samchain/econo-pairs-v1 huggingface dataset:
William C Dudley: The national and regional economy Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the New Jersey Performing Arts Center, Newark, New Jersey, 6 April 2015. *  *  *  Jason Bram, Chelsea Cruz, Tony Davis, Jonathan McCarthy, James Orr, Richard Peach, Paolo Pesenti and Joseph Tracy assisted in preparing these remarks. I am very pleased to be here at the New Jersey Performing Arts Center (NJPAC) and to have this opportunity to speak with the members of the Business Partners Roundtable. In my remarks, I will provide an update to my national outlook for 2015, as well as discuss economic developments in New Jersey. I will also briefly touch on how monetary policy might evolve should my economic outlook be largely realized over the next year. My meeting with you today is part of our continuing efforts to understand what is going on at the grassroots level of our economy. We plan these trips so I can meet with a diverse array of stakeholders in the region. This allows me to get a comprehensive picture of economic conditions in the region and a fuller understanding of the major issues and concerns. This is our first regional trip for 2015 and the third time we have visited northern New Jersey in the past four years.

Peter Pang: Policies adopted by authorities in different jurisdictions with respect to international reserves Welcoming remarks by Mr Peter Pang, Deputy Chief Executive of the Hong Kong Monetary Authority, at the International Monetary Fund Independent Evaluation Office (IEO)/Hong Kong Institute for Monetary Research (HKIMR) Workshop, Hong Kong, 24 March 2011. *  *  *  It is a pleasure to welcome all of you to this event co-hosted by the Hong Kong Institute for Monetary Research (HKIMR) and the Independent Evaluation Office of the IMF. The HKIMR, as some of you already know, is a subsidiary of the Hong Kong Monetary Authority. Its objectives are to promote research on longer-term and wider policy issues of relevance to the monetary and financial development of Hong Kong and the Asia region; and to foster cooperation and cross-fertilisation of research efforts between academics, international financial institutions and the HKMA research activities. For this reason we are particularly pleased to co-sponsor this workshop which deals with the important topic of policies adopted by authorities in different jurisdictions with respect to international reserves and with the advice the IMF gives in this regard in its consultations with policy authorities. The accumulation of international reserves has become one of the issues at the center of debates about the functioning of the current international monetary system as well as about reforms of this system.
865–934, New York: Elsevier North-Holland. Micco, Alejandro and Ugo Panizza (2006), “Bank Ownership and Lending Behavior,” Economic Letters, Vol. 93, Issue 2, pp. 248–254. Micco, Alejandro, Ugo Panizza and Monica Yanez (2007) “Bank Ownership and Performance. Does Politics Matter?,” Journal of Banking and Finance, Vol. 31, No. 1, pp. 219–241. Rajan, Raghuram (2010), Fault Lines: How Hidden Fractures Still Threaten the World Economy, Princeton, NJ: Princeton University Press. Reddy, Y.V. (2012), “Society, Economic Policies and the Financial Sector,” Per-Jacobsson Lecture, BIS. www.bis.org/events/agm2012/sp120624.htm. 4

This is even more relevant in the multi-facet role played by the Islamic financial institutions in dealing with Islamic banking customers as the Islamic financial transaction is not merely based on the lender and borrower relationship as is the case in conventional banking. The move towards the adoption of the supervised market approach requires continuous efforts to enhance product disclosures and to elevate the level of financial literacy of consumers. BIS Review 3/2004  3  To further enhance transparency in the conduct of banking institutions, proper accounting standards need to be in place to reflect the true and fair value of banking operations that would lead to greater accountability and responsibility on the part of the banking institution. Accurate financial reporting requires a body of financial accountants that are well-versed in Shariah principles to ensure that the accounts are not only drawn in accordance with the international accounting standards but are also in line with Islamic principles. This is to enable the investors and supervisors to obtain the true and fair assessment of the Islamic institution’s financial condition and the profitability of the business. Transparency and disclosure is even more crucial in Islamic banking where the concept of mudharabah (profit-sharing) entails an investor-entrepreneur relationship and is a significant element in sourcing of funds. The establishment of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) has made a significant contribution in formulating and issuing accounting and auditing standards for Islamic financial institutions.
What is needed here is a system where macroprudential policy fulfils an important role and can, in an interplay with fiscal and monetary policy, counteract the emergence of financial imbalances. The Riksbank’s assessment is that an amortisation requirement corresponding to at least Finansinspektionen’s proposal needs to be introduced as soon as possible. However, further measures in addition to this are needed to reduce households’ willingness to take on debt. Feasible measures include a reduction in the tax deduction allowed on interest payments, the introduction of a debt-to-value limit and stricter requirements for the banks’ credit assessments of individual households. More structural measures are also needed to increase the supply of housing and lead to a more efficiently-functioning housing market as I have already mentioned. But such reforms can only be introduced gradually and it will therefore take time before they can have any significant effect on household indebtedness. Next monetary policy decision presented on 3 September To summarise, I consider it is of the utmost importance that the mandate for macroprudential policy is clarified and that the application of the different tools does not come to a standstill. There is currently widespread awareness that a long-term sustainable solution requires a holistic approach that involves several policy areas. Nevertheless, there is a risk that more comprehensive measures and reforms are perceived as so unwieldy and difficult to manage that politicians would rather wait and hope for the best.

