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Category: Banking

  • MIL-OSI USA: Barr, Supporting Market Resilience and Financial Stability

    Source: US State of New York Federal Reserve

    Thank you, and thank you for the opportunity to speak to you today.1
    It is great to be here again, particularly because this year marks the 10th annual conference on the Treasury market, a milestone that is worth celebrating. I want to acknowledge the Federal Reserve Bank of New York for its leadership in this area, including the dedication and excellence it has brought to hosting this conference over the past decade, in collaboration with the Inter-Agency Working Group on Treasury Market Surveillance, led by the Treasury Department. The Treasury market is the means by which our government meets its financing needs in service to the American people, and it is also the bedrock of the financial system. Promoting the resilience of the Treasury market and ensuring it can continue to fulfill these roles requires the collaboration of agencies and individuals across the government along with the private sector.
    As others have pointed out today, we have made important progress since last year’s conference. The Securities and Exchange Commission has finalized a rule on central clearing of Treasury transactions, the Treasury Department has instituted a program for buying back less-liquid Treasury securities, and the Office of Financial Research is preparing for its permanent collection of data on non-centrally-cleared bilateral repurchase agreement (repo) transactions, which will support our understanding of this market segment as it evolves.
    I will share some thoughts with you on how I see the work of the Federal Reserve in supporting Treasury market resilience. Our capital and liquidity regulations, our supervision of the firms over which we have authority, and our liquidity facilities play important roles in supporting market resilience and financial stability. Earlier this month, I gave a speech where I reiterated the crucial role of capital in serving these objectives, and the need to balance resilience and efficiency in designing our rules. In that speech, I also outlined the elements of a capital re-proposal that I believe will have broad consensus at the Federal Reserve Board. The adjustments are in response to a robust public comment process, and some of them are designed to address interactions and market functioning concerns raised by commentators.
    In terms of rulemaking, today I will focus on some additional aspects of our regulatory framework—namely, enhancements to our liquidity regulations. I will share some perspective on how our liquidity regulations work together and are supportive of market functioning and the smooth implementation of monetary policy.
    The Intersection of Monetary Policy Tools and Supervision and RegulationWe consider how all of the Fed’s tools work together to support our objectives. In previous speeches, I have talked about the role of the discount window and the standing repo facility (SRF) in supporting both monetary policy implementation and financial stability, noting how important it is that eligible institutions be ready to use these facilities.2 Today I want to dig into this topic a bit more, including how these tools support monetary policy implementation through appropriate incorporation into liquidity regulations and supervisory practices.
    After the banking stress in March 2023, we saw a substantial improvement among banks of all sizes in their level of readiness to tap the discount window both in taking the necessary steps for set-up and in their pledging of collateral. Since that time, over $1 trillion in additional collateral has been pledged to the discount window, and additional banks have established access to the SRF. Both of these facilities are potential venues for monetizing assets and raising liquidity to address volatility in private funding market rates or gaps in the availability of private-market funding.
    We had been hearing that some were confused about how banks could incorporate ready access to the discount window and the SRF into their contingency funding plans and internal liquidity stress tests. Supervisors have a role in assessing the viability of large banks’ plans to meet stressed outflows in their stress scenarios, and we have been asked whether the discount window, the SRF, and also Federal Home Loan Bank advances can play a role in those scenarios. The answer to this question is “yes.”
    We provided clarity to the public in August on permissible assumptions for how firms can incorporate the discount window and the SRF into their internal liquidity stress-test scenarios. There are a couple of principles that underlie our response in the frequently asked questions we posted on the Board’s website.3 One principle is that our tools are readily available to firms. This means that we see it as acceptable and beneficial for firms to incorporate our facilities to meet liquidity needs in both planning and practice. If firms plan to use our facilities, we expect them to demonstrate ex ante that they are fully capable of doing so, including through test transactions. An additional principle underlying our approach is that, while firms should be ready to use a range of funding sources, firms need to hold sufficient highly liquid assets to meet their potential liquidity needs. That is, they need to self-insure against their own liquidity risks. A third principle is that firms should be ready and able to use private channels to turn these assets into cash, in addition to any public channels they may plan to use.
    I want to dig a bit deeper into the benefits to both individual firms and the financial system when firms incorporate Fed facilities into their stress preparedness planning. Again, a design feature of our liquidity regulations is that large banks must self-insure against major liquidity risks. Our regulations also provide flexibility in terms of the portfolio composition such banks use to do so. This flexibility allows them to adjust their portfolios based on market conditions and firm needs. A key component of this flexibility is that reserves and certain high-quality liquid assets (HQLA), such as Treasury securities, are equivalent in terms of being treated as the highest quality of liquid assets. This feature is important because, while it allows firms to manage their liquidity buffers more flexibly, it also allows for greater flexibility in our monetary policy implementation and it supports market functioning. We have heard over the years, however, that the degree of substitutability among these assets has been limited by concerns about capacity in stress for the market to turn securities into reserves immediately; these concerns are valid. This constraint can be addressed in part by the appropriate incorporation of Federal Reserve facilities into monetization plans in firms’ internal liquidity stress tests.
    When firms understand that they will not be fully constrained by the capacity of private markets or their individual credit lines to monetize HQLA immediately in stress, they can reduce their demand for reserves in favor of Treasury securities, all else being equal, for their stress planning purposes. This dynamic improves the substitutability of holding reserves and holding Treasury securities either outright or through repo transactions.
    When banks exhibit a high degree of substitutability of demand for these assets, money market functioning improves. Let me explain with an example. If a bank sees holding reserves and investing in Treasury repo as near substitutes in its liquidity portfolio, it should lend into Treasury repo markets when repo rates rise above the interest rate earned on reserves. When banks can nimbly adjust portfolios in response to price incentives, the efficiency of reserves redistribution through the system improves, and market functioning is enhanced.
    In aggregate, this activity can prevent rates from rising further, all else being equal. The point at which banks, in aggregate, have a relatively immutable demand for reserves, and are unwilling to lend them out, is evident when a small decrease in the supply of reserves results in a sharp increase in the cost to borrow them. Our monetary policy tools are well positioned to help us avoid this outcome. But, of course, greater willingness of banks to reallocate across close substitutes should help avoid the emergence of sudden pressures in money markets by reducing money market frictions.
    In 2021, the Federal Reserve launched the SRF, which, along with the discount window, should help cap upward pressure in repo markets that could spill over into the federal funds market. Use of these facilities also increases the supply of reserves in the system. The enhanced clarity for firms that Fed facilities are a fully acceptable venue to get same-day liquidity for their HQLA should help reassure firms about holding reserves and their close substitutes, such as Treasury securities, in their liquidity portfolios.
    Of course, as I stated earlier, for the largest banks, there is a requirement that they hold highly liquid assets to address their own liquidity risks. They must also be ready to use private markets to monetize these assets. It is also critical that banks recognize and manage the interest rate and liquidity risk of their securities portfolios to ensure those securities held for liquidity purposes can be monetized in stress without creating other adverse effects on a firm’s safety and soundness. In 2022 and 2023, certain large banks did not effectively manage the risks of rising rates, and suffered significant fair value losses on their securities holdings, including those in held-to-maturity (HTM) portfolios. These losses affected their ability to respond to liquidity stress, as monetizing the assets could result in realizing losses. When the banking stress hit in March 2023, these securities could not be sold to meet stressed outflows because large unrealized losses inhibited their sale without significant capital implications. This is further complicated in the case of HTM securities, which cannot be sold without risking revaluing a firm’s entire HTM portfolio. Selling HTM securities to generate liquidity would therefore have had a particularly large effect on these firms’ capital levels, likely increasing the stress on these firms. Further, some firms were unable to rely on private channels such as repo markets for monetization because they were not prepared, they were not regular participants in the market, and market participants were unwilling to lend because of counterparty credit concerns. This combination of factors meant that HTM securities that had been identified by banks as available to serve as a liquidity buffer of assets in stress could not effectively serve that function.
    Improvements to Our Liquidity RegulationsAs I have mentioned in previous speeches, to address the lessons about liquidity learned in the spring of 2023, we are exploring targeted adjustments to our current liquidity framework.4 Many firms have taken steps to improve their liquidity resilience, and the regulatory adjustments we are considering would ensure that large banks maintain better liquidity risk–management practices going forward. Improvements to our liquidity regulations will also complement the other components of our supervisory and regulatory regime by improving banks’ ability to respond to funding shocks.
    Specifically, we are exploring a requirement that larger banks maintain a minimum amount of readily available liquidity with a pool of reserves and pre-positioned collateral at the discount window, based on a fraction of their uninsured deposits. Community banks would not be covered, and we would take a tiered approach to the requirements. The collateral pre-positioned at the window could include both Treasury securities and the full range of assets eligible for pledging at the discount window. It is vital that uninsured depositors have confidence that their funds will be readily available for withdrawal, if needed, and this confidence would be enhanced by a requirement that larger banks have readily available liquidity to meet requests for withdrawal of these deposits. This requirement would be a complement to existing liquidity regulations such as those that require the internal liquidity stress tests (ILST) I described earlier as well as meeting the liquidity coverage ratio (LCR).5
    Incorporating the discount window into a readiness requirement would also reemphasize that supervisors and examiners view use of the discount window as appropriate under both normal and stressed market conditions.
    In addition, as I have discussed previously, we identified significant gaps in interest rate risk management in the March 2023 banking stress, including in portfolios of highly liquid securities. Relatedly, we saw that banks faced constraints in monetizing HTM assets with large unrealized losses in private markets because they were unable to repo these securities or sell these securities without realizing significant losses. To address these gaps, we are considering a partial limit on the extent of reliance on HTM assets in larger banks’ liquidity buffers, such as those held under the LCR and ILST requirements. These adjustments would address the known challenges of banks being able to use these assets in stress conditions.
    Finally, we are reviewing the treatment of a handful of types of deposits in the current liquidity framework. Observed behavior of different deposit types during times of stress suggests the need to recalibrate deposit outflow assumptions in our rules for certain types of depositors. We are also revisiting the scope of application of our current liquidity framework for large banks.
    These enhancements to our liquidity regulations will help bolster firms’ ability to manage liquidity shocks, and they will also be well integrated with our monetary policy tools and framework.
    Modernizing Our Tools to Meet Current and Future NeedsTurning back to the discount window, I also want to note that the discount window has served its role well in recent years, and that we are also engaging in ongoing work to improve its operations. Given the crucial role of the discount window in providing ready access to liquidity in a wide variety of market conditions, we continuously work to assess and improve its functionality while engaging with current and potential users of the window.
    Among the steps we have taken recently include that we now have an online portal, Discount Window Direct, that allows firms to request and prepay discount window loans in a more streamlined manner than was previously possible. We also recently published a request for information on discount window operations and daylight credit asking about key components of these functions. Feedback from the public will help us prioritize areas for improvement, so I strongly encourage anyone with an interest in this topic to weigh in during the comment period. Your feedback will help us ensure that the discount window continues to improve in its role of providing ready access to funding under a variety of market conditions.
    Thank you.

    1. The views I express here are my own and not necessarily those of my colleagues on the Board of Governors of the Federal Reserve System or the Federal Open Market Committee. Return to text
    2. See Michael S. Barr (2023), “The 2023 U.S. Treasury Market Conference,” speech delivered at the Federal Reserve Bank of New York, New York, November 16. Return to text
    3. See “Subparts D and O—Enhanced Prudential Standards” in Board of Governors of the Federal Reserve System (2024), “Frequently Asked Questions about Regulation YY,” webpage. Return to text
    4. See Michael S. Barr (2024), “On Building a Resilient Regulatory Framework,” speech delivered at Central Banking in the Post-Pandemic Financial System, 28th Annual Financial Markets Conference, the Federal Reserve Bank of Atlanta, Fernandina Beach, Fla., May 20. Return to text
    5. The LCR and ILST are two separate, but complementary, liquidity requirements. The LCR is a standardized liquidity measure across banks, meaning the outflow assumptions are the same for each bank. The ILST is a nonstandardized liquidity measure across banks, meaning each bank determines its own outflow assumptions, subject to supervisory input. Return to text

    MIL OSI USA News –

  • MIL-OSI United Nations: West and Central African Countries Advance Human Mobility and Climate Change in National Plans

    Source: International Organization for Migration (IOM)

    Geneva/Lomé, 25 September – Countries across West and Central Africa are taking decisive steps towards address the growing challenges of human mobility and climate change through efforts to integrating these into their national policies. This initiative marks an important milestone for the region as it moves toward more holistic, and policy driven climate action. 

    As the region grapples with rising climate-related displacement, with over 1.2 million people displaced by the recent flooding alone in 2024 compared to 624,700 people internally displaced the previous year. With the World Bank projection of up to 32 million climate migrants by 2050, governments are increasingly recognizing the need for comprehensive, forward-looking climate strategies. By prioritizing human mobility in national plans, countries are better positioned to address the dual challenges of climate change and displacement, ensuring that policies not only mitigate climate impacts but also support communities on the move.

    At a recent gathering, climate negotiators from West and Central African nations came together to discuss the critical link between climate change and human mobility. The event, co-hosted by the International Organization for Migration (IOM) alongside several United Nations agencies and environmental organizations, focused on equipping participants with the tools to integrate mobility concerns into their national adaptation plans (NAPs) and climate commitments (NDCs). This comes even as the United Nations Antonio Guterres called on all countries during the ongoing 79th session of the United Nations General Assembly (UNGA) to produce national climate action plans by 2025 to address global climate change.

    “The reality we face today is stark, climate change is not a distant threat but a growing challenge that intensifies existing vulnerabilities and creates new ones,” said Mr. Leonardo Santos Simão, Special Representative for the United Nations Secretary-General and Head of the UN Office for West Africa and the Sahel. “In West and Central Africa, extreme weather events, prolonged droughts, and rising sea levels are displacing entire communities and exacerbating competition for scarce resources.”

    The three-day event saw participants identify key opportunities to integrate human mobility considerations in climate negotiations, both at national and international levels, particularly in the lead-up to COP29 in November.  These discussions were crucial, as nations in the region seek to integrate climate-related migration and displacement into their broader climate resilience strategies.

    The event significantly featured active participation of young climate leaders and migrants from the region. They shared firsthand insights into the impact climate change is having in their communities, highlighting challenges such as increased flooding, shrinking arable land, and disrupted transhumance routes. Their innovative perspectives on integrating human mobility into national policies emphasize the need for inclusive, youth-driven solutions in regional climate strategies.  These insights underscored the urgent need for national policies that not only address climate change but also protect vulnerable populations forced to move by its impacts.

    “This training was an incredible chance for young advocates like myself to connect with experts and share ideas on the challenges we face. Integrating climate-related human mobility into our national policies is a big step forward,” said Mariam Hamzat, a climate and sustainability advocate from Nigeria.  “It’s up to us to keep pushing for these changes in West and Central Africa.” The event fostered collaboration among the nations, strengthening regional approaches to human mobility and climate change. By training negotiators to advocate for these issues at national levels and international platforms like COP 29 and amplifying the voices of young leaders, West and Central African countries are laying the groundwork for more inclusive, resilient climate policies that account for the growing realities of displacement in the region.

    “I have been impressed by the level of engagement of participants throughout the workshop, as well as with the willingness to keep on learning and understanding what human mobility entails in West and Central Africa”, observed Hind Aïssaoui Bennani, IOM Regional Specialist on climate mobility.

    The event was conducted in partnership with the United Nations Framework Convention on Climate Change (UNFCCC) Regional Coordination Centre for West and Central Africa, the United Nations Office for West Africa and the Sahel (UNOWAS), and the United Nations Environment Programme (UNEP), and in collaboration with NDC Partnership and the International Union for Conservation of Nature (IUCN). 

    For more information, please contact:

    In Dakar: 

    Hind Aïssaoui Bennani,  haissaoui@iom.int

    Joëlle Furrer, jfurrer@iom.int   

    In Geneva: 

    Chloé Lavau, clavau@iom.int

    Kennedy Okoth, kokoth@iom.int  

    MIL OSI United Nations News –

  • MIL-OSI Economics: Results of Underwriting Auctions Conducted on September 27, 2024

    Source: Reserve Bank of India

    In the underwriting auctions conducted on September 27, 2024, for Additional Competitive Underwriting (ACU) of the undernoted Government securities, the Reserve Bank of India has set the cut-off rates for underwriting commission payable to Primary Dealers as given below:

    (₹ crore)
    Nomenclature of the Security Notified Amount Minimum Underwriting Commitment (MUC) Amount Additional Competitive Underwriting Amount Accepted Total Amount underwritten ACU Commission Cut-off rate
    (paise per ₹100)
    7.04% GS 2029 12,000 6,006 5,994 12,000 0.03
    7.23% GS 2039 12,000 6,006 5,994 12,000 0.04
    7.09% GS 2054 10,000 5,019 4,981 10,000 0.09
    Auction for the sale of securities will be held on September 27, 2024.

    Ajit Prasad          
    Deputy General Manager
    (Communications)    

    Press Release: 2024-2025/1169

    MIL OSI Economics –

  • MIL-OSI China: China cuts reserve requirement ratio

    Source: China State Council Information Office 3

    File photo shows an exterior view of the People’s Bank of China in Beijing, capital of China. [Photo/Xinhua]

    China’s central bank on Friday announced a cut in the reserve requirement ratio (RRR) by 0.5 percentage points for financial institutions.

