2/4  BIS - Central bankers' speeches  In addition to its foreign-based scientific collaborators, the Committee has also reached out to other countries and international institutions in order to learn from their own experiences. The Central Bank of Austria and the Central Bank of Portugal have already been approached within the framework of close technical collaboration that the CBC agreed with certain national central banks Governors of the euro area, soon after I took over as Governor here in Cyprus. As envisaged, the Committee is currently in the process of drafting the National Strategy proposal aiming towards the promotion of financial literacy for the population as a whole, as well as for specific target groups. The initial draft is expected to be ready towards the end of the year, while the Committee is expected to submit the complete proposal to the Council of Ministers for endorsement soon thereafter. Objectives and challenges ahead Any big change in society requires bold decisions. There may be obstacles to overcome in order for the National Strategy in Cyprus to be fully implemented and it will take some time before we see the anticipated impact on society. These hindrances may be related to conflicting views of some stakeholders which should be carefully and appropriately addressed. Another important factor which might generate difficulties, is the securement of credible and long-term sources of funding since the estimated cost for such an endeavour is envisaged to be high.
Davíð Oddsson: The commercial banks are more resilient Opening statement by Mr Davíð Oddsson, Chairman of the Board of Governors of the Central Bank of Iceland, on behalf of the Board of Governors at a Press Conference on the occasion of the publication of the Bank’s Financial Stability 2007, 25 April 2007. *  *  *  In its analysis published in Financial Stability at the beginning of May 2006, the Central Bank of Iceland’s finding was that the financial system was broadly sound, but more challenging waters lay ahead. Two main causes of concern were identified: macroeconomic imbalances and uncertainty about the commercial banks’ refinancing of their foreign borrowing. Refinancing was successfully completed. However, macroeconomic imbalances increased. A year ago the focus was on short-term risks on the liabilities side of the financial companies’ balance sheets, but now it has shifted more to the long-term asset quality. The most pressing economic policy task is to restore stability. The conclusion of large investments in the aluminium and power sectors will automatically reduce imbalances, but other adjustment has been slower than expected. Increased foreign debt service has delayed the unwinding of the current account deficit, which will hardly be brought down to a sustainable level without a substantial contraction in demand. The latest forecast in Monetary Bulletin in March 2007 indicates that such a contraction lies ahead, as growth of investment and private consumption slows down.