Title Page

Bank of Albania International Monetary Fund

NEGATIVE EURO AREA INTEREST RATES AND SPILLOVERS ON WESTERN BALKAN CENTRAL BANK POLICIES AND INSTRUMENTS

The book represents the proceedings of the conference co-hosted by the Bank of Albania and the International Monetary Fund (IMF), in Tirana on May 4–5, 2017. The conference was organized with the financial support of Switzerland.

Edited by: Guido Della Valle, Erald Themeli, Romain Veyrune

Copyright

Published by:

© Bank of Albania

Address: Sheshi “Skënderbej”, Nr.1, Tirana, Albania

Tel.: + 355 4 2419301/2/3; + 355 4 2419401/2/3

Fax: + 355 4 2419408

E-mail: public@bankofalbania.org

Reproduction is permitted provided that the source is acknowledged.

Printed in: 300 copies

Printed by:

ISBN 978-9928-4453-9-1

The views expressed herein are of the authors and do not necessarily reflect those of the International Monetary Fund or Bank of Albania

The organizers of the conference would like to express gratitude to Switzerland for the financial support provided and Enri Herri of Bank of Albania and Anna Vlassova of the International Monetary Fund for the invaluable logistical support provided for the organization of the conference.

Contents

• INTRODUCTION

• Guido Della Valle, Erald Themeli, Romain Veyrune

• CONFERENCE AGENDA

• WELCOME ADDRESSES

• Gent Sejko, Bank of Albania, Governor

• Christoph Graf, Ambassador of Switzerland in Albania

• Miguel Savastano, International Monetary Fund, Monetary and Capital Markets Department, Deputy Director

• FIRST SESSION: NEGATIVE EURO AREA INTEREST RATES AND FINANCIAL STABILITY: A FIRST LOOK BEYOND THE WESTERN BALKANS AND GENERAL TRENDS

• Moderator: Klodion Shehu, Bank of Albania, Financial Stability Department, Director

• HOW DO INTEREST RATE DIFFERENTIALS IMPACT ON EUROIZATION? EVIDENCE FROM THE OENB EURO SURVEY

• Thomas Scheiber and Julia Woerz, Oesterreichische Nationalbank, Foreign Research Division

• NEGATIVE EURO AREA INTEREST RATES AND EFFECTIVE DE-EUROIZATION STRATEGY

• Romain Veyrune, International Monetary Fund, Senior Economist

• SECOND SESSION: NEGATIVE EURO AREA INTEREST RATES AND FINANCIAL STABILITY IN WESTERN BALKAN ECONOMIES

• Moderator: Natasha Ahmetaj, Bank of Albania, Second Deputy Governor

• INTRODUCTORY REMARKS: PANEL ON “NEGATIVE EURO AREA INTEREST RATES AND FINANCIAL STABILITY IN WESTERN BALKAN ECONOMIES”

• Natasha Ahmetaj, Bank of Albania, Second Deputy Governor

• IMPLICATIONS OF LOW INTEREST RATES FOR FINANCIAL STABILITY IN ALBANIA

• Klodion Shehu, Bank of Albania, Financial Stability Department, Director

• WHAT IS OBSCURED BY AGGREGATE DATA IN THE CASE OF BOSNIA AND HERZEGOVINA?

• Belma Čolaković, Central Bank of Bosnia and Herzegovina, Chief Economist

• FINANCIAL STABILITY UNDER UNILATERAL EUROIZATION: THE CASE OF KOSOVO

• Arben Mustafa, Central Bank of the Republic of Kosovo, Advisor to the Governor

• ECB NON-STANDARD MONETARY POLICY MEASURES AND FINANCIAL STABILITY IN WESTERN BALKAN ECONOMIES WITH EMPHASIS ON THE MONTENEGRO CASE

• Milena Vučinić, Central Bank of Montenegro, Department for Financial Stability, Research and Statistics

• THIRD SESSION: NEGATIVE EURO AREA INTEREST RATES AND RESERVE MANAGEMENT

• Moderator: Elisabeta Gjoni, Bank of Albania, First Deputy Governor

• INTRODUCTORY REMARKS: PANEL ON “NEGATIVE EURO AREA INTEREST RATES AND RESERVE MANAGEMENT”

• Elisabeta Gjoni, Bank of Albania, First Deputy Governor

• ARE YOU PREPARED TO ASSUME THE RISK OF INCREASING EURO YIELDS?

