samchain/econo-pairs-v1 huggingface dataset:
However, in addition to imperfect rules and policy actions, the crisis has revealed a series of institutional deficiencies which need to be eliminated in order to restore economic and financial stability. The clearest example in this regard is probably the European institutional framework. Over the last three years we have witnessed how the perception of country risks has climbed to very high levels as a consequence of both sovereign credit risk as well as the so-called redenomination risk. This development has impeded the adequate functioning of monetary union by leading to sizeable differences in the financing conditions for agents located in different States within the monetary union and by instigating the renationalisation of financial markets. There can be no doubt that much of what has happened is directly linked to the significant macroeconomic and financial imbalances accumulated by several euro area countries, as well as to the emergence of vulnerabilities within the financial sector. It is also clear that the main remedy for those destabilising developments lies in effective adjustment of domestic policies, which is currently being implemented in those countries suffering the most significant stress. But, at the same time, the elimination of any perception of redenomination risks can only be fully accomplished if – in addition to the required domestic policy action – the central bank is fully and credibly committed to intervening in sovereign markets as far as is necessary to avoid the pricing of sovereign risk becoming self-fulfilling.

So, what about the question I raised earlier on about whether the two financial systems of the country have a working relationship that maximises the mutual benefits of the two jurisdictions and therefore is in the best interests of the country? If you want an honest answer from me, it would I am afraid not be one in the affirmative. There seems to me considerable scope for a co-operative, complementary and interactive working relationship between the two financial systems, in which, as I said earlier, relative strengths are exploited and relative weaknesses addressed, and synergies maximised. The further question then is how such a working relationship should best, and realistically, be developed. It is quite natural to think that developing such a relationship between the two financial systems could be left to the market. While this is theoretically possible, it assumes that market forces are allowed to work freely across the two financial systems, which is not always the case. In merchandise trade, this is by and large true, and as a result the two economic systems specialise in areas in which they have respectively comparative advantage in producing. But in the provision of different services, as in the case of financial services, there are restrictions limiting the working of market forces, for example, restrictions on access of service providers to the other system and restrictions on the mobility of the user of services across the two systems.
For the households, the financial system provides a means to optimally spread their income and consumption over their life cycle. Accumulating wealth via saving, investment and borrowing in the initial years, and de-accumulating of the wealth during the later years, such as through pension products and annuity schemes during retirement. This is particularly important as a population matures. The absence of these products will impose tremendous burdens to the government fiscal position and the overall standards of living. The Malaysian experience has been to encourage diversity of financial product offerings to ensure that the needs of all segments of the population are met. This includes, from having basic banking products at negligible cost for lower income groups, to the wider range of  BIS central bankers’ speeches  1  savings, investment and protection products for the middle income groups and for the higher income groups, wealth management and comprehensive advisory services. In the area of financing, a key priority for any country is financing to promote home ownership. This is to meet an important basic need of society and to encourage wealth accumulation among households. Malaysia approached this by initially establishing Cagamas, a national mortgage corporation, which enables banks to source long-term funding to match long-term housing loans. The national mortgage corporation has continued to evolve to promote the secondary market for housing loans via securitization and mitigating risks in mortgage financing through the provision of mortgage insurance.

several European countries). Social health insurance schemes based on earnings contributions is a means by which such funding sources can become a complementary source of funding to public sector. Such an institutional arrangement should provide high quality basic healthcare for the population whilst private health insurance can have a complementary role in providing higher level care for those that have the means to absorb these costs. In developing a financial sector that will deliver innovative financing for economic transformation throughout the different phases of development requires several supporting elements. These include: a. Having strong financial institutions that are resilient to withstand the economic cycle;  b. Establishment of a credit information system;  c.  Development of a domestic bond market for financing large investments for both the public and private sectors. This includes the necessary infrastructure to facilitate the functioning of the bond market;  d.  Having the talent pool in the financial services industry;  e.  Financial literacy has to be advanced aggressively;  f.  Effective structure to ensure sufficient supervisory oversight to ensure soundness and stability of the financial system;  BIS central bankers’ speeches  3  g.  Mechanism for resolution of debt problems including for public and private sector;  h.  Potential to leverage on technology. This in particular enhances distribution channel and outreach;  i. Consumer protection framework needs to be in place; and  j.  Surveillance mechanism needs to be in place.
At the presentation of the last report on financial stability, we expressed our conviction that the financial system needs to be made more resilient to possible shocks. This is all the more valid if we consider the hundreds of billions of taxpayers’ money that had to be spent worldwide on stabilising the financial system over the past few months. The focus is on the need for improvement in the “shock absorbers”: capital and liquidity. The crisis has shown that the current regulation in these areas is no longer sufficient in the case of the big banks. Their level of capital is inadequate when set in relation to their risks. In the area of liquidity, events have occurred that were not taken into account in any of the big banks’ scenarios. The reform of the capital adequacy regulation for big banks, drawn up by the SFBC with the support of the SNB, represents an important step in the right direction – for the area of capital. It specifies an increase in risk-weighted capital together with the introduction of a leverage ratio. The leverage ratio is a supplementary instrument and does not call into question the principle of risk-sensitivity with regard to the capital regulation. An essential constituent of the reform are countercyclical mechanisms whereby, in good times, banks are required to considerably exceed the minimum requirements for capital and the leverage ratio. This ensures that a buffer is created to absorb losses during crises.

