samchain/econo-pairs-v1 huggingface dataset:
European Central Bank: Press Conference - introductory statements  Introductory statements by Mr Willem F Duisenberg, President of the European Central Bank, and Mr Christian Noyer, Vice-President of the European Central Bank, at the Press Conference, held in Frankfurt, on 14 September 2000. *  *  *  Ladies and gentlemen, the Vice-President and I are here to report on the outcome of today’s meetings of the General Council and the Governing Council of the ECB. The Governing Council of the ECB today conducted its regular examination of recent monetary and economic developments and their implications for the risks to future price stability in the euro area. Subsequently, it decided to keep the interest rates on the Eurosystem’s monetary policy instruments unchanged. Thus, the minimum bid rate in the main refinancing operations of the Eurosystem was left at 4.50%, and the interest rates on the marginal lending facility and the deposit facility were kept at 5.50% and 3.50%, respectively. Allow me to give you an overview of the main elements of our assessment of the latest information on monetary, financial market and other economic developments. As regards the developments in the context of the first pillar of the monetary policy strategy of the ECB, no new monetary data have become available since our decision taken on 31 August 2000 to raise the main ECB interest rates. After having increased at a very strong pace in the first quarter of 2000, M3 growth has been showing some signs of moderation over recent months.

This moderation has mainly been a consequence of lower growth in the most liquid components of M3, which bear little or no remuneration, indicating that the monetary policy measures taken since November 1999 are gradually feeding their way through. At the same time, the average of annual M3 growth rates for the period from May to July 2000, at 5.5%, continued to deviate on the upside from the reference value of 4½%. The pronounced expansion of credit to the private sector up to July also suggested that households and firms continued to regard financing conditions in the euro area as favourable. In the context of the robust expansion of economic activity, continued ample liquidity conditions would constitute a risk to price stability. Turning to the second pillar, real GDP growth in the euro area, according to first estimates published by Eurostat today, reached 3¾% (on an annualised basis) in the first half of 2000. Currently available forecasts predict that growth will remain above 3% next year. The strength of the euro area’s economic expansion in the past few months is in line with these forecasts. In fact, recent indicators suggest that, following the period of acceleration, the economic expansion may now have settled at a high rate of growth. The overall level of confidence has remained at, or close to, record highs in recent months. Moreover, employment continued to grow strongly in the first half of this year and the rate of capacity utilisation has risen further.
Mr Gjedrem reports on economic perspectives in Norway Annual address by the Governor of the Central Bank of Norway, Mr Svein Gjedrem, at the meeting of the Supervisory Council of Norges Bank on 18/02/99. Background Twenty-two years ago, in 1977, the Norwegian economy witnessed the onset of a deep crisis. An economic recession in industrial countries, high price and wage inflation in Norway and the expansion of public welfare services resulted in large current account deficits. Thirteen years ago, in 1986, the Norwegian economy was also in a difficult situation. A debt-financed upswing in consumption and investment, a fall in oil prices and a reduction in working hours gave rise to major imbalances in the Norwegian economy. In 1998 clouds again gathered over the economic horizon. Costs rose to a high level in Norway compared with other countries, oil prices fell, and the current account balance deteriorated sharply. This signalled a period of sluggish growth following six years of a strong upswing in economic growth and employment. The krone depreciated and interest rates were raised. There are many features that distinguish the three turning points in economic developments. However, one common denominator is the sudden shift in the assessment of future oil revenues. Fluctuations in petroleum revenues have proved to be a source of instability in the mainland economy. Following the last two turning points, the Norwegian economy went through a period of major restructuring, particularly at the end of the 1980s. Today the situation in the Norwegian economy is different.

