samchain/econo-pairs-v1 huggingface dataset:
The second way out of the crisis is the “classic” IMF prescription, that is to say, fiscal discipline, debt restructuring and currency devaluation. Note that to make such a scenario easier some aid is also very desirable at least in the form of support for the drachma from the ECB and/or European authorities (among others) to avoid an overshooting after the exit from the eurozone. Note that we are currently seeing a rather disorderly effort along the lines of the first scenario of keeping the current eurozone together. In the same spirit we could see an orderly exit from the eurozone, if there is the political will. In short, to minimise the costs, either scenario needs to be carried out in an orderly way, while disorderly implementation results in dramatically increased costs in both cases. Therefore, instead of the current muddling through, one of these two ways should be chosen and clearly communicated to markets, voters and others. Otherwise, we risk a further loss of credibility for everyone involved in Europe and very likely for the IMF as well. Further continuation of the current uncertainty will  BIS central bankers’ speeches  3  continue to cause significant economic costs for the EU and Europe in particular. At present, the risk of an event pushing Greece (and/or others?) into unexpected default is shooting up. That would surely be the most costly outcome, at least in the short term.

“Recent developments in the Chilean Financial System and Challenges ahead” Rosanna Costa, Governor of Central Bank of Chile Chile Day – December 12 and 13, 2022 – London, United Kingdom Good morning distinguishes authorities and dear friends. I am going to talk about the recent developments in the financial system in Chile and the view of the Central Bank of the challenges ahead. Introduction In December of last year, the former Governor of the Central Bank of Chile (and nowadays the Minister of Finance) presented in this very same forum in London about the developments and prospects of the Chilean economy. By then, our country was going through a process of strong recovery from major shocks that affected our economy: first the social unrest of 2019 and then the pandemic of Covid-19. Therefore, the discussion last year focused on the aftermath of the pandemic and the different measures that were adopted by the Central Bank and the government to mitigate its effects on the real economy. Since July 2021, the Central Bank has been hiking the monetary policy interest rate, due precisely to strong pickup of household consumption driven by governmental aids and pension funds withdrawals. A year ago, the Central Bank also raised a note of caution for 2022 and 2023 due to the weakening of the capital markets, identifying several factors including the reduction of long-term savings due to pension withdrawals and its impacts on access to long-term financing for companies and individuals, risk of fiscal deterioration and persistent uncertainty, among others.
Nor Shamsiah Mohd Yunus: Building trust and transparency collaborate, accelerate, strengthen Speech by Ms Nor Shamsiah Mohd Yunus, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the 11th International Conference on Financial Crime and Terrorism Financing (IFCTF) 2019, Kuala Lumpur, 5 November 2019. * * * Last year, I spoke at this same conference about our shared responsibility to combat financial crime and the need for us to have a deep understanding of new and emerging risks. I also called on reporting institutions to strengthen their compliance functions. I was therefore delighted to learn that the theme of this year’s conference is “Building Trust and Transparency: Collaborate, Accelerate, Strengthen”. This afternoon, I would like to briefly expand on some of the ideas that I put forward last year, which will build on this year’s conference theme. First, on the point on collaboration. We speak a lot about how combating financial crime is a shared responsibility. This is because of its massive impact, imposing a cost to governments, businesses and individuals. A Thompson Reuters report from 2018 revealed that nearly half of 2,000 plus large companies surveyed were victims of financial crimes in the past one year, losing an estimated 3.5% of their turnover. This goes to show that this is a battle that needs to be waged together. Key to this is the sharing of information.

Thank you. 3/3  BIS central bankers' speeches
Exchange rate movements are not to be considered as isolated events, neither should monetary policy’s reactions to them be mechanical. If a depreciation stems from an international slowdown, for example, the consequences for monetary policy will differ from a case where the roots lie in a lack of confidence in Sweden’s economic policy. The situation at the beginning of June can serve as an illustration. The problem was not simply that the krona was under-valued. That had been the case, though not so dramatically, for a long time. What led us to conclude that the situation was sufficiently serious to warrant action was a conjunction of several factors. The depreciation occurred very rapidly and we had not received any new information that justified such a marked movement. That meant that the future, relatively optimistic path for the krona on which monetary policy had been formulated now appeared less realistic. The depreciation was, moreover, particularly troublesome in that it coincided with a substantial price rise and accordingly heightened the risk of inflation expectations shifting to a rate of price increases that exceeded the Riksbank’s target. The increase in inflation stemmed both from transitory factors and from persistently high resource utilisation. BIS Review 75/2001  1  Forecasting exchange rates is difficult As I said, it is the exchange rate’s path in the coming two years that is important for monetary policy. So how can one arrive at a picture of the exchange rate several years ahead?