Philipp Hildebrand: Current state of the Swiss financial system and lessons learnt Introductory remarks by Mr Philipp Hildebrand, Member of the Governing Board of the Swiss National Bank, at the end-of-year media news conference, Zurich, 11 December 2008. *  *  *  When we published our report on financial stability six months ago, I talked to you about the most important lessons that the SNB had learned from the financial crisis. Today, after a brief assessment of the current state of the financial system, I would like to tell you about progress in the follow-up from these lessons. The focus here is on capital and liquidity regulation. Finally, I will speak briefly about a more cheerful topic that is unrelated to the financial crisis – the launching of a new series of Swiss banknotes. The economic environment has sharply deteriorated ... As you have already heard from Mr Roth, the economic environment has sharply deteriorated. The three big economic blocs – Europe, Japan and the US – are in recession, and growth in the emerging economies has slowed markedly. For Switzerland, we also expect a period of negative growth. The situation on the US real estate market has not yet stabilised. Futures on the Case-Shiller index indicate a further drop in prices of around 15% until 2010. Thereafter, the contracts suggest that prices will stabilise. Falling prices can also be observed in some European countries, in particular in the English and the Irish real estate markets.
That would only be a problem if the world recovery faltered seriously. While Asia and emerging markets continue to power ahead, and the US and the European Union are also recovering steadily, we should not expect to see a significant interruption to growth across the world economy. 3  See Sentance, A., “Sustaining the Recovery” Speech hosted by British American Business Council and RSM Tenon in London, 13 October 2010. Available on the Bank of England website. BIS Review 158/2010  3  Business resilience through the recession The turnaround that we have seen in the UK economy over the last year mainly reflects a change in demand conditions. But economic growth cannot be generated simply by stimulating demand if the supply side of the economy is not in good shape and able to respond. In the UK, we saw this most clearly in the 1970s and early 1980s, when British business was encumbered by problems of poor industrial relations, low productivity and inflexible labour markets – the symptoms of what became known as “The British Disease”. Since that time, we have seen quite a bit of evidence that the supply side of the UK economy has indeed become more flexible and supportive of growth. Surveys of the business climate in the UK, which aim to take into account the impact of regulation and other factors as barriers to doing business, show that we are well placed internationally, as the latest “Doing Business” survey from the World Bank shows (see Chart 2).

