samchain/econo-pairs-v1 huggingface dataset:
Erdem Başçi: Central bank responsibilities, global financial stability and payment systems Opening remarks by Mr Erdem Başçi, Governor of the Central Bank of the Republic of Turkey, at the “Payment Systems Conference”, organized by Al Bank Wal Mustathmer Group, Istanbul, 5 December 2012. *  *  *  Distinguished Governors of the Central Banks, Distinguished Guests and Esteemed Members of the Press, I would like to thank you all on behalf of the Central Bank of the Republic of Turkey and myself for your participation in the “Payment Systems Conference” organized by Al Bank Wal Mustathmer Group. Welcome to İstanbul and Turkey. Participants to the conference, who are all experts in the field, will be discussing payment systems, their significance and contemporary approaches. Before moving onto the topic of payment systems, I would like to briefly mention the main responsibility areas of central banks. Distinguished Guests, Price stability, financial stability and the development of the financial sector are three significant fields central banks are responsible for, either partially or fully. The primary objective is price stability. The social costs to be incurred from the loss of price stability have been thoroughly understood by economists.

The crisis, for example, had a different impact on the Albanian economy, from what we had historically experienced. At the time, the Albanian economy did not seem to be vulnerable to the foreign sector. Subsequent analysis, however, showed that domestic imbalances had built and, indeed, made the economy vulnerable to a foreign credibility shock. It is crucial that research in central banks focus on available information and methodologies, which scrutinize existing paradigms, making this information useful to policymaking, before it becomes or leads to vulnerabilities. In light of the financial and human capital constraints faced by central banks in small, open economies, such as Albania, we believe that it is important for these topics to be discussed, in this workshop, with fellow researchers from academia and other central banks. I would like to encourage our researchers to publish their papers in relevant, peer-reviewed 1/3  BIS central bankers' speeches  journals as the most important certification of their work. This will make your research projects more useful and facilitate speedy implementation in mainstream policy making. Despite recent success in publications, one of the things that I hear the most is that there is not much research interest in the scientific study of small, developing or emerging market economies like Albania. From my prospective, I think that there is interest in the scientific study of small, developing or emerging market economies such as Albania, because of the particular and distinguishing characteristics of our economy, which can be different from those represented in mainstream research findings.
26 Sweden also has a poorly functioning housing market that is also dependent on the international bond market, as a considerable proportion of the mortgage bonds are owned by foreign investors. If these investors were to lose confidence in the Swedish economy or the housing market and thus start selling their holdings, the banks' funding costs would rise and the result would be greater risks in the financial system. 27 See Final Report of the Riksbank Committee (2019). 16 [30]  Council discusses what measures are needed to counteract the build-up of financial imbalances. The Government has also recently presented a legislative proposal for Finansinspektionen to consult with the Riksbank when setting requirements for countercyclical capital buffers for Swedish banks.28 The Government emphasises that the decisions on how large capital buffers banks should have can have significance for monetary policy and should therefore be taken from as broad a perspective as possible. The Riksbank will return with its views on the Government's proposal to give the Riksbank greater influence over the countercyclical buffer. Central banks can counteract financial imbalances in certain situations. From an economic perspective, it is important that the risks in the financial system are manageable. Macroprudential tools are particularly effective when we know where the risks in the financial system are building up, such as excessive private debt. However, when interest rates are low for a long period of time, it can be difficult to know in advance where in the system the main risks lie.

