samchain/econo-pairs-v1 huggingface dataset:
In a scenario when we see oil prices slump from the current relatively high levels, both business and household expectations are set to be negatively affected for a time. However, we expect no reversal in the current positive economic trend. We cannot rule out a certain slowdown in the paces of growth between late this year and early next year; yet subsequently, the economic 2 / 14  BIS central bankers' speeches  trends of today will prevail. Businesses will be gradually building up investment as they capitalise on their profits accumulated in prior years. The real sector’s ability to borrow will also improve over time. Alongside with softer monetary conditions, this will give extra impetus to growth in investment. Consumer demand will recover gradually on the back of growing revenues and improving expectations. This process is expected to be smooth and create no inflation risks. The recent strengthening in the ruble is set to bring about increased demand for imports in the first half of 2017. Moving forward, however, this growth is on course to become slower; in this way, exports are set to grow at moderate paces. In 2017–2018, economic growth will total about 1-1.5%, with acceleration to 1.5-2% envisaged as early as 2019. Still, potential economic growth will be invariably constrained by structural factors. Following this recovery period, paces of GDP growth are expected to be equal or less than 1.52%. The current account balance is expected to rise in 2017, prompted by higher oil prices.

QUESTION from Reuters: Your press release allows for a gradual downgrade in the key rate. Is this to say that a 25 basis point reduction in future is the new normalcy? ELVIRA NABIULLINA: Thank you very much. It is true that we have decided on this magnitude of reduction – 25 percentage points after long time. A short while ago, I floated the idea of a smaller step as we transition progressively to a single-digit rate. This is understood to be standard practice when the key rate is below 10%. Yet, this is not to say that each policy meeting will decide in favour of a 25 bp reduction. I leave open the possibility of a further 0.5 bp reduction provided that the right conditions are in place; however, I envisage that a 0.25 reduction is likely to be more acceptable in the near future. QUESTION from Interfax: Two questions, please. First. Last autumn, the Central Bank issued a public statement that it was crafting guidance for civil servants, in an effort to mitigate the volatility of the exchange rate. Can you please update us on the status of this guidance? For which civil servants is this intended? Does this initiative remain current in light of recent statements that suggest a general over-strengthening in the ruble and that they weigh in on the exchange rate? And another question, if I may. Recently, we have heard heavy criticism against Rosstat. What is the Bank of Russia’s view of Rosstat statistics?
This is in line with surveys on inflation expectations. Although survey respondents now anticipate that inflation will be significantly lower, their expectations remain in positive territory for the medium term. With the new exchange rate situation, conditions for the Swiss economy have become more difficult. In the past, entrepreneurs and employees have always found ways to deal with a strong Swiss franc, thereby demonstrating, time and again, their great flexibility. Nevertheless, every appreciation represents a fresh challenge with an uncertain outcome. Therefore we have great respect for the difficult tasks which the economy now faces. In this regard, I would like to say a few words about the economic situation in Switzerland. In the fourth quarter, the Swiss economy again grew faster than expected. On the output side, growth was relatively broad-based, with manufacturing being the main driver. Value added also rose significantly in the banking industry and the public sector. On the demand side, both consumption and equipment investment recorded favourable developments. By contrast, exports of goods and services stagnated. In December, the SNB expected annual growth of some 2% for 2015. With the appreciation of the Swiss franc since mid-January, this forecast has had to be revised. A noticeable weakening in the economy may be expected, particularly in the first half of the year. For the year as a whole, the SNB now only expects real GDP to increase by just under 1%. Given this weakening, appreciable underutilisation of production capacity may be expected in the short term. Unemployment is likely to increase moderately.