Figure 15 shows that the population has increased much more than the number of completed homes over the past ten years, which is an indication that housing construction has been too low. Despite housing investment now increasing, it is important that structural problems on the housing market are discussed so that we can obtain greater efficiency on this market in the longer run. Several inquiries have put forward proposals regarding what needs to be done, most recently this was done in an annex to the Long Term Survey of the Swedish Economy. Not having an efficient housing market is not merely a problem for indebtedness, it can also comprise a threat to a healthy development of society and it can create conflicts between the generations. The Riksbank has long pointed out the risks linked to the high level of household indebtedness and has previously also weighed in them in the repo-rate decisions to some extent, by setting the rate somewhat higher than would otherwise have been the case. However, the effect these considerations have actually had on monetary policy – the amount by which the repo rate has actually been set higher – has been exaggerated substantially. There are quite simply limits as to how far the policy rate can be used for this purpose. And 6  BIS central bankers’ speeches  let me emphasise that the main focus for monetary policy has always been to bring inflation back on target and to attain a good development in the real economy.
The two-pillar strategy chosen by the Eurosystem where these pillars represent distinct, yet complementary, approaches - captures this complexity in an honest and genuinely transparent manner. This naturally brings me to transparency - a topic of considerable and ongoing debate in the euro area. In my view, the transparency of the monetary policy process is best understood as the extent to which the external, presentational role of the strategy is consistent with the internal, decision-making procedure. As a party to both the decision-making and the presentation of the single monetary policy, I can assure you that the correspondence between the internal and external aspects of the Eurosystem’s strategy is extremely close. Discussions in the Governing Council take into account, on the one hand, an analysis of monetary developments and their implications for monetary policy and, on the other, an assessment of other financial and economic indicators, including macroeconomic projections based on conventional forecasting models and expert judgement. Comparisons are drawn and links are made between these two forms of analysis. Decisions are based on the information revealed through this exercise. The two-pillar framework that is used to explain policy decisions to the public therefore mimics rather precisely the internal decision procedure. Honesty is thus at the heart of the Eurosystem’s approach to communication. An inevitable consequence of our honesty in the face of a complex, uncertain and changing environment is that the ECB’s strategy cannot be simple, in the sense that it cannot be described using a single indicator or forecast.

