samchain/econo-pairs-v1 huggingface dataset:
Thomas Jordan: Swiss banking centre – a great past and a successful future? Speech by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the Swiss International Finance Forum, Berne, 20 May 2014. *  *  *  The speaker would like to thank Till Ebner for his valuable support in preparing this speech. He is also indebted to Rita Kobel, Marco Huwiler, Peter Kuster and the SNB Language Services for their assistance. Introduction History has shown that important international banking centres can develop in small countries as well as large ones. Switzerland is an excellent case in point. During the course of the 20th century, the banking centre in this country became one of the world leaders in wealth management. With the associated creation of value and employment, the banking industry was transformed into a cornerstone of the Swiss economy. However, for some years now, the prominent international role of the Swiss banking centre has been subject to increasing criticism. Given this situation, Switzerland and its banks are confronted with a fundamental question: Can Switzerland, as a relatively small country, continue to provide a home to a banking centre whose importance is global in nature? In my view, this is possible as long as the following three prerequisites are fulfilled: The services offered by the banks, their crisis resilience and their reputations must all be considerably above average. It is up to the banks themselves, first and foremost, to fulfil these prerequisites.

In terms of the usual indicators of the financial development of a country – such as the size of the financial sector or access to financial services – Switzerland has one of the most advanced  1  Cf. Levine 2005. BIS central bankers’ speeches  1  financial systems in the world.2 At the same time, the economic importance of the banking industry in this country is above average. It generates an annual gross value added of some 6% of GDP and currently employs about 150,000 people. In addition, at least in the years before the financial crisis, the industry made a significant contribution to overall economic growth.3 When banks are familiar with the local conditions and are also able to integrate knowledge concerning Swiss macroeconomic conditions into their business decisions, this enables them to provide particularly efficient services to the Swiss economy. It is therefore advantageous for our country to have locally established banks which make their decisions here in Switzerland. It is not only with services which benefit companies and households located in Switzerland that the Swiss banking industry creates value added. As we all know, the industry is also very active in the international arena – on the one hand, via exports,4 that is, through the cross- border provision of financial services from Switzerland, and on the other, through its actual presence abroad. In this respect, the most important source of income is the crossborder wealth management business for private customers.
Quantitative easing by the BoJ has amounted to 100 trillion yen, or 21% of GDP. •  The Bank of England is buying gilts, and some commercial paper and corporate bonds. Its Asset Purchase Programme is now £ billion, or 24% of GDP. 26. Central banks cannot expand their balance sheets indefinitely. The incremental benefits of further monetary easing are diminishing while the potential costs are increasing. 27. On the benefit side, it is not clear that additional monetary stimulus is an appropriate tool at this stage of the cycle. We would do well to remember the words of John Maynard Keynes in 1936, “If .... money is the drink which stimulates the system to activity, we must remind ourselves that there may be several slips between the cup and the lip.” 28. The problem is not liquidity but credit. Capital-strapped banks are unwilling to lend and the private sector is unwilling to borrow, a reflection of uncertainty over fiscal policies, high indebtedness, and low income growth. 29. And we should be vigilant of the potential costs of cheap money. As market stresses subside and money multipliers recover, the abundance of liquidity could fuel a strong monetary expansion with adverse consequences for prices, which would eventually require large hikes in interest rates to counter. Easy money over a prolonged period can also lead to a mispricing of risks and unsustainable asset prices, compromising both price stability and financial stability. 30.

