samchain/econo-pairs-v1 huggingface dataset:
Jean-Pierre Roth: The financial crisis is receding – what will the future bring? Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the Centro di Studi Bancari, Vezia, 15 December 2009. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  After the financial crisis, the global economy will enter a phase of weak economic growth. Unemployment levels in the industrialised countries will be comparatively high. Public finances in these countries have been heavily depleted, both by the crisis and by the needs arising from the ageing of their populations, and will need to be consolidated. In monetary terms, inflation will remain under control, at least in those countries whose central banks enjoy a strong level of independence. Switzerland is comparatively well equipped to meet these challenges. Its public finances are in a healthy state and it is sufficiently open to the world to participate in its most dynamic markets. With its tradition of high quality and cutting-edge technology, Switzerland is well positioned to react to specific market requirements. Moreover, it can draw on considerable financial resources and, thanks to the openness of its labour market, also has easy access to labour resources, without which growth would not be possible.

A detailed analysis on them can be found in our Annual Report *  *  *  Dear Madam Speaker, Dear Members of Parliament, Turning back to our analysis on economic and financial developments in the country, during and after the crisis, I would like to highlight a structural weakness of the Albanian economy  BIS central bankers’ speeches  5  that has accompanied it throughout the transition: high current account deficit and still low degree of our economy’s competitiveness in global markets. Today we live in a global world, with integrated capital, product and labour markets. As a developing country, Albania is facing (and will continue to face) a rising competition, not only in the region but also beyond it. In our opinion, the long-term sustained development of the country and reduction of our structural weaknesses, imply necessarily increase of competitiveness of the Albanian economy. Ongoing structural reforms should be driven by ambitious goals and a realistic time horizon. Structural reforms should aim at creating a more attractive climate for foreign and domestic investments, encouraging employment and further growth of welfare, providing:   A sustainable macroeconomic environment;    An efficient and reliable financial system;    A legal, complete and transparent functional framework;    A modern infrastructure;    A qualified and competitive workforce in terms of cost; and    A clear perspective for a faster integration into the European Union, which will open the way to convergence funds.
Mr Gehrig focuses on special structural characteristics involved in solving the Year 2000 problem for the financial sector in Switzerland Speech by Prof Bruno Gehrig, a member of the Governing Board of the Swiss National Bank, at the Global 2000 Coordinating Group Meeting in Montreux on 30 April 1999. I am most delighted to be your luncheon speaker today and thank you for your invitation. I am sure that Montreux provides you with a highly stimulating environment for today’s Global 2000 meeting. As you are no doubt aware, you are leading the way in tackling the Year 2000 issue. I would like to thank you for your extremely important and valuable commitment, and I am certain that I also speak on behalf of my colleagues from other central banks, bank supervisors and - even more importantly countless customers in the financial industry. On the threshold of the third millennium we are indeed confronted with most complex and - in many regards - unique challenges. In terms of methodology, I believe it is essential to realise that we are dealing with complex network problems which cannot be solved on the basis of the behaviour patterns of market and competition we are all familiar with. In this context, external or third-party effects are in fact so significant that remarkable collective effort is necessary in order to minimise potential damages resulting from malfunctions. This applies both to the preparatory work and the challenge to overcome frictions which - in spite of our best efforts - will be unavoidable.

