samchain/econo-pairs-v1 huggingface dataset:
At its most recent monetary policy assessment about a month ago, the SNB published its new inflation forecast. The forecast shows that, assuming an unchanged interest rate policy, inflation will rise gradually over the coming quarters, and will exceed 1.0% in 2018 (cf. chart 12). So the forecast suggests that current monetary policy is appropriate. For this reason, in December the SNB decided to continue its expansionary policy. This is based on two elements: first, an interest rate of –0.75% on sight deposits at the SNB combined with a target range for the three-month Libor of between –1.25% and –0.25%; second, the SNB’s willingness to influence exchange rate developments if necessary. The negative interest rate and the willingness to intervene on the foreign exchange market serve to make investments in Swiss francs less attractive, and thereby reduce the pressure on our currency. These measures demonstrate that business as usual is still a long way off. During the crises of the last few years, recurring safe-haven flows of both domestic and foreign capital have led to severe upward pressure on the Swiss franc. Despite weakening somewhat over recent months, the franc is still considerably overvalued, as chart 13 illustrates. The blue curve shows changes in the inflation-adjusted, trade-weighted Swiss franc exchange rate. The yellow bars mark deviations from the long-term average, which is currently around 15%. At the same time, the global economic recovery is still not firmly bedded in. Our current monetary policy is tailored to these circumstances.

As of now, there are 13 companies holding Treasury Center licenses, of which 4 have been granted in the past 3 months, with one more awaiting approval from the Ministry of Finance. Many more have also made inquiries, which I am pleased to see. The second area is to foster the growth of regional capital markets. Apart from the banking sector, well-developed capital markets are critical to nurture sustainable development of financial interconnections. In this light, Thailand is playing a proactive role to enhance our capital market capacity, aiming to link up GMS capital markets with global investors. Firms from the GMS 7 can raise funds through the Thai capital market to facilitate their businesses, while global investors can invest in products with GMS exposure. As I mentioned earlier, we have seen successful and fast-selling baht bonds, issued in Thailand by the Lao government and corporates. A few years ago, we allowed companies operating in the GMS to be listed on the Thai stock exchange using the holding company structure. In addition, Thailand offers a more opened platform for GMS investors and global players looking for opportunities in the GMS. A new rule has allowed foreign firms, including those from the GMS, to launch IPOs in Thailand and become listed in the Thai stock exchange. This is aimed to provide global investors with wider choices of investment, and to provide an ideal financing destination for both GMS members and global players. The last area of policy to promote GMS financial connectivity is the better-connected payment networks.
While the initial ambition was to create a unified area where European banks could operate efficiently, we are still struggling with intra-European borders. The European banking sector remains far too fragmented. In 2019, the market share of the top five US banks was 43% [of domestic consolidated assets], compared with only 23% for the top five in Europe. There are still too many roadblocks to cross-border restructuring: geographical ring-fencing practices prevent groups from managing liquidity and capital efficiently on a consolidated basis. As a result, fewer than ten cross-border M&A deals have been signed since 2014, compared with 180 domestic deals over the same period, a historic low: at present, Banking Union has meant that our banks are actually not more Pan-European. This paradox is intolerable. Why it remains crucial. The creation of the Banking Union itself was a direct response to the sovereign debt crisis in Europe and its impact on the bank-sovereign nexus in a context of fragmented supervision. Beyond the need to mitigate any future crisis, the achievement of the Banking Union remains of the utmost importance, for both micro and macro reasons. At the micro level, moving further towards a true single banking market through cross-border restructuring is a matter of strategic autonomy. Genuine Pan-European banking groups could operate more effectively, raise their profitability thanks to scale effects and better face up to foreign competition, especially from the United States.

