The Eurosystem and the Bank of Russia met in Moscow for their seventh high-level seminar, with the aim of further strengthening the dialogue and enhancing their relations.
Seminar discussions focused on current economic developments and the changing role of central banks in the area of monetary policy, financial stability and banking supervision in the euro area and in Russia.
Current economic developments
Russia has been experiencing robust growth, notwithstanding a slowdown recently, while the euro area is expected to undergo a gradual recovery later in 2013. Seminar participants noted that several conjunctural indicators have recently stabilised in the euro area, albeit at low levels, while persistent uncertainty continues to weigh on economic activity. Financial market confidence has improved significantly. Participants recognised the progress made in consolidating public finances, advancing structural reforms and improving governance in the euro area. The discussion also considered the strong economic links between Russia and the European Union.
The changing role of central banks – the monetary policy dimension
Participants discussed the lessons from the global financial crisis for monetary policy strategies and operational frameworks. They agreed on the importance of central bank independence to pursue the objective of price stability, along with the need for effective communication to maintain the trust of the general public in central banks’ ability to keep inflation under control. They also discussed non-standard measures in monetary policy and monetary transmission in the light of highly volatile and partly dysfunctional financial markets. Participants reviewed progress in the Bank of Russia’s transition towards inflation targeting and agreed that the close monitoring of financial market developments is a useful element in the bank’s monetary policy strategy.
The changing role of central banks – the financial stability and supervision dimension
Participants exchanged views on planned changes in the supervisory architecture in the euro area and in Russia. The discussion focused on challenges arising from the enhanced powers of central banks in the area of supervision, which is the case both in the euro area and in Russia. Participants agreed that a strong role in supervision for central banks was desirable and that a financial stability and macro-prudential perspective has to complement micro-prudential supervision to ensure the effective functioning of the banking sector and financial system. It was stressed, though, that supervisory tasks should be organisationally separated from monetary policy functions within central banks.
Press release
© ECB - European Central Bank
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article