    Starting Friday, the weighted average RRR for lenders will come to around 6.6 percent, while those having already implemented a 5 percent RRR will not be involved, according to a statement of the People’s Bank of China.

    The central bank adheres to a supportive monetary policy with a strengthened intensity and more targeted regulation to create a sound monetary and financial environment for stable economic growth and high-quality development, the statement said.

    This RRR cut was first disclosed by central bank governor Pan Gongsheng at a press conference Tuesday. Pan said the RRR may be lowered further by 0.25 to 0.5 percentage points within the year depending on the liquidity situation.

    It came as part of the country’s recent stimulus package to boost the economy, which also includes measures to support the property sector and the capital market.

    MIL OSI China News –

  • MIL-OSI Economics: Money Market Operations as on September 26, 2024

    Source: Reserve Bank of India
    (Amount in ₹ crore, Rate in Per cent)
      Volume
    (One Leg)    		 Weighted
    Average Rate    		 Range
    A. Overnight Segment (I+II+III+IV) 579,199.63 6.48 5.00-6.80
         I. Call Money 12,503.25 6.54 5.10-6.70
         II. Triparty Repo 398,599.90 6.43 6.20-6.80
         III. Market Repo 166,728.48 6.58 5.00-6.80
         IV. Repo in Corporate Bond 1,368.00 6.66 6.65-6.75
    B. Term Segment      
         I. Notice Money** 99.00 6.05 6.00-6.40
         II. Term Money@@ 348.50 – 6.80-7.50
         III. Triparty Repo 4,234.60 6.56 6.35-6.65
         IV. Market Repo 618.95 6.70 6.69-6.78
         V. Repo in Corporate Bond 0.00 – –
      Auction Date Tenor (Days) Maturity Date Amount Current Rate /
    Cut off Rate
    C. Liquidity Adjustment Facility (LAF), Marginal Standing Facility (MSF) & Standing Deposit Facility (SDF)
    I. Today’s Operations
    1. Fixed Rate          
    2. Variable Rate&          
      (I) Main Operation          
         (a) Repo          
         (b) Reverse Repo          
      (II) Fine Tuning Operations          
         (a) Repo          
         (b) Reverse Repo          
    3. MSF# Thu, 26/09/2024 1 Fri, 27/09/2024 1,370.00 6.75
    4. SDFΔ# Thu, 26/09/2024 1 Fri, 27/09/2024 83,095.00 6.25
    5. Net liquidity injected from today’s operations [injection (+)/absorption (-)]*       -81,725.00  
    II. Outstanding Operations
    1. Fixed Rate          
    2. Variable Rate&          
      (I) Main Operation          
         (a) Repo Fri, 20/09/2024 14 Fri, 04/10/2024 25,002.00 6.52
         (b) Reverse Repo          
      (II) Fine Tuning Operations          
         (a) Repo          
         (b) Reverse Repo          
    3. MSF#          
    4. SDFΔ#          
    5. On Tap Targeted Long Term Repo Operations€ Mon, 04/10/2021 1095 Thu, 03/10/2024 350.00 4.00
    Mon, 15/11/2021 1095 Thu, 14/11/2024 250.00 4.00
    Mon, 27/12/2021 1095 Thu, 26/12/2024 2,275.00 4.00
    6. Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs)£ Mon, 15/11/2021 1095 Thu, 14/11/2024 105.00 4.00
    Mon, 22/11/2021 1095 Thu, 21/11/2024 100.00 4.00
    Mon, 29/11/2021 1095 Thu, 28/11/2024 305.00 4.00
    Mon, 13/12/2021 1095 Thu, 12/12/2024 150.00 4.00
    Mon, 20/12/2021 1095 Thu, 19/12/2024 100.00 4.00
    Mon, 27/12/2021 1095 Thu, 26/12/2024 255.00 4.00
    D. Standing Liquidity Facility (SLF) Availed from RBI$       8,495.66  
    E. Net liquidity injected from outstanding operations [injection (+)/absorption (-)]*     37,387.66  
    F. Net liquidity injected (outstanding including today’s operations) [injection (+)/absorption (-)]*     -44,337.34  
    G. Cash Reserves Position of Scheduled Commercial Banks
         (i) Cash balances with RBI as on September 26, 2024 1,013,463.75  
         (ii) Average daily cash reserve requirement for the fortnight ending October 04, 2024 1,005,433.00  
    H. Government of India Surplus Cash Balance Reckoned for Auction as on¥ September 26, 2024 0.00  
    I. Net durable liquidity [surplus (+)/deficit (-)] as on September 06, 2024 427,689.00  
    @ Based on Reserve Bank of India (RBI) / Clearing Corporation of India Limited (CCIL).
    – Not Applicable / No Transaction.
    ** Relates to uncollateralized transactions of 2 to 14 days tenor.
    @@ Relates to uncollateralized transactions of 15 days to one year tenor.
    $ Includes refinance facilities extended by RBI.
    & As per the Press Release No. 2019-2020/1900 dated February 06, 2020.
    Δ As per the Press Release No. 2022-2023/41 dated April 08, 2022.
    * Net liquidity is calculated as Repo+MSF+SLF-Reverse Repo-SDF.
    € As per the Press Release No. 2020-2021/520 dated October 21, 2020, Press Release No. 2020-2021/763 dated December 11, 2020, Press Release No. 2020-2021/1057 dated February 05, 2021 and Press Release No. 2021-2022/695 dated August 13, 2021.
    ¥ As per the Press Release No. 2014-2015/1971 dated March 19, 2015.
    £ As per the Press Release No. 2021-2022/181 dated May 07, 2021 and Press Release No. 2021-2022/1023 dated October 11, 2021.
    # As per the Press Release No. 2023-2024/1548 dated December 27, 2023.
    Ajit Prasad            
     Deputy General Manager
    (Communications)    
    Press Release: 2024-2025/1168

    MIL OSI Economics –

  • MIL-OSI China: Announcement on Open Market Operations No.194 [2024]

    Source: Peoples Bank of China

    Announcement on Open Market Operations No.194 [2024]

    (Open Market Operations Office, September 27, 2024)

    In order to keep liquidity adequate at a reasonable level in the banking system at quarter-end, the People’s Bank of China conducted reverse repo operations in the amount of RMB333 billion through quantity bidding at a fixed interest rate on September 27, 2024.

    Details of the Reverse Repo Operations

    Maturity

    Volume

    Rate

    14 days

    RMB333 billion

    1.65%

    Date of last update Nov. 29 2018

    2024年09月27日

    MIL OSI China News –

  • MIL-OSI China: SCIO Holds Press Conference on Providing Financial Support for High-quality Economic Development

    Source: Peoples Bank of China

    At the press conference held by the State Council Information Office (SCIO) at 9 a.m. on Tuesday, September 24, 2024, Pan Gongsheng, Governor of the People’s Bank of China (PBOC), Li Yunze, Minister of the National Financial Regulatory Administration (NFRA), and Wu Qing, Chairman of the China Securities Regulatory Commission (CSRC), briefed on the progress of providing financial support for high-quality economic development, and answered questions from the press. The transcript is as follows.

    Shou Xiaoli, Director-General of the Press Bureau of the SCIO and SCIO spokesperson: Good morning, ladies and gentlemen. Welcome to the SCIO press conference. Today we are glad to have PBOC Governor Pan Gongsheng, NFRA Minister Li Yunze, and CSRC Chairman Wu Qing at the conference. They will give introductions to their work on providing financial support for high-quality economic development and answer your questions. Now, I’ll give the floor to Mr. Pan Gongsheng.

    Pan Gongsheng, Governor of the PBOC: Thank you, Director-General Shou. Good morning, dear friends from the media! Glad to see you again. I want to thank you all for your long-standing attention and support regarding the financial sector reform and development and the work of the PBOC.

    Since the beginning of this year, the PBOC has been committed to the fundamental objective of providing financial services for the real economy, adhered to a supportive monetary policy stance and policy orientation, and made major monetary policy adjustments three times respectively in February, May, and July.

    In terms of the aggregates of monetary policy, the PBOC has adopted a variety of monetary policy tools, such as cutting the required reserve ratio (RRR) and policy rates, and bringing down the loan prime rate (LPR), to help create a favorable monetary and financial environment.

    Concerning the structure of monetary policy, the PBOC, with a focus on key links of high-quality development, has launched the central bank lending for sci-tech innovation and technological transformation in an effort to enhance financial support for sci-tech innovation and equipment upgrading and renovation. In addition, we have lowered the down payment ratio for housing mortgages, the mortgage rates, and the interest rates on personal housing provident fund loans. We have also set up the central bank lending facility for affordable housing to accelerate the destocking of housing inventory in a market-oriented manner.

    Regarding the transmission of monetary policy, we have improved the accounting method of the quarterly value-added of the financial sector, which has been adjusted from reckoning based on the growth of deposits and loans to an income-based approach. We have rectified the behavior of luring depositors with manual interest subsidy, reduced and prevented the idle circulation of funds within the financial system, activated existing financial resources that are inefficiently occupied, and enhanced the efficiency of fund use, thus improving the efficiency of monetary policy transmission.

    As for exchange rates, we let the market play a decisive role in the formation of exchange rates. We have maintained the flexibility of the exchange rate while strengthening guidance of expectations, and kept the RMB exchange rate basically stable at an adaptive and equilibrium level.

    The monetary policies have continuously delivered results. At end-August, the aggregate financing to the real economy (AFRE) registered a year-on-year growth of 8.1 percent, and RMB loans increased by 8.5 percent year on year, about 4 percentage points higher than the nominal GDP growth rate. Besides, financing costs were at historically low levels.

    In line with the decisions and arrangements made by the Communist Party of China (CPC) Central Committee and to further support stable economic growth, the PBOC will firmly adhere to a supportive monetary policy stance, intensify monetary policy adjustments, and implement more targeted adjustment measures, thereby fostering a favorable monetary and financial environment for the stable growth and high-quality development of the economy.

    At today’s press conference, I would like to announce several polices.

    The first is to lower the RRR and policy rates, and thus bring down the benchmark market rates. The second is to cut interest rates on existing home loans and unify the minimum down payment ratio. The third is to launch new monetary policy tools to support stable development of the stock market.

    First, we will cut the RRR and policy rates. We will lower the RRR by 0.5 percentage points, injecting approximately RMB1 trillion of long-term liquidity into the market in the days to come. We may further cut the RRR by 0.25 to 0.5 percentage points within the year, depending on liquidity conditions in the market. As for the central bank policy rates, we will lower the 7-day reverse repo rate by 0.2 percentage points from the current 1.7 percent to 1.5 percent. Meanwhile, we will bring down both the LPR and deposit rates, and thus keep net interest margins (NIMs) of commercial banks stable.

    Second, we will cut interest rates on existing home loans and unify the minimum down payment ratio for personal housing loans. To achieve that, we will guide commercial banks to lower the interest rate on existing home loans to a level close to that on newly issued loans, with an anticipated average decline of approximately 0.5 percentage points. We will unify the minimum down payment ratio for first- and second-home mortgages, with the nationwide minimum down payment ratio for second homes to be reduced from 25 percent to 15 percent. As for the RMB300 billion of central bank lending facility for affordable housing launched by the PBOC in May, the proportion of its funding support for banks and purchasing entities will be raised from the original 60 percent to 100 percent, so as to enhance market-oriented incentives for them. Together with the NFRA, we will extend the term of policies on commercial property loans and the “16-Point Plan”, which are set to expire by the end of this year, until the end of 2026.

    Third, we will launch new monetary policy tools to support stable development of the stock market. One is to establish a swap facility for securities, fund and insurance companies to support eligible institutions in obtaining liquidity from the central bank by pledging their assets. This facility will significantly enhance these institutions’ ability to raise funds and increase stock holdings. The other is to launch a special central bank lending to guide banks to provide loans to listed companies and their major shareholders for buying back shares and increasing stock holdings.

    For the above-mentioned policy measures, we will release policy documents or announcements item by item on the PBOC’s official website.

    This is my brief introduction. Next, I am glad to answer your questions together with Minister Li Yunze and Chairman Wu Qing. Thank you!

    CCTV: We know that so far this year, the PBOC has carried out three major adjustments of monetary policy. As Governor Pan just mentioned, there will be further reductions of the RRRs and the policy rates. People are widely concerned about the policies on aggregates as they will play an important role in stabilizing growth. So would you explain these policies in more detail? Thank you.

    Pan Gongsheng: Aggregates in monetary policy have been of great concern both to the public and in the market. As I have said on different occasions, the PBOC will adhere to a supportive monetary policy stance by stepping up monetary policy adjustments and enhancing their precision. We have used a mix of monetary policy tools to support stable growth of the real economy. While working on the adjustments to monetary policy tools, the PBOC has taken account of the following factors in particular. The first is to support the stable growth of the Chinese economy. The second is to push for a mild rebound in prices, an important factor to consider in developing monetary policy tools. The third is to strike a proper balance between providing support for the growth of the real economy and maintaining the soundness of the banking sector. The fourth has to do with the exchange rate, that is, to keep the RMB exchange rate basically stable at an adaptive and equilibrium level. In addition, we have attached importance to the coordination of monetary and fiscal policies so as to support the proactive fiscal policy playing its part more effectively.

    Regarding the specific adjustments to macro policies and the policies on monetary aggregates, which I talked about in my opening remarks, here are some more details.

    First, let’s look at RRR reductions. Having lowered the RRR by 0.5 percentage points this February, the PBOC is to carry out another RRR reduction of 0.5 percentage points, which will provide approximately RMB1 trillion of long-term liquidity to the financial market. Currently, the weighted average RRR for financial institutions stands at 7 percent. Following the adjustment, it will be lowered from 8.5 percent to 8 percent for large banks and from 6.5 percent to 6 percent for medium-sized banks, with the RRR for rural financial institutions remaining at 5 percent, which has been in place for some years. With the implementation of the RRR reduction policy, China’s average RRR for the banking sector will be around 6.6 percent, still having room compared with the central banks of the other major economies of the world. Since there are three months to go before the end of the year, it is likely we will further lower the RRR by 0.25-0.5 percentage points based on changing circumstances.

    Second, turning to policy rate cuts, in July, we lowered the 7-day reverse repo rate for open market operations (OMOs), the PBOC’s main policy rate, from 1.8 percent to 1.7 percent. This time, it will be reduced by 20 basis points from 1.7 percent to 1.5 percent. With the functioning of the market-oriented mechanism for interest rate regulation, the policy rate adjustment will lead to adjustments of benchmark market rates. As a result, the medium-term lending facility (MLF) rate is expected to go down by about 0.3 percentage points, while the LPR and deposit rates will decline by 0.2-0.25 percentage points.

    Overall, this interest rate adjustment will have a neutral influence on the NIMs of banks. Although cutting the interest rates on existing home loans will affect the interest revenue of banks, it will reduce the demand of customers for advance repayment of loans. An RRR cut by the central bank is equivalent to direct provision of low-cost, long-term funds for banks. MLF operations and OMOs are the main channels through which the PBOC provides commercial banks with short- and medium-term funds, so that interest rate cuts will also reduce the funding costs for banks. What’s more, as I mentioned just now, the LPR and deposit rates are also expected to see corresponding decreases. The re-pricing effect achieved through our previous efforts on guiding deposit rates downward via the self-regulatory mechanism for interest rates will materialize in a cumulative manner.

    In formulating the plan for the policy adjustment, the PBOC team has conducted several rounds of careful, quantitative analysis and assessment, which show this interest rate adjustment will have a neutral influence on bank profits and the NIMs of banks will remain basically stable. Thank you.

    Reuters: Despite the implementation of multiple policies aimed at attracting home buyers and alleviating the loan burdens of homeowners, housing prices in China continue to decline. In some cities, overall housing prices have experienced double-digit decreases. To this end, do China’s financial regulators believe that the time has come to introduce new monetary policies? Thank you.

    Pan Gongsheng: Thank you for your question. It’s a very good question and a prevalent concern of the society. We provide support in diminishing risks and fostering healthy development for the real estate market mainly from a financial standpoint, pursuant to our responsibilities. In recent years, the PBOC has refined macro-prudential financial policies for the real estate sector. We have adopted an integrated approach to address both the supply and demand. Key measures include reducing the minimum down payment ratio several times for personal housing loans, lowering lending rates, removing the policy floor for mortgage rates, and setting up a central bank lending facility for affordable housing to facilitate the purchase of existing residential properties. To implement the decisions and arrangements made by the CPC Central Committee on promoting the stable and sound development of the real estate market, the PBOC, in collaboration with the NFRA, is about to introduce five new policies regarding the real estate finance.

