http://www.bis.org/list/mgtspeeches/index.rss Speeches by senior management of the Bank for International Settlements. en http://www.bis.org/speeches/sp120124.htm Speech by Mr Jaime Caruana, General Manager of the BIS, at the seminar on "Long-term growth: organizing the stability and attractiveness of European financial markets", Berlin, 20 January 2012. Collaboration between financial authorities has never been so testing - and yet never has such cooperation been so important. I will start today by discussing some of the key challenges we face in the area of financial regulation. Then I will argue that the institutional settings for collaboration are actually improving. Given sufficient commitment from the authorities, these new settings and processes will pave the way for enhanced cooperation. The need for effective international collaboration in times of financial stress 2012-01-24T13:51:00Z Collaboration between financial authorities has never been so testing - and yet never has such cooperation been so important. I will start today by discussing some of the key challenges we face in the area of financial regulation. Then I will argue that the institutional settings for collaboration are actually improving. Given sufficient commitment from the authorities, these new settings and processes will pave the way for enhanced cooperation. The need for effective international collaboration in times of financial stress 2012-01-24T13:51:00Z BIS Caruana Jaime Caruana Jaime Caruana Caruana Mr General Manager Bank for International Settlements http://www.bis.org/speeches/sp111223.htm Panel remarks by Mr Jaime Caruana, General Manager of the BIS, at the Bank of Italy conference in honour of Tommaso Padoa-Schioppa, Rome, 16 December 2011. Tommaso Padoa-Schioppa was a far-sighted policymaker. This speech at a conference in his honour highlights three themes in his work. First, he rejected the "own house in order" doctrine. Second, he emphasised the importance of supervision in addition to regulation. And finally, he drew attention to the limitations on our ability to quantify risk. In honour of Tommaso Padoa-Schioppa: panel remarks 2011-12-23T08:24:00Z Tommaso Padoa-Schioppa was a far-sighted policymaker. This speech at a conference in his honour highlights three themes in his work. First, he rejected the "own house in order" doctrine. Second, he emphasised the importance of supervision in addition to regulation. And finally, he drew attention to the limitations on our ability to quantify risk. In honour of Tommaso Padoa-Schioppa: panel remarks 2011-12-23T08:24:00Z BIS Caruana Jaime Caruana PDF version http://www.bis.org/speeches/sp111223.pdf Jaime Caruana Caruana Mr General Manager Bank for International Settlements http://www.bis.org/speeches/sp111222.htm Keynote address by Mr Jaime Caruana, General Manager of the BIS, to the FSB Roundtable on risk disclosure, Basel, 9 December 2011. High-quality risk disclosure is good for markets, because it helps investors make more informed decisions. It is good for prudential supervisors, because it makes banks more accountable to both supervisors and investors. And it is good for financial stability, because it reduces the chance that unexpected events will disrupt the system. To be effective in promoting market discipline, disclosure must be complemented by ... Financial stability and risk disclosure 2011-12-22T10:03:00Z High-quality risk disclosure is good for markets, because it helps investors make more informed decisions. It is good for prudential supervisors, because it makes banks more accountable to both supervisors and investors. And it is good for financial stability, because it reduces the chance that unexpected events will disrupt the system. To be effective in promoting market discipline, disclosure must be complemented by strong incentives for counterparties to engage in monitoring. The public sector's role in promoting transparency arises from a number of market failures, including the externalities to be gained from common standards, the "free rider" problems that may lead to too little investment in producing and gathering financial information, and the tendency of markets to overreact to bad news when the information environment is clouded. Guided by these considerations, the Financial Stability Board and the Basel Committee on Banking Supervision have long supported improvements in transparency, through their work on accounting, disclosure templates and aggregate market data. At the same time, industry and investor representatives need to play a key role in developing disclosure standards. Accounting standards need to converge, standards for the discussion and analysis that accompany financial statements need to be established, and external auditors need to insist on higher-quality risk disclosures. Financial stability and risk disclosure 2011-12-22T10:03:00Z BIS Caruana Jaime Caruana PDF version http://www.bis.org/speeches/sp111222.pdf Jaime Caruana Caruana Mr General Manager Bank for International Settlements http://www.bis.org/speeches/sp111216.htm Keynote address by Mr Jaime Caruana, General Manager of the BIS, at the Bank of Thailand-BIS conference on "Central bank balance sheets in Asia and the Pacific: the policy challenges ahead", Chiang Mai, Thailand, 12 December 2011. Central bank balance sheets have proved crucial in designing and pursuing policies in the wake of financial crises in recent years. Central banks have bought a wide range of financial assets in order to ... Why central bank balance sheets matter 2011-12-16T15:58:00Z Central bank balance sheets have proved crucial in designing and pursuing policies in the wake of financial crises in recent years. Central banks have bought a wide range of financial assets in order to further major macroeconomic and financial stability objectives, which has implied a comparable increase in domestic liabilities. This has led to an unprecedented global expansion of central bank balance sheets. But balance sheets of the current size could create broad policy risks, beyond the increased exposure of the balance sheet to market developments. These risks include inflation, financial instability, distortions in financial markets, and conflicts with government debt managers. Analysing balance sheet-related risks can also help design suitable "exit strategies" from the current policies. Why central bank balance sheets matter 2011-12-16T15:58:00Z BIS Caruana Jaime Caruana PDF version http://www.bis.org/speeches/sp111216.pdf Jaime Caruana Caruana Mr General Manager Bank for International Settlements http://www.bis.org/speeches/sp111209.htm Closing remarks by Mr Jaime Caruana, General Manager of the BIS, at the Bank of Japan-BIS high-level seminar on "The development of regional capital markets", Yokohama, Japan, 20-22 November 2011. Many initiatives in emerging Asia over the past decade have sought to encourage foreign investors to participate in domestic bond markets and so boost liquidity in local currency instruments. The removal of withholding taxes and of some restrictions on local currency convertibility has been instrumental in this regard. At the same time, ... Foreign participation and bond market development in Asia and the Pacific 2011-12-09T12:32:00Z Many initiatives in emerging Asia over the past decade have sought to encourage foreign investors to participate in domestic bond markets and so boost liquidity in local currency instruments. The removal of withholding taxes and of some restrictions on local currency convertibility has been instrumental in this regard. At the same time, the elimination of barriers to cross-border investment can at times run counter to the policy objective of stabilising the financial system and macroeconomy in the face of large and volatile capital inflows. As a result, the region's policymakers have chosen on occasion to discourage foreign portfolio investment inflows. Foreign participation and bond market development in Asia and the Pacific 2011-12-09T12:32:00Z BIS Caruana Jaime Caruana PDF version http://www.bis.org/speeches/sp111209.pdf Jaime Caruana Caruana Mr General Manager Bank for International Settlements http://www.bis.org/speeches/sp111118.htm Speech by Mr Jaime Caruana, General Manager of the BIS, at the CAFRAL/BIS conference on "Financial sector regulation for growth, equity and stability in the post-crisis world", Mumbai, 15 November 2011. Recent events underscore the lesson that financial stability depends not only on the links between banks and the corporate and household sectors, but also on those between banks and the sovereign. The sovereign must be prepared to act as ultimate backstop for the financial system. But this requires ... Financial and real sector interactions: enter the sovereign "ex machina" 2011-11-18T15:43:00Z Recent events underscore the lesson that financial stability depends not only on the links between banks and the corporate and household sectors, but also on those between banks and the sovereign. The sovereign must be prepared to act as ultimate backstop for the financial system. But this requires that fiscal buffers be built up in good times. Otherwise, the sovereign can itself become a source of financial instability, as its credit risk interacts in a malign way with bank and other private sector credit risks. Sovereigns must now earn back their reputation as borrowers that are practically risk-free. Ultimately, the sovereign's solvency is a precondition for the central bank's success in dealing with threats to monetary and financial stability. Financial and real sector interactions: enter the sovereign "ex machina" 2011-11-18T15:43:00Z BIS Caruana Jaime Caruana PDF version http://www.bis.org/speeches/sp111118.pdf Jaime Caruana Caruana Mr General Manager Bank for International Settlements http://www.bis.org/speeches/sp111114.htm Panel remarks by Mr Jaime Caruana, General Manager of the BIS, at the DNB conference in honour of Nout Wellink on "Welfare effects of financial innovation", Amsterdam, 11 November 2011. Financial innovation can unlock economic value but, if banks are to reap the benefits, they need robust defenses against risk. Over the past two decades, bank profits have been underpinned by high leverage, creating vulnerabilities. The role of prudential regulation is to ensure that banks are well equipped to deal with