First, we have spent too much time and energy on protracted discussions on prerequisites and pre-conditions, such as a full EDIS, itself pre-conditioned by sovereign de-risking. Second, we should not focus on the creation of new instruments and their financing, but start by making existing ones work better. Third, in order to move beyond political divisions, we need to abandon the sequential approach in which the issues are discussed one after another, so that the smallest obstacle can bring the whole process grinding to a halt. I would like to call for simultaneous, parallel movements on several fronts and to broaden the scope of possible action. While welcoming the ambition of the Eurogroup’s “package” and its President, such a pragmatic method of small and parallel steps could help to move forward again. None of these steps is sufficient, but each of them taken separately would be welcome. Or if you prefer a restaurant analogy, call this proposal “à la carte” rather than a “set menu”… bearing in mind that at the end our lunch must be just as substantial and significant. II. Four pathways towards reigniting the Banking Union Building on this approach, I would like to share with you four possible and broader pathways towards a stronger Banking Union. 1. Moving beyond home/host issues. On this topic, I would like to start by issuing a wake-up call on the effective implementation of cross-border liquidity waivers within the union, as prescribed by the European legislation. They remain far too limited in practice.
You can see in the two right-hand side charts that the trade balances of the euro zone in general and of France in  Page 3 of 14 particular have fallen sharply since the end of 2021, with a cumulative deficit over 12 months for the euro area reaching almost 300 billion euros in September. While the bulk of this staggering fall is in energy, the situation is also deteriorating for non-energy goods. International trade, in purely accounting terms, is a zero-sum exercise and the deficits of some feed the surpluses of others. This transfer of wealth comes essentially from a change in the prices of traded goods as you can see in the bottom left chart for France that experienced a more rapid growth of its import deflator compared to its export deflator over the last 4 quarters. This “external tax” is a negative shock on the real income of both households and firms. Overall, this shock, along with the associated spike in inflation, is likely to have a sizeable negative impact on growth for several quarters at least. Let me now put forward quantitative measures of this external tax. It’s not that simple, and several ways of measuring it can be considered. We can look at a “gross” external tax, i.e. the amount of extra energy bill, for energy importing countries.

The Government  Page 14 of 14 has rightly planned the first steps for the beginning of 2023, with the planned 15% increases in gas and electricity tariffs and the end of the rebate on fuel prices, to be replaced by a fixed allocation of 100 euros targeted by income. ** Let me conclude: I believe it is normal that the public sector has stepped in in France and in other European countries in the face of this very significant economic pain. But let us be at the same time be honest with ourselves, use of medications must be temporary. The goal of public policy in the medium term must be, after a transition period, to grapple with the world as it is and to overcome challenges that are not about to disappear. In the end, we all have to share with fairness the “external tax”, and also pave the way to reduce our vulnerability by saving energy and by enhancing our domestic production of energy. France has in the past decade made significant progress in a number of areas, notably employment and training. In the present shock, too, I am confident that we can emerge collectively stronger. i  The macroeconomic impact of the terms of trade can be calculated as the difference between the [relative] growth rate of import and export deflators, weighted by the share of trade flows in nominal GDP.
French banks, for their part, are continuing to display solid fundamentals, thanks to a high level of own funds, which has stabilised at around 15 %i:  In this respect, the main euro area banks have fortunately defied certain – fairly pessimistic – predictions, which forecast that CET1 ratios would have deteriorated significantly by the end of 2020.ii This better than expected resilience among financial institutions, particularly in France, has played a decisive role in determining our economy’s capacity to weather the crisis. Banks already financed three quarters of the European economy, and more than 60 % of the French economy. Fortunately, they have increased their volume of financing since the start of the health crisis, especially in France:  Corporate lending, which was already rising at a rate of around 6 % per year between 2016 and 2019, accelerated markedly in 2020 (+ 13.3 %), especially lending to SMEs (+ 20.3 %), helped by the unrivalled success of the government’s distribution of state-guaranteed loans, which totalled nearly EUR 140 billion at the end of April 2021. Let us also make one thing clear, in the face of the doubts that have been raised, which are completely unfounded: French banks are in no way underprovisioned. The cost of risk is traditionally lower in our country than the European average, and certainly than the level in the US:  And the recent reduction in this cost reflects the improvement in the economic outlook, as well as the efficiency of the public support measures for households and businesses.