    The first policy is to encourage banks to reduce the interest rates on existing mortgage loans. In August last year, the PBOC urged commercial banks to implement these reductions in an orderly manner, yielding relatively positive results. Previously, mortgage loans were adjusted with reference to the LPR, with a uniform policy floor applied across the country. However, under the new mortgage policy launched on May 17 this year, the floor has been removed. As a result, the interest rates on new mortgage loans have been further reduced relative to the LPR. This significant decline has further widened the interest rate spreads between the new and the existing mortgage loans, particularly in major cities such as Beijing, Shanghai, Shenzhen, and Guangzhou. In this context, the PBOC will guide banks to conduct batch adjustments to the interest rate on existing mortgage loans, lowering it to a level close to the newly issued. We anticipate the average reduction to be approximately 0.5 percentage points. We use the term “average” because loans are issued during various time frames, and the interest rates on existing mortgage loans vary across issuing periods, regions, and banks. This is why I say the rate of decline is an average number.

    Banks reducing the interest rates on existing mortgage loans can significantly lower the interest expenses for borrowers. We anticipate that this policy will benefit approximately 50 million households and 150 million individuals, leading to an average annual decrease in interest expenses of around RMB150 billion for households. This reduction is expected to stimulate consumption and investment, while also contributing to the decrease in prepayment. Furthermore, it will help compress the space for illicit refinancing of existing mortgages, thereby safeguarding the legitimate rights and interests of financial consumers and contributing to the stable and healthy development of the real estate market.

    This document will be officially released soon. Given numerous borrowers involved, banks need some time to make necessary technical preparations. Moving forward, we are also considering guiding commercial banks to enhance the pricing mechanism for mortgage loans. This will allow both banks and customers to make dynamic adjustments through independent negotiations based on market-oriented principles.

    The second policy is that a minimum down payment ratio of 15 percent now applies to both first- and second-home loans. In order to better support the rigid demand for housing and the needs to improve living conditions of urban and rural residents, at the national level, second-home buyers will no longer be discriminated from first-home buyers when applying for residential housing loans, with the minimum down payment ratio of 15 percent applying to both types of buyers. On May 17, the minimum down payment ratio for first-home buyers was lowered to 15 percent, while that for second-home buyers stayed at 25 percent, and from now onwards, the two will share the same ratio of 15 percent. I would like to specifically mention two points. Firstly, the local authorities may adopt city-specific policies, independently choosing to differentiate or not the first- and second-home buyers, thus setting the minimum down payment ratio within their jurisdictions. Since China is a large country, the real estate markets of different cities and regions vary greatly, so local governments may adopt differential policies to determine the minimum down payment ratio within their jurisdictions based on the floor set at the national level. Secondly, commercial banks may negotiate the specific down payment ratio with their clients, according to the risk profile and willingness of the clients. Since 15 percent is the floor for the down payment ratio, commercial banks may ask for a higher down payment after evaluating the risk of the clients. Or the client may be wealthy enough to offer a 30 percent down payment on the house. It depends on the market-based negotiation between commercial banks and individuals.

    The third policy is to extend the period of two policy measures on real estate financing. Previously, the PBOC and NFRA launched together the “16-Point Plan” and policies on commercial property loans, which have played positive roles in promoting the stable and healthy development of the real estate market and in defusing risks in the market. Among them, some temporary measures, such as the rollover of outstanding loans of property developers and commercial property loans should expire on December 31, 2024, according to previous policy design. We have made the decision together with the NFRA this time to extend the two policies from December 31, 2024 to December 31, 2026.

    The fourth policy is to improve the central bank lending for affordable housing. On May 17, the PBOC launched the central bank lending for affordable housing with a size of RMB300 billion. We guided financial institutions to support local state-owned enterprises to purchase those completed yet unsold housing at a reasonable price based on market principles and the rule of law. The purchased properties shall then be resold or rented as affordable housing. It was an important measure to reduce the housing inventory. To further enhance market-based incentives for banks and the acquiring entities, we have increased the proportion of funds provided by the PBOC from 60 percent to 100 percent for the facility. For example, previously the PBOC was to provide RMB6 billion for a RMB10 billion loan granted by a commercial bank, whereas now the PBOC will provide low-cost funding in full amount, to speed up sales of commodity housing stock.

    The fifth policy is to support the purchase of property developers’ land inventory. Apart from spending the proceeds of some local government special bonds on buying the land reserves, we are studying on allowing policy banks and commercial banks to lend to qualified enterprises to acquire the land inventory of property developers based on market principles. It is to activate the inventory of land and ease financial strains of the property developers. When necessary, the PBOC may provide support through central bank lending. We are studying the policy together with the NFRA.

    Thank you!

    Market News International: Does the Federal Reserve’s 50 bps rate cut this month leave more room for further monetary policy easing in China? How does the PBOC evaluate the impact of the Fed’s rate cut on China’s foreign exchange market? Thank you.

    Pan Gongsheng: Thank you for your questions. Recently, major economies have adjusted their monetary policy stance. We can see that the depreciation pressure of RMB has significantly been alleviated, and RMB has turned to appreciation. On September 18, the Federal Reserve cut rates by 50 bps, which was the first cut after its rate hike in the past couple of years. Meanwhile, other central banks also kicked off their easing cycle. For example, the European Central Bank has lowered the rates twice since June this year by 50 bps in total. The Bank of England cut the bank rate by 25 bps in August. The Bank of Canada and the Sveriges Riksbank also turned to rate cut. Except for the Bank of Japan, most major economies have started to cut rates. The momentum of US dollar appreciation has weakened, with the US dollar Index retreated on the whole. Since the beginning of August, the US dollar Index fell by 3 percent, which is now hovering at around 101. With the convergence of domestic and overseas monetary policy cycles, the external pressure for the RMB exchange rate to remain basically stable has largely been reduced. On September 23, the RMB was trading roughly at 7.05 against the US dollar, appreciating 2.4 percent since August.

    Since the exchange rate is a relative value of one currency to another, it will be influenced by various factors, such as the economic growth, monetary policy, financial markets, geopolitics, unexpected risk events. All these factors may impact the exchange rate.

    From the external point of view, the external environment and the path of US dollar movement are still uncertain because of geopolitical movements like the diverging economic development of different countries and the US presidential election, as well as the volatile global financial market.

    Given the domestic developments, we believe there is a solid foundation for the RMB exchange rate to remain stable.

    First, from a macro perspective, the momentum of economic recovery will be further consolidated and strengthened. The strong monetary policies launched by the PBOC will help support the real economy, promote consumer spending, and boost market confidence.

    Second, the balance of payments remains broadly stable. In the first half of the year, the current account surplus was 1.1 percent of GDP, which remained within a reasonable range.

    Third, the PBOC and the State Administration of Foreign Exchange (SAFE) attach great importance to the development of the foreign exchange market. Market participants have become more mature, trading behaviors have been more rational, and market resilience has significantly improved. In the first half of this year, the proportion of import and export companies hedging exchange rate risks reached 27 percent, and the proportion of cross-border trade in goods settled in RMB registered 30 percent. These two figures do not overlap. Therefore, if we add the two figures, we can conclude that around 50 percent of companies are not that vulnerable to exchange rate risks in foreign trade. As the PBOC has communicated to the market on several occasions, in the context of two-way fluctuations in the RMB exchange rate, market participants should treat exchange rate volatility rationally, adopt the philosophy of risk neutrality, and refrain from “betting on exchange rate directions” or “betting on unilateral development”. Enterprises should focus on their main businesses, and financial institutions should continue to serve the real economy well.

    The PBOC’s stance on exchange rate policy is clear and transparent. The key points are as follows: first, we adhere to the decisive role of the market in exchange rate formation and maintain the elasticity of exchange rate; second, we need to strengthen expectation management to prevent the formation of a one-sided and self-fulfilling expectation in the foreign exchange market, guard against the risk of exchange rate overshooting, and keep the RMB exchange rate basically stable at an adaptive and equilibrium level.

    Thank you!

    CNBC Reporter: Analysts believe that the decline in Chinese government bond yields is partly due to market expectations of slower economic growth and an accommodative monetary policy stance. What is the PBOC’s response to this? What measures will be taken? Thank you.

    Pan Gongsheng: The discussion on this topic has cooled down recently, though there was a lot of hype earlier. The PBOC has communicated with the market in an appropriate manner for multiple times. The earlier decline in Chinese government bond yields was due to several factors. For instance, the PBOC guided market interest rates to move down through policy rates, and the .government bond issuance was relatively slow in the early period. Besides, small and medium-sized financial institutions lacked risk awareness and swarmed to the market, creating the effect of herd flock and exacerbating the situation. Driven by the market, China’s current long-term government bond yield hovers around 2.1 percent. The PBOC respects the role of the market. Undoubtedly, this has created a favorable monetary environment for China to implement proactive fiscal policy.

    However, it should be noted that interest rate risk is an important part of risk management of financial institutions. The case of Silicon Valley Bank in the United States is highly instructive as a risk event. As we are all aware, it reminds us that central banks need to observe and assess market risks from a macro-prudential management perspective and take appropriate measures to mitigate and prevent the accumulation of risks. This is an important mandate of central banks.

    Currently, as an important price signal, the government bond yield curve still has flaws such as insufficient long-end pricing and lack of stability. The PBOC has issued risk warnings regarding long-term government bond yields and has strengthened communication with the market to prevent the potential systemic risk of a one-sided decline in long-term government bond yields incurred by the effect of herd flock.

    Maintaining trading order in the bond market is also a mandate of central banks. Recently, the PBOC has identified violations in the bond market such as price manipulation, account lending, and tunneling. We will step up efforts to crack down on violations in the interbank bond market and keep the public updated on the developments. The National Association of Financial Market Institutional Investors (NAFMII) have already informed the public of several cases under investigation. Once the investigations are completed, we will make an announcement to the public.

    In recent years, as financial markets develop rapidly in China, the bond market have gradually expanded and deepened. The conditions for the central bank to purchase and sell government bonds as a way of injecting base money through the secondary market have been basically satisfied. I elaborated on our corresponding plan at the Lujiazui Forum on June 19. Currently, the PBOC has incorporated the purchasing and selling of government bonds into the monetary policy toolkit and begun to implement the instrument. Our operations are highly transparent, the information of which are available to the public on our official websites. We are also working with the Ministry of Finance to study on improving the issuance pace, maturity structure, and custody system of government bonds. The purchase and sale of government bonds by the PBOC in the secondary market will be progressive.

    Thank you!

    Financial News reporter: What are the main considerations for launching securities fund insurance swap facility and special central bank lending for listed companies and major shareholders to buy back shares and raise holdings? How will the PBOC conduct these operations? Thank you.

    Pan Gongsheng: Thank you for your questions. In order to maintain stability of China’s capital market and boost investor confidence, the PBOC, based on the international experiences and our own practices, has aligned with the CSRC and the NFRA and launched two structural monetary policy tools to support stable development of the capital market. This is also the first time that PBOC has innovated structural monetary policy tools to support the capital market.

    The first tool is a swap facility for securities, fund, and insurance companies. This facility supports eligible securities, fund and insurance companies, as determined by the CSRC and NFRA under specific regulations, in swapping their holdings of bonds, stock ETFs, and constituent stocks of the CSI 300 Index as collateral for high-liquidity assets like government bonds and central bank bills from the PBOC. Government bonds and central bank bills differ significantly from other assets held by market institutions in terms of credit rating and liquidity. Many assets held by institutions currently suffer from poor liquidity due to prevailing market conditions. By swapping these assets with the PBOC, market institutions can obtain higher-quality, more liquid assets, which will greatly improve their ability to raise funds and increase stock holdings. We plan to launch this swap facility at an initial scale of RMB500 billion, which may be expanded in the future based on market developments. As I said with Chairman Wu Qing, as long as the initial RMB500 billion works well, a second RMB500 billion could follow, and potentially even a third RMB500 billion. I believe this is possible, and our attitude remains open. The funds obtained under this facility can only be used for investing in the stock market.

    The second tool is central bank lending to support buybacks and holdings increase. This tool directs commercial banks to provide loans to listed companies and their major shareholders, specifically for buying back and raising holdings of the shares of the listed companies. In fact, it is a common practice in international capital markets for shareholders and listed companies to buy back shares and increase holdings. The PBOC will provide central bank lending to commercial banks in full amount, at an interest rate of 1.75 percent. The interest rate on loans provided by commercial banks to their customers is around 2.25 percent, which means a 0.5 percentage points increase. Given the current conditions, the 2.25 percent interest rate is also very low. The initial quota is RMB300 billion. If the tool works well, as I have discussed with Chairman Wu Qing, another RMB300 billion or even a third RMB300 billion could be provided. However, we need to assess the market conditions and make evaluations going forward. This tool is applicable to listed companies of different ownership, including state-owned enterprises, private enterprises, and mixed-ownership enterprises. We make no distinction between different ownership. The PBOC will closely cooperate with the CSRC and the NFRA, while cooperation from market institutions is also essential to successfully carry out this work.

    Thank you all!

    Shou Xiaoli: Thanks to our three speakers, and also thanks to our friends from the media for your participation. This is the end of today’s press conference.

    Date of last update Nov. 29 2018

    MIL OSI China News –

  • MIL-OSI China: China cuts reserve requirement ratio by 0.5 percentage points

    Source: China State Council Information Office

    File photo shows an exterior view of the People’s Bank of China in Beijing, capital of China. [Photo/Xinhua]

    China’s central bank on Friday announced a cut in the reserve requirement ratio (RRR) by 0.5 percentage points for financial institutions.

    Starting Friday, the weighted average RRR for lenders will come to around 6.6 percent, while those having already implemented a 5 percent RRR will not be involved, according to a statement of the People’s Bank of China.

    The central bank adheres to a supportive monetary policy with a strengthened intensity and more targeted regulation to create a sound monetary and financial environment for stable economic growth and high-quality development, the statement said.

    This RRR cut was first disclosed by central bank governor Pan Gongsheng at a press conference Tuesday. Pan said the RRR may be lowered further by 0.25 to 0.5 percentage points within the year depending on the liquidity situation.

    It came as part of the country’s recent stimulus package to boost the economy, which also includes measures to support the property sector and the capital market.

    MIL OSI China News –

  • MIL-OSI Economics: ADB Approves $2 Million Grant to Support Viet Nam’s Typhoon Yagi Disaster Response

    Source: Asia Development Bank

    HA NOI, VIET NAM (27 September 2024) — The Asian Development Bank (ADB) has approved a $2 million grant to assist the Government of Viet Nam in providing emergency and humanitarian services to residents affected by the super Typhoon Yagi in the northern region of the country.

    “We highly commend the extraordinary efforts of the Government and people of Viet Nam in responding to the damage caused by Typhoon Yagi,” said ADB Country Director for Viet Nam Shantanu Chakraborty. “ADB’s grant will support wider government efforts to deliver immediate humanitarian relief. ADB is also committed to working with the government on post-disaster recovery in the affected provinces to build back better and improve resilience, which is critical in the face of accelerating natural hazards.”

    The grant is funded by the Asia Pacific Disaster Response Fund, which aims to provide support to ADB’s developing member countries affected by major disasters triggered by natural hazards.

    Typhoon Yagi, the strongest typhoon to hit Viet Nam in decades, made landfall on the northern coast of the country on 7 September. As of 24 September, 337 people have been killed or reported missing and another 1,935 people injured, according to the Viet Nam Disaster and Dyke Management Authority.

    The typhoon and subsequent flooding and landslides caused widespread damage in 26 provinces, with an estimated 37 million people living in the affected areas. Initial economic loss across northern part of Viet Nam is estimated at around $2.6 billion.

    ADB has been working with other development partners to support the government’s response to the disaster, including assessing assistance needs in the affected northern provinces. ADB’s emergency assistance aims to help ensure that people living in disaster areas have access to basic medical and social services and resources to rebuild their lives and livelihoods and will continue to work closely with the government and other development partners to deliver humanitarian assistance in line with United Nations Resident Coordinator Disaster Response Plan.

    ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

    MIL OSI Economics –

  • MIL-OSI Economics: Build4Skills: Practice Guide for Procurement Practitioners

    Source: Asia Development Bank

    Designed to complement the Build4Skills Handbook, it details how to select which projects could potentially incorporate trainee programs and provides templates for projects in the energy, transport, water, urban, and social sectors. Explaining how to calculate traineeship cost estimates to be included in the bill of quantities and manage related disbursements for projects, the guide shows how to monitor trainee programs and collect feedback to ensure infrastructure projects maximize their skills development potential.

    MIL OSI Economics –

  • MIL-OSI Africa: SA’s G20 Presidency to focus more on Global South and African issues, says Lamola

    Source: South Africa News Agency

    South Africa’s G20 Presidency will be centred more on the interests of the Global South agenda, especially Africa, says International Relations and Cooperation Minister, Ronald Lamola. 

    Preparations are underway for South Africa’s G20 Presidency and hosting the G20 Summit in 2025. South Africa is expected to take over Chair of the G20 from December 1 this year, from Brazil. 

    Lamola announced that South Africa’s theme will focus on solidarity, equality and sustainable development. 

    “This theme speaks to the developmental priorities of the Global South, particularly, the African continent, which is now fully represented with the admission of the African Union (AU) in the G20,” he told delegates during the Troika high-level address at the United Nations (UN). 

    The G20 (or the Group 20) comprises 19 States, plus the European Union and the AU as of this year – bringing together the world’s major and systemically important economies. 

    The G20 operates a Troika system of hosting, where the Troika consists of the past, present, and next Presidencies. 

    Brazil’s Presidency is also in a Global South Troika – India-Brazil-South Africa. 

