samchain/econo-pairs-v1 huggingface dataset:
This speech is focussed on the PRA. Page 9 5. The UK hosts around 150 branches and around 100 subsidiaries of international banks. These include branches and subsidiaries of all the banks identified by the Financial Stability Board (FSB) as Globally Systemically Important Banks (G-SIBs). The UK hosts around 200 branches and subsidiaries of international insurers. 6. For banks, see PRA Supervisory Statement 5/21 – 'International banks: The PRA's approach to branch and subsidiary supervision', July 2021. For insurers, the PRA’s current approach is set out in PRA Supervisory Statement 2/18 – ‘International insurers: the PRA’s approach to branch authorisation and supervision’, March 2018. During 2023, the PRA plans to complete its assessment of any outstanding branches of international insurers currently within the Temporary Permissions Regime as well as to set out its proposed supervisory approach to branches. See ‘Letter from Charlotte Gerken and Shoib Khan “Insurance Supervision: 2023 priorities”’, January 2023. The PRA also plans to remove capital requirements for branches of international insurers operating in the UK as part of the upcoming Solvency UK package. See 'Fundamental Spreads − speech by Sam Woods', 20 February 2023. 7. The PRA currently has 79 supervisory cooperation and information sharing Memorandums of Understanding (MoUs) in place with authorities across 51 jurisdictions. Since the UK left the EU, the PRA has signed 34 MoUs with EU institutions and Member States. The PRA is in the process of seeking to agree eight further MoUs with non-EU countries. 8. New agreements include those with New Zealand and Australia.

But, in my view, that is best facilitated by retaining the clarity of the present remit, rather than muddying the waters by introducing another objective for monetary policy. The onus would then lie with the Monetary Policy Committee to explain that it was permitting a temporary deviation from the inflation target so as to reduce the likelihood of future financial disruption and improve its chances of meeting the inflation target further ahead. The past two and a half years have certainly been tumultuous for both the economy and for policy makers. After such an event, we should certainly examine how the overall policymaking framework should be re-made in order to reduce the chance of a repetition. But we  5  “The Role of Macroprudential Policy”, Bank of England, November 2009 provides an outline of some of the Bank’s thinking in this area. BIS Review 31/2010  7  should be careful not to throw the baby out with the bathwater. The inflation targeting framework served the real economy well for a decade and a half before the financial crisis. In addressing the shortcomings in the overall policy framework revealed by the crisis, we should be careful not to discard those parts that functioned satisfactorily. Thank you. 8  BIS Review 31/2010  BIS Review 31/2010  9  10  BIS Review 31/2010  BIS Review 31/2010  11  12  BIS Review 31/2010  BIS Review 31/2010  13
In a recently published study, Central Bank of Malta staff analysed in detail the effects of increases in government investment on the Maltese economy under different financing scenarios. Under all financing scenarios considered, an increase in government investment is expansionary throughout. In the short run, the expansionary effects are limited to demand-side effects. However, as government capital stock accumulates, significant supply-side effects begin to kick in. A higher  Page | 2  government capital stock helps reduce marginal costs, boosting factor productivity and helping to crowd-in other private factors of production. The reduction in economy-wide marginal costs in turn should lower overall prices, boosting competitiveness and exports. In line with other analyses, the study also shows that even if not debt-neutral, using fiscal space to finance government investment has the strongest effects on real activity in the short-to-medium run. A debt-financed 1 percentage point increase in the government investment-to-GDP ratio increases real GDP by 1.5 percentage points from its baseline level by the fifth year. Even if the investment ratio returns to its pre-shock level, GDP would still exceed its baseline level by around 1% by the tenth year. Thus, an expansion in public GFCF expenditure can help mitigate the negative impact that weaker external demand might have on Malta’s economy. Further investment in human capital is also necessary. Malta’s positive economic record is also partly reflected by a growing influx of foreign workers. These now account for around a fourth of all employment.

