samchain/econo-pairs-v1 huggingface dataset:
If, however, the exchange rate is forcefully headed in a certain direction, no central bank can withstand this trend for any length of time. This has been the experience throughout the world, wherever there is free movement of capital between countries. This was also the experience of the Central Bank of Iceland when it attempted to check the slide of the króna from mid-year 2000 to autumn 2001. To demand now that the Central Bank adopt exchange rate objectives is unrealistic. The only option to peg the currency is to return to former practices and introduce currency restrictions, but who wants to go back to that? Cutting interest rates beyond what the Bank’s inflation targets allow, in order to force down the exchange rate, would be highly inadvisable. The nominal exchange rate might temporarily drop somewhat, but it is practically certain that inflation would once more heat up and soon we would end up with the same real exchange rate as before, in addition to having kindled the flames of the next period of overheating and instability. Slowdown in the economy After a protracted period of high economic growth, which ended in overheating, we now have a slight slowdown in the economy and increased unemployment. It has, among other things, been claimed that this slowdown is in particular the result of a tight monetary policy.

There is now a consensus view among central bankers that providing information about policy intentions enhances the effects of monetary policy. However, no consensus has emerged on how to provide it. We may distinguish between three main categories of forward guidance: The traditional form of forward guidance has been to give qualitative statements about future intentions. For instance, some central banks have indicated the anticipated direction of the next change in the policy rate. In 1999, Norges Bank started to make statements such as “the probability that the next change in interest rates will be an increase is greater than the probability of a reduction”. Another example is the Federal Reserve, which has used “code” words such as “bias towards” or “balance of risks”, indicating the same. 3  According to Geraats (2006): “Transparency of Monetary Policy: Theory and Practice,” CESifo Economic Studies 52 (1), central banks seem to have embraced transparency for its perceived economic benefits, rather than accountability requirements. 4  To illustrate, we may consider an inflation-targeting central bank facing inflation below the target. In order to reach the inflation target in this situation, promising to allow inflation to overshoot the target later might help increase inflation today. Commitment in this sense would in practice involve some form of price-level targeting, rather than inflation targeting. 2  BIS central bankers’ speeches  A second approach to forward guidance has been adopted by some central banks when key policy rates have been at a zero lower bound.
As banks and other financial institutions seek to strengthen their balance sheets and avoid future credit losses, they may keep credit conditions tighter than normal. In addition, many consumers’ borrowing options may be limited by their impaired credit histories, and the recovery is not getting the strong boost from home construction that most previous recoveries have benefited from. Furthermore, as I will discuss later, households are still feeling the financial impact of lost wealth and jobs, which makes some cautious about spending and investing. The economy is healthier, but it is not yet well. In order to reduce joblessness significantly over the coming quarters, the economy needs to grow at a considerably faster rate than we have seen so far in this recovery. I am happy to say that we believe that conditions are in place for such higher growth in 2011 and 2012. We entered this year with a fair amount of momentum. Business and household spending has strengthened, presumably reflecting greater confidence in the economic outlook and progress in the repair of household balance sheets. Businesses are expanding their investments in equipment and software at a healthy pace. And, their spending on nonresidential structures, such as office and factory space is no longer contracting as sharply as it was a year ago. Further support comes from the agreement by Congress and the administration to postpone some tax increases, to reduce payroll taxes temporarily and to extend unemployment benefits. In addition, our exports continue to expand, supported by strength in demand abroad, particularly in Asia.

