After a very interesting first day of the conference, I am honored to start the second day and introduce a panel of highly distinguished central banks’ senior policymakers and economists.

Yesterday we focused on the repercussions of negative euro area policy rates on financial stability and reserve management of the countries in the region and beyond. Today’s focus is on monetary policy. In the first session, we will hear the experience of the ECB itself and from a few countries in the euro area proximity that also braced with the spillover from the euro area and had to make recourse to a different set of standard and non-standard monetary policy tools.

We start with a keynote address from Ryan Banjeree, Senior Economist in the Monetary and Economic Department at BIS and formerly Senior Economist at the Bank of England. I think most of you may have come across Ryan’s research papers, which span a wide array of topics. Inter alia, he has published papers on the effects of unconventional monetary policy and monetary policy spillovers. I think Ryan’s keynote speech will ideally set the scene for the entire day since he will provide a broad but very insightful overview of the consequences of negative euro area policy rates on the conduct of monetary policy in the proximity of the euro area.

We will then have four panelists. Ulrich Bindseil, Director General of the ECB’s Directorate General Market Operations, architect of the ECB monetary policy implementation framework, and leading contributor to the design of the recent ECB monetary policy actions during the crisis, will give us unique insight into the rationale of accommodating ECB monetary policy, and ECB’s own experience and current outlook.

We have then Thomas Moser from Swiss National Bank (SNB). Thomas is Alternate Member of the Governing Board of SNB, with experience at the IMF as Executive Director of the IMF constituency in Washington headed by Switzerland. We will hear from Thomas the SNB’s unique experience. Bracing with safe haven currency inflows from the euro area during the sovereign bond crisis, SNB first lowered the interest rate to zero and announced a floor to the CHF/EUR exchange rate to prevent a destabilizing exchange rate appreciation. Later on, it reconsidered the lower policy rate bound, abandoned the floor, and lowered interest rates where nobody had dared before. At the same time, via the tiered remuneration of reserves it shielded at least in part banks from a negative profitability impact. I am looking forward to hearing from Thomas also because he will touch upon several themes from the time varying lower bound, the combination of standard and non-standard tools, and the use of tools to mitigate some of the negative consequences of negative interest rates, thereby lowering the effective lower bound, which will be the focus of my presentation later on.

We have then Dana Hajkova, Advisor to the Bank Board of Czech National Bank,(CNB), and Daniel Felcser, of Magyar Nemzeti Bank (MNB). The Czech Republic and Hungary are two countries in the EU proximity in Central and Eastern Europe that have also coped with the consequences of low euro area interest rates but, interestingly, have taken different approaches. Czech National Bank lowered policy rates practically to zero and then reverted to non-standard monetary policy tools in the form of a koruna/euro exchange rate floor, which they successfully defended and recently decided to discontinue as an additional instrument for easing the monetary conditions. By taking this step, the CNB returned to the conventional monetary policy regime, in which interest rates are the main policy instrument. MNB also returned to a mix of standard and non-standard tools, but was likely driven by a context in which vulnerabilities to exchange rate movements were higher due to the high share of FX loans and some impairment in the bank lending channel due to the consequences of past NPLs, implemented non-standard monetary policy prevalently via the funding for growth scheme.

Therefore a very interesting panel, with different countries reacting to the same context in different manners, with different considerations on the effective lower policy rate bound, and the most appropriate non-standard tools to provide additional accommodation at the lower bound.