Ladies and Gentlemen, The topic of this meeting centered on the place of women in governing bodies refers inevitably to the challenges of women contribution to economic activity and more broadly to the issue of gender inequality. In this respect, I think there is no need to argue nor to justify the importance of this issue. It is discussed and debated every now and then in public debates within national and international bodies, not to mention the regular or specific reports devoted to it. This increasingly highlights the stakes involved and, fortunately, the greater awareness about it. It is not only a problem of social exclusion but, as we all know, a considerable economic loss. The available data on the different dimensions of this issue unfortunately show that our region MENA appears to have among the highest levels of gender inequality, if not the highest, in the world. However, I believe that there is a growing awareness about the situation. We have seen in recent years the adoption of policies and initiatives in the region to empower women and strengthen their economic, social and political status. I would like, if I may, to illustrate further on this referring to my home country and the institution I have the honor to lead. Ladies and Gentlemen, Since many years now, Morocco engaged in a process of improving the situation of women, ratifying several international conventions and complying with UN instruments on human rights in general and women rights in particular.
17.11.2016  Challenges facing the retail banking sector Remarks at the dinner event organised by the European Savings and Retail Banking Group (ESBG), Madrid Fernando Restoy Deputy Governor  Good evening. It is a pleasure to have the opportunity to participate in this event and to address this eminent group of bankers. I am grateful to Isidro Fainé and José María Méndez for inviting me. I hope that you have now got your breath back and recomposed yourselves after viewing Picasso’s impressive and to some extent disheartening masterpiece, Guernica. You certainly need a strong mind to discuss banking issues nowadays. I imagine that probably much of the agenda of your regular meetings is devoted to exchanging experiences on how financial institutions such as those participating in the European Savings and Retail Banking Group (ESBG) are addressing the current challenges affecting the entire financial sector in the current post-crisis period. Allow me to attempt to make a modest contribution to that discussion. I would like to say from the outset that I do not believe that the financial crisis, as such, has challenged any specific business model. We have seen institutions with quite different sizes, governance structures and business orientations failing all around the world. The crisis has affected both investment and commercial banks as well as wholesale and retail businesses.

Indeed, I would subscribe to the idea that, by and large, the crisis does not provide clear arguments with which to question a particular business model or line of activities, such as retail intermediation, wealth management or investment services. It does however encourage us to analyse whether those banking activities are conducted in a sufficiently efficient way by specific institutions so as to make them profitable. That said, pure European retail banks admittedly face specific challenges in the current environment, which need to be effectively addressed in order to preserve the social function that those institutions provide. Let me mention three of the most obvious challenges. First, the low interest rate environment, which is putting heavy pressure on financial margins, particularly for institutions –such as most of those belonging to the ESBG - with little investment in securities that could be revalued as rates go down, and with much funding obtained from retail deposits, which impedes a full transmission of very low or negative market rates to funding costs. Second, the accumulation of non-performing loans in several regions of the euro zone. This is particularly a challenge for banks, again mostly retail banks, with a significant concentration of exposures in a single country or even a single region subject to a subdued macroeconomic performance in the recent past. Third, regulation. Banks are now facing new requests to raise more and better-quality capital. More importantly, significant institutions will have to hold on their balance sheets substantial volumes of liabilities that could be subject to bail-in.
We need to better understand the degree to which any changes in the nature of liquidity reflect the evolving structure of financial markets, changes in regulatory policy or other factors. With respect to regulatory policy, an important objective should be to achieve the best balance between the benefits of increased safety and soundness versus any costs imposed by these regulatory changes on market function and liquidity. In my remarks today, I will focus on market liquidity rather than funding liquidity, although I recognize that the two are related in important ways. I will examine market liquidity in two important fixed-income markets – the U.S. Treasury market and the U.S. corporate bond market. The Treasury and corporate bond markets provide a useful contrast in evaluating liquidity conditions as they differ with respect to the homogeneity of their securities, how their securities are traded and how regulatory changes may have affected the incentives of dealers to make markets in these securities. BIS central bankers’ speeches  1  The Treasury market is much more homogeneous and the average size of each issue is much larger. Trading volume and average trade sizes are much larger, and much of the trading activity for interdealer on-the-run securities is conducted electronically through the use of central limit order books (CLOB). In contrast, the corporate bond market is much more heterogeneous; there are many more distinct bonds available; and bond sizes are much smaller. As a result, corporate bond trading is fragmented across a large number of distinct outstanding bonds.

