samchain/econo-pairs-v1 huggingface dataset:
Barbro Wickman-Parak: The financial crisis – where do we stand today and where are we heading? Speech by Ms Barbro Wickman-Parak, Deputy Governor of the Sveriges Riksbank, at Danske Market's Central Bank Seminar, Snekkersten, Denmark, 11 June 2009. *  *  *  When I joined the Executive Board of the Riksbank almost exactly two years ago, in May 2007, I expected my new job to be varied and exciting. Though I perhaps wasn’t expecting it to be exciting in the way it turned out to be. Of course we were then already aware of the problems with subprime loans in the United States. But, like most other people in Sweden and abroad, I didn’t foresee that the worrying signs we saw then would gradually develop into a global financial crisis of historical proportions. Nor did I anticipate that as a result of this crisis the Riksbank would lend several hundred billion kronor to the banks. Or that the Riksbank would cut the repo rate by 4.25 percentage points during the course of just over six months, to its lowest level ever – the fastest monetary policy easing in the period we have had an inflation target. And of course I could not anticipate that several other central banks would by then have reached the lower limit for their policy rates and have begun to resort to unconventional measures. But nevertheless – this is where we stand now.

Greater focus on credit risks Now that liquidity risks are less prominent, there is instead a greater focus on credit risks, as economic activity has weakened and growth prospects have deteriorated. The very large policy rate cuts made by central banks around the world and the fiscal policy stimulation from governments have not been able to prevent a severe weakening in economic activity. Our most recent forecast published in April points to GDP in the world falling by a good 1 per cent in 2009. This is a something quite unique: since 1970 GDP in the world has increased by on average 3.6 per cent a year and growth has not been negative even for a single year. The export-dependent Swedish economy is hard hit by the international downturn. In our April Monetary Policy Update we forecast a fall in GDP of more than 4 per cent in 2009. When economic activity weakens and the demand for goods and services declines it becomes more difficult for the banks’ borrowers to meet their payments. Bankruptcies  2  BIS Review 73/2009  increase and the banks suffer loan losses. The loan losses in their turn make the banks even less willing to lend money and the economy risks ending up in a spiral where falling activity and stricter credit terms reinforce one another. The banks can cope with loan losses The main scenario in the Riksbank’s forecasts does not involve Sweden ending up in a serious downward spiral.
We have introduced major reforms carefully, to minimise the disruption and side-effects, as we have done with the tax and CPF changes. We are providing social support to those adversely affected by the changes, to ensure that no one is left behind, without undermining the incentive to work. Our concern is not just social cohesion, but racial and religious harmony. If remaking our economy splits our society along racial or religious lines, we will be in deep trouble. 6  BIS Review 19/2003  This will be one of our most difficult challenges for a long time to come. Our future depends on Singaporeans being resilient and self-reliant, yet we must make sure that those who are truly unable to cope get the help they need. We will continually need to balance these two objectives, to ensure that we do not have any free riders on our ship, and yet that all of us will reach the destination together. Conclusion This will not be the last time that we have to remake the Singapore economy. Companies find it difficult to successfully ride even one wave of changes. For countries, the challenge is even greater as they have to be ready to transform themselves repeatedly. If a company fails to remake itself it goes under. The creative destruction of the market economy then recycles the freed-up resources to other more productive purposes. But if a country fails to remake itself, the consequences for its people are dire.

I hope to be up to the task of the legacy you are leaving us. My thanks, too, to the members of the Bank’s Executive Commission and Governing Council and, most particularly, to the Deputy Governor, Javier Alonso. Javier, your help and far-reaching knowledge of the Bank are making these first weeks in the job easier for me. But, above all, I should like to thank my colleagues over the course of the years. It would be impossible to list them all; many are here today. The career of a Banco España employee can only fully be understood through the prism of the numerous interactions and discussions between us, which are the bedrock on which we build our knowledge and our particular human capital. It is a privilege to be part of this environment and to participate in such an enriching process. Finally, the most singular thanks are for my family. Without them none of this would have been possible. Let me seize this opportunity to refer briefly to what should, in my view, be the two main objectives of the Banco de España at this juncture and which are related to our relevance and reputation. The first has to do with our insertion into the Eurosystem and into the Single Supervisory Mechanism. Some think this means that the Banco de España has an increasingly diminished role, given that the main functions linked to monetary policy and supervision of the financial system are decided in that framework.
What role do you think currencies, including the yuan, should play in the global rebalancing? Noyer: It is up to [China] to assess exactly what part the exchange rate can play in the rebalancing. But appreciation of the yuan can help [China] enhance domestic consumption and dampen some of the effects of the rise in commodity prices. BIS central bankers’ speeches  1  WSJ: In order to address currency misalignments, shouldn’t the G-20 call more strongly for increased currency flexibility across the board? Noyer: The G-7 has been monitoring excessive currency fluctuations. But the world having changed and G-7 economies no longer being the dominant ones, should we adopt the same rules as we did during the ‘70s? We need to find out how to manage the system. How can we monitor capital flows, and how can we avoid the risk of capital controls hampering global trade? We need to give a clear mandate to the IMF to monitor the capital account. It would be useful to have a clear set of rules. The IMF can be an independent assessor of policies and give advice on the best course of action. WSJ: What lessons have you learned from the crisis?

