samchain/econo-pairs-v1 huggingface dataset:
A second, related, factor is that even where the data has been collected, in many countries the default experience is distorted by the 1997-98 financial crisis: the question for banks is to what extent this experience should be factored into their risk management systems. A third issue is the extent to which off-the-shelf models that have been developed primarily for the US market can capture the behavioural characteristics of Asian borrowers. None of these problems are in principle insurmountable. However, they do suggest that a degree of caution is in order before banks make the leap to IRB. That is why we have been advising those banks that are considering using IRB approaches to "look before you leap." The most important consideration is for banks to make sure that their IRB systems are robust and well-founded, and that they are integrated with their overall systems for identifying, managing and controlling risk, for making credit decisions, and for product pricing. We are willing to allow banks as much time as they need to achieve these objectives. The implementation dates for the IRB approaches should not be taken as a deadline. Banks that feel they need longer to work on their systems will have our full support. Getting it right matters more than a specific date in the calendar. Looking ahead, both the regulators and the industry will continue to face many challenges over the coming months and years. Putting Basel II in place has been demanding for everyone involved, and will continue to be so.

Durmuş Yılmaz: Recent economic and financial developments in Turkey Speech by Mr Durmuş Yılmaz, Governor of the Central Bank of the Republic of Turkey, at the press conference for the presentation of the Inflation Report, Ankara, 27 October 2009. *  *  *  Distinguished Guests and Members of the Press, Welcome to the press conference held to convey the main messages of the October 2009 Inflation Report, one of the most important communication tools of the inflation-targeting regime of the Central Bank. The report typically summarizes the economic framework addressed in monetary policy decisions, elaborates global and domestic macroeconomic developments and presents the medium-term inflation forecasts, which have been revised in view of previous quarter developments, along with the monetary policy stance. I would like to start my speech by underlining once more that the Central Bank’s assessments on inflation outlook and economic activity, which I will share with you in detail shortly, should be considered in the light of existing global conditions. The global crisis, which erupted in developed markets and spread across the world during the last quarter of 2008, has continued to affect the economic outlook, albeit less forcefully, during the third quarter of 2009. In this period, data releases on activity indicated that the recovery continues to gain traction with growth forecasts being revised upwards after sustained downward revisions (Figure 1).
Our scope of responsibilities and stakeholder groups have also expanded in tandem. In order to ensure continuous integrity safeguards, the Bank has refreshed its framework and guidelines to include the procurement process, project management and whistle blowing to mitigate current and emerging project risks. Third parties which are engaged by the Bank must adhere to ethical practices as outlined in the vendor code of conduct, to be made publicly available soon. In closing, I would like to express my deep appreciation to Assistant Commissioner Tuan Mohan and his colleagues from MACC. We are very privileged to have had the opportunity to benefit 1/2  BIS central bankers' speeches  from their insight and experience and it will help us do our part in combating corruption. May this occasion foster an even closer cooperation between the Bank and MACC, and herald many more joint events to come. 2/2  BIS central bankers' speeches

I have since had reason to go through what happened when confidence was restored in the Swedish economy and economic policy. Despite the decision on budget consolidation essentially being taken by the Government and Parliament in autumn 1994, it took some time before various figures believed it would succeed. The first international recognition of our policy came from the European Commission in spring 1995. I accompanied Göran Persson to Brussels and gave an account of Sweden’s convergence programme to Giovanni Ravasio, who was one of the leading economists at the Commission. Each member state of the EU was to draw up a convergence programme that would show what policy they intended to conduct to achieve stable public finances, low inflation and low interest rates. The Swedish convergence programme was aimed at achieving balance in public finances in 1998, and had the broad support of all of the parties in Parliament with the exception of the Left Party. Ravasio was convinced that the programme was sustainable. 4  BIS Review 21/2006  It was possible to see in the financial markets that the interest rate differential between Swedish and German long-term bonds began to decline in spring 1995 when the Swedish convergence programme had been decided and even more so in autumn 1995, when it had been approved by the EU’s finance ministers. For the Riksbank it took until the beginning of 1996 before short-term interest rates began to be cut. The krona was still weak during 1995 and inflation was close to 3 per cent.
In particular, the insufficient consolidation of public finances in certain countries in the previous upturn has considerably eroded the stabilising capacity of fiscal policy in the current cyclical phase. Therefore, a number of countries had to curtail the operation of the automatic stabilisers and some had to run budget deficits above 3% of GDP, which triggered the related excessive deficit procedures. Evidently, the unfavourable economic situation is testing the multilateral surveillance mechanisms of budgetary policies. But the report drafted by ECOFIN, based on a proposal by the Commission and recently taken up by the European Council, has contributed to reinforcing the validity of the Stability and Growth Pact and to clarifying its application. The single monetary policy has also reacted to the cyclical slowdown, maintaining conditions propitious to the growth of economic activity while bolstering the credibility of its commitment to price stability. However, continuing inflationary pressures, linked in part to the aforementioned rigidities in price- and wage-formation mechanisms, have naturally limited the scope of the more relaxed monetary policy stance. In any event, the key ECB interest rate stands today at 2%, 125 basis points down on a year ago. That constitutes a tailored response to the weakness of economic activity and to the improved inflation outlook over the period to date, brought about by the substantial appreciation of the euro. The economic environment has been appreciably alleviated in recent months by the rapid outcome of the Iraq war and, in particular, by the favourable impact of this on oil and stock market prices.

