samchain/econo-pairs-v1 huggingface dataset:
Krzysztof Rybiński: Globalisation and its implications for monetary policy Speech by Mr Krzysztof Rybiński, Deputy President of the National Bank of Poland, at a series of seminars by the Centre for European Regional and Local Studies and the UNESCO Chair, Warsaw University, Warsaw, 6 April 2006. *  *  *  Ladies and Gentlemen, Globalisation is a term used frequently in the economic debate nowadays, and it would be difficult to find an area of economic research that is “globalisation-free”. However, its meaning is so broad, that when globalisation is referred to in a discussion, various people understand various things. For this very reason, a discussion on globalisation and the monetary policy should commence with an attempt to define the term. One of the definitions of globalisation is provided by the International Monetary Fund (IMF) 1 , where it is construed as “the growing interdependence (integration) of national economies, in particular as a result of the growing international trade and financial flows”. Moreover, an element of globalisation that is worth mentioning is the fast flow of information and knowledge, which is the driving force behind globalisation processes. One should keep in mind that globalisation is not a completely new phenomenon 2 . In view of the existence of political barriers to international trade, the flow of capital and goods was equally as possible one hundred years ago as it is today.

Or is it a natural phenomena? Are players in the industry not aware of the benefits? Or are they aware of the benefits, weighed it against the potential risks and decided not to pursue this strategy because of business and operational reasons? First let’s analyze the potential benefit. For example, a Bank enters into a joint venture with a housing developer. The financing of the project in the form of equity can yield a lucrative return when the development is completed and then sold. Margin for profit upon sale can be high, as Bank enters into the development at the earliest chain of production. The Bank can still provide financing for the home purchasers, the difference this time – the homes are the Bank’s own asset. Those are direct impact; there are positive impacts in other key areas as well. What happens to the profit from sales and financing? It gets channeled back to Depositors (giving them higher returns on the deposits). This concept would, completely, according to equity-based financing proponent, move Islamic banks away from mimicking conventional products and would truly operate as the shariah had wanted it. Is this true, are there any other factors to be considered? In terms of risk assessment, such a transaction will necessarily inject greater market discipline among industry players. This business model is premise on a few fundamental assumptions.
Interest income grew by 162% over the year and interest expense by 178%. In total, interest income increased by 15.6 b.kr. and interest expense by 13.7 b.kr. to leave net interest income of 1.9 b.kr. Operating expenses, i.e. salary and payroll expenses and other operating expenses, were 1.5 b.kr., depreciation 90 m.kr. and a supplementary contribution to the Bank Employees’ Pension Fund 386 m.kr., in accordance with an agreement between the Fund and its member organisations. By law, the transfer to the Treasury is calculated as one-third of net profit, i.e. 16 m.kr. Profit after transfer to the Treasury but excluding exchange rate gain therefore amounted to 32 m.kr. In 2006, the Central Bank's balance sheet total increased by 159 b.kr. to almost 322 b.kr. at the end of the year. The main explanation is that total Treasury deposits in the Central Bank rose by 135 b.kr. over 2006 to 211 b.kr. at the end of the year. The balance on Government current accounts increased by 47 b.kr. and the deposit in the foreign currency account amounted to 94 b.kr. at the end of the year. Most of the foreign currency deposit is accounted for by the € billion loan taken by the Treasury towards the end of the year to boost the Central Bank's foreign reserves. Notes and coin in circulation grew by 10% to 14.5 b.kr. and the Central Bank's liabilities towards deposit money banks by just over 10 b.kr.

