samchain/econo-pairs-v1 huggingface dataset:
Part III: The side effects of improved incentives Will higher capital restrict bank lending? Let me now turn to the examination of some of the potential side-effects of the measures described in the preceding section. A legitimate first question is whether improving incentives in the way we have described could have undesired indirect effects such as modifying the banks’ lending behaviour. An argument often heard is that higher equity requirements would force banks to set aside, or hold in reserve, funds that could otherwise be used for lending. Here the main observation is that extremely risky gambles should now be avoided as a result of improved incentives. There has been excessive risk-taking in the past; there should be less of it under the new incentives. Beyond this intended effect, which concerns only the most risky activities, the form of financing used by an institution – in itself – should have no impact on the profit-maximising business model. That is, as far as activities and revenues are concerned, imposing extra capital does not change the perspective of the decision-maker beyond restoring the incentives for balanced risk-taking. The exception is the case of marginally profitable activities, and here only to the extent that the cost of financing is increased (more on this later). Provided that activities are profitable, and bearing in mind that in banking the targeted return on equity is not only highly positive but incomparably higher than in other sectors of the economy, the cost of financing should not be the main determinant of activity.

Anita Angelovska Bezhoska: Increased availability and use of official statistics in the Republic of North Macedonia Introduction speech by Ms Anita Angelovska Bezhoska, Governor of the National Bank of the Republic of North Macedonia, at the marking of the European Statistics Day, Skopje, 19 October 2021. *** Your Excellency Ms. Forsgren Bengtsson, Dear Mr. Simovski and Mr. Stymne, Dear State secretary Ms Gaber, Distinguished speakers, representatives of the non-government sector, colleagues and participantsFor a second year in a row, we are marking the European Statistics Day in specific circumstances, shaped by the global pandemics. The health crisis has infiltrated itself into every single pore of our societies disrupting the world we know. Statistics has not been an exception whatsoever. At the time the crisis hit, statistics area in global terms was already facing many challenges. Producers of statistics were coping with lingering tasks that came as a side effect of the global financial crisis in 2008. Although the lack of statistics was not a cause of this crisis, still it revealed significant data gaps and underlined a need of more frequent, comprehensive and granular data to strengthen policy-making infrastructure. The second challenge rested in unprecedented digitalisation and data proliferation, by both private and public entities. It challenged official statistical producers, which serve as the primary source of data, to innovate their data and data sources, but even more to work intensively on setting proper data governance frameworks.
The external financing needs, within the current scenario, are expected to be covered by further inflows of foreign direct investments and by the public borrowing for infrastructure purposes. The current forecast points to a rather stable external debt to GDP ratio. No major pressures are foreseen in the following two years on foreign reserves, and they are to be maintained at the adequate level. Risks surrounding this baseline macroeconomic scenario should not be neglected. For us, as a small an open economy, they mostly come from the external environment and our main trading and financial partners. Although with the latest monetary easing of the ECB the downside risks to the euro zone growth are less pronounced, and in general the global growth risks are more balanced, they are still present and if being materialized, could impact the economy. Additional source of risks are the sharp and sudden swings in the primary commodities prices, which for country like ours, can change the envisaged economic profile to a large extent. A new, additional source of risks is the current domestic political context, which can harm the economy, if not being tackled swiftly. Of course, the risks are challenging and are to be closely monitored. This is even more pronounced, given that the policies’ space at the current juncture is to a great extent exhausted. Hence, the continuation of the structural reforms remains paramount and a challenge, as it can further increase the resilience of the economy, mitigate the risks and reduce the policy burden.

For us as emerging country, with foreign bank presence, the global financial regulatory reforms also pose challenges, as they can possibly stimulate deleveraging, reduce access to financing and financing flows to the private sector. At the end, let me also avail myself of this opportunity to emphasize yet again our continuous efforts to align with the EU requirements in all areas of operation, especially the banking regulation and statistics, notwithstanding the efforts and the progress done in all other fields. Thank you for your attention. BIS central bankers’ speeches  3
Durmuş Yılmaz: The role of competition policy and practices in attaining macroeconomic objectives Speech by Mr Durmus Yılmaz, Governor of the Central Bank of the Republic of Turkey, on the occasion of the 11th Anniversary of the Turkish Competition Authority, Ankara, 26 March 2008. *  *  *  Ladies and Gentlemen, First of all, I would like to greet you all. We have convened here on the occasion of celebrating the 11th Anniversary of a distinguished institution of Turkey. The Turkish Competition Authority has served its critical function in the development process of Turkey with the studies it has conducted. Let me take this opportunity at the very beginning of my speech to say that I believe the contributions of the Competition Authority to Turkey’s development will continue in an increased capacity in the upcoming periods. The main objective of public policies is to increase prosperity. Under the current circumstances, where economies are becoming increasingly interrelated, raising the level of prosperity of our country is contingent on increasing the share it gets from the global value added. In the post-2001 period, the Turkish economy grew by approximately 7 percent on a year-onyear basis and considerably increased its share in the world export market. During this period, the private sector was the engine for growth, with the greatest contribution from the industrial sector. In the 23-quarter periods of uninterrupted growth process, private sector investments increased by 150 percent in real terms.

