samchain/econo-pairs-v1 huggingface dataset:
Therefore in July 2006 Bank of Albania decided to shift the course of monetary policy by raising the base rate (7 days repo rate) with 25 basis points. We are happy to observe that market is reacting following our decision. However based on our short term inflation forecasts and in presence of several risks, some of which I already explained above, Bank of Albania perceives that inflation pressures for the next 12 months remain elevated. Currently we are cautiously evaluating the extend of market response and assessing whether further action is needed. Simultaneously Bank of Albania is becoming increasingly concerned regarding the quality of loan portfolio. The accelerated pace of credit expansion, is posing challenges to both banks and to supervisory authority. The response to these challenges will aim at achieving macroeconomic stability, by means of a well capitalized banking system. With this goal in mind, the Bank of Albania, as the supervisory authority, has intensified the dialogue with the banks in order to find an adequate consensus for: setting realistic objectives of annual activity growth; containing the credit expansion and maintain good credit portfolio quality; strengthen the internal control and risk monitoring systems; and monitor carefully the capital indicators. I would like to use this floor to emphasize that Bank of Albania will be very firm to follow strictly all requirements that derive from the law and regulatory framework.

With the depth and diversity of experience represented on both the Board and staff of Financial Mediation Bureau, I am confident that the new Bureau will be well placed to discharge its responsibility in ensuring a fair and equitable resolution process for consumers. The creation of this Bureau represents an important milestone in the enhancement of the consumer protection infrastructure. Consumers are encouraged to make full use of the avenue available to seek resolution of the issues faced by them. Ladies and gentlemen, I would like to take this opportunity to express our appreciation to the previous Board of Directors of the Banking Mediation Bureau and Insurance Mediation Bureau for their contributions and dedication in giving selflessly of their time and experience in the operation of the bureaus. I would also like to acknowledge the contributions and support by the Association of Banks in Malaysia, Association of Finance Companies in Malaysia, Association of Merchant Banks in Malaysia, Life Insurance Association of Malaysia, Persatuan Insurans Am Malaysia, Association of Islamic Banking Institutions Malaysia, Malaysian Takaful Association, Association of Development Finance institutions of Malaysia, MBF Card Services (M) Sdn. Bhd., American Express and Diners Club (M) Sdn. Bhd. in making this bureau a reality. They have agreed to fund the operational costs of this bureau through levies on individual member companies in order that the services of the bureau can be provided free of charge to members of the public.
Volatility in other markets also increased dramatically. At that moment, the Central Bank’s main task was precisely to maintain financial stability and contain both devaluation and inflation expectations. The Bank of Russia then discontinued to reduce the key rate and made the decision to carry out proactive foreign currency sales within the fiscal rule. We believe that foreign currency sales linked to the oil price in the market were a key element that helped stabilise the foreign exchange market. At that period, there were concerns that the oil price might stay even below 25 US dollars per barrel for a long time. This algorithm made it possible to temper volatility using the resources from Russia’s foreign currency and gold reserves to a very moderate extent. This was crucial during that period since nobody was able to predict then how the pandemic situation would develop, how long-lasting and deep the crisis would be, and how high the risks to financial stability might be. In such an environment, it is essential to use the available safety cushion thoughtfully to be able to give an adequate response to challenges if they persist. 1/6  BIS central bankers' speeches  The introduction of large-scale restrictions worldwide caused a deep decline in both domestic and external demand. In order to promote economic recovery, we shifted towards accommodative monetary policy as soon as the risks to financial stability abated. We resumed the cycle of the reduction in the key rate as early as April.

