samchain/econo-pairs-v1 huggingface dataset:
4  BIS central bankers’ speeches  Federal Reserve’s role in financial intermediation – particularly if it were permanently in place – by expanding the Federal Reserve’s presence in short-term funding markets or potentially altering the structure and functioning of money markets in unanticipated ways. 10 These risks are likely small given the sizable level of excess reserves currently in the system, which establishes the Federal Reserve’s large footprint in money markets. However, the risks associated with offering a perfectly elastic supply of ON RRPs at a fixed rate could increase as the level of excess reserves declines over the course of normalization and an ON RRP facility becomes less important to support interest rate control. These risks inform the Committee’s desire to phase the facility out when it is no longer needed to control the federal funds rate. Indeed, money market rates should become more closely aligned with the IOER rate as the quantity of reserve balances in the system approaches greater levels of scarcity, likely reducing the need for supplementary support from an ON RRP facility. And since ON RRPs just swap one Federal Reserve liability for another – reserves for reverse repos – demand for RRPs should recede as the asset side of the Fed’s balance sheet shrinks.

The difference between the sale price and the repurchase price, together with the length of time between the two legs of the transaction, implies a rate of interest (the reverse repo rate) paid by the Federal Reserve to its counterparty. The transaction leaves the size of the SOMA’s securities portfolio unchanged, but shifts some of the liabilities on the Fed’s balance sheet from bank reserves to reverse repos while the trade is outstanding  7  Unlike IOER, however, a full-allotment ON RRP facility would theoretically offer a perfectly elastic supply of a safe asset at a fixed rate. In practice, the amount of ON RRPs that the Federal Reserve could supply would likely be limited by the lesser of the level of excess reserves or the amount of securities available from the SOMA portfolio for such transactions. BIS central bankers’ speeches  3  point target, is viewed as appropriate for providing some flexibility in interest rate control when the quantity of reserves remains elevated. As for the Fed’s tools for policy implementation, setting the IOER and ON RRP rates at the upper and lower bounds of the target range is a straightforward arrangement at the start of policy firming.
However not all the initiatives that have arisen in response to this demand have the same impact on banking business. Allow me to introduce some nuances. 1. First, it is important to understand that, rather than projects that directly compete with banks, some of these technological innovations are in fact operational tools or improvements that credit institutions can incorporate into their own operations. Without giving an exhaustive list, this would, for example, be true of the use of technology to analyse so-called big data i.e. the analysis at great speed of a massive volume of data also generated at great speed and obtained from many sources. There are businesses that, with this tool, are capable of analysing or predicting customer behaviour using a large amount of unstructured information. This technology has many applications in the field of banking. In fact, one of the main assets of credit institutions is the information they have on their customers. Properly harnessed, this information would enable them to better know their risk profile and their preferences and needs, and thus to adapt the offering of financial products for the benefit of both parties. Moreover, banks have an invaluable asset, namely the confidence of bank customers in the confidentiality of their transactions which, as I will mention later should be nurtured and properly valued.

At the same time, the existence of fierce competition for good customers makes it difficult to raise lending rates. A second factor putting pressure on profitability is the still low level of banking activity. In fact, despite the improvement in recent years, year-on-year growth in lending to the private resident sector remains negative, standing at -4% at the end of 2016. Another factor is the still significant volume of non-productive assets (non-performing and foreclosed) on bank balance sheets. The good news is that this volume is falling – last year it fell by 9% –, which translates into lower provisions. Finally, as a result of the financial crisis there has been an increase in the regulatory pressure to which banks are subject. The tightening of the minimum capital requirements for banks, in terms of quantity and quality, has not been accompanied by an equivalent reduction in the perception of the riskiness of banking business, so that its cost of capital remains high and exceeds its profitability. Moreover, the stricter prudential requirements are compounded by the obligation to comply with the new resolution regulations, which requires banks to have a minimum level of liabilities enabling losses to be absorbed should this be necessary (MREL). Again, complying with this minimum volume of liabilities will not be cheap and may in fact be particularly difficult for those banks which, as a consequence of their business model, do not have the necessary experience of issuing this type of instrument.
Sources: Statistics Sweden and the Riksbank  10. GDP gap, September and in real time Per cent 6  6  4  4  September 2011 Real time  2  2  0  0  -2  -2  -4  -4  -6  -6  -8  -8 05  06  07  08  09  10  11  12  13  Note. September 2011 refers to the PF gap. Real time refers to the HP gap except from October 2010 and onwards when the PF gap is used. Sources: Statistics Sweden and the Riksbank  BIS central bankers’ speeches  13  11. Capacity utilisation Per cent, seasonally-adjusted data 100  100 Capacity utilisation in the manufacturing sector  95  95  Mean, 1996-2008  90  90  85  85  80  80  75  75  70  70 95  97  99  01  03  05  07  09  11  Source: Statistics Sweden  12.