We now have the same policy commitment to price stability as the rest of the world. That leaves around 40 per cent of the depreciation to account for. Our work at the Riksbank suggests that in the 1970s and ’80s, the major part of the real exchange rate’s weakening can be attributed to deteriorating terms of trade, low GDP and productivity growth compared with the rest of the world and growing external debt. One of the models we have used indicates that about three-quarters of the depreciation stemmed from relatively poorer growth in Sweden and about a quarter to worsening terms of trade. The picture in the 1990s looks different. As far as we can tell at present, in the past decade neither productivity nor GDP growth has been poorer than in the rest of the world (Fig. 1). So in this respect, too, there seems to have been a change for the better. It is partly against this background that the krona’s persistently weak average path in the latter part of the 1990s is surprising. BIS Review 75/2001  3  Fig 1.
Probabilistic weights from the past may be a fragile guide to the future. Weighting may be in vain. Strategies that simplify, or perhaps even ignore, statistical weights may be preferable. The simplest imaginable such scheme would be equal-weighting or “tallying”. Gigerenzer and Brighton (2009). 7 In complex environments, tallying strategies have been found to be superior to risk-weighted alternatives. Take avalanche prediction. Avalanches are difficult to predict, as they are drawn from a fat-tailed (Power Law) distribution. Yet simple tallying of a small number of avalanche indicators has been found capable of predicting over 90% of historical accidents. It has also been found to be superior to more complex decision methods (McCammon and Hägeli (2007)). A similar finding has emerged from studies of asset prices. They too are drawn from a fat-tailed distribution. When investing across N assets, the Merton-Markowitz portfolio strategy would weight by risk and return. A far simpler strategy would equally-weight all assets – a 1/N rule. In out-of-sample trials, the 1/N rule outperforms complex optimising alternatives, including Merton-Markowitz (DeMiguel et al (2007)). Indeed, Markowitz himself pursued a 1/N, rather than Markowitz, strategy when investing for retirement. (d)  Small samples and simple rules  The choice of optimal decision-making strategy depends importantly on the degree of uncertainty about the environment – in statistical terms, model uncertainty. A key factor determining that uncertainty is the length of the sample over which the model is estimated.

In these past 15 years, the Norwegian economy has been exposed to different types of shocks. The supply side has been influenced by increased labour immigration following EU enlargement in 2004. The legacies from the financial crisis have posed challenges that monetary policy has had to address. And not least, the Norwegian economy has had to contend with wide fluctuations in the terms of trade. Chart: Performance Inflation targeting has performed well over the past 15 years taken as a whole. When inflation targeting was introduced, inflation had already come down after years at an elevated level and has since been low and relatively stable. At the same time, monetary policy has helped to moderate fluctuations in the real economy. Flexible inflation targeting has functioned well. The monetary policy framework has provided sufficient flexibility to address the shocks that have hit the economy. LONG-TERM INTEREST RATES HAVE FALLEN Chart: International interest rates In recent years, monetary policy has faced a new challenge in many countries. The interest rate level that is consistent with balanced developments in the economy has fallen. This is reflected in the low level of global interest rates. The decline in real interest rates has been particularly marked over the past 15–20 years. In 2001, when inflation targeting in Norway was adopted, real long-term interest rates were around 3 percent. Now, the same interest rates are around zero. Chart: Forces driving the fall in the global real interest rate The causes of the decline in interest rates are complex.
BIS Review 23/2010  5  improved access to credit. But, in designing a facility, the Bank was concerned not to encourage the sort of risk-taking which had caused so many problems leading up to the crisis. In particular that meant a restriction on the degree of maturity mismatch between the underlying assets and the securities they backed. A purchase scheme was launched last July, but the Bank has not been offered any SCP to buy so far. New programmes take 3–6 months to set up and meanwhile, according to our contacts, the market for such paper, particularly in the United States, quickly improved to the point where our “backstop bid” was no longer attractive. And we are told there has been sufficient capacity within commercial banks’ existing programmes to fund the assets they were generating. Nevertheless, the facility remains open and the Bank is still in discussions with potential issuers. Supply chain finance (SCF) is another route by which smaller firms can potentially get access to credit against high-quality assets. Typically, this would arise when a large firm has a number of suppliers who wish to raise immediate finance against their invoices. Unfortunately there was no SCF market standard and so there was not a viable market that the APF could attempt to catalyse. Last Autumn, a working group of market participants (borrowers, lenders, banks etc) gathered together to develop some proposed standards and try to build a sustainable market in this space.

