1. Financial Markets Division Monitoring financial markets

2. Outline Introduction: ourselves and Financial Markets Division Importance of monitoring Monitoring sources Monitoring subjects Products

3. Financial Markets Division Asset Management Risk Management Treasury and Monitoring Asset Management: investment of fx reserves Risk Management: creates framework for investment Treasury and Monitoring: monetary policy implementation and monitoring

4. Importance of monitoring Monetary policy: -Developments financial markets input decision making -Expectations in markets -Assessment of policy

5. Importance of monitoring Financial Stability (FS): -Increased focus on FS -Monitoring risks to stability of financial system -Financial markets channel

6. Importance of monitoring Asset Management (AM): -Monitoring developments which impact the value of the portfolio -Monitoring trading opportunities

7. Monitoring sources Counterparties −Asset Management (capital market), Dealing Room (money market, foreign exchange) −Research & direct contact International economic news and data providers −Bloomberg, Reuters −Datastream −(Economic/financial magazines, Internet)

8. Subjects: expectations Get indications from market prices −Dollars and EURO’s −Futures (Fed Fund & 3M Euribor), Interest Rate Swaps (EONIA), Fed Fund Options Using research of market participants −Investments Banks −Research Agencies

9. Subjects: yield curve and exchange rates Yield curve dynamics −Monitoring yield curve −Development 10-year/2-year spread, comparing US and Euro area −Try to understand the market dynamics (e.g. pension funds, China, flight to quality) Exchange rate movements −Euro vs dollar/yen, dollaryen −Market factors influencing the impact of monetary policy (low volatility, low interest rates yen  carry trades based on yen) −Bank of England….

10. Subjects Which factors are moving the market in the short term −Follow news and report to the organisation −Contact counterparties (money market report) Special topics −Hedge funds (Parliament, ABN AMRO case) −Private Equity −Carry trades

11. Monitoring Financial Market Dashboard −Dashboard for real time monitoring asset prices (major exchange rates, stock indices, interest rates, bonds, oil and gold) −Special design for the board of directors

12. Monitoring Products Daily report & Money Market report −Focus on Europe, US and Japan −Market types: Foreign Exchange, Stock Market, Bonds Market, Other (mainly oil and gold)

13. Monitoring Products Monthly report −Focus on monthly developments in major markets (both countries and type) −Views market participants on possible explanation, highlighting special subjects (box) −Input for monetary Governing Council

14. Monitoring Products Market participants view −Mainly based on research of investment banks −GDP, Inflation and interest rates (policy rates, 10 year) −Individual views and average

15. Concluding remarks Monitoring important: Input monetary policy decisionmaking Financial Stability issues And of course: Portfolio investment decisions