The unemployment rate is 8-1/4 percent – well above the rate anyone on the FOMC sees as being consistent with our longer-run goal; in my view, this is a substantially higher rate than one might attribute to supply-side factors, such as extended unemployment insurance and a heightened degree of mismatch in labor markets. Realistically, this is a 2-1/4 to 3 percentage point deviation from our current maximum employment objective. Because this occurred with nominal interest rates stuck at the zero lower bound since December 2008, I believe it’s hard to say that we are not in a liquidity trap. Recently, the U.S. data have been more encouraging, with the labor market improving and private demand showing a little more traction. Without a doubt, these are welcome developments. But even the more optimistic forecasts see output increasing only moderately above its potential growth rates; no one has an expectation for a surge in activity that would quickly close resource gaps. At the same time, the outlook for inflation is subdued, with most FOMC participants’ forecasts for increases in total personal consumption expenditures prices averaging roughly between 1-1/2 and 2 percent over the next three years. Furthermore, private sector long-run inflation expectations are quite well anchored.
Since then, the Central Bank has intervened on three occasions. The first time, in August 2001, the Central Bank announced that it might intervene at any moment from then to the end of the year. It also explained that the exchange rate was depreciating very fast and with great volatility, which was cause for concern in financial markets, despite the fact that the peso was weakening largely because of stressful conditions abroad. The intervention consisted in a sale of up to $ billion of international reserves and issuing another $ billion in dollarindexed bonds. The final intervention amounted to a sale of slightly above $ million and the full issuance of bonds. The second time, in October 2002, the Bank announced a similar package, as it considered that the depreciation reflected an overreaction, high volatility and a liquidity shortage. $ billion were issued in exchange rate indexed debt and no reserves were sold. The third time, in April 2008, because of the high global uncertainty, the Bank decided to increase its holdings of reserves, while recognizing that, at the time of the announcement, the exchange rate was appreciated relative to its long-term fundamentals. The intervention consisted in daily purchases of $ million intended to accumulate $ billion in eight months. The outburst of the global financial collapse in September 2008 made us suspend these measures. The evidence at hand indicates that these interventions had an immediate impact on the exchange rate of around 3%, but on some occasions they also altered its later trend.

I am glad that, true to private sector entrepreneurial spirit, you have opened a branch in Luangwa where there was no bank representation from pre-independence days. In spite of the not - so reliable electricity supply to the area and the not – so good road to Luangwa, you did not see these as impediments to bringing banking services to Luangwa but rather you have looked at them as challenges to be overcome. Mr Managing Director, the step taken by your bank is to be lauded. I take this opportunity to appeal to the entire management to take the findings of the FINSCOPE Survey as a serious challenge to the Banking Industry to reduce the percentage of the unbanked population. 6. Planned move to the Listed Tier of Lusaka Stock Exchange  I am informed that due to the phenomenal growth of the Bank, Management and shareholders have agreed to move the Bank up the ladder to the Listed Tier of Lusaka Stock Exchange very soon. This has become necessary in order to raise more requisite capital and enhance the bank’s profile and oversight. This is an important step as it will mean that the bank will broaden public participation in its ownership and other public institutions will now participate as well. I therefore call upon Zambians and parastatals to take up shares in the bank. I am told that the Bank is about to venture into new products such as Women Empowerment loans and Islamic Banking.
As the pace of development of the Islamic financial services industry accelerates, the increasingly more complex and challenging environment will continue to shape the advancement of the industry. Central to this will be the expansion of the business parameters and innovative product offerings. For this, there is increased investment in research and development to yield new instruments and structures to meet the changing requirements of the international community. An area of focus, in particular, is related to the development of mechanisms for risk mitigation and liquidity management. Of importance, are the solutions needed to converge the market requirements and the Shariah compliance. Increased innovation also calls for greater emphasis on the implementation of best practices and higher standard of risk management. Vital to this is the implementation of the prudential standards promulgated by the IFSB. There is also a need to leverage more on IT applications and the strengthening of management capabilities of the Islamic financial institutions. Going forward, with the increased awareness and understanding of Islamic finance, the role of market discipline will become increasingly important in driving Islamic financial institutions towards ensuring Shariah compliance in the operations, in improving operational efficiency and in instituting sound and dynamic risk management practices. The forces of innovation also raise a number of issues concerning the divergence of Shariah views underlying a number of the Islamic financial transactions.

