samchain/econo-pairs-v1 huggingface dataset:
I’ll then outline some of the changes that are already under way, before finally asking what more needs to be done and outlining some of the questions our Review will be asking. Why Fixed Income, Currency and Commodity markets matter I want to start on a personal note. I was born in Egypt but left at a very young age when my family lost everything as a result of nationalisations under the Nasser government. It was a time when many well-intentioned people thought that the state could do a better job of allocating resources and managing economic activity than the market. That view was proven wrong. Perhaps as a result of that experience, I have spent large parts of my professional life thinking about the relationship between the state and the market. The perspective I have  BIS central bankers’ speeches  1  reached is that well-functioning markets are the key to prosperity, but that they must operate in ways that are fair and effective to sustain public support and confidence. By “fair and effective” I mean markets should allow their ultimate end users to invest, fund themselves, and transfer risk in a resilient and predictable way, on the basis of competitive prices. They should offer appropriately open access and transparency. And they should operate according to clear standards of market practice and integrity. Why should you care about Fixed Income, Currency and Commodity (or FICC) markets? Firstly they are huge.

5  Transfers in the main sterling payment systems are settled gross in real time across the Bank’s balance sheet. For members of the real-time system, no credit exposures amongst them arise. Transfers between smaller banks are settled across the balance sheets of big commercial banks. The banking sector would probably be more resilient if all banks joined the RTGS system. 2  BIS Review 67/2009  commercial banking system. Up to a point, the same goes for the abundant liquidity in asset markets that preceded the crisis. Of course, persistently strong demand for financial assets – crudely, rising prices – created liquidity. But, beyond that, the willingness and terms on which “market-makers” and traders underpinned liquidity depended on generous access to credit for financing inventory and positions. And the ultimate private sector providers of such credit are always the commercial banks. 6 So commercial banks are special. They are special because their deposit liabilities are money. But they are also inherently fragile. First, as monetary institutions, the liquidity insurance they provide, via demand deposits and committed on-demand lines of credit, entails large mismatches between the maturities of their liabilities and assets (actual and contingent). The accompanying conversion of liquid savings into illiquid loans to households and firms benefits society. But it also exposes the banks to big liquidity risks. Given a first come-first served system of redemption for retail and wholesale deposits, that creates the risk of runs.
Rapid demand growth; commodity price volatility; the influence of a broad range of global conditions on wages: all these factors can trigger large changes in relative prices, and this makes the job of capturing underlying inflation harder. So we have to be careful not to focus too narrowly on one particular measure. Instead we need to look at many. And indeed here in the United States we look at a range of different measures of core inflation, for example, that take energy and food prices out of the overall index. We look at these over different time horizons. We look at a variety of other measures that use different statistical techniques to strip out the more volatile parts of the index. These all have limitations, and their relative merits may change over time. Central banks approach this challenge of capturing underlying inflation differently, but ultimately we are all judged by what happens to overall inflation over time. These issues are common to central banks everywhere. But economic and financial integration has brought particular challenges for monetary policy makers in emerging market economies. The broad pattern of exchange rate and monetary policy regimes in emerging market economies has shifted dramatically over the past decade. Most now operate a more flexible exchange rate regime, though a significant number have moved to the opposite extreme, relinquishing monetary sovereignty in favor of full monetary integration.

