samchain/econo-pairs-v1 huggingface dataset:
Caleb M Fundanga: Payment system developments in the region Speech by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the official opening of the 2007 SADC Payment Systems Regional Conference, Livingstone, 2 April 2007. *  *  *  • SADC Payment Systems Project Team Leader; • SADC Payment Systems Project Country Leaders; • Chairperson, Bankers Association of Zambia; • Delegates from all SADC Countries; • Distinguished invited guests; and • Ladies and Gentlemen On behalf of the Bank of Zambia and indeed on my own behalf, I wish to welcome you all to Zambia and Livingstone in particular. For those of you coming to Livingstone for the first time, you will no doubt soon discover that this historical city, which incidentally was Zambia’s capital city until 1935 when it was moved to Lusaka, is one of the world’s pristine tourist destination and boasts of a number of magnificent sights and places of cultural interest. For those of you that have been here before, I wish you a joyous time as you renew your acquaintance with this beautiful city and enigmatic Victoria Falls. To all of you, I implore you to shop around and take a piece of Livingstone as souvenir on your return. Ladies and Gentlemen, allow me to thank you all for being here for the 2007 SADC Payment Systems Regional Conference. This event has now become interwoven into the tradition and fabric of SADC.

But even if the Governing Council does object, it cannot change the decision, but has to send it back to the Supervisory Board, which can either change the decision or call upon a mediation panel to resolve the difference of opinion. I can see that countries which join the banking union from outside the euro area might have some concerns. While they would have their seat on the Supervisory Board, they would not have a seat in the Governing Council. So, would they lose control over decisions that might directly affect their banks? Well, that would certainly not be in the spirit of the banking union. There are thus safeguards to avoid just that. Let me give you an example. If the Supervisory Board drafts a decision which affects a member from outside the euro area, and if that member disagrees with the decision, it can formally state its objection. Thus, the Governing Council is made aware that there are diverging views and has to take them fully into account. Now, what if the Governing Council objects to a draft decision, and the affected country does not agree with the objection? In such a case it could, for instance, call upon the mediation panel to resolve the issue. What I want to say is this: if a country from outside the euro area were to join the banking union, its voice would be heard at all stages of the decision-making process.
Taking into consideration even the impossibility of the European Central Bank to serve as liquidity provider to our countries, I would deem that the spaces available to us in the framework of current legal and regulatory aspect have already been exhausted (from the liquidity viewpoint). Otherwise, I would say we have reached a critical point, below which no space for action is left. Let me emphasise that now that the crisis highlighted many “vulnerabilities” of this rapid catching up, the analysis should go beyond just accepting it as valid. This becomes necessary if we take into consideration the designing of a different economic growth model. In this context, I am more and more convinced that the global crisis was a development that advanced in time the need for inevitable steering of many imbalances that our economies accumulated over the last 10-15 years. 2  BIS Review 146/2009

Since then, the Committee’s role as a standard setter has only grown – to the extent that, today, this is seen as its primary purpose. Whereas the Committee took 10 years to publish its first 10 documents, this year alone it has published more than 30 – with more to come. But with all the public focus on standard-setting, it is important not to forget the critical “behind the scenes” role of information-sharing, since we all well know that regulation cannot be successful without strong supervision and cooperation to back it up. The second important influence on the Committee has been the growing sophistication and complexity of international financial markets. The original Basel Accord was beautiful in its simplicity – something that many people long for today – but it could not keep up with the development of increasingly complex financial instruments. These may have offered substantial benefits to society, but they strained the simple Basel I methodology. The Committee’s response was most obviously manifested in Basel II. This marked another turning-point in the Committee’s evolution, moving us from a “one size fits all” regime to differential approaches using internal models. This meant the regulatory regime was better aligned with banks’ underlying risk profile, but regulation was now no longer simple or completely uniform across banks. Like any change, it has delivered some undoubted benefits, but it has also created a whole new range of challenges that we are still grappling with today. The third key influence on the Committee stems from increasing globalisation.
While these measures have merits in safeguarding financial stability, they could have complex and cross-border impact. Even on the monetary policy front, unconventional measures are becoming more conventional. Central banks in the major economies have increasingly used unconventional monetary easing. Though necessary to stabilize their economies at this juncture, these policies have side effects of large and volatile capital inflows into Asia. This  BIS central bankers’ speeches  1  further complicates safeguarding of financial stability in other countries including Asia, and could, in turn, trigger some countries to resort to macroprudential measures themselves. Thus, in terms of policy space, we are dealing with a new paradigm of expanded policy tools, with new transmission mechanism, and requiring their own policy framework and governance. So we need to recognize the need for cross-border coordination as well as flexibility in execution given emerging uncertainty. Turning to the more medium-term structural issues, major regulatory reforms especially Basel III, Financial Stability Board reforms, and Dodd-Frank Act are still a known-unknown. We do know that they are designed to redress weaknesses that caused the crisis by enhancing capital and liquidity, while addressing the problems of procyclicality, and too-big-to-fail of SIFIs. For this, their merits are well recognized. But these reforms will reshape the global financial landscape and raise cost of financial intermediation. They will also have implications for cross-border level playing field, regulatory arbitrage, and alter risk profile of banks.

