samchain/econo-pairs-v1 huggingface dataset:
Our currency board has been operating smoothly ever since, over various economic and financial cycles in both good and bad times, proving the cornerstone of monetary, financial and macroeconomic stability in Bulgaria’s most recent history. We can make an assessment that the currency board is the most successful time consistent policy commitment regime for achieving price stability that we have had since the restoration of the Bulgarian state. Our currency board is an undisputed success story. Historically, however, the Bulgarian National Bank has engaged in a number of monetary policy regimes. Notably monetary unions – the focus of the conference today – have repeatedly appeared as centres of gravity. In the late nineteenth century Bulgaria adhered to the Latin Monetary Union by means of unilateral commitment to its principles. In the second half of the twentieth century Bulgaria was part of the Comecon (the Communist Bloc’s Council for Mutual Economic Assistance) where a common international currency evolved to serve international payments between the participating members. At the turn of the last century the newly created euro replaced the Deutsche Mark as the reserve currency of the currency board in Bulgaria. To sum up, our own experience is part of the global history of alternating monetary policy regimes. It motivates our interest in both the history and future of monetary unions. As central bankers we do look forward to the papers and discussions today, since the historical perspectives therein should also bring out rather relevant contemporary insights for policy.

Kalin Hristov: Monetary unions in history Welcome remarks by Mr Kalin Hristov, Deputy Governor of the Bulgarian National Bank, at the Conference “Monetary Unions in History”, jointly organised by the Bulgarian National Bank and the European Association for Banking and Financial History (eabh) e.V., Sofia, 1 July 2022. * * * Dear Members of the Association, Dear conference participants, Ladies and Gentlemen, It is an honour to welcome you to this conference which the Bulgarian National Bank organises in cooperation with the European Association for Banking and Financial History. I am also delighted to have this event, together with yesterday’s workshop on the “Digital rebirth of historical datasets”, taking place in Sofia alongside the annual meeting of the Association. This year marks twenty years since the Bulgarian National Bank became a member of the Association; this is the first time, however, that an annual meeting and events of the Association are hosted in Bulgaria. Let me, therefore, extend words of gratitude for the excellent cooperation with the Association regarding the organisation of this series of events. The Bulgarian National Bank is one of the oldest central banks in the world, thirteenth by order of its establishment in 1879. Our institution has understandably cultivated a profound respect for banking and financial history, as seen from our topical publications and research projects we take part in. For us history is also vibrantly present today – exactly twenty-five years ago, 1 July 1997 was the day of introduction of the currency board in Bulgaria.
The answer to the above question lies in the prudential dimension. If the financial intermediaries of the EMEs were able to internalize the macroeconomic risks that arise from the current low interest rate environment, there would be no need for a policy apart from market based return equalization. Since this cannot happen by itself due to agency problems, there is a room for macroprudential policy. Turkey, following the second approach, has been using mainly macroprudential measures along with a relatively low and yet quite flexible interest rate policy in face of volatile short term capital flows.2 The Central Bank and the other government agencies responsible for financial stability, developed new tools and introduced new policies to avoid excessive deviations of the credit growth rates and the exchange rates from economic fundamentals. Examples of macroprudential policies used in Turkey are loan to value restrictions, high risk weights and provisioning requirements on credit with negative externalities, maturity based reserve requirements and leverage based reserve requirements. These policies already helped to start a rebalancing process for domestic and external demand during the rapid post Lehman recovery and the more recent European sovereign debt crisis.3 Distinguished Guests, The financial stability, when lost, has deep and long-term impacts on both employment and growth.4 The cost of preventing a financial crisis is much lower than the cost of living it. The recent developments have reminded us this economic dictum once again. The primary objective of the Central Bank of the Republic of Turkey is to achieve and maintain price stability.

