Part III: The side effects of improved incentives Will higher capital restrict bank lending? Let me now turn to the examination of some of the potential side-effects of the measures described in the preceding section. A legitimate first question is whether improving incentives in the way we have described could have undesired indirect effects such as modifying the banks’ lending behaviour. An argument often heard is that higher equity requirements would force banks to set aside, or hold in reserve, funds that could otherwise be used for lending. Here the main observation is that extremely risky gambles should now be avoided as a result of improved incentives. There has been excessive risk-taking in the past; there should be less of it under the new incentives. Beyond this intended effect, which concerns only the most risky activities, the form of financing used by an institution – in itself – should have no impact on the profit-maximising business model. That is, as far as activities and revenues are concerned, imposing extra capital does not change the perspective of the decision-maker beyond restoring the incentives for balanced risk-taking. The exception is the case of marginally profitable activities, and here only to the extent that the cost of financing is increased (more on this later). Provided that activities are profitable, and bearing in mind that in banking the targeted return on equity is not only highly positive but incomparably higher than in other sectors of the economy, the cost of financing should not be the main determinant of activity.
Anita Angelovska Bezhoska: Increased availability and use of official statistics in the Republic of North Macedonia Introduction speech by Ms Anita Angelovska Bezhoska, Governor of the National Bank of the Republic of North Macedonia, at the marking of the European Statistics Day, Skopje, 19 October 2021. *** Your Excellency Ms. Forsgren Bengtsson, Dear Mr. Simovski and Mr. Stymne, Dear State secretary Ms Gaber, Distinguished speakers, representatives of the non-government sector, colleagues and participantsFor a second year in a row, we are marking the European Statistics Day in specific circumstances, shaped by the global pandemics. The health crisis has infiltrated itself into every single pore of our societies disrupting the world we know. Statistics has not been an exception whatsoever. At the time the crisis hit, statistics area in global terms was already facing many challenges. Producers of statistics were coping with lingering tasks that came as a side effect of the global financial crisis in 2008. Although the lack of statistics was not a cause of this crisis, still it revealed significant data gaps and underlined a need of more frequent, comprehensive and granular data to strengthen policy-making infrastructure. The second challenge rested in unprecedented digitalisation and data proliferation, by both private and public entities. It challenged official statistical producers, which serve as the primary source of data, to innovate their data and data sources, but even more to work intensively on setting proper data governance frameworks.