Mr. Yam speaks on defending Hong Kong’s monetary stability Speech by the Chief Executive of the Hong Kong Monetary Authority, Mr. Joseph Yam, JP, at the TDC Networking Luncheon in Singapore on 14/10/98. … As I am sure you have noticed, Hong Kong, and specifically the involvement of the Hong Kong Monetary Authority (HKMA) in the stock and futures markets in August, has been the subject of some controversy recently. This is understandable, for Hong Kong has always been in favour of leaving markets alone, as much as possible. Indeed, Hong Kong has for many years been named as one of the freest, if not the freest, markets in the world. For the authorities in Hong Kong to go into the stock and futures markets to buy shares and stock futures contracts in such a big way naturally came as a surprise to every one, apart from the few of us who had the unenviable task of taking the very difficult decisions. Clearly the responsibility of public office includes taking difficult decisions in the overall public interest, and one must take them with courage and execute them with commitment. Furthermore, one must also try one’s best to explain the rationale behind them, and be transparent in, and accountable for, the actions taken. Difficult and controversial decisions can be easily misunderstood, even by the most learned man on earth. So we need to present the arguments patiently and clearly. This has not been easy.
Adequate reporting requirements were also imposed to monitor large cross-border flows of currency. “Know-your-customer” guidelines were issued to the banks as far back as 2001. However, the ever increasing sophistication with which criminals and terrorists operate globally have made our task to fight financial crime and terrorist financing even more daunting. In the final analysis, it is clear that, the financing of crime and terrorism is one of the most important dimensions of the physical violent acts unleashed by terrorists in the form of suicide bomb attacks, killing of innocent civilians, etc. This realization should confirm to us that very often we may be able to, through our collaborative efforts, prevent acts of terrorism by preventing the financing of crime and terrorism. If we can do that effectively, perhaps more than three fourths of the battle may be won. Without finances to equip themselves with sophisticated arms, intelligence, equipment, skills, machinery and techniques, terrorism will surely be on the wane. This then, is a fact that we must always be mindful of. 9/11 shocked the world. At the same time, it also united the world in its quest to defeat terrorism and eradicate financing of terrorism. Post 9/11, the whole world has renewed its battle against, this ever growing threat of terrorism. Until then, in a sad sort of a way, we in Sri Lanka, used to think that we were fighting this battle alone.

The firming and intensification of these trends will largely depend on developments in the Spanish economy and on recovery taking root. The outlook for the economy remains favourable; so far, it has proven resilient to an external environment in which growth forecasts for the global economy have been revised downwards, and in which the recovery in European countries – those most important for our economy – has lost momentum. Thus, on the domestic front at least, it would be necessary to embed the reforms under way, thereby enhancing our capacity for recovery. 2  BIS central bankers’ speeches  The start-up of the Single Supervisory Mechanism Among the challenges posed by the SSM is that of attaining quality bank supervision, applying strengthened and uniform standards and making the most use possible of the acquired knowledge of the various national authorities, while setting in place a common supervisory culture. In light of the work undertaken to date and the intense collaboration between the ECB and the national authorities, these goals are realistic. The Banco de España is striving to ensure this is a successful process, cooperating with the ECB and the other SSM participants. We have adapted our organisational arrangements and working methods to smooth interaction with the SSM and the ECB. A further key challenge will be to maintain a level playing field in the member countries, applying uniform supervisory principles. That is a major challenge, given that in Europe there is a wide diversity of banking models and legal systems.
Our fourth and final PoC in this category, also announced today with Digital Reasoning will examine the extent to which analysis of the large quantities of weakly-structured textual data on regulated firms available from multiple public data sources can yield insights on intent and sentiment. The PoC will look at whether those insights are capable of complementing analysis of more formal data reporting. Cyber security (2 PoCs) The Bank, in common with other major financial institutions, spends a lot of time on cyber security – both for its own systems, and in terms of its requirements and expectations of regulated firms. Much of this takes place as part of the Bank’s core work programme, but a number of more exploratory exercises have taken place through the Accelerator. In particular, we undertook a PoC with BitSight aimed at assessing the extent to which a firm’s cyber resilience can be evaluated using publically available data. And we worked with Anomali and ThreatConnect to explore ways of consolidating threat intelligence into a format that can be used to optimise information collation, enrichment and sharing. 8  All speeches are available online at www.bankofengland.co.uk/speeches  8  Non-PoC work of the FinTech Accelerator  In addition to enabling PoCs, the Accelerator team has also been able to leverage off the contacts and relationships made with firms and public authorities in the UK and overseas to provide a wider intelligence-gathering and horizon scanning function on FinTech to inform the Bank’s policy and operational work.

