samchain/econo-pairs-v1 huggingface dataset:
Thirdly, notwithstanding the availability of suitable collateral, there will be a maximum limit on the amount of support provided to an individual institution through repos or the credit facility. This limit would normally be set at between 100% and 200% of the capital base of the institution concerned subject to a cap of $ billion. Exceptions We believe that the provision of these details will go a long way towards removing market uncertainty and improving market liquidity, especially in times of crisis. This is the first time that we have made clear our requirements and parameters in setting out the mechanics for lender of last resort support. The emphasis, both in these details and in the preconditions for support, is on a rule-based approach more than on discretion or constructive ambiguity, and this is consistent with the HKMA’s policy of transparency. It is, however, necessary to stress that the policy still requires the exercise of discretion by the HKMA DWYDULRXVVWDJHV LQ MXGJLQJ ZKHWKHU D V\VWHPLF ULVN H[LVWV IRU H[DPSOH LQ GHFLGLQJ ZKHWKHU DQ institution meets the preconditions for support, and in determining the methods and level of support. Furthermore, any policy that is essentially a contingency plan for dealing with unusual, unanticipated, and undesirable situations must necessarily contain a provision for circumstances that fall outside the framework outlined in the policy. Such a situation might arise where, for example, an institution is unable to comply with the preconditions for lender of last resort support that I have outlined.

We called upon Marvin Goodfriend of Carnegie Mellon University to give his views on the optimum inflation rate, Frederic Mishkin of Columbia University to write about the policy of inflation targeting and to tell us to what extent it is truly a new phenomenon, and William White of  BIS Review 71/2007  1  the Bank for International Settlements in Basel to address the difficult question of whether price stability is really enough. Manfred Neumann from the University of Bonn was asked to provide an assessment of fixed and flexible exchange rate systems, Peter Kenen of Princeton University to give us his opinion on the need for foreign exchange reserves in flexible exchange rate systems, Martin Hellwig from the Max Planck Institute in Bonn to reveal his thinking on the co-existence of the Swiss franc and the euro, and Alexander Swoboda of the Graduate Institute of International Studies in Geneva to share his ideas with us on the reform of the international monetary system. This third section, which is aimed rather more than the first two sections at a specialised audience, is available in English only. The two other sections, meanwhile, are available in French, German, Italian and English. It only remains for me to that I hope you will find the book both engaging and interesting.
The fact that the increased lending results in an equal increase in deposits is due to all transactions in Swedish kronor being made through the banks’ accounts in the RIX payment system, which the Riksbank administers. The loans are distributed in the Riksbank’s auctions by means of the banks presenting bids for how much money and at what interest rate they want to borrow at each separate auction. Immediately after the auctions are over the money is distributed between the banks according to the bids that have come in. The Riksbank credits an amount corresponding to the allocation in the respective bank’s account in the RIX system. Then when the banks' transactions and payments are made during the day, the allocation of money between the banks changes, but the money never leaves the system. As we have already noted, the Riksbank has lent money to the banks on a wide scale since last autumn as a result of the financial crisis. However, monetary policy motives have gradually also gained significance in the lending. As the repo rate is close to zero and can in practice hardly be cut further, a need has arisen to supplement monetary policy with loans at longer maturities and at a fixed interest rate to also bring down slightly longer rates.

Consumption is projected to rise by about 5 per cent in 2004, then slow through the projection period as a result of lower growth in real disposable income. Looking ahead, an increase in employment and a tighter labour market are expected to result in somewhat higher wage growth. For 2005, the Government has proposed income tax reductions for households, but the effect on real disposable income will be partly offset by a higher rise in prices as a result of the increase in VAT. Debt accumulation in the household sector has been approximately 11 per cent in the last year. Debt has risen at a markedly faster pace than income. Our projections are based on a gradual increase in the interest rate in line with forward interest rates. Rising debt and higher interest rates will contribute over time to lower growth in household disposable income. In the first three quarters of 2004, imports increased markedly compared with the same period last year. This may indicate that some of the growth in demand has resulted in an increase in imports instead of higher domestic output. Imports as a share of mainland GDP are rising. This is a result of an increase in the international division of labour, due in part to the removal of trade barriers. The rise in the share of imports must also be seen in relation to low prices for imports from many low-cost countries and the weak competitiveness of domestically-oriented industries.
Licensing and regulatory framework During 2004 the banking system in Albania was characterized by dynamic developments, either in terms of increasing the number of banks operating in the market or in terms of extending the banking network in various areas of the country. At end of 2004 the number of banks in Albania was 16, from which 2 banks are totally with domestic capital and 14 other banks have foreign capital. On April 2004 the banking system was further consolidated with the approval on the ownership transfer of 100 percent of the Savings Banks’ stock to Raiffeisen Zentralbank, as a crowning of the privatization process of this bank. Also, the Popular Bank Jnt. Stk., the second bank with totally Albanian capital entered into Albanian market. An application for establishing a new bank with wholly Albanian capital was also submitted. This application has recently received the preliminary approval for licence, pursuant to requirements of the Law “On Banking System in the Republic of Albania”. Parallel to development and extension of the banking system and the products it offers, further improvements and amendments have taken place in the regulatory packet of banking supervision. During 2004, the Guideline “On bank regulatory capital, the Regulation “On capital adequacy”, the Regulation “On credit risk management” were revised, and the Regulation “On money laundering prevention” was adopted. Also, during 2004 work was done for making improvements in the existing Law “On Banking System in the Republic of Albania”, with the goal to realize its adoption by the Albanian Parliament within 2005.