The financial sector assessment program jointly carried out by the IMF and the World Bank in 2003 and updated in 2007, together with the associated technical assistance, contributed to strengthening Bank of Algeria’s supervisory tools. As of 2002, the supervisory framework also benefited from the adoption of a regulation on internal control of banks and financial institutions, which requires them to establish an internal control system for their activities and associated risks in order to improve risk assessment, management, and control. The emergence of excess liquidity in the money market since 2002 led to the introduction of new monetary policy tools in order to mop it up effectively. Based on a comprehensive regulation adopted by the Council on Money and Credit in 2005, important progress was achieved in 2006 in modernizing the payment systems, including the real-time gross settlement system for large value and urgent payments and the clearing system for retail payments. The efficiency and safety of transactions occurring through these systems have been strengthened since then, in line with international standards. To improve bank financing of private enterprises, especially SMEs, the government initiated reforms regarding loan guarantees in the 2000s. These include an increase in the level of guarantee (from 50 to 250 million dinars) provided by the Guarantee Fund for Investment Credits (CGCI), the creation of the national investment fund and regional investment agencies, and the introduction of an interest rate subsidy on investment loans.
Exchange rate flexibility is a key component in any policy mix to reduce currency mismatches. Indeed, this is an example of a macroeconomic policy that also contributes to financial stability. In the case of Chile, and elsewhere in Latin America, we saw currency mismatches drop after currencies were allowed to float following the Asian crisis, as agents and regulators adjusted to increased exchange rate volatility (Figure 3). Indeed, bank regulation should not only incorporate currency risks explicitly, but also indirectly by dealing with the credit risks that arise from currency mismatches in the corporate sector. Finally, the growth in size and complexity of the financial system that often accompanies capital flows calls for a continuous process of revision in micro prudential regulation. One of the key elements to consider here is the scope of financial regulation and supervision. For a start, in periods of abundant foreign capital, intermediaries that have not accessed crossborder financing may begin doing so, lacking both the adequate regulation and internal risk management. Furthermore, if prudential regulation on traditional intermediaries tightens in these episodes, incentives are increased for by-passing these intermediaries. An additional  4  BIS central bankers’ speeches  element to consider is the speed at which financial innovations are incorporated into middle income economies. For sure, large global financial institutions have incentives to expand the scope of their financial services.

Many EMEs have been trying to mitigate the appreciation through exchange rate intervention, with partial success. Chile is one of the latest to join this group. Others have sought the use of capital controls or macro-prudential regulations, not only for exchange rate reasons, but also to avoid the buildup of excessive market or liquidity risk associated to the foreign exchange position. In January this year we announced a program of reserves accumulation of 12 billion dollars, about 5 percent of GDP. This measure had a dual purpose. On the one hand, it would relieve some pressures on the exchange rate, facilitating the adjustment of the economy to the current international environment. On the other hand, it would increase Chile’s international liquidity position to levels around 17 percent of GDP. Indeed, evidence shows that having a high level of reserves makes economies more resilient to financial turbulences, even though they are generally not massively used. Reserves act as a deterrent against sharp capital flow reversals.1 In addition, reserves allow central banks to credibly establish foreign currency liquidity facilities. These played an important role in normalizing both domestic currency and foreign currency short term debt markets in many EMEs during the recent global crisis. After an initial sizable depreciation, the peso has strengthened, for some days even reaching levels similar to those prevailing before the intervention announcement. This contrasts sharply with the experience of the previous period of reserve accumulation initiated in April 2008 (Figure 1).
The remaining banks have also made appreciable improvements to their levels of own funds through various means such as the issuance of capital instruments, asset disposals or retained earnings, in line with the recommendations on dividend pay-outs made by the Banco de España over the past two years. 3. Cost of the reform of the banking sector  At this stage we might ask what the necessary total cost has been to ensure the stability of the banking system and how it has been distributed among the various parties involved. And, specifically, we can ask what the taxpayer has contributed in this process. An accurate reply to these questions is no easy task, as two factors combine to complicate the estimations required. First, not all aid has already been disbursed; rather, it consists of guarantees covering against future losses that only have a certain likelihood of occurring. Second, not all aid disbursed will entail a loss for the public coffers, insofar as it may be partly or fully recouped through its return by the recipient banks themselves or from the proceeds of the sale of State stakes in these banks. That said, a good starting point to disentangle the matter is the note published last week by the Banco de España,1 which included an update of the different types of public financial assistance provided to the banking sector in the period 2009–2013.

Technology may be set to change jobs and wages more fundamentally than in the past. Job displacement and creation may come thicker and faster than ever previously. “Hollowing out” may become more pervasive. And gaps between those with and without skills, or with and without jobs, may widen as never before. Or that, at least, is the picture some have painted. These issues have fundamental implications for the functioning of industries and economies and the well-being of families and societies. They also, of course, have fundamental implications for the TUC and for policymakers like me. So after reviewing labour market developments, historically and prospectively, I want to conclude with some reflections on policy, including monetary policy. Good news, bad news Let me start with a review of recent developments in the labour market. There is plenty of good news to report here, with a boom in jobs and, to a lesser extent, wages in the UK. Yesterday’s labour market data confirmed that picture. But there are also strong crosscurrents at work, often rooted in longer-term structural shifts in the labour market, which offer a more worrying window on the world of work. •  In the immediate aftermath of the global financial crisis, there were understandable fears that unemployment would rise rapidly. At the start of 2009, the Monetary Policy Committee (MPC) was forecasting that the UK unemployment rate would rise into double figures, equivalent to over the 3.4 million people.
We have assumed in our forecasts that the euro crisis will be resolved in an orderly manner so we can avoid the abrupt downturn that came in the wake of the Lehman Brothers crash in autumn 2008. Personally, I am not prepared to entirely abandon this assumption. Monetary policy must be based on forecasts, and basing these on disaster scenarios is not reasonable. We must continue in the same way as before, making forecasts that are based on incoming statistics and giving consideration to the risks of a poorer development in the euro area. Our forecasts for the Swedish economy and monetary policy need to be gradually adjusted to this. If there is a sharp downturn in the economy we are prepared to act quickly and forcefully. We demonstrated this during the crisis period 2008–2009. There is currently considerable focus on the euro crisis, but there is reason to point out that there are other risks, albeit less dramatic, to take into account. I will come back to these. There are also possibilities that growth in the world around us will be better in the slightly longer run than we are now envisaging. We are currently experience a confidence crisis with political overtones. This also means that if the political measures gradually gain credibility, confidence may return quickly and the economy may recover more strongly than we are predicting. This has happened before.

