an announced estimate of a sizable downward revision to payroll employment,0
"indeed looking at examples of
structural reform overseas there seem to be many cases where there was a deflationary impact in theshort term",0
by contrast if the realignments take place only underpressure from the markets high costs can easily arise  not just for the country itself by theway,0
"most importantly i have argued that the present 
bis review 832007 3
 supervisory arrangements are not designed to prevent the crossborder externalities that 
financial crises may result in",0
"the 
contraction in mortgage trusts and some other funds entities that were substantial investors 
in these securities helped to drive the decline",0
"the 
results of this initial assessment were made public on 21 june and showed initially that the 
spanish banking system as a whole might need between 51 billion and 62 billion in order to maintain a capital ratio of 6 in a very pessimistic macroeconomic scenario which in short means a cumulative fall in gdp of 65 between 2012 and 2014",0
"it is true also that 
macroprudential policy is not sufficient on its own to ensure financial stability as we have 
seen with the euro zone debt crisis where markets doubted the solvency of the sovereign and in this manner fiscal policy led to financial instability",0
"now in reality as i have noted an aging population will reduce labor force participation so the likely 
future trajectory of per capita consumption over time lies below that implied by the baseline scenario 
that assumes away the demographic change",0
another case in point is the czech banking crisis of the mid1990s which ultimately resulted in a foreign exchange crisis,0
the bigger issue is that the european economy has been growing more slowly than we hoped,0
indeed some of the policy responses have been suboptimal from a global vantage point,0
at the same time if financial innovations simply present new types of risks we will not be so accommodating,0
as a result in the early postwar period the australian banking system was highly constrained,0
these policy mistakes suggest that the burden of adjustment mainly lies in southern europe,0
certainly if the energy sector were still in the tight regulatory fetters of the 1970s our flexibility today would be markedly less,0
failing that if anglo and inbs were put into liquidation over 30 billion in guaranteerelated outlays might have been saved but these fiscal savings would have been substantially offset by the wider economic disruption costs which would have been triggered and which could to take a phrase from my 2010 report albeit there relating to a slightly different scenario have run into tens of billions of euros,0
as i havesaid in the past under certain circumstances the publication of the inflation forecast itself may leadto some form of implicit indexation of wages imparting a costly selfsustaining momentum to suchforecasts,0
there are rising concerns regarding customer as well as investor protection and even the adequacy of the financial safety net,0
"the committee recognizes that significant risks attend the outlook one is that the
impending constraint from domestic labor markets could bind more abruptly than it has to dateintensifying inflation pressures",0
however in fact it brought opacity with increasing complexity and a large degree of uncertainty about the value of the securities because their evaluation became much more difficult,0
if this is so then it is more likely that we will run into the zlb in future business cycles forcing central banks to tap upon these socalled unconventional measures time and again,0
again if this conflict of interest between the borrower and lender becomes particularly pronounced in the marketplace many lenders might decide that they would rather not make loans which leads to suboptimal lending and investment,0
the lack of clear fiscal strategy in the future can destabilise the markets already now,0
at the same time the level of debt certainly could stress borrowers if the economy weakens,0
consequently the net outflow by portfolio investors was to the tune of us  14 billion during 200809 against the net inflow of about us  29 billion in the preceding year,0
"a related question i sometimes hear  
 which bears also on the relationship between monetary and fiscal policy is this by buying 
securities are you monetizing the debt   printing money for the government to use  and bis central bankers speeches  5 
 will that inevitably lead to higher inflation",0
"not 
just in europe but around the world the crisis has progressively acquired a fiscal dimension that may be with us for a number of years to come",0
the bi ggest drag on the japanese economy is its demographics,0
indeed some measures of longterm inflation expectations have even diminished distinctly in recent months,0
in this context persistently high inflation during 201011 and the continuation of this trend through the first half of  201112 suggest that we need to revisit our estimates of the potential growth rate of the economy,0
"losing credibility can have more 
severe effects than let us say the temporary government deficit widening",0
in sum i believe such low inflationlow interest rate environment would not be a friendly one for banks  either because it means less macroeconomic stabilisation or because it means more nonstandard measures,0
for these banks the resolution procedure in eu is quite unfeasible as they do not pass the ie,0
"these economic trends combined with the discovery of egregious shortcomings in corporate 
governance fuelled misgivings about stockmarkets",0
"this said the 
remaining necessary balance sheet adjustments in the public and private sectors will 2 bis central bankers speeches  
 continue to weigh on economic activity",0
first we ma de publi c our preci se quantitative defin ition of price stability whe reas the fed does not,0
"inevitably
the eventual publication of the detail will expose deep political divisions which could make therealization of the budget projections less likely",0
naturally this implies higher risks to investors who also witnessed this firsthand in the past few months,0
"whatever the appeal of this argument
however it ignores the fact that a capital cushion is needed precisely when economic conditions are
adverse and confidence is shaky",0
there are both country and sectorspecific factors and the impact of these factors is turning out to be somewhat longerlasting slowing down growth momentum during the current year,0
a downside risk is that wage growth remains subdued which would undercut consumer spending,0
but we need to consider that as the stock ages automatically there is a duration leak if you do nothing about reinvestments,0
"and what the regulator cannot verify it is 
unlikely to be able to exercise supervision over",0
"the disadvantage of this reasoning is that the negative effects when the bubble bursts may 
be fairly substantial  which to a large degree is illustrated by the current financial crisis",0
the outcome of the uk elections might very well complicate the negotiations with the rest of the european union further,0
the path that connects the two extremes  starting from the policy interest rate that the ecb controls through its monetary policy operations  is long and convoluted,0
"the large 
current account and fiscal imbalances in the us also find its reflection in the savingsinvestment 
mismatches that have risen substantially in the pres ent decade",0
"while this is a concern the presence of undercapitalized small banks is likely to pose ri sks particularly during periods of adverse 
economic cycles",0
a key point in this context for the banks is that they cannot afford to outsource their responsibility of credit appraisal which is a basic function to a third party,0
"investors  even well informed ones   cannot access the 
information they need to assess the risks in their portfolios",0
it soon transpired that supervisory awareness of the vulnerability of the banks to the property turndown had been very limited,0
"intuitively the fact t hat the central ban k uses for its 
decisionmaking ma rket fo recast s which already implicitly assu me cert ain central ban k behavio ur 
could pro duce huge outp ut and inflation volatility",0
for instance concerns have been voiced that european support to countries under stress and the conditions on which it is granted are decided only by the eurogroup ie,0
if you ask me in an abstract way and thats only my personal view that could be the case if we had strong evidence that the negative deposit facility rate would impose a cost on the banking industry that would be such that this could become a hindrance to our monetary policy transmission to the bank lending transmission channel,0
indeed the vast majority of bank losses have been on retained trading exposures particularly highly rated cdos and leveraged lending,0
from an economic perspective it would seem obvious if a state gets into financial difficulty why shouldnt the states creditors bear the losses,0
"but i did point to 
the need for a rebalancing of demand in the uk economy because as i said then the 
strategy which the mpc has pursued in rece nt years  stimulating domestic demand to 
compensate for weak external demand in the face of a strong exchange rate  carries the risk that there could be a sharp correction to the level of consumer spending at some point in the future",0
embedded in this objective is the belief that persistent inflation would compromise the long term economic prospects of the country,0
in turn this misallocation of loans translated into significant negative effects for the real economy,0
for instance apart from the complexities of an expected loss model transitioning from an incurred loss to an expected loss model may also potentially adversely affect capital adequacy,0
"the 
riksbanks assessment was that if latvia had not received extensive financial support from abroad at this stage it could have led to uncontrolled exchange rate depreciation and very 
large currency outflows",0
"again if the economic downturn were the sole reason for the 
increase in restructured accounts of late then th e downturn should logically have affected 
the weaker segments of the economy more leading to a higher share of restructured accounts in the sme and priority sectors which is not the case",0
the first risk is that being too ambitious could lead to a crowding out of private payment solutions and a potential disintermediation of the banking sector,0
will the pandemic exacerbate them or on the contrary will it usher in structural changes that call for a different calibration of monetary policy in the future,0
"nevertheless it seems premature to conclude whether this or a further yuan depreciation would feed into imported disinflation in the us 
europe and japan",0
in turn the liquidation of an institution as systemically important as bes would entail very high costs for depositors severe risks to financing of the economy and consequently would jeopardise the financial systems stability,0
"it is argued 
that the increased capital requirements would impinge on the profitability of banks forcing 
them to either increase their lending rates to maintain their margins or cut down on lending to 
preserve their capital base both of which may have a large negative impact on economic 
growth",0
"and even the revelation of central 
bank support in its role as lender of last resort far from solving the problem could be interpreted as a negative signal about an institution as was so in the case of northern rock for example",0