    Lamola stressed that South Africa will ensure that the G20 provides strategic direction towards establishing a “more equitable, representative and fit-for-purpose international order”.

    According to the Minister, the theme will also confirm South Africa’s intention to build on the efforts and successes of the G20 Presidencies of Indonesia, India and Brazil. 

    He believes this will ensure that the needs, interests and aspirations of the developing economies of the Global South, and Africa especially, drive the overall G20 agenda going forward.

    According to the Minister, South Africa’s overarching theme will also zoom in on the country’s priorities. These include accelerating efforts to achieve Sustainable Development Goals (SDGs) and the objectives of Agenda 2063 of the AU and addressing the critical issue of debt vulnerability of many countries of the global South. 

    The country will also focus on creating consensus around reform of the International Financial Architecture (IFA) and the Multilateral Development Banks (MDBs). 

    “This is critical to ensure that they become fit for purpose to adequately address sustainable development and transboundary challenges,” Lamola explained. 

    In addition, the emphasis will also be on combating climate change, which has devastating consequences for food security in developing countries.

    South Africa also hopes to address issues of predatory mining by some countries and corporations, in the quest for Africa’s raw materials and critical minerals. 

    “South Africa will take forward the outcomes of the report of the UN Secretary’s Panel on Critical Energy Transition Minerals,” Lamola said, adding that strengthening the Multilateral Trading System was also key.

    The other key issues the nation will advance include industrialisation, employment and inequality, food security, the blue economy and artificial intelligence. 

    Lamola took the time to commend Brazil President Luiz Inácio Lula da Silva’s call, as the G20 President, for the reinvigoration of multilateralism, and the reform of global governance institutions to make it more representative and inclusive.

    “We further thank Brazil for its innovative leadership in calling for this G20 meeting and inviting all UN Members.

    “This meeting today and its call to action further demonstrates the collective global solidarity in addressing current and future global challenges. South Africa will carry forward the momentum laid by Brazil on the reform of the multilateral institutions,” Lamola said. 

    Meanwhile, he said that South Africa’s G20 Presidency will mark the end of the first cycle of G20 Presidencies. 

    “We intend to undertake a review of the first cycle of G20 Presidencies. This is critical to ensure implementation. Brazil can count on us to maintain the momentum they’ve started I thank you for your attention,” he added. 

    President Cyril Ramaphosa expressed his appreciation to Brazil as the current President of the G20 for convening this meeting.

    The President also commended the excellent way Brazil has been steering the work of the G20 during its Presidency.  – SAnews.gov.za

    MIL OSI Africa –

  • MIL-OSI Economics: China to Host 10th AIIB Annual Meeting in 2025

    Source: Asia Infrastructure Investment Bank

    The Board of Governors of the Asian Infrastructure Investment Bank (AIIB) announced that the Bank’s 10th Annual Meeting will be held in Beijing in June 2025.

    A ceremony took place in Samarkand, Uzbekistan to mark the end of the 2024 AIIB Annual Meeting and the handover to the host country of the 2025 AIIB Annual Meeting.

    Lan Foan, AIIB Governor for China, Chair of the AIIB Board of Governors for 2025 and host of the 2025 AIIB Annual Meeting, received the gavel in a ceremonial transfer from Laziz Kudratov, AIIB Governor for Uzbekistan and Chair of the AIIB Board of Governors for 2024 and host of the 2024 AIIB Annual Meeting.

    “We are grateful for the continued support from both the Governments of China and Uzbekistan,” said Jin Liqun, AIIB President and Chair of the Board of Directors. “The AIIB Annual Meetings are an important opportunity to seek invaluable insights and guidance from our shareholders on our Bank’s strategic direction and initiatives. Active engagement with our shareholders has been essential for promoting transparency and cooperation, which underpins AIIB’s growth and impact.”

    “Since its establishment, with the joint support of all Members and the joint efforts of the Management and staff led by President Jin Liqun, AIIB has achieved remarkable results in its business operations and has been fully recognized by the international community,” said Minister Lan Foan. “AIIB has become a new and important member of the multilateral development bank family and has made positive contributions to promoting global economic governance reform and achieving common global development. 2025 marks the 10th anniversary of AIIB, and we look forward to reflecting on the Bank’s achievements over the past decade and collaborating to shape the development blueprint of the Bank for the next 10 years.”

    The dignitaries also expressed their appreciation to the people and government of Uzbekistan for hosting the 2024 AIIB Annual Meeting.

    About AIIB

    The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank whose mission is Financing Infrastructure for Tomorrow in Asia and beyond—infrastructure with sustainability at its core. We began operations in Beijing in 2016 and have since grown to 110 approved Members worldwide. We are capitalized at USD100 billion and AAA-rated by the major international credit rating agencies. Collaborating with partners, AIIB meets clients’ needs by unlocking new capital and investing in infrastructure that is green, technology-enabled and promotes regional connectivity.

    MIL OSI Economics –

  • MIL-OSI Economics: RBI imposes monetary penalty on The Bihar Awami Co-operative Bank Limited, Patna

    Source: Reserve Bank of India

    The Reserve Bank of India (RBI) has, by an order dated September 20, 2024, imposed a monetary penalty of ₹1.50 lakh (Rupees One Lakh Fifty thousand only) on The Bihar Awami Co-operative Bank Ltd., Patna (the bank) for contravention of the provisions of section 26A read with section 56 of the Banking Regulation Act, 1949 (BR Act) and for non-compliance with certain directions issued by RBI on ‘Know Your Customer (KYC)’. This penalty has been imposed in exercise of powers vested in RBI, conferred under the provisions of section 47A(1)(c) read with sections 46(4)(i) and 56 of BR Act.

    The statutory inspection of the bank was conducted by RBI with reference to its financial position as on March 31, 2023. Based on supervisory findings of contravention of statutory provisions and non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions.

    After considering the bank’s reply to the notice and oral submissions made by it during the personal hearing, RBI found, inter alia, that the following charges against the Bank were sustained, warranting imposition of monetary penalty.

    The bank had:

    1. failed to transfer eligible amounts to the Depositor Education and Awareness Fund within the prescribed period; and

    2. failed to review risk categorisation of its customers as per the prescribed periodicity.

    This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.

    (Puneet Pancholy)  
    Chief General Manager

    Press Release: 2024-2025/1163

    MIL OSI Economics –

  • MIL-OSI: Monarch Private Capital Closes on Tax Equity Financing for Affordable Housing and Historic Rehabilitation of 1904 Farnam in Omaha, Nebraska

    Source: GlobeNewswire (MIL-OSI)

    ATLANTA, Sept. 26, 2024 (GLOBE NEWSWIRE) — Monarch Private Capital (Monarch), a nationally recognized impact investment firm that develops, finances and manages a diversified portfolio of projects generating both federal and state tax credits, is pleased to announce the closing of tax equity financing for the historic preservation and adaptive reuse of 1904 Farnam, a major redevelopment project located in downtown Omaha, Nebraska. The $25 million development, spearheaded by Clarity Development, will transform the historic building into 54 studio and one-bedroom units, providing much-needed affordable housing for the community. The financing includes Nebraska Low-Income Housing Tax Credits (LIHTCs) as well as State Historic Tax Credits (HTCs), making it a powerful tool for community revitalization.

    The 1904 Farnam project will offer affordable housing options to tenants earning 40%, 50%, and 60% of the Area Median Income (AMI). All units will be located in a seven-story, elevator-serviced building with ground-floor commercial space, designed to support the local economy and meet community needs. The development is expected to be completed by the end of 2025.

    Originally constructed in 1927 as The Union State Bank building, 1904 Farnam is a significant part of Omaha’s architectural and economic history. The building, which exemplifies early Art Deco design, reflects the spirit of modernity that characterized the 1920s and 1930s. Situated in the heart of Omaha, it has long been a landmark of the city’s growth and development. Of note, the building is located directly across the street from Omaha’s City Hall and the District Courthouse; furthermore, Omaha’s streetcar main route from Downtown to Midtown Omaha will run down Farnam Street.

    “Being part of a development that benefits the community in such a meaningful way is a privilege,” said Rick Chukas, Partner and Managing Director of Historic Tax Credits at Monarch Private Capital. “This project not only preserves a piece of Omaha’s history but also addresses the critical need for affordable housing in the downtown area. We are proud to support developments that have a positive impact on communities.”

    “The 1904 Farnam project is a great example of how LIHTC financing can be used to create affordable housing in areas that need it most,” said Steve LeClere, Partner, LIHTC at Monarch Private Capital. “With the help of Nebraska LIHTCs, we’re able to transform a historic building into modern, affordable housing while preserving the character and history of Omaha.”

    The redevelopment of the Farnam Building continues its legacy as an integral part of the downtown business community, while providing much-needed affordable housing in Omaha. Monarch Private Capital’s involvement underscores its commitment to community impact and sustainable development.

    For more information about Monarch Private Capital and its investment initiatives, please visit http://www.monarchprivate.com.

    About Monarch Private Capital

    Monarch Private Capital manages impact investment funds that positively impact communities by creating clean power, jobs and homes. The funds provide predictable returns through the generation of federal and state tax credits. The Company offers innovative tax credit equity investments for affordable housing, historic rehabilitations, renewable energy, film and other qualified projects. Monarch Private Capital has long-term relationships with institutional and individual investors, developers, and lenders participating in these federal and state programs. Headquartered in Atlanta, Monarch has offices and professionals located throughout the United States.

    CONTACT
    Jane Rafeedie
    Monarch Private Capital
    jrafeedie@monarchprivate.com
    470-283-8431

    A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/4b1343b0-2a34-4a27-ad7b-64b884c626ef

    The MIL Network –

  • MIL-OSI United Kingdom: Manchester to host 2025 UK Space Conference

    Source: United Kingdom – Executive Government & Departments

    Space professionals from organisations across the UK will descend on Manchester in July 2025 for the UK Space Conference.

    Sponsored by the UK Space Agency, the biennial event brings together organisations with an interest in space to meet, network, discover business opportunities and help shape the future of the space sector. The event will be held at Manchester Central on 16 to 17 July 2025.

    Dr Paul Bate, Chief Executive of the UK Space Agency, said:

    Following successful conferences in Newport and Belfast, and after opening new satellite offices across the UK this year, we are excited to host the UK Space Conference in Manchester, the world’s first industrial city.

    We look forward to welcoming attendees from across the UK, forging new collaborations and championing the benefits of the space industry as a key provider of jobs, prosperity and innovation.

    The UK space sector generates £18.9 billion and employs 52,000 people – and supports critical national Infrastructure, including energy grids and healthcare services. 

    Colin Baldwin, Executive Director of UKspace, official trade association of the UK space industry, said:

    UKspace is delighted to be supporting the 2025 UK Space Conference. This biennial event, organised by and for the sector through our strong and connected ecosystem, brings us together to discuss key issues and opportunities including addressing skills challenges, supporting fit-for-purpose regulation, spreading sustainability standards and promoting private investment – all of which underpins the long-term health of the sector.

    This first UK Space Conference under the new government will enable the sector to showcase how it plays a significant role in the delivery of the Government’s five missions – high growth, safer streets, clean energy, opportunity for all and a society that is fit for the future.

    In the early 19th century, the rapid growth of Manchester’s cotton industry drove the town’s expansion, putting it at the heart of new, global networks of manufacturing and trade.  The city is now the heart of the wider region’s thriving space sector, which comprises over 180 organisations and over 2,300 space professionals – collectively termed the North West Space Cluster.

    Companies based in Manchester include graphene specialists Smart IR, who are using breakthrough technology to control infrared thermal radiation and Graphene Innovations Manchester, who have ambitions to develop human rated graphene space structures. MDA Space UK is expanding their workforce and operations in all their UK locations, including their site near Manchester Airport, where their growing team designs and delivers digital systems and payloads for telecoms satellites.

    A night time view of Manchester from space. Image: NASA

    The North West sector has been supported by investment from the UK Space Agency’s Local Growth initiative and STFC’s (Science and Technology Facilities Council) industrial cluster development, which is helping to drive its expansion, accelerate innovation and seize commercial opportunities.

    STFC’s Alan Cross, Development Manager, North West Space Cluster, said:  

    From Jodrell Bank’s early breakthroughs to launch vehicle testing at Spadeadam in Cumbria, the North West has a proud legacy of driving space exploration and innovation. Today, as the UK reaches for new frontiers, the North West’s space sector is thriving.  

    Manchester’s satellite manufacturing and the University of Liverpool’s missions to the International Space Station are just two standout examples of this, and the UK Space Conference 2025 in Manchester will showcase this vibrancy and progress.

    Dr Phil Carvil, Head of STFC’s North West Cluster Programmes said: 

    As we leverage space to tackle 21st-century challenges and prepare for humanity’s return to the Moon, the North West Space Cluster is excited to welcome the UK Space Conference 2025 to Manchester.  

    Our businesses and institutions across the region are leading the way in space innovation and collaboration, inspiring our next generations that they too can take part in shaping the future of space and benefiting society as a whole.

    Renowned for being the birthplace of scientists James Joule and John Dalton, and sparking their discoveries in thermodynamics, meteorology and atomic theory, the region now boasts world class expertise in materials science and has unique capabilities in nuclear materials for deep space applications. A University of Manchester lab holds a world-leading range of equipment for simulation of and experimentation into material behaviours in the extreme conditions of space exploration.

    The largest scientific instrument in Human history, the Square Kilometre Array Observatory, is headquartered in Cheshire alongside the University of Manchester’s prestigious Jodrell Bank Observatory. With investment from both the UK and European space agencies, the National Nuclear Laboratory is also developing the next generation of deep space power systems in Cumbria.

    Kevin Craven, CEO of ADS Group said:

    The UK space sector is growing, unlocking significant opportunities for economic growth throughout the UK whilst delivering innovative solutions to domestic and global challenges.

    I’m delighted to see the UK Space Agency take its biannual conference to Manchester and we look forward to the event as an integral part of the space sector calendar.

    In 2023 the UK Space Conference was hosted at the ICC in Belfast and brought over 1,700 leaders together from national and international industry, government and academia to Northern Ireland for three days and generated a direct economic impact of £1.7 million through visitor spend alone. Local stakeholders in Northern Ireland reported that bringing the conference to Belfast provided Northern Ireland with a unique opportunity to promote its capabilities to an influential global space audience as well as to exchange ideas, plans and encourage development and success in the emerging space age.

    Updates to this page

    Published 26 September 2024

    MIL OSI United Kingdom –

  • MIL-OSI Economics: Status of Digital Financial Literacy in Lakshadweep Islands: Bottlenecks and Way Forward

    Source: Reserve Bank of India

    Today the Reserve Bank of India placed on its website a research study titled “Status of Digital Financial Literacy in Lakshadweep Islands: Bottlenecks and Way Forward” under the Project Research Study1. The study is based on the primary data collected from all the ten inhabited islands in Lakshadweep – Agatti, Amini, Andrott, Bitra, Chetlat, Kadmat, Kalpeni, Kavaratti, Kiltan and Minicoy – to analyse the present status of digital financial literacy and digital financial inclusion. While households were the primary unit of enumeration of the survey, SHG members, bank employees, school authorities, students and business-persons in the islands were also interviewed.

    The major findings of the study are the following:

    • All individual respondents in the surveyed islands reported access to bank deposit accounts. Not just access but the usage of deposit accounts was higher with about 90 per cent of the respondents reporting an operation of their accounts for the purposes of savings.

    • Though there was no gender gap in the access to bank deposit accounts, there was a considerable difference between men and women with regard to banking habits in general, usage of deposit accounts in particular. While about 91 per cent of the men operated their accounts by themselves, the corresponding figure among women was 71 per cent.

    • Not just basic literacy but also digital literacy, assessed in terms of possession as well as competency to use mobile phones and computers, was found to be high among the survey respondents.

    • Automated Teller Machines (ATMs) were the most popularly used means of digital banking in the islands. About 90 per cent of the respondents in the islands had ATM cards, while 80 per cent reported an actual usage of these cards. Internet banking was not widely prevalent in the islands and only about 38 per cent of the respondents used mobile banking.

    • Despite a high degree of financial inclusion and digital literacy, a major barrier towards digital financial inclusion in the islands was the poor Internet connectivity; respondents reported apprehensions about digital transaction failures, which often discouraged them from using Internet and mobile banking.

    • Only about 30 per cent of the survey respondents were familiar with digital hygiene habits assessed in terms of usage of public Internet connections, which can be risky; closing of digital payment apps after transactions; and usage of secure passwords.

    In sum, despite being secluded geographically and with limited economic activity primarily surrounding fisheries and tourism, the financial sector in the Lakshadweep islands is well-entrenched primarily on account of banks. Banks have played an important role in the financial inclusion of the islands. Going forward, strengthening of Internet and mobile network connectivity can be a key to expanding digital financial inclusion in the islands.

