samchain/econo-pairs-v1 huggingface dataset:
This is evident in the individual customer group, with almost 60 percent having no access to formal channels of credit, 37 percent of which are low-income consumers with annual income less than 100,000 baht. Access to deposit for the individual customer group is not as grave a problem as access to credit, although about one-eighth of this group still has no access to deposit. Quantitative gap: corporate customer group In terms of quantitative gap, it displays a similar pattern of deficiency in the corporate customer group to that of the previous group, but to a much lesser extent, with less than a quarter of corporate customers lacking access to credit and a mere half percent to deposit. Qualitative gap: the urban low income group and the rural low income group The survey reveals qualitative gaps among low-income customers that bear the brunt of inadequate financial services. Low-income customers in urban and rural areas face common problem of limited access to distribution channels of formal financial service providers, forcing some urban low-income customers to resort to loan sharks as the main source of financing. The rural low-income group in both agricultural and non-agricultural sectors also encounters the problem of limited choices of financial services, while the low-income customers in agricultural sector face additional problem of high funding cost.

In the fifth part I shall address the cost-benefit issues that sooner or later inevitably turn up whenever measures to improve resilience are discussed. I shall conclude with a summing-up of my main points. Value: significance and driving forces The main function of banks is intermediation. In its basic form intermediation takes place between borrowers and lenders. Additional intermediation functions are - among many others - making payments and buying and selling securities on behalf of clients. Over the past decades we have seen a huge decrease in the costs of intermediation. This has drastically changed the structure of the banking sector and, at a more general level, the structure of the whole financial sector. Two factors have triggered this change. First, competition in the markets has increased as a consequence of reduced trade barriers and of deregulation. Trade barriers not only in goods but also in services including financial services and in financial assets have been progressively lifted. This has led to rapidly growing interaction among economies, not least in the area of banking and financial services. Countries participating in this process have seen their domestic financial markets become deeply integrated with markets abroad. Distance and location, increasingly becoming less of an obstacle, no longer give protection from competition. This is globalization. Second, technological progress, especially in information technology (IT) and telecommunications, has exerted an all-pervasive pressure to innovate at the level of processes and products and has greatly affected the way the financial sector organizes itself.
By contrast, food price inflation and underlying inflation (excluding energy and food) have continued to rise, surprising on the upside and posting high rates in March (of 15.4% and 5.7%, respectively). Headline inflation is expected to remain high for the rest of 2023, albeit on a downward path that will take it to 2.8% in the last quarter of the year. This drop in inflation is mainly explained by the energy component, while underlying inflation is expected to remain elevated. Specifically, the ECB projections point to inflation averaging 5.3% in 2023, before decreasing to 2.9% in 2024 and to 2.1% in 2025. This downward trend would be underpinned by the gradual disappearance of upward pressures from the reopening of the economy, previous supply-side shocks (supply bottlenecks and high energy prices) and euro depreciation, reinforced by increasing pass-through of the recent fall in energy prices and exchange rate appreciation. The fall in inflation in the medium term is also explained by a moderation in domestic demand pressures, owing inter alia to increasing dampening effects of our monetary policy decisions. Importantly, the staff projections incorporate a number of financial indicators that reflect market expectations of our future monetary policy. In this regard, the inflation path in the March staff projections was based on a risk-free forward curve that continued to point to expectations of further interest rate increases at our subsequent meetings, including 50 bp in March, to around 3.2%. This inferred terminal rate was 40 bp higher than that expected at our December meeting.

•  The third is the importance of regular vulnerability testing. We launched CBEST, a controlled, bespoke, voluntary cyber security testing framework which aims to bring to bear the best available intelligence on potential threats to test directly a firm’s ability to protect, detect and respond to cyber attacks. 2. Recovery capabilities  But even with improved ex ante resilience, no network is impenetrable. Hence why firms’ recovery capabilities are equally important. We still need firms to work to be able to resume vital services quickly and reliably in the event of operational disruption. We are keen to see firms adapt their approaches to business continuity planning to take account of cyber. One possibility raised in the FSR is seeking more segregation between primary and backup systems. 3. Effective governance  I mentioned earlier it is for firms in the first place to be responsible for their cyber resilience. I’ve also noted that cyber is about people as much as it is about technology. And let me be clear, the responsibility for understanding this risk extends beyond technology specialists; firms’ boards need to view cyber risk as a core strategic issue and be in a position to challenge senior management in all business areas on the adequacy of their arrangements to deliver cyber resilience. Going forward So this is where we’ve got to on cyber. But now it’s clear we need to place cyber on a more permanent footing.
As a conclusion, I would like to make three remarks: on the global financial markets, on the euro and on the People’s Republic of China. –  On the global financial markets, I will draw our attention to one of the most important challenges we have to face up with: the “herd instinct” of market participants, which, in certain cases, can amplify considerably volatility, create or augment misalignments and induce large-scale global contagion in case of local crisis. The herd instinct is probably profoundly enshrined in the functioning of the marketplace. In order to minimize its effects, I have three provisional conclusions: •  Perhaps we should have a second look at the very rapid generalization of day to day mark to market accountings. Perhaps a better medium term functioning of the market would call for a clear distinction between various market participants depending on their own time horizons. •  It seems to me that it would also be important to reflect upon the consequences of the very rapid increase of mutual funds in some major markets. All the managers of these funds have to prove permanently on a very short-term basis that they are better managed than the average. This creates a very powerful potential herd instinct. •  Finally, I profoundly think that full transparency is the most efficient tool to counter the setting up of a “herd” and to cope with potential “herd” behavior.