in this scenario the german economy might even slide into recession with real output contracting by up to 2 in 20223 this could exert a degree of disinflationary pressure,0
"policy measures to address the challenge 
in economic terms population ageing is tantamount to a negative supply shock of which the fiscal 
impact is but a manifestation",0
"in effect for a long time this crisis incubated in an environment that was beyond the ken of 
macroeconomic models and characterized by wi despread opacity as to the actual soundness 
of the markets and individual participants",0
worse monetary policy can quickly become overburdened if national fiscal and economic policies fail to internalise the effects they have on the common currency,0
"greater nominal exchange rate changes if these should materialize is a concern for namibia for
reasons i already have touched upon",0
"these downward 
trends in wage and price inflation are not surprising given the substantial slack in the economy",0
"in subsequent years however the burdens will probably exceed our financial buffers

in which case we will report a loss carryforward",0
uncertainty in the euro area as measured by the vstoxx9 was on the rise  as the grey shaded area on my third slide shows,0
for instance fiscal dominance might become an issue if economic agents begin to emphasize the connection between fiscal sustainability and inflation and form expectations about inflation based on perceived fiscally irresponsible government behaviour,0
"but when we begin to consider the impact of structural food price 
shocks such as the ones we appear to be experiencing in the indian context the policy 
implications become complex",0
"firstly such a combination creates 
a deficit bias as it allows costs to be shifted partially on to others",0
"however the evidence on this last point is limited and 
inconclusive11  
policy implications 
these stylized facts  that inflation has become  less persistent and now responds less to aggregate 
demand and supply shocks  can lead to inappropriat e policy advice",0
but as i have just shown developments are instead showing a downward trend,0
"i also believe that it may be difficult to raise the target in a situation where inflation 
undershoots the target significantly particularly if the central bank has cut the policy rate to 
the near zero lower bound  that is the level at which may countries are now",0
the outlook was at best uncertain and potentially quite bleak,0
in this situation inflationary concerns seem to be mounting,0
a second worry concerning the consequences of the asset purchase programme is that by reducing interest rates it is expropriating the savers,0
"nonetheless if the current account deficit continues meaning that a domestic saving and 
investment balance will shift f rom a surplus to a deficit there is a possibility that the 
advantage japan has achieved by financing its deficits through ample domestic savings might change in the long run",0
"economic position of the euro area in the cycle
as regards the macroeconomic situation of the euro area let me start with stating the obvious in saying that the economic outlook has deteriorated steadily over the year",0
"v it is now recognised that the current microeconomicdriven prudential regulatory 
framework including basel ii is procyclical which further worsens the impact of crises on institutions",0
"the problem becomes even more complex when we recognize that market economies are cyclical and
have crises",0
"the second stage of the crisis is really a combination of i would say a challenging political 
phase where euro area leaders are reshaping what i called the fiscal compact and a 
situation where banks and countries face serious funding constraints",0
also the deficit of these schemes are expected to be around 42 of gdp around 60 higher than the overall budget deficit,0
the macroeconomic and financial situation of spain continues to spur doubts as reflected in the steady increase in its risk premiums,0
"when the group 
members share the same world view and thinking groupthink can lead the members astray",0
you have also to consider that we have in europe a connection to the rest of the global economy which is not the same in the us,0
particularly in germany theres the added accusation of monetary policy expropriating savers,0
it will increase their required capitalisation in a situation where their capital is already under pressure,0
however the countryspecific reform recommendations as just indicated by the commission have so far hardly or not at all been acted upon by member states,0
a decline in growth from over 10 in 2010 to slightly below 8 at the end of 2013 coupled with the persistence of domestic imbalances suggests that further reforms are needed,0
"not only the real evaluation was 
difficult but the distribution of the losses through the financial system was vague",0
duration risk has recently started to materialise and valuation losses may further increase in an environment of rising interest rates,0
"thus 
in 2009 assuming a growth rate of 15 percent the budget deficit is expected to 
reach about 3 percent of gdp based on the automatic stabilizers ie the expected drop in tax revenues resulting from the slowdown in growth on the one hand and a certain rise in government expenditure arising for example from an increase in 
unemployment on the other",0
"4  if a decision makers confidence is contaminated or er oded in the sense that she thinks though with a small 
probability say ε she is ignorant about the situation she fa ces her rational behavior can be described as 
maximin optimization",0
in a world of judgment the risk manager had considerable difficulty in persuading lending officers indeed management about excessive risk when quantitative procedures and systems did not exist,0
the fact that downside risks to the baseline growth scenario are prevalent accentuates the uncertainty and fragility of the growth outlook,0
the problem with econometric studies is that the computations made by authors remain as a black box  to ordinary readers,0
for us who target monetary aggregates this may lead to implementation of inappropriate monetary policy decisions which may adversely affect the real economy,0
an example is the doubledigit inflation which substantially eroded the value of pension incomes in the 1970s and early 1980s,0
in turn these periods plainly reveal structural weaknesses,0
as i have reported to you previously the currentuncertainties regarding the behavior of the monetary aggregates have implied that we have beenunable to employ them as guides to shortrun policy decisions,0
"4 importance of gathering financial institutions own default data for risk quantification
the estimated losses may be understated when only publicly disclosed bankruptcy data are used
since losses incurred through loans against de facto bankrupt borrowers and recipients offinancial support are not covered in such data",0
"the situation in the swiss banking sector 
the swiss banking sector found itself in a hostile environment in the past few months",0
in addition to adverse macroeconomic conditions they also assume an increase in the markets perception of sovereign risk,0
"nevertheless as i have already noted 
because policy affects spending and inflation with a lag committee members have no choice 
other than to make mediumterm forecasts  provisional and subject to uncertainty though they may be",0
thats how the tiering discussions came back to see if at some point the conditions evolved in such a way that you see some impairments in the lending part or on the corporate bond markets,0
"i feel very uneasy with this kind of deficit in the current situation since if the 
economy enters a re cession  a scenario which we must take into account   the deficit will 
grow and it will be harder to deal with it",0
"bis central bankers speeches 3
 are many practical problems in analyzing what could happen statistically in the tails since 
these scenarios are by definition rare and the payoffs may be nonlinear3",0
a sizable fragmentation of policy thereby occurred domestic policymakers no longer took full ownership of macro issues,0
the lack of good statistical information on securitisation gained increasing relevance over the last decade and became particularly obvious in the financial crisis,0
for example when lehman brothers failed in september 2008 counterparties to lehman terminated otc derivatives in which the contract was in the money ie lehman owed money to the counterparty and liquidated the collateral held against those obligations but kept open obligations in which the exposure went the other way from them to lehman,0
first uncertainty around these estimates is considerable with forecasts for next years inflation ranging from 04 to 25,0
but that question goes beyond the scope of my focus todaywhich is on what happens to those savings rather than on their scale itself,0
in addressing one incentive problem however this approach may risk worsening two others  between shareholders and depositors on the one hand and between shareholders and the public sector on the other,0
"nor would it have been in the interests of the
transition countries themselves in particular since their economies would not have been able tosurvive in a competitive single european market",0
"the nature of these adjustments and their levels of transparency can add further confusion to international comparisons
2",0
"the first lesson is that poor risk analysis can have a debilitating 
effect on banking operations",0
the fact that exchange rates and commodity prices which used to explain producer inflation developments in turkey to a large extent have fallen short of explaining producer inflation in the recent period points to additional supplyside factors,0
"the mergers were triggered primarily by the rising cost of funds of the housing finance entities 
which adversely impacted the viability of thei r business models",0
"finally a sluggish adjustment of real wages adds a further complication to the policy tradeoff in the face of an oil price shock a higher price of oil increa ses real marginal costs and thus inflation as long 
as the necessary decline in real wages is not bro ught about",0
as i already mentioned the financial crisis was not only related to the burst in asset prices but mainly to its interaction with financial fragility,0
the outlook in 2000 and beyond is however very difficult to foresee,0
"however  declining 
trend in revenue receipts coupled with increase in expenditure turned revenue account into deficit during 2009 10",0
"the depreciation of the krone
without our own national currency the situation would have been more challenging",0
on the other hand many banking and nonbanking participants reported to us that margin calls were insufficiently predictable with considerable uncertainty over the scale and the speed of increases they were likely to face over a given time period or for a given level of volatility,0
"i look at brexit through three lenses

firstly there is a direct and negative impact on the irish economythis impact will have knock on effects on the irish financial services system",0
"33  
one important issue is raised by the possibility that an acquisition m ay decrease the chances 
of material distress at a financial firm while simultaneously increasing the potential negative 
externality on the financial system as a whole should the firm nonetheless become seriously 
