Governor Olli Rehn, Bank of Finland, Panel Discussion on “Monetary Policy Frameworks”, Reinventing the Bretton Woods Committee, in the context of the IMF Annual Meetings, Indonesia, Bali, 11 October 2018

1. Governor, Bank of Finland
On the Road to a New Global Equilibrium
Remarks at the Panel "Monetary Policy Frameworks",
Reinventing Bretton Woods Committee, Bali, 11 October 2018
Olli Rehn
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2. Suomen Pankki – Finlands Bank – Bank of Finland
On Global Risks
 Global imbalances and vulnerabilities remain
– Some the legacy of the Great Financial Crisis
– Risk to global prosperity, to successful monetary policy
 Growth (trade). Resilience (finance). Prudence (monetary).
 Protectionism: The multilateral system under threat
 Financial stability absolutely vital for the real economy
 Developing regulation should remain on the political agenda
– In the Eurozone, completing the banking union a priority
– The US and the UK should protect their regulatory achievements
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3. Suomen Pankki – Finlands Bank – Bank of Finland
Towards Greater Resilience
 Monetary policy normalization
– Conditional on circumstances in each country/currency area
– International repercussions depend on vulnerabilities of countries
– Emerging countries should develop their macroprudential policies
 Ensuring effective monetary policy in the next downturn
– The decline in the natural rate of interest
– Where price stability still requires monetary stimulus (as in the euro area), a
gradual approach to tightening is called for
– The unconventional instruments should remain in the toolbox
 Normalization may be misleading: towards a new equilibrium
– Rather a journey to a new equilibrium
– Sustainability, resilience, inclusion
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