Its significant similarities to the principles in ethical finance and socially responsible investment has been a further factor that has drawn  BIS Review 136/2008  1  interest in Islamic Finance. Islamic finance does not only involve the avoidance of riba (usury) but also extends to issues relating to ethical values, such as fair trade and environmental protection. This has prompted participation from conventional global players in Islamic financial activities and in the acquisition of strategic stakes in Islamic financial institutions. There is also a growing number of established international financial centres such as London, Tokyo, Hong Kong and Singapore that have initiated plans for the integration of Islamic finance into their financial systems. Islamic finance has now become one of the fastest growing segments in the global financial system. The total Islamic assets under management by Islamic banks and conventional banks offering Islamic banking services is reported to exceed USD500 billion. This growth has also been in the other major components of the Islamic financial system. Islamic mutual funds are estimated to be about USD300 billion, while global takaful or Shariah-compliant insurance contributions are estimated to be about USD5 billion. Strengthening the international infrastructure Integral to the efforts in the development of Islamic finance has been the development of the supporting international Islamic financial architecture.
Technical details about the decomposition presented here are forthcoming in the Banque de France Bulletin. ii See Posen, A., “A US Monetary Regime Change What Difference to Overheating?”, April 1, 2021, Peterson Institute for International Economic, Spring 2021 Global Economic Prospects Meeting iii Keynote address by François Villeroy de Galhau, Official Monetary and Financial Institutions Forum, webinar, 25 September 2020. iv For a recent review see Lagarde (2021). v Introductory statement to the press conference, 11 March 2021. vi Villeroy de Galhau, F., “The role of central banks in the greening of the economy”, Speech, 11 February 2021. See also the recommendations of the recent NGFS annual report vii Bean, C. « The Future of Monetary Policy » speech at the London School of Economics, 20 May 2014. i

With the affordability and availability of many powerful financial technologies, there is no better time for us to improve on our productivity, immunity, and inclusivity so that we can ensure sustainable improvement in the standard of living our people. I am certain the contributions from the ACMECS leaders present here today will go a long way towards fulfilling our common goal. Thank you very much for your kind attention. 5/5
In the construction industry, the labour market is tight and enterprises are making use of foreign labour to some extent. The supply of skilled labour is, however, a constraint on growth potential. Signals from service industries also indicate that the supply of labour is becoming more limited. The general level of investment in this region is relatively stable. Investment activity in the public sector appears to be somewhat lower in 2005 than in 2004. In manufacturing and services, there are signs of increased investment activity. Tender prices are rising slightly in the building and construction industry as a result of increased costs and a higher level of activity throughout the country. Prices have risen slightly in manufacturing and service industries. In retail trade, prices have changed little or remained unchanged. Profitability is improving due to increased activity, but there are no major changes for small and medium-sized enterprises. In the approved budget for 2005, the structural, non-oil deficit increases compared with 2004. It therefore appears that fiscal policy will provide some stimulus to growth this year. In the National Budget for 2005, underlying spending growth over the central government budget was estimated at 5.2 per cent, which is somewhat lower than the previous year and somewhat lower than estimated nominal growth in mainland GDP. As from 2006, it is assumed that nominal growth in central government expenditure will be approximately the same as nominal growth in central government revenues and that the real tax level will remain unchanged.

However, we assume that households will choose to spread consumption over time, so that the saving ratio will continue to fall in spite of an increase in interest rates. Housing construction activity is still high. In January and February, housing starts were 17.5 per cent higher than in the same period last year. Growth in housing investment is expected to ease through 2005. However, the projection for housing starts is also very high for 2005. Such a high level of housing starts over several years probably means that more dwellings will be constructed than implied by underlying demand. As a result, housing investment is expected to decline after a period. Higher interest rates and weaker developments in the Norwegian economy may also lead to a fall in residential construction after a period. The rise in house prices has moderated, and prices in March were 8.2 per cent higher than in the same month last year. The upturn in mainland fixed investment is broadly based. Stronger profitability, higher capacity utilisation and solid export growth will contribute to continued investment growth in goods-producing industries. Demand for services is expected to continue to grow for a period ahead with an attendant increase in investment in service sectors. When growth in the economy gradually slows, investment growth will probably slacken. Mainland exports of goods and services will also benefit from solid global growth this year. Later in the period, a continued loss of market shares as a result of high cost levels will dampen export growth.
Headline inflation has been negative for quite some time, but could turn positive towards the later part of this year, barring large shocks to global oil prices or an unexpected decline in COE premiums. Our forecast for 2016 remains unchanged for CPI-All Items inflation at −1.0 to 0%. Headline inflation is expected to converge towards its historical average over the next couple of years. Monetary policy The progressive easing of monetary policy since January last year has been in line with weak underlying inflationary pressures. MAS has taken measured steps to reduce the slope of the nominal effective exchange rate band over the past 18 months. This has been validated by accumulating evidence of weakening inflationary pressures. In April 2016, MAS moved to a zero percent rate of appreciation for the Singapore dollar nominal effective exchange rate policy band. The current stance of monetary policy remains appropriate for overall macroeconomic conditions in 2016. MAS is monitoring global developments closely. Unless there is a marked deterioration in the global economy or significant shift to the inflation outlook, there is no need to change the monetary policy stance. The current stance will help ensure price stability in the medium term. Notwithstanding recent volatility in exchange rates, the nominal effective exchange rate of the Singapore dollar remains within the policy band. MAS’ exchange rate policy framework is sufficiently flexible to accommodate such heightened volatility in international financial markets. MAS stands ready to curb excessive volatility in the trade-weighted Singapore dollar.

