samchain/econo-pairs-v1 huggingface dataset:
Elvira Nabiullina: Review of recent inflation developments in Russia and economic outlook Statement by Ms Elvira Nabiullina, Governor of the Bank of Russia, in the follow-up to the Board of Directors meeting, Moscow, 6 September 2019. * * *  Today, the Board of Directors has decided to reduce the key rate to 7% p.a. If economic conditions are in line with our forecast, we will look into further key rate reduction at one of the upcoming meetings. Let me dwell on the main factors behind the decision. First. Annual inflation has already approached 4%. Our estimates suggest that as of the year-end it will fall within the range of 4.0-4.5%. Meanwhile, inflation is forecast to stand at 3.5-4.0% in the opening months of next year. This is largely associated with the fact that the VAT rate increase will be factored out from the calculation of annual inflation. This may be considered as a purely technical factor. Sustainable trends point to inflation of about 4%. Second. Inflation expectations of households and businesses remain elevated. Therefore, we stay focused on their dynamics. Right now, I will not highlight the figures we released last week. However, I would like to note that previously we abstained from posting the results of surveys on household inflation expectations during ‘the week of silence’. We have discussed this issue and from now on we will publish these data as soon as they are released.

It is essential that the market promptly receives the information which the Board of Directors consults when making its decision. The Bank of Russia will continue to publish its analytical commentary that summarises and estimates expectations of households, businesses and analysts, after ‘the week of silence’. Third. Monetary conditions are continuing to loosen. We expect that both previous and today’s key rate decisions will underpin this trend. Market expectations for interest rates shifted downwards on the back of the signals in the followup to the Board meetings in June and July. This was also driven by the shifting expectations for monetary policies of the US Fed and the ECB as the economic growth outlook for the US and euro area deteriorated. The decline in interest rates comes with an easing of non-price lending conditions in terms of maturities and volumes. The easing of both price and non-price monetary conditions contributes to expansion in lending. According to our estimates, corporate lending will rise by 7-10% while retail lending will increase by 15–20% this year. Fourth. Economic activity undershot the Bank of Russia’s expectations in the second and early third quarter. This results from internal and external factors. This made us revise our 2019 GDP growth forecast from 1.0-1.5% to 0.8-1.3%. An important external factor is a slowdown in growth of the global economy, which has proven more tangible than expected due to, among other things, the growing contradictions in international trade.
Mortgage lenders continue to be extremely risk averse in extending new credit, and mortgage availability to those with lower credit scores is still significantly constrained. I don’t anticipate that this situation will change in a material way any time soon. Second, because motor vehicle sales are now close to their pre-recession levels, the future growth impetus from this cyclical sector will likely also be restrained going forward. Third, growth in the rest of the world has slowed slightly and the dollar has appreciated somewhat. This will limit the growth in U.S. exports, and suggests that the trade sector is unlikely to provide much support to growth over the next year or two. Inflation: lower now, but likely to drift gradually higher next year Let me now turn to discuss the inflation outlook. Inflation has been running below the Federal Reserve’s objective of a 2 percent annualized rate for the personal consumption expenditures (PCE) deflator. For example, over the past twelve months, the overall PCE deflator has risen by 1.4 percent, and the core PCE deflator, which excludes food and energy, has increased by 1.6 percent. Recently, the overall index has been pulled down by sharply lower oil and gasoline prices. Also, I expect that core goods prices will be held down somewhat over the near-term by the recent appreciation of the U.S. dollar. Nevertheless, I expect inflation will begin to move back towards our 2 percent objective in 2015.

These uncertainties imply that no single approach is likely to be entirely reliable. The inherent uncertainty faced by the central bank cannot simply be wished away. Reliance on a single indicator or forecast, or a single model of the economy or view of the world, would, in these circumstances, be extremely unwise. The strategy needs to incorporate the full range of relevant indicators and assess them in the context of a variety of different models. In this respect, the two pillars complement one another. They allow for a structured cross-checking of the evidence and analysis underlying policy decisions, encompass all information and allow for various views of the structure of the economy. The academic literature and other external commentators are slowly coming to recognise the importance of “robustness” in monetary policymaking - something which I believe has been understood by central bankers for some time. A successful monetary policy is not one that performs “optimally” in the context of a specific model or given a particular view of the world. In the light of our limited understanding of how the economy works, no single model is reliable enough. Rather given the great uncertainty faced by central banks - a successful monetary policy should perform well in a broad range of possible situations and across a variety of models or views of the world, each one of which may capture important aspects of actual economic behaviour or may, ex post, turn out to be close to reality. Monetary policymaking is therefore complex.
However, the appreciation since 2007 is of an entirely different quality and even the appreciation shocks of the 1970s and 1990s pale in comparison. In particular, it must be borne in mind that the speed of appreciation was particularly high this time around. It is much more difficult to digest a rapid appreciation since it leaves companies with less time to initiate the process of adaptation. Even companies that would normally be in a position to absorb an appreciation and maintain their competitiveness are coming under pressure. Second, it must be emphasised that, on average, the export volume of Swiss products has reacted comparatively little to exchange rate movements. The qualification on average is an important one. In fact, the dependence on exchange rate movements of the two largest sectors in terms of export share (chemicals, including pharmaceutical products, and precision instruments and watches) is distinctly below average. Thus, these sectors’ share of total exports has gone up over time. By contrast, the adjustments some companies and industries have made to the strong franc have been – and still are – so far-reaching that they are having to completely rethink their future in Switzerland. Third, I am aware that it is easy for an outside observer to talk about the advantages of a strong currency. At the same time, the SNB’s various direct contacts with companies allow us to gain concrete insights into current problems.

