samchain/econo-pairs-v1 huggingface dataset:
Let me briefly give you our (Albanian) experience with remittances and some suggestions to improve their ingress and effectiveness in the economy. During 90s, Albania experienced a massive migration movement abroad, which soon became a crucial financial source for the new market economy. According to some studies (Barjaba, 2004; INSTAT, 2002; Kule et al, 2002, 2002), since 1990, nearly 800,000 Albanians may have left the country either permanently or temporarily. Some more recent estimations show that the number of Albanians living abroad may have reached 1 million. This is a considerable figure for a small country like Albania with just 3 million of inhabitants. As a result, exodus phenomenon has attracted a great deal of attention in political and economic circles. Remittances role in the economy has grown considerably over time. We can appreciate their weight easier if we put them against some main economic indicators. However, before doing that I want to say a few words on data reliability of remittances. It is very difficult to carry out an accurate estimation of remittances in Albania bearing in mind that a large share does not go through formal (official) transferring channels, therefore escaping the official registration of capital flows. The Bank of Albania traces only that part of remittances that goes through the official network, which includes banks and money transfer agencies. Remittances sent unofficially such as, cash brought by emigrants or their friends during their visits to Albania, need to be estimated.

Niklaus Blattner: Review of the Swiss economy Introductory remarks by Prof Dr Niklaus Blattner, Member of the Governing Board of the Swiss National Bank, at the half-yearly media news conference, Geneva, 14 June 2002 *  *  *  Gold sales Since May 2000, the National Bank has been selling gold that is no longer required for monetary policy purposes. A total of 1,300 tonnes of gold is planned to be disposed of under the agreement on gold sales concluded on 26 September 1999 between fifteen European central banks. This agreement limits the total quantity of gold that can be sold by the signatories until September 2004 to 2,000 tonnes. To date, we have sold almost 520 tonnes of gold, which corresponds to 40% of the total quantity earmarked for sale. As shown in our periodic Bank returns, we are conducting regular sales of approximately one tonne a day. We consider this method more flexible, less costly and better suited to the characteristics of the market than the strategy chosen by the Bank of England, which is holding gold auctions of its own. Our average selling price has by now reached USD 279.4 per ounce (level of 31 May 2002), which is USD 2 higher than the average London gold fixing price, the benchmark price for gold. This performance has, to some degree, been realised thanks to the National Bank having been allocated a somewhat higher portion of the central banks' total annual quota of 400 tonnes since September 2001.
The experience of the past few months already suggests a number of key lessons for liquidity risk management and supervision which I will cover later. But I would first like to review the impact of market developments in recent years for liquidity risk management. Section II: Changing environment and business models How then has the financial environment changed in the past few years, and why has this led to a greater vulnerability to liquidity risk? The decade leading up to July 2007 has been described as a period of great stability: around the world, economic conditions were dominated by low inflation, low nominal yields, and lower volatility of the economic cycle. The benign macro background was associated with a fall in financial market volatility. And advances in technology spurred a wave of financial innovation and the development of new products offering improvements in the tailoring and matching of risks to investors’ risk  BIS Review 50/2008  1  appetite. This combination of factors encouraged investors to seek out riskier investments in search of higher returns – the “search for yield”. One feature of this “search for yield” was the rapid expansion of structured financial instruments; for example, where individual loans are packaged into tradable securities, such as residential or commercial mortgage-backed securities (RMBS/CMBS), or where the risk of a pool of loans is packaged into complex securities offering different levels of exposure to the potential losses in the pool (a collateralised debt obligation – CDO).