How should we view financial bubbles, what causes them and what can we do about them? What drove the latest bubble, what can we learn from it and what is needed more generally to make stock markets function more efficient? BIS Review 50/2002  1  Nothing new about periods of undue optimism One important lesson is that in a deregulated world, waves of excessive due optimism can arise and result in pronounced financial cycles. In the 1990s there were several periods of financial turbulence. One was Sweden’s own bank and currency crisis about a decade ago. At the same time there were problems in other countries and turbulence in the European exchange rate mechanism (ERM). That was followed by the crises in Asia and Mexico, the problems with the major hedge fund Long Term Capital Management, Russia’s suspension of payments, the IT bubble and, most recently, the difficulties in Latin America. Further back, there have likewise been periods of excessive optimism and financial crises. Here, briefly, are the most spectacular items in Sweden’s economic history. •  The first real financial crisis in Sweden occurred back in 1857. It mainly involved the real estate market and obliged the government to support the banking system for the second time in our history. The first occasion had been in 1668, when the Palmstruch Bank was taken over by parliament and ultimately became what we now call the Riksbank.
This means that we have seen good improvements in the quality of compliance and operations. Companies that continue to receive shorter-term licences need to take stronger measures to address the issues that we have raised. Third, we should expect that financial markets will continue to remain volatile in the period ahead. It is therefore important for the industry to improve market arrangements to ensure that MSB companies will be able to respond efficiently to changes in demand for currencies by consumers and businesses. Such arrangements have to include better planning and management of currency stocks as well as sourcing strategies to ensure the ready supply of currencies at efficient market rates. Tonight’s MSB customer experience awards reflects an industry that aspires to place the customer first. A price advantage can be lost easily to your competitors, but a strong customer service culture is much harder to copy. Those of you that voluntarily took part in this process are sending a clear signal that your company and this industry takes customer service excellence seriously. The idea of customer service excellence is not only about the quality of service; it is also about the industry conducting itself in a way that builds trust in the industry. The Association therefore is to be commended for undertaking this initiative, as should all MSB companies that have supported it.

Ardian Fullani: The confidence indices Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the regional seminar “Development and implementation of business and consumer confidence indices in Albania 2”, Tirana, 1 December 2006. *  *  *  Dear participants, Today’s seminar, on the confidence indices, has a special importance, due to the fact that it regards the evaluation and decision-making basic elements in economic policies, information and in its real dimension. As in any decision-making process information is the first step to reach a sound judgment on the right monetary policy for a central bank. It is indispensable for the monetary authorities to prepare the analysis of the macroeconomic indicators, in order to prepare a monetary policy that ensures the stability of the internal indicators as well as the relations with the partner economies in trade affairs. On a more general view, the economy of a country can not achieve competitiveness and international standards, if development policies are built on a non complete information basis. The preparation of a complete information framework in the economic field is a challenge for the regional countries to reach occidental standards. At the current stage, for Albania this challenge is even more urgent. The actual condition of the national statistics has room for spreading the statistical basis and for providing stable statistics over time. However, the progress in the statistics field, as well as in other related ones, needs time, funds and the right legal ground for undertaking substantial projects.
More recently, in some jurisdictions the use of leverage ratios based on period-end reporting of assets—as compared to period averages in the United States—has encouraged window-dressing behavior by some banks at quarter-end. So, while the reforms have mostly had the intended effect of encouraging safer institutions, authorities and financial institutions should also be mindful of potential unintended consequences. Conclusion To sum up, we have made considerable progress toward a more resilient and robust financial system. While we should do more to make the regulatory regime more efficient, transparent, and simple, there are outstanding issues that still require additional work—such as the crossborder resolution of large global banks. We should also focus more on incentives, which can help ensure that regulations are dynamic and work well, and that banks are incentivized to take action early to steer away from trouble. Finally, regulation and supervision are necessary but not sufficient—they must be supplemented by bank cultures that encourage ethical behavior, the early identification of problems, and a willingness to address those problems proactively. Thank you for your kind attention. I would be happy to take a few questions. 1  Won Chai, Gerard Dages, James Hennessy, Beverly Hirtle, Thomas Noone, Kevin Stiroh, Katherine Tilghman Hill, and Emily Yang assisted in preparing these remarks. 2 See Financial Crisis Inquiry Commission, The Financial Crisis Inquiry Report (January 2011). 3 For further discussion, see remarks by Kevin J. Stiroh, A Perspective on Supervisory Objectives and Trade-offs,  February 23, 2017.

