samchain/econo-pairs-v1 huggingface dataset:
It is also impossible for these people to use their assets as collateral to take out loans and perhaps even to sell them. It is therefore crucial, according to de Soto, for developing countries to reduce bureaucracy and thereby release a mass of capital with the aid of the law. The World Bank has extended the studies made by de Soto to include more countries. The recentlypublished report Doing Business in 2005: Removing Obstacles to Growth shows, for instance, that it takes on average more than twice as long to register a new company in poor countries than in wealthy countries and that it is also much more expensive, in relation to income. Most companies in developing countries therefore operate in the informal sector. Despite this, wealthy countries implemented more than three times as many reforms to improve their investment climate last year than were made by poor countries. Developing countries can thus, often using fairly simple means, ensure that more job opportunities are created by improving the opportunities for entrepreneurs in the formal sector and thereby promoting economic growth. The final basic explanatory factor behind increased wealth that I wish to highlight here is the pioneering technological advances made, particularly in the fields of information technology, international communications and global transports. These have led to large cost savings, which in turn have enabled the rapid spread of technology around the world. This has helped, for instance, give developing countries the opportunity to diversify their exports to a greater degree.

A third difference is that while the 19th century globalisation was largely driven by falling transport costs, today it is largely falling information costs, thanks to computers and the Internet, that are the driving force. This development has led to entrepreneurship becoming increasingly global, as it has become much easier to localise various parts of the production process to different countries. An example using telegraphy and the current information technology can illustrate the significance of costs for the spread of innovations. Telegraphy was expensive; in the 19th century people had to go to a telegraph office or hire a telegraph boy and pay significant sums if they wished to send a telegram. In today’s money, it cost them around SEK 2,000 to send a long-distance message of 20 words, while the corresponding cost today is around 10 öre for 20 pages. In other words, the variable cost is negligible and the fixed cost is moderate. We can therefore now find powerful computers and Internet access in most workplaces and in many homes. The costs are so low that many people have the financial possibility to use computers and the Internet, at least in industrial nations. This spread also means that the time and the cost that lay in the telegraph boy’s running from place to place have been  4  BIS Review 60/2004  eliminated. It is thus this spread that makes the current information technology much more important than telegraphy was a hundred years ago.
This is a challenge that calls for the involvement of all levels of government. From this standpoint, it is very important to adapt the analysis of public finances and its economic policy implications to the current Spanish situation, marked by highly decentralised public spending. Leaving aside the transfers between different tiers of  BIS Review 117/2006  5  government and interest payments, which reflect past financing patterns, the volume of spending by territorial governments is almost two and a half times that within the State sphere. Such a figure shows the enormous increase in the role of these agents, which has significant consequences for budgetary policy conduct, both in terms of its contribution to macroeconomic equilibrium and as regards its influence on the economy’s growth capacity in the medium and long run. From the standpoint of the contribution to macroeconomic equilibrium, the initial data on the regional governments' budgets for 2007 point to a balanced budget target for the year. We might wonder, however, whether the macroeconomic situation I have described, at a cyclical juncture marked by a prolonged expansion, would require the setting of somewhat more ambitious targets, in line with the spirit of the new Budgetary Stability legislation, even though these are only legally binding as from the 2008 budget. Also, from the standpoint of their contribution to long-term growth, the role of the territorial governments in managing the public spending items of most relevance for improving the Spanish economy's competitiveness acquires considerable importance.

