samchain/econo-pairs-v1 huggingface dataset:
Chart 11 Distributions of cumulative 3-year GDP growth under typical conditions and with elevated debt and a wide current account deficit Distribution with typical conditions  Probability density 0.12  Distribution with elevated debt and wide current account deficit 0.10  0.08  0.06  0.04 -0.3% 0.02  0.00 -8  -6  -4  -2  0 2 4 6 8 10 12 Cumulative GDP growth over 3 years (%)  14  Notes: Chart shows the predicted distribution of the cumulative GDP growth rate over 3 years. The blue line is the predicted distribution when the change in household credit-to-GDP, the change in corporate credit-to-GDP and the current account deficit are at their historical average in the UK. The red line shows how this distribution shifts when household and corporate credit have increased by 10pp relative to GDP, and the current account deficit has widened by 2pp. Our work finds that if the economic earthquake comes after a 10% increase in household debt relative to incomes, the cumulative loss of output over the 3 years after the quake is 1.5%. If it comes after a 10% increase in corporate debt, the cumulative loss of output is 1%. And for every 1% of current account deficit before the quake, a further 0.5% of output is lost after the quake (Chart 12).

In the European Union, a small-size enterprise has about 50 workers, and the volume of its activity is around 10 million euros. Medium-size enterprises are defined as those which employ about 250 workers and their annual commercial activity is around 50 million euros. In Saudi Arabia, the Saudi Industrial Development Fund adopts the annual sales standard to identify small and medium size enterprises for the purpose of funding by “Kafalah” program. They are defined as enterprises with annual sales not exceeding Rls 30 million. The World Bank has conducted a questionnaire and distributed it to commercial banks to establish a definition for small and medium size enterprises. The result has shown differences between banks in their definitions, but it can be concluded from that survey that small-size enterprises are those whose annual sales range from Rls 100 thousand to Rls 5 million, and employ 2 to 49 workers. The medium-size enterprises are those with a turnover of Rls 5 million to Rls 50 million per annum, and employ from 50 to 200 workers. Ladies and gentlemen, SMEs have various advantages, such as their easy establishment due to low capital required for their establishment and operation, their easy establishment procedures, and low establishment and administrative expenditures due to their simple organizational structures. They are also characterized by management independence by their owners, who seek to achieve the best possible success.
That was why Basel II provided not only for the use of internal models in Pillar 1 of the regulatory framework, but also for the Pillar 2 and 3 requirements so as to provide a second view on banks’ solvency (Pillar 2), including one based on stress tests and performance measurement, and to facilitate market discipline via disclosure (Pillar 3). Unfortunately, the financial crisis and subsequent analysis have shown that bank and supervisory practices are not as consistent as they could be. For example, the risk weights of some banks that introduced internal models under Basel II have been trending downwards in recent years, when experience and intuition say they should have been moving in the opposite direction. Many people worried that Basel II would be procyclical. It would seem that those fears are largely unfounded, but for reasons that may be far from satisfactory! Increasingly, this has led to questions about the credibility of internal model-based capital ratios. Therefore, alongside the assessment of national regulations, the RCAP has also started studying the consistency of outcomes at individual banks. As with the introduction of a rigorous peer review programme, the significance of this initiative should not be underestimated. Never before have we had international teams of supervisors looking at the modelling practices at individual international banks. I think this is a quite telling example of the regulatory community’s commitment to improving the consistency, comparability and reliability of bank capital ratios.

