samchain/econo-pairs-v1 huggingface dataset:
BIS central bankers’ speeches  Chart 5:  Chart 6:  Net migration(a) from Ireland overwhelmingly to economies outside the euro area since the crisis  Risk-sharing in EMU substantially lower than in Canadian, US and German federal systems  (a) Cumulative net migration between 2009–14 from Ireland by destination. Source: Central Statistics Office of Ireland. Source: IMF – Toward a fiscal union for the euro area, technical background notes (September 2013). Based on Hepp and von Hagen (2012) for Germany; Asdrubali, Sorensen and Yosha (1998) for the US; Balli, Basher and Rosmy (2011) for Canada; and Afonso and Furceri (2008) for the EMU and EU. Chart 7: Rest of the world now borrowing from the euro area as a whole  Source: Eurostat (ESA 95 definitions).

It is this common view that I will present to you now as I have had occasions of presenting it, as the position of Banque de France, in the last G VII meeting, last April. I see five major points that are of systemic interest: –  the orderly liberalization of capital movements;  –  the question of reserve and debt management;  –  the key issue of transparency;  –  the question of the moral hazard associated with private sector involvement;  –  and finally the choice of the exchange rate regime. 1.1  Orderly liberalization of capital movements  The liberalization of capital movements benefits both individual countries and the world economy: it enhances long-term growth potential and improves savings/investments allocation. However, the two following principles need to be carefully taken into account in order to minimize risks: –  the restructuring of domestic financial systems and the strengthening of domestic regulatory and supervisory frameworks are preconditions of utmost importance: emerging economies should bring their domestic financial systems into line with regulatory and supervisory minimum requirements prevailing in mature economies. In that respect, the international community plays an important role through the Financial Stability Forum, the implementation of standards such as the “Core Principles for Effective Banking Supervision” or the Financial Sector Assessment Programs developed by the IMF in order to identify financial systems’ strengths and vulnerabilities. 1  BIS Review 52/2000  –  The liberalization process should be carefully sequenced, starting from the more stable capital flows (e.g.
These new possibilities mean that institutions have had to become much more sophisticated risk managers because of the singular features of these financial products and intermediaries, particularly their complexity and opacity. If we factor in the natural doubts as to the sustainability of this scenario (not so much as to whether it will continue but as to how benign it will be), it becomes evident that the satisfactory behaviour of the markets and financial intermediaries should not be allowed to lead to complacency, but should be used to strengthen the soundness of institutions as a precaution against possible changes in the favourable central scenarios. Spanish deposit institutions have not been unaffected by these developments. In fact, to the favourable factors listed above should be added, in the case of Spain, a highly favourable  BIS Review 45/2005  9  macroeconomic scenario and a growth differential with the core European countries in both output and employment. This, along with the good starting position of our institutions in terms of efficiency and competitiveness, enabled the soundness and international leadership of our financial system to be strengthened. Our institutions have thus been able to meet the demand for more and increasingly complex banking products and services, and at the same time improve their profitability. Naturally, however, the above comments on the international scenario and the need for markets and institutions to maintain their operational soundness apply likewise to Spanish institutions.

I draw attention to these limitations of the Spanish economy at a particular juncture in which foreign direct investment is slowing considerably (FDI having been one of the main channels for the diffusion of technological advances), and in which the weight of high-technology imports remains very limited, despite the surge in import penetration. The prolongation of the current trends might mean that the industries most exposed to foreign competition have to adjust their staffing levels in order to maintain their business margins. Hence the importance of creating an environment conducive to technological innovation and to higher productivity, which I shall refer to later. The second area where risks have arisen from the extended expansionary phase of the economy is related, as earlier indicated, to the ongoing buoyancy of household spending on consumption and residential investment. This variable has been favoured by the notable generosity of financing conditions, and this has given rise to certain pressures on the financial position of Spanish households. As is known, household debt last year held on the upward course it has been following since the mid-nineties, clearly exceeding 100% of the sector’s gross disposable income. This new peak marks a departure from the average levels of the euro area and is beginning to draw closer to that of countries such as the United States.
Table 2 Parities with respect to the U.S. dollar (1) (index 2005=100) Currency Australian dollar Brazilian real Canadian dollar Chilean peso Colombian peso Czeck koruna Euro Hungarian forint Indonesian rupiah Israeli shekel Japanese yen Korean won Mexican peso New Zealand dollar Norwegian krone Peruvian peso Polish zloty Russian ruble  15-Sep-08 Maximum 96.5 67.8 88.7 94.7 88.5 74.7 94.5 93.3 101.9 81.5 101.8 107.3 95.7 108.2 94.4 90.6 77.9 91.9  129.4 93.9 107.8 121.4 111.5 103.9 108.1 138.5 136.2 97.5 104.5 151.3 138.6 144.9 118.0 99.2 128.7 131.0  Depreciation Minimum (2) percentage 34.1 38.4 21.5 28.2 26.0 39.1 14.4 48.4 33.7 19.6 2.7 41.0 44.9 33.8 25.1 9.6 65.1 42.6  Appreciation (3) percentage  83.0 63.5 84.8 87.6 78.0 75.2 89.0 96.6 100.6 84.5 84.1 111.1 112.5 93.9 90.4 86.9 89.5 103.3  -35.8 -32.4 -21.3 -27.8 -30.1 -27.6 -17.7 -30.2 -26.2 -13.3 -19.6 -26.6 -18.8 -35.2 -23.4 -12.4 -30.4 -21.1  (1) From 15 September 2008 to the statistical closing of the Monetary Policy Report. (2) Difference between the currency's highest exchange rate over US dollars and the rate at 15 September 2008. (3) Difference between the currency's highest and minimum exchange rate in US dollars. Source: Bloomberg.