Purchases of private assets and assets other than government securities are primarily relevant when markets that are important to the financial system are threatened, and we risk an acute financial crisis, such as at the start of the pandemic. Under the new Sveriges Riksbank Act, the Riksbank can – under certain conditions – buy and sell Swedish securities issued by the government and private actors. Our monetary policy toolbox in this respect remains the same as before. However, the new act has a more restrictive view of when it may be relevant to purchase private securities. The Riksbank may only buy and sell such securities if there are exceptional reasons. This means in practice that, from a monetary policy perspective, we can only buy and sell private securities when we cannot achieve the desired effect on the economy by using other measures. The new act also gives the Riksbank a more explicit mandate than before to trade in securities, also within the scope of our task of contributing to a stable and efficient financial system. To counter serious disruptions in the financial system, the Riksbank may if there are exceptional reasons buy and sell financial instruments at predetermined prices to temporarily support the functioning of systemically important financial markets. An important task for the Riksbank is to be the lender of last resort for important credit institutions that have problems, but also, under certain conditions, to act to keep markets that are critical to the financial system going.
Much has been said about how the banking system has remained broadly resilient to date, and how banks have not been “part of the problem” in exacerbating the economic crisis. This is in no small part due to the fact that banks entered the pandemic on a much more resilient footing that during the Great Financial Crisis, thanks to the initial set of Basel III reforms, and the ongoing cooperation among Basel Committee members over the past year. In addition, the unprecedented range of fiscal and monetary measures taken by jurisdictions around the world to support the real economy have largely shielded banks to date from losses. 1/3  Yet in order to safeguard global financial stability, it is crucial to lock-in the benefits of the outstanding Basel III reforms by implementing them in a full, timely and consistent manner. Doing so would ensure that the regulatory fault lines of the global banking system – most notably with regards to excessive variability in risk-weighted asset, the gravity of which remains as important today as it was pre-pandemic – are adequately fixed. These reforms benefited from an extensive consultation process with a wide range of stakeholders. The finalised standards took on board many of the comments received from stakeholders and reflect the differences in views among our members. They are a compromise by their very nature. I should further note that the majority of the adjustments made in the finalised standards reflected the views of different European stakeholders.

It also finds that potential deviations from the globally agreed Basel III reforms – for example, with regard to the output floor – would significantly dilute the benefits to the real economy. 2/3  To sum up, there are clear and significant benefits to all from implementing the Basel III standards in a full, timely and consistent manner in Europe: -  For households and businesses, it would reduce the probability and impact of future banking crises, and provide banks with the capacity to maintain lending in both good times and bad. -  For European banks, such an implementation would shore up their resilience by fixing some of the outstanding frailties in the banking system. It would also avoid any stigma and negative signalling to financial markets about their noncompliance with global standards. The pandemic has further reminded us that the benefits of a resilient banking system should not be taken for granted. -  For policymakers, it would help safeguard global financial stability and avoid the risk of a harmful “race to the bottom” in bank prudential standards. And it would serve as an important input towards greater financial integration in Europe. Europe has a strong track record of playing a lead role when it comes to multilateralism and sticking to global agreements. Now, more than ever, it is crucial for Europe to continue to demonstrate these traits, including with regards to globally agreed prudential standards.
A positive development of year 2004 was also the agricultural production, which increased by 4.9 percent. The industry sector performance has been characterized by a mixed performance. Sub-branches of the processing industry like foodstuff industry, manufacturing of mineral products and metallurgy, performed higher sales during the nine-month period of 2004, while sales of the textile industry and processing leather industry marked rather low levels. The energetic sector experienced a positive performance during 2004. The electric energy production marked an annual growth of 12 percent, being expressed in the rise of exports by 20 percent and the decline of energy imports by 30 percent. Sales of the transport sector increased by 5 percent over the nine-month period of the year. An important aspect of the Albanian economy over the last years is the fact that the economic growth did not generate macroeconomic imbalances. On the contrary, it is accompanied by the ongoing consolidation of this stability, being expressed in the low and stable inflation rates, in the reduction of budget deficit and public debt, in the improvement of the balance of payments position and in the overall stability of monetary indicators.

I would be shirking my responsibilities if I did not explain to you the risks of failing to do so. Vague promises would not have been enough. Market reaction to rising sovereign debt can turn quickly from benign to malign, as we saw in the euro area earlier this year. It is not sensible to risk a damaging rise in long-term interest rates that would make investment and the cost of mortgages more expensive. The current plan is to reduce the deficit steadily over five years – a more gradual fiscal tightening than in some other countries. As a result of a failure to put such a plan in place sooner, some euro-area countries have found – to their cost – a much more rapid adjustment being forced upon them. Of course, no one can forecast the gusts – or indeed storms – the economy may face looking ahead. But if the recovery is slower than expected then the automatic fiscal stabilisers – the lower tax receipts and higher spending that result from weaker growth – will act to stimulate demand. And monetary policy can react too, especially when there is a credible plan to reduce the deficit. In the wake of the worst financial crisis ever, the amount of money in our economy – broad money – is now barely growing at all. It was the failure in the 1930s to halt a marked contraction in the money supply that led to the Great Depression.
Clearly, if carbon emissions remain on their current trend, and if we want to keep the increase in temperature below 2°C, our global carbon budget6 will be consumed within 15 to 30 years.7 As central bankers and supervisors, our mission is both humble and considerable. Humble because the success of the Paris Agreement is the responsibility of the signatory states: the EU is committed to reducing carbon emissions by at least 40% by 2030, 8 and financial regulation cannot be a substitute for an ambitious climate agenda. Considerable because, we must do everything we can to support and complement the action undertaken by states. It is a great challenge for us, as supervisors in the 21th century. I would even say that it is our “ new frontier”, comparable to the financing of growth and major infrastructures in the 19th century or the management of great financial crises in the last 100 years. For this reason, I am very pleased to see that the Network for Greening the Financial System (NGFS), that the Banque de France launched last December, is gaining momentum. This pioneering initiative brings together, for the time being, 9 central banks and supervisors from all over the world, and is chaired by Frank Elderson (De Nederlandsche Bank). We plan to publish our first report by April 2019. In the meantime, let us take a closer look at the risks presented by climate change, but let us not overlook the opportunities.