While  1/5  BIS - Central bankers' speeches  policy rates remain our main instrument for steering monetary policy, we have made clear that we are ready to adjust all our instruments to maintain the consistency we need in our monetary policy to achieve our primary objective of price stability. Datadependent, going meeting-by-meeting. Heute wie auch morgen und übermorgen bleibt die Geldpolitik auf der Hut und handlungsbereit. Banking supervision when macroeconomic tides are shiftingAs both an ECB Executive Board member and the Vice-Chair of the ECB's Supervisory Board, I am particularly interested in how banks adjust to the shifting macroeconomic tides. Higher interest rates as such are generally good news for banks because – after a decade of exceptionally low interest rates – they improve profitability. Indeed, euro area banks performed well in the first half of the year as their net interest income increased steadily, a trend that most analysts expect to continue in the near term as further monetary policy normalisation takes hold. Yet, even if the expectation of improved profitability for the median bank comes true in the near term, not all banks are expected to benefit equally from the increase in interest rates. More importantly, banks and we as supervisors need to be mindful that the increase in interest rates does not occur in isolation.
The Riksbank provided the liquidity assistance to Kaupthing because it wanted to prevent the crisis that has afflicted the Icelandic banking system from spreading to the Swedish financial system. Common to both instances of liquidity assistance is that they occur in a situation in which the entire global financial system is characterised by great uncertainty. Against this background the Riksbank has deemed it necessary to provide support to these institutions, which under normal circumstances would not receive it. In the current situation, suspension of payments by these financial institutions would pose a risk of serious disruption to the rest of the financial system and therefore lead to an undermining of confidence in the payments system. It is these assessments, not concerns about individual institutions, that motivated the Riksbank in granting the assistance for which the banks in question applied. With respect to Carnegie, a few days ago its operations were taken over by the Swedish National Debt Office, which granted a loan that replaces the liquidity assistance previously granted by the Riksbank. Financing assistance for companies Another problem begging for a solution is the financing situation of non-financial companies. As the financial crisis escalated, the credit supply to these companies has also become more troublesome, which could have strong repercussions on economic activity. To alleviate these problems, the Riksbank has temporarily offered banks the opportunity to borrow at three months against collateral comprising more commercial papers than usual.

Ardian Fullani: On building capacities for policy design and implementation Opening remarks by Mr Ardian Fullani, Governor of the Bank of Albania, at the workshop “On building capacities for policy design and implementation", Tirana, 3 December 2009. *  *  *  Dear participants, It is a very great pleasure for me to open the proceedings of this two-day workshop, entitled “Building Capacities for Policy Design and Implementation”, organised for the first time in Albania by the Bank of Albania, in co-operation with the Center of Excellence in Finance (CEF), Ljubljana, with support from the European Commission, European Central Bank, and International Monetary Fund. Welcoming you here in Tirana, allow me to express my gratitude for the excellent work done by the CEF in the course of these years, to the benefit of our region. Since our Washington meeting last April, the effects of the global crisis increased their presence in our region; however, as I have already emphasised even earlier, they did not immediately concert to full blown economic and financial problems. The extension of crisis effects to the real economy, to the budgets of governments and to financial sectors of the region, was mitigated by sound macroeconomic policies pursued in the recent years and by the availability of International Monetary Fund funding on an unprecedented scale, in coordination with support from the European Commission and the EBRD.
It finds a potentially material role for the decline in the value of mortgage servicing rights in particular, but concludes that the increase in the aggregate measure of profits and unmeasured costs is “not likely to be driven exclusively or even mostly by increase in costs”. This suggests that originator profits may have increased. The study examines a number of potential explanations. These include capacity constraints, market concentration, pricing 1  The Rising Gap Between Primary and Secondary Mortgage Rates. 2  We interpret originator to include all actors involved in originating and servicing mortgages. 2  BIS central bankers’ speeches  power over Home Affordable Refinance Program (HARP) refinance loans and pricing power on other loans. It finds that capacity constraints play a role and that there is evidence to suggest that originators enjoy pricing power and elevated profits on HARP and other refinancings. I encourage everyone to take a look at this paper. It represents a good starting point for today’s discussion. However, as the authors are the first to acknowledge, the increase in the primary-secondary spread and the underlying changes in originator costs and profits remain something of a puzzle. I hope today’s discussion will further deepen our collective understanding of this important issue. To sum up, for monetary policy to be as effective as possible in supporting economic recovery in a context of price stability it is imperative that the key channels of the monetary policy transmission mechanism are operating as effectively as possible.