compromised",0
obviously from the benefit of hindsight it is obvious that there was poor risk analysis of exposures to these sectors,0
the fall in irr could be driven by adverse shocks to cash flows and deterioration in macroeconomic conditions,0
"with regard to my earlier 
description of the policymaking process the burnsmiller fed did not properly understand the changing evolution of the us economy in the 1970s nor how monetary policy interacted with the new structure",0
"on the other hand if the restraint measures are insufficient it will be an upside 
risk for economic activity in the short run",0
"this proposition which undoubtedly has superficial appeal
overlooks the dynamics of the inflationary spiral that could lead to a very sharp deterioration",0
" if on the other hand we look at structural factors our problems were perhaps also worse
from the start",0
another complication might stem from the existence of more than one goal which may make the rationale for monetary policy decisions hard to convey,0
it is a truly daunting picture in terms of the size and the synchronised nature of the declines,0
in any case the risks to growth are tilted to the downside and not only for italy depend on geopolitical tensions and the economic outlook in the united states where also owing to the strong tightening of monetary conditions many indicators anticipate a possible gdp contraction in the coming months,0
rather it is more the interplay between the single monetary policy on the one side and national sovereignty in matters of economic and fiscal policy on the other that makes the monetary union susceptible to crisis,0
"once the first doubts emerge as to whether monetary policy can 
assert its independence the central bank runs the risk of losing control over inflation 
expectations and thus over inflation itself",0
there is a risk that we will see another wave of deleveraging when the aqr results are known and action has to be taken,0
"had sbp not responded the inflation outlook and reserve position of the country would have 
been worse",0
"in the deficit 
economies of the eurozone the recession and its accompanying deflationary pressures 
depreciate the real exchange rate",0
"but even a 
sceptic should acknowledge that the net accounting gain or loss on the asset purchase 
                                                 
3  of course that is not true of holdings of corporate assets",0
in the years before 1913 the united states suffered through a series of financial crises culminating in the panic of 1907,0
of course a countrys international responsibilities in this regard are murky while the central banks domestic mandate is explicit,0
on the other hand the national level is still home to key policy areas which have a bearing on the risks carried on bank balance sheets such as insolvency regimes,0
"but the risks associated with dislocations  in the money markets go far 
beyond the large banks",0
"at the same time monetary policy must not in itself
contribute to deflationary recessions as this could undermine confidence in the krone",0
in particular for industrial firms with a number of purchasingselling transactions going on this reconciliation involves large operating costs,0
"second and far more important the perception that official resources can be counted
on to bail out creditors directly or indirectly arguably generates moral hazard",0
"as a result some critics have argued that with sterling at its present level the burden of
containing inflation should fall more on fiscal policy",0
the range of possible outcomes is far too wide to incorporate into an economic projection,0
certain issues like the lack of credibility of fiscal rules or the harmful sovereignbank nexus still have to be adequately addressed,0
"table 1 shows estimates of two estimated phillips curves which include the typical wagedeterminants such as productivi ty but also include lagged measures of 
inflation expectations for households at a 2y ear horizon and financial markets at a 5year 
horizon",0
"yet in the financial sector it is more troublesome because tax considerations do not just have an 
effect on the funding choices they also stimulate the design of taxdriven financial products",0
in the case of banks this calls for the possibility to recur to public backstops and in a union like ours also a supranational one in the presence of systemic risks and risks of contagion,0
we also need to correctly identify cause and effect when itcomes to the decline in the external value of our currency over the past 12 months,0
"you think that the exit strategies of the fiscal policy namely in some countries higher 
deficits like ireland portugal or greece are in themselves threats to the economic recovery",0
9 there are some additional more technical features of the treasury market that push down the term premium,0
"the current
situation in the labour market is more complicated than that",0
"in a deregulated market environment public ownership becomes a serious constraint as the rule  
bound procedures and the rigidity in  the structure do not allow public sector companies the flexibility to 
respond promptly to dynamic market conditions",0
interestingly both measures  forward guidance and asset purchases  have been reinforced by the fact that the effective lower bound has proven to be slightly negative,0
afterwards against a backdrop of persistent macroeconomic weakness inflation began a prolonged downward drift consistently undershooting our staff projections,0
in this context mediumterm measures of inflation compensation from financial markets have moved around since august and current market volatility makes them difficult to interpret over recent weeks,0
"fundamental structural problems 
with eroded competitiveness came into evidence",0
there are a number of issues that we have to consider in our decision making to what extent is the depreciation going to be sustained,0
however the crisis exposed shortcomings on a national level and the fragilities of the institutional framework of the monetary union,0
alternatively it may mean a low return on bank equity which may have externalities through the fiscal channel given the principal shareholder of many stressed banks is the government,0
"meanwhile the general 
government sector tailored its spending plans to the need to reduce the budget deficit 
following the serious budgetary slippage evidenced at the close of 2011",0
"the problem is that to implement such an approach requires supervisory
judgments in areas where the right decision is not obvious",0
"average return on equity is likely to decrease in proportion to the decline in 
the risks assumed by shareholders",0
"the problem here is if countries with sovereign debt concerns need to borrow more to recapitalise their banks which harms their debt 
sustainability and therefore exacerbates the eu ro crisis impacting the real economy and 
feeding back to the banks",0
in considering the risk taking channel of policy transmission it is quite evident that policy makers need to more closely examine market behavior and its phases  the uncharacteristic calm market herding reversal and then panic,0
a third contributing factor was the fact that these securities were often complex and heterogeneous and thus hard to value,0
currently the mpcs policy dilemma has been compounded by cpi inflation breaching the upper end of the target range in the wake of a weak growth performance,0
"anyo ne who listened to speeches of central bankers on the economic outlook and the course 
of monetary policy knows what i mean they were deliberately unexciting technical and 
repetitive",0
as a consequence the institution was forced to restructure its administrative board,0
however a problem does arise if the fed remains reliant on inflation as our only gauge of the economys position relative to its potential,0
the additional delay created unnecessaryspeculation about the issues on the minds of mpc members and made it difficult for us toexplain our actions  for example to the treasury select committee  when our decisions hadmoved on from those described in the most recent minutes,0
" second there is the cost of asset sales and deleveraging that are mandated as part 
of the euimf programme and which reflect the impossibility of the banks 
continuing to operate on the oversized scale which they had reached by 2007",0
when the market liquidity dried up they had to post a vast amount of losses as well as valuation losses,0
unless this fall in netexternal demand is offset by sustained domestic demand growth in the industrial countries  unlessin other words the industrial economies collectively accommodate the necessary improvement in theexternal current account position of the emerging countries through a deterioration in their owncurrent account positions  the prospects for world economic activity would be dismal,0
"in the case of the advanced economies the key uncertainties include first the high rates of 
unemployment which could stifle the mom entum of consumer spending and private demand 
 the us unemployment rate in october was 102 percent second the large fiscal debt 
positions which could heighten investors concern on fiscal sustainability and put upward pressure on longterm interest rates and third problems in the advanced economies 
banking systems that could act as a drag on growth because of limited credit availability",0
"the main point of my discussion has been that leaving individuals alone to cope with these 
risks is inefficient from an economic point of view given that at least some of them are of a systemic nature",0
"however during the period 1997 to 2003 there was a reversal in the trend of fiscal consolidation and the cumulative impact of industrial slowdown fifth pay commission aw ard and a lower than expected revenue 
buoyancy culminated in fiscal deterioration",0
the debt level looks likely to exceed the 60 level soon perhaps next year unless new consolidation measures are imposed,0
on the other hand the risk of being left with debt and little or no equity capital increases when prices fall,0
"bis review 192007 3
 ultimately though ex ante judgments about leverage concentrations and liquidity risk will continue to 
prove elusive",0
this matters for our policy insofar as lower expectations of future income feed back into the present and add to the forces weighing on against inflation,0
for all these challenges relate to longterm fiscal sustainability,0
it is also true that thepresence of serious internal political division in malaysia to some extent discredited mr mahathirsrecent economic policy measures,0
"a fter the transaction the central bank has a building 
on the asset side of its balance shee t but at the same time on the liab ility side there is an equivalent 
amount representing the curr ency issue of the bank",0
instead the issue we have focused on is the possibility of future sharp cuts in household spending because of stretched balance sheets,0
"it is possible that the asymmetry in monetary policy which i have earlier mentioned where the central banks act rapidly in response to a decline in asset prices but have been more cautious when asset prices have risen has contributed to 
this",0
naturally this puts more weight on the shoulders of market participants that is the banks,0
"whether it is past performance based 
booking or cancellation and rebooking or eefc accounts the corporate dee med these 
instruments as unfailing profit channels rather than flexible operational tools to manage real  
