samchain/econo-pairs-v1 huggingface dataset:
Gent Sejko: Statement - press conference with IMF Mission Chief Statement by Mr Gent Sejko, Governor of the Bank of Albania, at the joint press conference with the International Monetary Fund (IMF) Mission Chief for Albania Minister of Finance and Economy, Tirana, 10 October 2022. *** Dear media representatives, In the last two weeks, the Bank of Albania and the Albanian government have been engaged in intensive discussions with the IMF Mission, which visited Albania in the framework of the regular Article IV consultations. Discussion focused on current challenges for the Albanian economy, as well as structural reforms that would enable a faster and more sustainable development of the country in the long term. Allow me - first and foremost - to extend my thanks to the IMF Mission for the open share of views in addition to the fruitful and transparent discussions. Overall, the Bank of Albania and the IMF share similar opinions on the developmental challenges that lie ahead. The swift upsurge of prices in the global markets following the unprovoked military aggression of Russia over Ukraine, have triggered serious economic and social challenges for the economies and citizens of all countries around the world, including Albania. Inflation hit 8% in August, increasing at a rapid pace and having a broad base. Based on our judgement, we have previously stressed out that the high inflation is the main threat on the macroeconomic stability and both the stable and long-term growth of Albania.

It is estimated that 2.7 billion adults in the world economy are currently excluded from the financial system. In addition to the G20 initiative, there are other global institutions such as the Consultative Group to Assist the Poor (CGAP), Alliance for Financial Inclusion (AFI) and the International Finance Corporation (IFC) that have assumed an increasingly active role at the international level in developing new research, setting standards and providing a platform for policymakers to share experiences. This improved visibility of financial inclusion on the global agenda has lent significant support to the initiatives at the national level to promote greater financial inclusion. In this recent decade there has also been a growing body of research in the area of financial inclusion. This has contributed towards enhancing our understanding of the different approaches and policies that have been adopted and their relative successes in achieving greater access to financial services. This has also allowed for an enhanced appreciation of the issues that need to be addressed and on how sustainable financial inclusion might be achieved in our own countries. While considerable progress has been made in improving the financial inclusion environment, the sheer numbers that remain excluded from the financial system suggest that much more needs to be done, both at the national and international level. Barriers to financial inclusion continue to exist in many countries.
Jean-Pierre Roth: Foreign trade is Switzerland’s growth driver Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at OSEC Business Network Switzerland, Zurich, 17 April 2008. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  Foreign trade has played a major role during the present economic cycle. Over the past two years, it has made an exceptional contribution to GDP growth – with figures that bear comparison to the two upswing periods of the mid-1980s and mid-1990s. This strong export performance not only reflects a reorientation to accommodate the world economy’s new growth hubs, but is also the result of successful sector specialisation and the Swiss export industry’s premium-quality positioning. Switzerland’s watchmaking and pharmaceutical industries have been particularly impressive in this regard. Thanks to the speed at which its export industry has been able to adapt to global demand, Switzerland is well placed to benefit from the prevailing increase in earnings within the emerging markets. By specialising in the technology segment and tailoring its exports to customer needs, Switzerland is not only able to reap the rewards of upswings in the global economic cycle.

The effect is, however, expected to be more than offset by the prospects of very low inflation this year. In 2005 and 2006, wage growth is projected to increase as a result of a tighter labour market and higher inflation. There has been a tendency in recent years for a larger portion of pay increases to be agreed in the first year of the two-year period covered by the main agreement. If we consider these two-year periods together, the estimated relationship between wage growth and developments in the labour market are approximately in line with that observed since the mid-1990s. Developments in real economic variables are mirrored in credit markets. In recent years, household income has shown solid growth, and household confidence has been high. However, corporate earnings have been low, and until recently enterprises have primarily focused on enhancing efficiency. Credit developments are giving ambiguous signals to our interest-rate setting. Growth in household borrowing is high, but enterprises are reducing debt. The change in the breakdown of credit may have been amplified by banks’ increased eagerness to extend credit to households after a period of losses on loans to the business sector. Some reports from our regional network indicate that there are some restraints on credit for the business sector in some areas. Developments in credit to enterprises shadow developments in their investments. Low credit growth indicates that mainland business investment has not yet picked up. Total credit is expanding broadly in line with normal growth in nominal GDP.
Given that the prices that determine inflation are partly rigid, the central bank may influence the real interest rate by adjusting nominal rates. Before the onset of the financial crisis, the central bankers’ manual prescribed that if the economy is overheating and prices and wages are under growing pressure, the central bank should raise nominal interest rates above inflation expectations, thus tightening real rates and cooling down the economy. And vice versa, in a downturn, with falling prices and rising unemployment, the central bank should cut nominal interest rates, thus reducing real rates and stimulating aggregate demand. 10  Conceptually, central bankers sought to maintain real interest rates at a level – known as the natural rate of interest – that would hold GDP at its potential level and would keep inflation stable around its target level.2 This natural rate of interest is not directly observable  2  The concept, determinants and monetary policy implications of the natural rate of interest are discussed in depth in Galesi, Nuño and Thomas (2017). 11  and may only be estimated, with some degree of uncertainty, using econometric techniques.3 In recent decades this natural rate of interest has gradually fallen in the advanced economies. This is attributed both to demographic factors (such as population ageing) and to technological factors (such as low productivity growth), which have changed the balance between the supply of savings and the demand for investment.

