samchain/econo-pairs-v1 huggingface dataset:
It will also be necessary to impose tight restrictions on foreign-denominated lending to households and businesses without corresponding foreign currency-linked income. But these restrictions are prudential rules rather than capital controls. The Central Bank sent the Minister of Economic  BIS central bankers’ speeches  5  Affairs a report on this topic at the end of 2010 and intends to send him a more in-depth report on the same subject shortly after Easter. Looking ahead to the next several years, the question is not whether we lift the controls, but how. This is not the time or place to go into that topic in detail, as it has been discussed recently in some depth by the Bank and its representatives, and that discussion will presumably continue. The main point is that carefully preparing the liberalisation process, as is currently being done, significantly reduces the risk to financial and economic stability. Progress has been made in this area, and a great deal more can be done in the near future. There is quite a bit at stake: the short-term benefits conferred by the capital controls could be lost at the eleventh hour and several years of long-term benefits of free capital movements could be burned up if liberalisation is carried out recklessly.

Moreover, the space for fiscal stimulus has narrowed, as a result of the orientation of the fiscal policy towards maintaining fiscal parameters stability. Under these circumstances, Albania’s economic growth will be determined mainly by the performance of consumption and private investment. The latter is expected to be driven by eased domestic lending terms during 2012, but will suffer, at the same time, from the uncertainty and hesitation of consumers and private businesses. The Bank of Albania deems that the second half of 2011 marked a turning point towards a more normal consumer behaviour, which should be encouraged and supported in 2012. *** Taking into consideration the information set out above, the Supervisory Council holds that pressures on consumer prices at home remain low over the monetary policy relevant horizon and they have shifted on the down side over the past months. On the demand side, below-potential economic growth will continue to generate low inflationary pressures as shocks from the supply side are expected to be moderate. At the conclusion of discussions, the Supervisory Council decided to cut the key interest rate by 0.25 percentage points bringing it down to 4.25%. This decision aims to provide the appropriate monetary conditions to meet the medium-term inflation target. In addition, the easing of monetary policy provides higher support for the development of the private sector’s demand in our economy. 2  BIS central bankers’ speeches
SPEECH DATE:  12/06/2019  SPEAKER:  Deputy Governor Martin Flodén  VENUE:  The Riksbank  TION:  SVERIGES RIKSBANK SE-103 37 Stockholm (Brunkebergstorg 11) Tel +46 8 787 00 00 Fax +46 8 21 05 31 registratorn@riksbank.se www.riksbank.se  Should the Riksbank’s payment system be open 24/365? * The central bank's role in the Swedish payment infrastructure has increasingly come into focus at the Riksbank.1 I am aware that this is an area that may not perhaps interest the general public as much as negative interest rates, housing prices, cash-free shops, the krona exchange rate and other things normally associated with the Riksbank. Most people are not – to be honest – very interested in how the “plumbing” works that enables millions of payments to be made every day, to a total value of hundreds of billions of krona. This is not really surprising. Payments are not an objective in themselves, but a means of making our day-to-day life work; getting our wages, paying our bills, buying food, giving the children pocket money, saving for our retirement and so on. But, like other central banks, the Riksbank has been given the task of promoting a safe and efficient payment system. We at the Riksbank therefore need to understand how the payment system is put together and to consider what measures and investments are needed to ensure it remains safe and efficient. The Swedish payment market has changed rapidly over the past decade.