life business events",0
vice versa fiscal sustainability concerns have rapidly spilled over to the financial sector thus giving rise to a vicious cycle that is difficult to break,0
but even in this case it can be argued that they will mainly lead to problems for theparticular country where inflation is higher rising costs ultimately result in downward adjustments ofproduction employment and inflation,0
"agency problems  refers in this context to divergences in the incentives of management and shareholders 
that create possibilities for management to make decisions in their own rather than shareholders  interests 
as well as for potentially expensive monitoring mechanisms for shareholders seeking to limit agency costs",0
also european banks suffer not only from squeezed margins in light of the low and negative interestrate environment but also from weak balance sheets,0
"over recent quarters these risks appear to have become manifest as 
inflation has trended upwards",0
"furthermore we should only go down the avenue of 
comprehensively mutualising liability if the shift in liability to the european level is 
accompanied by the transfer of control",0
"because the scope for further valuation gains in the future is estimated to be fairly limited analysts in germany are assuming that overall returns in the coming year could decline or even be negative also because of higher inflation8
these developments suggest that the lowinterest phase may lead to a structural change in the financial system which in turn could give rise to new risks",0
"certainly we needed to rethink the regulatory framework in light of what we have learnt from 
the past five years   the status quo was not acceptable",0
1 it is interesting to note that the la nguage associated with current account deficits also tends to be pejorative,0
beyond these considerations however there are political and economic considerations that have not been addressed here,0
the pension sector until september 2022 due to the unfavourable conditions in the international financial markets recorded a poor financial performance marking a negative return on investments in the amount of about 170 million euros,0
the fact is that policy has to be made in ignorance of how the future will turn out and one has to weigh certain nearterm costs against uncertain longerterm gains,0
"the loss of competitiv eness put germany in an extremely unfavourable 
position on international markets",0
clearly the fact that a liquidity issue has risen may well be a signal that the market has concerns about solvency,0
"in this situation 
the backing of the monetary liabilities by foreign exchange reserves would sever making monetary liabilities highly vulnerable to emer ging market developments specifically what 
would happen to the net domestic assets of the bank",0
"apart from the wellknown recognition and
decision lags in policymaking attempts to coordinate ex ante would not only blur the specificresponsibilities of individual policymakers but also reduce their accountability",0
there are even some observers who advance the hypothesis that a credible monetary policy which anchors inflation expectations at a low level actually sows the seeds for a buildup of imbalances in the financial sector later on,0
"the preliminary announcements to the industry and a possible interpretation of the delegated 
regulation recently published by the eu commission has led to estimates of mrel eligible 
liabilities by market analysts that would imply new subordinated debt issuance needs in the 
order of eur 560 bn",0
"but if we look at financial stability this situation entails the risk of a boombust cycle which would 
require a tightening of monetary policy",0
"20 moreover in addition to 
observable factors an unobservable threat ef fect  whereby workers in industrialised 
economies perceive themselves to have a we aker position and thereby moderate wage 
claims given a fear of production relocation to lowercost economies may have contributed 
to wage moderation",0
"it is important also to recall that as indicated a moment ago we can not control
the mix of monetary conditions",0
"the most important of these is the real exchange rate of the króna which is current ly onethird below its historical average and 
probably considerably below its longterm equilibrium",0
economic dynamics are also driven by underlying momentum that is very difficult to gauge,0
one challenge they face is their low profitability which is also related to the current level of economic growth,0
"as a result in the euro area switzerland and inflationtargeting countries inflation dynamics is  as of today  essentially  purely forwardlooking whereas in countries 
such as the united states and japan it still retains a significant backwardlooking 
component",0
"bis review 1562009 7
 the issue of regulatory perimeter being raised internationally in the post crisis scenario had 
also confronted us in the context of growi ng systemic significance of nondeposit taking non
banking financial companies",0
"nor
incidentally were we vulnerable as a creditor australian banks had not lent much to asia",0
disavowing the inflation aim in current conditions might also be perceived especially negatively by the public for instance as revealing expectations of secular stagnation and associated weak price pressures,0
"in this perspective it seems beside 
the point at this stage and impossible given the letter of treaty to question the reference 
standard as well as the speed of convergence even if we may readily acknowledge that business cycles usually extend over more than three years",0
there are legitimate concerns associated with the costs and benefits of continuing asset purchases,0
"indeed 
there are at least two situations where the use of capital controls and limits on gearing might not be a very effective means of maintaining financial stability namely if either  
1  the link between an institutions leverage and its robustness to real or imagined 
risks to the value of its assets were very weakor 
2  there were great sensitivity of the overall cost of funding to changes in equity capital  
so that requiring an institution to hold much more capital came at a very high price",0
"this is not without its problems as 
ultimately the central banks have no political authority to make fiscal policy decisions",0
an inflationary monetary policy would almost certainly lead tohigher unemployment in the medium run as longterm interest rates would rise and the benefits ofprice stability would be lost,0
the reality is that the financial sector may well simply pass on the tax burden to its customers and thus to the real economy and to retail investors,0
"in 
this case the basis of this uncertainty was that european banks had purchased large 
amounts of us mortgage securities often packaged in various structured products that were difficult to value and therefore also difficult to sell on the market",0
this has led to painful adjustments for many of you here and has also weighed on canadas bottom line,0
since then new lockdowns in china and especially the war in ukraine have created new shocks for the european economy and financial system,0
the latter means for example that crossborder euro area exposures are still considered as international exposures from a regulatory perspective which may lead to additional capital charges for systemically important banks,0
"those smal l countries in particular had to accept the new economic reality 
of lower demand higher unemployment and forced fiscal consolidation due to a fall in tax income or borrowing difficulties",0
"what becomes a concern for us is the risk that the shift in the global landscape will 
reverse the direction of portfolio flows to advanced countries particularly the us 
graph  10",0
"the downside risks to this scenario are 
compounde d by investors concerns a bout possible political instability",0
"the euro area crisis first surfaced in 2009 when portugal ireland greece and spain slipped 
into recession with exceedingly high budget deficits",0
"such a provision may not provide protection however if the rating change comes too late the firm is on the brink of 
insolvency and the requirement to post the margin can push it into insolvency",0
"however as 
mentioned earlier in the case of japan there is the problem that banks profits tend to fluctuate according to economic developments which lead to changes in capital",0
"as a consequence hungarys external financing requi rement is likely to decrease to close to 
3 per cent of the gdp in 2009",0
as such policy dilemma in emerging market economies is likely to become more pronounced especially as policy rate hikes from external front are imminent,0
first with the interest rate having ceased to be the main instrument incorporating balance sheet measures into the rule is not straightforward at all second as the transmission of policy interest rates to the economy has been impaired their comparison with taylor rule benchmarks has become much less informative,0
"one final remark another aspect where my former academic life did not fully prepare me to meet 
current challenges has to be mentioned",0
"to be frank with you it is impossible to say for sure whether our prudential policy approach is
working or not",0
secondly there may be structural breaks in the economy which are difficult to take account of when estimating over a long time horizon,0
"for example under plausible assumptions about how fiscal policies might evolve in the 
absence of major legislative changes the congr essional budget office cbo projects the 
deficit to fall from around 9 percent of gdp currently to roughly 5 percent of gdp by 2015 
bis central bankers speeches 3
 but then to rise to about 612 percent of gdp by the end of the decade2 after that it 
projects the budget outlook to deteriorate even more rapidly with federal debt held by the 
public reaching almost 90 percent of gdp by 2020 and 150 percent of gdp by 2030 up from 
about 60 percent at the end of fiscal year 2010",0
however if fiscal support is maintained for too long structural change could be delayed,0
"at present the chief concern is developments in overseas economies especially the 
european debt problem",0
an investor may also consider it costly to go against the tide and act on the basis of a view that does not appear to be shared by others,0
we know many retail investors are likely to find it hard to digest all the information in a prospectus especially since some of these are written in a technical and legalistic manner,0
"on the contrary it is 
possible that imbalances may make themselves felt on the real side of the economy or in asset prices 
before they are translated into instability in gener al prices",0
"in fact we recently experienced such a cooperation failure in my country with the situation 
concerning swedish banks operating in the baltic countries",0
looking at the current national discussions in the european states i doubt that the electorates or the governments and parliaments would be willing to take this leap  either now or in the foreseeable future  despite the common values i have just mentioned,0
"first we tend to be particularly alerted if we see balances in the red if we see minus signs 
negative numbers and apparent deficits",0
the current account deficit is large  almost 5  of gdp  and particularly large in relation tothe united states limited foreign trade,0
"in the short run central bank 