But the weak recovery of the global economy and persistently high uncertainty since the 2008 financial crisis have meant that these characteristics have become much more pronounced. The Swiss economy is accustomed to dealing with difficult exchange rate conditions, and has demonstrated its versatility time and time again. However, the Swiss franc is particularly overvalued at the moment. The SNB’s current monetary policy reflects this challenging environment. The negative interest rate on sight deposits, together with the willingness to intervene on the foreign exchange market as necessary, make it less attractive to hold Swiss francs and thereby support a further weakening of the currency. At the same time, the SNB continues to monitor carefully the effects of low interest rates on financial stability. 6  BIS central bankers’ speeches  Charts Chart 1  Chart 2  BIS central bankers’ speeches  7  Chart 3  Chart 4  8  BIS central bankers’ speeches  Chart 5  Chart 6  BIS central bankers’ speeches  9  Charts 7a und 7b  Charts 8a und 8b  10  BIS central bankers’ speeches
The implicit state guarantee for these institutions is a major source of incentive distortions. It is in complete contradiction with the functioning of a free market system and the hypotheses of our welfare theorems. Limited liability and the prevalence of bonus systems provide other significant distortions affecting individual decision-making. At various levels of financial institutions, decision-makers face asymmetric incentives. To give you an example, remuneration levels were high when risk taking paid-off, but there were no negative consequences – except possible job losses – when risks materialised. It is not surprising that excessive risk-taking was the consequence. 3  Domestic credit to private sector refers to financial resources provided to the private sector, such as through loans, purchases of nonequity securities, and trade credits and other accounts receivable, that establish a claim for repayment. Worldbank, World Development Indicators, http://data.worldbank.org/indicator/ FS.AST.PRVT.GD.ZS/countries/1W?display=graph. 2  BIS central bankers’ speeches  This problem of socially excessive risk-taking is even more damaging in the case of large interconnected institutions whose failure would endanger other institutions, with adverse consequences for the broader economy. Here, a clear externality is at work. My focus on incentive problems does not eliminate the possibility that cognitive or behavioural biases could also play a prominent role in driving excessive leverage in the banking sector. Herding behaviour and “group think” were certainly prevalent in “subprime investment”. A possible explanation for herding behaviour here is the propensity to suspect that “they know something that I don’t know”.

There are I think three reasons for this. First, it is in the nature of the shock – Covid itself does not destroy economic capacity over the longer term in the same way as a war, although of course the number of lives lost has been tragic. Second, the evidence here and in other countries indicates that the economic impact of Covid has attenuated with each successive wave – we are all by nature adaptive in our behaviour. For that reason, both in the UK and in a number of other countries, GDP releases during more recent periods of restrictions have typically surprised to the upside, relative to our expectations based on the effect of previous lockdowns. Third, the economic policy response has been designed to ensure that the longer term damage – often termed scarring – has been as small as can be. This has involved both monetary and fiscal policy pursuing their own independent objectives in a consistent and complementary manner. And just to be very clear on this point, when we use the tools of policy 1/5  BIS central bankers' speeches  consistently, and the objectives of policy are consistent, there is no compromise of independence whatsoever. So, we find ourselves now in a situation where there is an output gap, or slack as it is also called, but it is nowhere near as large as would be implied by the fall in demand if this was a normal recession.
Durmuş Yilmaz: Dollarization – consequences and policy options Speech by Mr Durmuş Yilmaz, Governor of the Central Bank of the Republic of Turkey, at a Conference on “Dollarization”, Istanbul, 14 December 2006. *  *  *  Distinguished Governors, Academicians and Guests, I would like to welcome you all to the conference entitled “Dollarization: Consequences and Policy Options”. I would also like to thank you for sharing your precious knowledge and experiences with us. As this conference is one of the activities organized in the context of the 75th anniversary of the Central Bank of Turkey, it gives me an honor to give the start for it. Before continuing with my speech, I would like to comment on the motives that lie behind the topic of this conference. Although we have never had hyperinflation, we, in Turkey, experienced high and chronic inflation for the past almost 30 years before 2001. Living long years with chronic inflation led to huge losses in the credibility of our national currency, which is important for us as an institution responsible for issuing banknotes and maintaining stability of the money. In this sense, it will be appropriate indeed to discuss dollarization in depth, I believe. Given the wide range of issues related to dollarization and the limited time available, I will make some brief remarks on the concept of dollarization in general and touch upon the Turkish experience in particular. Dear Guests, Dollarization has evolved as one of the noteworthy features of globalization during the last two decades.