Ivan Iskrov: Reflections on the past year Speech by Mr Ivan Iskrov, Governor of the Bulgarian National Bank, to the Association of Banks in Bulgaria on the occasion of the Banker’s Day, Sofia, 6 December 2010. *  *  *  Ladies and Gentlemen, It’s a great pleasure to be here this evening with you all, on 6th December, Saint Nicholas Day, and celebrate our professional holiday. Over the last eight years I and my colleagues from the BNB Governing Council, regardless of our numerous engagements, have not missed a single occasion to be with you and celebrate this great day. By this gesture we show our respect for and acknowledgement of the job well done by you in favour of the national economy. Commercial banks are not merely some of the many capitalist businesses focused on profit making for their shareholders. The banking system is a major part of the infrastructure of any market economy; it is its circulatory system. Without our daily committed work, our state would not be able to function properly. By tradition today we have the chance to pause and reflect on the past year and to share our hopes that in the year to come we would again successfully meet the new challenges. I have no doubts about that because we all have proved that we are capable of turning trials into useful experience, and experience into a means of completing the mission that society has assigned to us.
The progress made in the reform of the prudential regulation of banks needs to be accompanied by further reflection about the functioning of the financial system as a whole and the different ways of improving the management of liquidity risks. That is why, as a complement to the regulatory responses, banks need to take immediate action straightaway regarding their internal risk management policies, which play a crucial role both in terms of liabilities and assets. I would like to say a few words about this. 1. On the liabilities side  •  First of all, it seems to me important to not wait for the final calibration of the new rules to gradually increase the duration of bank liabilities. The management of maturity gaps, which is the primary responsibility of treasurers and ALM managers, cannot only be dictated by regulation; it also needs to be adapted to the risk profile of each institution. In the current context, we can only encourage banks to increase the proportion of medium- and long-term liabilities issued on the markets, so as to be less dependent on more volatile sources of funding. They should also reduce as far as possible their short-term vulnerability vis-à-vis unsecured market funding, notably in foreign currencies. •  Second, the treatment given to customer deposits in the one-month liquidity ratio could justify a form of reintermediation of money market funds and increased competition in banks’ deposit-taking. We are monitoring these developments very closely.

Almost all NPLs of government banks have been transferred to AMCs, and all multi-creditor NPLs of private commercial banks have been transferred to the TAMC. And we will speed up our effort to clear them out. However, please be informed that when similar financial crises occurred in the US in 1982, the US economy was not in as bad a shape as Thailand has experienced in the past four years. At that time, Japan, Europe and the Middle-Eastern economies were strong and contributed certain capital flows into the US economy. But now, under current world economic conditions, where every country has its own problems to solve, we know well that we cannot expect foreign investors to help us clear this NPL mess, so we have to help ourselves. I do not see why we cannot do it. And we will do it. Back to the economic forecast for next year. One important source of growth in 2002 will be fiscal spending, and the projected central government deficit of 224 billion baht or 4.4 percent of GDP strikes a good balance between improving the economic infrastructure, raising external competitiveness, and fostering economic recovery. It is very important, however, that the fiscal stimulus program meets its spending target. 2  BIS Review 99/2001  Safeguarding the recovery would require timely as well as effective disbursements of the 58 billion baht emergency spending plan.
For example, the change to a full-allotment system for all applications for liquid funds submitted by institutions; the extension of the assets eligible as collateral for these funds, precisely to prevent potential bottlenecks in this area that might ultimately make the full-allotment arrangement inoperative; and an extension of the maximum terms over which liquidity is granted, which in the recent December meeting was set at three years, a horizon that clearly goes beyond what, in normal times, should act as a reference for the pursuit of monetary policy. The Securities Market Programme for the purchase of assets on secondary markets is also playing a significant role in restoring the normal functioning of the sovereign debt markets. That said, the ultimate causes of the tensions in place are due to underlying problems over whose resolution the monetary authority can exert little or no influence. These policies respond to the need to ensure the correct functioning of the monetary policy transmission mechanism, without which the Eurosystem could not meet its objective of maintaining price stability in the euro area. But it should nonetheless be acknowledged that such conduct gives those responsible for the other areas of economic policy valuable time in which to pursue the design and implementation of the measures needed in those areas.

Although it is not easy to reconcile the recent sharp falls in confidence in the US and the relative stability of stock market prices, it would appear that investors generally have taken comfort from the Federal Reserve's ability and willingness to react to the latest data, and take appropriate action. The second cloud on the horizon is the risk to emerging market economies posed by the US slowdown and the unwinding of imbalances in the industrialised world. In some emerging markets, especially those in East Asia exporting high technology products to the United States, the immediate outlook is for weaker economic growth. But for other countries, especially in Latin America, the fall in US interest rates and in the dollar against the euro will mitigate the direct loss of export demand. But the major concern is to avoid another financial crisis, of which there have been too many in the past five years. From Mexico in 1995, through the Asian crisis in 1997 and Brazil in 1999, and, more recently in Argentina and Turkey, sudden reversals of short-term capital flows have created financial crises. In many cases, these crises have proved devastating to the citizens of the countries affected. 2  BIS Review 16/2001  The existence of deep and liquid international capital markets offers opportunities for greater risk diversification by both borrowers and lenders. But it also increases the risk of contagion from one country to another affected by an outflow of short-term debt finance.
Against this background, it should be stressed that notable headway has been made in recent years in correcting some of the imbalances that had built up in the Spanish economy during the expansion prior to the crisis. Contributing factors here, in addition to the more temporary factors I have just mentioned, were certain structural reforms introduced during the crisis. Of note, first, is the intense deleveraging, carried out by households and non-financial corporations. Specifically, the corporate debt/GDP ratio has fallen by 42 percentage points (pp) from mid-2010, when it peaked, to 2018 Q3, meaning that this indicator now stands some 2 pp below the related figure for the euro area. In the case of households, the process has been slower (partly on account of the greater average life of the debt incurred), but also very significant. Over the same period, households’ debt ratio fell by 25 pp and its level is but 3 pp above the related euro area figure. Accordingly, in both cases, the deleveraging 3/7  process is at a very advanced stage, although some heterogeneity is evident. In particular, in the two sectors, certain agents continue to face situations of high financial pressure as a result of debt incurred. In parallel, the banking sector has been subject to an intense process of clean-up, recapitalisation and restructuring. And in the past four and a half years its basic parameters – such as asset quality and profitability and solvency levels – have improved notably.