Ardo Hansson: European and domestic economic challenges for Estonia in 2014 Speech by Mr Ardo Hansson, Governor of the Bank of Estonia (Eesti Pank), to the Riigikogu (the unicameral Parliament of Estonia), at the presentation of Bank of Estonia’s Annual Report 2014, Tallinn, 26 May 2015. *  *  *  Honourable President of the Riigikogu, Distinguished Members of the Riigikogu I am here today to give you a summary of the year 2014 at Eesti Pank. I will speak on the economy in the euro area and on monetary policy, and I will discuss the Estonian economy and the work of the central bank last year. The euro-area economy, monetary policy and fiscal policy In 2014 the economy of the euro area as a whole grew, but the situation varied a lot between different countries and overall growth was slower than had been forecast. Data from the start of this year suggest that economic activity in the euro area is staging a modest recovery. The competitiveness of the euro area has improved during the recovery from the crisis, but again the situation varies between countries. There are countries that have successfully introduced reforms, but there are also those where reforms have stopped or even gone into reverse. •  Here I must emphasise that long-term economic growth can only be built on reforms that raise economic competitiveness.
Yet citizens can be certain that three elements will remain constant. The ECB will do what is necessary to ensure price stability. It will remain independent. And it will always act within the limits of its mandate. Yet it should be understood that fulfilling our mandate sometimes requires us to go beyond standard monetary policy tools. When markets are fragmented or influenced by irrational fears, our monetary policy signals do not reach citizens evenly across the euro area. We have to fix such blockages to ensure a single monetary policy and therefore price stability for all euro area citizens. This may at times require exceptional measures. But this is our responsibility as the central bank of the euro area as a whole. The ECB is not a political institution. But it is committed to its responsibilities as an institution of the European Union. As such, we never lose sight of our mission to guarantee a strong and stable currency. The banknotes that we issue bear the European flag and are a powerful symbol of European identity. Those who want to go back to the past misunderstand the significance of the euro. Those who claim only a full federation can be sustainable set the bar too high. What we need is a gradual and structured effort to complete EMU. This would finally give the euro the stable foundations it deserves. It would fully achieve the ultimate goals for which the Union and the euro were founded: stability, prosperity and peace.

BIS Review 55/1997  -4-  the banking sector. But it can also bring new risks if the banks do not use their new freedoms well - in particular if they do not develop the credit skills and risk management techniques which are required in the kind of lending boom that may develop after deregulation. 17. The pressures on the existing banks is increased if liberalization also allows new entrants into the market. Competition in some Asian economies has already intensified as a result of the granting of new domestic banking licences and more liberal policies on the admission of foreign banks. The need to meet WTO obligations will give further impetus to this process. But while the long-term impact on the efficiency of the banking system may be favourable, the short-term impact can be to narrow interest margins and erode franchise value. This can drive the local banks to take on more high risk business. 18. I should stress, however, that the answer to this dilemma is not to stop or reverse the process of deregulation. There are examples around the region of bad debt problems embedded in banks which are either owned by the government or, even if they are privately owned, have been granting policy loans on behalf of the government. Such banks should be encouraged to develop their own credit judgment in order to play an effective role in the process of credit allocation in the economy. So liberalization is the right approach.
Dividing price trends into different categories shows that it was mainly some imported product groups that showed unexpectedly weak development. It is difficult to determine from the outcome of only one month whether or not this is a sign of a more lasting development. Naturally, it is something we will pay attention to in our future assessments of inflation. We can also observe that over the past few years inflation has been kept down by high productivity growth and low import prices. This is partly related to developments in economic activity. However, there are probably also lasting factors behind the low inflationary pressure. We can see similar patterns in some other countries. Amongst other things, it is probably a question of the effects of increased global competition. The durability of this type of structural change is difficult to determine. I intend to return to this in connection with my look back at inflation developments during 2005. A further complication is that house prices and household borrowing have increased rapidly (diagram 3). There are some risks with this type of development that can be difficult to quantify. One cannot entirely rule out the possibility that credit expansion and house prices are being driven up by over-optimistic expectations. This could lead to a situation in future with sudden downward adjustments in house prices and a large increase in household saving.

