samchain/econo-pairs-v1 huggingface dataset:
They come close to the two ideal forms that I mentioned earlier: in some areas there will be centralisation and discretion; in others decentralisation and no discretion. From November this year banking supervision will be centralised in the Single Supervisory Mechanism (SSM). Bank resolution will also be centralised in the Single Resolution Mechanism (SRM). The latter is particularly important as the legal framework it will  BIS central bankers’ speeches  5  implement – the Bank Recovery and Resolution Directive (BRRD) – contains quite some discretionary exemptions, in particular from the new bail-in provisions. For deposit guarantee, there is no centralisation yet. But under the recently adopted directive national schemes will have to meet the same minimum standards for levels and funding, meaning that there is also little discretion. Implementation, therefore, will be key. Fiscal union Banking Union will certainly help reduce the impact of sovereign risk on the banking system. But still, there is little that can be done if sovereigns pursue manifestly unsound fiscal policies. Domestic banks remain heavily exposed to their sovereigns. And any regulatory initiatives to address this issue – e.g. large exposure limits or doing away with the risk-free treatment of sovereign debt – can only be introduced very gradually in order to avoid market turmoil, and most likely only in the context of other governance reforms. Thus, to be consistent, a single banking system and a single currency require a fiscal framework that guarantees budgetary solidity.

And it is not comprehensive: it won’t protect pedestrians, and pile-ups will still block important highways to traffic. In macroprudential policy as in road safety: an ounce of prevention can be worth a pound of cure. 34  Crash resilience must be accompanied with standards of driving behaviour that prevent accidents in the first place – with speed limits and a Highway Code. We have applied that principle in the mortgage market. Alongside capitalising banks to withstand a deep downturn in the housing market, we have put guards in place against looser lending standards:  A limit on mortgage lending at high loan-to-income ratios;  And a requirement to test that borrowers can still afford their loan repayments if interest rates rise. 35  These measures guard against lending standards that make the economy more risky; that make what could happen even worse. Debt overhangs – induced by looser lending standards – drag the economy down when corrected. And before they are, high levels of debt make consumer spending more susceptible to the unexpected. 36  So they guard against lenders being exposed to both the direct risk of riskier individual loans, and the indirect risk of a more fragile economy. This multiplicity of effects means there is uncertainty about precisely how much bank capital would be needed to truly ensure bank resilience as underwriting standards loosen. 37  A diversified policy strategy –  speed limits and air bags – is more robust to that uncertainty.
Therefore, the impact of remittances in creating new jobs has been limited. In this view, I do not want to downplay the importance of remittances, but to draw attention to additional structural reforms needed to enhance their impact in the economy. It is not a coincidence that after reaching the level of 14 percent of GDP, the growth rate of remittances has been as constant as that of foreign direct investments in Albania. This shows that in the mid-term, there is no difference between the decision of foreign investors and remitters to invest in Albania. Of course, emigrants may have a better knowledge of domestic markets. They are more connected to their home-country and react faster than foreign investors. Nevertheless, they demand guarantees for their investments as much as foreign investors do. Therefore, both the volume of remittances and their effectiveness largely depend on improvements of Albanian business environment. While efforts to speed up reforms aiming to improve business environment are underway, especially now with the most recent signing of the Stabilization and Association Agreement, a question still remains: is there any other measure that may enhance the contribution of remittances in the development? The Bank of Albania in cooperation with other governmental and non-governmental institutions has been considering some concrete measures, which I have already highlighted in a  BIS Review 16/2006  1  conference organized by EBRD on these issues last September. I would like to briefly mention some of them here again, with some new insights.