This included more frequent reporting on transactions, data, and information from market participants on Monday. Although conditions remained calm on that Friday, the simultaneous increase and widening dispersion in repo rates and, importantly, federal funds rates on Monday indicated that markets were not effectively distributing liquidity across the system. The New York Fed’s Markets team 1/5  BIS central bankers' speeches  built a timeline and implementation plan in case the Open Market Desk at the New York Fed (Desk) would need to operate on Tuesday. Early Tuesday morning, it became clear that this situation had persisted and had the potential to become more acute. In response to these developments, and in keeping with the FOMC’s standing directive to the Desk to conduct open market operations as necessary to keep the federal funds rate within the target range, on Tuesday morning the Desk announced and conducted a repo operation. Although such operations were common before the financial crisis, this was the first non-test repo operation in many years. This was followed by repo operations each day since. These actions had the desired effect of reducing strains in markets, narrowing the dispersion of rates, and lowering secured and unsecured rates to more normal levels relative to other benchmarks. The experience of the past week drew attention to the possibility of the development of strains in funding markets around the upcoming end of the quarter.
Chart 1 plots successive Bank of England forecasts of wage growth since 2012. Wage growth in the UK has persistently disappointed to the downside, on average by around 1 ¼ percentage points one year ahead. Part of the explanation lies in weak UK productivity, a key determinant of firms’ ability to pay workers. This, too, has persistently disappointed to the downside, with a mean error of around 1 percentage point one year ahead. Nonetheless, it is clear that wages have been weaker than can be explained either by slow productivity growth or by the other factors which typically affect wages, including the degree of slack in the labour market. This can be seen by looking at the unexplained components from the Bank’s wage equations (Chart 2). These residuals have been predominantly negative over recent years. That is despite on-going refinements to the Bank’s judgements on the labour market, as wages have come in short of expectations. This weakness in wages is the more surprising because it has come against a backdrop of a booming jobs market in the UK. Employment has increased by around 2.5 million people since 2011. Unemployment in the UK has fallen from its peak of 8.5% in 2011 to almost 4.5% currently. It has also fallen significantly in every region in the UK. Here in Yorkshire, unemployment has fallen from 10% to around 5% over the past few years, its lowest level since the 1970s.