So it is relatively early days to pass judgement on how the current recovery is proceeding. However, the performance of the British economy over the first year of this recovery does provide some grounds for encouragement. The recovery has been somewhat uneven. As Chart 1 shows, after a couple of quarters of rather subdued growth at the end of last year and early this year, GDP picked up strongly in the second quarter – producing the largest quarterly rise in GDP for nearly a decade. BIS Review 134/2010  1  We do not yet have an official estimate of growth for the third quarter, but the National Institute of Economic and Social Research estimates that GDP rose by 0.5% in this period. That would produce an annual growth rate of 2.5% for the first year of the economic recovery – in line with the historical average growth trend and somewhat stronger than the rebound we saw in the early stages of the previous two economic recoveries, in the early 1980s and early 1990s. 1 The fact that growth has been uneven from quarter to quarter should not be a great surprise as uneven growth is not unusual as an economy begins to recover from recession. This return to economic growth must be seen against the background of a sharper fall in output than we experienced in previous post-war recessions. But two more positive aspects of the early stages of this recovery are worth highlighting.
We cannot afford inertia for other countries are quickly building modern e-economy. 1  A.Blinder “Fear of Offshoring”, CEPS Working Paper No. 119, December 2005. 2  This and many other examples are available in “The Word is Flat, A Brief History of the Twenty-First Century” by Thomas Friedman published in 2005. 3  B. van Ark “Europe’s Productivity Gap: Catching Up or Getting Stuck?,” the article prepared for the International Symposium on Productivity, Competitiveness and Globalisation, Banque de France, Paris, November 4, 2005; R.McGuckin, M.Spiegelman, B. van Ark: The Retail Revolution - Can Europe Match U.S. Productivity Performance?,” The Conference Board, March 2005; and “Deepening the Lisbon Agenda, Studies on Productivity, Services, Technologies,” the report prepared by the Federal Ministry of Labour and Economy of Austria, published in January 2006. 4  For instance, the report by A. T. Kearney’s consulting company “Offshore Location Attractiveness Index, Making Offshore Decisions” published in 2004. Three categories of indices were evaluated: the financial structure (labour, infrastructure, tax and regulation costs) with a weight of 40%, the skills and availability of employees (cumulated experience in business activities, ability to easily employ the staff, command of foreign languages and qualifications, social indices, e.g. the rate of unemployment) with a weight of 30%, business environment (state’s conditions, infrastructure, ability to adapt to differed cultures and the protection of intellectual property) with a weight of 30%.