intermediation plays a stabilising role however  in the medium run it can increase the 
persistence of the shock by interfering with a marketled adjustment and can lead to moral 
hazard17 
the bottom line here is that we need to develop macroprudential policies that reduce liquidity risk ex ante in order to decrease the weight put on monetary policy tools during a 
crisis since we dont yet know very well the longrun impact of prolonged massive non
conventional interventions",0
in particular banking regulators failed to appreciate fully the implications of the growth  in size leverage and maturity transformation levels  of the shadow banking system for the balance sheets of commercial banks and for overall financial stability,0
"but the best thirdparty 
servicers would have to be diligent and willing to absorb relative losses when the standard business model for the industry would seem to put a thumb on the scale in favor of foreclosure",0
"but adjusting the level of the 
inflation target to the structural underlying trends that for the moment are influencing the 
economy does not seem like a good idea",0
"with regard to the inflation marker we have already experienced unduly low inflation of 1 percent so against an objective of 2 percent 3 percent inflation would be an equivalent 
policy loss to what we have already experienc ed",0
indeed the shaken confidence in the otd model reflected itself foremost in evaporating market and funding liquidity,0
the global financial crisis unfolded in three phases the us subprime crisis leading to a severe economic and employment crisis and then mutating into a banking and sovereign debt crisis,0
"first the socialisation of banks severe loan losses   in the first instance through the 
september 2008 guarantee and later through the unwillingness of our programme partners to consider burden sharing with unguaranteed senior bondholders   resulted in a very large 
infusion of public funds to restore their solvency",0
it is not so much that the top management of banks consciously swing for the fences but rather that wholesale credit may be systematically too cheap for banks and perhaps other intermediaries too unless the usual market disciplines of failure can apply,0
because in a situation where monetary policy lags behind the curve the macroeconomic costs would be significantly higher,0
cyclical developments are also interacting with structural developments notably the structural deleveraging of the banking system,0
"as early as mid2001 the macroeconomic and financia l outlook proved to be less favourable 
necessitating corrective measures",0
"those economists who stress this historical connection generally take an
optimistic view of it",0
in such a context a global recessionary trend such as the one we have experienced this year was unthinkable,0
a second risk regards the challenges to european banks profitability resulting from cyclical and structural factors,0
"no wonder 
that the policy analysis based on these models tend to be backward looking",0
this is because alongside redistribution problems we have another adverse factor namely a highly complicated demographic situation,0
"historical experience with sovereign standstills probably looks quite a
lot like corporate experience before insolvency rules were put in place with the workout process
inefficient and inequitable",0
experience suggests there is at least a possibility of diseconomies of scale lying in wait beyond that point,0
"the economic policy debate over recent years has been preoc cupied with the european 
troubles  as the conference title indicates",0
at the same time it would be shortsighted to imagine that the situation in greece is the euro areas only problem,0
uncertainty is more intense still over the shape and possible repercussions of future economic policy in the united states,0
"the ongoing deleveraging by banks is indeed having an adverse 
impact on the flow of credit to the real economy accentuating the procyclical effect",0
"in other cases the sales were 
made to offbalance sheet vehicles in which the banks retained residual risk",0
if on the other hand budgetary provisions are exceeded higher spending and widening of the fiscal deficit have as experience has shown inflationary consequences and possible spillovers that could undermine external viability the twin deficit argument,0
"these principles affect both the stage budget the reason for my appearance here today and the regional government budgets which i am not going to discuss although i do wish to take this opportunity to convey my concern regarding t he obsolescence of some of the assumptions 
on which the latter were prepared during the latter months of 2011",0
the drawnout recession has undercut firms selffinancing especially for smaller businesses,0
"the crisis affected particularly harshly those
economies such as spain s which were at that time in a situation of great weakness",0
however good those derisking and winddown plans will sometimes prove flawed,0
"in particular when borrowers have less collateral they face a higher external finance premium to compensate lenders for the 
increased monitoring costs see eg",0
"others stem from domestic factors incl uding  importantly in the current context  
changes in indirect taxes",0
"but there 
is much we do not understand about how these trans itions ahead will unfold  in fiscal positions the 
us external imbalance and in the exchange rate system and portfolio preferences",0
"the supplementary budget measures adopted in the middle of the year
bis review   151997 8 
failed to prevent a large overshoot on the order of 30 trillion lire compared with the original
target set in september 1995",0
"this is an 
especially dear issue for the central bank and particularly for me",0
the latest numbers from the international monetary fund imf follow the recent trend of steady downward revisions of growth estimates,0
"under such circumstances  with falling prices and heightened uncertainty postponing expenditures 
may be the optimal response for individual economic entities however from a 
macroeconomic perspective  it is a typical example of the  fallacy of composition  since it 
results in prolonging weak growth and deflation",0
my point is rather that while the ongoing deleveraging in the banking sector certainly plays an important role in the inadequate current levels of credit supply to the real economy factors related to the demand side may play an even more important role,0
"looking forward the issue of 
the sustainability of the debt in several industrial countries is looming",0
"these collapses lead so me to question whether overly prescriptive 
regulation may conduct to perverse incentives whereas others argue that the reasons reside in the lack of judgment on the level of the audit function rather than in the noncompliance with rules",0
in addition to the still sizeable market risks they face signifi cant credit risks overall,0
"i hope to have persuaded you today however that the economic imp lications of this transition go well beyond fiscal 
policy",0
"entering the year of 2012 our monetary policy was confronted with deteriorating 
global economic outlook due to the escalation of the european crisis",0
on the external side downside risks are related to the global outlook,0
"the main downside risks include a possible downward adjustments related to overseas economies including issues such as the 
sovereign debt problems in the euro area the  fiscal cliff  in the united states and the 
continued slower economic growth in china b uncertainty related to firms  and households  
medium  to long term growth expectations which may be adjusted downward by the delayed  
efforts of various agents to strengthen the growth potential of japan s economy c the 
greater than expected adverse impact of the consumption tax hike and d japan s fiscal 
sustainability issues",0
"first as i already mentioned it would not be a way to prevent taxpayers from suffering the 
consequences of bad investment decisions",0
the collapse of government tax collections and the development of a massive public sector deficit led to concerns in capital markets about the sovereigns ability to service the debt,0
"6  of course there are still banking organizations that ar e at neither end of the spectrum which our supervisory 
program reflects",0
"if the decision to exit is made too early the economic recovery ma y be put at risk as higher interest rates will 
produce a tightening effect on consumption and inve stment decisions at the very time when 
the pickup in the economy is still fragile",0
"the issues identified 
included the failure of accounting standards to deal with illiquid markets and distressed sales 
delayed recognition of losses associated with loans structured credit products offbalance sheet financing structures permitting certain structured special purpose entities and exposure to remain offbalance sheet lack of visibility in accounting statements to name just a few",0
for investors in innovative mortgage products there can also be risks  as recent events in the united states have so clearly shown,0
the broader issue of whether we should accept an average current account deficit of4 34 per cent of gdp in the long run would require another paper as long as the one i ampresenting today,0
this in turn leads to the large costs to the real economy i mentioned earlier,0
"again it would be confronted with the problem of which assets to buy with 
the proceeds of its increased debt issuance",0
the argument goes that largescale bond purchases would be perceived by markets as preventing policymakers from raising rates quickly as this would cause losses on central banks balance sheet,0
"eventually the underlying imbalances erupted and suddenly came to the 
surface  with the wellknown costs",0
and much like what we discussed in the case of physical risks lenders are exposed due to reduced collateral values or the risk that their borrowers onceprofitable business models are not profitable anymore,0
another concern being raised is the countrys current account balance which  after posting 13 consecutive years 20032015 of surplus turned into a small deficit in 2016 03 of gdp and in 2017 02 of gdp in janjune,0
"our 
accounting and prudential regimes may have increased procyclicality in recent years",0
the first of these risks is the deanchoring of inflation expectations from levels consistent with price stability which as we know the ecb defines as an expected inflation rate below but close to 2 in the medium term,0
the devaluation on august 11 was itself a significant surprise but to see it done on three consecutive days raised considerable concern over the potential extent of a slowdown of the chinese economy,0
"but the 
point to make is that focusing on the net balance of these flows which is the current account position is not particularly helpful relative to more scrutiny of the various components of the 
gross capital flows",0
and because firms approaching the minimum often have to deleverage sharply which can have a very adverse impact on the real economy,0
the ecb estimates that  in our medium scenario of a drop in gdp of around 8  the additional government financing needs in the euro area this year resulting from the recession and the required fiscal measures may exceed 10 of euro area gdp,0
"with my own view that infl ation is likely to run below this rate over the 
next few years i believe we run the risk of missing on our inflation objective as well",0