Third, it is necessary to implement the legislative program, which is not a matter of readiness with draft legal acts, but rather a matter of parliamentary procedures for discussion and adoption of the prepared legal acts. Next, in fourth place, are the tasks related to technical and logistical preparation. The banking sector has made relatively good progress and continues to work actively and systematically on this issue. The fifth group of tasks is related to the communication campaign, which must be launched without further delay and which will be an important factor in reaching both the messages and the answer to the specific questions to businesses and people. The success of the overall euro accession process will depend crucially on our ability to achieve political, institutional and fiscal consolidation. Thank you for your attention! 5/5  BIS - Central bankers' speeches
Partly because the Matching Adjustment benefit to holding sub-investment grade bonds is low, the great majority of these bonds are investment grade. The overall credit quality of the investment-grade bond universe has deteriorated significantly over the past decade. The share of BBB-rated bonds in the sterling market, for example, has increased from under 10% to nearly half since 1998 (Chart 5). Within this BBB-rated segment, analysts have drawn attention to potential ‘fallen angels’ at risk of downgrade to sub-investment grade or even default. These issuers may be at risk because of a combination of excessive debt, structural change in the economy and poor management. Insurers face a risk of reduced Matching Adjustment benefit if issuers are downgraded and financial loss if they default. They should be reviewing the credit quality of their corporate bond investments and focusing in particular on any lumpy exposures. It is reassuring that the proportion of BBB-rated bonds in UK insurers’ aggregate Matching Adjustment portfolios has remained more or less unchanged notwithstanding the increasing share in the wider market. These proportions do vary considerably across individual insurers, however (Chart 6). Firms with higher proportions of BBB assets should be stress testing to make sure that they can comfortably absorb downgrades at a time when markets may be less liquid and they cannot easily rebalance their assets. We will explore this in our upcoming Insurance Stress Test.

These can drive both asset valuations (if insurers use the approach of mapping to valuations of similarly-rated traded assets) and the Matching Adjustment benefit. We said in SS3/17 that: “an internal credit assessment should consider all possible sources of credit risk, both qualitative (eg due to strength of the terms and conditions in the loan agreement or a lack of default data) and quantitative (eg due to economic stresses), and how these may interact. An internal credit assessment will then need to be mapped onto a credit quality step (CQS). The PRA’s view is that the CQS to which an internal credit assessment maps should lie within the plausible range of CQSs that could have resulted from an issue rating given by an External Credit Assessment Institution (ECAI). Broad consistency between the CQSs resulting from firms' internal assessments and ECAI issue ratings will help to mitigate the risk of undue bias in the resulting fundamental spreads.” This does not mean that we want insurers simply to adopt rating agency models across the board. We want firms to develop their own rating models that take into account all possible sources of credit risk.
The MPC has set out forward guidance that it does not intend to tighten monetary policy at least until there is clear evidence of significant progress being made in eliminating spare capacity and achieving the 2% inflation target sustainably. As time passes and the economy recovers the forward guidance will become more salient, providing reassurance that there is a high bar to any future tightening. Figure 9: February 2021 Monetary Policy Report GDP projection, based on market interest rate expectations £ bn, 2018 prices 640 Projection  620 600  580 ONS data  560 540 520 500 480 460  440 420 2016  2017  2018  2019  2020  2021  2022  2023  400 2024  Source: February 2021 Monetary Policy Report. Conclusion  In conclusion, my view as I have set out in this third Peter Sinclair Town Hall lecture, is that QE is a policy tool that has worked: it has proved its worth in the policy response to the Global Financial Crisis and more recently in the response to the ongoing Covid crisis. Over the past twelve years, QE has meant an expanded role for the central bank balance sheet as a key feature of what Peter termed “the new normal” for monetary policy. Of course, public scrutiny and debate about the role of QE is also valid – it is a relatively new tool about which we still have much to learn.

But I do not expect to see too many destitute foreign exchange traders miserably wandering the streets in search of charity or menial employment because of course, as trading amongst the EMU currencies disappears, new international trading is developing in a range of currencies of leading emerging market economies. But more importantly, the advent of the euro will usher in potentially much deeper markets than exist in the individual national centres at present in a range of different money market instruments -- short-dated government and/or central bank paper, commercial bills, CDs, inter-bank deposits, commercial paper, repos, interest-rate futures, swaps, FRAs, options and a miscellany of tailor-made variants on these basic products. Markets in these products are of very varying depth and liquidity, where they exist at all, in the individual local-currency markets of the countries likely to participate in EMU. But all of these instruments are, as it happens, traded in London in the main international currencies; and with the advent of the euro, all of them will also, for the first time, be traded in the major European currency. This represents a tremendous business opportunity for banks and financial institutions with the capacity to trade these instruments and to harness them to the needs of their customers. 34. But there is a third impact on financial markets from the euro that is essentially a necessary prerequisite that must be fulfilled if the benefits from integration of the bond and money markets that I have identified are to be achieved.
Mr. Bäckström discusses the current situation for monetary policy in Sweden Remarks by the Governor of the Swedish Central Bank, Mr. Urban Bäckström, to the Standing Committee on Finance, in Stockholm, on 23/10/97. I should like to thank the Committee for the invitation to discuss the Swedish economy and the current situation for monetary policy. In my opening remarks today I shall begin by briefly summarising the recent years’ economic tendencies and then consider the present construction of monetary policy. A look into the future will conclude. What I have to say is based on the latest inflation report and events since it was published. From a dual situation to broader expansion Sweden’s economy is now entering the fifth year of expansion since the profound crisis at the beginning of the decade. Since GDP turned upwards in the summer of 1993, annual growth has averaged over 2.5 per cent. Annual inflation in this period has averaged only about 2 per cent. This is a marked contrast with the 1970s and 1980s, when annual growth averaged approximately 2 per cent and inflation about 8 per cent. In one respect, however, the situation to date is still dismal, namely as regards the labour market and employment. If an economy is growing well but employment remains weak and unemployment high, there is a strong probability that the labour market is affected by structural problems. Although growth in recent years has been satisfactory, the generation of a broader upswing in the economy has proved difficult.