The crisis, for example, had a different impact on the Albanian economy, from what we had historically experienced. At the time, the Albanian economy did not seem to be vulnerable to the foreign sector. Subsequent analysis, however, showed that domestic imbalances had built and, indeed, made the economy vulnerable to a foreign credibility shock. It is crucial that research in central banks focus on available information and methodologies, which scrutinize existing paradigms, making this information useful to policymaking, before it becomes or leads to vulnerabilities. In light of the financial and human capital constraints faced by central banks in small, open economies, such as Albania, we believe that it is important for these topics to be discussed, in this workshop, with fellow researchers from academia and other central banks. I would like to encourage our researchers to publish their papers in relevant, peer-reviewed 1/3  BIS central bankers' speeches  journals as the most important certification of their work. This will make your research projects more useful and facilitate speedy implementation in mainstream policy making. Despite recent success in publications, one of the things that I hear the most is that there is not much research interest in the scientific study of small, developing or emerging market economies like Albania. From my prospective, I think that there is interest in the scientific study of small, developing or emerging market economies such as Albania, because of the particular and distinguishing characteristics of our economy, which can be different from those represented in mainstream research findings.
§  6  Increases and decreases in financial flows - - and the fluctuations in pricing that naturally accompany positive or negative trends in policies and economic and financial performance - - are a reflection of, and act as a natural brake on, the development of imbalances. BIS Review 61/2002  §  G  But an assertion of control by the international community risks diverting attention from the policies of the local authorities. As a result, denial and delay, aggravating factors in almost every crisis, may well continue and be exacerbated. And then, as a practical matter, once market processes have been stopped, how and when do you get things started again, particularly if needed corrective policies still have not been convincingly and transparently implemented? To sum up, I believe the one-size-fits-all disposition inherent in a preemptive approach risks making situations much worse than they need to be. The only thing that strikes me as predictable under such an approach would be that market access would be harmed across the board. Just as bailouts risk encouraging too much risk taking, efforts to orchestrate preemptive bail-ins may encourage too little. •  Underlying the suggestions that I have made is a firm belief that the success of our approaches to crisis management needs to be viewed and assessed with a wide focus. Certainly, there is the question of efficacy in containing the crisis at hand, and the balance between this and the costs, actual and potential, to the public sector.

The approach needs to be marketbased, in part because that is what the game is all about. Today, the relevant considerations for crisis management relate more to markets and the problem of restoring market confidence, than to individual borrowers and creditors. G  To the extent that systemic concerns pertain, they more often relate to the risks of market disruption and over-adjustment than to potential domino effects caused by the failure or impairment of key institutions. Also, in today’s environment, a marketbased approach is much more feasible, because financial recoveries can proceed more rapidly than in the past. G  To be more specific, in my view, although much has been made of the difficulties in achieving debtor workouts, the truly thorny issues associated with emerging market financial crises usually relate to the following:  G  4  §  containing the fallout to domestic financial systems and to local consumer and investor confidence,  §  minimizing contagion and spillovers to other cases and markets,  §  maintaining or restoring market access, particularly for private sector borrowers, and,  §  most importantly, encouraging policy reform so that a given crisis falls as closely as possible to the liquidity, rather than the solvency, end of the spectrum. Working with the grain means recognizing the realities and limitations inherent in the current market structure and its functioning, and tailoring approaches to the specifics of individual cases. This involves acknowledging that attempts to impose solutions from outside are unrealistic and potentially counterproductive.
Demography is also important today, but the importance of a reasonable ratio of workers to pensioners has become somewhat less obvious because of the way we now try to ensure financial security in old age. It is probably no coincidence that the Norwegian expression for the end of our working career is “to withdraw with a pension”. The equivalent expression in  1  This figure has been adjusted for estimated extraordinary share dividends as from 2000. 1/7  English, “to retire”, means simply to withdraw. There are no associations with financial benefits. In Norway, everyone is entitled to a state pension at the age of 67. How much each of us will receive depends both on the size of our income through our working career and on the path of growth in the economy. With its current structure, the National Insurance Scheme will be facing a considerable challenge in the future when an increasing proportion of the population is over 67 years old. Many employees receive an extra pension payment in the form of an occupational pension. In Norway, this will soon apply to virtually all employees. Over the past few years, private pension insurance has become more common in Norway. In 2004, individual pension agreements had increased by 13 per cent since 1997. Membership in collective pension schemes increased by 22 per cent in the same period. It is likely that the debate around the state pension system has in some cases generated concern about how much the National Insurance Scheme will provide.

Households that save in banks or invest in other forms of financial assets make funds available to others. Banks convert some households’ savings into loans for other households wishing to finance house purchases, for instance. If we look at the household sector as a whole, savings accounted for about five per cent of household disposable income in 2004,1 which has been the level of saving for the past few years. These are funds that are channelled to the business sector in Norway or abroad to finance investment there. There may be various reasons behind a decision to save. In many cases, the objective is to spread consumption evenly through the course of a lifetime. Another reason may be the desire to leave behind an inheritance. For most people, the level of income will fluctuate through life. Most of our income is earned while we are economically active. Once our working career is over, we will have little to live on if we have not set aside capital as we earn or have secured our retirement by some other means. A hundred years ago, a common way of “saving” for old age was to have a large number of children. A large family increased the probability of some of the children growing up and being able to support their parents when they were old. By looking after family property, and perhaps expanding it, subsequent generations could also be provided for.
The legacy of those losses has likely limited the banking sector’s ability to extend new loans during this expansion, as banks acted in a highly precautionary way to accrue capital that had been depleted as well as to add to their previous capital levels. The need for banks to repair their balance sheets following the financial crisis contributed to the far slower growth of outstanding bank loans during this expansion when compared to previous long expansions. Real outstanding loans to businesses, which are dominated by bank loans, declined more in this recovery than in previous recoveries (Figure 4). On the household side, real outstanding residential mortgages, which are largely originated by banks, have declined through most of this expansion while they grew steadily in previous expansions (Figure 5). Consumer credit has risen at a modest rate in this recovery – comparable to that of the last cycle (Figure 6). This category includes auto loans, credit cards and other consumer debts that are mainly originated by banks. But it also includes student loans where the federal government is the dominant lender. Student loans have risen robustly during this expansion, and have driven much of the rise of overall consumer credit. We will have much more to say about them later in today’s briefing. The U.S. financial system relies more heavily on capital markets than other advanced economies. Bonds and other negotiable debt instruments are an important source of funding to credit-worthy corporations.