The fundamental issue is whether U.S. monetary policy has helped support our dual objectives of maximum employment in the context of price stability, and whether this support is consistent with a healthy global economy. Moreover, it is far from clear that explicitly coordinated policy would produce better outcomes for the global economy generally, or EMEs specifically. Central banks face enough challenges in tailoring policies to their own domestic circumstances. I believe that it would be taking on too much to attempt to collectively fashion policy in reference to global conditions. Monetary policy meant to suit everybody is likely in the end to suit nobody. Similar considerations underlie the widespread move in the emerging world away from fixed exchange rate regimes. Policymakers worldwide have learned that a framework capable of responding in a disciplined but flexible manner to changing domestic conditions works best over the long run. While explicit coordination looks neither feasible nor desirable, there is more that central banks in general, and the Fed in particular, could do to be better global stewards. As an example, recent events demonstrate the importance of effective Fed communication. It is clear, in retrospect, that our attempts in the spring of 2013 to provide guidance about the potential timing and pace of tapering confused market participants. Market participants seemed to conflate the prospective tapering of asset purchases with monetary policy tightening, and pulled forward their expectations about the likely timing of liftoff and raised their expected paths for policy rates.
Understanding the forces behind these phenomena or anomalies is important to thinking through what they mean for policy. When Alan Greenspan first used the term “conundrum” to describe the surprising behavior of forward interest rates, he was reacting to the decline in forward nominal rates over a period in which the Federal Open Market Committee was raising its federal funds target rate. This behavior of forward rates, the counterpart of which is the behavior of the bond yield curve, looked anomalous both in comparison to observations from past tightening cycles and with what seemed to be strong evidence about the fundamental soundness of the outlook for the real economy. The source of the relatively low level of nominal rates is still a matter of considerable debate. Part of the explanation lies in the decline in expectations of future inflation and uncertainty about future inflation. Part of the explanation may also lie in greater confidence that the secular decline in the variability of economic growth observed over the past two decades in the United States is likely to continue. However, even with the information provided by the development of the market for inflationindexed government securities, we have less ability than we would like to draw conclusions about what any nominal forward rate means for expectations about the level of future real rates, uncertainty about future real rates, and what those might imply about expectations about future economic activity. This uncertainty makes it harder to assess the appropriate path of monetary policy.

By contrast, the central bank essentially holds nothing but liquid assets – largely government securities (Chart 49). Shifting deposits away from commercial banks, and towards the central bank, would therefore make for a “narrower” banking system – a “narrow” bank being one whose assets are as liquid as its liabilities. In principle, it would also make for a safer one. Backed by liquid assets, rather than risky lending, deposits would become inherently more secure. They wouldn’t be vulnerable to “runs” and we would no longer need to insure them. 8  Nor is it a live issue for the Bank. As the Governor recently said to the House of Commons’ Treasury Committee, “May I…be absolutely clear: there are no plans to abolish cash at the Bank of England”. 9  The Bank of England’s balance sheet has obviously grown following QE. Those operations have been conducted via the Asset Purchase Facility (APF), which is not directly on the Bank’s balance sheet – strictly speaking, the blue bar in Chart 4 is not direct holdings of gilts but a loan from the Bank to the APF. But the APF itself holds only gilts and, even before QE, the vast majority of assets on the Bank’s balance sheet were government securities. BIS central bankers’ speeches  5  The case for narrow banks has a long and distinguished pedigree. The classical economists Adam Smith and David Ricardo favoured such a system.
Recently, a debate has begun on direct restrictions on some banking activities – in other words, prohibition. This is recognition of the social costs of systemic risk. Bankers are in uproar. This paper examines the costs of banking pollution and the role of regulation and restrictions in tackling it. In light of the crisis, this is the $ billion question. The last time such a debate was had in earnest followed the Great Depression. Evidence from then, from past crises and from other industries helps define the contours of today’s debate. This debate is still in its infancy. While it would be premature to be reaching policy conclusions, it is not too early to begin sifting the evidence. What does it suggest? Counting the systemic cost One important dimension of the debate concerns the social costs of systemic risk. Determining the scale of these social costs provides a measure of the task ahead. It helps calibrate the intervention necessary to tackle systemic risk, whether through regulation or restrictions. So how big a pollutant is banking? There is a large literature measuring the costs of past financial crises. 1 This is typically done by evaluating either the fiscal or the foregone output costs of crisis. On either measure, the costs of past financial crises appear to be large and long-lived, often in excess of 10% of pre-crisis GDP. What about the present crisis?