This will go a long way in enabling your customers not only access affordable funds to finance their investment activities, but also make it easier for them to pay back their loans and on time. The key intermediation role of the banking sector in providing finances will remain compromised if the costs of banking remain high. Distinguished Ladies and Gentlemen, as already mentioned, Zambia is currently going through challenging times when commodity prices remain subdued as result of uncertain demand for our main export product, copper. The visible effects of the economic global crisis have been volatilities in the exchange rate and job losses in the mining sector. The Second round effects, if not managed properly, could have devastating effects in our banking industry, especially through some notable deterioration in the personal loans category of the banks’ loan book. It is my expectation that Stanbic Bank Zambia Limited and other banks’ will enhance prudence in their lending activities and strengthen their risk management systems as a way of minimising further deterioration of the banking industry’s loan portfolio. It is also my firm belief that banks will continue to conduct safe and sound practices even under challenging times and therefore help to mitigate the risks that the financial system is currently facing from the adverse developments in the global economy and the global financial system in particular.
14 And it is a long way short of being something that can guide the practical use of macroprudential policies. Summary In this speech, I have broadly illustrated some of the thoughts and reflections that macroprudential (and other) policy-makers will need to consider going forward. There are many challenging issues: some of them are new (and particular to macroprudential policy) but many of them are not, such as the need to manage the overlap between policy areas. However, we can already see system-wide risks again building in financial systems, in Sweden and internationally – so it is important that we now face these challenges head on. The first challenge will be designing effective macroprudential frameworks to ensure that the appropriate agencies are given the appropriate mandates, sufficient capability, and policy instruments to deal with threats to financial stability. Governance arrangements will play an important role. They will help to clearly define the role of macroprudential policy, to ensure that it can be used effectively, and to manage the interaction with other policy areas. While there are likely to be numerous solutions for the design of effective governance arrangements, the issues and key concerns are fairly well defined and understood. 14  The Riksbank faced several econometric problems when attempting to estimate the capital adequacy rule shown in Figure 4. For example, we used a short time series and faced an endogeneity problem (because bank lending is included on the left and right hand side of the rule).

Moving the role of ‘Chief Economist’ towards the director of the ‘Economic Department’, and letting him be more independent of any particular body member (making him responsible to the decision-making body as a whole), can help to solve this problem of information filtering. Openness is a consequence of ‘staff independence’. Allowing staff to be more independent at the same time requires the decision-making body members to take an active approach towards the analysis produced by the staff. Since a perfect understanding of the message contained in the ‘policy documents’ is a prerequisite for proper policy conduct, interaction between the decision-making body members and the staff should be assured at different levels. And finally, a need to deal with uncertainty properly arises as a consequence of the uncertainty surrounding monetary policy practice. Therefore, it is highly desirable to discuss the implied risks at different levels: (i)  First, the risks should be discussed by the staff. (ii)  Second, an evaluation of the risks should be performed interactively by the decision-making body members and the staff (alternative scenarios can be produced on the basis of these discussions). (iii)  Third, the risk and the alternative scenarios should be discussed by the decision-making body members during the policy meeting. It is clear that all the above-mentioned properties can be satisfied when either a Bank Board or a Policy Committee are making the decisions. Over the years it has been proven that both systems can work well.
And to avoid taxpayer bail-out, losses may need to be imposed on a wide class of bank creditors, including holders of debt as well as equity – for example, by “bail-in”. Over recent years, these resolution lessons have been enshrined in banking legislation. For example, in the United States Title II of the Dodd-Frank Act was passed in July 2010. It creates a new regime for the liquidation of financial companies, banks and non-banks, which pose a systemic financial stability risk. It enables losses to be imposed on creditors in resolution, while also prohibiting state bail-outs. Internationally, in November 2011 the G20 endorsed the FSB’s Key Attributes of Effective Resolution Regimes, developed by an international working group chaired by my colleague Paul Tucker. Efforts are now underway to align national resolution regimes with these principles. As part of that, in Europe a draft Directive on bank recovery and resolution was published in June 2012. These initiatives are an important practical step in the right direction, lowering the societal costs of bank failure. As with systemic surcharges, it is striking how much progress has been made in so short a space of time on so complex an issue. The practical question is how far this takes us towards removing the too-big-to-fail externality. During a bank resolution, one way of ensuring continuity of banking services is by transferring assets and/or liabilities of a failing firm to a third party.