Our export to Austria was 1.1 billion USD and import from Austria was 1.6 billion USD at the end of 2012. These numbers are quite small compared to the potential. On the financing side, however, there is good news. Austria is the leading country in foreign direct investment flows to Turkey for the period after 2008 with 7 billion USD in total. Direct investments are mainly focused on the energy sector. There are currently 643 Austrian firms operating in Turkey. Distinguished Guests, The European Union is a success story regarding peace and cooperation among nations with rather bitter historical memories. No wonder the European Union obtained the Nobel Peace Prize in year 2012. Despite all the debates and a high degree of uncertainty regarding the new economic governance structure in the EU, I sincerely believe Turkey’s closer cooperation with Austria will bring invaluable outcomes in line with the European spirit. To conclude, I would like to express my view that the future of the commercial, financial and economic relations between Austria and Turkey looks more promising than ever. Today’s joint meeting and the opening ceremony of the Exhibition “Contemporary Turkish Painting and Printmaking in the Republican Era” are small, symbolic, yet quite significant steps to mark the start of this new and healthy trend. Thank you very much for your attention. BIS central bankers’ speeches  3
On the other hand, policies are possibly more short-term oriented and large policy errors more likely. Investors may therefore demand a higher risk premium. In direct democracies, the speed of reform is typically slower. Grid-locks are possible through referenda and therefore more common. On the other hand, political stability in direct democracies tends to be higher and economic policies typically have a more long-term orientation. As policy changes take more time to be introduced, the risk of large policy errors tends to be smaller. Over the long-term, investors appear to be willing to pay a premium for higher stability. Beyond differing parliamentary systems, our two countries’ political structures are organized along different principles. Whereas the political process in the United Kingdom can be broadly characterized as top down, Switzerland’s federalist structure implies a bottom-up political process with a great deal of political autonomy for our nearly 3000 communes and 26 cantons. It is interesting to note that there are at least some tentative signs of converging trends: In the United Kingdom, Tony Blair’s government has initiated constitutional reforms by establishing the Scottish Parliament and the Welsh Assembly in 1998 and by advancing the Regional Assemblies in England. In Switzerland, a number of centralization proposals are debated such as directly enhancing the power of the federal government or alternatively, merging a number of cantons with the aim of ending up with larger and fewer regional authorities.

In light of our two countries’ legal roots, the legal consequences of relations with the European Union are undoubtedly of greater concern to the people of the United Kingdom than to Continental Switzerland. More importantly, in my view, the political systems of the U.K. and Switzerland differ in fundamental ways. The United Kingdom is one of the oldest representative parliamentary democracies. Its electoral system tends to yield clear-cut political majorities. The ruling party - Tory or Labour - is elected for typically four years and can manage the country quite independently as it is assured quasi-autonomy to alter existing legislative acts or enact new ones. Switzerland has an equally proud democratic tradition. It is, however, deeply rooted in direct participation by the sovereign. A vote by the people is possible on nearly everything. Indeed, it is often compulsory. The Swiss parliament is elected every four years. Due to the proportional voting system, no political party can expect to achieve an absolute majority. Thus, the parliament elects the government as a collegiate body which traditionally encompasses all four main political parties. Consequently, legislative decisions tend to be deeply rooted in compromise, not least to overcome the potential referendum hurdle. The mechanics of a particular political system affects the ability of legislative bodies to pass politically contentious reforms to a country’s underlying economic structure. In parliamentary systems with a  BIS Review 24/2004  1  clear majority the speed of structural adjustment - once initiated - tends to be higher.
As the pace of activity intensifies, we are seeing a sharp increase in interest from both lenders and borrowers in taking advantage of such opportunities. Those who don’t, risk getting caught napping. How the Bank is adapting its own operations to the use of SONIA  Before concluding, I want to spend a moment setting out some of what the Bank of England, as a financial institution with a sizeable balance sheet in its own right, is doing to ensure that it is also ready for LIBOR transition. One of our key messages to firms has been to stop writing new LIBOR-related business that fixes or matures past 2021. The main area in which the Bank undertakes such activity is in the swap programme used to hedge the government’s foreign exchange reserves, which we manage as agent for HM Treasury. Last year, we set up a separate project team to advise the Treasury on its options – scaling the issue, assessing the available trading methods and liquidity in alternative markets, and evaluating the implications for risk and return. In light of that advice, the Treasury decided some months ago to instruct the Bank to cease writing new LIBOR business with fixings falling after 2021, and transact only in SONIA-linked contracts. Our experience of SONIA market liquidity so far has been positive: at least as good, if not rather better, than expected. Another way in which LIBOR potentially touches the Bank’s operations lies in the collateral that we accept in our sterling liquidity facilities.

