samchain/econo-pairs-v1 huggingface dataset:
Ivan Iskrov: Bulgaria and the Francophonian movement Speech by Mr Ivan Iskrov, Governor of the Bulgarian National Bank, at the opening of the 13th Annual Meeting of the Governors of the Central Banks from the Francophonian countries, Sofia, 12 May 2006. *  *  *  Dear Governors, Dear Ladies and Gentlemen, Welcome to Bulgaria, one of the oldest countries in Europe! It is a pleasure and honour for me to open the 13th Meeting of the Governors of the Central Banks from the Francophonian countries. I am also very much flattered by the fact that this meeting is for the first time held in a country from Central and Eastern Europe and it is precisely the Bulgarian National Bank's privilege to host such an event. This is also the year of the centennial anniversary of the birth of Leopold Cedar Senghor - the founder of the Intergovernmental Francophone Agency and the conceptual father of the Francophone Movement (La Francophonie). Tomorrow, the conceptual father of our gatherings and ECB honourable President, Jean-Claude Trichet, will join us. The fact that the BNB hosts this meeting is not only the result of the formal acceptance of Bulgaria to the Francophonian community in the early 90-ies of the past century. The French language and culture made their way into the country already in the first half of the XIX century when we were still part of the Ottoman empire.

One is a decision to “not do” and the other is decision to “do”. The first is the “not do”. We decided in the early 1990s not to implicitly subsidize cash anymore by storing it all over the country and allowing for overnight deposits. It took some time to implement this strategy. But as of a few years back, the Riksbank only has one cash depot in the entire country. It is the market’s responsibility to store and transport cash, hence those costs are now borne by the market. The second is a “do”. A few years back, we engaged in a dialogue with a consortium of banks and the Swedish clearing house on how a fast payment system available 24/7 could be created. For a payment system to be safe, you want to assure an eventual settlement over the central bank’s  2 [4]  books that is in central bank money. This can normally only be done when the central bank’s payment system is open. After some thinking, we found a way to connect the instant payment system with the Riksbank’s system and by allowing ring-fenced overnight balances for this purpose - or to put it differently by extending a secured credit overnight - we managed to construct a scheme where the fast payments are backed by central bank money even when our system is closed. The result?
A possible international slowdown in the coming two years could lead to growth failing to reach the level indicated in the main scenario of the Riksbank’s Inflation Report. Another question that affects the Riksbank’s monetary policy considerations is developments in the property market. Exaggerated increases in asset prices can lead to subsidence in the future. With a larger percentage of debt in relation to income and with shorter periods for fixing interest rates on loans, it is probable that monetary policy would have a stronger and faster impact on household consumption. Moreover, the Riksbank’s tasks include not only safeguarding price stability, but also financial stability. This is a further reason for closely following developments in indebtedness in the economy and price trends in the property market. In the event of economic shocks it might be necessary to weigh price stability, real economic stability and financial stability against one another; it might not be possible to achieve all of the objectives at the same time. 5/7  Future challenges for monetary policy Some factors that have monetary policy significance do not change according to the Swedish business cycle. This includes the effects of globalisation. As I mentioned earlier, globalisation and increased competition from low-cost countries like China and India have contributed to lower inflation by way of import prices, increased competition and greater pressure for structural change. This makes demands not only of monetary policy, but also structural and fiscal policy.

***  2/3  BIS - Central bankers' speeches  1 Insurance Business Asia Report, 23 Dec 2021. https://www.insurancebusinessmag. com/asia/news/property/apac-property-market-pegged-at-us137-5-billion-for-2025320798.aspx 2 Swiss Re Group, 23 Apr 2021. https://www.swissre.com/risk-knowledge/risk-  perspectives-blog/climate-change-cost-asia-pacific.html  3/3  BIS - Central bankers' speeches
5  There are various measures of under-employment, including the proportion of the workforce working part-time involuntarily and the gap between actual and desired hours worked. In practice, these two measures exhibit a very similar pattern (Chart 9). They also track the unemployment rate closely. This suggests the incremental information contained in measures of under-employment, relative to measures of unemployment, might be relatively modest. Econometric estimates confirm that impression. Replacing the unemployment gap with a measure of the 6  under-employment gap produces a very similar wage equation (Table 1). And in a pairwise comparison, under-employment is statistically insignificant if the unemployment gap is included. Under-employment is important for pay, but does not appear to much improve the explanation of recent wage dynamics. A third factor determining pay pressures is productivity. It is through gains in productivity that individual firms, and the economy at large, can finance increases in workers’ pay. Econometric estimates confirm that intuition. The productivity of the labour force is a (statistically and economically) significant determinant of pay (Table 1). On average across firms, a 1 percentage point rise in productivity raises aggregate wage growth by around 0.8 percentage points. 4 5 6  Espinosa-Vega and Russell (1997) provide a history and review of the NAIRU concept. For example, Bell & Blanchflower (2018). Specifically, the involuntary part-time share of employment.

