samchain/econo-pairs-v1 huggingface dataset:
So one of the secrets to making this new supervisory approach a success will be the accumulated experience of supervisory staff. That means having staff with a nose for a crisis (like a hedgehog) as well as ears and eyes (like a fox). Therein lies a dilemma. Galbraith observed that: “There can be few fields of human endeavour in which history counts for so little as in the world of finance.” 23 A full crisis cycle might last 20–30 years. A systemic crisis might only occur once or twice a century. Among  22  A number of authors have proposed basing contractual triggers in banks’ debt instruments on market-based measures of capital adequacy (Calomiris and Herring (2011), Flannery (2010)). 23  Galbraith (2008). 16  BIS central bankers’ speeches  risk managers, typical levels of experience are significantly less than a full crisis cycle. The same is true among bank supervisors. Historically, financial supervision has been long foxes and short hedgehogs. Ever-expanding numbers of regulators will not solve this problem – if anything, that may cause average levels of experience to fall, not rise. Nor will ever-expanding amounts of regulatory reporting – if anything, that breeds more complexity, not less. A strong case can be made for a reversal of the historical trajectory in which “more is more”. This strategy has comprehensively, and repeatedly, failed the crisis test. This calls for a different supervisory direction of travel.

Financial intermediaries are provided with sufficient incentives to improve their risk-management techniques. Therefore, the financial system is better able to absorb shocks without increasing the effects of such shocks on the economy. Broadly speaking, this seems correct to me. The financial system has coped with remarkable success and with few signs of instability with the various episodes of financial turmoil and shocks in recent years. Market-functioning difficulties were short-lived. The impact of these episodes on the real economies of industrialised countries was generally limited. However, we want to make sure that financial institutions and markets help to absorb and redistribute the shocks occurring in the real economy. We don't want them, in general, to be an additional source of shocks. In this regard, two specific questions come to the mind of policy makers. The first relates very simply to our ability to understand what is going on in the financial system when innovations permanently introduce additional layers of sophistication and complexity. As is often the case with  BIS Review 64/2006  3  financial innovations, evaluating the risk they entail requires the use of complex techniques that are not always sufficiently tried and tested 6 .The second issue, singled out by Rajan himself, is about incentives, an issue made especially important by the shift from depository intermediation to professional asset management. The system of incentives under which managers operate should be closely and permanently aligned with the interests of investors.
The credit of the sovereign was preserved, and all debt obligations have been paid in full and on time. On the whole, these measures were successful, which mitigated the effect of the banks’ failure on the economy. The domestic payment system functioned more or less seamlessly throughout, and there was continuous access to deposits and basic banking services in Iceland. The economic programme with the IMF was initiated in November 2008. It had three key goals: stabilisation of the exchange rate, fiscal sustainability, and reconstruction of the financial sector. Financing amounted to USD 4.4 bn. with 1.4 bn. coming from the IMF and the rest from bilateral loans from the Nordic countries and Poland. Despite some initial delays due to the bilateral dispute on deposit guarantees, which I will not discuss here, the programme was very successful, and all three goals were reached. The programme ended in August 2011. The Nordic bilateral loans were prepaid in 2012–2015, and the IMF facility and the Polish loan were prepaid in autumn 2015. Comprehensive capital controls were an important element in the programme, but their rationale was to help to stabilise the exchange rate after the currency had fallen more than 50% in 2008, where foreign króna positions – a legacy of carry trade and capital inflows – amounted to around 40% of GDP, and where a large fiscal deficit that had to be financed in the domestic market had developed.