As announced in March, the objective is still “to gradually bring the Libor down to the lower end of the new target range, i.e. to approximately 0.25%.” Progress will be slow, since monetary policy can only influence risk premia indirectly, for instance, by promoting a climate of greater confidence in the banking sector. The capital market was affected by forces working in opposite directions. On the one hand, long-term rates of interest, which were affected by global developments, rose slightly. This increase reflects renewed optimism about an upturn in the economy, inflationary fears and increased capital requirements on the part of the public sector. On the other hand, risk premia have fallen somewhat. Nonetheless, they remain elevated, and – moreover – the reductions that have occurred have been varied, depending on the quality of borrowers, the maturity of the bond in question and the industry. The months from November 2007 to March 2009 saw a significant appreciation in the Swiss franc, by 10% in trade-weighted terms and by 11% against the euro. Although interest rates had been reduced between October and December last year, the strengthening of the Swiss franc had the unwelcome effect of tightening monetary conditions. In view of this development, we decided at our March assessment to prevent further appreciation of the Swiss franc against the euro by purchasing foreign currencies on the foreign exchange market. We achieved our objective.
For example, a positive supply shock – as a result of technological progress, for instance – could keep inflationary pressure low for a prolonged period. Expansionary monetary policy conditions could therefore be maintained. But if we look at financial stability, this situation entails the risk of a boom-bust cycle, which would require a tightening of monetary policy. A similar problem is conceivable if the economic outlook is so poor that raising interest rates would be inappropriate because of the risk of deflation. However, maintaining low interest rates would pave the way for potential imbalances, which – from the point of view of financial stability – would actually have to be countered by raising interest rates. Such situations make it clear that a single instrument cannot simultaneously achieve two objectives. A further problem is that a bubble is not easy to identify. Expecting us to be able to tell in advance whether damaging price imbalances are building up within certain asset classes is not realistic. First, that would require us to be better than market forces in assessing the fundamentally justified value of a specific asset. Second, it is not easy to clearly identify which variables are to be used as indicators of imbalances. A third problem is that we do not yet have any sound knowledge of the timing, effectiveness and required scope of the monetary policy response that would be necessary to counter financial imbalances.

For example, recent work using the New York Fed’s Survey of Consumer Expectations shows a decline in longer-run inflation expectations by nearly half a percentage point over the last six years, to about 2-1/4 percent.7 This decline reflects both the low CPI inflation of recent years and demographic shifts, where members of older cohorts with high expectations (I’m afraid to say) die off. 2/4  BIS central bankers' speeches  If inflation continues to underrun target levels similar to the past six years, the downward trend in inflation expectations will likely continue. But there is still time to avert this fate—in this case, it’s fortunate that the young are impressionable. If inflation is sustained at target levels consistently, a further downward trend in expectations can be forestalled. But expectations depend on deeds, not just words, which brings me to the issue of accountability. One reason inflation targeting has been so successful at keeping inflation low and stable is that policymakers held themselves accountable for consistently delivering low inflation near the target. Finally, as well as holding ourselves accountable, policymakers need to be transparent and communicate their actions and the rationale behind them. Much has been made about whether central banks can credibly commit to future actions and outcomes, but the experience with inflation targeting gives me encouragement. Inflation-targeting central banks have proved beyond a doubt that they could bring inflation down and keep it low and stable. This was not a foregone conclusion, and initially there were doubts about whether inflation targeting would succeed.
Or as Joseph Schumpeter put it in 1934: “He (the banker) stands between those who wish to form new combinations and the possessors of productive means… He is the ephor (the overseer) of the exchange economy.”10 In fact, all the elements that have been identified in the finance and economics literature as the key functions of the financial sector are eventually directed towards the support of the real economy:   providing information about investment projects and allocating capital;    monitoring investments and exerting corporate governance after providing finance;    facilitating trading, diversification and management of risk;    and mobilizing and pooling savings.11  In providing these services, the financial industry plays its role to contribute to sustainable economic growth. I would argue that, during the recent years, the financial sector has lost focus in playing this role. In a period characterized   by search-for-yield with inadequate risk assessment and pricing,    by weak underwriting standards,    by inadequate risk management practices,    by fragile short-term funding of long-term assets,    by a proliferation of opaque financial products,    and by excessive leverage,  the financial sector has become to some extent self-referential. Rather than helping with a proper diversification and management of risk, the financial sector itself created a huge tail risk for the rest of the economy.