I think it merits serious consideration for more widespread adoption, irrespective of the accounting and tax treatment such reserves might attract. One key feature of such reserves is that they should be useable. That is, the markets and analysts need to accept that using such reserves to absorb write-offs when losses are high is the natural counterpart of building them up when losses are cyclically low. It is not a sign of  BIS Review 145/2008  5  weakness or of inadequate capitalisation, but of prudent management of the cyclical pattern of losses. From the point of view of market acceptability, separating cyclical reserves from more structural capital requirements seems a valuable idea. The second scheme I want to promote is growth-related capital requirements. Losses tend to be lower in the early stages of a loan’s life than when it is fully seasoned because borrowers are more certain of their own and the economy’s near-term prospects. A loan book which is growing more rapidly than average will be weighted towards such unseasoned loans, and so will appear to be performing better than a balanced portfolio of loans of different vintages. In addition, rapid growth of lending tends itself to be associated with taking on poor business – even if that is not obvious at the time it is written. Typically, rapid growth can only be achieved by drawing in marginal borrowers to the market. That is true of the banking sector as a whole.
I believe this will culminate in Islamic finance leadership that is premised on ethics and professionalism. Islamic finance can then truly fulfil its key role in elevating the well-being of humankind, and not just for achieving halal profits. Towards Sustainability: The Role of Islamic Finance Islamic finance value propositions not only are consistent with universal and ethical values, but the economic aspirations are to elevate our overall well-being. Much of today’s discussion focus on as Sustainable Development Goals (SDGs) and Sustainable Responsible Investments (SRIs) that centre on impact-driven and value-added outcomes, in addition to being commercial2/3  BIS central bankers' speeches  oriented. On this note, Malaysia is at the forefront of innovation and thought leadership with the Value-Based Intermediation (VBI) initiative that aims to create positive and sustainable impact to the economy, community and environment, without compromising the financial returns to shareholders. Our VBI journey has hit several key milestones. To date, 12 Islamic banking institutions have pledged to integrate environmental and social considerations in their offerings, practices and cultures. In facilitating this new journey, Bank Negara Malaysia will continue to collaborate with the industry to create an enabling environment for smooth and orderly transition. These include the issuance of several guidance documents such as the VBI implementation guide, VBI Scorecard and Value-based Impact Assessment Framework (VBIAF). More recently, the Bank and the VBI community of practitioners (COP) have embarked on efforts to develop sectorspecific guides on value-based impact assessment alongside sectoral experts.

In particular, they act out of self-interest or greed often at the expense of others. It is time to put this to rest. One can just take Islamic ethics as they are, and act as one say and as one mean. However, we should build on this, infuse it with a creed of professionalism that will provide its practitioners with not only a clear set of principles, but a sense of vocation to do what is right and to strive for the greater good and the betterment of the society to truly achieve the aspirations of maqasid al-Shariah. Let me share some further thoughts on this. In building such an ethos, we should always have in mind the basic or fundamental Islamic ethics that are also shared across many religions and societies. Such prescriptions lay out the fundamental basis of decency and behaviour. We cannot steal, cheat, lie, and act dishonourably. Principles that essentially guide us to be decent and in fact socially acceptable and responsible members of society. A natural component of this is ‘amanah’ or trust. As professionals, we should act as it is entrusted upon us, protecting the interests that we serve; our customers, shareholders, institutions, and sometimes this comes at personal expense. Trust is often called a valuable commodity. Indeed, it is even larger than that. Trust is a foundation or pillar of many relationships, including that of business and finance.
Mr. Erçel explains developments in the Turkish economy that help in understanding the country’s market opportunites Speech by the Governor of the Central Bank of the Republic of Turkey, Mr. Gazi Erçel, on the occasion of the Conference on “Private provision of infrastructure in Turkey” held at Çiragan Palace in Istanbul on 3/4/97. For a comprehensive understanding of the opportunities offered by Turkey’s market, I should stress the implications of our journey toward liberalisation. In 1980, with world conditions changing and the domestic economy in crisis, Turkey launched a structural adjustment program based on free market principles and an outward-looking economic policy. Since then, a series of liberalisation measures have been taken. The most significant accomplishment of the Turkish liberalisation process is that it has restructured economic relations. Both the financial system and the foreign exchange system have been liberalised. Before discussing Turkey’s economic performance, I would like to describe some features of our foreign exchange system and financial system. Let me begin with the foreign exchange system. Efforts to liberalise Turkey’s balance of payments go all the way back to the Great Depression, and ever since the 1930’s, the issue has been whether to liberalise the current account or the capital account. Now these questions have been settled. Let me summarise the state of the foreign exchange regime under five headings: 1. Residents are permitted to buy, sell, and use foreign exchange freely. 2.

