The National Bank of Romania organises, from 7 March to 25 April 2017, a seven-seminar series under the aegis of “Academica BNR” at the Faculty of Economics and Business Administration, the Babeş-Bolyai University in Cluj-Napoca.
The project aims to facilitate the direct interaction between central bank experts and the participants – postgraduate students, professors – as an opportunity to discuss about best practices, topicalities, and current banking and financial trends.
Presentations will focus on specific central bank issues such as monetary policy, macroeconomic modelling and forecasts, market operations, macroprudential policy, financial stability, euro adoption, bank deposit guarantee schemes, bank resolution, payment systems, issue and processing of notes and coins, as well as topics related to institutional governance, i.e. risk management, human resources, communication and strategies.
Panellists will address general economic and financial topics, practical issues related to contemporary banking phenomena, and the tailoring of economic education programmes to the current labour market requirements.
Programme
- 7 March 2017
- Tudor Grosu, Director, Macroeconomic Modelling and Forecasting Department
The lecture started by introducing the general theoretical structure underlying modern macroeconomic models used in central banks. These have stressed the importance of short-term nominal rigidities, as well as of the real factors in explaining the (medium-term) dynamic equilibrium of the economy. After presenting some features of the inflation targeting regimes (e.g. the importance of central bank independence, the choice of the optimal target level of inflation), two workhorse models widely used by economists in describing the data, performing macroeconomic forecasts and policy analyses, were presented to the audience: the vector autoregression model (VAR) and some semi-structural model (that benefits from a more explicit economic structure based on the hypothesis of optimizing economic agents). Numerous examples pointing out the advantages of the second type of model versus the VAR in a policy oriented environment were presented to the audience. Finally, the public was encouraged to run simulations with a structural model using the platform developed by the National Bank of Romania - Moneta.
- 14 March 2017
- Florian Neagu, Deputy Director, Financial Stability Department
- Mihai Copaciu, Deputy Director, Macroeconomic Modelling and Forecasting Department
The session focused on presenting the necessary steps for a macroeconomic model to be included in the set used by a central bank for analysis and forecasting. As an example, we used the dynamic stochastic general equilibrium model R.E.M. 2.0, developed at NBR by Mihai Copaciu, Cristian Bulete and Valeriu Nalban. The motivation behind the current structure of the model was represented by the relevance of the partial euroization phenomenon in conducting monetary policy in emerging economies. When presenting the theoretical structure of the model, a particular attention was given to its connection with the National Accounts and to the features specific to the Romanian economy. Furthermore, the toolkit used to assess the theoretical properties of the model and its relation with the data counterpart was presented. Finally, the use of the model (i.e. steps, materials and results) in a regular forecasting round (i.e. that corresponding to the May 2016 Inflation report) was illustrated.
- 21 March 2017
- Gabriela Mihailovici, Strategy Advisor, NBR Chancellery
- Mirela Roman, Strategy Advisor, NBR Chancellery
The times when ‘No comment’ was often associated with central banks’ communication model are now gone. Today, more than ever, the public expects these institutions to communicate, interact, explain what they do, and which part they play in the society. In spite of their rather dry, specialised language, central banks succeed, in their struggle to ensure price stability, in addressing audiences via a broad range of tools such as press releases, conferences, interviews, publications, or infographics, explainers by association with public-friendlier notions (e.g. fever = inflation/feverlessness = deflation), video games, Tweets, etc. Efforts aimed at directly targeting the public have been accompanied by greater openness, increased transparency of central banks; they provide more high-quality information, publish accurate and relevant assessments and analyses, explain decision-making processes, the reasons behind their decisions, their words sometimes become monetary policy instruments. While monetary policy messages are somewhat better perceived, in the more delicate and intricate area of financial stability to communicate and make yourself understood still poses a challenge. The same holds for decrypting arid, albeit relevant, statistics or the impact of new technologies on payment systems. Moreover, central banks communicate in an environment that is dominated by emotional elements, the latest Edelman Trust Barometer pointing to a loss of confidence at all levels, including the media, as the traditional pyramid of influence has been up-ended. Central banks’ messages must retain the substance of concepts and show the financial and economic implications even when the level of education or understanding these concepts is lower. Indeed, the academia plays an important role in explaining both fundamental and intricate concepts, thus complementing the efforts central banks make to disseminate accurate information and balanced messages. Independence, going hand in hand with accountability, enables and requires central banks to be rational, no matter how upsetting their voice could be.
- 28 March 2017
- Petre Tulin, Director, Bank Deposit Guarantee Fund
- Victor Andrei, Director, Market Operations Department
- 4 April 2017
- Eugen Rădulescu, Director, Financial Stability Department
- Emil Vonvea, Director, Bank Resolution Department
The presentation was aimed at providing details on the new national and European bank resolution rules. It started with the rationale behind the establishment of a harmonised EU framework for crisis management in the banking sector. The key elements of the bank resolution field were pointed out: the applicable resolution tools and powers, the conditions under which a resolution action is taken, the resolution objectives and general principles. The resolution planning process was then briefly explained, with reference to concepts such as: resolution plan, critical functions, resolvability, preferred resolution strategy, minimum requirements for own funds and eligible liabilities (MREL). The focus was on the bail-in tool, which is pivotal to the resolution framework. Mention was also made of issues related to resolution financing, the assessments in the context of resolution, the involvement of other institutions/authorities in the resolution process and the role of the resolution colleges. The presentation ended with an explanation of the resolution impact on a failing credit institution and with examples on how to apply resolution tools and strategies.
- 11 April 2017
- Mugur Tolici, Director, Human Resources Department
- Ioan Muntean, Director, NBR Bucharest Regional Branch
- 25 April 2017
- Răzvan Vartolomei, Director, Payments Department
The presentation focused on central banks’ tasks and involvement in the payment system field, looking at the National Bank of Romania as a case in point. The lecture started with a brief overview of the evolution of central banks and payment systems. After a short explanation of the fundamental notions on payment systems, central banks’ objectives and reasons for becoming involved in payment systems were reviewed alongside the connection between payment systems and securities settlement systems. Thereafter, the part played by central banks in the payment system field was discussed, in particular the National Bank of Romania’s role therein, followed by an overview of payment and securities settlement systems across the country and a brief presentation of the systems operated by the National Bank of Romania.
- Amalia Fugaru, Strategy Advisor, NBR CHANCELLERY
The country strategy does not fall within the responsibilities of a central bank. The need to present to the academic environment the main stages and features of a country strategy development process is underpinned by three observations regarding the quality of public debate on economic topics. First, it is obvious that there is an overall poor understanding of economic policies. Second, sectoral strategies developed in Romania in recent years reveal difficulties in setting priorities for action. Third, the failure to manage certain public issues stems from the inability to learn from mistakes. Increasing the quality of economic policies is a prerequisite for ensuring macroeconomic equilibrium.
- 10 May 2017
- Amalia Fugaru, Mirela Roman, Gabriela Mihailovici, Strategy Advisors, NBR Chancellery
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