The consequences for the macroeconomic outlook are clear: if labour productivity and/or labour input fail to improve, the impending demographic development will lead to slower medium and long-term growth. It is thus all the more important that labour productivity increases. The growth in labour productivity depends primarily on workplace capital and product market success. It would be ill advised, however, to make oversimplified calculations. Neither technological progress nor capital investment are unaffected by demographic aging. While enthusiasm for embracing innovation may decrease with old age, greater experience can enrich human capital. On the one hand, a tighter labour market can be counteracted by shoring up investment. On the other hand, both the savings and the investment rate can decline. If foreign locations become more attractive, the latter is a particularly likely scenario. It is not clear how the overall effect of these interactions would impact overall on growth. These perspectives call for measures that boost both labour productivity and labour input. In a market economy, employers, employees and the self-employed have a number of instruments and options at their disposal to increase labour productivity and labour input. However, there is also room for improvement with regard to the economic conditions within which businesses operate. First, the capacity for innovation in Switzerland should not be allowed to decline. Therefore, policies fostering education and research are called for. Second, Switzerland ought to continue to attract more investment. In other words, domestic investment should become more attractive.
The decades long conflict which sapped our combined energies in various ways, is finally behind us. Therefore, it is now time for all of us to get together and rebuild our nation, in particular, the areas that have suffered. We, on our part, are keen to assist the people of the North to resume normal lives as soon as possible. Towards that outcome, we believe the Diaspora too could play an active role and become partners in the development process of the North. They can be an important influence to accelerate investments to these areas and thereby support the expansion of industrial activity and tourism. Needless to say economic opportunities in the North are expanding day by day, and I would like to urge overseas Sri Lankans to take an early look at emerging investment opportunities in these areas, particularly in the fields of IT, education and real estate development where they can surely and effectively contribute. 2  BIS Review 16/2010  I would also urge the Chambers of Commerce and Industries, and other similar Associations to consider establishing international institutional frameworks and links, which would pave the way for two-way interaction between the overseas Sri Lankan community and our local institutions and businesses. Such relationships could then act as focal points to promote remittances and investments into the domestic economy, as well. My dear friends, today, we meet in the midst of a significant change in our country’s economic and political landscape.

For it to be credible, we need commitment on sound backstops as a fall-back option for fulfilling capital needs. In Japan, such a close inspection of bank balance sheets was carried out in 2002. It proved to be an important step to recognising losses and cleaning balance sheets to eventually set off a gradual recovery with credit expansion in Japan. Second, one of the objectives of a European banking union is to delink banks from their sovereigns. That also implies that bank funding costs will depend on the quality of banks’ assets, and not on the location of their headquarters. Achieving this would mark a milestone in that it would establish a single capital market throughout Europe that companies can tap into. A single capital market, in turn, provides better financing for companies and eases productive investment, which will revitalise the European economies. Ultimately, it will be decisive in ensuring that Europe avoids a repeat of Japan’s “lost decade”, during which zombie banks poorly allocated financing across firms. Third, orderly deleveraging in the euro area also requires that the restructuring and resolution of individual banks will not endanger financial stability or put public finances at risk. For this, the institutional framework needs to be solid. This is the rationale  10  Entries of business establishments declined from their peak of 7.4% in 1988 and have not exceeded 5.0% since then, whereas exit rates remained at subdued levels of 2.5–4.0% between 1988 and 2000 and have increased to above 4.0% since then.
The macroprudential policy response to the COVID-19 crisis The outbreak of the economic crisis stemming from the COVID-19 pandemic posed an unprecedented challenge, and it did so too from the macroprudential standpoint. As I have attempted to convey in this speech, macroprudential policy was conceived to tackle risks that arise endogenously in the financial system and build up gradually over time. The pandemic has thrown up a radically different crisis scenario, caused by a risk factor exogenous to the financial system. But, in any event, it has had a sudden and profound macrofinancial impact. Against this background, we must accept that the role of macroprudential policy in countering these effects is limited; it is other economic policies (fiscal and monetary policy in particular) that are best suited to combat them. In any event, at the onset of the pandemic, in parallel to the action taken by the monetary and fiscal authorities, numerous announcements of measures ensued at notable speed from the macroprudential authorities.7 Specifically, the main macroprudential instrument subject to these measures was the CCyB which, practically across the board, was drawn down (i.e. returned to its initial level of 0%) in those countries in which it had previously been activated. The aim was to encourage banks to maintain the flow of credit to the economy. In Spain’s case, the CCyB percentage was at 0% before the onset of the pandemic, since no signs of an accumulation of systemic risk had been detected.