Let me mention a few of them: (i) the reinforcement of policy measures to address bank-like risks stemming from the activities of non-banks, which have significantly increased in recent years; (ii) the emergence of new risks, such as those derived from financial technology or cybersecurity; 4/5  (iii) the strengthening of sustainable finance to address environmental risk, and (iv) the creation or expansion of global and regional backstops. I am certain that our speakers in this conference will address these and other interesting matters. Indeed we will have the opportunity to explore this subject in depth through nine selected articles by prominent researchers. Actually, we are most privileged to have with us two distinguished keynote speakers, Ricardo Reis and Torben Andersen, who will no doubt illuminate us on these important matters. This two-day conference is organised in four sessions: the first will address certain money and market-related aspects. During the second session we will try to shed some light on the propagation of shocks when considering higher-order statistical moments of economic and financial variables. The third session will deal with two issues related to risk which are important for central banks, namely the credit risk associated with monetary policy operations and the evaluation of systemic risk measures. Finally, the fourth session on uncertainty will deal with the spillovers from the uncertainty on certain financial markets to the macroeconomy or to other markets. And now, allow me to introduce you to our first speaker, Ricardo Reis. We are particularly honoured to have him here today.
Furthermore, technology has now improved to the extent that we do not really need centralized clearing and settlement systems. I have long supported the concept of Asiaclear as a network of linkages of domestic clearing, settlement and depository systems. 56. Again, we in the Hong Kong Monetary Authority made a start in building this network through establishing bilateral linkages between our clearing system for debt securities called CMU and other systems. Our system is now linked up with Euroclear and Cedel, and we are working on linkages with corresponding systems in Australia, New Zealand and the Mainland of China. Once the matrix of bilateral linkages is filled up, the network of Asiaclear would be formed, like the Internet. There is no need for a centralized system or even a location. There is no centre for that network and so we do not need to get into the politically difficult question of where the network should be headquartered. We have also expressed our interest to other central banks in the region to establish similar linkages of payment systems. Our payment system in Hong Kong is already on the BIS Review 91/1997  - 12 -  real time gross settlement (RTGS) mode. Others are proceeding with building their RTGS systems and as soon as they are ready we are happy again to work on establishing bilateral linkages to facilitate risk management of large value financial transactions across the two monetary systems.

Phase three will see the information sharing between participating banks when there is an update of customers' data for AML/Know Your Customer compliance purposes or when a new customer is onboarded and such person is already a customer of a participating bank. Finally, Phase four will deal with information sharing between participating banks for the purpose of account switching. The CBC is committed to make the project work as the benefits to all stakeholders and especially bank customers will be tangible in terms of cost and time savings. This will benefit the entire Cypriot economy including the banks themselves. Having said this, I wish to emphasise that digitisation on its own does not bring full efficiencies or solve the issues I mentioned earlier. The Association of Cyprus Banks and the CEOs and Chairmen of banks must make the necessary internal changes and training to make servicing of clients more efficient. Let me be clear, European banking regulations are the same across Europe. That's why they are called European. Hence differences on banking practices and efficiencies are because of banks' management and their practices. The Cyprus banking sector practice is less efficient than European counterparties. As I mentioned before, it's time for banks and stakeholders to act. In conclusion,  4/5  BIS - Central bankers' speeches  The world's economic system has been through a lot in recent years, from the challenge of the pandemic to the impact of the war in Ukraine.
The first is that although cross-border bank flows have plateaued, in many other ways the global financial system is as interconnected as ever, and that we need to be mindful of spillovers from elsewhere when setting policy. The second is that by acting in their domestic best interest, policymakers can often improve the global outcome. In short, we need to think globally, act locally. The need to think globally Let me start with some context. Evidence of a ‘global financial cycle’, which drives co-movements in asset prices, and pro-cyclical gross capital flows, has been well documented, for example by Helene Rey (2013) and by my colleague Kristin Forbes (2016). Global financial markets have become more correlated and common shocks play an important role. According to the IMF, around three-quarters of equity and foreign exchange returns in both advanced and emerging market economies are now attributable to international 3  factors. We have also observed an increase in the co-movement of domestic credit growth across countries over the last two decades (Chart 2). Elevated domestic credit growth has been found to be the best single predictor of banking crises (Drehmann et al (2011), Schularick and Taylor, 2012). However, banking crises come “in waves” (Reinhart and Rogoff, 2009; Laeven and Valencia, 2013), which, together with signs of greater correlation of credit growth across countries, suggests a role for external determinants and/or direct contagion.