45 We should also bear in mind that the current situation is highly unusual. We must not fall into the trap of believing that the innovative policy measures being taken now in response to these unusual conditions represent the basis for a new paradigm in the future. 46 I suspect that when the dust has settled and more normal conditions return, monetary policy regimes will not look drastically different from pre-Crisis days. •  I think more central banks will have an eye to financial stability considerations – at least informally – when setting monetary policy. •  More central banks are also likely to have macroprudential policy toolkits at their disposal, which they will use from time to time but perhaps not on the scale that has been used in Asia in recent years. •  But in essence, monetary policy will remain largely focused on price and output stability – as it should be. 47 Perhaps as T S Eliot puts it, the end of all our exploring is to arrive where we started and know the place for the first time. 48  I wish you a successful conference. Thank you. References Bank for International Settlements (2010), “An assessment of the long-term economic impact of stronger capital and liquidity requirements”, Basel Committee of Banking Supervision. Borio, C and Zhu, H (2012) “Capital regulation, risk-taking and monetary policy: a missing link in the transmission mechanism?” Journal of Financial Stability, Vol. 8(4), pp. 236–251.
Trade finance is another area of concern. It is often hard for banks to access the trade and customs records of importers or exporters. That can make it difficult for banks to conduct credit assessments – and difficult for companies to get trade finance loans. Although some banks are using their own big data initiatives to assess credit-worthiness, a more general and long-term framework is needed to solve this problem. 23. These examples highlight the need to improve the data landscape in Hong Kong. We want to make sure it doesn’t become a factor that limits our city’s potential for better banking. 24. So, today I’d like to introduce you to a new market development initiative for the next era: the Commercial Data Interchange or, as we call it, CDI. 25. CDI aims to establish a consent-based common standard for data owners to share their digital footprint with banks through data providers. Today, we rely on multiple one-to-one connections between banks and data providers. Under CDI, each bank and data provider will have a single connection to this interoperable platform. That should make data sharing more efficient and scalable. 26. Financial institutions and data providers will be able to easily connect their systems to this infrastructure. That will allow customers to authorise their own service providers – such as 2/4  BIS central bankers' speeches  utilities companies and payment gateways – to provide banks with relevant and authenticated data through this platform.

Jean-Claude Trichet: Interview with China Finance Interview by Mr Jean-Claude Trichet, President of the ECB Interview with China Finance, 16 February 2009. *  *  *  China Finance: At ten years, how would you assess the successfulness of Euro both in terms of bringing about benefits to the Eurozone economy and as an international currency? Mr Trichet: Since the introduction of the euro, fellow Europeans have enjoyed a level of price stability which previously had been achieved in only a few of the euro area countries. This price stability is a direct benefit to all citizens. It protects incomes and savings, and helps to bring down borrowing costs, thus promoting investment, job creation and prosperity over the medium and long term. The single currency has been a factor of dynamism for the European economy. In recent months we have seen another benefit of the euro: the financial crisis is demonstrating that in turbulent financial waters it is better to be on a large, solid and steady ship rather than on a small vessel. However, the euro was not created to either compete with any other international currency. We are not campaigning for the international use of the euro. The euro was created in order to achieve the single European market. For me, the greatest success is the fact that, after having promised the citizens that the euro would be equal, in terms of stability and the maintenance of value, to the previously most solid currencies, we have fulfilled this promise effectively.
1  See ECB, “Progress with structural reforms across the euro area and their possible impacts”, Economic Bulletin, Issue 2 / 2015. BIS central bankers’ speeches  1  However, since 2013, very low financing costs for sovereigns and rising share prices have eased the pressure to implement more difficult policies 2. By definition, for structural policies to be most effective, a long-term commitment, continuous implementation and strong reform ownership are needed. This is the only way to permanently change expectations and growth prospects. This leads me to our second, more concrete, question: Which structural reforms are still needed to support stronger and sustainable growth? To start with, let me stress that all euro area countries, albeit to different degrees, still need to implement structural reforms. There are a number of credible reforms that are able to increase permanently total factor productivity; to affect confidence; and to help reduce uncertainty and increase investment and sustainable demand. In particular, for the euro area I see the need to forcefully work on: 1.  reducing red tape – by easing licensing procedures and facilitating access to credit by viable firms;  2.  improving the judicial systems – including the effectiveness of insolvency regimes;  3.  increasing the efficiency of the public administration and tax systems;  4.  reducing entry barriers in sectors sheltered from competition; and  5.  reducing hiring costs and skill mismatch. These reforms would unlock immediately “hidden” demand, increase economic resilience and facilitate the working of monetary policy.