the main issue we faced was the perverse interaction between the euro area banking sector and institutional incompleteness of our monetary union which had fundamental implications for our policy in a system of bankbased monetary transmission,0
"thi s in turn might have bro ught abo ut an element of moral h azard namely overbo rrowing 
on the  part of the countrie s and lenient risk management on the part of some pri vate investors",0
temporary and global factors may be at play in the euro area with import prices going down,0
"on the 
other hand the costs in terms of poorer target attainment a couple of years ahead are very 
clear",0
"what this amounts to is that in the work on the present inflation report the riksbank has had to judge
whether global economic activity is slowing down to such an extent that demand growth in sweden isundergoing a selfadjustment as it were down towards the longterm trend",0
"in the former case the implications of the forecast for 
monetary policy are left implicit",0
others look to be more structural such as the stepdown in chinese growth compared to its double digit precrisis pace,0
in some countries the challenge for policymakers has been compounded by the relaxation in public spending policy  in particular civil service wage settlements  in recent years,0
the latest events in europe demonstrate how a weak fiscal situation combined with a couple of years of relaxation however warranted may damage the economys financial position and compromise its recovery,0
along with external factors this would lead to a significantly more complicated macroeconomic environment for the bulgarian banks,0
on the other hand there remains of course the risk that the economic downturn in the euro area might become more severe than the staff projections indicate for instance because of negative feedback effects from the financial system,0
such occurrences have the potential of further buildingup external debt stock due to the fiscal insolvency that could arise from limited export revenue and declining terms of trade,0
"for the philippines the fed taper may lead 
to greater volatility in domestic financial markets",0
"many structural 
reforms are difficult to implement precisely bec ause of the political economy of a society",0
"a third objection is that establishing sifi me trics and capital requirements will actually 
increase rather than mitigate moral hazard by identifying which firms are considered toobigtofail",0
" secondly the differences in the leverage ratios levels mainly result from 
accounting discrepancies that can lead to particularly misleading comparisons 
 if we observe the leverage multiples it is true that the figures displayed by 
us banks between 10 and 14 are lower than those of most of european 
banks",0
"or to put it bluntly from a financial stability point 
bis review 722008 1
 of view the fates of individual institutions are of interest only if they could negatively affect 
the system as a whole",0
"the issue is not merely one of transparency in fiscal 
operations or a de facto  larger borrowing programme of the government than admitted but 
one with significant implications for the government debt market and monetary management",0
"so equity linked structured 
notes for example have been out of fashion",0
"however two years ahead 
the forecasts have been almost been four tenths too high on average compared with the 
outcomes which is not negligible figure 10",0
the likely direct economic spillovers to the rest of europe also seem fairly contained since greece is quite a small economy,0
"it is not simply that the models employed over recent years  notably value atrisk  make assumptions such as 
normally distributed returns that are manifestly false",0
"lastly it is possible to contend that the reserve requirement did have 
significant distributive effects because large firms continued to access the international bonds market directly to obtain longterm f unding while smaller firms could only access 
shortterm banking loans which were made more costly due to the reserve requirement",0
the resulting investor skepticism about the accuracy of ratings combined with mounting losses at mortgage lenders caused investors to pull back from a broad range of structured products even though unrelated to mortgages,0
if we were to add the required repayment of principal on to this line there would be a larger tendency for the line to slope upwards,0
however macroprudential policy was simply not part of the standard toolbox and the mostly procyclical fiscal policy that was followed aggravated the macroeconomic imbalances,0
it will stay on a downward path in 2017 and i believe in the coming years as well,0
its market adjusted valuation approach could introduce significant volatility into the capital measure and capital requirement which could lead to procyclical economic effects and harm the ability of insurers to provide longterm savings products,0
"such perverse incentives in turn induced the process of accumulation 
and manifestation of financial imbalances thereby destabilizing the economy in the longer term",0
"in either case inflation expectations could 
become unmoored and the fomc could lose control of inflation itself",0
in connection with the call for additional funds for the efsf insistence on this top rating for efsf bonds leads however to the problematic leverage proposals i mentioned earlier,0
"hence the successive waves of depreciations of structured 
products imposed by the accounting rules in place with these depreciations in turn fuelling doubts about counterparty risks and solvency liquidity  constraints and further falls in asset 
prices",0
"the complication for monetary policy in this situation of externaldomestic
imbalance has of course been that a tightening of monetary policy to slow the pace of the domesticeconomy would have been likely to aggravate the appreciation of the exchange rate intensifying alsothe restraining external demand and price effects and putting even more intense pressure on theinternationally exposed sectors",0
"the monetary policy implications of such a regime 
8 bis review 742006
 are also complicated",0
"first of all their lenderoflastresort function only supervisory powers can enable the central bank to determine correctly and promptly whether a bank is illiquid or insolvent as the northern rock case in the uk made dramatically clear in 20075
at the same time putting more power in the hands of central banks is likely to increase the political pressure on them",0
"i in an emerging economy like ours it is not practical for the central bank to focus 
exclusively on inflation oblivious of t he larger development context",0
"18  the policy move in the netherlands may be structural in nature since ltvs exceeding 100 per cent are 
probably questionable apart from cyclical considerations",0
there are of course a range of other scenarios many of which unfortunat ely are on the downside,0
second there are also worries about low profitability,0
the commissions dual role as the guardian of the eu treaty on the one hand and as a political institution on the other is undoubtedly a factor in the repeated compromises made at the expense of budgetary discipline,0
their savings intentions remained at historically high levels as uncertainty continued to weigh on sentiment and consumption opportunities remained restricted amid renewed containment measures right chart slide 3,0
"as you know the crisis has also led the eu rosytem to embark on a very limited programme 
of bond purchases with a view to restori ng the monetary policy transmission mechanism 
where it had been impaired",0
"as a result the increa se in  the cash flow will no t 
affect the domestic economy",0
if in such a situation the interest rate had been substantially increased in order to rapidly bring inflation back down to the target the economic situation could have been undermined even more,0
this has been especially true in the current crisis as due to the unavoidable consolidation of public finances that i described earlier the contribution of fiscal policy to economic stabilisation could not be as significant as in normal circumstances,0
yet at the same time the macroeconomic environment has become more challenging,0
banking organizations would be forced to shrinkchange their asset mix or face supervisory discipline during downturns because spreadswould be more likely to run into a fixed cap at such times,0
as i see it the grounds for doing so are weak in the time perspective of one to two years that we are now talking about,0
"rates of inflation 
significantly above the low levels of recent  years can have serious adverse effects on 
economic efficiency and hence on output in the long run",0
similarly while the paper attempts to show that earnings management can fool themarket virtually all the evidence is based on data from the 1970s 1980s and early 1990s and thus itmay not be relevant for the later years,0
"calculations of costs in terms of number of unemployed must be taken with a rather 
large pinch of salt  
this leads me in to the discussion on the costs to the real economy of inflation on average 
undershooting the target",0
"these factors combined serve as a constraint for the bank in almost the same way as exchange rate
movements did under the fixed exchange rate regime",0
"eurostats latest estimates show that 
the average general government deficit ratio in the euro area increased from 20 of gdp in 2008 to 63 in 2009",0
conventional wisdom now is that the more recent episodes like northern rock were an accident waiting to happen as banking regulations have not been emphasizing on liquidity risks,0
"let me move on to slide 8  which displays what have been described as unusual 
expenditures by households which essentially means that these expenditures are generally 
incurred but not on a regular or predictable basis",0
of course various factors might be behind this one being uncertainty with respect to pensions andthe tax burden in the future because of the rapidly aging population,0
while the taper tantrum in 2013 sparked a transitory rise in risk aversion the market mood really changed around mid2014 as previous trends reversed including a contraction of portfolio investment inflows in the second half of the following year something which had not been seen since the global financial crisis,0
and to top it all there are downside risks as regards the level of our gas reserves,0
there are other questions such as how to set interest rates in a deleveraging environment,0
the situation in greece is fluid and the ongoing slowdown in china could prove more significant,0
conversely in the case of deflation the solvency of indebted companies may be jeopardized as the value of cash flows decreases over time while the face value of debt remains stable,0
"conversely due to the nature of our economy the 
floating exchange rate would fuel uncertainty and create imbalances and high inflation the 
alleviation of which would req uire extremely restrictive monetary policy",0
"balance sheets and profit and loss accounts are especially difficult to interpret
in banking",0
another possible consequence is that risks may shift to the shadow banking sector,0
"however it is very important to bear in mind that access to that collateral is often lengthy and costly eroding its net present value3

as i said earlier one of the main reasons we are concerned about high npls from a macroprudential perspective is that they weigh on bank profitability",0