This points to a high degree of flexibility about pay and conditions of employment in the short-term. But the likely “quid pro quo” of this approach is that, when company fortunes improve, employees will expect to share in the benefits of the upswing to compensate for sacrifices made in the downturn. For this reason, I would expect private sector wage growth to pick up now that the economy is recovering, returning quite quickly to the rates we saw before the recession. Employment has also been sustained by the long-term confidence of management in the viability and future success of their businesses. In past recessions, when this longer-term confidence was much weaker, employment has fallen more sharply. For example, in the early 1980s, UK manufacturing companies entered the recession facing many problems of low productivity, poor industrial relations and an unstable macroeconomic environment, with high cost and price inflation. It was therefore not surprising that the early-80s recession was the last straw which saw many UK manufacturers closing down operations and international businesses shifting their production bases elsewhere. In the recent downturn, the bulk of UK businesses have felt more confident about their longer term prospects and have sought to retain their resources of skilled labour and experienced workers so they would be well placed to benefit from the upswing when it came. That attitude and approach is in my view a positive signal for our future prosperity and business success.
Indeed, the EU Treaty calls, as a prerequisite for adopting the euro, for a high degree of sustainable convergence in the fields of price stability, government fiscal position, stability of the exchange rate, and long-term interest-rate levels. The sustainability of nominal convergence itself presumes that sufficient preliminary progress has been made towards real and structural convergence (and namely having set a fully-fledged market economy, catching-up in income and productivity levels, as well as economic and social infrastructures, upgrading of the legal system…). Conversely, a sustainable catching-up process requires macroeconomic stability. Therefore, nominal and real convergence should be pursued in parallel, and are not antagonistic. •  Secondly, I noted that several accession countries have already expressed their intention to join ERM II rapidly after EU entry. This intention is to be welcomed, although it should be clear that ERM II membership needs neither to happen immediately after EU accession in all cases, nor to be limited to only two years, which is the minimum before adopting the euro. It would be totally misleading to consider ERM II as a mere “waiting room” before the euro. On the very contrary, ERM II membership allows countries to retain some limited exchange rate flexibility during the catching-up process and offers a meaningful, flexible and credible framework for increasing nominal and real convergence with the euro area, and for helping determine the appropriate level for the eventual irrevocable fixation of parities, in the best interest of candidate countries themselves.

•  Fifthly, central bank independence is of the essence. It is an integral part of the acquis communautaire, which is laid down not only in national legislation but above all in the  8  BIS Review 71/2002  Maastricht Treaty. The effective implementation of the acquis communautaire is not only a legal prerequisite for accession to the EU. It also implies the effective transformation of accession countries’ economic framework, which should facilitate their integration into the EU and, later, the euro area. In this context, it should be ensured that there is no discrepancy between the central banks’ formal status in the legislation and the implementation of that legislation. It is of utmost importance that all present and future Member States respect this economic and institutional ground rule of the European framework. •  Sixthly, let us not forget the present and future contribution of Central and Eastern European countries to the economic prosperity of Europe at large. It seems that this contribution might be sometimes underestimated, while the relative influence of the US economy, for instance, might be sometimes overestimated. In fact, transition economies, as a whole, are as important as the US in terms of external demand addressed to the euro area: they both enjoy the same share, i.e. 13% of our exports. And, during the last two years, transition economies contributed for two-thirds to the overall growth of our total external demand, while the US contributed for less than 0.1%.
My colleague Andréa Maechler will describe the adjustments to monetary policy implementation in more detail later. Page 1/4  Zurich, 22 September 2022 Thomas Jordan  News conference  Inflation forecast  Let me now turn to inflation developments. Inflation rose to 3.5% in August and is likely to remain at an elevated level for the time being. The latest rise in inflation is principally due to higher prices for goods, especially energy and food. Our new conditional inflation forecast is based on the assumption that the SNB policy rate is 0.5% over the entire forecast horizon (cf. chart 1). Up to mid-2024, the forecast is above that of June. After that, it is lower due to the now tighter monetary policy. At the end of the forecast horizon, inflation stands at 2%. The new forecast puts average annual inflation at 3% for 2022, 2.4% for 2023 and 1.7% for 2024 (cf. table 1). Without today’s SNB policy rate increase, the inflation forecast would be significantly higher. Global economic outlook  I will now move on to the economic outlook. Global economic growth has slowed considerably in recent months. At the same time, inflation in many countries is markedly above targets. In response, numerous central banks have further tightened their monetary policy. In our baseline scenario, we expect this challenging situation to persist for now. Global economic growth is thus likely to remain weak in the coming quarters.