Moreover, firms today appear to be adapting their costs to more strained financial conditions, which has resulted partly in less office space per employee. A bubble in the housing market? Developments in the housing market have been markedly different than those in the rest of the property market. Housing prices have risen by almost 60 per cent since 1992. During the same period the general price level has increased by around 20 per cent. The sharp rise in prices has continued despite the economic slowdown in recent years. This is a new experience that distinguishes the situation from previous business cycles. A significant driving force behind these price developments is the lower interest rate level. Lower interest rates mean that households and firms can finance more expensive properties, all other things being equal. The low-inflation economy that has been established in Sweden since the crisis at the beginning of the 1990s has therefore also brought with it higher debt ratios among households. Debt as a proportion of disposable income has risen on average from 90 per cent in the mid-1990s mitten to around 120 per cent at the end of last year.2 In spite of this, households’ interest ratio, i.e. the proportion of disposable income that is used to make interest payments, has fallen from 7 per cent to below 5 per cent. In comparison, the ratio during the crisis years was up to 11 per cent.
Concluding remarks Let me conclude, starting with a quote from the monetary economist and economic historian Charles Goodhart who back in 2008 used a metaphor that describes well the conundrum we face with liquidity buffers that are not used:[35] “The weary traveller who arrives at the railway station late at night, and, to his delight, sees a taxi there who could take him to his distant destination. He hails the taxi, but the taxi driver replies that he cannot take him, since local bylaws require that there must always be one taxi standing ready at the station.” In the context of impediments to liquid asset usability, the issues go beyond local bylaws: low internal risk appetites to let regulatory ratios fall hardwired in banks’ behaviours, market stigma amplified by stringent spot disclosures of volatile ratios, uncertainty about the eventual size of the shock. At the same time the benefits of liquidity regulation are also clear. Banks entered the Covid-19 crisis with strong liquidity – providers of funding to banks did not express any doubt on this front. To understand better the issues and to encourage debate for potential solutions the Bank and the PRA published a Discussion Paper on 31 March this year. [36] I look forward to your engagement. Many thanks to Marzio Bassanin and Artur Kotlicki for help in preparing this speech.

Underlying price pressures in the euro area are expected to remain subdued, reflecting the broad-based weakness in aggregate demand and the modest pace of the recovery, as well as subdued monetary and credit dynamics. Medium to long-term inflation expectations continue to be firmly anchored in line with price stability. The risks to the outlook for price developments are expected to be still broadly balanced over the medium term, with upside risks relating in particular to higher commodity prices as well as stronger than expected increases in administered prices and indirect taxes, and downside risks stemming from weaker than expected economic activity. The ECB’s monetary policy stance continues to be geared towards maintaining the degree of monetary accommodation warranted by the outlook for price stability. It thereby provides support to a gradual recovery in economic activity. Looking ahead, our monetary policy stance will remain accommodative for as long as necessary. In line with the guidance provided in July, the Governing Council expects the key ECB interest rates to remain at present or lower levels for an extended period of time. This expectation is based on an overall subdued outlook for inflation extending into the medium term, given the broad-based weakness in the economy and subdued monetary dynamics. In the period ahead, the ECB will monitor all incoming information on economic and monetary developments and assess any impact on the medium-term outlook for price stability.
We cannot justify having a banking system that depends on the use of public money to douse the fire when the crisis comes. And we also cannot allow conditions to exist where risks are taken on the basis that this backstop exists. “Too big” or “Too important to fail” are shorthand for institutions that exist in their chosen form as a result of underwriting with public money. I don’t believe that there is anything controversial about a statement that no industry can take on a form which is a consequence of such a massive potential, and of course recently actual, call on public money. The big issue is therefore what to do to correct the situation. There are three elements to the debate: regulation, structure and resolution. We can re-design and re-build the fire prevention systems in the existing landscape. This is the regulation element. At the heart of this is action on capital requirements, including a role for contingent capital and larger liquidity buffers. But we may also conclude that we want to prevent fires by having a different landscape of buildings – a town planning solution in which the structure of the industry is re-drawn. And in the past, cities were rebuilt with that objective in mind. This is the structure element. But, whichever combination of these courses we choose to take, we cannot guarantee that there will be no fires in the future, and we would be extremely foolish if we made that promise.

