Parallel to the recovery in domestic demand, credit markets continued to rebound robustly in the second quarter, leading to rapid loan growth in the real sector (Figure 28). The ongoing recovery both in commercial and consumer loans indicates that credit conditions support the rebound in economic activity. Accordingly, as in the previous quarter, our revised forecasts are based on an outlook that envisages the gradual removal of financial tightness. 10  BIS Review 133/2010  Developments in global economic activity have been of major concern for our forecasts through external channels ever since the global financial crisis erupted. In this respect, I would like to express our views on the effects of global developments on aggregate demand and the inflation outlook in the second quarter of the year. The uncertainty caused by fiscal problems in the euro area in May, and the consequent sharp depreciation of the euro led to a weaker external demand in the second quarter than envisaged in the April Inflation Report. Global growth forecasts remain basically unchanged compared to the April Inflation Report. However, euro area growth forecasts have been revised slightly downwards, reflecting the change in the outlook owing to the problems in Greece, Portugal, and Spain spreading throughout the financial systems of the euro area – our largest export destination. In this respect, the export-weighted global economic activity index constructed by the CBT implies weaker external demand than that envisaged in April (Figure 29).
Richard Dzina: Luncheon remarks at the Community Bankers Conference Remarks by Mr Richard Dzina, Executive Vice President of the Financial Services Group of the Federal Reserve Bank of New York, at the Community Bankers Conference, Federal Reserve Bank of New York, New York City, 18 April 2018. * * * Good afternoon. I am conscious that I am the concluding speaker for today’s conference, a line usually followed by “and the only thing that separates you from the bar.” In this case, I’m the only thing that separates you from the gold vault, which may be even more compelling, so I’ll keep things brief, but hopefully meaningful. Allow me to share two preliminary comments as prelude to formal remarks: First, convening this conference underscores for me and my colleagues that fulfillment of Federal Reserve mandates in monetary policy, supervision, and financial services does not constitute an end to itself, but a means to an end. The end is to foster conditions and to provide services that support robust and sustainable economic activity on which our nation depends and in which community banks play an integral, indeed indispensable, role. May those of us who have the privilege of serving this great institution, and working within these walls, never forget the ultimate object of our mandate, at which you sit at the center. Second, my perspective in addressing you today is not as overseer, or as policy maker, but as head of Financial Services at the Federal Reserve Bank of New York.