why i.t., why success? - cnb.cz · pdf fileinflation vs net inflation short term vs longer...
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Why I.T., Why Success?
Pavel Kysilka, Deputy CEO and Board Member, Česká spořitelna, a.s.
Conference to 15th Anniversary of the Czech National Bank and the 10th Anniversary of InflationTargeting, 8 April 2008, ČNB, Senovážné nám. 30, Prague
1998 Switch To Inflation Targeting: Why
Dissapointment with „monetary targeting“ 1991 – 97
really MT?
in fact „monetary schizophrenia“
Fixed ER abandoned in 1997
Real opportunity to have a textbook pure monetary targeting
2
Ignored Opportunity
Lack of confidence in „expectation power“ of MT
IT – new challenge: communicationcredibility
↓
? real transmission
expectations
3
Communications & Credibility
inflation vs net inflationshort term vs longer termpublic vs analysts, experts
public: netterm
analysts: inflationterm
inflation
net
short
longer
4
Enemies & Allies & Neutrals
E A
N
global inflation; commoditiesbusiness cycleretail market (internal competition)external competition (openess)IR relevancewe
double digit and increasing inflation
we
exchange ratemonetization
expectations
5
Money supply/Loans/GDP ratio
0
10
20
30
40
50
60
70
80
199519961997199819992000200120022003200420052006
M2/GDP
Loans/GDP
Householdloans/GDP
Corporateloans/GDP
%
6
New bankrupticies
0
500
1000
1500
2000
2500
3000
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
7
Inflation expectations in 1998
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
ČNBCredita
nstalt KB
ČSOB ŽB
Pat ria ČSÚGovernmen t
OECDExpandia
Wood
2 3 1 2 2 3 4 21 4
CPI (%)
8
Inflation
-2
0
2
4
6
8
10
12
14
01/98 04/98 07/98 10/98 01/99 04/99 07/99 10/99 01/00 04/00-5
0
5
10
15
20
25
30
35
Total inflation Net infaltion Price adjustment inflation
CPI(%)
9
Inflation expectations in 1998
10
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
ČNBCredita nsta
l t KB
ČSOB ŽB
Pat ria ČSÚGovernmen t
OECDExpandia
Wo od
2 3 1 2 2 3 4 21 4
CPI (%)
CPI
Ni
CPI
NI
Global inflation
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
USA EU
CPI(%)
11
Commodities helped
0
50
100
150
200
250
300
95 97 99 01 03 05 07
Wheat
0
2
4
6
8
10
12
14
16
95 97 99 01 03 05 07
Gas
0
20
40
60
80
100
120
95 97 99 01 03 05 07
Oil0
500
1000
1500
2000
2500
3000
95 97 99 01 03 05 07
Aluminium
05000
100001500020000250003000035000400004500050000
95 97 99 01 03 05 07
Nickel
12
Openess of the economy: (X+M)/GDP
020406080
100120140160180
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
%
13
GDP and unemployment
-4
-2
0
2
4
6
8
10
12
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
GDP Unemployment
14
Exchange rate
0
5
10
15
20
25
30
35
40
45
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
CZK/EUR CZK/USD
15
Market share war
0
10
20
30
40
50
60
70
80
90
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
hypermarket supermarketdiskont Σ
%
16
Why I.T., Why Success?
Why IT? I don´t know
Why success? I don´t know
Thank you.
17