Developments in the USA play a key role here and the recovery that is expected to begin next autumn presupposes that the housing market there has stabilised, that the repercussions of the financial crisis have faded and that employment has begun to increase again. As the international forecast is highly uncertain, this also applies to the recovery that is predicted to take place here in Sweden next year. When it comes to inflation, it is of course impossible to deny that it is uncomfortably high today. However, I do not believe that the outcome figures contain evidence that shows that the price increases for oil and other commodities have spread to other areas. The repo rate increase in July was also intended to prevent such contagion effects. The risk of these effects has also declined recently, partly due to the fall in the price of oil and other commodities and partly because economic activity is declining. The development of productivity has been a disappointment and we do not have a really good explanation of why it has been so weak. Weak productivity also helps to keep cost pressures high. However, I was more worried about this earlier when economic activity was higher and the pressure on the labour market was stronger. In the current economic situation it is probably difficult for the companies to pass cost increases on to the consumers. There is every reason to continue to keep a close eye on inflation expectations as they are still some way above the inflation target.
I remember that moment vividly, as it happened during my mandate as Prime Minister of Romania. As a veteran, in office since 1990, I am fully aware to what extent Romania has benefited from the significant support provided by the European Investment Bank. The projects financed by EIB proved to be a catalyst for development, with a multiplier effect in all the economic sectors. Nevertheless, Romania continues to need (i) to develop solid growth strategies based on investments and (ii) to accomplish the development priorities in infrastructure, healthcare and small and medium enterprises (SMEs), as well as (iii) to enhance cohesion with the other EU member states. The future will certainly bring challenges as well as opportunities. One opportunity, as per the latest European Investment Bank’s flagship report on investment, is the present context of low interest rates, which could provide support for speeding up lending and investments. There is adequate room for upscaling public investment in areas such as: smart infrastructure, digital technology and education. Fairly new topics like the digital economy and FinTech, as well as climate change risks and Green Finance are gaining ground and importance on everyone’s agenda, having the potential to shift capital allocation and contribute to new investments. Ladies and gentlemen, please allow me to stress the importance of the EU structural and cohesion funds for Romania and to point out the need for further foreign direct investments.

Ajith Nivard Cabraal: Developments in the evolution of central banking and challenges faced by central bankers Inaugural speech by Mr Ajith Nivard Cabraal, Governor of the Central Bank of Sri Lanka, at the International Course on Central Banking organized by the Centre for Banking Studies, Colombo, 22-23 May 2007. *  *  *  Ladies and Gentlemen, I am pleased to be here to address you at the opening ceremony of this international course on Central Banking. Let me also welcome all the participants to the course and extend to the participants from overseas countries and Prof. Sinclair, a very warm welcome to our country. The Centre for Banking Studies(CBS) has provided training opportunities for officers in the financial sector in Sri Lanka over the last 26 years. It also has past experience in coordinating a number of international programmes of the SEACEN Centre, APRACA and World Bank held in Sri Lanka. Also several officers of central banks in SARRC countries have participated in the scheduled programmes of the Centre, though they were not specially designed for an international audience. This Central Banking course in fact is the very first international programme designed and conducted by CBS. I am glad that there are 14 overseas participants at this first programme. I congratulate CBS for successfully organizing it. I am sure that there will be more overseas participants in the forthcoming international programmes. Our plan is to invite eminent resource persons to conduct these international programmes.
Many industrial outputs of developing countries have failed to make a mark in the international markets because of the absence of welldeveloped after sale and maintenance services. The Indian auto-maker, Maruti, failed to sell its fuel economy car until Suzuki of Japan stepped in with technology and after-sale services. Therefore, without the attendant services, it is not possible for either industry or agriculture to sustain itself. Sri Lanka which is devoid of a sufficient natural resource base would find it difficult to enhance growth through industry or agriculture alone. The country’s available land is limited and its population density at 293 persons per square kilometer is one of the highest. In comparison, Canada has a density of 3, USA 31, New Zealand 14, Australia 3 and Russia 9. While the latter group of countries could  8  6  World Development Report 1987, p.39  BIS Review 4/2007  conveniently move into extensive farming, Sri Lanka’s choice is limited only to improved productivity through intensive cultivation. That again is through innovation which comes from services. The second factor that would drive Sri Lanka to the services sector is the ever rising globalization of services. In the past, services which, by nature, cannot be stored, were non-tradable. Hence, there was no any prospect of selling, services beyond the borders of a country limiting its clientele to its own citizens.