The rapid transformation of economic structure and the development of interbank markets and economic agents were coupled with fundamental changes in the monetary policy transmission mechanism. The latter has now become more complex, involving more players whose sophistication is ever-increasing, and incorporating more instruments and financial contracts that are timely structured and indexed to different indicators. The Albanian economy is now economically and financially integrated into the global economy, having the characteristics of a market economy but at the same time featuring the typical challenges of economic management that such an economy entails. These changes have called for the constant monitoring by the monetary authority in order to make the necessary changes in the monetary policy regime and the operational aspects of its implementation. Against this background, the Bank of Albania has been committed to a process of constant evaluation of the interbank market performance and at the same time fine-tune its monetary policy regime. The Monetary Policy Document for the 2009–2011 Period was a major step in this regard. In this Document, the role of monetary aggregates as indicators of inflationary pressures in economy and as intermediate targets of monetary policy was complemented with a wide range of information provided by the real sector of the economy, which is systemized and finalized in the inflation forecast performance. This change was entirely based on the Albanian experience.
But they could also exacerbate inflation if the domestic exchange rate weakens. Adding to the complexity is that monetary policy operates with long lags. If policy is tightened at a pace that does not take into account the effects of previous hikes, we risk a deeper economic downturn or financial stresses. But if policy tightening ends prematurely, we risk destabilising price expectations, entrenching inflationary pressures, and eroding central bank credibility. Of course, the question of how fast core inflation can return to central banks’ target bands is contingent not just on monetary policy. The speed of disinflation is subject to three near-term uncertainties: labour market dynamics, China’s re-opening, and a surge in food and energy prices. The first uncertainty is labour markets: continued labour market tightness could lead to persistent services inflation, especially in the advanced economies. COVID-19 presented the ultimate supply shock for labour markets across the world, as workers exited the labour force in large numbers. Even with the return of most workers post-pandemic, sectoral labour shortages remain severe in many countries, especially in contact-intensive industries such as retail trade, food, hospitality, and manufacturing. With labour markets persistently tight in most advanced economies, nominal wage growth has been robust. There are three possibly structural factors driving tight labour markets and wage pressures. First, workers have been moving away from low-wage services jobs and moving up the occupational ladder, generating worker shortages in these services jobs.

So the message is: consumers of financial services have to be responsible for the decisions they make and the consequences of such decisions. Think twice before you sign on the dotted line. Conclusion To conclude, the key takeaways are: •  banks must treat customers fairly by looking after their interests and not treating them just as target of sales; and  •  bank customers must learn to become “smart” as well as “responsible” consumers of financial services. Then how do we go about in achieving these two objectives? For banks, the HKMA will ensure that there is a set of robust but fair rules governing banking conduct. We will enforce these rules vigorously through on-site examinations and off-site surveillance. We will investigate and, if appropriate, take enforcement action against breaches when they are reported by customers or detected by the HKMA. But we appreciate no external forces can be as effective as internal controls and culture in guarding against breaches. We therefore consider it important for the boards and senior management of banks to share and cherish the same value as we do in terms of treating customers fairly.
Risks and Opportunities  0.62  0.00  0.41  b. Impact on Organisation  0.79  0.00  0.42  c. Resilience of Strategy  0.82  0.00  0.40  a. Risk ID and Assessment Processes  0.54  0.00  0.40  b. Risk Management Processes  0.87  0.00  0.42  c. Integration into overall Risk Management  0.66  0.00  0.40  Strategy  Risk Management  Metrics and Targets a. Climate-Related Metrics  0.70  0.00  0.41  b. Scope 1,2,3 GHG Emissions  0.82  0.00  0.42  c. Climate-Related Targets  0.99  0.00  0.43  This still nascent field will be important to understanding the utility of different climate disclosures. To this end, the Bank will continue its research. Third, we must spread knowledge on how to measure and use information on strategic resilience to manage risks and realise opportunities. Consistent with the Paris Accord’s objective to stabilise temperature increases to below two degrees, many governments are now committing to reaching net zero carbon by 2050. In convening this Summit, Prime Minister Abe has rightly highlighted the enormous investments that will be necessary to deliver these objectives. 8  All speeches are available online at www.bankofengland.co.uk/news/speeches  8  With an estimated US $ trillion of infrastructure spending expected between 2015 and 2030, the right decisions now can make sure those investments are both financially rewarding and environmentally sustainable. There has been a recent surge of environmentally focused investment funds.