Everything that I have mentioned about digital infrastructure and connectivity is well within the capacity of Africa to achieve. In fact, you have a unique opportunity to leapfrog legacy systems and vested interests, and build a modern digital economy and society, from the ground up on a clean slate. This room is filled with innovators, investors, business leaders, and policy makers from around the continent. Together, you can shape a future where technology and finance  2/3  BIS - Central bankers' speeches  converge to create a more prosperous, vibrant, and inclusive Africa. Thank you. 3/3  BIS - Central bankers' speeches
The choice of M3 as an aggregate is supported by empirical evidence regarding the long-run stability and leading indicator properties of this aggregate. Moreover, conceptual arguments pointed to the considerable importance of including in the monetary aggregate those assets which have a high degree of substitutability with narrower definitions of money. Therefore, in addition to currency in circulation and deposits, repos, units or shares of money market funds and money market paper as well as short-term debt securities, all of which are close substitutes for more traditional bank deposits, have also been included in this definition. The first reference value for M3 growth has been set at an annual rate of 4½%. This reference value is consistent with the maintenance of price stability over the medium term, while allowing for sustainable output growth and the trend decline in the velocity of circulation of M3. In setting the reference value for monetary growth, the Governing Council has taken account of various factors and emphasised its medium-term orientation. First, the Governing Council is committed to maintaining price stability according to the definition enshrined in the Treaty on European Union. This requires increases in the HICP for the euro area of “below 2%”. Second, the Governing Council takes the view that a figure in the range of 2% to 2½% per annum for the trend growth in real GDP in the euro area appears to be reasonable.

Sunil Mendis: A brief look at financial information technology Keynote address by Mr Sunil Mendis, Governor of the Central Bank of Sri Lanka, for the Financial Information Systems Seminar, Colombo, 8 September 2004. *  *  *  His Excellency Akio Suda, the Ambassador for Japan in Sri Lanka, Mr Yoshihisa Onishi, Executive Director, FISC, other officers from the FISC in Japan, Ladies and Gentlemen, The Central Bank of Sri Lanka is happy to co-sponsor this programme together with the FISC of Japan (Center for Financial Industry Information Systems), in view of the importance of financial information technology in the financial services industry. Sri Lanka is no exception to continuous changes in the technology used by its financial services industry. In a market driven financial system, for information to be effective, there should be two vital ingredients, that is system integrity and timeliness - both of which are crucial. The more dependable your information systems are, the more efficient and competitive banks can be as a player in the financial services industry. That is why we see banks investing heavily in IT. Globally too, with the interdependence of markets their integration is facilitated through information systems which link these markets which make the world a very small place indeed on a PC monitor where the whole world is virtually at your doorstep.
The results show that a significant part of the debt is accounted for by households that have both substantial assets and fairly sizable margins; not even a sharp increase in interest rates or unemployment would affect their ability to service debt to an extent where it would seriously increase the risks in lending to Swedish households. The risks in lending to the household sector therefore remain small, even when individual households are studied. Here it can be added that it was not the household sector that caused problems for the banks during the financial crisis of the early 1990s; despite the fact that the interest ratio rose to 11 per cent in 1991 and unemployment peaked during 1993 at 8.5 per cent. With regard to developments in house prices, the assessment is still that Swedish house valuations are relatively reasonable. Fundamentals such as rising disposable incomes and falling interest costs could to a large extent explain the observed price trend. The demand for housing is expected to grow more rapidly than the supply. However, developments in house prices in Sweden vary considerably from region to region. Prices in metropolitan regions have risen by a significantly larger amount than for the country as a whole, although prices in the Stockholm region have stagnated over the past two years. There has also been a steeper price rise for tenant-owned apartments than for single-family dwellings. It is difficult, at present, to envisage any tendencies towards imbalances that could lead to a substantial fall in prices.

A more recent story that comes to mind involves two factory workers who earn approximately 6,000 baht per month. Both were invited to apply for a credit card but only one signed up for the offer. This worker first used his credit card to purchase a TV set, which he could easily finance with his salary. Nevertheless, the TV was followed by a washing machine and a motorcycle, which eventually pushed his monthly debt payment to exceed his income. As he exhausted all of his savings, and could no longer borrow from family and friends, his belongings were repossessed by the creditors, and finally he had to quit his job in hopes of running away from his remaining creditors. The story highlights a dangerous combination in the fabric of Thai society and that is low-income earners who lack financial literacy, or the ability to effectively manage their finances, but yet have very high marginal propensity consume. They in turn are more susceptible to unknowingly consume beyond their means, and like my previous story, become a burden an society. That burden is further intensified by the difficulty in finding and obtaining new employment. This probable risk demands that stakeholders take a more cautious approach to ensure quality growth in Thailand’s consumer finance market. Ladies and Gentleman, In reality there are more than one type of savings behavior in the world, but most importantly the savings behavior should be appropriate for the developmental needs of each country.