As a regular attendee of TSC hearings I can assure you that we are already held very robustly to account for our activities – but I can see the point that some in Parliament have been making that if we do more rule-making, and with European Parliamentary scrutiny of rule-making no longer present, then we might be expected to do more to support Parliament in probing technical regulatory issues. Whatever Parliament decides on this, we look forward to engaging fully. International standards are another important safeguard. The UK has always been at the forefront of their development: with the Federal Reserve, the Bank of England was the driving force behind establishment of the Basel Committee on Banking Supervision and supplied its first chair. We remain fully committed to the development and implementation of international standards, and this applies as much in insurance as it does in banking. Actions speak louder than words – Dr Vicky Saporta, who runs prudential policy for the PRA, is also a very energetic and successful Chair of the International Association of Insurance Supervisors. There is also an increasingly lively debate around our objectives and ‘have regards’. As with accountability arrangements, it may well be sensible for these to evolve as our role changes. And we need to be wary of the natural tendency of regulators to become strongly attached to the objectives Parliament has currently set for them. But I would offer two notes of caution.
The court’s adjudication role in Islamic finance is reinforced by the support from the SAC in its capacity as a consultative body to the Malaysian judiciary system. Under the law, the Central Bank of Malaysia Act 2009 prevails, if a question concerning a Shariah matter arises in any proceedings relating to Islamic financial business, where the court or the arbitrator shall take into consideration any published rulings of the SAC or refer the matter to the SAC for its ruling. The SAC’s rulings are binding on the courts and arbitrators. This referral system preserves and enhances the sanctity of Shariah rulings and the consistency in the interpretation and application of Shariah principles in Islamic financial transactions. To complement the court system, specific arbitration rules for Islamic banking and financial services have also been developed, enabling disputes for both domestic and international cases to be dealt with by the Kuala Lumpur Regional Centre for Arbitration (KLRCA). Such comprehensive legal infrastructure for Islamic finance is unique to Malaysia and essentially reflects the support and dedication by the legal fraternity in keeping abreast with the development of Islamic finance. Adding to the strength of the institutional and legal framework in Malaysia is our continuing emphasis on human capital development. Various measures have been implemented to ensure that our market players, including the judges and lawyers, are well-trained in Islamic finance.

An efficient and authoritative adjudication system helps create certainty and establishes the legitimacy of Islamic financial contracts. Islam places great importance on contracts and on parties to a contract. The ability of parties to enforce a contract is thus critical as it constitutes the core of maintaining the confidence of the public at large. Therefore, there is a crucial need for a dispute settlement mechanism that is able and competent to dissect in a judicious manner Shariah matters in contracts, so that issues of dispute in Shariah interpretation could be resolved and enforced accordingly. Whilst it is neither practical nor desirable to change the entire court system, a potential solution is to create a special Islamic bench that deals with financial transactions undertaken in accordance with the Shariah. This could be a viable option particularly for Muslim majority countries, as is the case in Malaysia. The use of market discipline is another option to ensure the sanctity of Shariah via mandating sufficient check and balance in adherence to Shariah matters including a minimum disclosure requirement, certification by the Shariah committee or an external audit done on the Shariah compliance aspects of an institution’s operations. In Malaysia, we have taken the approach in ensuring that the sanctity of contracts is always paramount and enforceable in our court of law. For adjudication purposes, a dedicated judge in the commercial division of the High Court in Malaysia has been assigned to preside over litigations relating to Islamic banking and finance.
This scenario is based on the expectation that the global economy will remain resilient, with the slowdown of economic growth in the United States partly offset by the continued strength of emerging market economies. However, in view of the potential impact of ongoing financial market volatility and re-pricing of risk on the real economy, this assessment remains surrounded by a high level of uncertainty. And in the Governing Council’s view, the risks surrounding this outlook for economic growth lie on the downside. The monetary analysis had confirmed the prevailing upside risks to price stability at medium to longer-term horizons. On the basis of latest available data, covering the period to the end of November 2007, the underlying money and credit expansion remains vigourous, even taking temporary factors into account, such as the flattening of the yield curve, the financial market turmoil and specific transactions associated with the restructuring of certain banking groups. Therefore, monetary and credit developments continue to require very careful monitoring, not least with a view to better understand the response of the private sector to increased financial market volatility. Thus far, there has been little evidence that the financial market turbulence since early August 2007 had strongly influenced the dynamics of broad money and credit aggregates. Indeed, the expansion of loans to households and non-financial corporations has remained robust, which may suggest that the supply of credit has not been impaired.