risk, thereby ... Panel remarks on "Welfare effects of financial innovation" 2011-11-14T10:39:00Z Financial innovation can unlock economic value but, if banks are to reap the benefits, they need robust defenses against risk. Over the past two decades, bank profits have been underpinned by high leverage, creating vulnerabilities. The role of prudential regulation is to ensure that banks are well equipped to deal with risk, thereby stabilising their profitability. The Basel Committee on Banking Supervision under Nout Wellink's chairmanship has made important progress towards this goal. Panel remarks on "Welfare effects of financial innovation" 2011-11-14T10:39:00Z BIS Caruana Jaime Caruana PDF version http://www.bis.org/speeches/sp111114.pdf Jaime Caruana Caruana Mr General Manager Bank for International Settlements http://www.bis.org/speeches/sp111103.htm Speech by Mr Stephen G Cecchetti, Economic Adviser and Head of Monetary and Economic Department of the BIS at the CFA Institute, Paris, France, 03 November 2011. The rules of the road making the financial system safe for everyone 2011-11-03T16:14:00Z Today I would like to take you on a road trip. Try to recall the worst road trip you have ever experienced. Maybe it was leaving Paris for the South on 1 August. Or, possibly you were driving on the périphérique when there was an accident. Some of you will remember the scene with an endless line of cars in the classic 1967 Godard film Week-end. For me, it is the childhood experience 40 plus years ago of driving around Italy with my family. We would be cruising along the autostrada, when suddenly everyone would completely stop. Emergency vehicles rushed by, sirens blaring, on the shoulder of the road as we watched. I found this entertaining. My parents did not. And when, an hour or two later, traffic started moving again, we would eventually drive by some wreckage - a burned out hulk of a car or truck - that had been pushed off to the side of the road. The rules of the road making the financial system safe for everyone 2011-11-03T16:14:00Z BIS Cecchetti PDF version http://www.bis.org/speeches/sp111103.pdf Stephen G Cecchetti Cecchetti Mr Economic Adviser, Head of Monetary and Economic Department Bank for International Settlements http://www.bis.org/speeches/sp111026.htm Speech by Mr Hervé Hannoun, Deputy General Manager of the BIS, at the Financial Stability Institute High-Level Meeting, Abu Dhabi, UAE, 26 October 2011. The sovereign debt strains in most advanced economies have focused attention on the treatment of sovereign risk in banking regulation and supervision. This speech highlights the recent rise in sovereign risk and the exposures of banks to some sovereigns as reflected in BIS data. Then it reviews recent criticisms of the ... Sovereign risk in bank regulation and supervision: Where do we stand? 2011-10-26T13:44:00Z The sovereign debt strains in most advanced economies have focused attention on the treatment of sovereign risk in banking regulation and supervision. This speech highlights the recent rise in sovereign risk and the exposures of banks to some sovereigns as reflected in BIS data. Then it reviews recent criticisms of the supervisory treatment of sovereign risk. It argues that complacent pricing and accumulation of sovereign risk was largely a market outcome that should not be laid at Basel II's door. On the contrary, the treatment by large banks of sovereign credit as risk-free should be regarded as inconsistent with Basel II. Sovereigns should aim to restore their low-risk (if not risk-free) status in the bond market through fiscal reform and consolidation and banks' exposure to sovereign risk will need to be properly measured and covered by adequate capital. Sovereign risk in bank regulation and supervision: Where do we stand? 2011-10-26T13:44:00Z BIS Hannoun Hervé Hannoun PDF version http://www.bis.org/speeches/sp111026.pdf Hervé Hannoun Hannoun Mr Deputy General Manager Bank for International Settlements http://www.bis.org/speeches/sp111019.htm Comments by Mr Stephen G Cecchetti, Economic Adviser and Head of Monetary and Economic Department of the BIS, prepared for the 10th Annual Conference of the International Association of Deposit Insurers, "Beyond the Crisis: The Need for a Strengthened Financial Stability Framework", Warsaw, Poland, 19 October 2011. I believe that "too big to fail" - the focus of this panel - is the single most important policy issue that has emerged from the crisis. In a market-based financial system, the right to succeed is the right to fail. The orderly entry and exit of firms, combined with an appropriate relationship between risk and return, means ... How to cope with the too-big-to-fail problem? 2011-10-19T14:30:00Z I believe that "too big to fail" - the focus of this panel - is the single most important policy issue that has emerged from the crisis. In a market-based financial system, the right to succeed is the right to fail. The orderly entry and exit of firms, combined with an appropriate relationship between risk and return, means that risk-takers that stand to profit also stand to lose. The too-big-to-fail problem and the associated moral hazard costs affect these core preconditions for competitive markets. That is why addressing the too-big-to-fail problem is of fundamental importance. How to cope with the too-big-to-fail problem? 