Against this background, the Banco de España has a tradition – one that I think it is comprehensively successful – of conferring high importance in its supervisory work to monitoring the rigour of financial information and of the models used to calculate riskweighted assets. Naturally, it is our wish that these elements, which crucially affect the supervisor’s capacity to properly measure banks’ solvency situation, should be part of the common model adopted by the SSM and applied uniformly to all banks. A third significant challenge concerns achieving a fruitful framework of interaction between the SSM and the Single Resolution Mechanism. The regulations have set in place a complex structure in Europe, which includes the creation of a resolution agency (the Single Resolution Board) separated institutionally from the supervisor. This agency has been granted wideranging powers both in respect of the definition of resolvability requirements – which include the determination of a minimum volume of instruments capable of absorbing losses – and of  4  BIS central bankers’ speeches  the activation of resolution procedures for non-viable banks, as well as the selection of the most suitable tools to implement them. Resolution actions have direct consequences for financial stability, which is a public good that the SSM seeks to protect, and they turn on the more vulnerable banks, which are precisely those that require greater attention from the prudential supervisor.
Recognising the importance of equipping talents with relevant skillsets, the Bank and the financial industry are pursuing several initiatives on this front. They include: The development of an industry-driven framework that serves as a single point of reference on future skills and career development pathways, for those working or aspiring to work in financial services. We hope this can be a starting point for a holistic future skills framework at the national level to unlock greater benefits and synergies for cross-sector talent mobility; and Continuous efforts are being made to raise the professionalism of the workforce through higher standards of professional programmes and qualifications for various career pathways. These range from risk specialists in banking to loss adjusters for insurance. Nonetheless, some job losses may be inevitable due to a shift in the division of labour between humans and machines. 2/4  BIS - Central bankers' speeches  Therefore, a whole-of-industry approach is crucial: First, we want to ensure appropriate supporting mechanisms are in place; Second, we want to minimise the impact of job displacement on livelihoods; And third, we want to support an orderly transition of the affected workforce to jobs in other organisations or economic sectors. Such support may include, among others, appropriate compensation, reskilling opportunities and outplacement assistance. Employing a 'good jobs strategy' to unlock the value of human potential My next point focuses on employing a 'good jobs strategy' to unlock the value of human potential in our workforce.

In the medium term, the Bank of Albania will focus its efforts on a number of initiatives, notably on further legal developments and infrastructure improvements. An important step in the medium term is the drafting of the bill “On the payment account". The bill will transpose the European Union Directive “On the Payments Account” and promote transparency by creating a public register to present all commissions applied by institutions, which can be easily compared. At the same time, during this period, the Bank of Albania will engage in a number of infrastructure developments that support financial inclusion, reduce the costs of using these instruments and is estimated to have an impact on the remittance market, mainly from the point of view of remittance receivers and their use. Here we can mention the creation of a national platform for processing payments in real time (instant payment and processing of card payments). The platform creates conditions for the development of innovative and low-cost services and also aims at market segments that create ample volumes by targeting state institution payments as well as daily payments that Albanian citizens make. Last but not least, I would like to thank the Government of Albania for the importance it places on this matter and its continuous support. In particular, I would like to thank the ministries such as the Ministry of Diaspora and the Ministry of Finance and Economy for their support and fruitful cooperation.
We are, again, watching this carefully, and it is why in 2010 we implemented the Building Societies Sourcebook to encourage appropriate risk management of lending and funding. The latter will be supported in future when we implement the net stable funding ratio which is the international standard to discourage reliance on short-term funding. We are also increasingly focussed on operational risks and the prudential implications of conduct risk, as I know are societies. I want to pick out one area of operational risk which is important, namely IT systems risk. One aspect of this is the cost and complexity of updating legacy IT systems in the face of growing demands on those systems from innovation in products. Cyber risk is also very high on our list of priorities. I recognise that not all societies have an internet presence, though I do know, of course, that you all use the internet. We will be seeking to ensure that cyber risk is properly tackled by societies as appropriate. In saying this, I am not seeking to pick out societies from other firms that we supervise, but we do think that these risks are in important respects common to all firms. Societies have generally been less affected than the large banks by conduct mis-selling costs, though not fully immune.

Looking at the sector beyond Nationwide – and I do this not to ignore Nationwide but because its size means that it has a large impact on averages – the average Core Tier One Capital ratio at the end of last year was over 17%, and the average leverage ratio was around 6%. The overall quality of capital is in our view in a good place and you have taken the implementation of Basel 3/EU CRD4 in your stride. In the four quarters to the end of last year, the societies (again not including Nationwide) contributed 22% of net new mortgage lending in the UK, which compares with a 9% share of the stock of lending. Arrears on first charge mortgages continue on a downward trend that we have seen for at least the last five years, and the building society arrears rate on average is lower than the average for all mortgage loans. All societies are meeting their liquidity requirements and quite a few of you choose to hold higher liquid asset buffers than our requirements, which is perfectly acceptable as a choice. Access to Bank of England liquidity facilities, which is an important form of insurance, has increased in terms of the number of societies having reserve accounts and preparing for the use of lending facilities should that be needed at some point in the future. Unsurprisingly, therefore, the overall position on ratings for those societies that have them has improved. So, it’s true, Harrogate really is the happiest place in England.
The creation of these indicators, their calculation and rating in the relevant markets would create the conditions for the real assessment of the competitive advantages that this district has to offer. The help that the local authorities can give in identifying the competitive advantages and the provision of local statistics are perhaps the best investment they can make for the regional and national development. Today, more than ever before, all the attention of global economy is oriented towards the markets, as the best estimators of the competitive advantages in the global economy. The developments in these markets are bringing about the reconfiguration of the economic powers at a global level. The new commercial and financial trends appear to be in favour of the utilization of natural resources and competitive advantages, through investments in emerging economies, to later import them in the form of final products, ready for consumption. These are advantages for the Albanian economy, which, with the major structural reforms taking place (privatizations, natural and human resources, creativity and the entrepreneurship spirit), enjoys all the opportunities and should play an active role in the regional market and beyond, in the global market. I am optimistic and I do believe in our economy and its potentials. Thanking you for your attention, I welcome any comments. BIS central bankers’ speeches  5