These declines have been even larger if measured from the release of the minutes of the previous FOMC meeting in August, after which market expectations of easing in September increased. This is solid evidence that our policy has been and continues to be effective – though it is certainly not allpowerful in current circumstances. However, the impact of monetary easing on the economy through housing and mortgage finance has been impeded to some degree by two factors. First, not enough people can take advantage of today’s low primary mortgage rates. Mortgage underwriting standards have tightened quite dramatically and the share of new mortgages going to households with better credit metrics has risen. While it is difficult to disentangle how much of this is due to supply versus demand factors, it appears likely that credit standards for home purchase loans have not just tightened since the housing bust but overcorrected. BIS central bankers’ speeches  1  In addition, many homeowners find it difficult to refinance their existing mortgage because they have little equity in their homes, or are outright “underwater” with mortgage balances that exceed the current appraised value of their property. In a speech earlier this year, I called for measures to ease refinancing and tackle other frictions and market failures that lead to economically inefficient outcomes in housing. Some useful steps have been taken. But, more could be done, and these issues warrant ongoing focus by policymakers.
It must contribute to creating a framework which promotes a balanced economic development, meaning adequate real growth, low unemployment and modest inflation. Ensuring price stability is the primary goal of monetary policy. Our definition of price stability is a consumer price index below 2%. This is obviously not an end in itself, but a means to an end. An economic system which relies on the forces of the free market must be able to count on price stability for its smooth functioning. In particular, price stability prevents undesirable distortions in the social area. Economic teaching and experience leave no doubt as to the connection between the money supply and price stability. As economists tend to say: money matters. Whether the supply of money is adequate depends on its relation to real economic development. Monetary policy is therefore able to make its best possible contribution if it succeeds in bringing the supply of money basically in line with real growth in the long term. Three main problems have to be contended with in the conduct of monetary policy: the difficulty of assessing the economic situation, the limited knowledge of the way a modern economy works and  BIS Review 106/1999  2  foreign influences, over which we have little control. While knowing that these uncertainties exist should not paralyse our ability to make decisions, it should nevertheless lead us to exercise appropriate restraint.

Both the basic interdependencies previously mentioned and current events, which are reflected in the relevant economic indicators, must be factors influencing the decision-making process. As a small and open economy, Switzerland is highly integrated in international economic relations. By participating in international cooperation, the Swiss National Bank contributes to creating favourable conditions for an international division of labour. In this context, stable currency relations are crucial. Such relations are ultimately a result of sustained convergence of sound economic policies implemented by individual countries. With an increasing international integration of individual economies, the awareness of mutual dependence has also grown. Accordingly, efforts to coordinate the behaviour of individual countries in the field of economic policy have been reinforced. In this context, it is important to realise that the stability of international economic and monetary relations is not primarily a matter of institutional regulations. What is of the essence is the conduct of individual countries. These considerations are also relevant for an assessment of the European Monetary Union. Creating the Union at the beginning of this year meant a big step forward for the process of European integration. With the European Monetary Union, the participating Western European countries are trying to put their currency relations on a new footing in line with the changed environment. If the European Monetary Union can be implemented according to plan, this will vastly improve the preconditions for a balanced economic development in Europe. Freedom of movement for persons will be facilitated along with the free flow of goods, services and capital.
Yes, it is perfectly possible to explain why inflation has been so high for so long. And yes, there are good reasons why monetary policy did not try to keep inflation closer to target during this period. But just like the Judge looking down on me earlier, to some people, at some point, this may just start to sound like a series of excuses. This risk is heightened by the fact that the MPC has consistently under-predicted inflation during this period. It is much easier to be wise after the event. For many people, the one thing about inflation they know with certainty is by how much their cost of living has increased in recent years. And if they take any signal from that about the path of future inflation, this could have significant implications. Discussions of MPC credibility are often framed in terms of a set of binary arguments. Has the MPC lost its credibility or not? Are inflation expectations anchored or de-anchored? This approach encourages a focus on measures of medium-term inflation expectations. The rate of inflation expected over the next year or so may consistently move around since the MPC does not attempt to bring inflation back to target over very short time horizons. But this  10  In the extreme, the law of one price (LOOP) suggests that, in the absence of transport costs and trade barriers, the price of a given commodity will be the same all over the world.