However, the possibility of reduced access to external funds, plus the increase in global risk, put pressure on internal financial conditions, causing a significant increase in interest rates and lending standards. At the same time, when future earnings became more uncertain, households and firms significantly reduced their demand for new credit, as revealed by the Banking Credit Survey that the Central Bank conducts on a quarterly basis. Overall, the tightening of financial conditions was not so severe as to hinder banks’ access to external credit or their proper functioning domestically. This was possible also because of a set of measures adopted by the Central Bank and the Ministry of Finance to ensure the proper functioning of the financial system. Nonetheless, due to the higher uncertainty, the sensation that the world economy might enter into a significant depression with huge losses of wealth triggered an unprecedented erosion of global confidence. Growth forecasts began adjusting at great speed. Undoubtedly this hit the behavior of households and firms hard around the world, which stopped their spending plans, or put them on hold indefinitely. Consumers’ and entrepreneurs’ expectations indicators showed a profound weakening in the last quarter of 2008 (Figure 8). A look at durable goods consumption indicators reveals the steep fall in sales levels (Figure 9). All this takes me back to the previous point in my presentation. The dramatic increase in uncertainty that began in September of last year altered people’s behavior substantially, leading to an abrupt and sudden paralysis of the demand for durable goods.
As Figure 1 shows, most of that expansion has come in the past 7 years, in large part reflecting the implementation of monetary policy since the financial crisis that started in 2008. Maintaining credibility in the money we issue has been an objective of the Bank from inception. Since the early 1990s this has been pursued through an inflation targeting regime, and most of that period the tool of choice for monetary policy was interest rates. In the wake of the financial crisis and ensuing recession, however, Bank Rate was cut to a historic low of 0.5% – a level that was at the time considered to be the effective lower bound as further cuts could reduce the profitability of the banking sector and constrain the supply of credit to the economy. When more stimulus was needed, the MPC used a different tool – the Asset Purchase Facility – to deliver the needed stimulus by expanding the balance sheet using newly created central bank reserves to purchase £ billion of government bonds with a range of maturities out to 55 years. Of course what was once considered radical has become mainstream by today’s standards. Indeed other central banks have gone further as the circumstances of their economies have dictated. The European Central Bank and the Bank of Japan have stated their intention to purchase significant amounts of private sector assets, and some central banks have used their balance sheets to purchase other countries’ assets with the aim of maintaining their exchange rate at a certain level.

the act laying down the setting up of the National Bank of Romania, was published, ranking our institution among the first modern central banks. We hold dear the memory of our founding fathers. We honour them each year, but now I wish to commemorate two of them: the Prime Minister of those times, Ion C. Brătianu, whose commitment and great efforts materialized in the cornerstone law for the establishment of Romania’s central bank as a modern institution for “monetary circulation and a solid credit system” and the the artisan of the National Bank of Romania Eugeniu Carada, advisor to the Prime Minister, a man of deeds, rather than words. Eugeniu Carada took up the strategic mission to achieve the establishment of our central bank, had a clear vision of its role and set up a sound and modern credit system to foster loans and investments. By implementing modern instruments and policies for those times, the National Bank of Romania also contributed to the expansion of financial intermediation and the dissemination of financial education, since 1880 until the present day. Even though we are living difficult times, we should remember that we share a common institutional collective memory. The National Bank of Romania has been a member of the Bank for International Settlements since its establishment, on January 20, 19301, when the Final Act of the Second Hague Conference2 was adopted.
Current account and public finances Per cent of GDP 12  12 Government net lending Current account  8  8  4  4  0  0  -4  -4  -8  -8  -12  -12 90  92  94  96  98  00  Note. Broken lines represent the Riksbank’ s forecasts. 02  04  06  08  10  12  Sources: Statistics Sweden and the Riksbank  22. Low repo rate over long period of time Per cent, quarterly average 7  7  6  6  90% 75% 50% Repo rate  5  5  4  4  3  3  2  2  1  1  0  0  -1  -1  -2  -2 04  05  06  07  08  09  10  11  Note. The uncertainty interval is calculated using historical forecasting errors. 18  12  Source: The Riksbank  BIS Review 98/2009  23.

When a criminal activity generates substantial profits, the individual or group involved must find a way to control the funds without attracting attention to the underlying activity or the persons involved. Criminals do this by disguising the sources, changing the forms of the funds, or moving the said funds to a place where they are less likely to attract attention. In response to mounting concern over money laundering, the Financial Action Task Force on money laundering (FATF) was established by the G-7 Summit in Paris in 1989 to develop a coordinated international response. One of the first task of the FATF was to develop Recommendations, (40 in all, plus 9 Special Recommendations) which set out the measures national governments should take to implement effective anti-money laundering programs. The FATF works closely with other international bodies involved in fight against money laundering. And, one of those international organizations is the Asia Pacific Group on Money Laundering (the APG) in which Samoa is a member. The APG was officially established as an autonomous regional anti-money laundering body in February 1997 for Asia and the Pacific region at the Fourth Asia/Pacific Money Laundering Symposium in Bangkok, Thailand. This was the culmination of a process of “awareness raising” in the Asia Pacific region initiated by the FATF as part of its global strategy. To date, the APG has 39 member countries and a number of international and regional observers, including the United Nations, the IMF and the World Bank.
A flexible exchange rate should help mitigate this risk. In addition, the development of the foreign exchange derivatives market should allow private agents to hedge against currency risk. In addition, capital inflows may be behind the development of bubbles in domestic asset prices, and there are also macro tools to deal with them. However, there are other risks that must be considered, which have implications on macro prudential regulation. Note that these risks may be relevant even when net capital flows are limited. Therefore, from the standpoint of financial stability, gross flows become relevant determinants of fragilities. These risks associated to capital inflows are: funding and credit risks. Regarding funding risk, large capital inflows in the form of short-term loans to local banks will tend to increase banks’ dependence on this external funding source, which has been shown to be a volatile source of funding. From the point of view of central banks, the accumulation of reserves may help mitigate the economy-wide consequences of this risk, but the soundness of the banking system must be safeguarded with the proper regulation. As for credit risk, large capital inflows in the form of loans to local banks and portfolio debt securities may translate into an increase in the credit supply as local intermediaries and corporations access more elastic and often cheaper sources of funding (beside currency risk).