(2) Includes the United States, Japan, the United Kingdom and the Eurozone. (3) Includes Australia, Canada, Norway and New Zealand. Source: Central Bank of Chile based on data from CEIC and the International Monetary Fund. Figure 10 Long term indebtedness and financial burden (percentage of disposable income) 80  18  70  15  60  12  50  9  40  6  30  3  20  0  Jun.02  Jun.03  Jun.04  Jun.05  Jun.06  Indebtedness  Jun.07  Jun.08  Jun.09  Financial burden  Source: Central Bank of Chile based on information from SBIF, SVS, SuSeSo. BIS Review 9/2010  11  Figure 11 National employment and unemployment rate (seasonally-adjusted series, percent)  3  12  2  10  1  8  0  6  -1  4  -2  2  97  99  01  03  05  Quarterly change in employment  07  09  Unemployment rate  Sources: Central Bank of Chile and National Statistics Bureau (INE).
News of Fed tapering in late spring last year reversed the flow of capital into EME-dedicated equity and bond funds, and emerging market currencies depreciated against the dollar. Sovereign debt yields rose sharply in vulnerable emerging market nations such as Brazil and Turkey. Sovereign debt spreads edged up in Mexico also, but significantly less so than in other EMEs. Much like in the morning after a party the night before, investors woke up sober and more discriminating. Why Mexico stands apart There are concerns that the outsized capital flows to EMEs during the QE era pushed down interest rates and led consumers and businesses to take on too much debt. Mexico seems better positioned than many other countries in terms of this risk exposure. While according to the Banco de Mexico, private lending is up 38 percent since its recession low in 2010, international comparisons based on World Bank figures show the rate of credit expansion in Mexico pales in comparison to other emerging market nations. Between 2009 and 2012, private lending as a share of GDP grew 5 percentage points in Mexico while jumping 20 percentage points in Brazil. The level of debt exposure is also lower in Mexico than in many other emerging market nations. Private lending as a share of GDP was 28 percent in  4  BIS central bankers’ speeches  Mexico in 2012, compared with 35 percent in Indonesia, 54 percent in Turkey and 68 percent in Brazil.

Therefore, we do not foresee a significant shift in our current approach to regulation following the proposed global financial reforms. In fact, this reinforces our thinking that the approach we are taking is appropriate for our system. Bank Negara Malaysia has been engaging the banking industry to better understand the impact that the proposed reforms have on Malaysia’s economy and financial system. This will allow us to develop implementation strategies for Malaysia after taking into account specific characteristics of the domestic financial system, including compensating tools and arrangements within the financial system that mitigate risks to financial stability. An important point to consider is that, the implementation process does not result in any unintended consequences. This is where engagement with the banking industry is of utmost importance. We used inputs from the industry and share the inputs at regional and international-level regulatory fora, thus providing an emerging market perspective to the recommended proposals. Malaysian financial reform, regulatory framework and conduct of supervisors Some key regulatory initiatives by Bank Negara Malaysia to further enhance its prudential regulatory framework and conduct of supervision moving forward.   First, to strengthen financial sector legislation through the modernisation and consolidation of existing regulatory/oversight laws under Bank Negara Malaysia’s purview. The enhanced legislation ensures that Bank Negara Malaysia is entrusted with the necessary mandate and power to maintain financial stability and to conduct effective supervision of financial institutions.
This at a time when Malta has already started to graduate from the General System of Preferences (GSP) through which some developed countries grant non-reciprocal preferential trade access to less developing countries. For example, Malta graduated from the GSP scheme of the USA at the end of last year. In addition, pressures are mounting on developed countries in the WTO to extend any preferential treatment accorded to a subset of WTO members to all other members, such that any preferential treatment given to Malta by any country over and above that accorded to other WTO members will be lost in any case. In a non-membership scenario, moreover, the EU-Malta income gap would tend to widen because the other new members will continue with reforms that are conducive to attracting FDI. Indeed a recent study shows that the EU decision to open negotiations with the first-wave of accession countries had by itself reinforced FDI flows into these countries. This has implications for the catching-up process, because countries that absorb the highest amounts of FDI normally continue to attract the bulk of new 14 investment in later years. So that if the scale of FDI flows into Malta fails to keep up with that going to the other candidate countries, Malta could easily fall behind these countries in terms of GDP growth and living standards.