In the euro area, because the banking system has a more dominant role in the financing of the private sector than the capital market, compared with other economies, the implementation of such measures would be more focused on the banking system. Potential measures could include an extension of the maturity of the central bank liquidity provided to banks and purchases of private debt securities in the secondary market in order to improve its liquidity and reduce the cost of funding of the real economy, thus helping its recovery. Could a further easing of monetary policy contribute to containing potential disinflation risks and provide further support to economic activity? I would like to make two general remarks concerning the role of monetary policy in fostering the economy’s recovery and sustained growth at this juncture and more generally. First, as we have emphasised in the past, the ECB’s monetary policy should ensure that inflation expectations over the medium to longer term remain firmly anchored in line with the Governing Council’s aim to keeping inflation below, but close to, 2%. This anchoring of inflation expectations supports sustainable growth, employment creation and contributes to financial stability. Second, the monetary policy stance should be determined so as to also contribute to a smooth exit strategy from the current exceptional circumstances of historically low rates and unlimited provision of central  BIS Review 38/2009  3  bank money to the banking system.
In other words, a monetary policy committee must not only agree that it can disagree, it must also agree on which way it is okay to disagree. But these differences also contribute to the diversity that leads to better decisions. There is no one who holds the key to the truth with a capital T, and when views and assessments are contrasted with one another there is less risk of bad decisions. There is some support for this in academic research, where one result is that a group of persons who process information and reach their decisions in different ways can outperform even very skilful individuals when it comes to solving complex tasks. 1 One could say that diversification trumps specialisation – it is the differences that create added value. 1  See, for instance, Alan S. Blinder, “Monetary Policy by Committee. Why and How?” European Journal of Political Economy 23 (2007). 6  BIS Review 134/2010

The experience of the financial crisis has taught us that this is important. In closing, I would like to thank the Supervisory Board and the Monetary Policy Committee for their collaboration, and I wish to thank the Central Bank’s many colleagues and collaborators for their cooperation – not least the Prime Minister’s Office, the Ministry of Finance and Economic Affairs, and the Financial Supervisory Authority. I would also like to thank the financial institutions with which the Bank interacts for their cooperation. Furthermore, I would like to thank the Parliament of Iceland, particularly the Economics and Commerce Committee, for their collaboration. And last but certainly not least, I want to thank the staff of the Central Bank for their tirelessness, dedication, and outstanding work in the past ten years. And at this turning point, I would like to extend my sincerest thanks to all of you who have come here today and have attended the Bank’s annual meetings in the past. Central banks can be a force for change, but history and tradition are also strong, and they contribute to strength and steadfastness in the work they do at any given time. It means a great deal to me that here today are two former Governors and other former Central Bank employees have attended the Annual Meeting every year during my term as Governor. Thank you for that. 8
The novelist William Makepeace Thackeray called it “as grand a painting as ever figured on the walls of any academy, or came from the easel of any painter.”6 In 2005, was voted Britain’s greatest painting in a BBC poll.7 The quote – “Light is therefore colour” – is from an 1818 lecture by Turner. It refers to his innovative use of light, shade, colour and tone – one example of his unquestioned contribution to the visual arts in Britain and beyond. Turner rarely signed his paintings, so the signature on the banknote was taken from his will. It is fitting because, in that document, he bequeathed his paintings to the nation – a wider contribution to British society. Most Turners are not locked away in private collections or spread to the four winds. They are free for the British public to see across some of our greatest museums. And finally, Turner’s legacy endures. From his influence on art for more than two centuries, to the prize that bears his name and celebrates British contemporary art – indeed, to this magnificent gallery, the Turner Contemporary. It is fitting we are here in Margate, where Turner visited frequently throughout his life. This gallery stands on the original site of Mrs Booth’s seafront guest house, where Turner stayed whenever he visited.8 More than 100 of his works were inspired by the East Kent coast, and he held that “the skies over Thanet are the loveliest in all Europe.” ***  6  P. Ackroyd, Turner (Vintage, 2006) p. 136.