2011-10-19T14:30:00Z BIS Cecchetti Stephen G Cecchetti Cecchetti Mr Economic Adviser, Head of Monetary and Economic Department Bank for International Settlements http://www.bis.org/speeches/sp111014.htm Speech by Mr Jaime Caruana, General Manager of the BIS, at the Bank of Portugal conference on "Basel III and the new challenges for supervisors, risk managers and auditors", Lisbon, 14 October 2011. Full, timely and global implementation of Basel III and other reforms is essential for strengthening the financial system. Responsibility for Basel III does not rest only with the regulatory community. Bank boards, senior management and risk managers all have a clear role in adapting to the new framework. Auditors also play a key part in ... Basel III: New strains and old debates - challenges for supervisors, risk managers and auditors 2011-10-14T15:30:00Z Full, timely and global implementation of Basel III and other reforms is essential for strengthening the financial system. Responsibility for Basel III does not rest only with the regulatory community. Bank boards, senior management and risk managers all have a clear role in adapting to the new framework. Auditors also play a key part in providing independent and disciplined review and feedback on management's efforts. But regulation is only part of the broader public policy agenda. We need to continue with the finalisation and implementation of regulatory reform. Safeguarding financial stability, however, requires action in all areas of public policy - including fiscal, monetary and macroprudential measures. These policies need to take a long-term view and to better internalise systemic risk. And, lastly, various institutional reforms and private sector reforms are essential if confidence in the financial system is to be restored. The private sector also has a vital part to play in building a more resilient financial system. Basel III: New strains and old debates - challenges for supervisors, risk managers and auditors 2011-10-14T15:30:00Z BIS Caruana Jaime Caruana PDF version http://www.bis.org/speeches/sp111014.pdf Jaime Caruana Caruana Mr General Manager Bank for International Settlements http://www.bis.org/speeches/sp111013.htm Remarks by Mr Stephen G Cecchetti, Economic Adviser and Head of Monetary and Economic Department of the BIS, prepared for the SEACEN-CEMLA Conference, Kuala Lumpur, 13 October 2011. In my remarks, I would like to examine three main themes, drawing out the main lessons from the crisis for central banking in the post-crisis era. They are: · The future of inflation targeting · The future of central banks' operational frameworks · The future of global central bank cooperation Monetary policy lessons learned from the crisis and the post-crisis landscape 2011-10-13T07:01:00Z In my remarks, I would like to examine three main themes, drawing out the main lessons from the crisis for central banking in the post-crisis era. They are: · The future of inflation targeting · The future of central banks' operational frameworks · The future of global central bank cooperation It is immediately clear to everyone here that we have seen each of these aspects - inflation targeting, central banks' operational frameworks and global central bank cooperation - put to the test. In each case, the experience of the last three years has changed the way in which we do and should think about how central banks go about meeting their macroeconomic stabilisation objectives. But, not only do these lessons influence how we formulate policy frameworks, they also have implications for how we should go about constructing a credible and consistent governance structure. After all, governance is the enduring core of central banking. Without appropriate governance arrangements, policymakers cannot even set out on the difficult path that they need to follow. Monetary policy lessons learned from the crisis and the post-crisis landscape 2011-10-13T07:01:00Z BIS Cecchetti PDF version http://www.bis.org/speeches/sp111013.pdf Stephen G Cecchetti Cecchetti Mr Economic Adviser, Head of Monetary and Economic Department Bank for International Settlements http://www.bis.org/speeches/sp110928.htm Remarks by Mr Stephen G Cecchetti, Economic Adviser and Head of Monetary and Economic Department of the BIS, prepared for the Myron Scholes Global Markets Forum, University of Chicago, 27 September 2011. Global imbalances: current accounts and financial flows 2011-09-28T20:00:00Z My topic today is cross-border flows. It is difficult to find anyone who would protest the increase in international trade. To give you some sense of the magnitude: in a span of 30 years, the global ratio of exports plus imports to GDP has risen from 43%, in 1980, to 59%, in 2010. Even in the United States, notoriously less open than other industrialised countries, the same measure rose from a much more modest 21% to a still relatively low 32%. The benefits we all reap from this are so easy to see that virtually no one seriously suggests