In general, we will always listen to arguments when people disagree with us, and we will always take into account new evidence. This includes tailoring rules that are already in place in response to our own evaluations or to evidence from industry, broader civil society and other stakeholders. Page 6  This is what we did when we implemented an earlier Basel regulatory package known as CRR2. In that case, we implemented a new standard for banks’ long term funding after tailoring it to be more risk sensitive for activities that are important for the UK. That was a change we made in response to evidence-based arguments we received during the consultation. We are now taking the same approach to work on Solvency II rules for insurers. Debates between us and the Government have got a lot of public attention. But there are many areas where we fully agree about the benefits from simplifying the regime to better reflect the needs of the UK. And with the high-level policy decisions now clear, we are focused on implementation and on delivering detailed proposals for consultation. My colleague Sam Woods recently set out what we are committed to doing. [18] All of this will be on top of what we are already doing to remove unnecessary rules we inherited from our time in the EU. We have so far deleted 13 guidelines issued by EU regulators, five superseded Supervisory Statements and 26 technical standards onshored from the EU. This work will continue.
Last observation refers to December 2010 in the case of the US, China and the euro area and to November 2010 in the case of EMEs and World. Sources: IMF IFS, PBoC, Haver Analytics and ECB staff calculations. BIS central bankers’ speeches  9  Chart 8: Real ex-post short-term interest rates and real GDP growth – US and EA  Note: Last observation refers to January 2011 for the US and December 2010 for the euro area. Sources: National sources, Haver Analytics and ECB staff calculations. Chart 9: Real ex-post short-term interest rates and real GDP growth – China and EMEs  Note: Last observation refers to January 2011 for China and November 2010 for EME aggregate. Aggregate created on the basis of GDP PPP weights from IMF October 2010 WEO (2009 fixed weights). Sources: National Sources, Haver Analytics and ECB staff calculations. 10  BIS central bankers’ speeches  Chart 10: Monetary policy accommodation and lending standards  Note: Monetary policy accommodation is proxied by the residual of an estimated monetary policy reaction function (with inverted sign). For the US it is based on G. Rudebusch (2009), “The Fed’s Monetary Policy Response to the Current Crisis”, San Francisco Fed Economic Letter. For the euro area it is based on an update of the reaction function estimated in L. Christiano, R. Motto and M. Rostagno (2010), “Financial Factors in Economic Fluctuations”, ECB WP No. 1192. The lending standards are the net percentage of respondents tightening lending standards to enterprises.

