samchain/econo-pairs-v1 huggingface dataset:
Michael Gondwe: Importance of the SME sector in Zambia Opening remarks by Dr Michael Gondwe, Governor of the Bank of Zambia, at the launch of the Soweto branch of Stanbic Bank Zambia Limited, New Soweto market, Soweto, Lusaka, 31 August 2012. *  *  *  •  The Standard Bank Chief Executive for Personal and Business Banking in Africa, Mr Terry Moodley;  •  The Managing Director of Stanbic Bank Zambia Limited, Mr Dennis Kennedy;  •  Distinguished Customers of Stanbic Bank Zambia Limited;  •  Management and Staff of Stanbic Bank Zambia Limited;  •  Distinguished Invited Guests;  •  Members of the Press;  •  Ladies and Gentlemen. I feel honoured and privileged to be amongst you this morning. I wish to thank the Stanbic Bank Management for extending an invitation to me to deliver a keynote address on this important occasion. Ladies and Gentlemen, I would like to begin by applauding Stanbic Bank Zambia Limited for opening the Soweto Trader Branch. I commend Stanbic Bank as I observe that the Trader Branch is specifically designed with the Small and Medium Sized Enterprise (SME) sector in mind. This branch opening fully complements the Bank of Zambia which has set Financial Inclusion as one of its key strategic objectives. It is our expectation that the opening of this branch will provide opportunities for the SMEs to access financial services which for a long time have been lacking in this sector.

6 In this regard, the symmetry of the downward response is also an open question. Some support for this hypothesis can be found in recent developments in upstream stages of the price formation process. In particular, non-energy industrial consumer prices are still accelerating (as the flash estimate for January shows). However, industrial prod ucer prices (excluding energy) have decelerated significantly since last spring and this deceleration is rather widespread among components. In any case, the transmission and broadening of inflationary pressures is occurring at different speeds and intensities across expenditure components. Pressures on underlying inflation have so far been highly concentrated in particular expenditure items like household equipment and maintenance, transport, and activities involving more social contact. Some of their prices are more cyclically sensitive, others are more directly affected by the increase in the cost of energy, food prices or bottlenecks, while, in general, a fast pass -through has been facilitated by particularly strong demand during the pandemic (especially in the case of durable goods) and the reopening phase (notably in the case of services). These items’ prices continued increasing very strongly in December, in both year-on-year and month-onmonth terms, pointing to strong underlying inflationary pressures. 7 Excluding these items from the basket, core inflation stood at 2.8% in December, 8 with a slight upward trend that also points to an incomplete and slow pass-through.
This, in turn, introduces uncertainty over the behaviour of the incomes of these agents, which means they tend to postpone their consumption and investment decisions. The sharp decline in the consumer confidence indicator in March (the largest decrease in the historic time series, which goes back to July 1986) gives an indication of the magnitude of these effects. This fall suggests that the increase in uncertainty may have begun to adversely affect household spending decisions. The results of the latest edition of the Banco de España Business Activity Survey (EBAE) suggest that the war has begun to worsen the expectations of non-financial corporations regarding their turnover and also the duration of the global supply chain problems, which is now estimated to be longer. Third, the invasion of Ukraine will affect the Spanish economy through the trade channel, the direct impact of which is assumed to be moderate, as bilateral trade flows with the countries at war are relatively limited. In 2019, the last year before the pandemic, Spanish goods exports to Russia and Ukraine represented only 1.6% and 0.3% of the total,  respectively. Russian tourism, meanwhile, accounted for 2.2% of total spending by foreign tourists. However, the indirect effects on Spanish trade flows may be significant. The war will particularly affect central and eastern European countries, which are more exposed to Ukraine and Russia, and, therefore, the growth of Spanish export markets.

Nevertheless, the increase of aggregate demand will remain below the economy’s potential even during 2014, thus determining the gradual return of inflation to target. At the end of discussions, the Supervisory Council decided to keep the key interest rate unchanged, at 2.50%. 2  BIS central bankers’ speeches
In the aftermath of the crisis, the configuration of the world economy will be transformed as changes in the pattern of global demand take place, as demands for greater efficiency and lower costs occur, as actions are taken for a reduced role of government in the economy, as new regulatory regimes are being introduced, and as efforts are being undertaken to enhance our capacity to manage systemic financial crisis. Many of these changes will involve cross border arrangements and collaboration. We are all stakeholders with interest in what the post-recovery world will look like. Indeed, the issue of new economic models in the context of these developments is relevant not just to Asia but also for other parts of the world. We have seen how within the short period of less than a decade, the rapid escalation of debt-driven consumption in North America led to chronic financial and economic imbalances that has resulted in a significant economic dislocation on a global scale. Several lessons can be drawn from these developments. The Asian economic model for the future needs to be redefined if the economic progress is to be sustained, taking into account the global changes that are taking place. Asia's success which has been described as a “miracle” has been well documented. It has been acknowledged that “the miracle” is not the result of any one single factor but rather, a confluence of factors. Structural change and pro-growth policies were coalesced synergistically with hard work ethics.