    (Puneet Pancholy)  
    Chief General Manager

    Press Release: 2024-2025/1162

    MIL OSI Economics –

  • MIL-OSI Economics: Monetary developments in the euro area: August 2024

    Source: European Central Bank

    26 September 2024

    Components of the broad monetary aggregate M3

    The annual growth rate of the broad monetary aggregate M3 increased to 2.9% in August 2024 from 2.3% in July, averaging 2.5% in the three months up to August. The components of M3 showed the following developments. The annual growth rate of the narrower aggregate M1, which comprises currency in circulation and overnight deposits, was -2.1% in August, compared with -3.1% in July. The annual growth rate of short-term deposits other than overnight deposits (M2-M1) decreased to 10.6% in August from 11.4% in July. The annual growth rate of marketable instruments (M3-M2) increased to 22.0% in August from 21.4% in July.

    Chart 1

    Monetary aggregates

    (annual growth rates)

    Data for monetary aggregates

    Looking at the components’ contributions to the annual growth rate of M3, the narrower aggregate M1 contributed -1.4 percentage points (up from -2.1 percentage points in July), short-term deposits other than overnight deposits (M2-M1) contributed 3.0 percentage points (down from 3.2 percentage points) and marketable instruments (M3-M2) contributed 1.3 percentage points (up from 1.2 percentage points).

    Among the holding sectors of deposits in M3, the annual growth rate of deposits placed by households increased to 2.3% in August from 2.1% in July, while the annual growth rate of deposits placed by non-financial corporations stood at 1.8% in August, compared with 1.7% in July. Finally, the annual growth rate of deposits placed by investment funds other than money market funds increased to 11.7% in August from 6.3% in July.

    Counterparts of the broad monetary aggregate M3

    The annual growth rate of M3 in August 2024, as a reflection of changes in the items on the monetary financial institution (MFI) consolidated balance sheet other than M3 (counterparts of M3), can be broken down as follows: net external assets contributed 4.0 percentage points (up from 3.8 percentage points in July), claims on the private sector contributed 1.2 percentage points (up from 0.9 percentage points), claims on general government contributed -0.4 percentage points (as in the previous month), longer-term liabilities contributed -1.8 percentage points (up from -1.9 percentage points), and the remaining counterparts of M3 contributed 0.0 percentage points (up from -0.1 percentage points).

    Chart 2

    Contribution of the M3 counterparts to the annual growth rate of M3

    (percentage points)

    Data for contribution of the M3 counterparts to the annual growth rate of M3

    Claims on euro area residents

    The annual growth rate of total claims on euro area residents increased to 0.6% in August 2024 from 0.3% in the previous month. The annual growth rate of claims on general government stood at -1.1% in August, unchanged from the previous month, while the annual growth rate of claims on the private sector increased to 1.2% in August from 0.9% in July.

    The annual growth rate of adjusted loans to the private sector (i.e. adjusted for loan transfers and notional cash pooling) increased to 1.6% in August from 1.3% in July. Among the borrowing sectors, the annual growth rate of adjusted loans to households stood at 0.6% in August, compared with 0.5% in July, while the annual growth rate of adjusted loans to non-financial corporations increased to 0.8% in August from 0.6% in July.

    Chart 3

    Adjusted loans to the private sector

    (annual growth rates)

    Data for adjusted loans to the private sector

    Notes:

    • Data in this press release are adjusted for seasonal and end-of-month calendar effects, unless stated otherwise.
    • “Private sector” refers to euro area non-MFIs excluding general government.
    • Hyperlinks lead to data that may change with subsequent releases as a result of revisions. Figures shown in annex tables are a snapshot of the data as at the time of the current release.

    MIL OSI Economics –

  • MIL-OSI Asia-Pac: Text of Vice-President’s address at the 83rd CSIR Foundation Day Celebrations at the NASC Complex, New Delhi

    Source: Government of India (2)

    Posted On: 26 SEP 2024 3:06PM by PIB Delhi

    Good morning, all of you. 

    It could not have been more delightful for me, everyone present in this room is a role model for me. Your contributions are spinal, your contributions in silence are resonating with the last man in the last row, your efforts are changing Bharat. A great occasion for me to be here, this is a very distinguished premium platinum category that is defining the growth history of Bharat, home to one-sixth of humanity. 

    Professor Ajay K. Sood, rightly honoured with the civilian distinction of Padma Shri, Principal Scientific Advisor to the Government of India, his address though brief on account of constraints of time, was illuminating. He indicated synergetic stance being generated with all stakeholders to ensure sustainability of the rise of Bharat. 

    Dr. K. Radhakrishnan his lecture will be a feast to intellect, team excellence, team itself in hears excellence, team is something which is harmonious. Harmony doesn’t mean keeping your point of view to yourself, harmony means having enough space to voice the other’s point of view. It is heard with respect, not rejected by drop of a hat. Team excellence is the ultimate sublime evolution of it, then, Indian Space Odyssey and your life lessons.

    I have instructed my team to record it, I will have a look at it, as will millions, through our platform in Rajya Sabha and Parliament. 

    Dr. N. Kalaiselvi, Director General, CSIR, normally we say, the man is always in the move, gone are those days, she is always on the move, always in action, with passion, mission, and execution. 

    I very fondly remember the visit I had where she was there, I had the occasion to see for myself how the aviation landscape of skilling will be changed by what her team has created. I had the occasion to visit Dehradun and another institute in her absence, we are proud of her because she sacrificingly gives credit to everyone except herself. I was greatly touched by this reflection of Indian civilisational ethos.

    Dr. G. Mahesh he is a Chairperson of the CSIR Foundation Day Celebration, we are gratified and honoured by the presence of those who laid the firm foundations of CSIR who headed it as DGs Dr. Mashelkar is present here. 

    Dr. Samir Brahmachari  is amongst us but science is all about finding out. Everyone present here, particularly in the front row, is to be respected by us. Because like education, education never ends when you leave an institution, education is life long learning same they may have left legally CSIR but their bond continues. 

    I must mention the Central Electronics Limited chairperson, Mr. Jain, for one reason, the honourable minister, who is very passionate about this sector, he wanted to come, I dissuaded him please won’t, he was preoccupied unavoidably.

    Distinguished scientists, researchers, staff, and esteemed audience, my greetings to the entire scientific community in the country, we are beholden to this category for the contributions they have made to make a Viksit Bharat which is before us today. This day is a special day, not just for CSIR alone. This is a very special day for the nation because if we go into our historical perspective, we will find that ages ago, our Bharat had scientific prowess. We were global leaders, we were the centre of the globe when it came to scientific knowledge, the kind of discoveries and inventions that were made by us made the world proud, we lost our way somewhere, we are regaining that way. 

    It is your foundation day, but it is integrally connected with the firm foundations of Bharat, you are firming up those foundations of the most vibrant, functional democracy on the planet. You are firming up the foundations of a nation that is on the rise as never before, and this rise is unstoppable, the rise is incremental, and the destination of a developed nation by 2047 will be realised, if not earlier.

    What I see here is your activities and activities of your sister’s concerns.  It is an endorsement that we are on the way to regaining our past pristine glory in the world of science. As I said, your contributions are in silence, I am using the word “silos” in a positive sense, your activities are in silos, but they physically, positively, and affirmatively impact the lives of 1.4 billion people.

    CSIR can be defined as a catalyst scientifically and imaginatively for Ras. C for catalyst, S for scientifically, I for imaginatively, and R for rashtra. 

    Distinguished audience, it is my great honour and privilege, and it will forever be etched in my memory, that I am associating with the 83rd Foundation Day of CSIR. This is an occasion to commemorate and commend the past achievements, and also to look ahead, unfold a roadmap to be more significantly involved with the nation’s rise and global rise, because Bharat stands for Vasudev Kutumbakam.

    A journey that started in 1960, when I was in class four, and where we have come, is a recognition of the hard work you all have done. I am fully aware of the headwinds you face, the air pockets you endure, the difficult terrain you negotiate, and, on occasions, the lack of due recognition therefore an ecosystem existed earlier where you were contributing, but recognition was not forthcoming in the right form. Soothing to note that, in the last few years, recognition for the scientific community has increased. It has increased in several ways, including the government’s serious focus on it. The Prime Minister’s heart and soul are deeply connected to the scientific community. His belief in your power, prowess, and capacity to generate, at global level, those aspects of science which matter to humanity is evident. I am sure, therefore, that we are in good times.

    Now, there is an ecosystem in place where our scientists can fully exploit and expand their energy, exploit their talent, and contribute to the nation by unleashing their innovative skills. I was not surprised, because that was my expectation, but I was in disbelief when I went through the thematic exhibition, amazing things are happening. Imagine if, from bamboo, you can have wooden flooring. Imagine if, from bamboo, you can have something which far superior or equivalent to sagon teak wood and sagon teak wood life is 4 decades or so. It helps the farmer, and it creates wealth. I am making a reference only to only one, there were many such things, I was greatly touched. 

    These developments reaffirm my confidence, and the confidence of the nation, that Bharat is a factor to reckon with globally. Your tremendous accomplishments have emboldened me to assert that, in research and development, it is matter of time when we will be having our due share at the moment, we are on way to it., much remains to be done. Several energies have to converge, they have to converge diligently, they have to work togetherness and in tandem, there has to be the right amount of fiscal input.

    I am so glad that the Principal Scientific Advisor that is uppermost in his mind, you may not be aware, and it may not have been covered in the media, but he is your star batsman when it comes to securing everything for your scientific community. 

    Let me make a brief reference to the Union Budget 2024-25. He must have put his foot down, I am sure of it when the budget is formed, there are always too many claimants. He fought for your segment, got the due, and it can only be incremental henceforth. It emphasises the budget. Innovation, Research and Development, and Anusandhan – the National Research Foundation has been started. I leave it at that; you know it when a beginning is made, even by a toddler, it takes shape over the years, unstoppably. My congratulations to him, for being your advocate with the government, you are an able advocate. I am so glad. 

    The growth engine of the nation, any nation in the world, is driven by science and technology and this is fuelled by research and development, this makes the focus on research and development of paramount importance. I call upon you from this platform to come forward and generously invest in research and development. I look forward to the day when our corporates will figure in the top 20 global corporates that invest in research and development at the moment, there is none, that doesn’t mean our corporates are not doing enough, they are doing enough. In automobile and in information technology, much is being done but looking at our nation’s size, its potential, its position, and the growth trajectory on which it is, our corporates need to come forward to engage in research and development.

    The investment in research and development is lasting and this, distinguished audience, please note, has another cutting edge: soft diplomacy, if you get something, nations flock to you. We have that power, research and development is so integrated with security these days therefore, investment is for the nation. Investment is for growth. Investment is for sustainability. 

    I am concerned about one aspect in particular, and that aspect, fortunately for me, was voiced in a survey by CSIR, the sample size was 3,000. We must not do lip service to research and development, our contribution has to be substantial, the result has to be substantial, not cosmetic or superficial. We cannot just take pride in saying so much for research and development. The one doing research or development in academic institutions should not be in pursuit only of academic information. Research is not a simulation. Research is research, and I therefore appeal to everyone concerned to have SOP for it. Invest in that human resource or institution that can authentically engage in research and development. The two are separate, when I went to one of the IITs – all IITs are doing well, I am not naming the IIT for that reason – I was amazed that research and development were excellent, it was being done by professors and students. So, we will have to be on guard that merely because physical resources are committed, we cannot take pride, saying, “Oh, I have spent so much for research and development.”

    Investment in research and development, distinguished audience, has to be correlated to tangible outcomes and there are people in the front row who can evaluate what is a tangible outcome. 

    Friends, there is enough to say, but I will conclude by focusing on the state of the nation, state of the nation today is beyond my dreams. I never imagined it. I did not conceive of the earth as it is today, I did not have that contemplation. I am referring to 1989, when I was elected to the Lok Sabha. In 1990, I was a union minister. I will focus on four aspects. 

    One, we went to Jammu and Kashmir, Srinagar, as a member of the Council of Ministers. We stayed at a hotel near Dal Lake, everything was dull, not even twenty souls could be seen on the road, a state of dejection and hopelessness and it was declared in the Rajya Sabha, which I preside as chairman, that last year, two crore tourists went to Jammu and Kashmir. Where is the figure of twenty? Two crores, article 370, a temporary article of the constitution – the only article labelled as temporary was taken by some people, including those who had taken oath under the constitution to be permanent. It is no longer there.

    Second, I suffered the pain because, as a student, हमें पढ़ाया गया था कि भारत सोने की चिड़िया है। As a minister, I had the occasion to see our gold physically airlifted, to be placed in two Swiss banks to sustain our fiscal credibility, because our foreign exchange was around one billion US dollars. Now it is more than six hundred billion US dollars, mind you. We are getting things back rather than giving. I suffered the pain then when the World Bank and IMF would give us not advisories or advice, but peremptorily direct us: “Do this, otherwise…”  and now the same institutions, IMF says, India is a favourite global destination of investment and opportunity. World Bank says, digitisation of India and its penetration that happened in six years is otherwise not achievable in four decades or more. We are a role model, according to the World Bank, of digitisation, that happened there.

    Another aspect was that we had a system where corruption was rampant in power corridors, nothing could catalyse without a middleman, your pedigree was a password to opportunity and a job or a contract. Now power corridors are fully sanitised, the middleman has disappeared from the one-sixth of humanity, at least. Do we see middlemen around? No. All transactions are taking place digitally, without human interface. That is the change I never imagined. This change I am seeing myself. We were living in an era where there was privilege pedigree.some thought law was not for them, they were immune to law. They were not accountable to law, it was a concept not known to them but now, the privileged pedigree is feeling the heat of law and why not? Equality before the law is an inalienable facet of democracy. How can we call a nation a democratic nation if some people pass away more equal than others? That is the benefit to young minds and as a result of that, our youth are energised.

    The fourth point I wish to make is about the economy. I can’t even tell you the size of the Indian economy in 1990 was smaller than the city of London or Paris. Imagine. A decade ago, we were counted amongst the fragile five nations. A cliff hanging economy, a concern to the global community. Now we are a robust economy, we are amongst the five great economies of the world, we are the fifth largest, on the way to becoming the third, ahead of Japan and Germany, in two years. Our economic rise is like a plateau, affecting everyone. 

    In all this, the contribution of science is there, technology is there, corruption would have been there, Transparent, accountable governance would not have been there unless there was technology. Digitisation and penetration would not have happened but for democracy. People are adept at technology, they may not be very literate, but they know how to use the internet, how to avail themselves of services. This means the Great Marathon March for Viksit Bharat@2047. You are the major stakeholders. You may not be that visible on the screen, but you are the driving force of it. You will have to be contributing 24X7. 

    My best wishes to you, CSIR exemplifies excellence, academic brilliance and cutting-edge research. In the near future, we will doubtlessly see Bharat emerging as a global pioneer in the domains of science and technology that will help us script a new chapter in our growth story.

    Thank you so much.

    ****

    JK/RC/SM

    (Release ID: 2058962) Visitor Counter : 5

    MIL OSI Asia Pacific News –

  • MIL-OSI Banking: ICC joins Private Sector Humanitarian Alliance as founding member at UNGA 

    Source: International Chamber of Commerce

    Headline: ICC joins Private Sector Humanitarian Alliance as founding member at UNGA 

    As the world’s largest business organisation, ICC will leverage its global network in 170 countries to help respond to global disasters and humanitarian crises, in line with its purpose to enable peace, prosperity and opportunity for all.  

    “We must see improved integration of the private sector into the humanitarian architecture to sustain peace and security in the face of increasingly complex global challenges.”

    ICC Secretary General, John W. H. Denton AO.

    Despite the generosity of the international community, humanitarian emergencies remain a major challenge today. Globally, 1 in 11 people face malnutrition and food insecurity. More than 130 million people have been forced to leave behind their homes, families, and their lives in search of safety. With far-ranging consequences, sometimes for generations to come.

    PSHA is designed to bridge the divide between the humanitarian ecosystem and global businesses. With its unique platform for humanitarian coordination, PSHA has established the technological infrastructure needed to manage complex humanitarian efforts among different stakeholders, both public and private. This ensures vital resources reach those who need them most.  

    Reshaping humanitarian efforts through technology 

    PSHA’s innovative platform integrates cutting-edge data analytics, crisis intelligence, and algorithmic matching of business resources with humanitarian needs. This unique use of technology helps deliver humanitarian aid as swiftly and efficiently as possible. Improving the efficiency of humanitarian efforts not only redirects vital help toward those in need – it also ensures donors that their donations are used wisely. 

    In its first year of operation, PSHA has already demonstrated its potential to reshape global giving. PSHA successfully directed cross-sector coordination during the Caribbean hurricane season, saving lives. It led efforts to mobilise private sector resources for the Sudan crisis. It has also strengthened private sector support for humanitarian efforts in the Middle East. 

    PSHA is incubated at Schmidt Futures and operationalised under Rockefeller Philanthropy Advisors. It has signed Memoranda of Understanding with USAID, the US Department of State, and The United Nations Office for the Coordination of Humanitarian Affairs (UNOCHA). Private sector partners include Google, BCG, Vodafone Foundation, Mastercard, Henry Schein International, Miyamoto International and Flexport. 

    MIL OSI Global Banks –

  • MIL-OSI Europe: Montenegro’s digital transition starts at school

    Source: European Investment Bank

    Decades of urbanisation and funding shortages have placed a strain on Montenegro’s education system. Now, with funding from Team Europe, the country is investing in its education system to prepare students with the skills they need for the job market and the Western Balkan country’s bid to join Europe’s single market.