The problem is that that commitment means that the central bank is voluntarily breaching its future inflation objective, which may possibly not be credible in advance. 7  Andreeva and García-Posada (2019) estimate the impact of the TLTROs on bank lending policies in the euro area. For an analysis of the macroeconomic effectiveness of forward guidance on interest rates and on future developments in the central bank’s asset portfolio, see Arce et al. (2019). 9 See Eggertsson and Woodford (2003). 8  13  This is what we economists call “dynamic inconsistency”: a central bank could announce today that it will tolerate higher inflation in future in order to stimulate the economy, but once the economy and inflation recover, there would be an incentive for it to breach its initial announcement if it conflicted with its price stability objective. If agents doubt the central bank’s credibility, this type of forward guidance will not be effective in the first place. One way to avoid this problem is by modifying the monetary policy “strategy”, seeking to grant greater credibility and transparency to the central bank’s actions; in other words, to change the way in which the central bank’s objective is articulated and the way that the central bank pursues that objective with the tools available. To date, in their strategic frameworks most central banks have followed variations of inflation targeting, which entails targeting an inflation rate that is close to a specific number (for example, 2%) over a medium-term horizon.
Earlier this week, the Central Bank published a report on Iceland’s underlying external position, in which it addresses the question of whether Iceland is facing a debt sustainability problem or a balance of payments problem as I have just defined them. But in order to answer that question, it is necessary to peer through the settlement of the estates resulting from the financial crisis – a process that is nowhere near completion – and correct for the effects of certain international corporations operating in this country. These companies have a profound effect on Iceland’s international investment position as measured according to international standards, but they would have a negligible impact on the state of the domestic economy if they defaulted on their debt. As a result, the task requires a great deal of estimation and entails some uncertainty, as previous findings have shown. The estimates are now more reliable than before, however, as time has clarified a number of factors concerning the failed banks’ estates and analysts have now gained access to the best available data. The results are the same as in previous appraisals, however, in that there are no signs of a debt sustainability problem as I have just defined it. Iceland’s net underlying debt position is estimated at 60% of GDP, the lowest since 1999. Furthermore, it is lower than that of many countries that no one would claim faced a sustainability problem. New Zealand’s net debt position, for instance, has hovered around 80% for more than one decade.