4  BIS Review 50/2008  Section IV: Lessons The recent turmoil has highlighted clear deficiencies in banks’ liquidity risk management. And it has also demonstrated that these deficiencies pose serious risks to financial stability and thus to the economy more broadly. To address this risk in the near term, central banks globally have provided additional liquidity to the banking system and emergency operations have been conducted to support Northern Rock and Bear Stearns. Additional liquidity has been provided at longer-term maturities to address the problem of funding an unexpected overhang of illiquid assets. The Bank’s recently launched Special Liquidity Scheme is enabling UK banks to liquefy a proportion of their outstanding stock of illiquid assets by swapping them for high quality liquid government securities, while ensuring that credit risks remain very clearly with the banks. That should ease current funding pressures. But in the medium term, it is clear that action is needed to strengthen the financial system’s defences to liquidity risk to limit the likelihood of any recurrence of the recent problems. Central banks globally are reviewing the lessons of the episode for their market operations, for example, to ensure that the usefulness of facilities is not undermined by perceptions of stigma that may be attached to a bank that uses them. But it is clear that primary responsibility for bolstering the defences lies with the banks themselves and that supervisory regimes for liquidity risk need reinforcing to support that process.
Det framtidige omfanget av petroleumsvirksomheten på norsk sokkel” [The future of petroleum activity. The future scale of offshore petroleum activity in Norway]. BIS Review 145/2010  1  The Committee had limited confidence in the government’s ability to save: The Committee stated the following concerning a savings fund: “It is up to the political authorities to determine whether such a fund construction designed to avoid a future decline in income is realistic. The Committee chooses not to build on such an assumption.” The notion of a sovereign oil fund matured through the 1980s. The government, under the premiership of Kåre Willoch, called for the establishment of such a fund in the Long-Term Programme presented in spring 1986, and the Act on the Government Petroleum Fund was passed in 1990. The main rules are: First: The totality of government petroleum revenues is transferred to the Fund. Second: The Fund is integrated into central government budgets and accounts. The non-oil deficit is covered by an annual transfer from the Fund. The government cannot borrow to finance current expenditure as long as there is capital in the Fund. Third: The capital in the Fund can only be used for domestic spending via general budget transfers, and not for earmarked transfers. Fourth: The Fund’s capital must be invested abroad. When the Act was enforced, the Norwegian economy was in a deep downturn, with high unemployment and government budget deficits. Projections also indicated that offshore production would pass the peak in the early 1990s 5 .

We have also pointed to possible improvements to the investment guidelines for the Fund. The fixed income portfolio has a number of weaknesses. We have learned that we should not necessarily invest most in those companies and states that are the most eager borrowers. Large borrowers thus have a high weight in the portfolios. Our assessment is that the fixed income portfolio should instead be weighted based on the income that is to service the debt. The GDP-weighted alternative is the most relevant alternative for government debt. Both the equity and fixed income portfolios are constructed using regional weights. Today’s distribution was partly determined using Norwegian import weights from the mid-1990s. It should be considered whether the regional weights should no longer be used so that the Fund’s holdings across all companies and recognised markets are of equal size. If regional weighting is discontinued, the share of the Fund’s European equity and bond holdings will be  13  See “Norges Banks aktive forvaltning av Statens pensjonsfond utland” [Norges bank’s active management of the Government Pension Fund Global], letter to the Ministry of Finance of 23 December 2010. 14  “Utvikling av investeringsstrategien til Statens pensjonsfondutland” [Development of the investment strategy for the Government Pension Fund Global], Norges Bank’s letter to the Ministry of Finance of 6 July 2010. 6  BIS Review 145/2010  reduced. Investments in the Americas and Asia will then increase. With such a revision, the stability of economic and political systems must also be assessed.
Prominent examples of “dread risks” with these characteristics are plane crashes and terrorist attacks, such as 9/11 in the US. This exaggerated sense of risk is stronger, the more recent the event. In other words, the over-estimation of risk is subject to time decay. This is known as disaster myopia (Guttentag and Herring (1986)). Rates of time decay from dread events are, however, typically slow. While the psychological scars from dread events fade, they do so only gradually and never fully disappear. Although the over-estimation of risk is, in one sense, “irrational”, its anthropological roots are deep. They are found in the hunter-gatherer communities that existed thousands of years ago, typically involving groups of 50–100 people. Simultaneous loss of 100 people would, in this setting, have threatened these communities’ very existence. And this “dread” appears to have hard-wired itself into our psyche to this day (Gigerenzer (2014)). The consequences of dread risk may not, however, be benign. It generates risk-averse behaviour which, while instinctive, may be counter-productive even from a risk perspective. The dread risk associated with 9/11 led to an exaggerated fear of flying and a sharp rise in car use. The loss of life from this increased car use may have been greater than the loss of life from 9/11 itself (Gigerenzer (2014)). This is the paradox of precaution. The self-same logic applies when moving from catastrophic losses of life to catastrophic losses of livelihood. Financial crises are the classic example of such catastrophic events.