As a euro participant, however, Sweden would be in the same boat as other member states as regards many of what appear to be likely supply shocks, for instance oil price fluctuations. As regards the lack of knowledge, there are clearly no simple institutional solutions. But this does not mean that the institutional frameworks for conducting policy do not affect the accumulation of knowledge. As I mentioned earlier, the Stability and Growth Pact has led to a rapid development of EU work to arrive at a better understanding of the interaction of public budgets and capacity utilisation. In Sweden, the acquisition of knowledge about potential growth, the output gap and so on has been stimulated in that the Riksbank has been made accountable for safeguarding the value of money and we have placed this mandate in a clear intellectual framework that calls for deeper analyses. This in turn has had consequences for how both the Ministry of Finance and the National Institute of  4  BIS Review 6/2002  Economic Research are now working on these matters. Another reason why Swedish authorities have reason to be more involved in a broad discussion and analysis of questions such as these is perhaps that euro participation could lead to the financial markets becoming less interested in analysing specifically Swedish conditions. I consider that the importance of a high level of competence in such institutions as the Finance Ministry, the Riksbank and the National Institute should be emphasised.
In the alternative path that is assumed to represent a policy that does not lean against the wind, the repo rate would have been close to zero since July 2009, that is, for more than five years. This in an economy that began to recover from the crisis very quickly and where the temperature on the housing market cooled only temporarily. We can see today, when the repo rate has once again been cut to very low levels, that housing prices have begun anew to soar (see Figure 3).13 Lending to households increased by almost 10 per cent a year when the repo rate increases began in July 2010 (see Figure 4). And lending has begun to rise once again as the repo rate has been cut. Another important element here is that there was no framework for macroprudential policy for most of the time when the repo rate, according to this alternative, should have been at 0.25 per cent. It was not until August 2013 that the allocation of responsibility for macroprudential policy was clarified and the Swedish government had set formal guidelines for this.14 As yet, it remains to be seen how well this framework will actually work in practice. Given this, advocating a repo rate of 0.25 per cent for more than five years and entirely disregarding the risks of distorted expectations and problems with developments in housing prices is quite remarkable.

It would of course be unfortunate for the continued international discussion if the conclusion of the Swedish experiences were that when the policy of leaning against the wind was attempted in practice, it led to a very poor, or even catastrophic, result. Because this is not the case. 1  See, for example, Visco (2014) and Yellen (2014). 2  See, for example, Blanchard, Dell’Ariccia and Mauro (2013), Borio (2014), Carney (2013), Smets (2013), Stein (2013) and Woodford (2012). BIS central bankers’ speeches  1  Before I continue, I would like to make it clear that my purpose here today is not to justify every single decision the Riksbank has made. It is natural that different observers make different assessments regarding economic developments and thus reach slightly different conclusions regarding what exact policy should be conducted. With hindsight, it is clear that monetary policy could have been somewhat more expansionary if we had known that inflation would be as low as it is now. This is a natural and unavoidable consequence of the fact that monetary policy has to be based on forecasts, which are uncertain. However, most of the recent criticism has gone far beyond discussing this type of difference in assessments. Instead, it has claimed that the policy conducted by the Riksbank was wrong on a more fundamental level. This is the type of criticism I intend to focus on here.
The conditionality imposed on IMF financial support was associated with the application of “shock therapy” to Asian countries’ financial sectors: losses had to be written down immediately, banks were closed or sharply restructured and many institutions were sold to foreigners, arguably at “fire sale” prices. Within the euro area, various buffers – not least, the Eurosystem’s provision of liquidity support – have tempered the stresses in the financial system. This reflects the recognition that, within such a deeply economically and financially integrated region, “shock therapy” adjustments may, through spillovers, weaken the financial system in other parts of the euro area. However, we must also ensure that such liquidity support to the banking sector does not delay or hinder the fundamental reforms required to address the underlying weaknesses the financial crisis has revealed. In the end, the crisis-hit countries have no alternative: they have to make fundamental reforms to their banking systems, involving substantial restructuring and, in some cases, very significant downsizing. Liquidity support can help to reduce adjustment costs by smoothing the transition. But those costs should not be used as a pretext for delay. 5. Concluding remarks  Financial markets are testing the strength and resilience of the euro area and the willingness and ability of the euro area authorities to preserve the integrity and stability of the euro as a currency. The institutional response to their challenge has been swift, strong and resolute.

I would then like to turn my attention to the subject of gold as part of our currency reserves. But first, let me begin with the key events in monetary policy. Key events in monetary policy in 2012 and 2013 More than 20 months have passed since the SNB introduced the minimum exchange rate against the euro under exceptional circumstances. In summer 2011, the Swiss franc had appreciated to such an extent that we had to take action. It is the SNB’s statutory mandate to ensure price stability, while taking economic developments into account. With money market interest rates already close to zero and conventional monetary policy options exhausted, we would have no longer been able to fulfil this mandate without the introduction of a minimum exchange rate. In taking this step, the SNB averted the threat of adverse developments to price stability and the Swiss economy. The minimum exchange rate provided the foreign exchange market with clear guidance and gave companies a sounder basis for their investment planning. Notwithstanding the minimum exchange rate, conditions for the Swiss economy remained difficult in the past year. Global economic growth weakened, after having already lost momentum the previous year. This slowdown was mostly due to the deterioration in economic activity in emerging economies and to the recession in the euro area. Although the European financial and debt crisis is weighing particularly heavily on the euro area economy, it is also curbing growth in other regions.
One central issue in this context is the inflation target. If a central bank “promises” low inflation, but the economic agents do not find this credible, it will not have the desired effect. It is possible to inspire confidence in the inflation target by the central bank being politically independent. What does this have to do with the zero interest rate problem and the repo rate path? What I mean is that the existence of a repo rate path in connection with cutting the repo rate to 0.25 per cent, provided credible evidence that a low interest rate over a long period of time was what was needed to attain  5  One argument in favour of the bound possibly being below zero is that there are handling costs for cash. This would then mean that one can accept a negative interest rate to refrain from cash and invest in interestbearing assets. See, for example, Meredith Beechey, and Heidi Elmér (2009), “The lower limit of the Riksbank’s repo rate”, Economic Commentaries no 11, 2009, Sveriges Riksbank. 4  BIS Review 85/2010  the Riksbank’s monetary policy objective of an inflation rate close to the target, and to stabilise resource utilisation. One could say that we put our cards on the table. 6 Figure 2 shows the relationship between market expectations according to forward rates and the Riksbank’s repo rate path in connection with the repo rate being cut to 0.25 per cent in July 2009.