Thank you very much, and I would be happy to take any questions. 6  BIS Review 46/2006
What we have seen is that there is a pressure on banks‘ unit margins, but that’s been compensated by volume effects – as there is more activity in the banking sector thanks to the support of monetary policy to the recovery. Nominal GDP has been better and NPLs have started to go down, and as a result banks have been able to reduce provisions. Globally you would see that the net effect of those measures so far has been positive on bank profitability. BIS central bankers’ speeches  3  Inflation has repeatedly undershot your forecasts… It is key for a central bank to keep inflation expectations anchored, especially in a period of slack in the economy. And we have some signals that these inflation expectations are still fragile. Is that still the case? I think it’s still the case. Long-term inflation expectations remain fragile. I never said they are de-anchored, I don’t think they are, but there are risks and this is why we are considering further action. A possible de-anchoring of inflation expectations together with a lot of slack is a dangerous cocktail. A lot of the latest wave of commodity price declines is demand related. At some point in the recent past you had a supply side issue, which is a windfall for consumers, but now a significant part is also coming from weak global conditions. Global growth this year will be the weakest since 2009. 4  BIS central bankers’ speeches

Because they are so closely linked to monetary policy, they had shown signs of almost full integration right after the introduction of the euro. But with the crisis, a degree of re-segmentation took place again along national borders; and the Eurosystem had to step in to take on the intermediation role that these markets play in normal times. Another set of issues relate to banking. Banks expanded both across borders and financial sectors, often combing commercial banking, investment banking and insurance business in one and the same group. The two groups whose CEOs are in the panel are clear examples of this evolution. But cross-border integration of rules and prudentials, including the institutional framework, has not proceeded with the same speed and there continue to be clear differences according to the activity type. Banking consolidation also raises sensitive moral hazard and crisis management questions, as painfully illustrated by the crisis. The securities markets showed strong growth in the years before the crisis and clear signs of integration, though not to the same extent as observed in the euro money markets. With the crisis, bond price indictors showed signs of more dispersion across countries in Europe, but the question is whether this points to more segmented markets or rather increased risk awareness on the part of investors. Very topical in this respect is also the CDS market and its interaction with the underlying (sovereign) bond market. Finally, the integration of a securities market depends to a large extent on the integration of the supporting market infrastructure.
Further, retail deposits cover a substantial portion (75%) of the total stable funding needs (60% for European banks as a whole). Assets Consolidated assets saw growth of 2.1% in 2022, below levels seen in 2020-2021 (3.8% on average). However, the drop in financial assets in Spain (by 5.4% to March 2023) is noteworthy, while assets abroad (expressed in euro) rose (by 7.2% to March 2023). The latter increased to represent 53.7% of the total – 4.3 pp more than one year ago (32% in 2008). Much of the decline in financial assets in Spain is owing to the reduction in balances held with central banks (-31.9%) and, to a lesser extent, to the dip in loans to the resident private sector (-2.5%). Meanwhile, the increase in financial assets abroad was the result of growth in lending to the resident private sector in third countries (10.3%) and in debt securities (16%), against the background of a depreciating euro.9 The pass-through of monetary policy interest rate rises to average rates on the stock of loans took place gradually over the last 16 months, although it quickened in early  4  Standing at 54.1% of total consolidated assets at end-2022, a rise of 14.7% since 2019. 5  Interbank funding and financing from other financial corporations, as well as marketable debt instruments (whose share of the sector’s funding had dropped in recent years) increased their weight in liabilities by around 2 pp in 2022.

In particular, the creation of a fully mutualised European deposit insurance scheme would boost both public and market confidence. It would also contribute to greater risk-sharing in the euro area, and thus help reduce potential fragmentation episodes. 15  From highs of 119.9% and 85.6% of GDP, respectively, in 2010, to 72% and 53% at end-2022. 16  The 3-month EURIBOR is the main benchmark rate for non-financial corporations’ funding costs. 17  These figures are obtained drawing on different hypotheses as to the percentage of debt expiring and renewed in the short term. The top-end figure (6.8 pp) is the effect of all debt expiring in the short term being renewed. 18  A firm is considered to be under high financial pressure when the ratio of (gross operating profit + financial revenue) to financial costs is less than one. 19  The 12-month EURIBOR is the main benchmark rate for households’ funding costs. 20  The net interest burden is considered to be high when the ratio of (debt service expenses - interest income from deposits) to household income is over 40%. 7  On a global scale, an in-depth analysis is also needed of the recent banking turmoil from a regulatory and supervisory standpoint. The Federal Reserve System has now published an assessment of the reasons for the recent events in the United States. On the Financial Stability Committee and the Basel Committee on Banking Supervision, we have embarked on an analysis of the recent developments, to enable lessons to be drawn.
We know that linking compensation to productivity is efficient, but the devil is in the details. Second, the regulation-making process, as very well discussed in Dr. Reddy’s lecture, was also distorted by comprehensive capture by the financial industry. As he explains, this was not only capture of the regulators, but also capture of public policy relating to the financial system. With a little bit of moral hazard, which is exacerbated by regulatory and policy capture, the result was the creation of a very vulnerable financial system. Finally, there was indifference in policy circles. None of us saw it coming, at least not with the intensity with which it arrived, which still persists. Indeed, it was difficult for those of us from emerging markets to think that this could happen in the advanced world. Whenever we had raised a concern we had been told that “these are developed countries,” as an argument that “this time is different”. There were, of course, calls for prudence, in particular from this institution, but we never thought that the consequences would be so dramatic. Markets should provide enough discipline to balance risk and return, but that was not exactly the case. The market functioned poorly. In addition, we had a sense of security given the “decoupling” that took place in the 2000s, in part due to good macroeconomic management, and which became a recoupling by mid-2008 (Dooley and Hutchison, 2009; Korinek et al., 2010).