They too cause large losses of income by a large number of people at the same time. In other words, they have all the hallmarks of a dread event, albeit one associated with economic, rather than physical, insecurity. The Great Depression was the most prominent example of an economic dread event in the 20th century. Historical accounts point clearly to it having generated an exaggerated sense of insecurity (Galbraith (1954)). One way this manifest was a surge in demand for safe assets. In Friedman and Schwartz’s words: “Expectations of great instability enhanced the importance attached to accumulating money and other liquid assets”. In the 1930s, this search for safety resulted in a rise in the demand for, and price of, government securities, lowering their yield. The yields on US and UK government bonds fell significantly and persistently during the 1930s (Chart 6). Insecurities revealed themselves in securities. The Great Depression also widened the gap between the return on safe and risky assets such as equities. This wedge – the equity premium – appears to have risen sharply after the Great Depression. It remained elevated for several decades thereafter. In finance circles, this is known as the “equity premium puzzle” (Mehra and Prescott (1985)). Recent academic evidence has argued, persuasively, that this puzzle can be solved by recognising that the Great Depression, and other catastrophic output losses, are dread events which exaggerate and prolong risk perceptions. Catastrophe risk then explains the size and persistence of the equity premium (Cogley and Sargent (2005), Barro (2005)).
Consumer goods price inflation hovered around zero for most of the last ten years, until the recent rise in oil prices. As a result, the purchasing power of UK consumers has risen with higher real wages achieved without any cost to employers. In other words, for a period the beneficial tailwind allowed the economy to run at a higher level of activity than would otherwise have been the case, without generating additional inflationary pressures. But the economic environment overseas has taken a turn for the worse. In many ways it is a tale of two cycles. The financial cycle The first cycle has been in the financial sector in the West. A banking cycle is not a new phenomenon but the scale of the expansion of cheap credit for some years and speed of the downswing in the last year has been exceptional. It started in the US with a real downturn in the housing market and rising default rates on sub-prime mortgages in particular. That led to a freeze in the structured credit markets built on those loans as investors lost confidence in the credit ratings they depend on. In finance at least, it is still true that when America sneezes the rest of the world catches a cold and the sub-prime crisis swiftly spread to financial institutions across the world. They became uncertain about the value of the financial positions they held, let alone what their counterparties held.

To put this in context, in the preceding 3 decades stretching back to the 1960s, annual GDP growth deviated from its 10 year average by more than 1 percentage point about half of the time (about 20 quarters in each 10 year period). 2  BIS Review 80/2008  employers and employees are less likely to adjust their prices and wages to a surprise movement in inflation. In other words, their expectation of inflation in the medium-term remains low, stable and anchored at the target. And that has helped to contribute not only to the stability of inflation, but output as well. Reforms to both the labour market and monetary policy have undoubtedly played an important role in the reduction in output volatility and emergence of a stable, low inflation environment. But there was a third factor at play that was probably also quite fundamental. Over the first decade of the MPC the economic cycles in the rest of the world were generally moderate, although not without excitement. And there is good evidence to suggest that the integration of emerging economies, such as China, into the global economy was beneficial to countries like the UK. The share of Chinese goods in total UK goods imports has almost tripled in money terms over the past fifteen years to around 8 per cent, and it’s likely that much of the content of imports from elsewhere originated in China. This rising share of Chinese imports has reduced manufactured imported goods prices relative to other prices and wages.
New legislations, both in the central bank act and financial institution act will empower the central bank to have much more ability to manage the nature of commercial banks and will follow the principle of transparency when we shall BIS Review 111/2000  2  be able to do much more for such an important event as a national election and hopefully then commercial banks would be much less inclined to cooperate in less than virtuous activities. Whilst it is probably true central banks of the modern era spend so much time in trying to stabilise national events, the biggest single cause of untold misery, poverty, death and famine in the modern economy is probably neither disease nor natural events, but it is the ever more frequent financial and currency crises and many central banks in many economies have been helpless in this prevention. There are now many international fora to tackle these problems, but all of them now are bent on making emerging markets behave themselves better with a better system, monitor themselves better and monitor what’s going on in the rest of the world, the latter is actually an impossibility. All financial transaction of significance is now computerised. A central bank with any kind of competence will have good access within the nation and understand and manage their own destiny. Given a reasonable government and even minimal legal system, each nation should be able to keep peace and stability. But international transaction is something else.