Assets under management of these non-bank investors went from less than 1% of GDP in 1984, to 65% in 2000, and to almost 100% of GDP in 2018. Currently, around 85% of total domestic corporate bonds and around 65% of sovereign bonds are held by institutional investors, as a result of which reliance on banking credit of these corporations has gone from 91% of financial debt in 1986 to around 25% in the recent years. High-level Policy Seminar on Integration or Fragmentation?
Real short-term interest rates were reduced around the world, following a nearly decade long secular decline in inflation rates, a slowdown in growth at the turn of this decade and subsequent deflation. As central banks raised their policy rates when the outlook improved and deflation risks had dissipated, both real and nominal long-term interest rates remained anomalously low. Global savings appeared to rise faster than did perceived real investment opportunities, and this development helped to push down real long-term interest rates around the world. At the same time, many emerging market economies built up very large levels of official reserves to reduce external vulnerability and to hold the value of their currencies stable against the dollar. The exchange rate policies in these economies – economies that together accounted for a increasing share of global GDP – made overall global financial conditions more accommodative, even as the United States and other countries tightened their monetary policies. Expected and realized volatility in both debt and equity markets were remarkably low for most of the last half a decade. Term premiums declined and remained low over much of this period. Credit spreads across a wide range of asset classes fell to levels that assumed unusually low levels of future losses. In the United States, credit, and mortgage credit in particular, expanded relative to GDP.

If the risk of significant damage to growth from these financial market pressures is attenuated and if global growth remains strong and drives a continuing rise in energy and commodity prices, then inflation may not moderate as much as we anticipate. If the medium term outlook for inflation deteriorates significantly, the FOMC will move with appropriate speed and force to address this risk. This requires a fine balance. The principal challenge for policy is to provide an adequate degree of insurance against the downside risks that still confront the economy as a whole, without adding to concerns about inflation over the medium term. We cannot know with confidence today what level of the short-term real funds rate will be consistent with our objectives of sustainable growth and low inflation, but if turbulent financial conditions and the associated downside risks to growth persist, monetary policy may have to remain accommodative for some time. Liquidity provision Although concerns about credit quality are at the root of the current problems in financial markets, a substantial impairment in market liquidity conditions can exacerbate and prolong the adjustment in credit conditions. To mitigate this risk, we have taken a series of actions to help reduce the risk that market liquidity conditions exacerbate the adjustment process in credit markets.
The peso/dollar parity, with ups and downs, is somewhat lower than in the previous Monetary Policy Report, while the real exchange rate (RER) has shown no significant variation. The Board continues to estimate that, with the prevailing nominal exchange rate and currency parities, the RER is in the lower part of the range of values consistent with its long-term fundamentals (figure 3). In the baseline scenario, y-o-y CPI inflation will stand below the tolerance range in the coming months, to start rising later and approach 3% by the end of 2013 and over the projection horizon, this time the last quarter of 2014. There are several factors explaining the lower figures foreseen for the near future, including the high basis for comparison of late 2011 and the turn of 2012. Core inflation will post y-o-y variations below 2% over most of 2013, then it will rise gradually to near 3% over the course of 2014 (figure 4). This path assumes that wages will grow in line with productivity and target inflation. In addition, it relies on the methodological assumption that, over the projection horizon, the RER will be fairly unchanged from its recent values. Finally, the baseline scenario uses as a working assumption that the MPR trajectory will be stable, as suggested by the latest surveys available at the statistical closing of this Monetary Policy Report (figure 5).

