Kevin Stiroh: Opening remarks at the GARP Global Risk Forum Remarks by Mr Kevin Stiroh, Executive Vice President of the Financial Institution Supervision Group of the Federal Reserve Bank of New York, at the Federal Reserve Bank of New York / GARP Global Risk Forum, New York City, 2 November 2016. * * * Good Morning. I’m Kevin Stiroh, the head of the Supervision Group at the Federal Reserve Bank of New York. I’d like to extend a warm welcome from the Federal Reserve Bank of New York, which is co-hosting the Global Risk Forum with the Global Association of Risk Professionals. I’d like to thank the many organizers of this meeting—as you can imagine, considerable time and resources went into planning this conference and that is what makes it so valuable for the participants and the risk management profession. First, let me state that my comments today are my own and do not necessarily represent those of the Federal Reserve Bank of New York or the Federal Reserve System. Looking Back at the Global Risk Forum When I was asked to speak at today’s session, I realized that it’s been five years since I served on the planning committee that developed the Global Risk Forum program in 2011. I wondered how our risk priorities and risk management issues have evolved over those five years as the world has changed around us.
The restraining influence of low economic activity will begin to fully impact inflation dynamics in the second half of 2015. By this time, the effect of temporary factors, such as the depreciation of the ruble and foreign trade restrictions that have led to acceleration in consumer prices growth, will be exhausted. As we have already noted, inflation will reach its peak in 2015 Q2, and afterwards it is forecast to fall. In March 2016, inflation will approximate to 9% before falling down to 4% in the medium run. Such inflation dynamics will be accompanied by economic recovery. The bottom of economic recession is expected in 2016 Q1, later on the economy will start growing on a quarterly basis. By that time the initial adjustment of the economy to the new environment will be over. Higher global oil prices, the economic recovery of trade partner countries, and the formation  BIS central bankers’ speeches  3  of new sources of financing will also contribute to this growth. In 2017, economic recovery is expected to exceed 6%. We shall continue to regularly update our forecast by monitoring movements of a wide range of indicators taking into account not only annual inflation dynamics, but also quarterly, monthly and weekly ones. If new pro-inflationary factors do not appear and inflation decelerates according to our forecast, we shall continue cutting the key rate.