Russia’s unjustifiable invasion of Ukraine has brought supply security back to the top of the agenda for all major economies, most saliently for energy. And over the longer term, it is likely to accelerate the global transition to clean energy production as a way to increase climate and energy security. But such technologies are highly resource-intensive in their installation phase. Getting the global economy on a path to meet the Paris Agreement goals could see total mineral demand from clean energy technologies quadrupling by 2040. [7] This threatens a new era of competition for resources. Challenges for Europe in 2023 As this new global map takes shape, we enter 2023 facing three big challenges. The first challenge is to reconsider how we can best protect Europe’s critical interests in a fast-changing world. As an economy that is very open to trade and deeply integrated into global supply chains, we are vulnerable to geopolitical headwinds. For example, 35% of Europe’s manufacturing output is absorbed outside the EU, much more than for the United States or China. So, as the next chapter in the globalisation story is being written, we need to ensure that Europe is a leader, not just a follower. And as the French President and German Chancellor have recently argued, we have the capacity to do so. [8] Already now, Europe is the top trading partner for 80 countries, compared to just over 20 countries for the United States.
Dominant academic paradigm may restrict those who radically incorporate lessons of these days into their studies. And of course, central banks, as always, will be criticized for spoiling the party at its hottest moment by taking away the punch bowl. We should be aware that keeping the old habits will only give us a new and may be more severe crisis in the near future. Thanks to the global efforts, lessons derived from the crisis have already started to initiate dramatic changes in the global financial governance. There have been encouraging developments in recent months to design a new global financial system to prevent future crises. In the recent meeting of G-20 finance ministers and central bank governors, member  BIS Review 120/2009  1  countries confirmed their commitments to the principles of strengthening transparency and accountability, enhancing sound regulation, promoting integrity in financial markets, and reinforcing international cooperation. I believe the establishment of Financial Stability Board with increased participation of emerging countries is a critical step in achieving these objectives. In recent years, as a byproduct of market-oriented structural reforms and prudent macroeconomic policies, the share of emerging countries in world output and their role in global financial markets has significantly increased. Now, we are faced with a more diversified group of countries with different objectives and interests. Since the rise of emerging economies has dispersed economic power, decision-making process and international cooperation has become more complicated.

However, risks only changed form and address in the financial system, just like the energy continuously transforms in the physical universe. Almost all economists agree that we are heading to a slow, gradual and painful recovery. And as a central banker who has spent almost 30 years in this profession, I can tell you that it is a miracle itself to have so many economists agree on one issue with so much vigor and conviction. The future of the global financial system will be shaped by the lessons we derive from our current experience. The ongoing crisis revealed that preventive measures put in place at the local level by national authorities may not be effective to address global problems. It also underlined the importance of international cooperation and coordination in designing and implementing economic policies. It is clearly understood that the only way to prevent future crises at the global scale is multilateral cooperation. However to establish and sustain multilateral cooperation is not an easy task. As (John Maynard) Keynes once said, “The biggest problem is not to let people accept new ideas, but to let them forget the old ones.“ It is very likely that economic agents will try to hold onto their old habits when the effects of the crisis subdue. Appeals on regulators will pile up for a more lenient implementation of rules, regulations, and policies. Politicians will face pressure from their constituents to give priority to local concerns at the expense of global coordination.
Increased demand for dollar assets lowers their return, creating an incentive for firms to borrow in dollars. The liquidity and safety properties encourage this further.15 In turn, companies with dollar-denominated liabilities have an incentive to invoice in dollars, to reduce the currency mismatch between their revenues and liabilities. More dollar issuance by non-financial companies and more dollar funding for local banks makes it wise for central banks to accumulate some dollar reserves. Given the widespread dominance of the dollar in cross border claims, it is not surprising that developments in the US economy, by affecting the dollar exchange rate, can have large spillover effects to the rest of the world via asset markets. As Hélène Rey has put it,16 and as Arvind Krisnamurthy and Hanno Lustig echo in their paper for this symposium, the global financial cycle is a dollar cycle. In part, that arises because movements in the US dollar significantly affect the real burden of debt for those companies (especially in EMEs) that have borrowed unhedged in dollars, and tend to reduce the dollar value of companies’ collateral.17 Both result in tighter credit conditions and, in the extreme, defaults. Fluctuations in the dollar also significantly affect the risk appetite of global investors. As discussed by Şebnem Kalemli-Özcan earlier today, these risk spillovers can have a significant impact on receiving economies, especially in EMEs where global risk perceptions interact with country-specific risks.