For these reasons, markets have seldom, during living memory, considered a large fiscal deficit in the US as presaging monetary laxity or signalling a weaker dollar. Indeed, the contrary often seems to have been the case: with the fiscal deficit providing some circumstantial evidence of a deficiency of domestic  2  BIS Review 70/2002  savings, the prospect that interest rates might need to rise to bring savings and investment into equilibrium – or the reality of such a rise – may actually have contributed to the strength of the dollar on occasions, as noted already. A similar trait was apparent with the deutschemark in the early 1990s in the wake of German reunification: the prospect – and subsequent emergence – of a substantial budget deficit, and hence higher interest rates than otherwise, was accompanied by a strengthening of the exchange rate. By contrast, however, and as discussed below, the more recent deterioration in the fiscal outlook in Germany has not been a positive factor for the euro. At the other extreme lie examples of countries where budgetary indiscipline has plainly been a factor behind the collapse of the currency. It would be invidious to mention names, but the story can be caricatured as follows. The government is running a deficit which it is unable or unwilling to correct. Domestic savings are in short supply and savers do not have abundant faith in the government from the credit-risk perspective.
These arguments make it difficult to specify strict regulatory rules for all seasons. They point to the need for a forward-looking, horizon scanning approach with scope for supervisory judgement and macroprudential discretion (BCBS (2017)). This does not, however, obviate the potential benefits from seeking, over time, to specify clearer mandates and regulatory reaction functions, especially on the macroprudential front. Incentives and Arbitrage  The empirical exercise in the previous section looked at how a set of regulatory standards, applied counterfactually, might have done in spotting stress among a set of banks. Plainly, any such counterfactual 27  All speeches are available online at www.bankofengland.co.uk/speeches  27  exercise is subject to significant caveats. The most important of these is that it cannot take account of how changes in the regulatory regime might themselves have reshaped risk-taking incentives at the time. This Lucas Critique plainly looms large in the field of financial regulation. Financial regulation, like any tax, is very likely to change the behaviour of the party subject to it. This is neither surprising nor, necessarily, undesirable. Indeed, sometimes it is the precise purpose of the regulation in the first place. For example, average risk weights on assets held in the trading book have increased by 45% across a sample of major UK banks between 2006 and 2013. Partly in response, trading books have shrunk by, on average, 24% across these banks and by 45% across the world’s G-SIBs. This was an intended, and probably desirable, behavioural response to a necessary recalibration of regulatory standards.

Aikman et al (2014) discuss where the classification of failure departs from Laeven and Valencia (2010). 23  All speeches are available online at www.bankofengland.co.uk/speeches  23  instrument if policymakers have a low tolerance for failure. That matters if, for example, the costs of higher capital requirements increase non-linearly (Greenwood et al (2017)). These points are also evident if we assess individually the performance of the RWCR and NSFR. Chart 18 and Table 3 below show that hit rates of 80 or 90% can only be achieved with high false alarm rates and stringent calibrations of these metrics. Overall, each metric individually does somewhat worse than the leverage ratio in balancing hit and false alarm rates. And similar results hold when the loan to deposit (LTD) ratio is considered instead of the NSFR in the wider sample (Chart 19).
Ardian Fullani: Recent economic and monetary developments in Albania Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the press conference on the Monetary Policy Decision of the Bank of Albania Supervisory Council, Tirana, 29 June 2011. *  *  *  Today, on 29 June 2011, the Supervisory Council of the Bank of Albania reviewed and approved the monthly Monetary Policy Report. Based on an analysis of Albania’s latest economic and financial developments and following discussions on their performance outlook, the Supervisory Council of the Bank of Albania decided to leave the key interest rate unchanged at 5.25%. The Supervisory Council holds that the actual monetary conditions are appropriate for meeting the inflation target and for continuing to stimulate the economic activity. Let me now proceed with an overview of economic developments and main issues discussed at today’s meeting of the Supervisory Council. *** Annual inflation pointed to 4.2% in May, remaining close to preceding months levels. Under higher foreign prices pressure, the prices of “processed foods” and “non-food consumer goods”, including oil, were the main contributors to inflation rates. In the meantime, the seasonal effect of increased domestic supply of fruits and vegetables is reflected in a lower contribution of the “unprocessed food” to inflation. The rise of some administered prices and the effect of higher excise tax rates for some goods continued to provide a constant, but positive, contribution to annual inflation.