G7 2019 Conference – Banque de France, 10 May 2019 Cybersecurity: Coordinating efforts to protect the financial sector in the global economy Conclusion by François Villeroy de Galhau Governor, Banque de France  Press contact: Mark Deen (mark.deen@banque-france.fr). Page 1 sur 6 Ladies and Gentlemen, First, I would like to thank the moderators and the panelists for their very rich comments and the very useful ideas. We are all convinced that cybersecurity of the financial sector will remain on our agenda for a long time. The challenge is no longer about gaining awareness anymore, but to find ways to intensify and rationalise our action. Based on the discussions today, let me start with one pre-requisite – coordination - and then propose concrete steps and tangible actions to improve our coordination in three areas: I. Regulation and supervision; II. Information; III. Preparation. A. Global threats, coordinated action Panel 1 questioned the importance of cyber threats for the financial sector. There is a consensus that the level of cyber threats has never been so high, but at the same time, we must acknowledge that the capacity to anticipate attacks needs to be reinforced. Following an attack, we need to address the potential contagion issues to the entire financial system or the entire economy. This is why coordination is a pre-requisite, not an easy one but a necessary one. While remaining realistic, there will not be a “world organization for cybersecurity” for obvious reasons, including trust. Hence, coordination should be cross-jurisdictional.
This is the fourth edition of this Conference organised by the European Institute of the Mediterranean, with the support of the Banco de España, to discuss economic and financial matters in the Mediterranean region. The three previous editions were in Barcelona, in 2014 and 2017, and in Rabat in 2015, on that occasion with the support and hospitality of Bank Al-Maghrib. This conference is therefore beginning to take root as a successful meeting point between different actors with interests in the economic and financial developments in these countries. The exchange of ideas among a wide and diverse range of participants – including central bankers, public officials, academics, and representatives from the private sector and international organisations– in a friendly environment proved enormously fruitful in previous editions, as, I am sure, will be also the case this time. Let me also add that forums like this are particularly relevant for central banks, which in recent years have had to face deep-seated transformations in economic and financial relations globally. This new environment forces us to re-think the design and implementation of economic policies in order to better contribute to the progress of our society. I would also like to inform you that the Banco de España is preparing a seminar on central bank communication, the first of which is aimed at Mediterranean and Latin American countries, to be held in the spring of 2019.

Conventional policy options at the zero lower bound Conventional macroeconomic theory states that, when interest rates are at the zero lower bound, monetary policy becomes ineffective and economic policy action should concentrate on fiscal measures. In slide 1, the depiction of the economy using the standard IS/LM model summarises this point of view. As you can see, the economic situation is represented in terms of two key variables, the interest rate and output (or GDP). Economic equilibrium is represented by the intersection of the IS and LM curves. The first corresponds to the interest rate and GDP levels that balance savings and investment and the second represents the combinations of these two variables, which equilibrate the demand and supply of money. Expansionary monetary policy corresponds to pulling the LM curve to the right. When interest rates are at the lower bound, however, the LM curve is horizontal. At this point, pulling a horizontal to the right has absolutely no impact on the intersection of the IS and LM curves, and therefore on the equilibrium level of output. Conventional monetary policy hence becomes ineffective. Intuitively, if interest rates are at the zero lower bound they cannot be lowered further, yet it is precisely by lowering interest rates that monetary policy can stabilise the real economy. By contrast, it is at the zero lower bound that the potential benefits of fiscal policy are most significant. As the same diagram suggests, it is precisely when the LM curve is flat that it becomes most appealing to use fiscal policy.
And, to date, many of the largest firms have considerably improved their capital levels and capital planning processes. Simply addressing the quantity of capital and the quality of the planning processes isn’t enough, though. And without elaborating too much on something I’m sure you are quite familiar with, the reasons include: •  Capital ratios and numerical targets are snapshots in time – and often a lagging indicator of financial condition. •  These snapshots don’t incorporate the future – they don’t anticipate what might happen in different economic times or in different market conditions. •  Capital ratios don’t incorporate the impact on a firm’s ability to generate revenues during stress periods – and thus don’t indicate a firm’s ability to rebuild capital as necessary. •  So, clearly, stronger capital standards need to be combined with a better ability to anticipate the future – to incorporate a more forward-looking element into assessing the financial strength of a firm. Thus, supervisory and risk management tools need to expand to include stress testing – and from this came the supervisory stress test and resulting Federal Reserve Capital Rule and the requirements in Dodd-Frank for stress testing. I think it’s fair to say that the new capital rules will and should change how firms think about risk within their organizations.