6  BIS central bankers’ speeches  With domestic demand growing at around 3% in 2014, the fastest for ten years, all these factors will underpin the momentum needed to bring domestic cost growth back to up to a rate consistent with the inflation target. The fall in inflation we’ve experienced is in large part down to falling energy prices. It is not generalised “deflation” proper. The proportion of prices that are falling is consistent with the average over the past decade. The Bank will be vigilant in monitoring inflation expectations. Declining headline inflation seems likely to have cooled households’ inflation expectations as the prices of the goods they buy frequently – like fuel and food – have declined markedly. On balance, however, inflation expectations remain broadly consistent with the 2% inflation target. As the MPC noted in our February Inflation Report, we retain considerable policy options in the event that downside risks materialise. 6. Conclusion  The Bank of England’s inflation target is symmetric. We care as much about inflation below target as above. With inflation below target and unemployment above its long-run sustainable rate, we are aiming to return inflation to target as quickly as possible. In our most recent forecast, The Bank expects to return inflation to target within two years and to make limited and gradual increases in Bank Rate over the next three years in order to achieve that in a sustainable manner.
5  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  5  Chart 4: Underlying UK inflation relative to target-consistent levels  pp  2 1.5 1 0.5 0 -0.5 -1 -1.5 -2 -2.5  2012  2013  2014  2015  CPI ex VAT Trimmed mean core  2016  2017  2018  Core services CPI ex VAT SPPI  2019  2020  2021  Core CPI ex VAT  Source: ONS and Bank calculations  Chart 5: UK inflation expectations  Source: Bank of England, HMT Survey of Professional Forecasters and Citi/YouGov Household Expectations Survey  6  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  6  On the demand side, a disinflationary drag factor over the past decade has been the persisting effects of the global financial crisis. The recovery from this crisis was significantly slower than expected, with the level of activity in the UK consistently undershooting expectations (Chart 6). This resulted in a larger and more persistent output gap, and hence a larger and longer downdraught on inflation, from the demand side of the economy than was anticipated. The same was true internationally. Chart 6: UK GDP growth and historic forecasts  per cent  6 4 2 0 -2 -4 -6 -8  2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source: ONS and Bank of England.

While affecting both demand and supply, most economists believe the hit to demand from Covid has been larger than to supply, opening up output gaps. The IMF estimate the output gap among the G7 countries rose from around -0.4% in 2019 to 3.8% in 2020. In the UK, the MPC judge that the output gap has widened and will continue to widen in the near term, peaking at 3% and lowering inflation by around ½% in 2021. 10  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  10  Chart 10: Velocity of Broad Money  Nominal 0.3 GDP/Broad money  0.25 0.2 0.15 0.1 0.05 0 06  07  08  09  10  11  12  13  14  15  16  17  18  19  20  Source: ONS and Bank of England. There are contrasting views among economists about the pace at which these output gaps will close. The MPC’s central view is that the UK’s output gap will close this year, although uncertainty around the timing and pace is considerable. A key factor, as after the global financial crisis and the Great Depression, will be the extent and persistence of psychological scarring among lenders, households and companies. The deeper and longer-lasting these psychological scars, the slower the likely pace of recovery, the more persistent the output gap and the greater the disinflationary drag from the Covid crisis.