I can’t say that monetary policy will perfectly anticipate every twist and turn of the economy. We will continue to be surprised by events and need to adjust policy accordingly. But I can assure you that the MPC remains as committed and as focused as ever in our determination to hit the inflation target. 15  This distinction between nice and not nice reasons for raising Bank Rate was made in an interview by Charlie Bean with the Western Mail on 1 February 2011. 8  BIS central bankers’ speeches  BIS central bankers’ speeches  9  References Batini, N, and E. Nelson (2005), “The U.K.’s Rocky Road to Stability”, Working Paper No. 2005–020A, Federal Reserve Bank of St. Louis. Bean, C (2011), “The MPC’s policy dilemma”. Speech at ABI’s Economics and Research Conference, London, available at: http://www.bankofengland.co.uk/publications/speeches/2011/speech479.pdf Benati, L (2006), “UK monetary regimes and macroeconomic stylised facts”, Bank of England Working Paper, No. 290. Benati, L and Mumtaz, H (2007), “U.S. Evolving Macroeconomic Dynamics: A Structural Investigation,” European Central Bank Working Paper N. 746, April 2007. Brazier, A, Harrison, R, King, M and Yates, T (2008), “The Danger of Inflating Expectations of Macroeconomic Stability: Heuristic Switching in an Overlapping-Generations Monetary Model”, International Journal of Central Banking, June 2008. Campa, J and Goldberg, L (2006), “Distribution margins, imported inputs, and the sensitivity of the CPI to exchange rates”, NBER Working Paper No. 12121. Carroll, C (2003), “Macroeconomic expectations of households and professional forecasters”, Quarterly Journal of Economics, 118(1): 269–98. Dale, S (2010), “Inflation, Inflation, Inflation”.
If we take trends in self-employment, temporary and zero-hours contract workers since 2000, we would expect these to have collectively directly subtracted from wages by around 0.6 per cent, or around 4 basis points from annual wage growth. 18  Again, although these estimates are modest they  probably understate the true effect, given they ignore any behavioural effects of these trends. Wages are not the only way in which these shifts in the nature of work may have affected labour market behaviour. As with unionisation, these shifts may also have widened the dispersion of wage rates within a given sector or occupation, with less collective-bargaining and more localised rates of pay. Vacancies data lend some support to this hypothesis. Charts 9 and 10 plot the distribution of offered wage rates in different occupations, comparing job vacancies containing the terms “self-employment” and “flexible hours” with those that do not. These vacancies data probably capture a particular segment of the self-employed and flexible working population, who differentiate their pay by more than the typical self-employed worker. Indeed, the ‘self-employed’ vacancies here are advertised by firms who invite applicants to become self-employed before hiring them. Nonetheless, these “violin” plots of offered wage distributions play an interesting tune. The distribution of offered wage rates is far wider for vacancies associated with self-employment and flexible hours than those without, within a given occupation. There is far less evidence of a “going-rate” for jobs associated with the self-employed and flexible working. This sounds intuitively plausible.

The City of Bradford is itself normalising, after a long period of painful adjustment. It has shown real resilience and an indomitable spirit during those lean years. There are now reasons for optimism about the City’s future, as civic and commercial investment return and confidence among businesses and residents builds. Those characteristics – resilience, spirit, optimism, investment, confidence – are ones the UK economy has also had to exhibit of late. They are ones it will continue to need over the next few years during what is likely to be a bumpy ride. Thank you. 16  All speeches are available online at www.bankofengland.co.uk/speeches  16  Annex  Chart 1: Successive Inflation Report forecasts of wage growth from 2012 Four-quarter wage growth, per cent  7 6 5 4 3 2 1 0 -1 -2 -3 -4  2001  2003  2005  2007  2009  2011  2013  2015  2017  Data  Sources: ONS and Bank of England calculations. Notes: ‘Data’ refers to whole economy total pay (average weekly earnings). Other lines show forecast vintages. Chart 2: Fitted and ‘inexplicable’ component of wage growth Four-quarter wage growth, per cent  8 6 4 2 0 -2  -4 -6 2010  2012 Residuals  2014 Data  2016 Explained by equation  Sources: ONS and Bank of England calculations. Note: ‘Data’ refers to private sector total pay (average weekly earnings).