Krugman, Paul R. (1998). “It’s Baaack: Japan’s Slump and the Return of the Liquidity Trap”. Brookings Papers on Economic Activity 49, 137-206. BIS Review 19/2009  3  inflation, the real economy and the repo rate, the central bank can affect expectations of inflation and future repo rates. Even if the real economy becomes weak and inflation low or even negative in the short term, the central bank can, with a good and convincing analysis, present forecasts in which inflation returns to the inflation target and the real economy stabilises. This means, all in all, that the central bank's forecasts and scenarios constitute central tools in the effort to influence inflation expectations. Central banks that already have well-established numerical inflation targets may therefore find it easier to hold up inflation expectations and create credibility for their policy. In countries that do not have a numerical inflation target it may be good to introduce such a target in a situation with a binding zero lower bound for the interest rate, although it would of course have been better to already have the inflation target established and credible before ending up in such a situation. Inflation targets do, however, have a disadvantage . Following a period of unwelcome low inflation below the inflation target, inflation targeting entails, as it is usually applied, that the central bank subsequently seeks to maintain a level of inflation in line with the target.
As the world economy began feeling the brunt of the global financial crisis with the fall of Lehman Brothers in September 2008, public discourse in most countries called for a rapid and decisive policy response. In an unprecedented move, finance ministers from many OECD and emerging countries announced important fiscal packages in an attempt to revive the world economy. Chile was no exception, where the government implemented a fiscal expansion over 2% of GDP – in relative terms, among the largest in the world. Central banks, for their part, also implemented large monetary expansion measures to stimulate the struggling economy, first by lowering interest rates to their effective lower bound, and then, in many cases, by taking additional steps aimed at providing liquidity to seized financial markets. This was also the case of Chile, where we reduced interest rates to its lowest historical level, and then increase its expansionary stance by implementing nonconventional measures. This is a fundamental factor in Chile’s current strong recovery. The present challenge is the withdrawal of the monetary stimulus at an appropriate pace, which insures that inflation forecast is consistent with our target of three percent in a two year horizon. We are taking into account the different factors affecting the outlook, such as the behavior of the exchange rate, the strength of the expansion of demand and activity, and the perspectives of lower interest rates in the world, among others.

José De Gregorio: Fiscal policy and macroeconomic performance Opening remarks by Mr José De Gregorio, Governor of the Central Bank of Chile, to the 14th Annual Conference of the Central Bank of Chile “Fiscal policy and macroeconomic performance”, Santiago de Chile, 21 October 2010. *  *  *  Good morning. Welcome to the fourteenth installment of our annual conference, entitled Fiscal Policy and Macroeconomic Performance. Year after year, this event gathers an outstanding group of economists from academic and policy circles to discuss a topic at the forefront of the global discussion, and a glance at our program makes clear that this year is no exception. This venue serves to reinforce the strong links that our Bank has cultivated with top research institutions around the world. We at the Bank believe that rigorous research represents a fundamental pillar in the analysis of the causes and effects of economic developments, and we thus consider it an essential input to our policy decision-making process. Interaction between academics and policy makers is crucial, because it provides each with distinct feedback, permitting advances to occur at the frontier of knowledge – where they are most needed – while providing solid grounds for policy decisions. As I have mentioned, the topic of discussion during this conference will be Fiscal Policy and Macroeconomic Performance. Understanding the way in which fiscal policy transmits into the economy in normal and abnormal times is key to enhance the effectiveness of monetary policy.
In terms of its composition, moreover, the draft Budget has most of the adjustment falling on public spending. And this, on past experience, raises the effectiveness of the consolidation strategy. Yet the presence of risks threatening the attainment of these targets should not be understated. The Budget is based on a macroeconomic scenario of significant recovery which, if not confirmed, might lead to a revenue path worse than projected. As I said, if this were the case, offsetting measures should immediately be applied. But perhaps the biggest risk to general government meeting its targets stems from the potential deviations that may arise at the regional and local government level. As known and reiterated on many occasions, the high decentralisation of public spending in Spain means that the collaboration of the regional and local governments is essential for achieving budgetary stability. At the end of this year it will be possible to make a full assessment of the consolidation drive made by the regional budgets, but my impression is that, as matters stand today, the measures announced by most regional and local governments far from respond to the reduction in public spending needed. I therefore believe formulas must be sought to strengthen regional and local government commitment to budgetary stability and to encourage compliance. In this respect, we should not rule out a revision and strengthening of the national budgetary framework, in particular in the case of regional and local governments, a framework that resides essentially on the Budgetary Stability Law.