    The government’s new Montenegro education programme aims to transform the learning experience for generations of pupils and provide them with the skills required for innovation and growth.

    The funds will enable the reconstruction, digitalisation and equipping of 13 education facilities, including kindergartens, primary, vocational and secondary schools. The investments will create up to 1,700 new places for pupils and 530 full-time jobs for teachers, once the project is completed in 2027.

    “The education sector in Montenegro is in need of attention and faces many challenges,” says Yngve Engstrom, Head of Cooperation at the EU Delegation to Montenegro.

    “We hope that these investments will improve the conditions for Montenegrin students, teachers and other school personnel and that they will support the comprehensive reforms needed in the education sector,” he added.

    EU funds will also finance the construction of a new primary school in the capital city, Podgorica, that will use at least 20% less energy and water than comparable facilities and set a new energy efficiency standard for public buildings.

    MIL OSI Europe News –

  • MIL-OSI: RBC iShares Expands Access to BlackRock’s Award-Winning Investment Platform with Active ETFs

    Source: GlobeNewswire (MIL-OSI)

    TORONTO, Sept. 26, 2024 (GLOBE NEWSWIRE) —  Today, RBC iShares expands access to BlackRock’s award-winning investment platform with the launch of two active bond ETFs (collectively the iShares Funds).1 The iShares Funds provide clients with the best of BlackRock’s fixed income investment insights in liquid, transparent and cost-effective ETFs.

    The iShares Flexible Monthly Income ETF (XFLI, XFLI.U) invests in the BlackRock Flexible Income ETF (BINC)2, managed by Rick Rieder, Chief Investment Officer of Global Fixed Income at BlackRock. The strategy will also be available hedged to the Canadian dollar with the listing of the iShares Flexible Monthly Income ETF (CAD-Hedged)(XFLX). The iShares Funds seek to deliver monthly income by primarily allocating to hard-to-reach global fixed income sectors, such as high yield, emerging markets debt and securitized assets.

    The iShares Flexible Monthly Income ETF has now closed the initial offering of its units and the units will be listed on the Toronto Stock Exchange (TSX) when markets open today. The units of the iShares Flexible Monthly Income ETF (CAD-Hedged) are expected to be listed on the TSX when markets open on October 1, 2024.

    The iShares Funds are designed to complement core bond exposures by providing enhanced yield across the global fixed income opportunity set, unconstrained by traditional benchmarks. They leverage the scale of BlackRock’s US$2.8 trillion fixed income platform,3 providing clients with unparalleled market access.

    Rick Rieder, Chief Investment Officer of Global Fixed Income, BlackRock:

    “Today’s investment environment presents a golden age for fixed income. Investors can achieve high yields without taking on excessive risk. By staying active, agile, and well-diversified, these ETFs aim to capture historic opportunities across fixed income markets whenever and wherever they become available.”

    Helen Hayes, Head of iShares Canada, BlackRock:

    “The launch of these ETFs brings the alpha generation capabilities of BlackRock’s global fixed income platform to Canadian investors. The deep resources and specialized market insights of our Fundamental Fixed Income Team will provide investors exposure to less accessible sectors of fixed Income, further enabling opportunities to capitalize on the strong yield environment.”

    The new iShares Funds are noted in the table below and will be managed by BlackRock Asset Management Canada Limited (“BlackRock Canada”), an indirect wholly-owned subsidiary of BlackRock, Inc.

    Fund Name Ticker Management Fee4 Listing Date
    iShares Flexible Monthly Income ETF XFLI
    XFLI.U    		 0.55 % September 26, 2024
    iShares Flexible Monthly Income ETF (CAD-Hedged) XFLX 0.55 % October 1, 20245

    RBC iShares aims to help clients achieve their investment objectives by empowering them to build efficient portfolios and take control of their financial futures. RBC iShares is committed to delivering a truly differentiated ETF experience and positive outcomes for clients.

    For more information about RBC iShares, please visit https://www.rbcishares.com.

    About BlackRock        

    BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable. For additional information on BlackRock, please visit http://www.blackrock.com/corporate.

    About iShares ETFs

    iShares unlocks opportunity across markets to meet the evolving needs of investors. With more than twenty years of experience, a global line-up of 1400+ exchange traded funds (ETFs) and US$3.86 trillion in assets under management as of June 30, 2024, iShares continues to drive progress for the financial industry. iShares funds are powered by the expert portfolio and risk management of BlackRock.

    iShares® ETFs are managed by BlackRock Asset Management Canada Limited.
      
    About RBC

    Royal Bank of Canada is a global financial institution with a purpose-driven, principles-led approach to delivering leading performance. Our success comes from the 100,000+ employees who leverage their imaginations and insights to bring our vision, values and strategy to life so we can help our clients thrive and communities prosper. As Canada’s biggest bank and one of the largest in the world, based on market capitalization, we have a diversified business model with a focus on innovation and providing exceptional experiences to our more than 18 million clients in Canada, the U.S. and 27 other countries. Learn more at rbc.com.

    We are proud to support a broad range of community initiatives through donations, community investments and employee volunteer activities. See how at rbc.com/community-social-impact.

    About RBC Global Asset Management
    RBC Global Asset Management (RBC GAM) is the asset management division of Royal Bank of Canada (RBC). RBC GAM is a provider of global investment management services and solutions to institutional, high-net-worth and individual investors through separate accounts, pooled funds, mutual funds, hedge funds, exchange-traded funds and specialty investment strategies. RBC Funds, BlueBay Funds, PH&N Funds and RBC ETFs are offered by RBC Global Asset Management Inc. (RBC GAM Inc.) and distributed through authorized dealers in Canada. The RBC GAM group of companies, which includes RBC GAM Inc. (including PH&N Institutional) and RBC Indigo Asset Management Inc., manage approximately $660 billion in assets and have approximately 1,600 employees located across Canada, the United States, Europe and Asia.

    RBC iShares ETFs are comprised of RBC ETFs managed by RBC Global Asset Management Inc. and iShares ETFs managed by BlackRock Asset Management Canada Limited. Commissions, trailing commissions, management fees and expenses all may be associated with investing in ETFs. Please read the relevant prospectus before investing. ETFs are not guaranteed, their values change frequently and past performance may not be repeated. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional.

    ® / TM Trademark(s) of Royal Bank of Canada. Used under license. iSHARES is a registered trademark of BlackRock, Inc., or its subsidiaries in the United States and elsewhere. Used under license. © 2023 BlackRock Asset Management Canada Limited and RBC Global Asset Management Inc. All rights reserved.

    Contact for Media:
    Reem Jazar
    Email: reem.jazar@blackrock.com

    1 Rick Rieder, Chief Investment Officer of Global Fixed Income at BlackRock, was awarded the U.S. Morningstar Award for Investing Excellence: Outstanding Portfolio Manager on March 21, 2023.
    2 Currently, the iShares Funds will, directly or indirectly, invest all or substantially all of their assets in BINC.
    3 Source: BlackRock Q2 2024 Earnings, as of June 30, 2024.

    4 As an annualized percentage of the iShares Fund’s daily net asset value. If applicable, BlackRock Canada or an affiliate is entitled to receive a fee for acting as manager of each iShares ETF in which this iShares Fund may invest (an “underlying product fee” and together with the management fee payable to BlackRock Canada, the “total annual fee”). As the underlying product fees are embedded in the market value of the iShares ETFs in which this iShares Fund may invest, any underlying product fees are borne indirectly by this iShares Fund. BlackRock Canada will adjust the management fee payable to it by this iShares Fund to ensure that the total annual fees paid directly or indirectly to BlackRock Canada and its affiliates by this iShares Fund will not exceed the percentage of the NAV set out above. The total annual fee is exclusive of HST. Any underlying product fees borne indirectly by this iShares Fund are calculated and accrued daily and are paid not less than annually.
    5 Listing date is subject to regulatory approvals.

    The MIL Network –

  • MIL-OSI: Form 8.5 (EPT/RI)

    Source: GlobeNewswire (MIL-OSI)

    FORM 8.5 (EPT/RI)

    PUBLIC DEALING DISCLOSURE BY AN EXEMPT PRINCIPAL TRADER WITH RECOGNISED INTERMEDIARY STATUS DEALING IN A CLIENT-SERVING CAPACITY
    Rule 8.5 of the Takeover Code (the “Code”)

    1.        KEY INFORMATION

    (a)        Name of exempt principal trader: Investec Bank plc
    (b)        Name of offeror/offeree in relation to whose relevant securities this form relates:
            Use a separate form for each offeror/offeree    		 Eckoh plc
    (c)        Name of the party to the offer with which exempt principal trader is connected: Investec is Joint Broker to Eckoh plc
    (d)        Date dealing undertaken: 25th September 2024
    (e)        In addition to the company in 1(b) above, is the exempt principal trader making disclosures in respect of any other party to this offer?
            If it is a cash offer or possible cash offer, state “N/A”    		 N/A

    2.        DEALINGS BY THE EXEMPT PRINCIPAL TRADER

    Where there have been dealings in more than one class of relevant securities of the offeror or offeree named in 1(b), copy table 2(a), (b), (c) or (d) (as appropriate) for each additional class of relevant security dealt in.

    The currency of all prices and other monetary amounts should be stated.

    (a)        Purchases and sales

    Class of relevant security Purchases/ sales Total number of securities Highest price per unit paid/received Lowest price per unit paid/received

    Ordinary Shares

    Purchases

    29,191

    45.2

    45

    Ordinary Shares

    Sales

    100,833

    46.96

    45

    (b)        Cash-settled derivative transactions

    Class of relevant security Product description
    e.g. CFD    		 Nature of dealing
    e.g. opening/closing a long/short position, increasing/reducing a long/short position    		 Number of reference securities Price per unit
    N/A N/A N/A N/A N/A

    (c)        Stock-settled derivative transactions (including options)

    (i)        Writing, selling, purchasing or varying

    Class of relevant security Product description e.g. call option Writing, purchasing, selling, varying etc. Number of securities to which option relates Exercise price per unit Type
    e.g. American, European etc.    		 Expiry date Option money paid/ received per unit
    N/A N/A N/A N/A N/A N/A N/A N/A

    (ii)        Exercise

    Class of relevant security Product description
    e.g. call option    		 Exercising/ exercised against Number of securities Exercise price per unit
    N/A N/A N/A N/A N/A

    (d)        Other dealings (including subscribing for new securities)

    Class of relevant security Nature of dealing
    e.g. subscription, conversion    		 Details Price per unit (if applicable)
    N/A N/A N/A N/A

    3.        OTHER INFORMATION

    (a)        Indemnity and other dealing arrangements

    Details of any indemnity or option arrangement, or any agreement or understanding, formal or informal, relating to relevant securities which may be an inducement to deal or refrain from dealing entered into by the exempt principal trader making the disclosure and any party to the offer or any person acting in concert with a party to the offer:
    Irrevocable commitments and letters of intent should not be included. If there are no such agreements, arrangements or understandings, state “none”

    None

    (b)        Agreements, arrangements or understandings relating to options or derivatives

    Details of any agreement, arrangement or understanding, formal or informal, between the exempt principal trader making the disclosure and any other person relating to:
    (i)        the voting rights of any relevant securities under any option; or
    (ii)        the voting rights or future acquisition or disposal of any relevant securities to which any derivative is referenced:
    If there are no such agreements, arrangements or understandings, state “none”
    None
    Date of disclosure: 26thSeptember 2024
    Contact name: Priyali Bhattacharjee
    Telephone number: +91 9768034903

    Public disclosures under Rule 8 of the Code must be made to a Regulatory Information Service.

    The Panel’s Market Surveillance Unit is available for consultation in relation to the Code’s dealing disclosure requirements on +44 (0)20 7638 0129.

    The Code can be viewed on the Panel’s website at http://www.thetakeoverpanel.org.uk.

    The MIL Network –

  • MIL-OSI: HSBC Bank PLC: Pre Stabilisation Notice

    Source: GlobeNewswire (MIL-OSI)

    Aercap Sukuk Limited

    Pre Stabilisation Notice

    LONDON, Sept. 26, 2024 (GLOBE NEWSWIRE) — HSBC (contact: syndexecution@noexternalmail.hsbc.com) hereby gives notice, as Stabilisation Coordinator, that the Stabilisation Manager(s) named below may stabilise the offer of the following securities

    The securities:
    Issuer: Aercap Sukuk Limited
    Obligor (if any): International Lease Finance Corporation
    Guarantor (if any): AerCap Holdings N.V., AerCap Global Aviation Trust, AerCap Aviation Solutions B.V., AerCap Ireland Limited, AerCap Ireland Capital Designated Activity Company and AerCap U.S. Global Aviation LLC
    Aggregate nominal amount: USD Benchmark                     
    Description: Fixed due 3 October 2029
    Offer price: TBC                                           
    Other offer terms:  
    Stabilisation:
    Stabilising Manager(s): Bank ABC, Dubai Islamic Bank, Emirates NBD Capital, HSBC Bank plc, J.P. Morgan and KFH Capital
    Stabilisation period expected to start on: 26th September 2024
    Stabilisation period expected to end no later than: 1st November 2024
    Existence, maximum size & conditions of use of over-allotment facility[1]: 5% of the aggregate nominal amount
    Stabilisation Venue(s) Over the counter (OTC)

    In connection with the offer of the above securities, the Stabilisation Manager(s) may over-allot the securities or effect transactions with a view to supporting the market price of the securities at a level higher than that which might otherwise prevail. However, there is no assurance that the Stabilisation Manager(s) will take any stabilisation action and any stabilisation action, if begun, may be ended at any time. Any stabilisation action or over-allotment shall be conducted in accordance with all applicable laws and rules.
    This announcement is for information purposes only and does not constitute an invitation or offer to underwrite, subscribe for or otherwise acquire or dispose of any securities of the Issuer in any jurisdiction.

    In addition, if and to the extent that this announcement is communicated in, or the offer of the securities to which it relates is made in, any EEA Member State before the publication of a prospectus in relation to the securities which has been approved by the competent authority in that Member State in accordance with the Regulation (EU) 2017/1129 (the “Prospectus Regulation”) (or which has been approved by a competent authority in another Member State and notified to the competent authority in that Member State in accordance with the Prospectus Regulation), this announcement and the offer are only addressed to and directed at persons in that Member State who are qualified investors within the meaning of the Prospectus Regulation (or who are other persons to whom the offer may lawfully be addressed) and must not be acted on or relied on by other persons in that Member State.

    This announcement and the offer of the securities to which it relates are only addressed to and directed at persons outside the United Kingdom and persons in the United Kingdom who have professional experience in matters related to investments or who are high net worth persons within article 12(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 and must not be acted on or relied on by other persons in the United Kingdom.

    This announcement is not an offer of securities for sale into the United States. The securities have not been, and will not be, registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or an exemption from registration. There will be no public offer of securities in the United States.

    ___________
    [1]     Please note that the existence and the maximum size of any greenshoe option, the exercise period of the greenshoe option and any conditions for exercise of the greenshoe option must also be disclosed, if such option exists. In addition, the exercise of the greenshoe option must be disclosed to the public promptly, together with all appropriate details, including in particular the date of exercise and the number and nature of securities involved 

    This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit http://www.rns.com.

    The MIL Network –

  • MIL-OSI Economics: Development Asia: Promoting Gender-Inclusive Growth Through Regional Integration

    Source: Asia Development Bank

    The Impact of Economic Opportunities for Women

    Expanding economic opportunities for women trigger widespread benefits. In South Asia, equal employment opportunities for men and women could enhance incomes by 25% and increase intraregional trade of $44 billion. Despite progress in education and health outcomes, low women’s economic participation remains a major issue . In 2021, women’s labor force participation was 22%  in South Asia and 32%  in Sri Lanka, while other regions, except the Middle East and North Africa (18%), surpassed 50%. Also, a 27%  gender wage gap indicates that women in Sri Lanka earn about 20% less than men. Achieving gender parity in South Asia will take 149 years, compared to 67 years in Europe and 95 years in North America.

    Challenges and Opportunities in Regional Integration

    Unlike South Asia, regions like East Asia, Europe, and North America harness the benefits of regional integration by developing strong relationships with their neighbors. Intraregional trade make up 50% of total trade in East Asia and 22% in Sub-Saharan Africa but only 5% in South Asia. In South Asia, intraregional trade accounts for just  1% of regional GDP,  compared to 2.6% in Sub-Saharan Africa and 11% in East Asia and the Pacific.

    South Asia’s regional integration is restricted by high tariffs, non-tariff measures, lack of trust and political will, weak policy implementation, and inadequate infrastructure. Deeper regional integration offers benefits like cheaper goods for consumers, better access to inputs, and expanded market access for producers and exporters.

    Reforming Regional Integration for Gender-Inclusive Growth

    To promote gender-inclusive growth, it is essential to improve the lagging dimensions of regional integration. This process is complex and varies by country due to its multidimensional nature. The six key dimensions are trade and investment, movement of capital, regional value chains, infrastructure and connectivity, people’s mobility, and legal and institutional basis for international policy cooperation.

    Balanced progress across these dimensions leads to stronger regional integration and higher women’s economic participation. The EU, with the most evenly distributed dimensions, is the most integrated regions, with more than 50% women’s participation in the workforce.