• Roberto de Beaufort Camargo, World Bank, Lead Financial Officer

• NEGATIVE EURO AREA INTEREST RATES AND RESERVE MANAGEMENT AT THE CENTRAL BANK OF ROMANIA

• Victor Andrei, National Bank of Romania, Market Operations Department, Director

• IMPLEMENTATION OF THE NEW FX RESERVES INVESTMENT STRATEGY AT THE CENTRAL BANK OF HUNGARY

• Sandor Ladányi, Magyar Nemzeti Bank, Foreign Exchange Reserves Management, Strategy Department

• FOURTH SESSION: NEGATIVE EURO AREA INTEREST RATES AND RESERVE MANAGEMENT (CONTINUED)

• Moderator: Roberto de Beaufort Camargo, World Bank, Lead Financial Officer

• NEGATIVE EURO AREA INTEREST RATES AND SPILLOVERS ON WESTERN BALKAN CENTRAL BANK POLICIES AND INSTRUMENTS

• Marian Gjermeni, Bank of Albania, Monetary Operations Department, Director

• FX RESERVE MANAGEMENT IN A NEGATIVE INTEREST RATES ENVIRONMENT: THE MACEDONIAN EXPERIENCE

• Vesna Hristovska, National Bank of the Republic of Macedonia, Financial Market Operations Department

• FIFTH SESSION: NEGATIVE EURO AREA INTEREST RATES AND MONETARY POLICY IN THE PROXIMITY OF THE EURO AREA

• Moderator: Guido Della Valle, International Monetary Fund, Monetary Policy Advisor

• INTRODUCTORY REMARKS: PANEL ON “NEGATIVE EURO AREA INTEREST RATES AND MONETARY POLICY IN THE PROXIMITY OF THE EURO AREA”

• Guido Della Valle, International Monetary Fund, Monetary Policy Advisor

• MONETARY POLICY IN THE PROXIMITY OF THE EURO AREA: WHAT CHANGES WITH NEGATIVE EURO AREA RATES?

• Ryan Banerjee, Bank for International Settlement, Senior Economist

• MONETARY POLICY BELOW THE ZERO LOWER BOUND

• Ulrich Bindseil, European Central Bank, Market Operations, Director General

• MONETARY POLICY BELOW THE ZERO LOWER BOUND

• Thomas Moser, Swiss National Bank, Alternate Member of the Governing Board

• MONETARY POLICY AND EXCHANGE RATE COMMITMENT IN THE CZECH REPUBLIC

• Dana Hajkova, Czech National Bank, Advisor to the Bank Board

• NON-STANDARD MONETARY POLICY IN A LOW INTEREST RATE ENVIRONMENT

• Daniel Felcser, Magyar Nemzeti Bank, Monetary Strategy Department, Senior Economic Analyst

• SIXTH SESSION: NEGATIVE EURO AREA INTEREST RATES AND MONETARY POLICY IN THE WESTERN BALKANS

• Moderator: Erald Themeli, Bank of Albania, Monetary Policy Department, Director

• SPILLOVERS OF THE ECB’S NON-STANDARD MONETARY POLICY MEASURES ON SOUTHEASTERN EUROPE

• Keynote address: Isabella Moder, European Central Bank, Economist

• ESTIMATING THE LOWER POLICY RATE BOUND IN A EUROIZED ECONOMY

• Guido Della Valle, International Monetary Fund, Monetary Policy Advisor

• IMPLICATIONS FROM THE LOOSE ECB MONETARY POLICY FOR THE REGION (FOCUS ON MACEDONIA)

• Anita Angelovska Bezhoska, National Bank of the Republic of Macedonia, Vice Governor

• CONDUCT OF MONETARY POLICY WITH FINANCIAL STABILITY ISSUES AND A CHALLENGING ENVIRONMENT: THE CASE OF SERBIA

• Branislav Zoroja, National Bank of Serbia, Monetary Operations Department, General Manager

• CONCLUDING REMARKS

• Miguel Savastano, International Monetary Fund, Monetary and Capital Markets Department, Deputy Director

• SPEAKERS’ BIOS