That won’t be easy. Transitions between global reserve currencies are rare events given the strong complementarities between the international functions of money, which serve to reinforce the position of the dominant currency. And the most likely candidate for true reserve currency status, the Renminbi (RMB), has a long way to go before it is ready to assume the mantle. The initial building blocks are there. Already, China is the world’s leading trading nation, overtaking the US at the start of this decade.34 And the Renminbi is now more common than sterling in oil future benchmarks, despite having no share in the market prior to 2018.35 The greater use of the Renminbi in international trade is also leading to its growing use in international finance. This has been enabled by reforms to China’s monetary, foreign exchange, and financial systems that have liberalised and improve its financial market infrastructure, making the Renminbi a more reliable store of value.36 The Belt and Road Initiative could foster further take up of the Renminbi in both trade and finance. However, for the Renminbi to become a truly global currency, much more is required. Moreover, history teaches that the transition to a new global reserve currency may not proceed smoothly.
Without formal supranational solutions in place, it is all the more important to ensure cooperation between the central banks and supervisory authorities involved. The fact that a large share of the financial institutions in the new EU member countries are foreign-owned makes this issue even more relevant. In June 2003, the governors of the Nordic central banks signed an agreement on the management of a potential financial crisis in a Nordic bank with activities in two or more Nordic countries. The agreement contains procedures for the coordination of crisis management between the central banks. The Nordic supervisory authorities have drawn up a similar cooperation agreement. One particular problem in the Nordic region is the differences in the countries’ deposit guarantee schemes. The different schemes vary both with respect to guaranteed amount and type of deposit covered. However, these differences are also widespread across Europe and some convergence of rules and operating procedures is certainly long overdue. What instruments are available to secure financial stability? Monitoring and analysis of the financial system result in an assessment of the current situation regarding financial stability. This leads to the question: what instruments are available to enforce and secure financial stability? We can distinguish between preventive measures and measures for crisis resolution. Of relevance to the latter is the role of the central bank as the lender of last resort. In some countries this role was the main reason for establishing the central bank in the first place.

To navigate amidst turbulent seas to arrive at the new frontier of opportunities in Islamic finance, there is a need for the industry to build on its strengths and achievements thus far, in the pursuit to realize the distinctive value that Islamic finance brings to the global economy. Indeed, Islamic finance needs to leverage on its inherent strengths and demonstrate leadership in the real economic agenda and contribute towards global economic prosperity and stability. 4  BIS central bankers’ speeches
For instance, with this crisis, we witness a breakdown in the key assumptions that form the basis of our thinking about the efficiency and the self-correcting nature of markets which, for a long time, underpin the rationale for globalization, liberalization, and deregulation. These assumptions are now being challenged. Next, in this crisis, the most damage comes from the most regulated sector of the economy, notably the financial sector. What we saw is that, even with regulation in place, the sector surprisingly exhibited important failure in risk management discipline across a variety of institutions and players, including banks, institutional investors, credit-rating agencies, and regulators. On this, a better way to manage risk to support the process of international financial intermediation still needs to be worked out. And finally, the global economy has never before been put in a position that it might have to deal with the consequences of the  BIS Review 92/2009  1  massive policy response that have been put in place both on the fiscal and the monetary fronts. These 4 consequences are the known unknowns, and the approach we choose to address them will importantly influence the direction that global finance will take going forward. Given the focus of this conference is on the stake of emerging economies in the international financial system, let me share with you briefly how emerging economies in Asia so far have managed in the current crisis, and how we see the direction of global finance evolving.

This is based on significant differences that exist, between the core-crisis countries and the countries affected by contagion, in the relative strength of the economic fundamentals, the state of the banking sector, and the perception of risk by investors. However, beyond the initial recovery, sustained economic decoupling will be difficult without a major restructuring in the sources of growth which, in the case of Asia, calls for a reorientation of the growth driver from exports to domestic demand. Making this transition safely in this era of globalized finance will be the next important challenge for emerging markets in Asia. In the past ten years, the share of domestic demand in the region’s GDP fell by 6.3 percentage point, and the share is now 12.3 percentage point below its peak in 1994. Moving the ratio back will require major restructuring in both the demand and the supply sides of the economy, which needs to be supported by policies that redirect economic incentives from savings to domestic consumption and investment. Such task is gigantic. Chief amongst the polices needed to support this transition will be the development of the region’s financial system, to ensure an efficient intermediation of savings into productive investment. This is really the key issue where the challenge and the constraint to economic decoupling lies. One of the prime reasons underlying the current global imbalance is the limited capacity of the financial systems in emerging markets to generate investment from their local savings.