Technically speaking, this means we cannot determine an optimal commitment period for our investments. In point of fact, our investment horizon is usually relatively long-term, although it can be abruptly shortened in the event of a crisis. Finally, we also pay special attention to reputation risks when engaging in specific investments. One of  BIS Review 123/2006  1  the SNB's most important assets is its good reputation and its credibility. Damage to its reputation could also have a negative impact on monetary policy. Consequently, in cases of doubt, we avoid investment classes and instruments that may be expected to have a damaging impact on our reputation. We are also very risk-conscious when it comes to potential conflicts of interest. For instance, all staff engaged in practical investment activities are shielded from confidential monetary policy information. Effective risk management requires that all relevant risks be identified and assessed regularly, in a manner that is as unbiased as possible. Experience has shown that technical failure is seldom at the root of serious losses. The greatest losses result from a lack of risk consciousness, from a total failure even to recognise significant sources of risk. This danger exists when risk assessment is restricted exclusively to easily measurable quantitative risk variables, excluding areas such as processes or legal risks, which are referred to as 'operational risks'. For this reason, we also include operational risks in our assessment. However, while pursuing this broader route, we certainly do not neglect the regular quantitative measures for assessing financial investment risks.
3  Third, the financing gap is now much lower than it was when the crisis emerged: after jumping in 2009 to 16.4% of GDP, it gradually decreased year after year, it went below the 10% benchmark in 2014, then to 7.5% in 2017 and it stagnated now in 2018. (Figure 5). Fourth, the refinancing risk has been significantly diminished as it is negatively correlated with the average maturity. As of June 2018, the average maturity of Romania’s Eurobonds is 9.7 years (Figure 6), and the investors base is much more diversified than in 2011. Average maturity for local bonds doubled from 1.6 to 3.2 years, and the average maturity of our debt is 6.4 years, compared to 3.8 years in 2011. Moreover, the share of public debt with fixed interest rate is 90%, which reduces the interest rate risk on the stock of debt. Regaining and consolidating our access to the international markets after the crisis has been a major success of all governments and it is a sign of trust in our economy. Another factor pointing towards lower contagion risk from external shocks refers to net external debt. The net external debt is now lower than in 2008: 20.2% of GDP in 2017, against 27% in 2008 (Figure 7). The reduced contagion risk is also visible in the banking sector, through at least 5 key indicators.

Gold  Source: NBR  Foreign currency reserves  40.0  30.0  20.0  10.0  Figure 5. Financing gap  percent of GDP 18.0  16.4%  16.0  14.8%  14.0  13.0% 11.5%  12.0  11.6%  10.0  9.0%  8.0 6.0  8.8%  9.1% 7.5%  7.6%  2017  2018f  6.4% 4.3%  4.0 2.0 0.0 2007 Source: MPF  2008  2009  2010  2011  2012  2013  2014  2015  2016  Figure 6. Average maturity of Romania’s public debt 12  percent  9.7  10 8  7.2 5.8  6  3.8  5.3 4.1  2 1.7  2011  2012  8.1  5.7  5.8  5.9  3.5  3.3  3.2  2016  2017  Jun-18  6.4  4.4 2.4  1.6  8  6.2  4 4  7.8  3  3  2014  2015  0 2013  average maturity total debt Source: MPF  average maturity eurobonds  average maturity local bonds  Figure 7. Net external debt percent of GDP 45 40 36.0 35 30  37.7  38.4 35.8  32.0 29.8 27.2  27.0  25  22.4 20.2  20 15 10 5 0 2008  Source: Eurostat  2009  2010  2011  2012  2013  2014  2015  2016  2017  Figure 8.