William C Dudley: The importance of incentives in ensuring a resilient and robust financial system Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the US Chamber of Commerce, Washington DC, 26 March 2018. * * * It is a pleasure to have this opportunity to speak to you. In my remarks today, I will discuss financial regulation and the ways in which proper incentives help ensure resiliency in the financial system. As always, what I have to say reflects my own views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System.1 We have come a long way since the global financial crisis in building a more resilient financial system—one that can better support the provision of financial services to American households and businesses such as those represented here, both in good times and in bad. But, there is still unfinished business. On the regulatory side, for example, there is more work to be done to ensure that a systemically important bank can be resolved effectively on a cross-border basis in the event of failure. Additionally, the efficiency, transparency, and simplicity of the regulatory system could be improved without weakening the core reforms to capital, liquidity, and resolution that have made the financial system much stronger. Most importantly, we need to recognize that an effective regulatory regime and comprehensive supervision are not sufficient. We also need to focus on the incentives facing banks and their employees.
Global banks’ misconduct costs have now reached over $ billion – capital that could otherwise have been used to support up to $ trillion of lending to households and businesses. The FSB’s misconduct action plan addresses these issues through: (i)  improvements to financial institutions’ governance and compensation structures to align better risk and reward;  (ii)  new global standards of conduct in fixed income, commodities and currency markets; and  (iii)  reforms to major financial benchmark arrangements to reduce the risks of their manipulation. Authorities cannot and should not try to legislate for every circumstance, watch every transaction, or anticipate every market innovation. So while fines and sanctions have roles in deterring misconduct, they will not, on their own, bring about the cultural change we need. In the view of UK authorities, we must move from an excessive reliance on punitive, ex post fines of firms to greater emphasis on more compelling ex ante incentives for individuals, and ultimately a more solid grounding in improved firm culture. In the UK a significant proportion of variable compensation for senior employees now must be deferred for a period of seven years. This ensures that it can be clawed back over the time scale it generally takes for conduct issues to come to light.

On the downside, Spanish banks have higher expenses from asset impairment and provisions than euro area banks. The profitability of the Spanish banking system has a significant cyclical component. In the past economic crisis profitability contracted more sharply than in other jurisdictions: in 2012 it entered negative territory, standing at –21% in terms of equity and at -1.2% in terms of assets according to the consolidated financial statements, which include not only business in Spain but also international exposures. The main reason for this was the higher losses on the loan portfolio associated with a significant rise in defaults, particularly in the Spanish construction and real estate activity sectors, where banks had an excessive concentration. 5/29  Subsequently, the profitability of the Spanish banking system has tended to recover in recent years, basically because impairment losses have decreased as loan quality has improved. A fundamental factor has been the decrease in non-performing assets, including both non-performing loans (NPLs) and foreclosed assets. Turning to the more recent information, in the first three quarters of 2019 the net profit of Spanish credit institutions attributable to the controlling company decreased by 18%. The decline in profits is due to a significant fall in gains on financial assets and liabilities (-23%), accompanied by an increase of nearly 4% in operating expenses. Thus, the fall in net operating income amounted to 1.1%. The increase in operating expenses in the past year was largely due to staff reduction agreements at some banks.
If the Swiss franc were to appreciate rapidly, the National Bank would react appropriately. Today’s increase in the three-month Libor was generally expected. Why did financial markets anticipate this move? The answer is simple. The moderate increase in the interest rate is compatible with our strategy of making gradual corrections to a very expansionary monetary policy, while taking into account economic recovery. Let me clarify this statement. Economic activity At our monetary policy assessment in mid-September, we addressed the factors indicating an economic improvement in the second quarter. We expected that this trend would strengthen in the second half of the year. The movements in economic indicators over the last three months confirm this scenario. According to estimates by the State Secretariat for Economic Affairs (seco), real GDP in the third quarter exceeded the previous quarter by an annualised figure of 4.3%. With respect to the year-back level, it was up by 2.3%. Together with the GDP figures for the third quarter, seco also presented revised figures for the first two quarters. The new figures are substantially higher than before, even after the considerable increase in the figure for the first quarter that was presented in September. Most observers were surprised by the size of the growth estimate for the third quarter. What is more, the retrospective revisions have considerably modified the perception of the economic situation in the first half of the year.