2  BIS central bankers’ speeches  The Riksbank’s calculations of potential GDP Resource utilisation can be measured in several different ways. Here, I will demonstrate how we, at the Riksbank, calculate measurements of resource utilisation based on GDP and potential GDP, as well as hours worked and potential hours worked. Potential GDP refers to the level of GDP that is consistent with a use of the available resources that is sustainable in the long term and that does not push up inflation. If GDP exceeds the potential level, then resource utilisation is high – and vice versa. We call the difference between actual and potential GDP the GDP gap.6 When resource utilisation is normal, GDP is equal to potential BNP, and the GDP gap is equal to zero. Consequently, potential GDP does not refer to the highest level GDP may reach over the short term. In Figure 1, the trend development of GDP is represented by a Hodrick-Prescott trend (HP trend). An HP trend is something between a linear trend and the actual development of GDP. The HP trend is a common and often fairly good measure of the underlying long-term development in GDP during normal cyclical fluctuations. But the HP trend is not good at estimating the underlying development of GDP at the end of a time series and it gives no guidance as to why output deviates from its trend level.
Today, we can easily say that payment and settlement system in Turkey is at par with its counterparts in developed countries promoting the efficiency and effectiveness of the financial system. Distinguished Guests, Removing market imperfections is essential for the smooth operation of financial system. In this context many central banks have been involved in addressing information problems experienced in credit markets. At this point I will draw your attention for a few minutes to the asymmetric information problem, which can lead to credit rationing. It is known that obtaining credit information to ensure sound-lending activities is a costly procedure requiring an efficient monitoring process. The lack of adequate information about a borrower’s credit solvency and the viability of a project may raise screening and monitoring costs for banks. This situation sometimes leads banks to cut credit supply or make them reluctant to supply loans. Of course, collateral based lending could ease banks’ reluctance as it partially reduces the risk involved in lending. However, collateral may play a limited role in the case of small and medium size enterprises since they are less likely to possess appropriate collateral. In order to improve exchange of information on credit history of a borrower, regulators of many countries have actively involved in setting up public credit bureaus. In Turkey, the Central Bank took the lead in setting up the Risk Center of Turkey in 1951. The Risk Center has been operating within the Central Bank since then.

Regulatory and supervisory authorities should strengthen prudential and other financial market regulations in order to deepen financial markets and improve investment climate, whereas central banks should focus more on greater currency flexibility and price stability. In conclusion, as a central banker, I would like to highlight three key messages from the thoughts I have shared with you. First, to achieve price stability, central banks need to ensure efficiency of financial infrastructure and maintain smooth operation of financial services. An efficient and effective payment and settlement system is at the core of financial infrastructure. Second, removing market imperfections is essential for the smooth operation of financial systems. Establishment of credit bureaus to improve exchange of information on credit history of economic agents and reducing fiscal dominance are important steps to ensure sound-lending activities. In this context, the role of micro finance in promoting the access of the low-income segment of the society to credit should be supported and encouraged. Third, the overall level of external financing and its composition is important for domestic access to finance. The benefits of capital inflows to economic growth would be higher with a developed financial sector. Central banks could best support this process through their contribution to macroeconomic stability. Thank you. 4  BIS Review 21/2008
Completing Europe’s capital markets union (CMU) will be key to financing the green and digital transitions. Equity investors tend to have a greater appetite than banks for high-risk, high-return projects and equity finance tends to increase green innovation. [12] But the full and swift implementation of the Commission’s ambitious CMU Action Plan will be crucial here. Some progress is being made. The Commission has recently put forward proposals on harmonising national insolvency laws and facilitating public listing. It is also tackling issues that have held back the growth of European capital markets, like putting equity financing on an equal tax-footing with debt financing. And Europe’s recent agreement on a minimum level of taxation for large corporates will support tax harmonisation within the EU, the absence of which has often been seen as a barrier to capital market integration. [13]  The third big challenge facing Europe is the high inflation environment. And this, of course, is the challenge that concerns me the most. Inflation in Europe is far too high, partly due to our vulnerability to the changing geopolitics of energy. Decoupling from Russia last year pushed up energy inflation in the euro area to extraordinary levels. But while energy inflation has recently been coming down, underlying inflation continues to rise. As a result, it is vital that inflation rates above the ECB’s 2% target do not become entrenched in the economy. We must bring inflation down. And we will deliver on this goal.