Giving a greater degree of legal security to rental contracts, and liberalising the related terms, is absolutely necessary for reducing rental costs and for making a smoother real estate adjustment, without a collapse of the value of the wealth in which Spaniards have their assets concentrated. Re-launching privatisation, liberalisation and the boosting of competition in numerous sectors is vital because, by reducing unwarranted business margins, workers' real wages can be increased without harming competitiveness. And thus we could say for many more areas of reform. But we'd need many more speeches to talk about this. And fear not, I won't be making them today. Thank you. BIS Review 18/2009  7
In those areas where decisions have already been taken by the international community, implementation is now key. The G20 yesterday committed to full implementation of Basel III along the agreed timelines. The EU has already started this process early with the European Commission putting its proposals on the table for the so-called Capital Requirements Directive IV, which will translate Basel III into the legal framework of the EU Member States. In terms of macro-prudential framework, the European Systemic Risk Board has started its operation this year. All jurisdictions must ensure timely implementation so that we can ensure that we have done everything to make a difference as regards the resilience of the global, regional and national financial systems. Let me briefly highlight three key areas on which we need to stay committed and where swift progress is of the essence. The first challenge may come from the shadow banking sector. The introduction of more stringent capital requirements may provide incentives for banks to shift part of their activities outside the regulatory realm. It is therefore decisive that we continue our work to improve our capacity to identify and assess the potential risks stemming from the shadow banking system. This includes regulatory reform of money market funds, securitisation and the interaction with the banking sector. The second challenge is how to keep pace with financial innovation.

I trust that by sharing with you my views on our monetary policy normalisation path I have reassured you about our commitment to stopping high inflation from becoming entrenched. The more confident our fellow euro area citizens are that inflation will return to 2% in a timely manner, the smoother the adjustment process will be. Thank you. 16  Fo r instance, Banco de España staff have co nducted a mo del-based exercise to assess the impact o n euro area inflatio n of a non-targeted, permanent public expenditure sho ck of 1% of GDP. The results sho w that fo r each 1% of GDP expenditure, inflatio n increases by 0.2 pp three years later. This relatio nship might be stro nger depending o n the co mpo sition o f expenditure and against a backdro p o f supply-side co nstraints. 9
It is therefore important that the authorities do not sow doubt, but on the contrary pursue a longterm and predictable policy. The authorities must be credible and inspire confidence. There must be consistency between the stated objectives of economic policy and what is actually done to achieve these objectives. This is the most important reason why the conduct of monetary policy has been delegated to the central bank in Norway, as is the case in other comparable countries. The question of central bank independence is not new. When Norges Bank was established almost 200 years ago, there was much discussion about where to locate the head office. Trondheim was chosen and one of the arguments in the debate was that locating the central bank far from the seat of government would prevent the central bank from coming under political pressure. It was not until 1896 that the Storting decided that the central bank should be moved to Kristiania (now Oslo). The strongest objection to relocating the central bank from Trondheim to Kristiania was expressed by Director Karl Gether Bomhoff, who was in fact also a friend of Henrik Ibsen from his Dresden period. 11 Bomhoff was a member of the Bank’s board for 35 years, from 1885 to 1920. In 1893, he became the first permanently employed chairman of the board and the first director for the entire central bank.

The interaction between the political authorities and the central bank can be effective if the authorities take the role of “leader”, and the central bank the role of “follower”. Inflation targeting provides a clear indication as to how the central bank should respond in different situations. The political authorities are the “leader” in this interaction. They can internalise the central bank’s – the “follower’s” – pattern of response in their actions. 13 Government spending growth can then be decided knowing the effect it will have on interest rates. We have also learned from history that financial bubbles and crises occur from time to time. Even though financial crises may seem to be very different, they usually have a common feature. The US economist Hyman P. Minsky was of the view that this could be summed up in five stages: First a shock, often triggered by a technological breakthrough or changes in legislation and regulation of the business sector, followed by a period of growth – a boom – where new technology and opportunities are applied. This turns into euphoria – people get carried away. At some point some people wake up and take out their profits by selling. This triggers a fall in asset prices and equity prices and ultimately leads to panic and a crash. 14 This is referred to as the Minsky moment. We are now in the midst of a global financial crisis, which originated in the US housing market.
I want to briefly sketch the journey of Singapore’s insurance industry from writing pure domestic risks to becoming a regional underwriting hub in just ten years. I will then share our vision and strategies for the next phase of the industry’s growth – to become a global insurance marketplace at the heart of Asia. The journey to a regional underwriting hub In the early days, the Singapore insurance industry was focused on servicing domestic business, with life insurance being the mainstay. In fact, MAS had adopted a closed-door policy to direct insurers since 1990. In 2000, MAS liberalised the insurance industry, lifting the closed-door policy on direct insurers and the 49% foreign shareholding limit in locally owned direct insurers. Singapore’s development as a regional insurance hub took off. •  Since 2000, offshore business has been on a steady uptrend, growing an average of 13% per annum to $ in 2012. The share of offshore non-life business has increased from 50% in 2000 to 65% in 2012. •  Major insurance groups across different segments of the industry, from direct insurers to reinsurers and brokers, have sited their regional operating and business hubs here. Today, Singapore is recognised as the leading reinsurance hub in Asia. Amongst the top 25 reinsurers in the world, 16 have regional hubs here. The market has built up significant expertise in specialty insurance, namely marine, energy, catastrophe, credit and political risks. For example, Singapore is the second largest market for structured credit and political risk worldwide after London.