At that time, the long “fiscal dominance” history of the Turkish economy that severely restricted the efficiency of monetary policy and shallow financial markets that were not well developed were the primary characteristics of the Turkish economy. All these limited the economy’s room for maneuver on the eve of the adoption of the new monetary policy regime. Independence of the Central Bank of Turkey that came in 2001, was almost the only institutional factor in hand at that time on the way towards the ultimate objective of price stability. Given this overall framework and conditions, the Central Bank of Turkey preferred a smooth transition towards inflation targeting whereby it would wait until all these factors that restrict the efficiency of monetary policy would weaken. In early 2002 following the achievement of relative stability in financial markets after the 2001 Crisis, the Bank announced its new monetary policy regime in a public statement as implicit inflation targeting. As it was emphasized in the same now historical statement, the final aim was to adopt the full-fledged inflation targeting regime, once the preconditions were met. This ‘new’ regime was defined as inflation targeting since the central bank announced a numeric target for annual inflation jointly set by the government according to its law and price stability was now its primary objective. Furthermore, it was similar to inflation targeting in the sense that the decision making process was shaped in a forward looking manner by exploiting the broadest set of information available.
Notwithstanding this, and as a natural consequence of credit growth in the past, and of a macroeconomic setting characterised by a cyclical turning point, we should expect continuing rises in bad debts in the coming months. This rise in bad debts should concern us, and indeed it would be alarming if bank regulators and supervisors were unconcerned; but it does so only moderately, bearing in mind the resilience of the banking sector according to the stress tests performed by the Banco de España under assumptions in which extremely adverse scenarios materialise. Nor will I be referring today to the problems that are common to all adjustment processes, the adjustment in the Spanish economy having moreover begun before the turbulence emerged last summer. Rather, I shall be focusing on what for me is the worst effect of this turbulence: the global financial market dysfunctions. So you may better understand my subsequent remarks, I would like to very briefly outline how, starting from a very limited  BIS Review 62/2008  1  segment of the US mortgage market (the subprime mortgage segment), we have reached a generalised situation of international financial market turbulence. The factors behind the current situation are complex. But in my opinion there are two key elements that explain such an intense process of propagation.

Consequently, thanks to the design of a general provision such as the present one, along with a tightening of the parameters that determine  BIS Review 62/2008  5  the specific provision, the Spanish banking system had the highest volume of provisions among the developed countries when the market turbulence emerged. Last lesson: on how the turbulence affects us all I have attempted to convey to you that, in Spain, banking regulation has proven to be strict, having included concern over procyclicality among its criteria for action, and that Spanish banks have properly managed the risks associated with financial developments in recent years. The absence of a subprime segment, of an originate-to-distribute model, of complex structured products and of off-balance sheet investment vehicles attest to the fact we have all done the right things. Can we afford to be complacent? I would say no, for three reasons. First, because if we have not made certain mistakes, this is largely due to the fact that our financial system has been very traditional, without sophisticated institutions such as those that have most suffered from the turbulence. Second, because, as I have already said, the Spanish economy needs to undergo adjustment in several areas, but essentially in that of residential investment. And third, because the strong interconnections within the financial system, which is today more global than ever, mean that if markets cease to function, that has negative consequences not only for those that generate the problems but for all those participating in them.
This was around a tenth more than we estimated at the most recent monetary policy meeting. A large part of the decline is due to the fall in mortgage rates and energy prices. Underlying inflation measured as the CPIF, which excludes changes in mortgage rates, amounted to 2.1 per cent in January. This underlying inflation has also fallen in recent months, but not as much as CPI inflation. If one also excludes energy prices, underlying inflation amounted to 2.4 per cent in January. Food prices increased by around 5 per cent in January and are still holding up inflation. We see ahead of us that CPI inflation will continue to fall over the coming six months and that it will become negative for a large part of the year. But the heavy fall is mainly due to our cutting the repo rate, which means that mortgage rates fall. In addition, energy prices will be lower than one year ago, which will also push down inflation. At the beginning of 2010 the rate of increase of the CPI will quickly rise again and be over 3 per cent at the end of 2011. I shall return to this a little later. 6  BIS Review 25/2009  Underlying inflation measured as the CPIF excluding energy is calculated to be close to 2 per cent during the forecast period.

I know of no sure way of predicting what will happen, but my personal view is that the internet is likely to emerge more as a channel to build on existing relationships and to increase the efficiency of basic services than as something which changes the landscape of the banking industry. But perhaps I am guilty of thinking that everyone else possesses the same inertia as I do when it comes to changing one's habits. Concluding remarks I have skimmed over a few issues which can rather loosely be said to fall under the heading of banking and development. There are many experts attending this symposium who will, I am sure, offer much deeper and more provocative insights into the economic outlook in general, and the relationship between financial development and growth in particular. I wish you all a fruitful and enjoyable couple of days. 4  BIS Review 59/2001
The third imperative is strengthening connectivity for greater innovation and impact. I see opportunities for this in three areas. The first relates to the halal sector, and the role that the Islamic finance industry can play in supporting its growth and expansion. While the percentage of halal-certified companies utilising Islamic finance facilities has been on a rapid uptick – nearly doubling from 21.9% in 2018 to 41.3% in 2021 – more can be done, especially to facilitate connectivity across halal value chains. The industry should continue to explore new sources of funds based on the concept of risk sharing and develop more impact-based funding, investment and trade facilities that can drive improvements in productivity and efficiency of halal companies. Technology can also be leveraged to embed financial services into the halal ecosystem,  3/4  BIS - Central bankers' speeches  where Islamic finance solutions are seamlessly integrated into the offering of halal products or services. Apart from being more efficient and frictionless, it can also offer a more complete proposition to businesses and consumers The second is on community-based connectivity. Here, the integration of social finance within the core offerings of Islamic financial institutions can be a game-changer. In an environment of high household leverage, taking on more debt-based borrowing may not be the best solution for micro-businesses and low-income segments. Therefore, deploying blended capital – using social impact investment, donation, waqf and zakat – enables funding to be more accessible and responsibly used to support entrepreneurship for innovation.