While the risk of increased trade protectionism seems to have abated somewhat, it remains a significant tail risk that could seriously injure global growth. Against this backdrop, a rising tide of populist backlash against globalisation is a wild card for the medium-term. These risks are not pre-destined. The world is in a better position than before to deal with these risks. Where we go from here hinges strongly on domestic policy responses in each of the major economies and the trade-offs they make today between the short-term and the long-term. 2/6  BIS central bankers' speeches  Asia’s medium-term prospects are good Lest we forget, many parts of the emerging market world have not seen a significant backlash against globalisation. And Asia stands out in that regard. Asia remains committed to openness, is positioned for sustained growth, and offers much promise to investors. Led by China and India, Asia will remain the fastest-growing region in the world. The IMF projects that Emerging and Developing Asia will grow by an average of 6.3% p.a. from now to 2022. The ASEAN1 economies are expected to grow by about 5% p.a., China by about 6% p.a., and India by 7-8% p.a. Three factors will drive investment opportunities in the region. First, a growing middle class and rapid urban migration. According to the ADB, by 2030, about 1 billion people across China, India and ASEAN will be in the middle-income bracket. This is more than a threefold increase from today, and presents significant potential for growth in private consumption.
I would like to highlight some conclusions that can be drawn from this crisis: –  First, the crisis reminded us that not only does liquidity have a price and that this price could fluctuate greatly, but above all that liquidity cannot be taken for granted, irrespective of the price that some market participants are willing to pay;  –  Second, central banks rapidly and efficiently adjusted their operational frameworks to provide liquidity to the financial system, re-establish the normal functioning of the money market and restore confidence. But such measures must naturally remain exceptional, and central banks must be vigilant about the signals and incentives they give to the financial system. –  Third, due to its magnitude, the crisis has highlighted the risks associated with excessive maturity transformation when long-term assets are funded by short-term liabilities, or even funded overnight. This raises questions regarding both interest rate risk management and liquidity risk management. While these are distinct areas, they have close linkages. It is important not to have a short memory and relegate all this to ancient history. Indeed, at present, in an environment of ongoing extremely low interest rates, it is still possible to fund long-term assets at very low cost, with the risk of creating further asset price bubbles. In this respect, the example of the real estate sector seems telling. Housing loans have become highly important commercial product and could prompt certain institutions to slash their profit margins in order to win customer loyalty.

The greatest attention will be therefore required when assessing the impact of this standard on the financing of the economy. To back up this somewhat critical observation, I would like to stress three points: •  First, I wish to recall that central banks and supervisors are aware of the demands made on banks to implement the new regulations and we are regularly assessing with them the technical details of these standards. •  Second, a distinction must be made between the different measures set out in Basel III: –  those that are absolutely necessary, such as the increase of capital charges for market activities, securitisation and counterparty credit risk exposures, and,  –  those, such as liquidity ratios, whose impact on the real economy must be assessed ex ante. As regards the latter, a real observation period has been scheduled to allow for any necessary changes. The current arrangements should not be regarded as set in stone. •  Third, while the proposed rules may appear harsh, we will ensure that a level playing field is achieved for their implementation. However, French institutions are well-equipped to comply with them. The major French banks have no difficulties raising funds in capital markets: to date, thanks to their size, ratings and reputation they have maintained their funding capacity. II. What are the avenues for improving the management of maturity transformation risk?