reversing the tide. In fact, I would count the fact of so much more trade openness, as well as society's attitude towards it, as one of the great successes of the latter half of the 20th century. And, I consider the fact that the ugly spectre of protectionism has not raised its head during the last four crisis-ridden years as both a victory and a relief. Global imbalances: current accounts and financial flows 2011-09-28T20:00:00Z BIS Cecchetti PDF version http://www.bis.org/speeches/sp110928.pdf Stephen G Cecchetti Cecchetti Mr Economic Adviser, Head of Monetary and Economic Department Bank for International Settlements http://www.bis.org/speeches/sp110711.htm Speech by Mr Jaime Caruana, General Manager of the BIS, at the annual Pierre Werner Lecture, Luxembourg, 7 July 2011. Despite significant progress in a number of crucial areas since the global financial crisis, the global economy and financial system remain vulnerable to unexpected shocks, and the likelihood of some adverse scenarios materialising has not decreased. There remain important challenges for financial reform. These fall into four broad groups. First, there is a need to consistently implement the substantial... Regulatory reform: remaining challenges 2011-07-11T13:19:00Z Despite significant progress in a number of crucial areas since the global financial crisis, the global economy and financial system remain vulnerable to unexpected shocks, and the likelihood of some adverse scenarios materialising has not decreased. There remain important challenges for financial reform. These fall into four broad groups. First, there is a need to consistently implement the substantial reforms already agreed. Basel III raises the level and quality of capital in the system, improves risk capture, calls for the conversion of all regulatory capital to common equity at the point of non-viability and, for the first time, sets standards for liquidity. Second, there is a need to build a resilient financial system given a still weak recovery. Two studies conducted last year under the auspices of the BIS found that the growth costs of implementing Basel III, both in the transition and in the steady state, are likely to be modest, and far outweighed by the benefits. A sound recovery is contingent on having a secure financial system. Third, there is a need to complete the regulatory reform agenda. In particular, systemically important financial firms need higher loss absorption capacity and sound resolution frameworks, while the risks relating to shadow banking must be monitored and reduced. And fourth, there is a need to ensure adequate oversight, both macroprudential oversight and more proactive prudential supervision. Completing the regulatory reform agenda and seeing that it is implemented are part of the broader challenge of providing a framework for macroeconomic stability. All three elements of policy - fiscal, monetary and prudential - will need to work together to deliver strong, sustainable global growth. Regulatory reform: remaining challenges 2011-07-11T13:19:00Z BIS Caruana Jaime Caruana PDF version http://www.bis.org/speeches/sp110711.pdf Jaime Caruana Caruana Mr General Manager Bank for International Settlements http://www.bis.org/speeches/sp110707.htm Speech by Mr Jaime Caruana, General Manager of the BIS, at the South African Reserve Bank 90th Anniversary Seminar, Pretoria, 1 July 2011. Central banking is in a state of flux. The crisis pushed central banks into the front line and tested to the limit their ability to provide instant system-wide liquidity. At the same time, it highlighted a new set of challenges for monetary policymakers. The consequences for the role of central banks are likely to be far-reaching. Central banking between past and future: which way forward after the crisis? 2011-07-07T14:59:00Z Central banks face serious economic, intellectual and institutional challenges in the years ahead. In meeting these challenges, central banks should consider four guidelines. First, monetary policy strategies should allow central banks to lean against the build-up of financial imbalances even if near-term inflation remains low and stable. This calls for an extension of policy horizons beyond the typical two years. Second, the monetary policy responses to financial busts should be more balanced. The currently prevailing view, which prescribes very aggressive and prolonged monetary easing, underestimates the resulting collateral damage. Third, monetary policy should take into account spillover effects across currency areas. In a highly integrated world, purely domestically oriented policy approaches are bound to be inadequate. Fourth, central banks need operational independence in the pursuit of new tasks in financial regulation and supervision. The well known arguments for central bank independence in the context of price stability apply with even greater force in the context of financial stability. Central banking between past and future: which way forward after the crisis? 2011-07-07T14:59:00Z BIS Caruana Jaime Caruana PDF version http://www.bis.org/speeches/sp110707.pdf Jaime Caruana Caruana Mr General Manager Bank for International Settlements