It is sufficiently larger than the negative investment demand effect from higher interest rates, such that internal balance is attained and monetary policy is able to pursue domestic inflation and growth objectives.4  1  Linda Goldberg, Paolo Pesenti, Joseph Tracy and Matthew Higgins contributed to these remarks. 2  A global financial cycle refers to the global co-movement of credit by banks and capital markets, asset prices, term premia, and risk premia. 3  Fleming (1962) and Mundell (1963). 4  Krugman (1999). The balance sheet effects imparted from a large international debtor position may work against achievement of an improved external balance and attainment of internal balance. BIS central bankers’ speeches  1  Different policy options are available to a country with a high degree of capital mobility and a preference for currency stability. A country may prefer currency stability as an effective nominal anchor, or because of concerns about the broader uncertainties associated with currency volatility. Regardless of the reason and because the exchange rate is not available to absorb external shocks, this country will be in an unfavorable position to achieve domestic macroeconomic objectives by using monetary policy. Instead, monetary policy is aimed at external adjustment. Tighter foreign monetary policy and financial conditions need to be validated by tighter domestic monetary policy to maintain currency stability. With domestic monetary conditions effectively imported from abroad, they may sometimes conflict with domestic growth and inflation objectives. Simply put, currency stability is prioritized. These policy considerations are summarized in the well-known international policy trilemma.
Urban Bäckström: Financial cycles Speech by Mr Urban Bäckström, Governor of Sveriges Riksbank, at the Philadelphia Fed Policy Forum on Crises, Contagion and Coordination: Issues for Policymakers in the Global Economy, Philadelphia, 22 November 2002. *  *  *  First I want to express my thanks to the organizers for inviting me to this very interesting conference. Let me especially thank Tony Santomero for everything he has done in his previous capacity in inspiring and assisting us at the Riksbank over the years as an academic adviser. I wish you, Tony, every success as president for the Philadelphia Fed and as an important policy maker here in the U.S. I think one can say that central bankers around the world have never before had such a central and well respected position as they have had during the past decade. Their task seemed to be well defined and the job to deliver price stability has worked rather well. Much of the mystique that typically surrounded central banks has gradually disappeared. Openness and transparency have become the key words of the day. Moreover, research concerning monetary policy has made good progress during the past decade. The world of central banking has indeed undergone positive changes. However, it would be most dangerous for us, central bankers, to just sit down and relax in the belief that all the important problems in the field of monetary policy have been resolved and need no further consideration.

Whether improved prudential regulations, supervisory practices and risk management techniques will suffice to avoid financial cycles in the future remains to be seen. Our experience so far does, however, leave some doubts about this. This brings us to a possible third line of defense that could at least in principle be used to prevent large financial cycles. I am of course thinking about monetary policy The argument is that since we live in a fiat money system, there is no exogenous constraint on the supply of credit except through monetary authorities. If those reactions are geared exclusively to controlling inflation, then the monetary anchor may not counter a build-up of credit that does not immediately lead to inflation in the price of current output. Hence, there is little to prevent the emergence of cycles in the prices of real and financial assets that are not included in the measure of inflation. In addition, experience has taught us that price stability is not, by itself, sufficient to ensure financial stability. So why don’t central banks simply change the way they conduct monetary policy and also try to prevent financial cycles? Well, the conventional view is that they should not. There are some very powerful arguments against a central bank trying to respond to credit expansion and “misalignments” in asset prices that do not lead to inflation in goods and services. First, how do we know that a bubble is a bubble and not a reflection of fundamental values?
So, most of the risk management that occurs in an organization will be done by people who don't have the word "risk" in their job title. And third, risk management could be misinterpreted as an attempt to create a contingency plan for every possible thing that could go wrong. It is important to prepare by scanning the horizon, exploring the range of possible futures, and understanding how those futures could help or impair desired outcomes. We do want to invest in effective responses to key scenarios. However, no organization has the resources to prepare for all possibilities. And, no matter how creative we are, we still can't imagine every one of them anyway. As it is said, "Things that have never happened before happen all the time. "3 So, effective risk management is more than planning. It is creating the capacity to adapt to and recover from unexpected shocks, which is what we often mean when we talk about resilience.4 To me, successful risk management is as much about culture as it is about structure. My version of the saying "culture eats strategy for breakfast" is: "culture eats structure for breakfast. "5 Practically speaking, we have policies, procedures, and rules to help us make decisions. But, much of the time, decisions aren't clear, and it is organizational culture that shapes the tradeoffs that we make and the actions we take.

·  Second, the New Accord will recognise that some banks treat their smallest business credits as retail exposures. In these cases, banks group and administer their small business loans on a “pooled basis,” similar to the way they manage most small personal loans. The New Accord will permit aggregate exposures to a single business borrower of up to € million to be treated as retail exposures. Because retail exposures enjoy a preferential treatment under both the standardised (reduction of risk weights by 25 percentage points, from 100% to 75%) and IRB (a different risk-weight curve) approaches to credit risk, banks making such loans may face lower capital requirements than are currently applicable. Moreover, for those who have monitored our work closely, the Committee recently eliminated a controversial requirement governing the “granularity” of such loans. In plain language, the rules will no longer require that retail portfolios contain exposures to a minimum number of unrelated parties. Instead, national supervisors will determine whether such portfolios qualify for retail treatment. Although the media has not reported on this change widely, it is quite important because it will help more banks to enjoy the preferential retail treatment for their smallest business credits. 2  BIS Review 32/2003  ·  Finally, the New Accord will recognise a far wider range of collateral and guarantees than the current rules do.
This interest we are witnessing in the financial sector is due to the favourable economic environment that has been created in the last seven years. During this period, the economy has performed relatively well as reflected in the overall macroeconomic stability, which has been underpinned by sustained positive growth rates in the real Gross Domestic Product averaging over 5% in the last five years. I do hope that Access Bank Zambia, will play a special role in taking this growth to an even higher level. In the financial sector, stability has continued to characterize the financial system with all banks being adequately capitalised and non-bank financial institutions performance being satisfactory. I am convinced that this stability, among other factors, will continue to contribute to the attraction of international investors such as Access Bank to invest in Zambia. It is my hope that with new entrants in the banking sector, the provision of financial services to the public will become more competitive both in terms of the variety of services offered, efficiency and pricing. The need for provision of affordable banking services to the majority of our people can not be ever emphasised. Such services will greatly benefit our people and contribute positively to poverty reduction in the country. As Access Bank ventures into full fledged business, I urge the bank’s management to devise strategies that will contribute to Government’s efforts of reducing the cost of borrowing and increasing the level of inclusiveness in the country.