Full separation may also be operationally simpler to implement than the existing structural proposals. Finally, enhanced banking competition would potentially help to reduce some of the problems of too-big-to-fail by reducing the degree of banking concentration. Greater exit from banking, through enhanced resolution regimes, can help. But a bigger problem still is bank entry: the UK went 100 years without a new retail bank being set up. One potential barrier to banking entry is the difficulty of switching deposit accounts and loan contracts. A shared banking platform, containing customer account details, would dramatically reduce the frictions in search and switch for deposit and loan products for customers (Leadsom (2012)). It could lower materially barriers for new banking entrants. A powerful counter-argument to all of these more radical proposals is that they could erode the economies of scale and scope associated with large banks. These economies clearly do exist in banking, as they do in other industries. For example, fixed costs are large in finance and spreading them widely ought to deliver productivity improvements. The interesting question is at what point these economies of scale are exhausted. Indeed, informational and managerial diseconomies of scale are likely at some scale, whatever the business line. In his classic theorem, Ronald Coase tells us that firms will seek a privatelyoptimal size which balances the benefits of economies of scale against these diseconomies (Coase 1937)). How does all of this apply in banking? The empirical evidence on economies of scale and scope in banking is surprisingly patchy.
The outlook for the euro area is still not very encouraging. In particular, industrial confidence has been weak for some time. Contribution of exports and net exports1) to GDP growth Percentage points 3  3  2  2  Exports  1  1 0  0 -1  -1  Net exports  -2  -2  -3  -3 -4  -4 1996  1997  1998  1999  2000  2001  2002  1) Based on figures for total imports and exports for mainland economy. 2002 figures are projections Sources: Statistics Norway and Norges Bank SG Gausdal 31.01.03  There are also signs of stagnation and low growth in the Norwegian economy. The chart shows the contribution from net exports to activity in the mainland economy. We see that this component curbed growth in mainland Norway by about ¾ percentage point, from a positive contribution of a good 1 percentage point in 1999. In contrast to the situation in the mid-1990s, when high imports contributed to weak net exports, our export industries are now being affected. Traditional merchandise exports fell towards the end of last year. Export prices have also declined somewhat, reducing corporate profitability. A strong krone and high domestic demand have also contributed to the continued rise in imports. Regional network November 2002  • Generally falling production in the export industry.