The steeper projected drop in investment considers shutdowns at several sites due to the sanitary crisis and the fact that companies have been re-evaluating their planned investment projects, which is consistent with the findings of the Bank’s survey. These showed that a non-negligible fraction of the respondents shelved their investment plans for this year and about half were having second thoughts about their execution. The projection also contemplates a near 2% contraction in consumption during 2020 with its private component being more concentrated in durables. This is in line with the significant depreciation of the peso and the double-digit drop in consumer goods imports in the early months of this year. The recovery of consumption will depend especially on the evolution of employment and income, and how companies manage to live through the most critical period without destroying a significant number of jobs. Chile’s exports will also shrink in 2020, reflecting the reduction in trade flows associated with the world recession. Actually, already in February and March they posted year-on-year drops. Imports will contract too due to weaken domestic demand. Thus, the substantial adjustment in business and household spending will not be compensated by the government’s savings depletion implicit in the announced fiscal package, so this year the current account balance will become marginally positive (Figure 9). 5  The medium-term inflation trajectory will be dominated by the sharp widening of the activity gap projected in the scenario just described.
BIS central bankers’ speeches  1  Ladies and gentlemen, I note with gratitude that this workshop is designed to address supervisory standards in the non-bank and microfinance sector through three main themes, namely; i)  regulatory structures,  ii)  international trends and standards, and  iii)  integration of non-banks into the formal sector. These are all very important and topical issues and allow me to talk a little bit more about one of these themes – the development of regulatory structures. First, while there is a definite role for international standards for regulation of this sector, it is very important that they are implemented in a way that takes into account the individual circumstances of each country. Secondly, the standards we adopt should in the end not impede financial sector inclusion. We need to balance this in order to achieve our overall objective which is a sound and efficient financial system. Ladies and gentlemen, It is important not to assume that supervisory arrangements should be, or can be, the same in every country. They must be tailored to the individual circumstances of each country. As an example, what is appropriate for Namibia may be totally inappropriate for another country like Uganda, and vice versa. However, there are likely to be common characteristics that cut across and can enable us all to learn from each other.

Mr. Heikenstein discusses the Swedish financial crisis of the early 1990s Speech by the Deputy Governor of the Bank of Sweden, Mr. Lars Heikenstein, at a seminar arranged by the Swedish embassy held in Seoul, Korea on 15/7/98. Let me begin with a thank you to the organisers of this seminar. I am honoured to have the opportunity to share with you some experiences from the Swedish financial crisis in the early 1990s. 1. Introduction An IMF study from 1996 showed that in the past fifteen years, 132 of the Fund’s 182 member countries had experienced macroeconomic and/or financial crises. Today the figure is even higher. Crises are a recurring phenomenon. In spite of every effort to prevent them, I fear that crises will continue to occur. We should therefore use the opportunities to learn from each other, both in order to avoid making the same mistakes and to find the appropriate correctives sooner. Needless to say, there are no single “best solutions”. Crisis situations are always specific in some respects, not least with regard to their structural and political environment. Had they not been specific, they would probably never have occurred because they would have been “spotted” in advance. Having said this, however, there are a number of globally accepted “truths” about what constitutes a good response to crises. Discussions around crisis situations are usually divided into two parts: crisis prevention and crisis management. In this presentation I will be focusing on the latter.
The CRB provides an essential service that aids lenders to be able to evaluate and price loans better. Good borrowers with a perceived low risk premium should have access relatively cheaper credit while bad borrowers can be denied credit thus reducing default rates and ultimately the price of credit. (v)  Sovereign Credit Rating: Fitch Rating and Standard and Poors both assigned the country with a B+ Sovereign Credit Rating. The rating is expected to provide an opportunity for both the Government and the private sector to access cheaper funds on the international financial markets. 6  BIS central bankers’ speeches  8.0  Conclusion  The Bank of Zambia acknowledges that there has been remarkable development in the financial sector over the past years, as evidenced by the various new products and innovations. However, despite the growth in products and services being offered, customers are still faced with high costs of borrowing. The challenge for the financial sector therefore is to improve on their operations by engaging in innovative activities that will reduce their cost of operations and pass on the efficiencies to borrowers. From the foregoing, it is clear that the challenges of reduction of interest rates to levels that would facilitate economic development through an efficient savings mobilisation and credit allocation system are numerous. However, they are not insurmountable. The solutions are in the hands of all stakeholders in the financial sector.

Credit providers are required to disclose the annual interest rate charged on a loan. Although, interest rates on loans and charges on services and products may vary significantly from one institution to another, it is incumbent upon all financial services providers to provide clear information and full disclosure on the costs and options available. It is also important for institutions to sensitise customers on what products may best suit their incomes and to educate them to borrow prudently. In this way, transparency is enhanced and consumers would have a clear picture of precisely how much they need to borrow relative to their income levels. This would result in responsible lending and a more competitive and transparent financial industry. However, financial education needs in Zambia are many and varied. They stem from inadequate understanding, by a good proportion of the population, of basic financial terms and concepts on the one hand, and a lack of knowledge of financial products and services that are increasingly available, on the other. To this end the Bank of Zambia through the FSDP in collaboration with stakeholders has developed a national financial education strategy for Zambia. The proposed national strategy for Zambia clearly identifies all the possible financial education delivery channels and responsible institutions in order to avoid duplication and waste of efforts during the implementation stage of the strategy.