    Figure 1: Heterogeneity in the Contribution of Multiple Dimensions of Regional Integration

    NOTE: Regions with the most evenly distributed dimensions have the highest women labor force participation, e.g., the European Union.

    SOURCE: C.Y. Park and R. Claveria. 2018. Does Regional Integration Matter for Inclusive Growth? Evidence from the Multidimensional Regional Integration Index. ADB Economics Working Paper Series. No. 559. Asian Development Bank.

    In contrast, South Asia’s uneven dimensional distribution makes it one of the least integrated and lowest women’s economic participating regions. South Asia prioritizes infrastructure, and connectivity and movement of people, and less on money and finance. Similarly, Sri Lanka has focused heavily on infrastructure, with 60% of public investment directed toward it in recent decades.

    Table 1: Identifying Specific Dimensions of Regional Integration Toward Gender-Inclusive Growth

    Country Year 2020 Highest Share Lowest Share
    Bhutan 0.524 Movement of people Institutional and social integration
    Nepal 0.518 Trade and investment Institutional and social integration
    India 0.487 Institutional and social integration Trade and investment
    Sri Lanka 0.474 Infrastructure and connectivity

    Institutional and social integration

    Money and finance
    Bangladesh 0.415 Money and finance Regional value chains
    Pakistan 0.381 Infrastructure and connectivity

    Trade and investment

    Movement of people
    Afghanistan 0.345 Infrastructure and connectivity Institutional and social integration

    NOTE: The Multidimensional Regional Integration Index (MDRII) provides a cumulative score across six dimensions: 1) Trade and Investment, 2) Money and Finance, 3) Regional Value Chain, 4) Movement of People, 5) Infrastructure and Connectivity, and 6) Institutional and Social Integration. A higher score indicates better integration. Dimensions with scores below 0.4 require significant reforms to ensure that regional integration promotes gender-inclusive sustainable growth.

    Author’s calculations basis:  C.Y. Park and R. Claveria. 2018. Does Regional Integration Matter for Inclusive Growth? Evidence from the Multidimensional Regional Integration Index. ADB Economics Working Paper Series. No. 559. Asian Development Bank.

    Strengthening institutional and social integration, alongside improvements in money and finance, could reduce gender inequality by nearly 50% in South Asia. Enhanced mobility and institutional and social integration benefit women in industry and services but not in agriculture. In developing countries, women often work in low-skilled, labor-intensive, low-skilled, and low-paid sectors—referred to as the “feminization of labor.” Regional integration can reverse this trend by increasing employment in manufacturing and services, resulting in higher wages and demand for women labor. 

    In contrast, trade and integration negatively impact women in agriculture due to limited skills and mobility. Regional integration alters the production structures, where sectors with export potential grow, and import-dependent sectors shrink. Women in shrinking sectors may face job losses, and gender segregation can limit their benefits in growing sectors. Opening specific sectors and providing opportunities for upskilling and reskilling women can mitigate these negative effects. 

    MIL OSI Economics –

  • MIL-OSI Economics: Post-turmoil bank failure management: the European challenges

    Source: Bank for International Settlements

    1. Introduction

    Let me first thank the organisers for their kind invitation to participate in this event on financial crisis management.  

    Today I plan to share with you some reflections on bank crisis management inspired by recent experience on bank failures in different jurisdictions.

    As you all know, one of the most significant policy reforms that emerged from the Great Financial Crisis (GFC) was the creation of a new bank resolution framework. Under the slogan “avoid the perception of too-big-to-fail banks”, the Financial Stability Board established new standards aimed at reducing the impact of systemic bank failures.

    The FSB’s Key Attributes of Effective Resolution Regimes for Financial Institutions contain the main elements of the new framework. The Key Attributes aim to facilitate orderly resolution of systemic entities without exposing public funds to losses. A key component of the new resolution regime is the bail-in tool that would allow resolution authorities to write down liabilities or to convert them into equity in order to absorb losses and, in some cases, recapitalise a firm in resolution.

    During the 2023 bank turmoil, crisis management frameworks in both the United States and Switzerland were directly tested. In the US, the failure of two regional banks, Silicon Valley Bank and Signature Bank, required the use of a systemic exception as authorities felt that the preservation of financial stability justified waiving the restrictions on the support that the Federal Deposit Insurance Corporation (FDIC) is allowed to provide, in order to protect all the deposits of those banks. Moreover, a special liquidity facility was established by the Federal Reserve to ease potential system-wide funding pressures.

    In Switzerland, the crisis of Credit Suisse, a global systemically important bank (G-SIB), was not managed under the new resolution framework but rather through a series of ad hoc measures taken to facilitate the absorption of Credit Suisse by UBS without the formal declaration of Credit Suisse as a failing institution. Moreover, although the measures adopted outside resolution included a substantial bail-in of some creditors, they also entailed the provision of public guarantees to support the liquidity and solvency of the resulting institution.

    Arguably, the actions taken by authorities met the primary objective of preserving financial stability. At the same time, those actions did not follow the usual procedures and, contrary to the objectives of the post-crisis reforms, required different forms of external support.

    While not directly affected by last year’s turmoil, the application of the new resolution framework in the European Union had previously shown relevant flows. In particular, the crisis of two significant Venetian banks in 2017 had to be resolved with a large amount of government intervention. That triggered a still ongoing discussion on how to improve the current crisis management framework. In particular, there is now relatively broad consensus that, at present, there is no effective mechanism to deal with crises of mid-sized banks without public support.

    My remarks will discuss some of the issues that the recent turmoil and other recent bank failure episodes in Europe have raised in relation to the current policy framework for bank crisis management.1

    2. Some issues stemming from the recent turmoil

    Resolution planning

    The speed with which apparently solvent banks became failing banks, particularly in the US, points to the need to strengthen resolution planning (FDIC (2023a)). This should first be achieved by enlarging the scope of application of meaningful resolution planning obligations to all banks that can be systemic in failure – something that is not yet the case in some jurisdictions, notably the US.

    In addition, resolution plans for international banks should address practical issues relating to the operationalisation of resolution actions – particularly bail-in – in a cross-border context. Given that debt securities earmarked to be bailed-in in resolution are typically issued in international financial centres, it is important that resolution decisions – such as a conversion of debt securities into equity – be effective in all relevant jurisdictions.

    Moreover, resolution plans should contemplate different options and not focus on just a single resolution strategy (FSB (2023a,b)). As the case of Credit Suisse shows, the preparatory work conducted around the development of the entity’s resolution plan proved very useful for managing the failure of the bank, even if the plan was not ultimately implemented. Yet the process would have been smoothed if, in addition to contemplating a massive bail-in, the plan had included provisions for a possible full or partial sale of business (SoB).

    Loss absorbency

    One of the main ingredients of the new resolution framework – and of the new resolution planning and resolvability requirements – that emerged from the crisis is the availability of sufficient resources within systemic banks’ balance sheets to absorb losses and, if needed, recapitalise the institution after resolution is triggered. In particular, the FSB has issued standards for total loss-absorbing capacity (TLAC) that all G-SIBs should comply with.

    In jurisdictions where the new resolution framework is being applied beyond G-SIBs (like the EU), there is a version of the TLAC standard, the minimum requirements for eligible liabilities (MREL), that is also binding for less systemic institutions. In other jurisdictions, such as the US, no TLAC-type requirement is applied for non-G-SIBs. Therefore, most US banks – including those failing in the recent turmoil – had no specific obligation to hold liabilities that could absorb losses in resolution beyond the capital requirements established in prudential regulation.

    However, a recent proposal by the FDIC (Gruenberg (2023) and FDIC (2023b)) would require banks with more than $100 billion in assets to satisfy minimum long-term debt requirements. The counterpart of those debt instruments on the asset side could be transferred to the acquirer, but the debt instruments themselves would be left in the residual entity to be liquidated. This would make those debt instruments act as gone-concern capital supporting the transfer transaction (Restoy (2023)).

    MREL obligations in the EU are, on average, substantially larger than the long-term debt requirements now considered in the US2. However, while the proposed US requirements can only be met with debt, MREL targets in the EU can be met with a variety of eligible liabilities that include equity, debt and even some non-covered deposits. In reality, many small and mid-sized institutions in the EU cover a large part of their MREL requirements with equity instruments.3 This is probably due to the fact that it is difficult for those banks to tap regulated debt markets, given their lack of experience and their specific business model.

    From a conceptual point of view, there is merit in, at least, limiting the eligibility of equity to satisfy gone-concern capital requirements. Experience shows that, unlike long-term debt, equity instruments tend to disappear quite quickly as a bank approaches the point of non-viability and during the resolution process itself as hidden losses emerge in the balance sheets.4  Therefore, equity, being the most powerful loss-absorbing instrument in going-concern, might simply not be available in gone-concern.

    Public support

    Finally, a word on public support. The foundational principles of the new resolution framework developed after the GFC included the objective to minimise the cost of bank failure management actions for taxpayers. However, experience – including the recent bank turmoil – shows that there are instances in which some form of external support is required to preserve financial stability and the continuity of the systemically critical functions of failing banks.

    Regular support for resolution actions is often provided by the deposit insurance fund (DIF). That support is normally capped by a least-cost restriction that prohibits the DIF from committing funds exceeding the expected cost (net of recoveries) of paying out covered deposits if the bank were liquidated (Costa et al (2022)). Additional support aimed at protecting public interest could be provided directly by the national Treasury or by dedicated funds contributed by the industry. In the US, extraordinary support for failing large systemic institutions can be provided by an orderly liquidation fund as provided for in Title II of the Dodd-Frank Act. Moreover, under the FDI Act, the least-cost restriction for FDIC support can be waived if a systemic risk exception is applied. In both cases, extraordinary external support can only be authorised through a special procedure requiring the endorsement of the regulatory agencies and the Treasury after consulting the US president.

    A completely different model is in place in the European Union, where external support can be provided by the Single Resolution Fund (SRF), built up with contributions from the industry. However, the conditions for access and the available amounts are highly restrictive.5 Moreover, beyond the SRF, the possibility of the state directly supporting resolution is almost non-existent. Since national insolvency regimes are less restrictive and allow for the provision of public liquidation aid, the failure of some European banks that could have systemic implications was in fact managed through national insolvency procedures, thereby effectively reducing the scope of application of the common resolution framework.

    Recent developments show that the minimisation of public support should remain a key objective. However, there should be no ambition to establish a resolution framework that can eliminate any possible need to use external funds to support the orderly resolution of any systemic bank.

    A specific situation in which some sort of public support would normally be required is the provision of liquidity in resolution. Once a bank has been resolved, there is no guarantee that it will immediately recover the trust of its clients and other fund providers. Therefore, there is a need to put in place an effective funding-in-resolution facility, backed by some sort of public indemnity that would allow a bank in resolution to obtain funding from the central bank even when it does not hold all the required collateral.

    3. The European challenges

    The failures of the two Venetian banks in 2017 clearly showed the internal contradictions of the European bank failure management regime. Importantly, it also illustrated the EU’s lack of an effective regime to resolve mid-sized banks, ie those deemed too large to be subject to regular piecemeal liquidation procedures but too small and unsophisticated to issue large amounts of bail-in-able liabilities (Restoy (2016)).

    Against that framework, a key flaw of the current resolution regime is the absence of effective conditions to operationalise SoB resolution strategies, which are arguably the most appropriate for mid-sized banks (Restoy et al (2020)). The tight constraints on the provision of external support to facilitate these transactions make them unfeasible in most cases. Arguably, the assets acting as counterparts of MREL could help compensate acquirers. However, strict MREL obligations can be a challenge for many mid-sized banks, which would tend to meet them with equity that – unlike debt instruments – might not be available when the bank is declared non-viable.

    Those deficiencies in the common resolution framework are particularly relevant in a context in which there is no last-recourse source of funds that could be mobilised if resolution actions are unable to meet their objectives and, in particular, preserve financial stability.

    In any case, the main weakness of the current European bank failure regime within the banking union is the absence of a common deposit insurance regime. Since the banking union’s main objective is the denationalisation of bank risk, it can scarcely be contested that the absence of a common deposit guarantee scheme renders the union not only incomplete but potentially also unable to meet its stated objectives.

    The CMDI proposal

    The legislative proposal by the European Commission (EC (2021)) for a reform of the current crisis management and deposit insurance (CMDI) regime constitutes a valuable attempt to correct some of the main flaws and inconsistencies of the current framework.

    The CMDI contains three important proposals:

    First, while the dual route for bank failure management (resolution or insolvency) is kept, the definition of “public interest” criteria to determine the application of one regime or another is clarified. In the proposal, the public interest criteria would include the expected disruption of financial stability “at the national and regional level”.

    Second, the external funding of SoB transactions is significantly strengthened by alleviating the existing financial cap for DIF support and the minimum bail-in restrictions for access to the SRF. The formulation of the least-cost constraint on DIF support for SoB transactions remains unaltered. However, in line with the US regime and the proposals made by several observers,6 the current super-preference for DIF claims in insolvency is replaced by a general depositor preference rule. Moreover, any contribution made by the DIF (together with any bail-in of eligible liabilities) would count to meet the 8% minimum bail-in required for SRF access.

    Third, while the (now more ample) available external support could not be directly considered for the purposes of MREL determination, the CMDI now formally allows the SRB to adjust MREL for banks with a preferred resolution strategy of SoB based on a set of pre-established criteria such as size, business model, risk profile or marketability.

    Naturally the CMDI could not remedy all imperfections of the current European bank failure regime, as there is not yet political support for more ambitious reforms. For instance, a key deficiency that will remain is the lack of an effective mechanism for providing liquidity in resolution. At present, there is no guarantee in the banking union that banks in resolution could satisfy the conditions required to obtain funding from the ECB/Eurosystem. That would most likely require a sort of public indemnity such as that available in other jurisdictions, including Switzerland, thanks to the emergency legislation that was passed in March 2023. While the SRF could be used to provide liquidity to banks in resolution, its current resources are worth only €80 billion. It is now foreseen that the European Stability Mechanism (ESM) could provide a backstop to the SRF as soon as the ESM Treaty is properly amended. Yet, even with the (still pending) approval of the backstop, the new maximum lending capacity (of around €140 billion) would remain quite restrictive for managing systemic bank failures in the banking union.

    More importantly, the CMDI could not make any progress on the completion of the banking union. The enlargement of the scope of the common banking union resolution regime – as opposed to the national insolvency regime – strengthens the European framework. Yet enhancing the role of national deposit insurance funds in bank resolution makes the lack of a European fund particularly problematic.

    In any event, the proposal certainly provides for a substantial technical improvement of the current framework. Resolution would arguably become the default option for all bank failures with any sort of systemic impact. At the same time, by improving the available funding for SoB transactions, the CMDI effectively expands the SRB’s ability to deal with the failures of mid-sized banks, thereby helping to address the most significant flaw of the current framework.

    Importantly, the BU resolution regime would continue to exclude the government stabilisation tool as a last-resort option. Under those conditions, the legislative framework’s ability to preserve the stability of the financial system upon the failure of a mid-sized bank would depend exclusively on the effectiveness of the existing resolution tools. In particular, the available external support from the national DIF and the SRF would need to be sufficient – together with MREL – to facilitate an SoB transaction under which deposits and other sensitive liabilities could be assumed by a suitable acquirer.

    The ongoing negotiations 

    In that context, it is somewhat worrying that in the current negotiations around the Commission’s CMDI initiative in the European Parliament, and particularly the Council, some opposition has emerged against the key aspects of the proposal aimed at enlarging the available funds to support SoB transactions. In particular, the position that the super-preference of DIF claims in insolvency should be kept seems to be gaining support, although the interpretation of the least-cost constraint could be made more flexible. Also, a number of additional conditions and obstacles would be introduced to allow DIF support to count towards the satisfaction of the 8% minimum bail-in condition for the SRF to provide support to facilitate SoB transactions.

    Those amendments to the original CMDI could put at risk the objectives of the original Commission proposal. First, as discussed before, the super-preference of DIF claims in insolvency does severely undermine the DIF’s ability to support resolution by considerably tightening the least-cost constraint, as understood today. Introducing more leeway to interpret the costs for the national DIF of paying out deposits in liquidation, by considering indirect effects on the industry, would blur the line between the roles to be played by the SRF and the national DIF, introduce uncertainty about the effective available support and provoke inconsistencies across countries.

    Moreover, introducing additional constraints and operational obstacles to reduce the minimum bail-in required to obtain support from the SRF would most likely further constrain the available funding for SoB transactions. At the very least, the timely verification that all those conditions are met could be operationally challenging given the speed with which resolution actions need to be adopted.

    In sum, there is a risk that, under some of the proposed amendments in the CMDI, the SRB could find itself unable – due to the lack of sufficient funding instruments – to deal with the failure of mid-sized banks even if they pass the now more flexible public interest test. Ultimately, that might require the SRB to transfer the responsibility to national authorities in order for them to apply national insolvency procedures including liquidation aid to be provided by the domestic sovereign. That would not only contradict the spirit of the European bank failure regime and the objectives of the new resolution framework at the global level but also challenge the very purpose of the banking union.

    4. Conclusions

    Let me conclude.