A change of culture is possible and as the England Cricket team has demonstrated to our great enjoyment, a lot can be achieved in a short space of time where there is commitment. Thank you  BIS central bankers’ speeches  3
BIS central bankers’ speeches  1  The Bank’s two main liabilities are banknotes in circulation (currently around £ and the reserve balances held by commercial banks.4 You can think of these balances as the commercial banks’ current accounts with the Bank of England. Together with banknotes, reserves balances are the most liquid, risk-free asset in the economy. The aggregate balance on reserves accounts stood at around £ before the start of the asset purchase programme in March 2009 and the current total stands at around £ The asset side of the balance sheet mainly comprises the Bank’s lending to commercial banks (via both short and long-term OMOs) and latterly to the Asset Purchase Facility (APF). The Sterling Monetary Framework: setting interest rates The Bank’s operations are designed to support both monetary and financial stability objectives. Together they make up the Sterling Monetary Framework (SMF) which is outlined in a document known as the “Red Book”5. In normal times, the SMF operates a system known as “reserves averaging”. Under that system, commercial banks are required to hold an average level of reserves over the “maintenance period” running between one MPC decision and the next. Until the start of the financial crisis, similar reserves averaging mechanisms were employed at the US Federal Reserve, the European Central Bank and the Bank of Japan. But uniquely in the UK system, the target level of reserves for each bank is chosen by the individual firm.

This illustrates the importance of further reforms. 1/1  BIS central bankers' speeches
The room was absolutely jam-packed with staff from the PRA and the wider Bank – standing room only, in fact if one more person had entered it would have been a clear health and safety breach. My colleague Vicky Saporta was in the Chair, and this was a tough job: arguments raged, data was questioned, competing views were offered and challenged. Why so much excitement at the PRA? After all, boring is good in our line of work. Were we perhaps having our own private Brexit debate, with Vicky in the role of speaker? Were we changing our pension scheme, which is in my experience the only topic that gets people hotter under the collar than Brexit? Or were we picking next year’s Charity of the Year? None of the above. This was a meeting on what we call “horizon-scanning”, which we have made a strategic priority for the PRA as we come out of the post-crisis reform period. What is this activity? Why have we made it a priority? And why does it generate so much interest from our staff? This part of our work has its origins in two simple observations about financial history. The first is that crashes and financial crises are an enduring phenomenon 1. The second is that as memories of the most recent crisis fade, market participants often gravitate back to bad practices, sometimes in a new-fangled form, leading to the next crash.

In this sense, just as the leveraged lending issue is akin to the UK mortgage risking-up issue, these margin loans have an echo of the problems we’ve been tackling on capitalisation of equity-release mortgages – complexity creates a weakness in the system. Another area our scanners are always interested in is the border zone between different industries – and in our case, in particular the border zone between banking and insurance, given we oversee both of these industries. There are a number of cross-border activities which we are keeping an eye on. One is the use of credit insurance to optimise capital positions of banks. This is a perfectly legitimate business and not one that we object to on either side of the border. But we do of course need to be satisfied that a risk which disappears from a bank’s capital requirement has genuinely been moved across the border 2, and that the receiving insurer is properly reserving and capitalising for that liability. Another area of interest is where insurers are taking on illiquid or structural risks from banks, for instance assuming the risk on long-dated inflation swaps. It is natural that some of these risks should gravitate towards the parts of the financial system which can bear them more efficiently. But we need to be sure that this isn’t just because regulation on one side of the border is missing something which has been captured on the other.
It is possible that some households planned on the basis that this increased economic stability would persist indefinitely. If so, the events of the past two years would have come as a substantial shock. Households’ consumption has slowed sharply since the beginning of 2008. Indeed, consumption is estimated to have fallen for the past five consecutive quarters, the first time this has happened since records began in 1955. Relative to an average rate of increase, the level of consumer spending has fallen by around 7½% since the start of 2008, and the savings rate has increased sharply. There has already been a considerable adjustment in households’ spending. In the near-term, the prospects for consumption depend importantly on the performance of the labour market. Although there has been a substantial fall in employment over the past year or so, the size of this adjustment to date has, if anything, been less than we might have feared given the falls in output. This may partly reflect the greater degree of wage flexibility that has been apparent in this recession compared to that in either the 1980s or 1990s. 6 This greater flexibility has meant that more of the burden of firms’ adjustment to the recession has been spread over the workforce as a whole, rather than on those losing their jobs.