Your Excellency, Honourable Ministers in order to insulate the financial system from external influences like the financial turmoil currently being experienced in some Western countries, the Bank has been working on a macro prudential approach to supervision of the financial system. Macro prudential analysis looks at the health of the underlying financial institutions in the system and performs stress tests and scenario analysis to help determine the system's sensitivity to economic shocks. This analysis also looks at macroeconomic data including GDP growth rates, inflation, interest rates, balance of payments, exchange rates, asset prices and the correlation of markets within the system. Distinguished guests, I am advised that Access Bank comes with a bouquet of banking products and excellent services, aimed at enhancing the quality of lives of Zambians and the economy in general. I urge management to remain committed to ethical standards and see themselves as a Zambian bank because you are indeed a Zambian bank now. Based on our inquiries, the Bank has a strong heritage and history of performance that will positively contribute to the health of the financial sector in Zambia. Your Excellency, Honourable Ministers, It is also exciting that the bank we are commissioning today is coming to Zambia in the context of pan-Africanism. This is an African bank investing in another African country, a demonstration of South to South cooperation. It is such investments that will accelerate the pace of the much needed economic integration in Africa.
Real GDP has still not returned to its pre-crisis level. As for real per capita GDP, it is lower now than it was in 2007. This weak growth is one of the main factors behind the high public debt ratio, which has been rising since 2008. Another consequence of feeble growth is the high unemployment rate, particularly among the young (32% in September 2018 for 15–24 year-olds). The tragedy of the scoraggiati, especially in the south, should be seen as our tragedy too. It is with this image in mind that I want to shed some light now, here in Rome, on the economic prospects for the euro area. I would like to share with you two firm beliefs: with regard to the challenges we face, the euro is one of the solutions, not one of the problems; but in order to build a more solidarity-based euro area, we need to have an Italy that is 1/5  BIS central bankers' speeches  committed. ** I. The euro is one of the solutions, not one of the problems. There is still a temptation to blame the euro for this weak rate of growth. Proponents of this idea see the single currency as a German-imposed straitjacket, managed by “Frankfurt” strictly for Germany’s benefit. It is always legitimate to have a debate, and we should not shy away from this one. But in reality the euro is one of the solutions, for four reasons.

These challenges increase ambiguity, uncertainty and volatility in goods, services and financial, markets, broaden and intertwine the nature of shocks and place the authorities vis-à-vis new and unprecedented phenomena. These developments render the well management of monetary policies and financial stability even more difficult As a result, scientific research needs to: explore and propose new solutions, more efficient empirical and theoretical models for policy implementation by central banks; assess the effects of the adopted policies; and, carefully observe the side effects in the economy or the financial system, which may potentially accompany such policies. Due to unconventional monetary policies, central banking is practically in unexplored territories; therefore, it is necessary to carry out an assessment of how the economy reacts to shocks under such circumstances. The Bank of Albania is interested in identifying potential shocks and their modelling with a view to guaranteeing optimal solutions in terms of prices, economic activity, employment and financial system soundness. For that reason, we invite you to discuss openly and thoroughly all the papers that will be presented during these two days. This would serve to discuss about their findings, improve them and assess their effectiveness for the Bank of Albania’ decision making. The Bank of Albania deems that the economy and the financial system are currently sound and in line with our expectations and forecasts.
Rather than forcing ourselves to act on both instruments almost simultaneously (which could fuel fears of an excessively brutal effect), we could give ourselves more time and consider the latest inflation outlook before deciding about the calendar of rate hikes: a decision that anyway we don’t need to make before our June meeting. Any speculation about this calendar of future lift-off is at this stage premature. The forward guidance on interest rates Let me stress here an important semantic point about our monetary stance: the steps I am discussing here are about the normalization of our monetary policy, not about tightening. It’s still the exit from exceptional instruments and an extremely accommodative monetary policy (increase of the already large assets stock, negative interest rates). It’s the first phase of a gradual return towards a more neutral stance, which we are still far from. Tightening would be another story, going beyond a neutral stance, which is not within our present policy horizon. Let me then remind you of the three state-dependent criteria on our forward guidance: “the Governing Council sees (i) inflation reaching 2 per cent well ahead of the end of its projection horizon; (ii) and durably for the rest of the projection horizon; and (iii) it judges that realised progress in underlying inflation is sufficiently advanced to be consistent with inflation stabilising at two per cent over the medium term”.