30  In spite of the cold war, proxy wars and several wars of independence of colonies, the period after the Second World War remains one of relative peace in the developed world, compared with any other period in history. 31  Most of the sub-periods during which debt grew fastest have coincided with periods of economic slowdown. But what is remarkable is that we have not generally seen a reduction in debt levels in good times that would match the increases in debt in downturns. 32  What the graph hides is the fact that most of the increase in the average OECD public debt-to-GDP ratio in the late 1990s has been driven by the steep debt increases of Japan in the 1990s. Taking out Japan from the sample shows a slight drop in the average debt ratio during this period. BIS Review 106/2008  7  Gallatin’s debt reduction efforts look even more remarkable when viewed through the prism of current fiscal developments throughout the developed world. If Albert Gallatin had been in charge of OECD public finances during the decade prior to the onset of the current financial turmoil, we might be in a more comfortable fiscal situation today. As it stands, our longerterm fiscal challenges are formidable and will demand courageous political and fiscal leadership. Albert Gallatin’s adopted home country is no exception. Regardless of who moves into the White House in January 2009, the new President’s longer-term fiscal policy options will be constrained by the legacy of the past.
At our January MPC meeting, we have increased the overnight repo and late liquidity window rates, delivering a strong monetary tightening in order to contain the deterioration in the inflation outlook. The MPC statement underlined that the CBRT will continue to use all available instruments in pursuit of the price stability objective. 8  We have also stated that inflation expectations, pricing behavior and other factors affecting inflation will be closely monitored and, if needed, further monetary tightening will be delivered. Moreover, the statement signaled that necessary liquidity measures will be taken in case of unfounded pricing behavior in the foreign exchange market that cannot be justified by economic fundamentals. The figure depicts the two main interest rates that matters most for the monetary transmission mechanism (Figure 12). The first one is the cost of central bank funding (shown by the red line), which recently has increased by 200 basis points to around 10.3 percent. The second one is the interbank rate (orange line), which has sharply moved up and have been consistently close to 11 percent since our latest MPC meeting. These two rates clearly indicate that monetary policy has been tightened to a great extent. Figure 12.

Yield Curve  5 Year-3 Month Differential in Swap Rates (Percent)  9,5  9,0  9,0 1  2  3  4  5  7  8  9  10  -0,5  -1,0  -1,0  -1,5  -1,5 01.16  0.25 0.5  0,0  -0,5  Term (Year) Source: Bloomberg. 02.17  9,5  0,5  0,0  01.17  10,0  1,0  0,5  12.16  10,0  1,5  1,0  11.16  10,5  10.16  10,5  2,0  1,5  09.16  11,0  2,5  2,0  08.16  11,0  3,0  2,5  07.16  11,5  3,5  3,0  06.16  February 3, 2017  11,5  3,5  05.16  January 9, 2017  04.16  12,0  03.16  12,0  02.16  (Treasuries, Percent)  Source: CBRT, Bloomberg. Were these policies effective? More time is needed to assess the ultimate impact, but the initial response is encouraging. Turkish lira, which has depreciated relative to peer currencies in the second half of 2016, has stabilized after the policy tightening, partly containing the upside risks on the inflation outlook (Figure 15). Figure 15.
BIS Review 139/2009  5  Nonetheless, budgetary policy and the petroleum fund mechanism contribute to stability in the krone, as is clearly reflected in the movements in the krone in recent years compared with the currencies of other open economies with substantial exports of raw materials, such as Australia and New Zealand. The outlook for the Norwegian economy is better than for most other advanced economies. The rebound in activity will probably occur more rapidly, with inflation maintaining a somewhat higher level than in many other countries. Monetary policy measures, combined with petroleum investment and growth in public spending, have boosted activity. The downturn in the Norwegian economy may be relatively mild. The Norwegian authorities implemented a range of measures to mitigate the impact of the crisis on the Norwegian economy. As a result, the liquidity crisis did not turn into a bank solvency crisis or a crisis in the real economy. Norges Bank reduced the key policy rate considerably last autumn. The key policy rate has been reduced further in 2009 to 1.25 per cent. Norges Bank also stepped up its supply of liquidity to banks in the form of short- and long-term loans. The arrangement whereby banks could exchange covered bonds (OMF) for government securities made a contribution to securing long-term funding for banks. Strong growth in government spending fuelled demand for goods and services. The authorities supply risk capital to Norwegian banks through the Norwegian State Finance Fund to strengthen banks’ solidity.