most importantly some significant classes of borrowers  namely commercial real estate and small business  are almost wholly dependent on the banking sector for funds and those funds are not easily forthcoming,0
"the challenge is even more complex if the problem is defined in bis central bankers speeches 3
 terms of current account surpluses because there can be surpluses for good reasons such 
as when the population is aging leading the country to lend to younger more dynamic 
countries that need to borrow or bad ones where the surpluses arise because of distortions",0
"since late 2004 domestic vulnerabilities r eemerged and mounted as the fiscal and external 
current account deficits rose above 4 of gdp and induced inflationary pressures",0
"in addition the announced losses have 
been very large and came as a bit of a shock to the market at a time when the states 
finances were already under pressure and with heightened market sensitivity to sovereign debt issues in the euro area",0
but insurers as long term investors are also exposed to changes in public policy as this affects the investment side,0
at the same time it means that the central bank to a greater extent risks being exposed to criticism,0
"sheer ignorance by bank managements of the true risks may also have played a role10
slide 9  market discipline vs structure of banks  a chickenandegg problem to be solved
the toobigtofail assumption weakened market discipline as did the opacity of large complex financial institutions",0
of course when you start to look at that  yes there are europespecific issues  but a lot has to do with the slowdown in global trade which is some mix of trade policy a kind of revision of the speed of growth in asia in particular and related issues,0
lacking enough liquidity to repay all the counterparties who declined to roll over their investments these intermediaries were forced into fire sales that further depressed asset prices thereby reducing the values of assets held by many other intermediaries raising margin calls and leading to still more asset sales,0
it would of course also raise the question of which of the other expenditure components of gdp should bear the offsetting fall in share,0
"a further consideration in the irish case was market 
participants expectations of significant writedow ns on propertyrelated assets that would eat 
into existing capital",0
although the amounts involved here at that stage were less than 5 billion or about 3 of gdp this widely known episode is the one hardest to rationalise even taking account of the persistent stress in european banking market conditions at the time,0
"but i think we all underestimated just how 
wide the gulf is in the mindset not only of the political class but also in terms of public opinion 
in the individual countries concerning the objectives of fiscal policy",0
"such a policy is definitely not advisable apart from the costs associated with higher inflation central bank 
credibility established in past decades at great costs and now one of our most important 
assets would be seriously or  even critically damaged",0
the difficulties in the euro area have affected the us economy,0
all in all this maturity mismatch could then lead to losses,0
these expectations may also have contributed to imprudent risktaking which once the crisis started unfolding led to real losses,0
on the other handa floating exchange rate adds huge volatility to the businesses of the external sector of theeconomy requiring further costs in terms of hedging,0
for investors whose business models are centred around fixed income this is undoubtedly a very challenging environment,0
what was not appreciated was how serious the fallout from such a decline would be for the financial sector and the macroeconomy,0
"nonetheless the fiscal authorities will face significant challenges meeting the demands of their countercyclical policy but at the same time prevent a significant deterioration in the 
fiscal accounts",0
on the current account deficit itnow looks as though it has averaged around 5 per cent of gdp in 1998 rather than the 5½ percent we expected at the last hearing,0
"some observers think that the european stability and growth pact might exacerbate cyclical
divergences because it hampers unduly the stabilising role played by national fiscal policy",0
"as a result we have shift to another 
problem which is close to the idea of disaster myopia2 
the issue of measuring price stability 
however this raises another issue especially in the current context of muted inflationary pressures 
but ample fluctuations in asset prices are we measuring inflation accurately",0
"the last international conference the bank sponsored on a
financial stability topic back in september 1998 followed closely on considerable turbulence in global
bond markets and in fact managed to coincide with the incipient collapse of ltcm",0
there are other puzzles like the flattening of the philips curve and i would range here the fall of financial intermediation in some nonmember sates in romania and hungary in particular,0
"at the same time the external financial conditions relevant for chile are estimated to 
be tighter while the terms of trade will be lower figure 2 and table 1",0
"t he analytical challenge is magnified by the inherent 
difficulty in predicting how behavior changes in crisis  that is how investors and counterparties would 
react to actual losses and the fear of future loss es",0
in addition the persistent currentaccount deficit needs to be financed at a time when capital flows to emerging markets are declining,0
"however this is where there is a tension between the regulatory approach and the accounting rule makers who view such countercyclical measures as being liable to be misused for profit smoothening and find it against their basic principles of transparency and 
reporting plain economic reality",0
looking at this graph one may wonder whether the turmoil has in fact led to a higher segmentation and therefore less integration in the market,0
"paradoxically in a large number of 
cases the credit risk remained in the realm of the commercial banks through the commitment they still had to activate back up lines of conduits or structured investment vehicles",0
"although to an undisciplined trader working in a dealing room  without the appropriate controls 
he might see an opportunity which could then bring danger to the firm and result  
in crisis ",0
this primarily had to do with the fact that the initial macroeconomic imbalances were much higher in greece than in other countries,0
"the introduction of a 
single currency may also have contributed to accommodative financial conditions and 
macroeconomic stability in the mid2000s resulting in the lack of fiscal and financial discipline during the period",0
"secondly there is the lack of trust between european states northern european countries 
do not want to bail out the peripheral countries because they do not trust them to use the 
money wisely and cause them to relax their reform effort",0
"second a 
signalling effect may amplify this downward pressure as market participants would see a 
realisation of a completely new scenario which they had previously priced in as a mere 4 bis central bankers speeches  
 possi bility",0
"in view of the constrained condition of the public finances the availability of these subsidies will be quantitatively small and they are likely to be 
focused as they should be on households in low income circumstances",0
"because this solidified in investors  minds that 
tbtf firms   after the lehman debacle  would be protected this worsened the tbtf 
problem",0
in other words financialstability factors can weigh significantly in the decisionmaking process without being an end objective in and of themselves,0
"however if asset shortages story is correct then upcoming us slowdown or brief recession 
according to some nonconsensual forecasts would likely further increase excess saving as fading 
growth prospects will discourage investment projec ts and encourage more private saving amid rising 
uncertainty only partly offset by higher public di ssaving due to automatic stabilizers and lower 
valuation of us equities will make the world supply of  assets even more scarce",0
"however a key lesson from the literature and from our own experience is that the 
transmission of monetary policy to financial stability is far less clear than its transmission to 
inflation",0
"if instead it is all left to monetary policy then the 
outlook will be much less satisfactory",0
this will be another force bearing down on margins and profitability,0
we may also note that the two decades 1960s and 1980s when the current account deficit increased marginally towards 2 per cent of gdp were followed by significant balance of payments and economic crisis,0
"on a macroeconomic level the reliance on foreign savings especially when 
channeled into consumption manifested in lar ge current account deficits",0
"economists recognised t hat distorted incentives whether arising 
from implicit public subsidies asymmetric information or a host of other imperfections will cause a marketbased outcome to be suboptimal from the perspective of society",0
developments in the external sector of the economy signalled a sluggish foreign demand in the third quarter of the year,0
"it turned out 
to be a long process to finally have the institution closed something which may have contributed to the failure coming at higher costs to the deposit insurance scheme than necessary",0
for example the current macrofinancial environment outlined above masks how certain regulatory changes will really alter firms incentives over the medium term,0
"the united states is faced with a
thorny issue of cyclical adjustment",0
"slide 7  
however in the medium term forces of growth will be weighed down by the burden of  
debt  the excessive leverage  which still troubles the european economy in particular",0
"the possibility that the recent stabilization 
in household spending will prove transient is an important downside risk to the outlook",0
where substantial leverageeither nominal or syntheticis also present the risks are only greater,0
"2 bis review 782010
 among the factors worth noting are 
 higher economic agents uncertainty and liquidity premiums  
 the correction of the business model in particular financial market segments  
 increased exchange rate volatility and 
 contracted demand for loans in the second half of 2009",0
"you are right that credit provision to the real economy is a 
concern",0
nonetheless a number of factors are likely to continue to weigh on consumer spending among them the weak labor market the declines in equity and housing wealth that households have experienced over the past two years and stilltight credit conditions,0
"uncertainty over the pace breadth and scale of these changes could weigh on our economic 
prospects for some time",0
however certain institutional aspects of us money markets including bankonly access to ioer credit limits imposed by lenders and other impediments to market competition and the costs of balance sheet expansion appear to create frictions that have made ioer act more like a magnet that pulls up shortterm rates,0
"although downside risks persist there are also upside risks regarding  global economy particularly driven by the 
lagged impacts of the exceptionally loose policies implemented by the advanced economies 
over the past two years",0