And for another, we need to factor in various considerations to keep up with the latest international standards, including measures to uphold and protect data privacy. Therefore, enhancing our financial data infrastructure must be a concerted effort by the banking and tech industry as a whole. A team effort will ultimately lead to public goods that deliver value, benefit all the parties, and at the same time are commercially viable. 30. By improving our data infrastructure, we are empowering the industry and encouraging creativity for developing innovative financial products and solutions, in turn building up the overall appetite for fintech solutions. Expanding the fintech-savvy workforce 31. The three strategies I just mentioned will, hopefully, generate demand in the industry for fintech solutions. However, from what we learnt from the industry, the supply of fintech talent remains a pressing issue. Therefore, our fourth strategy is that we want to foster a fintechsavvy workforce and nurture all-round fintech talent, including students and practitioners. 32. We don’t need reminding of how Hong Kong boasts an extremely strong talent pool – be it in law, finance, accountancy, or other professions. We are a city that thrives on our people’s high agility and efficiency. We pride ourselves on keeping up with international standards as well as customer and market requirements. 33. With fintech being a relatively new area, it is understandable that we currently face an acute fintech talent shortage. Hong Kong is in need of grooming all-round fintech talent and expertise.
2  All speeches are available online at www.bankofengland.co.uk/speeches  2  The accompanying burst of financial innovation spread the application of these technologies and supported the process of globalisation that bolstered trade, productivity and incomes. Once again, however, the hard and soft infrastructure of the financial system failed to keep pace. Lighttouch regulation, out-moded codes of market conduct, inadequate settlement and clearing infrastructure all contributed to the global financial crisis. We can draw on these experiences to help ensure that FinTech boosts growth and promotes financial stability. Not least because, following a raft of post-crisis reforms, the Bank’s regulatory frameworks are now fit for purpose. The Bank of England’s Financial Policy Committee (FPC) is mandated to assess new and emerging risks to financial stability, including those that may exist beyond the existing regulatory perimeter. And it now has the powers to treat similar risks consistently, wherever they originate. 4  With this new approach, the Bank can help build the right infrastructure for FinTech to realise its promise. The Promise of FinTech To its advocates, FinTech will democratise financial services. Consumers will get more choice and keener pricing. SMEs will get access to new credit. Banks will become more productive, with lower transaction costs, greater capital efficiency and stronger operational resilience. Financial services will be more inclusive; with people better connected, more informed and increasingly empowered. And tantalisingly, FinTech could help make the system itself more resilient with greater diversity, redundancy and depth.

It is its very flexibility that should make the PEPP our preferred marginal instrument for dealing with the consequences of the crisis, and I would now like to expand on its components. First, flexibility in terms of time. We are not bound by a monthly allocation. And the programme is clearly intended to be temporary: the Governing Council “will conduct net asset purchases under the PEPP until it judges that the coronavirus crisis phase is over, but in any case not until the end of this year [2020]”. There is a risk that the economic consequences of the crisis may continue beyond the end of 2020, possibly justifying an extension to the PEPP; I then believe it would be advisable for us to clarify the criteria, “state-dependent” on the economic situation, upon which we will base our decision to close the programme in the future. Second, flexibility in terms of volume. Unlike the PSPP, we are not committed to a fixed amount – today, the PEPP can go “up to EUR 750 million”, and we stated on 30 April that we were prepared to go further if need be. However, in my opinion this would only make sense if at the same time we ensure the maximum effectiveness of the PEPP. And this brings me to my third point, flexibility in terms of allocation between countries.
It is quite simply impossible to make any reliable forecasts for two and three years ahead. My opinion is that it is normally fairly meaningless to have a firm opinion of what will happen in two and three years’ time. But there are exceptions, particularly in situations where resource utilisation is very low. During 2008–2009 we assessed that the repo rate would be at an exceptionally low level for one year and we backed this up by lending around SEK 300 billion to the banks at this low interest rate for one year. We should continue to report a main scenario for economic developments and the repo rate over the coming three years, a scenario where inflation approaches 2 per cent and resource utilisation approaches a normal level. But we should regard this merely as a potential scenario. It is important that monetary policy follows a predictable pattern. We endeavour to avoid surprising the market. This means that we normally change the repo rate and the reporate path in gradual small steps, where the steps are due to new information received since the most recent monetary policy meeting, and that we react in roughly the same way to the same type of changes in the new information. Such stability means that we can avoid causing problems on the financial markets, and that we can have a greater impact on the markets when an unexpected event occurs. We should also continue to analyse the consequences of various sequences of events.