While individual jurisdictions may be confronted with specific challenges of implementation that may arise from differences in economic and market structures, there is also much in common, particularly among emerging economies, that can be shared among jurisdictions. The period of observation on some of the components of the reform package provided by the Basel Committee is welcomed. It will allow jurisdictions to consider appropriate actions needed to support the effective implementation of the reforms. At the same time, there is an expectation that there will be a willingness by the international standard setting community to adjust or otherwise supplement current prescriptions, frameworks or implementation strategies as more experience is gained under changing market conditions. The effective implementation would also require support for the implementation of the reforms, particularly in the area of capacity building, particularly in the emerging and developing world. Inclusive communication channels with the market and an inclusive process of global consultations will allow us to benefit from the experience of others and, more importantly, facilitate more coordinated policy responses and thus support the orderly adjustments to the new standards. While the evolution of financial stability policies over the recent two years has seen clearer mandates being established for the regulatory authorities, the framework for financial stability both at the national and international levels continue to be a subject of intense discussion.
The situation remains highly unstable and the market is showing little confidence in the European leaders’ resolve and ability to bring an end to the debt crisis. The situation is very worrying. 6. Once a country gets into the habit of spending beyond its means, relying on debts to finance its expenses and rolling over old debts with new ones, it is a matter of time that the country would run into trouble. The only way out is to reduce debt and endure the excruciating pain of de-leveraging. While leveraging or borrowing normally produces intoxicating feel-good effects, such as job and income growth, buoyant consumption and investment, strong credit demand, asset value appreciation and business boom, deleveraging has exactly the opposite effect, creating very unpleasant and painful consequences. The injection of ample liquidity into the banking system by central banks to suppress interest rates is certainly helpful in alleviating the pain of those debtors who can refinance their loans with lower interest rates and thus reduce their interest and repayment burden. However, many households in the US are denied access to cheaper and falling mortgage rates because they are in negative equity and cannot afford to refinance. Lower interest rates are thus of little help to them. Moreover, pushing interest rates to close to zero also deprives prudent savers of the interest income that they can earn from their savings. Many savers, including pensioners, have to cut back spending because of the sharp fall in their recurrent interest income.

This will strengthen its position as a global leader in wealth management. BIS Review 110/2008  1
Mr. Meyer addresses the competitiveness of financial centres from a Swiss perspective Address by the Chairman of the Governing Board of the Swiss National Bank, Mr. Hans Meyer, at the International Bankers Club Luxembourg, held in Luxembourg on 23/3/98. Both Luxembourg and Switzerland are major financial centres in Europe. The performance and competitiveness of the financial services industry are thus of key economic and social importance to both countries. I should like to use this opportunity to say a few words on the subject from what may be a somewhat unusual perspective. The factors which determine the competitiveness of an industry are basically the same as those determining the success of the entire economy. In both cases, we are looking at a multitude of quite diverse factors with varying degrees of importance. Today, I would like to single out just three of them which I believe are of particular significance: economic stability, social equilibrium (i.e. political stability), and the human factor. Although each of these elements could be dealt with separately, they should ultimately be viewed in a broader context. Let’s start with economic stability. I define this as a state of balanced development across the economy as a whole, characterised by steady growth, a modest inflation rate and low unemployment. One of the main prerequisites for achieving such a state is the ability not only to create but to sustain an appropriate economic framework. This is primarily an objective for monetary policy, fiscal policy and competition policy.

I have already spoken about the general prerequisites needed for a financial market to flourish. Within the scope defined by the operating conditions mentioned, market players are basically responsible themselves for what they do or don’t do. Their prime concern is to stay solvent at all times by adopting sound business practices and putting an effective organisation in place. To prevent problems from occurring, the responsible bodies at the individual banks must be able at all times, and with a minimum of delay, to accurately assess their risk situation and to take rapid and appropriate action. Of course, it is never possible to rule out the possibility of an individual bank running into difficulties. In such cases, a solution must first be sought through the market. Solidarity among the other market players should provide a “first line of defence”. Seeking funds from the central bank can only be contemplated in the last instance - hence the expression “lender of last resort”. Obtaining credit from the central bank presupposes that the liquidity requirements are only temporary. If the solvency of a BIS Review 26/1998  -4bank is in peril because of a threat to its capital, the problem is a matter for the supervisory authorities and possibly for the state itself. In practice, the boundary between liquidity and solvency problems can be a fluid one. In my view, it is important for everyone involved not to lose sight of these principles which are in fact quite simple.
If we rely on strong macroeconomic policy, the principles of an open economy and future-looking investment, Estonia will continue to have all the possibilities for defeating the crisis. But what are the national economy level measures the government should take and how should they support the financial system? Here I start with a firm standpoint that the fixed exchange rate of the kroon to the euro is the pillar of Estonia's economic policy and the accession to the euro area as soon as possible is its logical continuation. The experience of the past half a year show that monetary policy that is based on the fixed exchange rate and the currency board supports economic stability also in more difficult times. But how does the fixed exchange rate help us overcome the crisis? First of all, it helps stabilise inflation expectations and stop price rises. Price corrections after the accession to the EU were sharper then we expected. The opening of the labour market and price rises of many goods in the global market had a strong impact on Estonia. This stage, which was, in a sense, unavoidable and paradoxically also the result of successful reforms at the start of the century, is now over. The price level is expected to decline somewhat both this and next year. Second of all, the currency board arrangement brought about a relatively fast correction in several sectors of the economy, which displayed clear signs of overheating after the accession to the EU.