While in 2017 the non-financial sectors (energy, transport, building and agriculture) led the way, banking is now the most advanced sector in disclosing information. Chart 3: Rates of disclosure against each TCFD recommendations by industry  Banking  Insurance  Energy  Materials & Buildings  Transport  Agri, Food & Forest  Tech & Media  Consumer Goods  a. Board Oversight  48%  29%  38%  37%  25%  22%  19%  29%  b. Management's Role  54%  35%  32%  35%  18%  26%  17%  40%  a. Risks and Opportunities  51%  39%  57%  50%  39%  40%  38%  50%  b. Impact on Organisation  55%  26%  64%  65%  34%  45%  25%  52%  c. Resilience of Strategy Risk Management a. Risk ID and Assessment Processes b. Risk Management Processes c. Integration into overall Risk Management Metrics and a. Climate-Related Metrics Targets  20%  12%  13%  12%  5%  4%  2%  6%  52%  30%  38%  41%  23%  24%  24%  22%  46%  33%  42%  39%  17%  26%  19%  23%  32%  16%  21%  18%  11%  9%  17%  21%  51%  27%  49%  63%  36%  45%  37%  55%  b.
At the same time, we have the tool of forward guidance, which we have used and later reaffirmed: with regard to the inflation outlook, based on current data we expect that the central bank interest rates in the euro area will remain at the current level for an extended period. In addition we have taken a number of targeted unconventional measures which should improve the monetary policy transmission mechanism. One of these is targeted longer-term refinancing operations (TLTROs), with which banks can obtain liquidity for a fixed interest rate for up to four years. We have drafted two purchase programmes, one for covered bonds and one for asset-backed securities (ABS). The purchase programme for covered bonds started in October. So far purchases of around € billion have taken place. We started the ABS programme just last week. I anticipate that together the longer-term refinancing operations and both purchase programmes will have a strong impact on the balance sheet of the Eurosystem. Innovation or imitation Every month there are fresh calls for further measures. But is it appropriate to contemplate further measures at this moment in time? Under normal conditions, central banks are in a position to ensure price stability in an environment of positive nominal interest rates by means of conventional interest rate policy. Once interest rates are at zero, a central bank is left with only unconventional measures in order to fulfil its mandate. Central banks all over the world have indeed been anything but idle.

How innovative is an ECB allowed to be, which as a start-up from the year 1999 is in many ways itself an innovation, and as a custodian of a currency without a state can only partly be compared with other central banks. Of course I can only give you today, less than a week before our ECB Governing Council meeting, some general reflections from my personal point of view. I think we can all readily agree that innovation cannot be an end in itself. The ECB must and will act only in accordance with its mandate. Price stability is the guiding principle of our actions. The definition of our mandate does not allow for innovations. Moreover, in uncertain times of crisis a clear focus is not less, but doubly important. Central banks therefore have a particularly strong understanding of tradition, and for a good reason: monetary policy is all about trust, reliability and consistency. Innovative measures must therefore be judged against our mandate of maintaining and creating price stability. As with any decision, innovation demands a sober analysis of the costs and benefits, the opportunities and risks. Allow me to slip briefly into legalese: innovative monetary policy measures, too, should be suitable to achieve their objective. Since monetary policy measures also have side effects, a central bank should use the mildest means to achieve the fewest possible side effects. Low inflation rates and the catalogue of measures So what does this mean for the current situation? Unanimous monetary policy can and must maintain price stability.
Many financial institutions are still deleveraging – a factor in why we are seeing too little lending rather than too much. Real estate can be a very important asset because it serves as collateral for many loans. However, in the current situation both residential and commercial real estate are, at best, stabilizing. 5  Banks must, of course, maintain their capital ratios. As some banks have taken significant losses that drained capital, they have been reluctant to expand lending, so that the supply of loanable funds has likely been constrained. But this supply-side effect has been exacerbated by the credit condition of potential borrowers in the wake of the Great Recession. Even for banks that are less capital-constrained, with the balance sheets of many potential borrowers in much worse shape than they were before the recession, lenders making prudent lending decisions will be reluctant to lend to high-risk potential borrowers. 4  BIS Review 62/2010  Even if we were to see asset prices rising, it is not obvious that somewhat tighter interest rates will make a significant difference. A more targeted approach would be to examine whether supervisors should require tighter lending standards, or higher capital requirements, in areas where asset prices are appreciating rapidly. This would make sense from the perspective of good risk management – if institutions hold assets that appreciate quickly, they should retain sufficient capital and be vigilant in credit standards to insure that they can weather a quick reversal in asset prices.

4 Such a growth rate has some historical precedent, as shown on the right side of the chart, but it is much faster than the growth rate in the past two recoveries. And to reach 5 per cent unemployment by 2015 would still take growth averaging 4.2 per cent per year – considerably faster than the average rate of growth after the 1991 and 2001 recessions. Given the need for very rapid growth to get unemployment back to 5 per cent, let me pose an oversimplified question – why would policymakers not keep monetary policy very accommodative, and fiscal policy very stimulative, until we had a sustained growth rate that brought the economy much closer to full employment? At least on the monetary side, one reason might be concern among policymakers that rapid growth would be inflationary. To explore that, let’s turn to Figure 7, which shows the total and core inflation rates, measured by changes in the CPI, with recession shading. What the chart shows is that inflation has declined in each recession, including this so-called Great Recession. It also highlights that inflation tends to continue falling in the early stages of a recovery. Figure 8 shows the change in the inflation rate from the business cycle peak. From the peak (shown at zero on the horizontal axis) the inflation rate is very restrained, and generally negative, for many months.