Pursuing monetary policy to stabilise inflation and raising the key rate to achieve this, the Bank of Russia curbs growth in long-term interest rates in the economy. This quarter experience is a good illustration of the above. Despite the increase in the key rate on three occasions since last March for a total of 125 basis points, the yields of long-term OFZs are currently on the same level as in late March. As far as the pace of lending growth is concerned, it remains high both in corporate and particularly retail segments. Thus, mortgages are rising by more than 25% year-on-year. In addition, retail loans are heating consumer demand. We are also concerned by the fact that lending is growing due to loans to borrowers with a high debt burden. Therefore, we resume prepandemic macroprudential add-ons on unsecured loans from 1 July and on mortgage loans with a low down payment and a high debt-to-income ratio of borrowers — from August. The Bank of Russia will stand ready to further increase macroprudential add-ons to prevent the accumulation of systemic risks and to ensure financial stability. Since our meeting in April, the balance of risks has tilted even more towards proinflationary risks. Elevated inflation expectations as a response to high inflation and low interest rates still pose a major risk. With fears of future price growth, people tend to spend more today and save less for tomorrow. This makes prices grow even more rapidly. Disinflationary risks look weaker.
Andrew Large: Basel II and systemic stability Speech by Sir Andrew Large, Deputy Governor of the Bank of England, at the British Bankers' Association - Basel II/CAD 3 Conference, London, 13 March 2003. *  *  *  Introduction Welcome to all present - particularly Bill Rutledge of the New York Fed, whose President, Bill McDonough, is rightly credited with the paternity of Basel II. Basel II is a significant step forward. It brings life to the concept of capital requirements as a function of the actual risks which banks undertake. And it extends many of the principles long developed in the area of market risk, into that of credit risk. The very essence of the banking business. This was a courageous move. And it has required Herculean labour, intellectual agility, and sheer hard work. It seeks to address the public policy objectives of regulation and supervision on the one hand, and the real-world best practice of how banks manage their businesses on the other. It has sought to provide incentives to private firms to encourage them to manage themselves in ways which reinforce their own strengths, and hence to contribute to financial stability as a whole. But equally it is designed to enable supervisors to develop resources to sharpen their own judgement, to encourage them to take account of individual circumstances, to avoid box ticking, and to add real value to the process. These are worthy ambitions. They rely on the interaction of the three pillars to achieve it.