Among these reforms I believe that particular attention needs to be given to all legal, administrative and bureaucratic impediments that can lead to an increase of the overall costs for debt workouts, make the distinction between viable and non-viable firms more difficult, and hamper firms’ exit from and entry to markets as well as investment. In concrete terms, this means improving the efficiency of insolvency regimes. In corporate debt restructuring, experience to date shows that an effective insolvency regime is critical to facilitate the early rescue of viable firms and the speedy exit of non-viable ones. IMF analysis also shows that weak debt enforcement and ineffective insolvency frameworks tend to lower the recovery values of problem loans 3. Our internal analysis finds that in order to be able to cope with high private debt ratios and to deleverage reasonably quickly, the strength of the insolvency framework is important. Also, recent analysis from the European Commission found evidence that in the presence of a high stock of private debt, the quality of insolvency frameworks is important for financial stability and for spurring entrepreneurship and thereby mitigating the impact of deleveraging on growth. In particular, it was found that a good insolvency framework is associated with speedier adjustment of non-performing loan ratios. 4  2  See OECD, “Economic Policy Reforms 2015: Going for Growth”, 2015.
But risk managers know that having adequate levels of capital does not ensure success - or even longterm survival. In calm seas, everyone is a pilot. Only rough waters prove the skill of a ship’s crew. Supervisors and risk managers know that a bank’s management and controls make up its first line of defence. The New Basel Accord seeks to capture the relationship between capital adequacy and risk management, a relationship that is quite apparent in its approach to operational risk. I’d like to take this opportunity to discuss the latest news on the New Accord and some of my thoughts on the framework for operational risk. I’ll begin with the Committee’s announcement from two weeks ago about plans for finishing the New Accord. I’ll then share some thoughts on the treatment of operational risk and the Committee’s motivation for adopting an explicit charge for it. Given the interest that this proposal attracted, I’ll address three important themes raised in public comments that the Committee is currently considering. During that discussion, I’ll offer some thoughts on what lies ahead, not just for bankers, but also for supervisors in conducting and coordinating supervision under the New Basel Accord. BIS Review 45/2003  1  Recent developments: the October press release First, to the most current news. By now you’ve no doubt read that the Basel Committee agreed two weeks ago on a plan to address the final issues raised in public consultations over the summer and to complete the new rules.

On this front, a risk manager and a bank supervisor share similar interests. A risk manager seeks the best risk measures and management techniques to protect a bank against losses, to hone its competitiveness, and to enhance its profitability and long-term growth. Supervisors, for their part, advocate the use of sound risk management practices to ensure the adequate capitalisation and prudent management of all banks. This, in turn, strengthens the ability of financial sector to withstand periods of distress, to serve as an intermediary of credit through good times and bad, and to contribute to more sustainable growth in the economy. The Basel Committee’s landmark revision of the international bank capital standard represents one of the most important global efforts to encourage the responsible pursuit of risk and rewards and, hence, to promote greater financial stability. This represents the outgrowth of trends in many countries to build incentives into the regulatory framework that encourage banks to identify and understand the risks they face today, to consider what risks may arise tomorrow, and to respond actively and appropriately to both. You’ve been discussing this topic here in Paris for two days now, but all of us have been thinking long and hard about the New Basel Accord for many years. That should come as no surprise, as capital requirements are the foundation of the regulatory framework. Even more importantly, capital is a key ingredient to the health of the banking sector.