Ian Plenderleith: Current issues in UK monetary policy  Speech by Mr Ian Plenderleith, an Executive Director of the Bank of England, to the Aberdeen Chamber of Commerce on 26 July 2000. *  *  *  If you look at the performance of the UK economy as a whole, there is a great deal from which we can draw encouragement. Since the early 1990s, we have enjoyed what by any standards has been an impressive period of continued growth in output, employment and living standards. The sustained growth in output has been achieved despite the downturn in Asia in 1997-98, which, accentuated by the crisis in Russia, spread to the emerging market economies as a whole and produced a sharp weakening in external demand felt by all the industrialised countries. With the help of the rapid steps we took then to cut interest rates, we have seen a strong recovery in activity in the UK economy last year and continuing growth this year. Equally, we can draw encouragement from the steady rise in employment that has accompanied this sustained growth in output. The improvement has been shared right across the UK: rates of employment vary from region to region, but all regions have shared a rise in employment rates. What is particularly encouraging is that this substantial rise in employment rates has been achieved in the face of considerable changes in the business environment - for example, shifts in demand and in consumer taste, advances in technology and intensified competition.
And you can, and must, make progress now whilst policy is developing – ahead of regulation and to support the development of best practice. A necessary foundation for that is investing in education to increase your staff's understanding of climate issues. Without that, none of this can happen. Transition plans are fundamental to driving the right transition. They allow financiers both to manage their risks and to allocate capital to support real economy decarbonisation. And by highlighting where there is clarity about the way forward and  4/7  BIS - Central bankers' speeches  where gaps remain, they compel the right conversations. I encourage you all to engage in them now. The second challenge is that the world does not stand still. We have seen unexpected political and economic headwinds and it seems prudent to assume more will come. With unexpected headwinds and limited bandwidth, longer-term issues can end up deprioritised. Issues do not though go away – quite the opposite, they build in the background. So we all need to be nimble and adaptable in our responses to the nearterm whilst continuing to make progress on the long-term. We must also learn lessons as we go. Russia's illegal invasion of Ukraine, for example, was a shock to our transition pathway and highlighted the sorts of disorderly transition risks we have been worried about. We saw first-hand the economy-wide costs of a necessary reduction in (Russian-imported) fossil fuels before alternative energy sources were in place - a reminder of the costs of disorderly transition.

But this is a collective action problem where seemingly rational individual inaction makes our collective future problems much bigger. So we must not let perfection be the enemy of progress. And after all, managing uncertainty is what you do all the time. Be brave here too. 6/7  BIS - Central bankers' speeches  I will leave you with an encouragement (again) to each play your role, and to make the most of this important network. I would like to thank Jenny Clark, Tim Rawlings, Chris Faint, David Swallow and Theresa Löber for their help producing this speech. 1 In pathways that limit warming to 1.5°C with no or limited overshoot, net global GHG  emissions are projected to fall by 43% below 2019 levels by 2030. See IPCC (2023), ' AR6 Synthesis Report: Climate Change 2023Opens in a new window' 2 World Economic Forum (2022), 'Analysis: Global CO2 emissions from fossil fuels hits  record high in 2022Opens in a new window' 3 From around 0.1% in 2012 to above 4% in 2021. See The City UK (2022), 'Green  finance: a quantitative assessment of market trendsOpens in a new window' 4 40% of homes in England now have an EPC rating of B and C or better.