when the fixed exchange rate policy was abandoned there was a risk that the norwegian economy might again lose its nominal anchor,0
"in particular i am concerned with the interaction between price and financial stability when a small open 
economy like chile is exposed to volatile capital flows",0
an additional factor is the unfavorable demographic trend in europe,0
"the difficulties 
are compounded in that in questions such as these  taxes cyclical activity the direction of fiscal policy  the distinction between knowledge and values tends to be indistinct",0
however downward risks prevail including most importantly lessthanexpected us industrial improvement and secondly a largerthananticipated contraction in oil production,0
"but the choice of currency regime does have important economic implications which need to be
carefully assessed and i believe it is appropriate for me to comment on those",0
of greatest concern to me is that the risk of scrutiny and criticism might hinder policymakers from acting quickly enough to remove or dampen the dry inflationary tinder that is inherent in the massive but currently fallow monetary base,0
but this matter is also of vital importance to the esm as the act of granting loans to member states that later prove to be insolvent is unlikely to be easily reconcilable with the nobailout clause not least when a haircut actually becomes necessary and private creditors find that they have been substituted by other publicsector creditors prior to that step being taken,0
the inevitable funding difficulties which would ensue both for the banks and for the sovereign would have been regarded by european partners as having been wholly selfimposed,0
"but loosening the consumers belt for a year will not 
do them much favours in the medium term and  might also trigger a swift negative reaction 
from international investors at the time when they are particularly sensitive to nonprudent public spending",0
"the crises reminded foreign investors of the indirect barriers that continue to exist especially in the developing world a lack of adequate corporate disclosure and governance underdeveloped and often 
capricious legal structures for contract dissolution and bankruptcy and ex post government 
intervention in favor of domestic residents over foreign investors",0
"if they intervene in the forex market to prevent  appreciation they will have additional systemic 
liquidity and potential inflationary pressures to contend with",0
"bis review 982009 5
 accountability could be diminished its credibility reduced and potentially inflation 
expectations themselves could become unanchored18
the key question is whether the financial stability benefit of greater flexibility is worth the 
price stability risk of forfeited credibility",0
"at the same time the shift between types of pension schemes transfers the longevity risk of the individual into a future income 
risk for the individual",0
up until then the only historical reference points for the zlb were from the great depression of the 1930s and more recently japan in the 1990s,0
"because the funding costs of the smaller participants have tended to rise by more their profit 
margins have been squeezed more and in some cases their capacity to provide new loans has also been curtailed",0
"strains in global financial markets have resurfaced in recent months reflecting renewed 
uncertainty about the resolution of the european situation",0
if one takes current surveys of market participants views about the time over which the ecb is anticipated to roll over its app securities and assumes the modal expectation of a twoyear period one finds that the downward pressure that app asset holdings  current and expected  are exerting on longerterm interest rates is in the order of 100 basis points chart 5,0
"this market correction of great amplitude that we are observing 
creates an additional element of uncertainty as regards the future evolution of the real economy",0
the already mentioned sideeffects of the low interest rate policy  wrong incentives for governments financial market stability and distribution effects  are even more acute in the case of quantitative easing,0
there is a serious risk however of missed opportunities as the present debate over the future of the euro area seems to be getting bogged down in neverending arguments such as on the european deposit insurance scheme edis or sovereign debt restructuring,0
in hungary as in many new eu members it was not only the wellknown procyclicality of banking sector at play but also the effects of fx lending started to surface,0
"the japanese economy continues to experience serious difficulties its banking and insurance sectors
fragile its public debt very large and increasing and its immediate prospects clouded",0
there is a second important downside to diversification,0
unsurprisingly then at the height of the crisis when the very survival of the monetary union and the euro were in doubt the wave of mistrust affected us most forcefully,0
the potential downsides to this approach include the reduced risk sensitivity that a bank may experience to a particular test and potential technical challenges associated with changes to a banks balance sheet and earnings,0
"as a result of these factors government revenues are now projected to decline by 
about 15 per cent compared with the budget",0
"but now the problem has come forward in time with the potential national incomes 
available to support future fiscal expenditure looking much lower",0
the situation was especially challenging as the economic downturn coincided with high inflation,0
the risks surrounding this economic outlook continue to be on the downside,0
that rebuilding could in fact have taken quite a few years given the low level of earnings,0
"the norwegian economy may also be exposed to negative events that provide the prospect of a
deflationary recession and a depreciation of the krone",0
"i am more concerned about what can happen with inflation and growth after the forecast period if
demand increases at the rate we have anticipated",0
this was also the ecbs view because it created issues elsewhere in the euro zone,0
i am also critical of the idea of the european commission having a strong position in resolution since the commission is also responsible for state aid procedures which would create a conflict of interest that would be impossible to resolve cleanly,0
"essentially when capital stops coming in the current account drives the exchange 
rate and naturally the pressure is to depreciate in the face of the deficit",0
when these imbalances became apparent the change in the markets risk perception led to financial fragmentation in the euro area which affected not only the most vulnerable economies via an inability to access external financing but also the monetary policy transmission mechanism itself and consequently the emu,0
in australia the investment picture is very different,0
"at the same time it became apparent that the lossabsorbing capacity of the capital held was too 
low",0
our economic challenges both near term and longer term are daunting indeed,0
the socalled core measures of inflation  which strip out volatile components  have also been drifting down since mid2012 when the euro crisis hit its climax and have been hovering around 1 for nearly two years,0
the dangers inherent in this approach were to materialise once the source of these cyclical revenues dried up,0
"the difference originates mainly from the fact that fiscal policy is by definition a political issue with strong 
redistribution aspects which cannot easily be mandated out of direct democratic control",0
"most 
importantly the public debt problems in certain european countries constitute a major risk factor",0
however at the same time if policy discussion based on such economic analysis is not taking due account of the supporting rules or contracts things will not practically work,0
that view isnt entirely off the mark  after all the scarcity principle applies to the running of a school as well so its not possible to offer every subject,0
"the whole thing depended on confidence  if depositors wanted their funds 
back en masse a bank could not provide them because its assets were not all in cash",0
therefore when we finally faced the postlehman brothers meltdown and the different  and far more serious  decision of handling panic against preserving incentives the required experience on how to deal with it had to some extent been lost,0
"however the big risk facing the us 
economy is the nature of the fiscal contraction",0
"the inherent credit weaknes ses of 
such accounts are further aggravated due to lower stake of the promoters in the restructured business",0
a further implication is that the economys trade patterns could end up becoming less diversified than they have been in recent years,0
on the other hand the growth prospects are gloomier with global growth forecast trimmed by 13 pp with similar downgrade for the cesee region 17 pp where growth is revised down to 30 on average,0
reputation risk also has to do with the current and prospective impact on earnings and capital arising from negative public opinion,0
it follows then that the weakness in productivity growth since the financial crisis may be a symptom of a postcrisis hangover,0
looking ahead one of the biggest sources of known uncertainty to the us outlook is whether this foreign weakness fades or intensifies,0
if however monetary policy decisions are influenced by supervisory considerations this would significantly impact on the credibility of monetary policy,0
since then the global macroeconomic outlook has become suddenly overcast with the economic costs of the war and retaliatory sanctions,0
"unlike 
predictions of some months ago when most thought that the mpr would be raised further 
the changes in the macroeconomic scenario have led to a greater dispersion of private expectations",0
"one worrying development is that divergences in current account balances 
have mostly gone hand in hand with divergences in price competitiveness",0
"however first of all these costs are primarily a reflection of the fact that a subsidy in the form of a de facto too big to fail 
guarantee will be reduced",0
while it is an accepted fact that the relationship between financial economy and real economy is symbiotic de facto merger of the segments may actually aggravate the systemic risks,0
"in the event of a reduction 
in household income debt burdens may become heavy to bear forcing households to 
reduce spending on consumption with a deeper downturn as a result",0
"chang es in the economic environment 
were accompanied by a sharp decline in consumer and corporate confidence in august",0
"this has the potential of 
influencing the boards to take decisions that may not always be in the interest of the depositors who 
constitute the most important stakeholders of a bank",0
the somewhat higher gdp levels which might have been attained in the counterfactual as a result of the higher fiscal deficit would not have altered these ratios by much7 besides gdp might not have been much higher despite more net government spending doubts about the chances of the government recovering access to market financing on any reasonable terms at the end of the programme would likely have constrained business investment and household consumption,0
the weakening of prospects for the us economy is another issue,0
of course this is an economic issue but it is also institutional and political given the electoral results of the recent past,0