In this way, we aim to ensure that price stability is not endangered in future. The monetary policy decision The economic and monetary situation has developed in the way we anticipated. The inflation outlook prior to today’s decision was largely in line with the figures presented at the last monetary policy assessment. For 2006, however, we forecast a slightly higher level of inflation to that presented in the last assessment. This is due to revisions made to certain figures that point to a higher rate of utilisation in the economy. In view of this inflation outlook, what is the justification for our decision to increase the target range for three-month Libor by 25 basis points? While we anticipate falling rates of inflation next year, this decline is not relevant in terms of monetary policy. Recent inflation levels of over 1% are probably largely due to the rise in oil prices which began in the first half of 2004. At the time, we decided not to take this increased inflation into account in our monetary policy decisions, due to the fact that its consequences could not be neutralised through monetary policy measures. It seems logical, therefore, not to take account of a decline in inflation attributable to subsiding oil prices, particularly since this drop also results from a statistical effect. A number of inflation components are likely to persist at a low level, even in 2006.
Basically, there is now a broad consensus that low inflation is good for economic development and accordingly contributes to gains in prosperity. While it is true that in certain situations the economy can be stimulated by means of low interest rates, this works only if there are unutilised resources. Taken too far, it is liable to result in bottlenecks that push prices and wages up. There is then a risk of households and firms gradually starting to act in the belief that inflation will continue to be high — inflation expectations become firmly fixed on this. In other words, in the long run monetary policy is not capable of influencing growth. What does underlie a country’s economic development and thereby its prosperity are such factors as the labour force, a willingness to invest and technical progress. The best the Riksbank can do is promote an economic development that is more stable, with smaller fluctuations around the long-term trend. It therefore seems to me that the economic debate is somewhat lopsided. The long-term issues you work on in the Riksdag (Sweden’s parliament) ought to attract more attention. The Riksbank’s doings get more than their fair share. Convincing people in Sweden about the value of low inflation really should not be difficult. After all, what did we get out of letting inflation take off in the 1970s and ’80s? Recurrent devaluation cycles and a level of prosperity today that is considerably below that in many other countries.

Ardian Fullani: Brief overview of key topics and the appropriate macroeconomic policy response Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the joint press conference of the International Monetary Fund (IMF) mission with the Ministry of Finance and the Bank of Albania, Tirana, 3 November 2010. *  *  *  Dear Mr. Minister, Dear Mr. Bell, Dear media representatives, It is a pleasure for me to appear before you today following a week of intensive and fruitful discussions to present the Bank of Albania’s position. Allow me first to underline that the meetings held broadly confirmed the conclusions provided in our last monetary policy report and the Bank of Albania’s outlook regarding its future performance. In what follows I will provide a brief overview of our opinions, dwelling upon the key topics of discussion: current and expected economic developments; risks and related concerns, and; the appropriate macroeconomic policy response. The Albanian economy had a positive performance in the first nine months of 2010, expressed in positive growth rates and improved key parameters of macroeconomic stability. In turn, the recovery has been reflected in contained and downward inflation rates, improved current account deficit, lower budget deficit and relative sustainability of public debt figures. These developments contributed to fully restoring confidence in the banking system, lowering the interest rates and the risk premiums, enhancing the exchange rate sustainability and improving the liquidity and financial sector’s balance sheet indicators.