My own judgment was that the uncertainty surrounding both the economic outlook and the effects of asset purchases made it difficult to have a strong view as to the relative merits of increasing the asset purchase programme to £ billion or £ billion. Indeed, the inflation projection that was published in the August Inflation Report suggested that either policy was consistent with hitting the inflation target, depending on the future path of interest rates. For me, the decision came down to an assessment of the risks of doing too much versus the risks of doing too little. With regard to the potential risks of doing too little, my main concern was that nominal demand would not recover to a level consistent with hitting the inflation target. My main worry with doing too much stemmed from the uncertainty associated with using asset purchases as a policy instrument. We do not have much experience of conducting monetary policy via asset purchases and there is a risk that their effects will be transmitted through the economy in ways we do not predict and do not want. For example, the substantial injections of liquidity might result in unwarranted increases in some asset prices that could prove costly to rectify. I placed considerable weight on both risks and thought that they were best balanced by an expansion of the programme to £ billion. 6  BIS Review 114/2009  I am hopeful that we have started along the road to recovery.
What made the economic context in which the NBR was operating in the run-up to the European Union exceptional? 2. How far has the NBR departed from the standard paradigm? 3. Did markets and banks react to the departure from the paradigm? 4. Was the unorthodox approach effective? Allow me to sketch the answers to these questions: 1. What made the economic context in which the NBR was operating in the runup to the European Union exceptional? First of all, the banking system was dominated by foreign-owned banks. After a string of domestic bank failures (particularly in the late nineties), the lack of domestic private capital, combined with the fragile situation of the state budget, made it compulsory to privatize the existing banks by selling them to foreign entities. As a matter of fact, the dominant view at the time was that opening the banking system to foreign capital was essential for improving efficiency and expertise, alleviating the shortage of domestic capital, and increasing competition. Against this background, by facilitating a better resource allocation, the penetration of foreign capital into the Romanian banking sector was seen as a means to promote restructuring of the loss-incurring SOEs and to stimulate convergence to the EU. Of course, such a development brought about positive effects in the economy, as it came with stronger corporate governance and modern banking practices. However, it also had the byproduct of rapidly growing forex credit, undermining the effectiveness of conventional monetary policy and giving rise to risks from the financial stability perspective.

Mugur Isărescu: Unconventional monetary policies and financial stability – implications for banks and financial markets Address by Mr Mugur Isărescu, Governor of the National Bank of Romania, at the joint CIGI (Centre for International Governance Innovation) – Oliver Wyman conference, Rome, 15 December 2015. *  *  *  The address was presented by Governor Mugur Isărescu during the panel session “Unconventional monetary policies and their impact on financial markets”, which also included the following members: • • • • • •  Domenico Lombardi, Director of the Global Economy Program, CIGI Malcolm Knight, Distinguished Fellow, CIGI (former General Manager of the BIS) Lorenzo Bini-Smaghi, Chairman, Société Générale (former Vice-President of the ECB) Lorenzo Codogno – Professor in Practice European Institute, LES Pierpaolo Benigno, Professor of Economics, LUISS University Carlotta de Franceschi, Co-Founder and President, Action Institute  Participants included, among others: • • • • • • •  Robert Ophèle, Deputy Governor, Banque de France Dimitar Bogov, Governor, National Bank of the Republic of Macedonia Korbinian Ibel, Director General, Micro-Prudential Supervision IV, ECB Margarita Delgado, Deputy Director General, SSM, DG1, ECB Matthew Elderfield, Head of Compliance, Lloyds Bank Carlo Corradini, Member of the Supervisory Board, Intesa Sanpaolo Pierre Siklos, Senior Fellow, CIGI  Ladies and Gentlemen, It is an honour for me to address the audience during this conference on unconventional monetary policies.