This is important because it shows that there is another less-explored way in which central banks can effectively contribute to fostering financial integration: identifying the policy issues where the input from research is welcome and providing researchers with a forum where they can debate their ideas among themselves and with policy makers who, if convinced, will be in charge of carrying them forward. I am sure that the presentations and discussions during the course of this conference will provide central bankers with fresh and high-quality material which will be useful to us in finding the most efficient way to foster financial integration without jeopardising our objective of promoting financial stability. I sincerely hope too that this conference will encourage researchers to go on working on these and other related areas in the coming years, thereby rapidly filling the current gap between the policy relevance of the questions posed and the availability of profound analytical and empirical research to substantiate the possible answers. I would like to end my intervention by thanking the organisers for gathering together such an impressive group of researchers and policy makers, thanking the audience for their attention and wishing you all a fruitful exchange of ideas and a pleasant stay in Madrid. Thank you very much. 4  BIS Review 118/2006
The ruble’s strengthening since the beginning of the year made an additional contribution to inflation slowdown. Higher oil prices and overall favourable conditions in financial markets helped. International investors’ interest in Russian assets recovered, which was the most distinctive in the OFZ market. The agreements on retail fuel prices between the Russian Government and oil majors are continuing to play a significant role. Consumer petrol prices rose in May by 2.8% year on year, and their growth is likely to be moderate in the near future. That said, the new regulation in this market, in particular, the offsetting mechanisms (including reverse excise duties), is rather complicated. Currently, it is hard to accurately estimate its medium-term economic effectiveness, especially for scenarios providing for tangible oil price fluctuations. Moderate domestic demand is also curbing inflation. This calls for a deeper insight into the economy. This is the second most important factor that we took into account. Economic growth in the first half of the year has been lower than expected. We predicted that business activity might slow down somewhat at the beginning of the year on the back of the following factors: the VAT hike, a likely slowdown in growth of the global economy and demand for Russian goods and services, and the implementation period of the major national projects scheduled for the second half of the year. Some of these factors had a stronger effect than expected. In particular, budget expenditure dynamics.

As regards monthly growth in prices of non-food goods and services, it held close to or below 4% in annual terms in March-May. Fourth. We factored in that inflation expectations of households and businesses remain elevated against both the inflation target and the minimum levels reached in the opening months of 2018. Inflation expectations show mixed dynamics. Business price expectations continued to decline in April-May. Inflation expectations of households came in at 9.3-9.4% during this period. However, we expect that inflation decline to 4% will bring down inflation expectations of households and businesses. Analysts’ expectations remain anchored at the inflation target of close to 4%. Fifth. Monetary conditions are softening. This is driven by changing expectations of domestic and external financial market players. First, this is enabled by revised expectations as to the path of the Bank of Russia key rate; second, by an adjustment in expectations and yields in the external financial market against the background of changes in major central banks’ rhetoric – which I have mentioned. OFZ yields are declining in this environment, enabling a potential reduction in deposit and lending rates. Between April and May, a number of major banks revised downwards their interest rates on several deposit products; interest rates on mortgage loans were also beginning to trend down. Today’s decision to cut the key rate alongside the signal we have sent out will work to solidify these trends. Medium-term outlook. The outcome of OPEC+ negotiations remains uncertain.
Denis Beau: What role should banks play in the twin digital and climate revolution? Speech by Mr Denis Beau, First Deputy Governor of the Bank of France, at the conference at the Jean Monnet University, Saint-Etienne, 15 April 2022. * * * Accompanying slides can be found on the Bank of France website. [SLIDE 1] Students, faculty, ladies and gentlemen, We now have sufficient distance to say that, if the health crisis unleashed by Covid-19 was not compounded by a financial crisis, this was in part because our prudential framework has made banks considerably more resilient. The new framework, coupled with the exceptional support measures introduced by governments and the European Central Bank (ECB), enabled banks to continue financing businesses during the health crisis. Today, it is enabling them to cope with the economic and financial impacts linked to the war in Ukraine. That being said, for this new architecture to be consolidated, the Basel III Accord still needs to be fully implemented in a manner that is fair, reasonable and definitive. Yet this strengthened abilities to withstand shocks cyclical crises must not blind us to more structural vulnerabilities, which the health crisis has helped to amplify, I am thinking in particular of digitalisation and the transition to a sustainable economy.

French banks have a head start in this regard, owing to the statutory disclosure requirements applicable to institutional investors since 2015 and the ongoing dialogue in recent years with the ACPR, notably aimed at measuring action on climate 2/6  BIS central bankers' speeches  commitments. 1.3 These vulnerabilities are a source of risk for financial stability [SLIDE 4]  The vulnerabilities that I have just outlined could affect financial stability. If the public and private responses to these structural developments fall short, banks could be weakened, which in turn could adversely impact the real economy. In terms of the digital transition, competition from new intermediaries, such as fintechs, bigtechs and DeFi players, along with the rise of private digital assets like stablecoins and cryptoassets could (i) lead to fragmentation of financial and payment services, making them less safe and efficient, and (ii) cause banks to be crowded out of the value chain by the “platformisation” of financial services. DeFi especially is seeing pronounced growth, although the amounts in play remain small in absolute terms, as the chart illustrates [SLIDE 4]. Moreover, these new participants and products are not currently subject to regulations and supervision comparable to those applicable to banks. This situation could eventually impact financial stability, notably if it is accompanied by decreased regulation of critical financial and payment services providers and a reduction in the security associated with regulation.