Moreover, the Riksbank contributed to slowing down the fall in production and employment when the financial crisis hit Sweden with full force in autumn 2008. Partly by quickly and forcefully cutting the repo rate, and partly by supplying around SEK 500 billion in liquidity to the banking system. I have in this speech discussed the uncertainty in monetary policy. As monetary policy acts with a lag, it must be based, at least partly, on forecasts. However, our forecasting ability with regard to GDP growth and inflation is very limited one year ahead and largely non-existent two and three years ahead. This is what I have called the Catch-22 of monetary policy. BIS central bankers’ speeches  9  We should therefore place greater emphasis on analysing the initial situation and making forecasts for the coming year. We should also concentrate on assessing the repo rate over the coming six months, as there is such great uncertainty over the repo rate in the longer run. The level of the repo rate should be checked against other monetary policy frameworks, such as the Taylor rule. And we should be clear about the objective of monetary policy. We should regard the forecasts for longer than one year ahead as potential scenarios rather than unbiased forecasts.
But there is no doubt that the unique, intra-European exchange rate certainty that would be provided by a single currency could nevertheless -- through increased competition as a result of greater price transparency and lower transaction costs, and through the associated improvement in resource allocation -- greatly increase the benefits that are to be derived from the single market. So, on the positive side there is no doubt that it would -- other things equal -- be a very desirable complement to the single market. The problem is that other things may not necessarily prove to be equal. Essentially, the downside is that there is a risk that the single monetary policy -- the single short-term interest rate -- throughout the euro-area, which is a necessary corollary of the single currency, may not, in the event, prove to be appropriate to the domestic needs of each of the participating countries. That risk was quite clearly recognised by the drafters of the Maastricht Treaty. They quite deliberately included in the Treaty the famous convergence criteria in order to ensure that countries wanting to participate in the euro-area should have to demonstrate, before they were allowed to join, at least a minimum degree of sustainable economic convergence precisely in order to reduce the risk of divergent national monetary policy needs once the single currency is introduced. Without that, the potential problems could be serious.

On that basis, the euro-area would have no reason -- and certainly no right under European legislation -- to seek to act in any discriminatory way. Indeed, it would be economically damaging to both sides if it were to do so. I have no serious concerns on this score. Assuming, as I do, a continuing responsible and constructive relationship -- which, as I say, would clearly be in our mutual interest -- it seems to me that some of the concerns that are occasionally expressed, for example, about the possible loss to the UK of internationally mobile investment, are exaggerated. I would suppose that, in the future as in the past, investment will be located wherever it is expected to earn the highest return -- indeed I would suppose that shareholders would insist that this be the case. And while exchange rate uncertainty may be a factor in such decisions, it is not at all clear that it is likely to be the decisive factor very often, when set, for example, against the whole range of supply-side influences, including labour market flexibility. Similarly, in relation to concerns about the future of the huge UK financial services industry, the reality is that financial activity will be carried on wherever it can be carried on most conveniently, efficiently and profitably. And in this case, too, the question of whether or not the UK is part of the single currency is unlikely to be decisive.
Looking ahead, we are considering how the needs of the users of our wholesale settlement services might change and whether new technologies could make settlement in wholesale digital central bank money more efficient and secure. In particular, we are assessing the potential of DLT and the extent to which it could improve our services. Market players that are active in payments and securities settlement, such as banks and financial market infrastructures, are already experimenting with DLT. Our ongoing engagement with these stakeholders reveals that many of them expect DLT to experience a significant uptake in the financial industry. This would entail a shift from using centralised databases for transferring cash and assets to using decentralised networks instead. Proponents of DLT highlight a range of benefits, such as the possibility of settling transactions instantly, around the clock, in a wider range of assets and with a broader spectrum of participants, potentially including non-financial corporations. Users of DLT platforms could also program transactions to be settled automatically based on predefined conditions. Stakeholders expect DLT to be used prominently for securities post-trade processes, where it could help to reduce costs, processing times and the need for reconciliation. Some market players see the potential for efficiency gains by using DLT along the whole lifecycle of a security. And in the area of wholesale payments, market stakeholders see the potential for DLT to improve cross-border and cross-currency transactions, as it would overcome some of the frictions related to correspondent banking.