BIS Review 85/2010  3  During the forecasting process, the main scenario presented at the monetary policy meeting has in practice become a scenario that is supported by a majority of the Executive Board members. If there are any reservations against the main scenario or the monetary policy decision, these are made clear at the monetary policy meeting. Thus, the monetary policy decision is preceded by a long process. As the decision now also includes the Board’s view of the future repo rate, more in-depth and long-term discussions are required than if it was merely a question of whether or not to alter the repo rate. The repo rate path has entailed a fruitful change. The role of the repo rate path during the financial crisis When we began to make repo rate forecasts a few years ago, I do not believe anyone expected a situation like the one we had when GDP fell by 5 per cent in 2009. During the financial crisis several central banks were forced to cut their policy rates to close to zero. This has entailed restrictions on future decisions, as the nominal interest rate has a lower bound. The classical argument in favour of this lower bound is that the nominal interest rate on cash is zero, and that a negative interest rate would mean that economic agents would hoard banknotes. There are many discussions in the academic world as to whether the lower bound lies at zero or slightly below.
Thus far, the global financial crisis has had limited direct effects on Islamic finance. While Islamic finance by its very nature only engages in transactions that have underlying tangible productive activities, the slower overall growth and the increased uncertainties have affected pricing and activity in certain market segments. However, this in part reflects the shift in activity from the financial markets to the Islamic financial institutions. The scope of Islamic financial business has now expanded to more sophisticated financial products in response to the changing global customer base. Such Shariah-compliant products include private equity, project finance, the origination and issuance of sukuk, as well as fund, asset and wealth management products. The sukuk market in particular, has  2  BIS Review 136/2008  become an important avenue for international fund raising and investment activities. This market has expanded by an annual growth rate of 40%. The year 2007 saw an exceptional growth of the global sukuk market which expanded by more than 70%. New issues during the year reached a record high to about $ billion and the outstanding global sukuk market has now surpassed the $ billion mark. Up until August this year, it has held its ground with a total global issuance now exceeding $ billion, and is expected to exceed USD200 billion in 2010. This growth is spurred in part by the growing funding requirements in emerging market economies, in particular, in Asia and the Middle East. This is reinforced by the continued confidence of investors in the Islamic financial instruments.

Mugur Isărescu: Challenges to economic growth in the European Union – reforms for the future of Europe Opening speech by Mr Mugur Isărescu, Governor of the National Bank of Romania, at the Conference “Challenges to economic growth in the European Union. Reforms for the future of Europe”, organized by the National Bank of Romania and the British Embassy, Bucharest, 29 September 2011. *  *  *  Ladies and gentlemen, Distinguished audience, It is with great pleasure that I welcome you all here, at the National Bank of Romania, which tonight hosts a conference on a particularly interesting and up-to-the-minute topic: “Challenges to Economic Growth in the European Union. Reforms for the Future of Europe”, an event benefiting from the extraordinary support of the Embassy of the United Kingdom in Bucharest. I am honoured to salute very dearly Mr. Vincent Cable, the British Minister for Business and Innovation. I also wish to extend my greetings to Mr. Martin Harris, the British Ambassador to Bucharest, and to the other diplomats. Ladies and gentlemen, Sustainable economic growth of both Romania and the entire European Union hinges decisively on economic policy consistency. Moreover, the global economic and financial crisis has proved to us yet again that there is no valid substitute for consistent economic policies. The correction of economic policy errors is, for all countries in the world, painful, often difficult to comprehend by the public at large and inherently delayed, but it is absolutely necessary.