2024-05-06
Lietuvos banko valdybos pirmininko Gedimino Šimkaus įžanginė kalba per 2024 m. gegužės 6–7 d. Vilniuje vykusį Vienos iniciatyvos forumą.
Forume dalyvavo 12 šalių centrinių bankų aukščiausio lygmens vadovai, tarptautinių organizacijų, didžiausių tarpvalstybinių bankų grupių ir kitų finansų sektoriaus suinteresuotųjų šalių atstovai. Jie aptars ekonomikos ir finansų sektoriaus raidą Rytų, Vidurio ir Pietryčių Europoje, taip pat iššūkius, su kuriais susiduria finansų įstaigos, esant dideliam ekonominiam ir geopolitiniam neapibrėžtumui.
Pranešimas skaitytas anglų kalba, šis tekstas nėra kalbos nuorašas.
Dear Governors, members of the Vienna Initiative, Ladies, and Gentlemen,
I am glad to see the Initiative gathering in Lithuania, hosted by the Bank of Lithuania. Before going any further, I would also like to thank our esteemed international partners – the European Bank for Reconstruction and Development, the International Monetary Fund, the European Investment Bank, the European Central Bank and the European Commission – for their fruitful partnership in organising this event which brings us here today to the Baltic Sea region.
This week, the region is turning into a hub of international gatherings and events. Besides the Vienna Initiative and the usual celebrations dedicated to Europe Day, the neighbouring Swedish city of Malmö is hosting the Eurovision Song Contest, to which I will come back a little bit later.
Dear Guests,
Singing has both historical and cultural significance for Lithuania. I will refer you to three facts.
First, in 1990, the independence of the three Baltic states was restored by the Singing Revolution. People’s desire to break the Iron Curtain was expressed by singing in peaceful gatherings.
Second, our national traditional Baltic song and dance festivals are part of the UNESCO Intangible Cultural Heritage List. Lithuania organised its first festival in 1924, so this year is quite an anniversary!
Third, the foundation of the capital, Vilnius, 700 years ago is linked to the legend of the iron wolf. In it, the wolf wasn’t silent. As you can see from the picture, it was also singing, albeit in its own way.
The gatherings of the Vienna Initiative are not a place to sing. Usually. The Initiative started as a temporary financial crisis mitigation platform in 2009. From then, it turned into a permanent forum for discussions between high-level stakeholders and decision-makers. The Vienna Initiative enables the central banks of host countries to gain an in-depth understanding of the strategies of foreign banking groups’ operations. In turn, it allows not only better-informed, but also more timely monetary and macroprudential policy decisions to be made.
Learning is a journey, and the excitement lies in new discoveries along the way. This year, our discussion will help us learn more about high policy rates and their effects on financial stability. We will also raise the question of whether the financial systems are in good enough shape to support economic recovery across the region. We are going to exchange views and learn more about the macroeconomic developments over the last year.
I am looking forward to the discussion on competition in the banking market, which I’m very pleased to be moderating. In my view, banking competition and financial stability are closely interrelated concepts, but we will shed more light on this topic tomorrow.
Dear Friends,
The overarching priority of the Vienna Initiative is to reduce risks; that is, to induce orderly behaviour. In fact, preventing disorderly deleveraging was the original motive for the Initiative.
Over recent years, the issue has not been the sudden stop in the credit markets that we encountered during the global financial crisis. This time, the threat has come from a series of supply-side shocks hitting our open economies in quick succession.
The highly uncertain present-day environment prevents premature celebration, but so far, a major negative impact on financial stability has been avoided. In other words, the discussions at the Initiative are bearing fruit.
The risk in the banking system appears to be limited due to robust capital and favourable liquidity positions. The ECB analysis indicates that profitability has continued to improve with widening interest margins. Asset quality indicators have remained favourable so far, and the NPL ratio has not increased strongly. We will have an entire session on asset quality in the region this afternoon.
The Vienna Initiative is a positive-sum game – that is how I like to think about it. Due to financial integration by and large, and cross-border exposures in particular, maintaining financial stability entails benefits not only for host countries, but also for home economies and their banking systems. Given the financial stability environment to date, I am not surprised that the most recent Vienna Initiative bank lending survey found that cross-border banking groups wanted to expand or maintain exposure to the region1.
Now, let’s get back to some easier stuff: Eurovision, a very different type of event. The goal of its participants is to take risks; to act, in a manner of speaking, disorderly and wild. Unlike our forum, the song contest is a zero-sum game, although in it, the winner takes it all, the loser has to fall, it’s simple and it’s plain, why should I complain?2
However, despite Lithuania’s efforts, 6th place is the most that we have achieved so far. The best Eurovision performer from our region is Ukraine – no doubt. The country has managed to win the contest three times since becoming independent in 1991.
Ladies and gentlemen,
This week is also a week for the Day of Europe celebrations. The basis of this is the Schuman Declaration, signed on 9 May in 1950.
Back then, European unity was a new and exciting idea. The goal was to look for what is common, not what divides, to lean towards the future and not be trapped in the past, and to realise that economics matter for the consequences of peace3.
This is important. At a practical level, the idea of Europe was implemented by uniting national coal and steel industries. Uniting and upgrading our defence capabilities is of the highest priority today, not only to increase our own ability to deter, but also to ensure continuity of support for Ukraine, our neighbour, to defend itself.
Here at the Vienna Initiative, our primary focus is on financial stability. This is also the topic of discussion for the upcoming two days. If we are successful at continuing to ensure it, this can and will act as a significant confidence booster for our communities, cities and societies, whilst also increasing our resilience geopolitically.
Thank you and welcome to Vilnius once again.
1 Vienna Initiative, Central, Eastern and South-Eastern Europe (CESEE) Bank Lending Survey: Second half of 2023.
2 The Winner Takes It All, ABBA.
3 John Maynard Keynes, The Economic Consequences of the Peace, 1919.