Second, I would welcome the efforts of the supervisory community, namely through the Basel Committee on Banking Supervision and the Committee of European Banking Supervisors, in keeping each other abreast of developments and in considering jointly possible measures to contain the potential effects of the turmoil. Third, I would underline the importance in stress situations, like the current one, of effective and smooth cooperation and exchange of information between the supervisory authorities and central banks. As to the policy lessons to be learned in order to avoid the recurrence of similar disruptions in the future, I would say that, while it is still too early to draw definitive conclusions, there is a common understanding on the key issues requiring further analysis. In this respect, let me recall a few topics. First, the need for the financial industry to provide significantly more public information about securitisation, credit risk transfer and complex structured products. Transparency appears to be of the essence in order to restore trust and confidence. Second, the need for rating agencies to review their methodologies for complex structured products and to address very seriously potential conflicts of interest. Third, the need for investors to review their investment behaviour excessively reliant on ratings. Fourth, the need for supervisors to implement the new capital framework under Basel II as rapidly and effectively as possible and to reflect on possible improvements of the framework, including the enhancements of the supervisory regime for liquidity risk.
Credit can be used to finance education, a car and a place to live while we are young and enables us to enjoy the benefits while earning money to pay for them. Over the past century, a modern financial system has evolved that provides ample access to credit. A welldeveloped credit market is an important part of a well-functioning economy. There is another side of the coin: Once we have incurred a debt, it remains with us. The debt must be repaid – with interest. We might say that while credit is an unvarnished good, debt is a necessary evil. Paying for bread already eaten can be tough. When we borrow money, we draw up a repayment plan with the bank. Implicit in this plan are a number of expectations – regarding our future earnings, net worth and interest rates. If these expectations pan out, the plan succeeds. We arrive at the desired outcome. And many times, the future turns out even better than expected. In recent decades, house prices have risen and with them our wealth. Income growth in Norway has been high and has benefited nearly everyone. At the same time, interest rates have fallen to historically low levels. This has made a high debt burden easier to bear. In forming our expectations, we often look in the rear-view mirror. As anyone knows who has driven a car, mirrors are important. But if you only look back in the mirror, you will land in the ditch.

Speedy and efficient liquidation of insolvent companies is crucial for the economy’s overall ability to restructure, innovate and grow. This is closely related to creditor protection. Creditors enjoy high standing in Norwegian legislation. High creditor protection makes it relatively easy for creditors to demand liquidation when the conditions are met. As long as the legal system and administrators in bankruptcy function as intended, the creditors may realise their claims on the estate and resources are freed up for society. It is essential that resources – labour, skills and capital – that are tied up in an unprofitable business are freed up for new activities. This also provides adequate, if painful, adjustment in a crisis. The downturn is shortened, and the economy gets back on its feet faster. Household debt is harder to restructure. Norwegian households can settle debt by liquidating their assets, but this usually only takes place after the borrower dies.4 Before that, the rule is that debt follows you to your grave. Norway has a Debt Settlement Act. Very few would voluntarily petition to enter into a debt settlement arrangement. While some of the debt may be forgiven, such an arrangement involves garnishment of wages, down to the minimum for necessities. Many of those who enter into such an arrangement in Norway struggle with debts incurred while self-employed. Recent years have seen a sharp rise in consumer debt. Defaulting on this sort of debt is much more common than defaulting on a residential mortgage. Default does not mean that lenders forfeit their money.
This is because traceability in our food products allows customers to realize the added values; whether they are transgenic or organic. This is one of the examples that the presence of the digital technology gives us the potential to move up the value chain in terms of food, which will provide large benefits in terms of employment and income due to Thailand’s high employment exposure in the agricultural and related sectors. Apart from food, tourism is another sector that would benefit from digital technologies. Currently, most of our tourism would stay for a short period of time and hence do not spend much. However, the digital technology’s trend towards work-from-anywhere provides the opportunity for us to attract different types of tourists who come, work, and stay for a long time. They are able to work from anywhere using working-from-anywhere technology which provides significantly higher value-added for the tourism sector. Because of that, one area that needs the improvement immediately is our visas and other regulations which are preventing us to realize possibilities from increasing values that we get from foreigners and foreign workers. Another area that people talk about is medical tourism. With the help from telemedicine technology, patients will able to come here because the technology allows them to talk to their doctor back in their home country while the actual medical treatments are provided by the doctor here in Thailand.

This is again to help address the problems that SMEs have, not just during this COVID-19 period, but also to help them restructure their businesses post-COVID. Those are some examples of how we are ending up where we are today which is largely due to measures undertaken by the government to support the recovery as well as cushion the impact from the COVID-19. I would like to turn now for the second part of my talk today which is on what lies ahead given that the recovery is likely to take some time. Again, the contraction from the COVID-19 last year was 6 percent and we expect the economy to grow 3 percent this year. For the next year, we are looking at a GDP growth of about 4.7 percent. Therefore, we are expecting the economy to come back to the pre-COVID level at least in terms of the headline GDP sometime around the third quarter of next year. However, given the uneven nature of the recovery, it does not mean that everything would go back to what it was like before. Recovery in the service sectors will lag quite significantly; notably, sectors related to tourism where the current forecast foresees a period of almost 4-5 years until we are likely to see tourism come back to the pre-COVID level.