If we look at the performance of the banking industry over the last decade, the Asian financial crisis clearly marks a watershed. Between 1992 and 1996 our research indicates that the profitability of the average bank in our sample, measured by return on assets, improved by around 0.7 percentage points. It appears that this performance owed little to the macroeconomic environment of the time. Rather, it was due to improved performance at the individual bank level, driven by bank-specific factors such as more efficient operations and improving asset quality. In contrast, between 1997 and 2002 the average return on assets declined by more than 0.7 percentage points. This deterioration was largely driven by macroeconomic variables, with deflation contributing most to the worsening profitability. Bank-specific factors were less significant during this period in explaining both average performance and variations in performance across banks. 2  BIS Review 32/2003  It may seem somewhat obvious to say that the lower profitability of the banks over the last few years has been largely due to the poor economic environment. Certainly, as participants in the syndicated loan market, you will be well aware of the impact of the current sluggish state of the economy on loan demand and margins. But the conclusion does have important implications if we look to the future. If the profitability of the banks has gone down with the economy, equally it should go up with the economy as it improves.
Hence, the keel has been laid for a single market for retail payments. And not just the single market for the euro area, but for Europe as a whole. SEPA and also the Payment Services Directive (PSD) are standardising retail payments across the EU-27. So what does that mean for the UK market? The UK banking market is highly interconnected with the euro area. We also see that several UK banks are actively involved in the SEPA process. They have recognised that the implications of SEPA extend to their UK business too. Ladies and Gentlemen, SEPA is not just about cross-border payments in euro and in continental Europe, it is about changing the retail payments infrastructure throughout the whole of Europe, including the UK, about bringing it up to a higher level of efficiency, quality and security. For example, the European PSD will significantly reduce transaction times to a maximum of three days and requires full transparency on the currency conversion. This will bring significant benefits to all bank customers – consumers and corporates, also in the UK. Let me in the following give you three major achievements of the SEPA process and outline briefly the way forward of the SEPA project. What has been achieved so far, and what are the next steps? The SDD launch has been the greatest SEPA achievement this year, and perhaps even of the entire project. The preparations for the launch of SEPA Direct Debit have taken up a lot of the banking industry’s time and energy.

Sweden is not alone in changing its approach to economic stabilisation policy. A similar change of course has taken place in country after country – in fact, this took place very late in Sweden – in which context the deregulation of the financial markets nationally and internationally played a crucial role. Sweden’s economic successes during this century are the result of an openness towards the surrounding world, a large foreign trade, and the growth of large multinational companies. It would not have been possible to adopt a completely different approach than liberalisation of foreign exchange legislation and the capital market without very large costs for Sweden. It can therefore be said that the alternative to the new approach to economic policy would not have been feasible. However, this also says that when the present economic order changes, then Sweden will follow the tide. No economic policy regime lasts forever. To date we can distinguish at least five distinct regimes/epochs this century. History has not come to an end. 6. Conclusion The principles I have outlined above are illustrated by the Riksbank’s policy this spring. At the special monetary policy meeting on 2 November, the repo rate was at 3.4 per cent. The Riksbank noted then that at that interest rate inflation would be less than the target of two per cent in one or two years’ time.
The total amount of guarantees applied for is € million, which have enabled funds to be mobilised through new loans and other forms of financing for a total of 28  € million. This means that, on average, 76% of the amount of these operations has been covered by public guarantees. 29  The need for a common response from the euro area countries As I explained before, various euro area countries taking purely individual action will not provide the most effective response to the crisis. We have forged increasingly closer links as European citizens over recent decades, and this process has intensified over the last 20 years following the creation of the single currency. Europe has been one of the regions hardest hit by the current crisis, with the result that all Europeans have been affected, to a greater or lesser extent, by the same problem. Some of the reasons for joint action by European countries in response to this emergency even transcend the economy. Europe embodies the ideas of freedom and progress. And in a crisis of this gravity, it is essential that European citizens perceive their governments to be capable of acting jointly if we want to consolidate and strengthen public support for the European project. Furthermore, going beyond these ideals and from a strictly economic rationale, if there is one lesson we should have learnt from the sovereign debt crisis ten years ago, it is that a lack of unified action is detrimental to all.

Jean-Pierre Roth: Heading for more sustained growth? Summary of an address by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at the General Meeting of the Swiss Italian Chamber of Commerce, Zurich, 20 June 2006. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  Lately, Switzerland has been experiencing an encouraging upturn in the economy on the back of growth in the international economy. This development is particularly welcome because it follows a number of years of economic listlessness which have prompted repeated criticism from international bodies, due to the lack of growth in the Swiss economy. However, Switzerland's medium and long-term growth problem has not disappeared. Faster economic growth is the only possible response to the challenges posed by an ageing population. Moreover, it is the sole antidote to Switzerland's continuing loss of ground with respect to the other members of the OECD. Reforms are needed to ensure that, in the future, we can achieve more with fewer resources. The ways and means of doing this are evident. The Federal Council's package of growth measures is a move in the right direction, and the current improvement in the economy gives Switzerland the opportunity to move ahead with the requisite reforms. BIS Review 59/2006  1