Average inflation between 2001 and 2013 was 3.1% annually. Pillar number three is our floating exchange rate regime. Exchange rate flexibility allows to rapidly and effectively accommodate big external shocks such as changes in the terms of trade via movements in the exchange rate. This flexibility gives more room to monetary policy to contribute to the smoothing of the domestic business cycle. Chile’s long-term interest rates, unlike those of other economies, have decreased in recent months. And they are certainly lower than they were in the 1990s. By way of example, compare the 6.5% average rate of indexed 10-year bonds in the nineties with their 2% rate of today. The floating exchange rate provides the right incentives to the private sector to administer the currency and foreign liquidity risks in a much globally integrated economy like ours. On the financial sector side, there is a sound regulatory and supervisory framework grounded on a set of prudential norms and standards. These are in line with international recommendations, and are under the supervision of specialized regulatory entities, aimed at the correct management of financial institutions. All this has helped to develop a mature, stable, solvent financial system. The Basel index, measured by the Capital Adequacy Ratio of the Chilean banking system is more than 13%. The banking sector shows sound capital and funding structures, concentrated in long-term sources. Additionally, they carry no significant currency mismatches on their balance sheets, nor do their customers.
The Bank has just begun to put in place a system for measuring the socio-economic background of its recruits. In future, that might help in sketching the contours of the Bank’s own experiential diversity map. Some organisations have taken more purposive action still to promote social mobility. For example, some have set themselves recruitment targets for employees drawn from lower socio-economic groupings. Others have put in place so-called “contextualised” recruitment, adjusting their entrance requirements to prevent filtering out of candidates based on their socio-economic background. The Bank has also made some initial steps in the direction of contextualised recruitment, as well as signing up as a member of the so-called Social Mobility Compact, which promotes social inclusion and mobility in the UK. 67  Heckman (2006) finds that very early intervention for disadvantaged children is crucial in order to affect outcomes. Intervening when a child is over the age of six has comparatively little effect. 68  Attanasio and Blundell (2014). 69  Feinstein (2003). 70  Commission on Child Poverty and Social Mobility (2014). BIS central bankers’ speeches  13  Across all organisations and institutions, there is plainly much further to go. This new dimension to the diversity debate could, if the evidence is even half-right, yield high organisational and societal returns from a modest investment in better measurement and in different approaches to recruitment and performance. (c)  Recruitment strategy  Recruitment is typically a singular pursuit. The successful candidate is typically the one deemed to best meet the job requirements.

However, as we saw in the mid-2000s, there is also the associated risk of upward pressure on inflation from global energy and other commodity prices, if the momentum of world growth becomes too strong. Fourth, the high degree of stimulus provided by fiscal and monetary policy to combat the recession will need to be withdrawn over a period of time. Returning budget deficits to a more sustainable level will require a prolonged tightening of fiscal policy in many countries, including the UK. Monetary policy can provide an offset by continuing to support the growth of private spending – though the appropriate degree of monetary stimulus will need to be continually reassessed in the light of the progress of the recovery at home and abroad and its impact on inflationary pressures. Given the turbulence we have seen in the major economies of the world over the last two years, it is very natural to worry about setbacks to the recovery, both in the UK and overseas. In the past, economic recoveries have not been smooth and linear. So we should expect to see some variability in growth rates, both at home and abroad, as this recovery develops. However, looking through this data volatility, there are also good grounds for expecting the growth of the world economy to continue to provide a healthy support to the UK’s economic recovery over the years ahead.
The resulting dispersal of risk allows banks to diversify their risk profile as well as their sources of revenue. Providing that the gain from diversification outweighs the increased cost of credit assessment, as banks take on exposure to entities where they have no banking relationship, and that risks are priced fully and appropriately, such innovation should improve market efficiency and lower the cost of intermediation and of capital. These changes in the financial environment, however, resulted in banks increasing their exposure to liquidity risk. Banks originated large volumes of long-term loans in the expectation that they could be quickly and readily sold on, but leaving them with additional funding risks if they could not. Contingent liquidity lines to securitisation conduits and special purpose vehicles rose rapidly with little expectation that they would be drawn. Exposures to higher yielding complex structured products rose, with market participants failing to recognise sufficiently that the high yields offered by such products were in part compensation for higher liquidity and market risk and that prospective risk-adjusted returns were much lower than might first appear from their short historic track record. Moreover, in buoyant market conditions, the compensation for liquidity risk itself was bid down to negligible levels by early 2007 (Chart 2). By that stage, many market participants recognised that compensation for risk-taking was too low, but judged that the business risks of exiting lines outweighed the financial risks of continuing to write new business.

MAS posted a net profit of $ 5.0 billion for the year due to higher returns from MAS’ foreign investments in buoyant financial markets globally. VIII  Further enhancing transparency of MAS’ operations  In this annual report, we have included a new section that highlights our key achievements and work in progress. To enhance transparency of our decision making framework, we also disclosed details of the Board Committees in the annual report. Conclusion In closing, MAS continues to be focused on supporting non-inflationary economic growth, developing the financial sector and enhancing the supervisory framework for a sound and resilient financial sector. The economy is expected to do well this year. The IMF/World Bank Financial System Stability Assessment concluded that our financial sector is robust, and our legal, supervisory and institutional framework is sound. Rating agencies like Standard & Poors, Moody’s, and Fitch continue to re-affirm the strength of our economic fundamentals, which underpin our status as the only Asian country with a triple A sovereign credit rating on both domestic and foreign currency debt. We are committed to Singapore’s vision as a leading financial centre. We continue to stay abreast of market developments and industry concerns and uphold our high standards of regulation and supervision. We will work with the industry to continue to develop a more dynamic, competitive and vibrant financial sector. BIS Review 43/2004  3