But such lending is well-collateralised, so low risk, and is always intended to be temporary: to overcome a one-off shock or to bridge to a more lasting solution. To discourage reliance on these operations, standard practice is to charge a penalty rate relative to market prices. These liquidity insurance operations are an integral part of the Sterling Monetary Framework which delivers our monetary policy objectives (See Fisher, 2009 for further details). The Bank of England does not have access to funds that could be used to sustain commercial lending operations. We do not have the power to raise tax, nor do we have significant retail deposits, nor the freedom to borrow in large scale in the wholesale markets for non-monetary purposes. 3 More generally, in a capitalist economy, it is private sector or, in some cases, national savings which ultimately fund the banking system. And it is the job of financial intermediaries to translate those savings efficiently into private sector spending. In contrast, the fiscal authorities (including national wealth funds where they exist) can access private sector funding via taxation or by borrowing in large scale. There are many instances throughout UK economic history where the government has intervened to support private markets, or indeed individual firms. There are well-known risks associated with such action, including the loss of public money and/or an inefficient allocation of capital in the economy. There are also substantial and well-known potential benefits if the intervention corrects a market failure or achieves a wider social objective.
And to offer a very practical suggestion as to how each of you might be able to do more in your organisations too. Why diversity and inclusion matters The Bank’s approach is to consider all aspects of diversity as part of a broad strategy to deliver an inclusive working environment for all our colleagues. And I can tell you from speaking with senior leaders throughout the City that diversity and inclusion are no longer seen as HR buzzwords, but as critical ingredients to running a successful organisation. A workforce that lacks diversity will never be as effective as it could be. That should be obvious. If we look the same, think the same, and come from the same backgrounds, then we are bound to make the same mistakes. Strangely enough, I have found an analogy to this issue in my day job as the supervisor of UK banks. If a bank has substantial exposures in one sector or geography, it is running significant risk. On the other hand, a bank with a diversified portfolio is less exposed to something going wrong in any one area, and so will likely find itself better positioned, in most states of the world, to weather bad times. Launched in 2011, “The Network of Networks” (TNON) serves as both a forum for sharing best practice and a support community for the leaders of employee networks.

Out and proud – a note-worthy cause Speech given by Sarah Breeden, Executive Director, UK Deposit Takers Supervision  LGBT The Network of Networks (TNON) breakfast, Bank of England 25 July 2019  I would like to thank Zane Jamal, Nick Strange and Eoghan McArdle for their help and assistance in preparing this speech 1  All speeches are available online at www.bankofengland.co.uk/news/speeches  I am very pleased to welcome you all here to this cross-industry employee Network of Networks (TNON)1 event at the bank for banks that is more famously known as the Bank of England. Being a bank for other banks is just one of our roles. For many people, we are known best for printing Sterling banknotes. On that theme, I am sure that many of you are aware that just last week we announced that the new face for our next 50 pound note will be Alan Turing - father of computing and artificial intelligence, the basis of our modern economy, and a gay man persecuted for his sexuality2. The response to this news from the Lesbian, Gay, Bisexual, Transgender plus (LGBT+) community has been incredibly positive. Speaking personally, I was thrilled to hear it given my role as executive sponsor of the Bank’s LGBT+ and Allies network. Building on this positive momentum, I want to use my opening remarks today to set out what more we can do to support this community.
This is the main reasoning behind the strengthening of our forward guidance, which we reasserted yesterday at the Governing Council. We now foresee that the ECB’s floor rate will remain at its current level of -0.5% or lower, until there is a lasting convergence in the inflation outlook towards a rate that is sufficiently close to, but below, 2%. The low interest rates, and even the negative interest rates, are nothing new: what  Page 3 of 6  is new is that the low interest rates are going to continue, and have to continue, given the global economic cooldown. The current low interest rate environment also has positive effects that must not be underestimated. If the ECB had not acted to bring down interest rates and purchase assets, there would have been between 1 and 1.5 percentage point of inflation less in the euro area during the 2015-18 period, but above all there would have been less growth (of approximately 2.5 percentage points) and fewer jobs in France and Europe. The insurance profession, like banks, benefits from this improved economic environment. Since 2013, the euro area has created 11 million jobs. Mario Draghi, whose term comes to a close next Thursday, has been far more than a great ECB president. He has been a great servant of Europe. B. This low rate environment calls for vigilance and adaptation Nonetheless, and this is an undeniable fact as it is mechanical, low rates are putting pressure on European insurers’ SCR coverage ratios.