•  Another welcomed development of the banking system belongs to the customer service, which through electronic terminals, has been naturally associated with the increased number of electronic cards in circulation. Presently, banks provide debit and credit cards, in cooperation with the international companies of Visa and MasterCard, Diners Club. Nine banks provide the ATM service and the number of the latter ones at end of December 2005 was 205, while in August of this year it has reached to 266. In the meantime, the number of the points of sale has reached to 1073, of debit cards to about 70,176 and of credit cards to 4,245. •  Undoubtedly, the further expansion and strengthening of the banking system is an important aspect. The geographic extension of covering the territory with banking business, the increased competition, the introduction of many new products and the new recent developments constitute an additional argument for the vital role played by the banking system. The map of covering the country with banking business was further expanded, including new regions uncovered previously. Thirty new branches and agencies were opened during 2004, while in 2005 their number became 48, making the total number of branches at end of 2005 reach 127 and that of agencies reach 113. 4  BIS Review 115/2006  •  The positive developments in the banking sector and the increased number of subsidiaries and agencies have brought about a considerable increase in the number of employees.
In the next 10 years, gas production could rise to at least the same level as oil production, measured by energy content. High oil prices have led to a strong increase in activity on the Norwegian continental shelf. Many projects have been launched to increase recovery from fields in operation. A number of companies have revised up the long-term oil prices that are used as a basis for investment decisions, but they are still moderate compared with futures prices. Further out in the projection period, developments in petroleum-related investment become highly uncertain. It is assumed that overall activity will decline somewhat when the Snøhvit and Ormen Lange projects are completed, but high oil prices are expected to contribute to maintaining investment at a relatively high level throughout the projection period. The Government Pension Fund – Global, previously called the Government Petroleum Fund, will increase substantially in the years ahead. The fiscal rule entails a gradual phasing-in of petroleum revenues into the economy, approximately in pace with the expected real return on the Fund, which is estimated at 4 per cent. On the basis of our assumption in the March Inflation Report for developments in oil prices (oil futures prices), the fiscal rule allows for an increase in petroleum revenue spending of more than NOK 30 billion from 2006 to 2009. If the Norwegian economy continues to exhibit solid growth, it will nevertheless be in line with the fiscal guidelines specifying that petroleum revenue spending is lower than the expected real return for a few years.

This supports the interpretation of the first price peak as a property price bubble. The value of office property increased in 2005, from a historically low level. In relation to historical levels, the rise in the value of commercial property seems to be moderate, compared with the rise in capacity utilisation. One possible reason for this may be that employment growth was for a long period relatively low in this upturn compared with the upturns in the 1980s and 1990s. This has now changed. In addition, signals from market participants indicate that the rise in value for 2005 as a whole will be sharper than the chart estimate, which was calculated as of July 2005. Developments in real house prices also tracked developments in capacity utilisation from 1985 to 1998. In the period since then, however, house prices have increased further at a steady pace, even when business cycles have fluctuated. This sharp rise, combined with similarly strong growth in household debt, may be viewed to some extent as a delayed adaptation to the deregulation of the housing and credit markets in the 1980s, after many households burned their fingers immediately after deregulation. In recent years, household income growth has been solid, household confidence regarding the future has been strong and households probably perceive higher income levels as permanent. This may have resulted in a further rise in house prices and debt. In addition, low real interest rates are currently making a contribution. Sales in the commercial property market reached a very high level in 2005.
In the five years to 2004, the annual growth rate averaged only 1.2 per cent in real terms, well below that of many of our EU partners; and while this year’s growth rate up to September, at 1.7 per cent, may be encouraging, it is too early to know whether the implied acceleration will be sustained. And yet the need to achieve a faster pace of economic growth has probably never been as urgent as at the present time. Growth is not only necessary in order to satisfy society’s legitimate aspirations for higher living standards. Beyond that, an expansion in the economy’s supply capacity and an enhanced degree of international competitiveness are essential to overcome the daunting challenges the country is currently facing. A threefold challenge: globalization and its implications The first challenge derives from the pervasive process of globalization, which, powered by rapid advances in technology and trade liberalization, has given rise to an unprecedented mobility of resources between countries in pursuit of the best cost-quality combinations. Suffice it to say that over the past two decades exports and foreign direct investment have been growing twice and three times faster than global output, respectively. Globalization is undoubtedly creating numerous profitable business opportunities. At the same time, however, it represents a potential threat for open economies like Malta’s because of the concurrent intensification of competition.