A positive output gap indicates a level of activity that fuels pressures on economic resources and rising price and cost inflation. (See for example Frøyland and Nymoen (2000) and Olsen, Qvigstad and Røisland (2003) for more on the output gap.) The optimism spread to Norway, where equity prices also rose. The level of activity was very high in the securities market, among corporate lawyers, consultancies and in the ICT industry. High oil prices through most of the 1990s resulted in buoyant investment activity and growth in operating expenses in the petroleum sector. With substantial government tax revenues, expectations concerning the use of petroleum revenues also rose. It became increasingly challenging to keep pressures in the economy at bay by means of fiscal policy. The response to this challenge was the revision of economic policy in spring 2001. The most important policy change was the strategy for the phasing in of petroleum revenues – the so-called fiscal rule. An inflation target for monetary policy was introduced at the same time. The revision came after four years of strong economic expansion and high growth in labour costs, pressures to spend petroleum revenues and high household credit growth. Implementation of monetary policy • The interest rate is set so as to keep inflation at a low and stable level • Higher interest rates will reduce inflation by curbing demand and strengthening the krone. An interest rate reduction has the opposite effect. • The effects of interest rates on inflation may vary over time.
Taking account of this uncertainty is particularly important in the case of the euro area, whose “deep structural parameters” are somewhat uncertain to the extent that the inception of the euro may have been associated with a “regime shift”. More prosaically, this medium-term orientation of the single monetary policy recognises that it is impossible for a central bank to control price developments with accuracy over the short-term. The second implication is that the relevant indicators for monetary policy must reflect, almost exhaustively, the main sources of both short and long-term inflation. In the light of this, the monetary policy strategy seeks, as far as possible, to rely on a “full information approach”. This is what the concepts economic analysis and monetary analysis – also known as the two-pillar approach – used notably at the press conferences given by the ECB President following monetary policy decisions, reflect: - the economic analysis examines cyclical, economic and financial indicators related to the main determinants of short-term inflation;  4  BIS Review 4/2006  - the monetary analysis, is based on a monetary explanation of long-term inflation. It is signalled by the announcement of a reference value, which is not a committing target, of 4½% for the annual growth of the broad money aggregate. - The medium-term orientation of the single monetary policy makes necessary the cross-checking of these two complementary approaches. From this point of view, the ECB’s monetary policy strategy is more comprehensive than pure inflation or monetary targeting strategies.

Our analyses show that in the vast majority of instances the signals and complaints received at the BNB theoretically could have been resolved then and there, at the branches and divisions of your banks, as these did not need to get as far as the head offices and executive directors of the institutions. I would like to emphasize that the BNB had stated its position about the relations between commercial banks and their customers long before this became a hot topic in the media. Allow me to conclude my speech in literally the same words, which I used to speak to you here exactly 4 years ago (back then, in 2006, banking was on the upswing and nobody was talking about crises or difficulties in repaying loans): “…it is in the interest of both consumers and the banking industry to establish between the two sides of the process long-term relations based on transparency of financial services pricing, and on the strict observance of obligations by both parties.” In conclusion, allow me, on behalf of the BNB Governing Council and on my own behalf, to congratulate everyone of you on the occasion of our professional holiday, the Banker’s Day – 6 of December! I wish you a successful 2011 year and much health to your families as well as to the balance sheets of the banks you are running! Happy Banker’s Day, dear colleagues! BIS Review 169/2010  3
It is hard for domestic monetary policy to offset such effects, both because they are external in nature and because it is unclear how long they will dampen the U.S. recovery. One thing is for certain: Given the effects of banking crises on economic recoveries and the interconnectedness of financial markets, it is imperative that our European partners resolve their banking issues if we are to sustain a prolonged economic upturn. BIS central bankers’ speeches  5  This is not to say that the Federal Reserve has no role to play. Our franchise includes assuring an efficient financial transmission mechanism. For example, everyone acknowledges that small business is the originator of jobs and the incubator of our nation’s prosperity. In addition to wanting to see the whites of the eyes of growing final demand, needing clarity on fiscal policy and wanting regulatory relief, many of the small businesses that Dunk [Bill Dunkelberg] represents – and others that we survey – will need better access to the abundant and cheap liquidity the FOMC has made possible. Small businesses turn to community and regional banks for credit; their credit activity does not move the needle on the dashboards of the megabanks. It is incumbent on the Fed and other bank regulators to reduce the regulatory burdens that are inhibiting – indeed, overwhelming – community bankers whose business it is to lend to creditworthy small businesses. This is a supervisory and regulatory matter, not a matter of general monetary policy.

The 1.1 percentage-point gap we’ve seen between Texas and national job growth over the current recovery corresponds almost exactly to the long-run (40-year) historical gap between our growth rate and the nation’s. The shortfall in jobs at the national level is but one indicator of the pervasive anguish of American households since the Panic of 2008. Another sign of that anguish is that average real per capita net worth in the United States has not regained the losses incurred in the latter part of the last decade. At the end of the first quarter of 2011, average per capita net worth was nearly 14 percent below the peak seen four years earlier. Real income has not fared as badly, but per capita salary income is, nevertheless, almost 2 percent below its peak in the first quarter of 2008. A likely widening of income dispersion over the period, however, suggests that median income has probably fared worse. We will get a better read on this when the Federal Reserve Board completes it triennial Survey of Consumer Finances early next year. I do not expect that survey to paint a pretty picture. I am most aware, as are many of you, that if history is any guide, getting back to where we were will be no small task. The 2008–09 recession was precipitated by a banking crisis.