Unit-linked policies accounted for more than a quarter of gross inflows in September 2019, but only 7% of net inflows. This discussion is relevant for new subscriptions; for top-up payments into existing policies, the terms of the contract must of course continue to apply. With regard to new policies and new ad hoc inflows, these should not lead to the returns paid to existing policyholders being overly diluted. The duty of advice applies here: it has to be tailored to the individual client and to their particular situation, but it is rarely good advice to invest 100% in euro funds or 100% in unit-linked policies. So I am asking you to use your innovative capacity and promote offerings that, alongside eurocroissance and retirement savings, could make up a category of investments where the risk is contained, somewhere between euro products and unit-linked policies. At the ACPR, we are fully prepared to facilitate these initiatives, by supporting any demands for regulatory adjustments that might prove necessary, and without ruling out a recalibration of the tax rules applicable to different products. But more broadly, over the medium-term, it is life insurers’ business model that needs to be redesigned. We need to think about this together, and get ready to use all the levers that can help in this transformation. II. Our ambition for the Solvency II review  I would like to turn now to your second major concern: Solvency II.
In the light of these developments, the Executive Board decided at its monetary policy meeting on 26 April to leave the repo rate unchanged at 4 per cent. I would like to spend the rest of my time here discussing the conditions for economic growth in the near future – both here in Sweden and abroad. The American economy is a decisive factor There is still great uncertainty over how quickly confidence in the American economy will return and what spread effects this will involve for the rest of the world. The slowdown in the American economy was preceded, as we know, by a long and pronounced economic boom. Great optimism over future growth prospects, based mainly on expectations of gains in efficiency from IT, led to a substantial increase in investment, a strong growth in consumption and rising share prices over several years. The growth in investment and rise in share prices were particularly strong in IT-related sectors. The high level of domestic demand could not be met with American goods and services, but spilled over to create a considerable deficit on the current account over several years. At the same time, there was a strong expansion of credit. Both households and companies have greatly increased their level of indebtedness, while rising asset prices have increased household wealth. This development has been reflected in a considerable deficit in savings.

Qualifying high-growth and high value-added financial activities will enjoy a concessionary tax rate of 5%, while a 10% rate will apply to tax-sensitive but mature activities. We have also enhanced incentives for specific activities, such as fund management, trustee and custodian services, insurance and capital market and treasury activities. We also undertook a fundamental review of the Central Provident Fund (CPF) Scheme, which is our social security and pension fund scheme. We refocused the CPF on its core objective of providing for the basic needs of the majority of Singaporeans, in terms of retirement needs, healthcare expenses and home ownership. We are tightening the use of CPF for buying properties, so as to leave more for retirement needs. We are reducing the coverage for high-income Singaporeans, who should be able to plan and provide for their own retirement. We are lowering contribution rates for older workers, who are most vulnerable to losing their jobs. These measures will make our labour market more flexible, and contribute to our economy’s overall resilience and competitiveness. Second, we want to encourage entrepreneurship in order to develop more local and foreign start-ups and emerging enterprises to complement our strong base of MNCs and established local companies. In this rapidly changing, unpredictable environment, the best way to spot and exploit new opportunities is not by centralised direction, but through the drive and entrepreneurship of our people. According to the 2001 Global Entrepreneurship Monitor Report, Singapore ranked 27th out of 29 countries in terms of entrepreneurial activity. We need to do better.