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My second congratulation is also for Governor Paul Acquah for having achieved the Central Bank independence. I have noted that the Bank of Ghana was established in 1957. The Bank of Thailand was established in 1942 and we have not managed to gain independence through legal means yet. So, you are one up on us. Ladies and Gentlemen, the issue of “Central Bank Independence and Monetary Policy” is very much closed to the heart of all central bankers, and I am very happy to be able to share some thoughts on it. In Thailand's case this issue has been much discussed among all concerned throughout the 60 years period since the Bank of Thailand's establishment in 1942. One of the most famous governors of the Bank of Thailand and certainly the longest serving Governor (more than 10 years) had this to say about central bank independence and I quote “…If the policy in question is so profound that it might undermine principles or lead to catastrophe, the Central Bank Governor may not only voice his disapproval against it, but he also has the ultimate prerogative of resigning from the governorship”. Dr. Puey Ungphakorn was an outstanding Governor who gave great importance to the Bank of Thailand to carry out its functions as an independent institution free from political and governmental domination, undaunted by any influential powers-that-be. For the sake of his country-and using the delicate art of being a central banker, Dr. Puey protested against the government whenever it did not act righteously.

Dr. Puey believed that the government must have faith in the central bank in providing benefits for the country as a whole. The Governor and senior management should have enough courage to voice their critical, even dissenting opinion when such an action is necessary. His view was that the Governor and his senior management cannot be saints, but must carry out their work adhering to the principles of honesty and integrity. Neither can they act indifferently, because when it is necessary to reprimand the government, they must do so. Dr. Puey was determined to protect its officials from political interference. He issued regulations prohibiting Bank of Thailand officials to stand for political office or write articles on politics, which are still in force today. I totally agree with what Dr. Puey had thus said and practiced without fail. However, since Governor Puey left the office at his own will to concentrate on another job which he loved dearly, that is, rector of Thammasart University, we have had nine governors over a period of almost 30 years. Out of this nine, only two retired from the office, the other seven were either fired or pressured to leave the post by the Government for some reason or another and in most cases the causes of removal had nothing to do with their performance in conducting monetary policy. BIS Review 53/2002  1  How could this have happened?
The ACPR has greatly contributed to the smooth functioning of the joint supervisory teams, which supervise the major French banking groups, with 38 on-site missions. Under the second pillar, the single resolution mechanism, which entered into force on 1 January 2016, the ACPR has actively prepared the preventive plans for the resolution of the four French banking groups known as systemic banks and the transitional resolution plans for the other important groups. Two and a half years of banking union, this is a significant step forward, but its construction is not yet completed: we have to complete the “resolution” pillar, with finalised and simpler rules between MREL and TLAC, with a more efficient functioning between Frankfurt, Brussels and the national authorities. The banking problems that remain in Italy, Portugal and even elsewhere can be solved: but they must be dealt with quickly, and definitively. It is not normal to have localised difficulties weigh to such an extent on the overall image of a European banking sector that is in fact much stronger than before. Today the question arises as to the architecture of European supervision and regulation. Indeed, the Commission has opened the triennial review of the functioning of the three European authorities, in charge of convergence in the regulation of banks, insurance companies and markets respectively. In the short term, it is essential to relocate the European Banking Authority to take account of Brexit.

On this subject of the “Eckert Act", the insurance companies monitored by the ACPR paid out EUR 2 billion to the beneficiaries of unclaimed policies in 2015; banks, for their part, transferred 5.5 million inactive bank accounts to the Caisse des dépôts et consignations in 2016, representing a total amount of EUR 1.9 billion to be claimed by the account holders or their beneficiaries. The fourth challenge is the fight against money laundering and the financing of terrorism, which in 2016 was a higher priority for action. We carried out 30 missions among banks and insurance companies on this subject in 2016, as against 22 in 2015. These missions complement the substantive action of the ongoing supervision, which resulted last year in close to 700 follow-up letters. In total, we initiated and published six disciplinary sanctions against institutions. The year 2016 was therefore an active year in this field, raising to 22 the number of sanctions taken since 2010 for noncompliance with the regulations. * * * In conclusion, it is with pride that I look at what was achieved in 2016, but without any let-up or complacency: many projects await us in 2017, both nationally and internationally. A strong ACPR must have the necessary means to accomplish its missions: I would like to emphasise this imperative. I will now give the floor to Bernard Delas, who will present the prudential developments in the insurance sector. Rémi Bouchez will then discuss the work of the Sanctions Committee. Thank you for your attention.
The growth of the ASEAN economies is no longer only export driven but for several years now has been driven by a growing domestic economy. In this current environment, most ASEAN economies have been adversely affected by the spill over effects of the global financial crisis. Sharp declines in export earnings are being experienced. The economies of ASEAN and greater Asia, however, have the potential to strengthen further their domestic economies. Indeed, in doing so this would contribute towards reducing further the global imbalances. In addition, being diverse economies we are also able to take advantage of the complementarities that exists in the region. This is reflected in the increased intra-regional trade and intra-regional investment flows. Intra-regional trade as a ratio of total trade of the region has increased from 30% in 1990 to 40% in 2007. Intra-regional investment flows now account for 12% of the region's foreign direct investment. With a total population of 575 million, ASEAN also has greater potential to increase its economic interface with the larger economies in greater Asia. The current financial crisis is expected to accelerate the financial and economic integration in Asia. This should be viewed positively, not only towards the unwinding of the global imbalances, but also because this has the potential to contribute towards global growth. The banking sector in ASEAN and the greater Asian region will have an important role in facilitating this trend.