Against the above-mentioned developments, monetary indicator analysis confirms controlled inflationary pressures originating from the domestic economy. Money supply annual growth was 12.2% in April, staying close to its historic trend. Monetary expansion reflected the accumulation of liquidity in the banking system, revealing the households’ preferential behaviour towards saving. Our assessments point out that monetary expansion is compliant with the private sector’s demand for real money, thus indicating controlled monetary-related inflationary pressures. The contained behaviour of the private sector about spending and investing is reflected also in a low demand for bank lending. Annual growth rates of lending to the private sector ranged 10%–12% in the four first months of the year, on average, only 2 percentage points higher than a year earlier. The business  2  BIS central bankers’ speeches  demand to cover liquidity needs was their main driver for loans, while lending to households increased by low rates. Developments in financial markets speak of low risk premiums and liquidity. Short-term interest rates in the inter-bank market stayed close to the key interest rate and demonstrated contained volatility. In the primary market, government securities yield surged in the last three months, in response to a higher demand of the public sector for funding. Nevertheless, their curb remains lower in comparison with a year earlier, pointing to more favourable financial conditions in the economy. Looking ahead, assessments and projections of the Bank of Albania suggest continuation of positive growth in the upcoming period.
To a large extent, the convergence of inflation to the 3% target in two years’ time is based on the assumption that the economy will continue to adjust the significant imbalances it accumulated in 2021. In the central scenario, the economy will grow below its potential for several more quarters, so that the gap will continue to narrow and will turn negative beginning at the end of this year. In this scenario, GDP will post annual variations between 1.75% and 2.25% this year, between -1.5% and -0.5% in 2023, and between 2.25% and 3.25% in 2024. For this three-year period, our projection contemplates a fiscal spending trajectory that is consistent with that described in the last Public Finance Report. Activity outlook foresees that private consumption will continue to tighten, a result that largely stems from the expiration of the massive income-support measures adopted in 2021, as well as from the tightening of monetary policy. About investment, weak performance is anticipated through the remainder of 2022 and all of 2023, reflecting less favorable financial conditions, increased business pessimism, a higher real exchange rate, and declining, albeit slowly, uncertainty (table 1). The current-account deficit will decrease in the coming quarters, in line with the continued adjustment of spending on tradables and a much more favorable savings-investment balance than in 2021. As income stimulus measures will not be repeated, both public and household 5  savings will improve drastically compared to 2021, triggering a significant drop in the current-account deficit from the second half of this year onwards.

We will do whatever is necessary to ensure that this pandemic, which is having a massive economic impact, does not turn into a debt crisis or a crisis of the financial system. We will not allow this to happen. We are dealing with a situation which requires us to act with extreme intensity. You have said that the measures taken by the Spanish government and other European governments are appropriate. But you have also hinted recently that the European Union has perhaps not responded quite as effectively. Are you afraid that a crisis of this kind could take its toll on the European project? Let’s hope not. The ECB has already acted. Basically what remains is for Member States also to act and continue to act through their fiscal policies. And we need a pan-European response. We need a coordinated EU fiscal policy response. I am sure that this is what will happen in the end. The ECB cannot be the only policy tool used from an economic standpoint. Monetary policy cannot be the only instrument employed. I am certain that Member States will do something about this and they will adopt a coordinated position in terms of the fiscal policy instruments employed by the EU in response to this huge crisis. The economic impact will be enormous. We just hope that it will be temporary.
Finally, I will comment more specifically on some of these challenges, and in connection to that also discuss some of the proposed alternative ways of responding to these challenges. The Swedish case Before the banking crisis in the early 1990s, the cooperation between the Riksbank and the Swedish FSA (then the Banking Inspection) was limited to high-level contacts. In their day-to-day activities, however, the two authorities worked in different silos – the Riksbank with monetary and exchange rate policy and the FSA with regulating and supervising financial institutions. The crisis made it very clear to the Swedish authorities that there is a strong link between soundness of financial institutions and macro financial stability, and hence a need for close cooperation between the FSA and the central bank. This economic link is mirrored by a parallel link spanning at least three aspects of regulatory involvement in the financial sector – crisis prevention, crisis management and crisis resolution. In Sweden, these aspects of regulatory involvement are shared between the supervisor, the central bank and the Ministry of Finance. In crisis prevention, the supervisor has the tools for regulating and supervising the institutions, while the central bank might play a supporting role through monitoring the stability of the system and the links to the real economy. In crisis management, the supervisor lacks the financial resources to back any intervention, while the central bank has the power to act as a lender of last resort.

Such an acceptance comes naturally when consumers trust that the goods or services being offered by the company are of the quality that is worth their price, that they are being treated fairly and with respect; and that they do not have ill feelings towards the company. In Western society where there is great awareness for consumer protection, such ideas have therefore not been incorporated in the prescribed governance of the corporation. In the Oriental world, however, the idea of consumer protection has not been well embedded in our culture. Hence there is a need to broaden the principle of governance to include consumer protection. In short, this means that the Board of Directors needs to oversee that the firms provide not only quality goods and services, but that they also treat their customers fairly and with respect. Indeed, the absence of a strong consumer protection standard does not give the corporations the liberty to act in their interests alone at the expense of the interests of consumers. Producers and service providers that start by caring about the interests of customers as part of the principle of non-exploitation and mutual co-existence, will find that they can maintain long standing relation and consumer loyalty. Within the universe of businesses, the domain of financial services, particularly commercial banks, stand out as one of the most prone to abuse. As capitalist organizations, commercial banks are in a convenient position to profit directly from the general public.