—POLICY REVIEW Radev, was circumspect regarding recent calls for a review of the ECB’s monetary policy strategy. He also expressed caution in response to suggestions the institution should lower its mandated medium-term inflation rate target from close to but below 2% to around 1%. "There may be reasons to start thinking if an overhaul needs to be considered,” he said. But he added: “Whatever, if anything, the ECB decides in this regard should be shaped into a carefully communicated process. I cannot but fully agree with a recent comment by Peter Praet who warned that such public announcements may be misread and, furthermore, interpreted as the ECB admitting to having failed on its mandate, which is not the case." The ECB has “plenty of instruments” at its disposal in the event of a severe economic downturn, he said, adding: “The door is not closed to asset purchases, and there is no rule-set limitation on moving rates such as those on the standing facilities or the regular open market operations. "We know there may be varying degrees of support within the Governing Council for certain especially non-standard measures, if those are to be considered. Hence it is also true that the effectiveness of any firepower of the ECB ultimately depends on its determination and leadership rather than variety or size of the tools."
Although this trend is impressive, much more needs to be done in order for the sector to meaningfully contribute to the growth of the country’s economy. Provision of finance to the SMEs can be a leading conduit for transforming our economy by opening up business opportunities as well as channelling resources more efficiently and effectively to the sectors that require it the most. BIS central bankers’ speeches  1  Distinguished Guests, To see a commercial bank bring its services to the heart of the informal sector is an encouraging sign not only to the Bank of Zambia but to the entrepreneurs of Soweto Market as it demonstrates the confidence that the Bank has entrusted in the SME sector. It is also our hope that the perception of banks being intimidating to the informal sector will be a thing of the past thus alleviating the challenges faced by SMEs in accessing finance. Furthermore, by partnering with the local entrepreneurs in Soweto Market which is the biggest market in Zambia, Stanbic Bank is encouraging a culture of banking for a myriad of Micro small and medium entrepreneurs. Because of the key role that SME sector plays in the economy, the Bank of Zambia will ensure that financial institutions are fully responsive to the unique characteristics of this sector. The Bank of Zambia attaches great importance to initiatives that seek to enhance the provision of financial services to the underserved sectors of the economy. The opening of this Branch today is a demonstration of this important objective.

In fact, it’s been more than 15 years since the Basel II capital accord included a capital charge for operational risk. 2/6  15 years later, I believe we can draw two conclusions. First, measuring these risks is still challenging. Second, their importance for the banking business has not diminished a bit. On the contrary, it has become more relevant for banks and, certainly, supervisors. Indeed, looking at the 2020 priorities, released by supervisors worldwide, it is clear that nonfinancial risks are on the top of the list. Let me give you a few illustrative examples: the importance of IT has soared, since it has become a key component of any viable Business Model, which makes cyber risk an even greater source of concern. Second, considering recent scandals across the EU I believe I don´t need to emphasize that Anti-MoneyLaundering is more relevant than ever. Finally, it is also clear that the nature of retail banking business means that conduct risk is a major source of concern. In this regard, it is not easy to compile all the losses stemming from the wave of fines and lawsuits that has swept through the financial industry during the crisis and its aftermath. According to a report from the ESRB1, the cumulative losses to December 2014 stemming solely from misconduct exceeded 200 bn € worldwide, with more than 50 bn € affecting EU banks. But, despite the size of these losses, the direct financial consequences are not the only source of concern.
And France has become a very attractive country for foreign investors.i We need only look around us: in this regrettably turbulent world, there is no more reliable partner for Germany than France, and for France than Germany. This is why – and this is the second cliché – we need to stop reducing the debate to an old opposition between “German rules” and “French spending”. In the face of German fears, which I understand, I want to make a clear pledge: there is no question in my eyes of creating a “transfer union” that would only benefit certain countries, or of creating eurobonds that would equate to a pooling of debt. Need I remind you that France is also a net contributor to the European budget and that its public deficit is well below the 3% ceiling? But in light of the current deterioration in the economic outlook, those countries with the fiscal space should “act in an effective and timely manner”, according to the ECB Governing Council which was unanimous on this point in September. Economic studies show that public spending has a bigger impact on the economy when three conditions are met: (i) when spending is focused more on productive public investment, such as infrastructure and R&D, than on current expenditure; (ii) second, when monetary policy is close to the interest rate lower bound, as there is less crowding out of private investment; (iii) and last, when countries have low levels of public debt.