Liquidity management in the Islamic financial system and the institutional arrangements for resolution are among the other areas that need further development. Of critical importance is for the board and management of Islamic financial institutions to institute higher standard of leadership and a comprehensive governance culture and framework. Mutual recognition in Shariah and human capital challenges On this occasion, I would like to touch on two areas confronting Islamic finance firstly on, the issue of mutual recognition in Shariah and secondly the human capital development in the industry. Malaysia takes cognisance of the diversity of Shariah views within the region and among jurisdictions. Although Islam welcomes diversity of views, there is also a need to promote greater harmonisation among jurisdictions on the specific issues relating to Islamic finance. Such convergence is important for the long-term sustainability of the sector. Malaysia has taken the initiative to organise Regional Shariah Scholars Dialogue in 2006 and 2008 as part of the efforts to foster greater engagement among the Shariah scholars in the region. Indonesia has been active in these dialogues. Moving forward, the newly established International Shariah Research Academy (ISRA) has been entrusted to intensify the regional Shariah Dialogues as well as to enhance further the international engagement among Shariah scholars in our pursuit for Shariah harmonisation. Most encouraging is the greater appreciation and understanding that has been achieved in these deliberations of the Shariah practices that are peculiar to the respective jurisdictions.
More specifically, the Euro area quarterly economic growth reached 4.8 percent in the first half of 2022. However, the biggest impact from war developments is expected to be shown in the data of the fourth quarter of 2022 and the first half of 2023. This outlook is reflected in the latest ECB projections for economic growth, which have been revised down markedly for the remainder of the current year and for 2023. At the September 2022 ECB forecast round the euro area real GDP growth is expected to reach 3.1% for 2022, 0.9% for 2023 and 1.9% for 2024. The euro area economy is now expected to grow by less than projected, with the possibility of a recession taking place in 2023 being more likely. Inflation started rising in 2021, due to demand and supply imbalances following the reopening of economies after covid-related restrictions were lifted and due to supply chain bottlenecks. But there was another unpredictable and bigger inflation shock from the Russian war in Ukraine that catapulted energy prices. Harmonized inflation in the euro-area rose to a high of 10 percent in September, up from 9.1 percent in August, indicating a continuing rising trend. Based on the September Eurosystem staff Broad  1/4  BIS - Central bankers' speeches  Macroeconomic Projection Exercise, both headline and core inflation are expected to be higher in 2022, at 8.1 per cent and 3.9 per cent, respectively.

The non-performing loan ratio has continued its downward trend and stands at 11.2  3/4  BIS - Central bankers' speeches  percent as at June 2022, with total non-performing loans amounting to € billion, which is the lowest level observed since 2014 when the definition was harmonised across the European Union. So far the first round effects from the geopolitical crisis have been manageable and of limited direct extend. Nevertheless, the second round effects are yet to be materialised. Adverse macroeconomic developments may weaken banks' profitability and deteriorate asset quality, causing delinquencies and an upward pressure on impairments and provisions. It is therefore important for banks to adapt their business models to the new realities as shaped by the consecutive crises. Challenges emerge through various channels. Intense competition, from entities not falling in the traditional banking spectrum, threat of additional provisions due to increased credit risk, the need to invest in digitalisation to streamline operations, and the costs of managing climate change and the transition towards a sustainable greener economy are among the challenges that the Cyprus banking sector faces. It is important to say that these challenges are not country specific to the banking system of Cyprus. They are challenges that are commonly faced by European banks. Especially the issues of digital transformation together with the management of climate risks and the transition to a green economy are key issues that should be on top of the agendas' of European economies and banks. They surely are on the top of the supervisory agenda.