As we look across the industry, hear the experiences of firms and read the emerging literature, like the recent report by the UK FCA, one can identify factors that are likely to impact, and possibly erode, cultural capital.6 I’ll outline several areas where these dynamics may be at play, including loss of personal interactions, severed networks, uncertainty, and decreased monitoring and oversight. Lack of personal interaction. The first dynamic is lack of personal interaction, which is critical to forming trusting relationships. As trust, a cornerstone of a good culture, is built through frequent interactions and reliable behavior, the lack of personal interaction at the workplace has the potential to weaken trust between colleagues, within teams, and across organizations.7 Trust is a complex human emotion that allows individuals to have faith in colleagues to do the right thing and not cause harm.8 Is it possible to sustain this ‘trust’ in colleagues as frequency of interactions decrease and the format of interactions make personal bonding more challenging?
Moreover, most of these banks’ capital is of the highest quality, and thus loss-absorbing. However, in the current environment, the resilience of these banks, as measured by the regulatory capital indicators, is overestimated.   First, certain risks are not captured by the regulatory requirements. This applies, in particular, to interest rate risk in the banking book, which covers traditional deposit and lending activities. In the current situation, with historically high interest rate risk exposures, this is a significant shortcoming.   Second, the current capital requirements have a procyclical effect. Thus rising real estate prices, by causing loan-to-value ratios to fall, can lead to lower capital requirements. Given the growing imbalances on the real estate market, banks’ resilience, as measured by the regulatory capital indicators, is overestimated.   Third, the low level of diversification of most domestically focused commercial banks is not taken into account in capital requirements. The main focus of these banks’ business activities, and their risk exposures, relate to mortgage lending. This concentration of activities is compounded by a geographical concentration at the cantonal or regional level. In the light of these factors, the SNB considers that action is needed on two fronts: First, the capacity of some banks to bear the risks incurred must be reviewed, and strengthened if necessary. This applies particularly to banks which have cumulative risks, such as high interest rate risk and high exposure to the mortgage and real estate markets. FINMA’s microprudential measures will play a key role in this regard.

In the 1990s he was Head of the Treasury and Chief of Staff for the Ministers of Finance Edmond Alphandéry and Jean Arthuis. During those years he built up considerable European and international experience. He was a member of the European Monetary Committee and held the office of alternate for the Minister of Finance at the OECD, the G7 and the G10. As Head of the Treasury, he also chaired the Paris Club. In 1998 he was appointed Vice-President of the newly established European Central Bank. In 2003 he succeeded Jean-Claude Trichet as Governor of the Banque de France, a post that he still holds following his reappointment in October 2009. He is a member of the Governing Council of the European Central Bank and Chairman, since 2010, of the Baselbased Bank for International Settlements. He is also head of the Prudential Control Authority, one of the two most important regulation and supervision bodies in France. Today, Christian Noyer is one of the most respected and long-serving central bankers. He has extensive experience in monetary policy management, and in banking and financial regulation and supervision. He has been at the forefront of efforts to address and resolve the financial crisis that began in 2007 and the subsequent European sovereign debt crisis. As well as for his profound knowledge of monetary and financial matters, Governor Noyer is known for the extremely courteous and careful way in which he always expresses his opinions and even his most serious disagreements.
On the other hand, if what we are seeing is the beginning of a structural shift from bank to non-bank financial intermediation, we have to keep a close eye on the potential risks that might be building up. Indeed, there may be little long-term value in shifting risk from a highly regulated sector to a lightly regulated one, particularly if more and more lending is taken up entities that fall outside the regulatory reach. Conclusion Let me conclude. My message today is simple: the euro area financial system has been hit by a major shock, which few of us foresaw, but through good policy choices it is possible to steer this development towards a positive outcome, while avoiding unintended negative consequences. And looking at the developments across the euro area today, in my view the right choices are being made. Banks are already strengthening their capital as a result of the comprehensive assessment. The European supervisor will be fully operational in November this year. From next year we will start building up a single fund for European bank resolution. And initiatives are underway to strengthen access to finance for SMEs, especially through securitisation. For Asia, there is every reason to be confident that the euro area is addressing the structural problems in its financial system, which should in turn support more sustainable growth in Europe and for the world economy.