Fifth, the risk of default on the country’s sovereign debt must be viewed as negligible, to ensure both that the currency is a stable store of value and that continuous, deep liquid domestic markets will be available regardless of the economic circumstances. Sixth, the country must have a credible central bank that is insulated from political interference and committed to keeping inflation low and stable – a necessary condition for a reserve currency to be a reliable store of value. I think that the U.S. dollar satisfies these general criteria. That is why over 60 percent of foreign exchange reserve holdings are denominated in dollars – a share that has been quite stable in recent years. The dollar’s share has remained steady despite the presence of a number of currencies that broadly satisfy the attributes that I have just discussed. But should the U.S. be concerned if more countries satisfy the attributes needed to be successful reserve currencies? Would it be problematic for the United States if the U.S.  BIS central bankers’ speeches  1  dollar share of foreign exchange holdings slipped over time because of progress made elsewhere? I think the answer to both of these questions is “no.” It would seem positive to me if a decline in the U.S. market share reflected the following developments: a greater number of stable and effective central banks and fiscal authorities, more investors who are reassured about countries’ institutional arrangements and financial stability, and deeper and more liquid capital markets outside the United States.
The way you will monitor and communicate information to the public is very important. In this context, I would like to underline that the Bank of Albania shall be very open to assist. To this aim, we have recently made the Bank communication office functional, thereby meeting one of short-term FSAP recommendations. I avail myself to this occasion to stress that our immediate plans are to provide a more contemporary communication approach, in particular in the context of preparing and launching educational and training packages, targeting different interest groups. From the moment we were acknowledged to FSAP recommendations, our institution started listing them by priority and by institutional right. As also monitored by you, we broadly discussed in the Forum organized in the first days of December the issue of establishing a Monetary Policy Committee. With regard to banking market developments, the Bank of Albania sticks to its engagements to augmenting the opportunities of commercial banks in the securities market. In more concrete terms, starting from September the Bank of Albania charged a fee for the operations carried out in its windows, and in early December the two-level securities register was placed into function. Pursuant to FSAP recommendation and with a view to enhancing daily liquidity management, the intra-credit regulatory basis was amended. The new bill “On Banks in the Republic of Albania” is complete and ready to be presented to banks for discussion.

With the assistance of a specialized international consultation, we believe this shall be a new, contemporary law and it shall identify a number of issues addressed in the form of FSAP recommendations. Starting from July 2005, the automated electronic clearing house system commenced to operate. Currently, we are working on completing the regulatory framework with a view to augmenting the services provided to the economy, aiming primarily at automating utilities’ periodical settlements. In November, the Bank of Albania Supervisory Council amended the Regulation “On licensing nonbank entities”, aiming at involving all non-bank financial institutions which operate in the territory of the Republic of Albania in the Bank of Albania licensing and supervision scheme. In October 2005, the Bank of Albania Supervisory Council approved the new organization structure of the Bank of Albania, placing a major emphasis to enhancing legal counselling, statistical service and public communication. These tree functions are deemed as very significant, in particular when considered in the context of our objectives related to monetary policy and EU integration. BIS Review 88/2005  1  Another short-term FSAP recommendation related to improving Bank of Albania transparency is now accomplished. Every interested person could be informed on the rules that the Bank of Albania pursues when it intervenes in the foreign currency market or be acquainted with the present agreements between the Bank of Albania and the Ministry of Finance. We have been intensifying our efforts to reaching to a rapid and effective solution as regards the Credit Information Bureau.