Macroprudential policy – car loans and property loans While monetary policy is focused on overall price stability, macroprudential policies target specific areas to promote economic and financial stability. The two key macroprudential measures taken in recent years relate to the property market and car market. In the property market, MAS has implemented prudential limits on loan-to-value, loan tenure, and debt service ratios while the Ministry of Finance has implemented stamp duties on buyers and sellers. This collection of measures is the so-called property cooling measures. In the car market, MAS has implemented limits on loan-to-value and loan tenure. MAS eased the limits on car financing in May this year. But it is not time yet to ease the property cooling measures. The considerations and circumstances in the two markets are quite different. The restrictions on car financing were imposed in 2013 – at a stringent level – primarily to restrain the strong demand for cars and COEs, and consequential pressures on inflation. The objective of curbing inflationary pressures has been achieved. The contribution of private road transport (excluding petrol) to headline inflation has eased from +1.3% points in 2011– 2012 to –0.5% point in the first quarter of this year 2016. MAS therefore reset the car loan restrictions in May this year at a level that would continue to promote financial prudence and support the move towards a car-lite society over the long term.
It is our view that there is a need for further improvement of the current precautionary facilities to make them more suitable in providing countries with preventive financial assistance to face capital account crises. In this context, the discussion of this morning gave the Fund’s staff useful elements to consider on the design of more effective financial instruments to limit contagion from shocks in the global financial market. But not only the Fund’s financing instruments should be explored. The Fund should have a dialogue and a permanent association with private financial markets around the world to promote and eventually participate in the creation of new financial instruments that provide liquidity support at times of stress. This is an integral part of the process of managing systemic risks to macroeconomic and financial stability, which we referred to previously. From this standpoint, the Fund could contribute to alleviating the impact of existing externalities in global financial markets by creating new knowledge relating to the design of new market instruments, valuation methodologies, benchmarks and indices, for instance. This is especially important for countries that have made lots of progress in addressing their main weaknesses both on policies and the development of their intuitional framework. After almost twenty years since the debt crisis of the eighties, a good part of the Latin-American countries have repaid their obligations with the Fund.

Vittorio Corbo: The Fund’s medium-term strategy – a view from Latin America and a dialogue with high-level officials Keynote speech by Mr Vittorio Corbo, Governor of the Central Bank of Chile, at the High-level Seminar “The Fund’s Medium-Term Strategy: Considerations for a New Liquidity Instrument for Crisis Prevention and Effective Surveillance. Dialogue with High-Level Officials”, organized by the International Monetary Fund and the Central Bank of Chile, Santiago, 11 December 2006. *  *  *  Latin America has benefited substantially from the fast growth experienced by the global economy during the last four years and from domestic policies that have contributed to enhanced macroeconomic stability. External current accounts and primary fiscal balances are in surplus, exchange rates are more flexible, and inflation is no longer a major issue as it was for several years and after surpassing the average of 400 percent per year during the 1990s. Likewise, the structure of public debt has become less vulnerable, characterized by lower shares of short-term and foreigncurrency debt in most countries as compared with the early 2000s. At the same time, there is renewed appreciation in the region that a solid commitment to maintaining macroeconomic stability is a necessary condition to achieve high and sustainable growth rates in the medium term. A distinguished feature of the region is that fiscal revenues are highly dependent on natural resources. In the current favorable context for commodity prices, primary fiscal surpluses have clearly shown positive numbers, averaging around 4 percent of GDP of the region.