My second observation is that this is a difficult topic, one that generates very heated discussions, but one that is necessary as the industry tries to tackle the complex issue of what can be done to restore public faith in the financial industry. This begins with questions like: •  What is the source of the problem? •  Are the problems we are experiencing unique to financial services? •  What incentives and disincentives – compensation, fines, prosecutions and other measures – need to be altered for behaviors to really change? This is a topic that we will surely revisit a number of times over the coming months as both the industry and the supervisory community begin to answer some of the tougher questions. Complexity Let me now turn to the third element of the supervisory framework: reducing complexity. In large measure, this translates into sound recovery and resolution planning. The development and implementation of a credible resolution mechanism for large, global banks is a must. By credible, I mean that if a failure of one of these financial institutions arises, then home authorities will proceed with the resolution plan, rather than intervene to prevent a failure. Although the specifics of the resolution mechanisms will necessarily vary to some extent across jurisdictions, the goal is common: to be able to resolve any large, global firm regardless of its home jurisdiction without taxpayer funds and in a way that minimizes the knock-on effect to financial markets and other financial institutions.
This, however, is a very wide agenda. There is an extensive and growing literature giving varying perspectives on the subject, and one can only be selective in the examination of the issues. Meaning and scope Accountability and transparency are major pillars in the architecture of governance. While governance itself is not uniquely defined in its various uses, as we shall discuss shortly, most definitions of the term implicitly or explicitly embrace the principles of accountability and transparency. Many examples can be cited in support of this position. A typical example of this is provided by Paul Wolfowitz, former President of the World Bank, who in a 2006 speech in Jakarta stated as follows: In the last half-century, we have developed a better understanding of what helps governments function effectively and achieve economic progress. In the development community, we have a phrase for it. We call it good governance. It is essentially the combination of transparent and accountable institutions; strong skills and competence, and a fundamental willingness to do the right thing. Governance itself is not a new phenomenon. While its genesis may be traced to the Greek city-states, its meaning, purpose, practice and extent have evolved over the centuries, reflecting changing circumstances and specific concerns. In the context of developing country relationships with the international donor community however, we are dealing with a recent manifestation, which surfaced in the 1990s.

So the relative weight of past inflation, the exchange rate, wage inflation, market expectations and output gaps in inflation dynamics may differ significantly from advanced economies. Chile has pioneered monetary policy innovation in the emerging world. After four decades of double-digit inflation, our Central Bank was given independent status and a mandate of price stability nearly 30 years ago and exercised it swiftly, with the support of a first version of inflation targets in the early 1990s. The monetary policy framework further evolved after the Asian Crisis to a fully-fledged forward inflation targeting regime with a floating exchange rate in 1999. This was soon complemented by a major upgrading of monetary policy communications and a structural fiscal policy rule. 2  Central Bank of Chile October 2018  This framework has basically remained in place for the last 18 years and its effectiveness has improved as markets, agents and institutions have adapted to it. Over time, markets have developed adequate FX hedging mechanisms, inflation expectations have become more anchored at the monetary policy target level, the Central Bank has overcome fear of floating, financial markets have deepened and the labor market has gained some flexibility. As an open economy, we are not immune to external shocks but the ability to cushion them through the exchange rate and countercyclical policy response has improved significantly. At the time of the 2007 Global Financial Crisis, this framework helped us to avoid large costs and contain financial problems despite our strong ties with the global economy.