Policy autonomy It is now widely accepted that a broad policy toolkit and pragmatic policymaking are paramount in dealing with multiple challenges. Unconventional and unprecedented policies are no more heresy. This shift in mindset is a very welcome change. If only this mindset had persisted during the AFC, our experience in the region would have been much more positive. Experience also suggests that policy autonomy is critical in deploying measures in an environment with no precedent. Especially when the essence of the problems is domestic in nature, compounded by the specificity of each economy’s operating and legal environment, political and social structures. 3/5  BIS central bankers' speeches  Policy prescriptions will be least effective when it is not ‘owned’ by the domestic policy maker or when it is not independent of external influence and coercion or when policy being administered is more a reflection of ‘consensus economic’ thinking. External influence can be viewed from two aspects. External developments that transcend national boundaries; and external players that may directly or indirectly suppress domestic autonomy. The former has been greatly discussed, where financial liberalisation and globalisation have worsened the trade-offs for monetary policy to achieve its multiple domestic objectives. Some consensus has also been reached on the ways to regain autonomy, in the form of broad policy toolkit to prevent overburdening of any single policy instrument, the buildingup of buffers and instituting the necessary structural reforms that serve to fortify the economy.
I would like to reiterate that we will not allow these developments to affect medium-term inflation expectations and the medium-term inflation outlook adversely. Indeed, we have already started the necessary monetary tightening to keep inflation under control and to ensure that inflation realizations remain in line with the target set for 2012. Details on this issue can be found in the Inflation Report that I will summarize shortly. Secondly, I will talk about our interest rate policy. After the last Committee meeting, banks’ funding costs from the Central Bank were set within the interest rate corridor, in other words, between 5.75 and 12.5 percent on average, or at a level that the Central Bank considers appropriate. In cases where funding is effected at 12.5 percent, the Central Bank will meet banks’ demand with no upper limit and against eligible collateral. Tightening or easing to be achieved via the funding channel will be implemented even on a daily basis depending on the course of economic and financial developments. In the event that risks to price stability are observed, the Central Bank will allow banks’ overnight borrowing rates to hover around 12.5 percent for some time. Thirdly, I will provide you with some information about our reserve requirement policy. Depending on the outcome of the EU Leaders Summit and the foreign markets’ perception of this outcome, the Central Bank may introduce a limited reduction in the Turkish lira required reserve ratios if deemed necessary.

This has led to an increase in short term inflation forecasts by 0.6 points (Table 1). The assumptions about fiscal policy used for medium-term forecasts were based on the outlook presented in the Medium Term Program (MTP). Therefore, the baseline scenario envisages that the ratio of primary expenditures to GDP would gradually be reduced from 2012, the public debt-to-GDP ratio would continue to fall, and the risk premium would remain broadly unchanged. Moreover, tax adjustments and administered prices are assumed to be consistent with inflation targets and automatic pricing mechanisms. Distinguished Members of the Press, As I have already stated, since the publication of the July Inflation Report, emerging economies have faced rapid capital outflows due to the deteriorating risk appetite. In this respect, excessive depreciation in the Turkish lira has become more evident. This development, coupled with the increase in prices of administered goods, has raised the risk of deterioration in pricing behavior. We responded to these developments strongly by increasing our overnight lending rate markedly in our October meeting (Chart 6). We expect monetary tightening to contain inflationary pressures in the period ahead. However, inflation is forecasted to increase significantly in the short term with the contribution from low base effects in unprocessed food prices.