Indeed, banks that wish to be among the first to adopt the AMA must being collecting the required three years of data by the end of this year - but for practical reasons, this process should have begun already. Adopting a more risk-sensitive treatment of operational risk will require significant work on all our parts. What we learn about the factors driving operational failures, and how we can better measure and reduce our exposure to losses, means much more to all of us than simply a more favourable capital requirement. Instead, our efforts on operational risk, combined with advances on the credit and market risk fronts, will advance our understanding of the many risks banks face and improve our ability to navigate them successfully. For all of us, that offers the reward of a more stable banking system that is less susceptible to systemic risks and better able to ensure the circulation of credit to businesses and consumers alike. BIS Review 45/2003  5
In this way, structural reforms in the major economies can also contribute to a normalisation of the interest rate level and monetary policy worldwide – including in small open economies. In principle, structural measures that result in higher productivity growth, a lower propensity to save and a greater willingness to invest will increase the equilibrium interest rate. Absent a change in monetary policy, such an increase means that monetary conditions will become more expansionary. This would further encourage economic recovery and facilitate the implementation of these structural measures. The central banks could then gradually raise policy rates again, and the undesirable sideeffects of low or negative interest rates would be contained. Conclusion To conclude, let me sum up my remarks in five core messages. First, the low level of interest rates is a global, secular phenomenon. Real interest rates have fallen worldwide, and have been doing so steadily for the last 20 years. This suggests that the equilibrium real interest rate has declined. Underlying this are demographic trends and altered behaviour on the part of consumers and companies, which have resulted in a higher supply of savings and lower investment demand. Second, although negative nominal rates are often perceived as unnatural, the laws of economics are not inverted once the zero lower bound is breached. In principle, taking a policy rate into negative territory has a similar effect to cutting a policy rate in positive territory. In Switzerland, the negative interest rate has its main impact via the exchange rate channel.

This seems surprising at first glance but is attributable to the fact that banks tried to offset a further decline in their interest margin with increased income from credit business. Meanwhile, interest rates on mortgage loans are also lower than before the introduction of negative interest. Thus, we can conclude that taking a policy rate into negative territory has a similar effect, in terms of transmission to other interest rates, to cutting a policy rate in positive territory. Although interest rates have fallen, no significant increase in credit growth has been observed over the last two years. The volume of bank loans to businesses and households has risen further, as you can see in chart 10, but credit growth has weakened. This slowdown in growth is particularly evident among loans to private, non-financial corporations. However, the picture is different for companies that are able to finance themselves via the capital market, as chart 11 shows. Domestic non-financial corporations have exploited the low capital market interest rates and issued more bonds since the introduction of the negative interest rate. As a preliminary conclusion, we may state that the negative interest rate in Switzerland principally operates via the exchange rate channel. Together with our willingness to intervene in the foreign exchange markets, it has helped to ensure that the Swiss franc has not strengthened further despite heightened uncertainty, for example in the wake of the British EU referendum.
With a limited battery life of an hour and weighing more than a pound, that might not be entirely surprising. But another key reason was probably this – there was no m-commerce at that time. (b)  The present – opportunities offered by m-commerce/m-payment  5. Let’s fast-forward to 20 years later after the birth of the first smart-phone, and get back to the present. We are all witnessing the sea change in the landscape of e-commerce, and are enjoying its huge benefits. 6. Most smartphones are much lighter now and have much longer battery life. But more importantly, what was once known as “e-commerce” is expanded by what we now call “m-commerce”. It is the name of the game. 7. People are no longer satisfied with buying or selling things online using their desktop or notebook computers. They want to do these in both the virtual and the real world anywhere, anytime, using their mobile devices like smartphones or tablet computers. 8. Let’s face it: businesses can take place in the virtual marketplace, but people don’t live there. Books can be made digital, but coffee cannot. We still enjoy – and need – physical goods and services. That’s why “m-commerce” is becoming the “game changer”, as it fills the gaps of “e-commerce” by making it portable and connecting the virtual world with the real world. 9. Furthermore, the penetration power of m-commerce has been significantly boosted by new marketing tools made possible by combining mobile technology with Big Data analytics.

Dear guests, I wish you a successful work and a pleasant stay! Thank you. 2  BIS Review 165/2010