2021 David Finch Public Lecture

The 2021 David Finch Public Lecture was presented by Dr Claudio Borio, Head of the Monetary and Economic Department, Bank for International Settlements.

Watch the lecture recording

Read the lecture text

View Dr Borio's slides

Additional Q&A:

What is the role of financial deregulation in the decline of the neutral rate? Do you think it possible to regain monetary policy space and reinstate symmetric responses with the current financial regulatory structures?

Reply from Dr Borio:

• In my story, financial liberalisation is a key factor driving changes in the business cycle and, through that channel and the interaction with monetary policy, also driving down nominal and real interest rates as well as estimates of the natural interest rate
• All else equal, the financial regulatory structures put in place post-GFC should help monetary policy to normalise (stronger banking system, macroprudential frameworks etc). That said, a lot needs to be done concerning non-bank financial intermediaries, notably the asset management industry in its various forms. The FSB, in particular, is looking into this.