The second pillar is related to the regulatory framework of the activity of the banking system, therefore, related to the day to day activity of the Bank of Albania and the banking system. 2  BIS central bankers’ speeches  We have identified the regulations that will be subject to amendments. In addition to the objective for creating higher flexibility in relation to certain aspects of the activity in the treatment of the credit portfolio, we will aim at adopting a new concept: the “background check (biografi)” of the client in relation to bank borrowing. We believe that this new element will help banks assess the borrowing potential of each client. In spite of what I said above, it is a fact that, recently, lending in the national currency has seen positive growth over the months. This phenomenon, among others, has been accompanied with a positive side effect at a higher speed and intensity in the pass through mechanism of the monetary policy in the economy. Dear guests, As I pointed out, at the beginning, economic activity at home remains in a positive trajectory, but it has not yet reached the level we wish it were. Research at the Bank continues to confirm that the Albanian economy has unutilised potential and that the closing of the gap remains the main challenge for policymakers. Interventions through both the monetary policy and macro-prudential elements insofar have not succeeded to definitively close the gap.
On the fiscal side, the authorities can cut taxes or increase spending to support income and demand during the deleveraging phase that follows the financial crisis. But the ability of such stimulus to continue to support economic activity ultimately encounters budgetary limits. For example, the need to keep the long-term fiscal trajectory on a sustainable path limits the size and duration of federal fiscal stimulus measures. For state and local governments, the statutory requirements for balanced budgets meant that fiscal policies turned restrictive relatively quickly once budget surpluses and rainy day funds were exhausted, and this was only temporarily mitigated by federal transfers to the states as part of the initial fiscal stimulus program. Fiscal policy is now a drag rather than a support to growth in the United States, and this will likely continue. BIS central bankers’ speeches  3  Monetary policy I would give each of these four explanations some weight for why the recovery has been consistently weaker than expected. But I would add a fifth, monetary policy, while highly accommodative by historic standards, may still not have been sufficiently accommodative given the economic circumstances. Now let me be clear. I believe the evidence overwhelmingly indicates that our monetary policy has been effective in easing financial conditions and supporting economic activity.

I believe that we would all be better off if the system evolved toward more flexible exchange rates and greater monetary independence in the EME world. Notwithstanding this, we can and do pursue our monetary policy objectives in the United States ever mindful of how our policy choices affect other parts of the global economic system, recognizing that these impacts will, in turn, influence U.S. economic outcomes. For the Federal Reserve, pursuing the dual mandate of full employment and price stability allows us to make an important contribution to global stability and growth. Ensuring low and stable inflation preserves the purchasing power of the dollar and sustains its attractiveness as a medium of exchange. Supporting maximum sustainable employment means that we have an important growth mandate. This remains the case even when we are at the so-called zero bound with respect to shortterm rates. In this context, I believe that our large-scale asset purchase programs were fully consistent with our global responsibilities. For example, our recent program to purchase $ billion of Treasury securities sought to prevent a relapse into recession and to lessen the risk of deflation – outcomes that would have been very damaging to global economy. I do not mean to dismiss lightly the concerns raised by some EMEs about the program. By removing long-duration Treasury assets from private investors’ hands, we encouraged those investors to purchase other assets, including foreign assets. This eased U.S. financial conditions and, thus, boosted U.S. demand for both domestically and foreign-produced goods.