India’s ascent to a formidable global ICT power has been mainly driven by economic reforms, establishment of a free market democracy, perseverance of some unbeatable private entrepreneurs and above all, continuous human capital development in engineering and electronic fields. 10 The last development came from the high educational standards maintained by a web of reputed state owned Indian Institutes of Technology (IITs) and permission given to private sector to set up higher learning institutes. This is definitely an eye opener for Sri Lanka. Even in the midst of growing evidence from India and elsewhere that privately owned institutes of higher learning could make a significant contribution to the globalization of education and training, Sri Lanka still keeps education as a closelyguarded relic in the public sector. As a result, its capacity to meet the demand for higher education is woefully low with one place being offered to satisfy about 16 aspirants. This has led aspiring youth to seek higher education in other countries at a high personal investment cost. Since every investment should yield commensurate returns, it also has compelled them to seek employment elsewhere. Whatever the intention, the closely protected public university education system has become a waste of scarce public resources, since only a fraction of the total registered students is reported to be in 11 attendance in classes. Hence, to gain reputation as a global centre of learning, it is necessary that the Sri Lanka’s university education system should undergo a complete overhaul and reform.
But how can this be done in an environment where interest rates are already very low to start with? It is important to remember that there has long been a trend with falling interest rates around the world – a trend that has nothing to do with monetary policy, but rather concerns ageing populations and other structural factors that have pushed up savings in relation to willingness to invest. In the midst of this the central banks have also had to manage the effects of the financial crisis and a protracted economic slump. Many of them, including the large central banks like the ECB and the Federal Reserve in the United States, have conducted an expansionary monetary policy to support the recovery and bring up inflation, both via very low policy rates and via more unconventional measures such as various asset purchase programmes. Monetary policy in Sweden has also needed to take this into account. So to safeguard the upturn in economic activity and inflation in Sweden and to turn around the negative trend in inflation expectations, we have cut the repo rate down to a negative level, and with effect from the beginning of 2015 we have implemented an asset purchase programme to make our monetary policy even more expansionary. Our assessment is that this monetary policy has by and larger been successful. Market rates have followed our cuts in the repo rate and become negative. And the bond purchases seem to have pushed down interest rates more or less in the way we expected.

Debt-to-income ratio in different income groups 2016 Percentage of disposable income 400  400  350  350  300  300  250  250  200  200  150  150  100  100  50  50  0  0  1  2  3  4  5  6  7  8  9  10  Note. The columns show the median in each decile group. Data for July 2016. The high debt ratio in the lowest income group should be interpreted with a certain amount of caution, as this group includes, among others, households with highly varied incomes, for example households with negative income. Source: The Riksbank  In addition to households having different sizes of assets and liabilities that are affected by interest rates to different degrees, there may also be other dimensions that play a role in how the distribution of income and wealth is affected by a period of very expansionary monetary policy. For instance, one can imagine that household that are used to managing their assets and liabilities have better conditions for safeguarding themselves against or benefitting from the effects of monetary policy on interest rates and asset prices. However, the distributional effects of monetary policy do not come solely through changes in nominal interest rates and asset prices. Ultimately, it is the effect when consideration is given to inflation that is important. And the composition of household wealth is also significant in this context.
To be successful in today’s environment, a case-by-case approach needs to be market-based and adaptive to the particularities of the case at hand, as well as the global financial and economic context. This requires seeking, as far as possible, to work with the grain of a given situation, as a good artisan works with the grain of the wood. •  The approach needs to be market-based 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. 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 market-based approach is much more feasible. Financial recoveries can proceed more rapidly than in the past, because market participants generally have the ability—and many have little choice, because of the prevalence of mark-to-market accounting—to digest losses and move on. •  Working with the grain means recognizing the realities and limitations inherent in the current market structure and its functioning, and tailoring approaches accordingly. This involves acknowledging that attempts to impose solutions are unrealistic and potentially counterproductive. Instead it involves identifying ways to induce and encourage desired behaviors. I would also suggest that it means avoiding departures from normal market functioning whenever possible.