Had this situation continued, it would have jeopardised the soundness of the financial system and the vital funding of the economy. In order to break the dangerous dynamic unleashed and to restore confidence in the Spanish economy, which had become the main objective, it was vital to set new bearings for economic policy through the adoption of substantial fiscal, labour and financial measures. I previously had the opportunity to inform you of the numerous financial measures pursued to oversee the necessary restructuring of the Spanish banking system, an essential condition for the sound and sustainable recovery of the economy. Allow me today to refer to the role played by the stress tests of the banking system in late July. These are a marker of the progress made in restructuring and, above all, they have provided for an exercise in transparency, allowing us to break the vicious circle of lack of confidence that was building up on the basis of relatively unfounded assumptions and expectations. As you will recall, when I presented the Banco de España Annual Report for 2009 in June, I set out our intention to publish the stress tests of all Spanish banks and savings banks. This initiative was assumed at European level by the European Council under Spain’s presidency, and the results of the exercise, harmonised by the Committee of European Banking Supervisors, were published on 23 July.
We cannot, and should not aspire to a zero-risk solution, but we do need to be prepared to take measures to restore confidence if things do go wrong. 11. Public policy response - process  The first area of public policy response concerns how we handle our day to day activities. These have to be sharpened and broadened to oversee this more complex environment: a real life challenge for all of us here in London. Given our position as a major international financial centre the stability of the system could be impacted by any significant storms from elsewhere. 6  BIS Review 5/2004  Perhaps I can say a few words about what this means to us at the Bank of England. Responsibility for the overall stability of the financial system as a whole means we undertake activities ranging from behavioural research to oversight of payment and settlement systems; from involvement in standard setting to implementing infrastructural change. To do this efficiently means, as our Governor Mervyn King recently reminded us, that we have to see the wood for the trees. The challenge is where you draw the line. This entails a prioritisation process to decide on the extent and degree of potential threats - and also a “sunset” approach where we subject each area of work to regular review to assess progress and continued relevance. There are a number of, interconnected, areas of work.

It explains endeavours to encourage or enforce compliance with them, through a variety of measures including international bodies, such as the Basle Committee, IOSCO, the Committee on Payment and Settlement Systems, the IMF, and the World Bank - and others too numerous to mention. The Financial Stability Forum is noteworthy too, as it brings together the three sets of key bodies involved in financial stability oversight - central banks, regulators and finance ministries - to supplement the actions of other international organisations in promoting standards globally. 13. Public policy response - if things go wrong  I spoke about identifying threats and the steps to mitigate them, but we also need to be able to intervene if things do go wrong. In a non-zero risk environment, failure is a possibility. So we need to look at both mitigants in relation to the impacts of financial crisis, and how to restore confidence. This is true both for financial crises which could occur as a result of business failure, as well as possible major operational disruption - whether from terrorism, cyber failure, or natural calamity. They are situations where predictability is so vital, when normal mechanisms for decision making may be in abeyance. I have left until last the tricky question of emergency liquidity injection and lender of the last resort. This is an area full of mystique and ambiguity.
In earlier times, the compliance function was largely left to a single, usually mid-level, individual within the organisation, whose principal job was to serve as a contact point with the regulator, or to handle matters relating to anti-money laundering and counter financing of terrorism. Today, almost all financial institutions have a compliance function, staffed with whole teams dedicated to all aspects of a firm’s compliance with relevant laws, regulations and internal policies. Indeed, we have progressed. Many efforts have been taken to continuously strengthen the supervisory framework. Bank Negara Malaysia has identified the compliance function as one of the key control functions in a financial institution – right up there with senior management, risk management function, and finance and reporting functions. In 2015, we issued the compliance standard for financial institutions, which raised our expectations of boards and management to address the full breadth of structural, operational, resource and process issues that go into assuring compliance. We also issued strengthened corporate governance standards which reinforce the accountability of the boards in overseeing an effective compliance function. While it should be obvious why compliance is so important, I think it bears repeating. If motivations for an increased focus on compliance are exclusively driven by the avoidance of regulatory fines, then we are missing the big picture. We should be aware that a strong compliance function and culture makes good business sense. Today I would like to address the following matters: i.

But given that banks are in the business of risk-taking, compliance functions can and should also provide the means by which a bank can take reasonable business risks based on more informed judgements. In other words, compliance doesn’t only serve to constrain risk-taking, it can help banks assume legitimate business risks more responsibly and with greater confidence. Our economy still relies strongly on bank intermediation. An excessive aversion to risk by banks has dire consequences on economic growth. A strong and effective compliance function can redress this by assisting banks to form better judgements about risks taken by their institutions. In a 2017 survey of 28 countries including Malaysia, the financial services sector was ranked as the least trusted industry, coming in last after the technology, food and beverage, consumer packaged goods, and energy sectors. I recently shared that popular polls also show that most people do not hold banks in high regard in terms of ethics and honesty. This is, indeed, a very unfortunate state of affairs. This brings me to my third point on the impact of compliance on public confidence and trust in the financial industry. When things go wrong, two questions inevitably get asked. Were there any rules to prevent this from happening, and if so, why were they not followed? And if this could happen, how far can we really trust banks to act in the public’s interests? Today, banks remain dominant players in many aspects of financial services.