The sustainability of fiscal policy is very important for restoring confidence in Estonia and adopting the euro. When looking at the changes made in the budget this year and at the new fiscal strategy, it has to be pointed out that the support of fiscal policy to the economy was remarkable in 2008. The state budget swung from a 2.7% surplus to a deficit in the course of one year. This year, the share of state expenditures in GDP may rise to 43%. Thus, it is important to ensure fiscal sustainability this year and also in the next years. Thereafter reserves must be restored. In Eesti Pank's estimate this means an extra 7 billion kroon cut in addition to the curtailments already made. Actions related to fiscal policy must be decisive, but thoroughly considered. I am not so pessimistic as to absolutely agree with the opinion that the government has reached the stage where it faces just "bad and very bad solutions". But it is also clear that there is no simple or simplified way to rekindle growth. Measures need to be taken on both the revenue and the expenditure side. But I think it should be kept in mind that it is state expenditure that has soared over the past years. On the other hand, the tax burden that has been relatively stable so far is one of the main strengths of the Estonian economy, leaving sufficient room for private initiative. To conclude, I will repeat the main message of Eesti Pank's spring forecast.
Today’s key interest rate cut aims at providing a further boost to consumption and private investments, creating premises for lower financing costs in the banking sector. Data on public sector performance refer to the first four months of the current year. Revenues increased 9.1%, in annual terms, while spending shrank 5.9%. This performance materialised in the budget deficit of about 73.1% lower than a year earlier. A similar dynamics, though less intensive, is expected to persist in the months ahead. Consistently,  BIS central bankers’ speeches  1  the Bank of Albania has been in favour and has endorsed the consolidation path of fiscal policy, deeming that such policy contributes to the reduction of risks in the economy. Developments in the external sector led to an annual expansion of the trade deficit by 8.7%, during the first quarter of 2014. Albanian exports grew 11.6%; yet, the trade deficit expansion was determined by a 10.1% annual increase in imports. A more detailed analysis of trade developments shows that trade deficit expansion was attributed almost entirely to the increase in electrical energy imports. Albanian exports’ growth, however, was driven by the gradual improvement of foreign demand and depreciation of the real exchange rate over the past years. A steady improvement in this area should be anchored in structural reforms supporting the increase in productivity, development of Albania’s comparative advantages and reduction of vulnerabilities in certain sectors of the economy.

Who better to deliver this year’s MAS Lecture than the chief architect and prime mover behind that far-sighted policy: Dr Zhou Xiaochuan Dr Zhou needs little introduction. We secured his agreement to deliver the MAS Lecture just three weeks ago. The letters of invitation went out two weeks. The fact that more than 500 of you are gathered here at short notice is testament to Dr Zhou’s reputation as a visionary leader who shaped China’s financial reform agenda. Still, it would be remiss of me if I did not briefly highlight the key milestones in Dr Zhou’s distinguished career in public service spanning more than 30 years. He held leadership roles in the Bank of China and the China Construction Bank. He served as Administrator of the State Administration of Foreign Exchange (SAFE) and Chairman of the China Securities Regulatory Commission (CSRC). And of course – what he is most well known for – he served as Governor of the People’s Bank of China (PBoC) from 2002 to 2018, the longest-serving Governor of 1/2  BIS central bankers' speeches  the PBoC. Dr Zhou became one of the most respected central bankers on the international circuit. In February this year, Dr Zhou was awarded the Lifetime Central Banking Award by London-based publication Central Banking, a most fitting recognition of his contributions to the Chinese economy and financial sector. From a bilateral perspective, during Dr Zhou’s tenure, the PBoC and MAS forged close ties and deepened financial and regulatory cooperation.