In a developing economy such as Thailand, the customary savings behavior is to save first and spend later. BIS Review 50/2004  1  Developing economies can and should benefit from this type of behavior since it allows for vital investments to be madc using domestic savings, thereby lessening reliance on extemal capital inflow, while at the same time promoting an economically viable savings-investment gap. On the other hand, the savings behavior of the west and developed economies tend to lean toward spend now save later. This type of behavior is practicable in western countrics due to many factors that can be summed up under the heading of high level of economic development. The existence of social welfare systems, mature capital markets, diversified economy, and highly educated workforce are a few factors that allow such countries to be able to grow under a relatively low savings environment. Without such factors, a country could find it difficult to grow and develop without straining its finances. Coming back to Thailand, it is possible to say that with more widespread usage of credit cards and other types of consumer loans, we can expcct Thailand’s savings behavior to become more in line with those of the developed economies. This trend is a double-edge sword that if not managed carefully can cause a severe negative savings-investment gap. Such predicament will worsen Thailand’s dependence an extcrnal capital inflow that historically has shown its ability to change direction rapidly and jeopardize macroeconomic stability.
Rising importance of this topic is clearly demonstrated by the adoption of the Bali Fintech Agenda of the IMF that provides guidance for national authorities on how to cope with new and evolving financial landscape, and underlines the need for stronger international cooperation as financial services are blurring boundaries, both institutionally and geographically. In what follows, I would like to briefly focus on the challenges of fintech developments for the banking industry and policy makers. We do have to take into account that digitalization of banking is not a new phenomenon; it has been present for more than 3 decades (in the form of automated teller machines, electronic payments, e-banking). The emergence of fintech is only the latest wave of innovation to affect the banking industry. Still, in the last decade, a significant change has occurred in the way of using technology, thus creating environment in which disruption can happen more quickly, and urging traditional banks to adjust faster to maintain market share. Besides the advancement in technology, a few other factors have also contributed to proliferation of financial innovation. The fact that banking industry was dealing with the legacy issues of the global financial crisis-impaired balance sheets, perhaps was important factor that provided space for non-banks to penetrate in financial business. Also, banks’ resources to a great extent were tilted towards implementation of the new Basel 3 requirements aimed at increasing the resilience of the banking system.

8  BIS central bankers’ speeches  The Icelandic authorities have a strategy in place to lift the capital controls gradually, as conditions permit, without unduly undermining exchange rate and financial stability. The strategy is currently under review. It is clear that the process will be significantly affected by how the króna problem associated the winding up of the old banks is dealt with, as an amicable solution could greatly expedite the removal of the controls. But the basic thinking will remain the same. The first element is to secure the framework conditions for lifting the controls, such as at least balanced public sector finances, an underlying current account surplus, and adequate FX reserves. All of this is either in place or well on its way. The second element is to put in place the economic policy frameworks and prudential rules that will make it possible for Iceland to deal with the risks associated with free and volatile capital movements. That is also underway. The third element is to reduce the overhang of liquid offshore krónur to a safer level, either through release at a discount or by tying the offshore krónur up in longer maturities and real investments. That is underway as well, although some are of the view that the process is too slow. The fourth element is to open market access and, through other means, generate longer-term inflows to replace the capital that wants to leave. History shows that those who jump early on such a bandwagon have a lot to gain.
While the capital controls are being removed, the risk-adjusted interest rate differential between Iceland and its trading partners must be sufficient to make ISK assets attractive relative to foreign currency alternatives. On the other hand, there are strong arguments for a considerable reduction in interest rates, provided that the capital controls keep the króna stable. Whether the interest rate at any given time is appropriate depends in part on the timing of the phased capital account liberalisation. Both the market and the Monetary Policy Committee face uncertainty about when, and in what stages, it will be possible to lift the controls. In line with transparent monetary policy implementation, the Monetary Policy Committee has explained how this uncertainty affects its decisions. To that end, the Committee has given an account of various factors that affect the prospects of continuing the phased capital account liberalisation that began in November 2009. Uncertainty about key Supreme Court decisions and the third IMF review increased the likelihood that the next stage of liberalisation could be delayed quite a while. The bond market appeared to interpret this delay to be more fundamental in nature than the Monetary Policy Committee intended to convey in its statement, thus contributing to the decline in yields that had begun somewhat earlier. The uncertainty had abated by the time the Monetary Policy Committee met in September, and the Committee explained this in its statement. Furthermore, the Committee implied that it would inevitably consider this point in its next interest rate decisions.

I have given my views on the current monetary policy situation and described the principles that guide monetary policy. I have also mentioned some of the practical problems we face. When it comes to the current monetary policy situation, my assessment is that the picture we painted of inflation prospects in the February Inflation Report still holds true to a great extent, although it now looks as though energy prices may contribute to higher inflation in the short term. Monetary policy needs to become less expansionary. With regard to the monetary policy strategy, one important message has been that we do not always aim to bring inflation back on target as quickly as possible; we also give consideration to the real economy. We cannot rule out the possibility of situations arising where it may be necessary to set our sights further ahead than the time period normally used to guide monetary policy decisions. However, in this case we will make it clear in advance that we envisage such a development. Thank you! BIS Review 44/2006  5