Sources: Statistics Sweden and the Riksbank  BIS central bankers’ speeches  15  Figure 11. Lending to households and companies Annual percentage change, seasonally-adjusted 20  20  Lending to households Lending to companies  15  15  Total  10  10  5  5  0  0  -5  -5  -10  -10 99  00  01  02  03  04  05  06  07  08  09  10  11  Source: The Riksbank  Figure 12. Market surprise at repo-rate decision Basis points 50  50  0  0  -50  -50  -100  -100  -150  -150 Change in the repo rate  Feb 07 Mar 07 May 07 Jun 07 Sep 07 Oct 07 Dec 07 Feb 08 Apr 08 Jul 08 Sep 08 Oct 08 Oct 08 Dec 08 Feb 09 Apr 09 Jul 09 Sep 09 Oct 09 Dec 09 Feb 10 Apr 10 Jul 10 Sep 10 Oct 10 Dec 10 Feb 11 Apr 11 Jul 11 Sep 11 Oct 11  Market surprise  -200  -200  Note. The market surprise is measured on the basis of the change in the interest rate for a 1-month STINA swap in connection with the publication of the repo-rate decision. Sources: Reuters and the Riksbank  16  BIS central bankers’ speeches  Figure 13.
Total assets have amounted to ALL 353,6 billion, whilst liabilities have amounted to ALL 321 billion. Realized profit totalled about ALL 10 (9,993) billion, the highest in the last three years. This result has increased the Bank of Albania’s capital. Pursuant to the obligations of Law No. 8269, dated 23 December 1997, Article 9, 25 percent, about ALL 2,5 (2,479) billion, of the net profit was capitalized, causing the general reserve to amount to ALL 10 (9.994) billion. Similarly, the Bank of Albania has observed the obligation of transferring the net profit to the State Budget pursuant to Article 10 of the same Law, and paid to the State Budget about ALL 6,74 billion for the year 2009. Pursuant to Article 10, in March 2010 the balance of 2009 net profit amounting to ALL 2,4 (2,436) billion was paid to the State Budget. BIS Review 78/2010  9  Honourable Ms. Chairwoman, Dear deputies, Thanking you for your attention, on behalf of the Supervisory Council of the Bank of Albania, I want to guarantee the Parliament of the Republic of Albania that the central bank will remain a responsible decision-making institution in 2010. Our decision-making will:   remain transparent both for the financial market and the public at large;    consider all possible information in and out of Albania;    rely on qualified human resources, and    improve its policy and operational framework, considering the best contemporary and international practices.

The banking system remains sound, a fact that also attributes to the effective carrying out of the regulatory and supervisory function of the Bank of Albania. In what follows I would like to elaborate more on these aspects. 2.1  Banking system performance  The Albanian banking system’s total assets increased in 2009, but at a rate about twice lower than in 2008. This decrease reflects fully the lower expansion of lending. Our banking system continues to be mainly financed by public deposits and be concentrated on business lending. The banking system’s deposits and loans grew but at a lower rate than in the previous years. Loans to total deposits increased by nearly 3 percentage points, from 62 to 65 percent. On the other hand, the increase of deposits as a result of the restored public confidence has improved the liquidity situation in the banking system. Non-performing loans increased in 2009 owing to the economic slowdown and the exchange rate depreciation. Loan portfolio quality index expressed as “non-performing loans to total outstanding loans” rose to 10.48 percent as at end 2009 from 6.64 percent at the end of 2008. On net basis, that is deducting total provision fund, the same figure is only 6.3 percent. The Bank of Albania has monitored the situation closely being aware of the pro-cyclical effects that these developments may have on the loan portfolio. Despite the loan portfolio deterioration, capital adequacy and quality, to carry out the banking operations, to extend and expand lending, have remained almost intact.