But human nature being what it is, they also began issuing paper notes equivalent to the value of precious metal which they don’t have in the vaults and the various currencies issued by the various banks became devalued very quickly. Another aspect to the whole thing is that people do cash in paper notes at times and banks have to hold large reserves sometimes up to 30% of their liabilities in order to make sure that they have adequate liquidity that may be used in case of unforeseen events. The first central banks in its relatively modern form were therefore established to provide the function of being the sole issuer of currencies and the single keeper of reserves as defined by law, notably the Bank of England in 1694 and epitomised in a tome in 1873, Lombard Street by Bagehot, Editor at the time of the Economist, where the concept of the Banking Department and the Note Issuing Department was so clearly explained. This gave credibility and value to paper currency and it was also a very much more efficient system in that the single reserves at the central bank could be used by the many commercial banks who thereupon kept much smaller contingencies, historically sometimes as low as 4 % of liabilities and accessed the joint “reserves” at the central bank whenever necessary enabling a much more efficient use of financial reserves than each bank having its own large reserves. Thus was born the term “banker to the bankers” and “lenders of last resort”.
These differences suggest that we should be careful in crafting the regulatory answer to the crisis. Our experience in France is that our banks’ universal model has weathered the storm relatively well. It would be a major paradox to put in place rules which would challenge such universal models. There needs to be scope for different countries to tailor solutions to their circumstances, while at the same time doing so within a globally agreed framework. BIS Review 35/2010  1  Many banks have improved significantly their capital position through raising high quality capital. Yet, banks may not feel comfortable if their new capital position is barely above the new minimum. Indeed, a critical issue going forward relates to the behavior of banks with respect to capital buffers they retain on top of the existing minimum. If banks target buffers above the regulatory minimum, which is an endogenous market outcome, they may need to raise even larger amount of equity than what can be expected just looking at the current package. On the one hand we know from empirical studies that weaker capitalized banks typically exhibit weak loan growth compared to other better-capitalized banks. On the other, banks may find it less costly to adjust loan volumes and loan pricing than capital, as frictions in the market for bank capital make the latter option more expensive. Finally, any regulatory framework needs to manage avoidance and regulatory arbitrage, and keep up with innovation and other forms of structural change.

Christian Noyer: Financial stability in Europe and in the world – a French perspective Speech by Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, at the Open podium debate on “The euro in the financial crisis – lessons and perspectives”, Copenhagen, 22 March 2010. *  *  *  It is a great pleasure to be here in Copenhagen at the gate of the euro area. This makes it all the more stimulating to discuss here with you issues related to the single currency, the financial crisis and the emerging new financial order. It allows for sharing experience and perspectives, which in and of itself is valuable for policy-makers. I would like to focus my remarks more on the emerging new financial order. More specifically, in the few minutes I have, I would like to share with you some thoughts, in a candid way, on three important policy questions. How can we make our financial systems more resilient? How can we reduce the procyclicality of financial systems? How can we best address systemic risk? Resilience Central banks have a strong stake in the resilience of financial systems. An environment of financial stability reduces the risk that monetary policy instruments become less efficient due to frictions and volatility in financial markets. Strong prudential standards are a certainly a prerequisite.
In addition, we reduced the annual commission rate of 0.02 basis points that had been applied since 1 February 2015 on euro-denominated accounts of banks and financing companies at the CBRT to a yearly 0.005 basis points as of 1 July 2015, and abolished it as of 27 July 2015 due to the recent developments in the euro area. 2  BIS central bankers’ speeches  Thanks to the tight monetary policy stance and the macroprudential measures, loan growth continues to stay at reasonable levels. Adjusted for exchange rate changes, loans provided to the non-financial sector increased modestly by 18.1 percent year-on-year in the second quarter of 2015. A comparison of consumer and commercial loans shows that commercial loans continue to grow more at a higher rate than consumer loans, partly due to BRSA regulations. The annualized growth rate of commercial loans dropped to 15.1 percent at the end of the second quarter of 2015, whereas this rate was 21.6 percent for exchange rateadjusted commercial loans. Likewise, comparing their growth trend to averages in past years, commercial loans are close to the average whereas consumer loans are significantly below the average (Charts 10 and 11). Due to the moderate economic activity and the recent tightening in financial conditions, loan growth is likely to slow somewhat in the forthcoming period. 2. Macroeconomic developments and main assumptions  Now, I will talk about the macroeconomic outlook and our assumptions on which our forecasts are based.

Accordingly, we revised assumptions for annual percentage changes in average import prices downwards by 1.7 points for 2015 and 1.4 points for 2016. Developments in food prices show that unprocessed food prices exhibited a notable correction in the second quarter of 2015 and the contribution of food prices to inflation witnessed a significant decline. Due to the projections that this correction will continue and the effects of measures taken by related institutions will materialize, we revised the food inflation assumption for end-2015 downwards from 9 percent to 8 percent. Our medium-term projections are based on the assumption that tax adjustments and administered prices will not exceed inflation targets and be consistent with automatic pricing mechanisms. The medium-term fiscal policy stance is based on the Medium Term Program projections covering the 2015-2017 period. Accordingly, we assume that a cautious fiscal  4  BIS central bankers’ speeches  stance will be implemented and the primary expenditures to the GDP ratio will decrease gradually. 3. Inflation and the monetary policy outlook  Now, I would like to present our inflation and output gap forecasts based on the outlook I have described so far. Our medium-term forecasts are based on a framework that a cautious monetary policy stance will be maintained by keeping the yield curve flat until there is a significant improvement in the inflation outlook. Moreover, we envisage that the annual loan growth rate will continue to hover around the recent reasonable levels in 2015, also thanks to the macroprudential measures.