Yves Mersch: Finance in an environment of downsizing banks Keynote speech by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the Shanghai Forum 2014 “Asia Transforms: Identifying New Dynamics”, Shanghai, 24 May 2014. *  *  *  Ladies and gentlemen, Thank you very much for inviting me to speak today. Europe and Asia have an increasingly symbiotic relationship. In 2013 total EU trade with Asia reached € trillion, almost double the value recorded a decade ago and representing over one-third of total EU trade. At the same time, the EU accounted for almost 30% of Asian trade last year, far ahead of any other trading partner, including the United States. The EU is also a major investor in Asia, and vice versa. Around 20% of EU outward investment goes to Asia, while 20% of inward investment originates in the region. In other words, the economic situation in Europe today has important consequences for the growth trajectory of Asia – and this is a relationship that will likely only increase in strength in the future. I would therefore like to use my remarks to discuss developments in Europe as part of the growth equation for Asia. Asian policy-makers know best the domestic challenges that face them and the types of solutions that are needed. The European situation is no doubt a complex one, but if there is a common factor in the crisis and its persistence, it is the difficulties of the euro area banking sector.
The meager growth of the late 1990s and early 2000s, plus the accumulation of large current account deficits during the 1990s, caused the region to begin the new century with relatively high levels of debt-to-GDP. For example, at the end of 2002 Brazil’s government debt reached 80% of GDP while its external debt was close to 55% of GDP. In every other country in Latin America – with the exception of Chile –, the debt of the general government exceeded 40% of GDP. Moreover, large current account deficits persisted throughout the region. Take the year 2002, when Mexico and Peru – as well as Bolivia and Costa Rica – had accumulated 5 years of current account deficits of over 2% of GDP. 1 Doubts about the sustainability of national debts across the region fueled an academic debate as to identifying the highest level of debt that could be tolerated. In a 2003 paper by Carmen Reinhart, Miguel Savastano and Kenneth Rogoff – which has been part of a successful research program on the history of debt crises –, the authors examined the history of defaults around the world, and concluded that relatively low levels of debt-to-GDP were enough to trigger credit restructuring events. 2 In particular, the paper found that several countries in the region had debt levels above the limits of what could be deemed “tolerable”. The authors also provided evidence of how countries – in Latin America and elsewhere – have historically used deleveraging to regain a sustainable path for their external debt.

Once these exercises are complete, we will analyse the feedback we have received and use it to inform our final decision, which will be announced in December. If a final decision is made to move to polymer, we will also use the opportunity to introduce notes which are somewhat smaller than the current series. These will be easier for both the public and the cash industry to handle and will generate further financial benefits in terms of lower production and storage costs. In moving to smaller notes, we will retain the present tiering of denominations by size, which is of particular benefit to the visually impaired. I would now like to invite any questions that you may have. I’ll be joined in addressing these by the Bank’s Chief Cashier and Executive Director for Banking Services Chris Salmon, and the Head of our Notes Division Victoria Cleland. 2  BIS central bankers’ speeches
It is crucial for long-term financial stability that those who make long-run debt commitments are fully aware of this reality and that they plan accordingly. What about inflation risk? Personally, I do not share the view that the current period of central bank activism will be followed by a resurgence of inflation. First, contrary to common assertions, persistent - as opposed to unanticipated - inflation is limited in its capacity to reduce sovereign debt burdens. Second, the low levels of inflation we are currently experiencing are the result of improved monetary policy, combined with a general acknowledgement that inflation does not buy durable economic performance. Neither of these factors are affected by recent events. We can therefore anticipate that, with current or enhanced levels of understanding of monetary mechanisms, and central bankers’ continued preference for price stability, future inflation levels will resemble those of the last 20 years. References Bernanke, Ben S. 2005. The Global Savings Glut and the U.S. Current Account Deficit. Remarks at the Sandridge Lecture, Virginia Association of Economists, Richmond, Virginia. 10 March 2005. Borio, C., and P. Disyatat. 2011. “Global imbalances and the financial crisis: link or no link?” Bank of International Settlements. Working Paper No. 346. May 2011. Gagnon, J., Raskin, M., Remache, J. and Sack, B. 2010. “Large-scale asset purchases by the Federal Reserve: did they work?” Federal Reserve Bank of New York Staff Report No. 441. IMF. 2005. Building Institutions. World Economic Outlook (International Monetary Fund). September 2005. Joyce, Michael, Ana Lasaosa, Ibrahim Stevens and Matthew Tong. 2010.

Political philosopher Thomas Paine said: “If there must be trouble, let it be in my day, that my child may have peace.” Let us hope that beyond Brexit, we will find common grounds to build a desirable future for the next generations. Thank you for your attention. 1 Chair’s summary : G7 finance ministers and central bank governors’ meeting, Chantilly, 17–18 July 2019 2 « Breaking the tragedy of the horizon – climate change and financial stability », Speech by Mark Carney given at  the Lloyd’s of London, 29 September 2015. 3 3/4  BIS central bankers' speeches  3 Source: European Commission 4 F. Villeroy de Galhau (2019), “Climate change: central banks are taking action”, Banque de France, Financial  Stability Review, no. 23 – June 2019. 4/4  BIS central bankers' speeches