    I have covered in this presentation several possible reforms of bank failure management regimes. In general, adjustments to the current setup should aim to satisfy two basic objectives. The first is to improve the resolution framework and resolution tools to make them more effective and therefore reduce the need for government support to be provided to failing banks in order to preserve financial stability. The second is to embed sufficient flexibility and pragmatism in the arrangements as regards the use of different tools and the availability of external funds.

    In particular, there are strong reasons to extend resolution planning obligations to all banks whose failure could have adverse effects on the financial system. Crucially, resolution plans should include well defined requirements for a minimum amount of loss-absorbing liabilities in resolution. Those requirements should be calibrated to directly support the feasibility of the envisaged resolution strategy and ideally be composed primarily of debt -instruments rather than equity as the latter might well largely disappear before resolution is triggered.

    In addition, as there is no way to foresee all the possible conditions that might occur in a resolution weekend and affect the feasibility of resolution measures, planned resolution strategies should be more an array of options for deploying different tools than a rigid playbook. Importantly, experience shows that it is wise to put in place well defined procedures for the delivery of extraordinary external support in extreme circumstances. 

    Finally, the EU now has a great opportunity to address the deficiencies identified in the current bank crisis management framework, particularly with regard to the failure of mid-sized bans. The European Commission’s CMDI legislative proposal is a highly valuable and internally consistent initiative. The rest of the European authorities would do well if, despite the difficult negotiations that reflect a disparity of national interest, they manage to achieve a political compromise that would preserve the proposal’s main features and objectives.

    Many thanks.

    References

    Acharya, A, E Carletti, F Restoy and X Vives (2024): “Banking turmoil and regulatory reform”, IESE Banking Initiative and CEPR, June.

    Costa, N, B Van Roosebeke, R Vrbaski and R Walters (2022): “Counting the cost of payout: constraints for deposit insurers in funding bank failure management“, FSI Insights on policy implementation, no 45, July.

    European Commission (EC) (2021): Targeted consultation on the review of the crisis management and deposit insurance framework, January.

    Federal Deposit Insurance Corporation (FDIC) (2023a): Options for deposit insurance reform, May.

    — (2023b): Fact sheet on proposed rule to require large banks to maintain long-term debt to improve financial stability and resolution, August.

    Financial Stability Board (FSB) (2023a): 2023 bank failures: preliminary lessons learnt for resolution, October.

    — (2023b): 2023 Resolution Report: Applying lessons learnt, December.

    Garicano, L (2020): “Two proposals to resurrect the Banking Union: the Safe Portfolio Approach and SRB+”, paper prepared for ECB conference on “Fiscal policy and EMU governance”, Frankfurt, 19 December.

    Gelpern, A and N Véron (2020): “Europe’s banking union should learn the right lessons from the US”, Bruegel Blog, 29 October.

    Gruenberg (2023): “Statement by Martin J. Gruenberg, Chairman, FDIC, on the notice of proposed rulemaking on long-term debt“, August.

    Restoy, F (2016): “The challenges of the European resolution framework”, closing address of the conference “Corporate governance and credit institutions’ crises”, organised by the Mercantile Law Department, UCM (Complutense University of Madrid), Madrid, 3 November.

    — (2019): “How to improve crisis management in the banking union: a European FDIC?”, speech at the CIRSF Annual International Conference 2019 on “Financial supervision and financial stability 10 years after the crisis: achievements and next steps”, Lisbon, 4 July.

    — (2023): “MREL for sale-of-business resolution strategies“, FSI Briefs, no 20, September.

    Restoy, F, R Vrbaski and R Walters (2020): “Bank failure management in the European banking union: what’s wrong and how to fix it”, FSI Occasional Paper, no 15, July.

    Single Resolution Board (SRB) (2023):

    MIL OSI Economics –

  • MIL-OSI Europe: Monetary developments in the euro area: August 2024

    Source: European Central Bank

    26 September 2024

    Components of the broad monetary aggregate M3

    The annual growth rate of the broad monetary aggregate M3 increased to 2.9% in August 2024 from 2.3% in July, averaging 2.5% in the three months up to August. The components of M3 showed the following developments. The annual growth rate of the narrower aggregate M1, which comprises currency in circulation and overnight deposits, was -2.1% in August, compared with -3.1% in July. The annual growth rate of short-term deposits other than overnight deposits (M2-M1) decreased to 10.6% in August from 11.4% in July. The annual growth rate of marketable instruments (M3-M2) increased to 22.0% in August from 21.4% in July.

    Chart 1

    Monetary aggregates

    (annual growth rates)

    Data for monetary aggregates

    Looking at the components’ contributions to the annual growth rate of M3, the narrower aggregate M1 contributed -1.4 percentage points (up from -2.1 percentage points in July), short-term deposits other than overnight deposits (M2-M1) contributed 3.0 percentage points (down from 3.2 percentage points) and marketable instruments (M3-M2) contributed 1.3 percentage points (up from 1.2 percentage points).

    Among the holding sectors of deposits in M3, the annual growth rate of deposits placed by households increased to 2.3% in August from 2.1% in July, while the annual growth rate of deposits placed by non-financial corporations stood at 1.8% in August, compared with 1.7% in July. Finally, the annual growth rate of deposits placed by investment funds other than money market funds increased to 11.7% in August from 6.3% in July.

    Counterparts of the broad monetary aggregate M3

    The annual growth rate of M3 in August 2024, as a reflection of changes in the items on the monetary financial institution (MFI) consolidated balance sheet other than M3 (counterparts of M3), can be broken down as follows: net external assets contributed 4.0 percentage points (up from 3.8 percentage points in July), claims on the private sector contributed 1.2 percentage points (up from 0.9 percentage points), claims on general government contributed -0.4 percentage points (as in the previous month), longer-term liabilities contributed -1.8 percentage points (up from -1.9 percentage points), and the remaining counterparts of M3 contributed 0.0 percentage points (up from -0.1 percentage points).

    Chart 2

    Contribution of the M3 counterparts to the annual growth rate of M3

    (percentage points)

    Data for contribution of the M3 counterparts to the annual growth rate of M3

    Claims on euro area residents

    The annual growth rate of total claims on euro area residents increased to 0.6% in August 2024 from 0.3% in the previous month. The annual growth rate of claims on general government stood at -1.1% in August, unchanged from the previous month, while the annual growth rate of claims on the private sector increased to 1.2% in August from 0.9% in July.

    The annual growth rate of adjusted loans to the private sector (i.e. adjusted for loan transfers and notional cash pooling) increased to 1.6% in August from 1.3% in July. Among the borrowing sectors, the annual growth rate of adjusted loans to households stood at 0.6% in August, compared with 0.5% in July, while the annual growth rate of adjusted loans to non-financial corporations increased to 0.8% in August from 0.6% in July.

    Chart 3

    Adjusted loans to the private sector

    (annual growth rates)

    Data for adjusted loans to the private sector

    Notes:

    • Data in this press release are adjusted for seasonal and end-of-month calendar effects, unless stated otherwise.
    • “Private sector” refers to euro area non-MFIs excluding general government.
    • Hyperlinks lead to data that may change with subsequent releases as a result of revisions. Figures shown in annex tables are a snapshot of the data as at the time of the current release.

    MIL OSI Europe News –

  • MIL-OSI United Kingdom: Press release: PM meeting with President Abbas of the Palestinian Authority: 25 September 2024

    Source: United Kingdom – Prime Minister’s Office 10 Downing Street

    The Prime Minister met Palestinian President Mahmoud Abbas at UNGA this afternoon.

    The Prime Minister met Palestinian President Mahmoud Abbas at UNGA this afternoon.

    President Abbas opened by condemning the Hamas attacks of October 7th. He also highlighted the civilian death toll in Gaza since then, with 41k killed and 100k injured, plus 70% of infrastructure devastated. The Prime Minister agreed that the loss of civilian life had been intolerable. 

    The President and Prime Minister also condemned the increase in settler violence and settlement activity there has been on the West Bank. 

    The President and Prime Minister agreed that we need an immediate ceasefire, the release of the hostages and a surge in humanitarian aid getting in. 

    They also discussed what needed to come next in terms of supporting and reforming the Palestinian Authority and working towards a political horizon which was the only long term solution to this crisis: a viable Palestinian state along a safe and secure Israel.

    Updates to this page

    Published 26 September 2024

    MIL OSI United Kingdom –

  • MIL-OSI United Kingdom: PM meeting with President Abbas of the Palestinian Authority: 25 September 2024

    Source: United Kingdom – Executive Government & Departments

    The Prime Minister met Palestinian President Mahmoud Abbas at UNGA this afternoon.

    The Prime Minister met Palestinian President Mahmoud Abbas at UNGA this afternoon.

    President Abbas opened by condemning the Hamas attacks of October 7th. He also highlighted the civilian death toll in Gaza since then, with 41k killed and 100k injured, plus 70% of infrastructure devastated. The Prime Minister agreed that the loss of civilian life had been intolerable. 

    The President and Prime Minister also condemned the increase in settler violence and settlement activity there has been on the West Bank. 

    The President and Prime Minister agreed that we need an immediate ceasefire, the release of the hostages and a surge in humanitarian aid getting in. 

    They also discussed what needed to come next in terms of supporting and reforming the Palestinian Authority and working towards a political horizon which was the only long term solution to this crisis: a viable Palestinian state along a safe and secure Israel.

    Updates to this page

    Published 26 September 2024

    MIL OSI United Kingdom –

  • MIL-OSI Global: Easing Africa’s debt burdens: a fresh approach, based on an old idea

    Source: The Conversation – Africa – By Danny Bradlow, Professor/Senior Research Fellow, Centre for Advancement of Scholarship, University of Pretoria

    The statistics are stark: 54 governments, of which 25 are African, are spending at least 10% of their revenues on servicing their debts; 48 countries, home to 3.3 billion people, are spending more on debt service than on health or education.

    Among them, 23 African countries are spending more on debt service than on health or education.

    While the international community stands by, these countries are servicing their debts and defaulting on their development goals.

    The Group of 20’s current approach for dealing with the debts of low income countries is the Common Framework.

    It requires the debtor to first discuss its problems with the International Monetary Fund (IMF) and obtain its assessment of how much debt relief it needs. Then it must negotiate with its official creditors – international organisations, governments and government agencies – over how much debt relief they will provide. Only then can the debtor reach an agreement – on comparable terms to the official creditors – with its commercial creditors.

    Unfortunately, this process has been sub-optimal.

    One reason is that it works too slowly to meet the urgent needs of distressed borrowers. As a result, it condemns debtor countries to financial limbo. The resulting uncertainty is not in anyone’s interest. For example, Zambia has been working through the G20’s cumbersome process for more than three and a half years and has not yet finalised agreements with all its creditors.

    The need for a new approach is overwhelmingly evident. Although the current crisis has not yet become the “systemic” threat it was in the 1980s when multiple countries defaulted on their debt, it is a “silent” sovereign debt crisis.

    We propose a two-part approach that would improve the situation of sovereign debtors and their creditors. This proposal is based on the lessons we have learned from our work on the legal and economic aspects of developing country debt, particularly African debt.

    First, we suggest that official creditors and the IMF create a strategic buyer of “last resort” that can purchase the bonds of debt distressed countries and refinance them on better terms.

    Second, we recommend that all parties involved in sovereign debt restructurings adopt a set of principles that they can use to guide the debtor and its creditors in reaching an optimal agreement and monitoring its implementation.

    The current approach fails to deal effectively and fairly with both the concerns of the creditors and all the debtor’s legal obligations and responsibilities. Our proposed solution would offer debtors debt relief that does not undermine their ability to meet their other legal obligations and responsibilities, while also accommodating private creditors’ preference for cash payments.

    Our proposal is not risk-free. And buybacks are not appropriate for all debtors. Nevertheless it offers a principled and feasible approach to dealing with a silent debt crisis that threatens to undermine international efforts to address global challenges such as climate, poverty and inequality.

    It uses the IMF’s existing resources to meet both the bondholders’ preferences for immediate cash and the developing countries’ need to reduce their debt burdens in a transparent and principled way.

    It also helps the international community avoid a widespread default on debt and development.

    Bondholders are a major problem

    Foreign bondholders, who are the major creditors of many developing countries, have proven to be particularly challenging in providing substantive debt relief in a timely manner. In theory, they should be more flexible than official creditors.

    Developing countries have been paying bondholders a premium to compensate them for providing financing to borrowers that are perceived to be risky. As a result, bondholders have already received larger payouts than official creditors. Therefore, they should be better placed than official creditors to assist the debtor in the restructuring processes.

    However, despite having received large returns from defaulted bonds, bondholders have remained obstinate in debt restructurings.

    Our proposal seeks to overcome this hurdle in a way that is fair to debtors, creditors and their respective stakeholders.

    How it would work

    First, the official creditors and the IMF should create and fund a strategic buyer “of last resort” who can purchase distressed (and expensive) debt at a discount from bondholders. The buyer, now the creditor of the country in distress, can repackage the debt and sell it to the debtor country on more manageable terms. The net result is that the bondholders receive cash for their bonds, while the debtor country benefits from substantial debt relief. In addition, the debtor and its remaining official creditors benefit from a simplified debt restructuring process.

    This concept has precedent. In 1989, as part of the Highly Indebted Poor Countries Initiative, the international community’s effort to deal with the then existing debt burdens of poor countries, the World Bank Group established the Debt Reduction Facility, which helped eligible governments repurchase their external commercial debts at deep discounts. It completed 25 transactions which helped erase approximately US$10.3 billion in debt principal and over US$3.5 billion in interest arrears.

    Some individual countries have also bought back their own debt. In 2009, Ecuador repurchased 93% of its defaulted debt at a deep discount. This enabled the government to reduce its debt stock by 27% and promote economic growth in subsequent years.

    Unfortunately, the countries currently in debt distress lack sufficient foreign reserves to pursue such a strategy. Hence, they need to find a “friendly” buyer of last resort.

    The IMF is well positioned to play this role. It has the mandate to support countries during financial crises. It also has the resources to fund such a facility. It can use a mix of its own resources, including its gold reserves, and donor funding, such as a portion of the US$100 billion in Special Drawing Rights (SDR), the IMF’s own reserve currency, which rich economies committed to reallocate for development purposes.

    Such a facility, for example, would have enabled Kenya to refinance its debts at the SDR interest rate, currently at 3.75% per year, rather than at the 10.375% rate it paid in the financial markets.

    It is noteworthy that the 47 low-income countries identified as in need of debt relief have just US$60 billion in outstanding debts owed to bondholders. Our proposed buyer of last resort would help reduce the burden of these countries to manageable levels.

    Second, we propose that both debtors and creditors should commit to the following set of shared principles, based on internationally accepted norms and standards for debt restructurings.

    Guiding principles

    1. Guiding norms: Sovereign debt restructurings should be guided by six norms: credibility, responsibility, good faith, optimality, inclusiveness and effectiveness.

    Optimality means that the negotiating parties should aim to achieve an outcome that, considering the circumstances in which the parties are negotiating and their respective rights, obligations and responsibilities, offers each of them the best possible mix of economic, financial, environmental, social, human rights and governance benefits.

    2. Transparency: All parties should have access to the information that they need to make informed decisions.

    3. Due diligence: The sovereign debtor and its creditors should each undertake appropriate due diligence before concluding a sovereign debt restructuring process.

    4. Optimal outcome assessment: The parties should publicly disclose why they expect their restructuring agreement to result in an optimal outcome.

    5. Monitoring: There should be credible mechanisms for monitoring the implementation of the restructuring agreement.

    6. Inter-creditor comparability: All creditors should make a comparable contribution to the restructuring of debt.

    7. Fair burden sharing: The burden of the restructuring should be fairly allocated between the negotiating parties.

    8. Maintaining market access: The process should be designed to facilitate future market access for the borrower at affordable rates.

    The G20’s current efforts to address the silent debt crisis are failing. They are contributing to the likely failure of low income countries in Africa and the rest of the global south to offer all their residents the possibility of leading lives of dignity and opportunity.

    Danny Bradlow, in addition to his university position, is Co-Chair of the T20 task force on sovereign debt, and Co-Chair of the Academic Circle on the Right to Development.

    Marina Zucker-Marques is a co-chair for the Brazil T20 Task Force 3 on reforming the International Financial Architecture

    Kevin P. Gallagher does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

    – ref. Easing Africa’s debt burdens: a fresh approach, based on an old idea – https://theconversation.com/easing-africas-debt-burdens-a-fresh-approach-based-on-an-old-idea-239427

    MIL OSI – Global Reports –

  • MIL-OSI China: Announcement on Open Market Operations No.192 [2024]

    Source: Peoples Bank of China

    Announcement on Open Market Operations No.192 [2024]

    (Open Market Operations Office, September 25, 2024)

    The People’s Bank of China (PBOC) issued the ninth batch of central bank bills in 2024 on the Central Moneymarkets Unit (CMU) bond tendering platform of the Hong Kong Monetary Authority (HKMA) through interest rate bidding on September 25, 2024.

    Issue

    Volume

    Maturity

    Rate

    The ninth Batch of Central Bank Bills (2024) (Hong Kong)

    RMB25 billion

    6 months

    (182 days)

    1.55%

    Date of last update Nov. 29 2018

    2024年09月25日

    MIL OSI China News –