samchain/econo-pairs-v1 huggingface dataset:
These tools will allow us supervisors to develop macro-prudential policies that interact with micro-prudential policies and monetary policy. However, creating macro-prudential tools is not sufficient. To ensure their effectiveness, they must be appropriately assigned from an institutional point of view to avoid so-called inaction bias. In this respect, the Spanish Government has announced that a macroprudential authority is to be set up, composed of representatives of the Ministry of the Economy and Enterprise, the Banco de España and the National Securities Market Commission. Spain was one of the few European countries still without a national macro-prudential authority. By setting up this new authority, Spain is complying with the recommendation of the European systemic risk board, which urged EU Member States to establish such an authority. The aim of this authority will be to carry out the macro-prudential supervision of the Spanish financial system, in order to contribute to the prevention or mitigation of systemic risk. For this purpose, the Banco de España is due to be given new powers in this area. These include, notably, the possibility of activating tools, such as the sectoral countercyclical capital buffer, limiting sectoral credit concentration and others relating to credit standards. Giving the Banco de España these new macro-prudential tools clearly strengthens the Spanish supervisory system and brings it into line with best international practice.

12.12.2018  Opening of the 14th banking industry meeting: should we reinvent banks or improve their management? IESE Pablo Hernández de Cos Governor  Good morning. I should like to thank the IESE for its kind invitation to open the 14th edition of the banking industry meeting. This gives me an excellent opportunity to review the progress made by the Spanish banking industry and the main challenges it currently faces. Let me start, however, with a brief explanation regarding the content of my speech. As a member of the Governing Council of the European Central Bank I am, as of today, subject to a “quiet period”, before a meeting at which monetary policy decisions are due to be taken. Accordingly, my reflections in this speech should not be interpreted as indicating the monetary or economic outlook (see Chart 1). Following the last crisis, Spanish banks have carried out a major balance sheet clean-up, recapitalisation and restructuring which, over the last four and a half years, has notably improved the situation of the industry in terms of its basic parameters, such as asset quality, profitability and solvency. Starting with asset quality, between December 2013 and June 2018 the reduction in nonperforming loans and foreclosed real estate assets has been very notable. Also, the return on equity has turned positive again and is above the euro area average, following its collapse in 2012, to minus 25%.
This, coupled with the higher remittance cost of 4.5% in Kota Kinabalu compared to other parts of Malaysia presents a unique opportunity to leverage on the Greenback project, to support the financial needs and goals of foreign workers here in Sabah; to increase the development impact of remittances to our neighbouring countries; and importantly, to make remittances generally more efficient for businesses and the population of Sabah itself. Even though this is the second champion city in Malaysia, we are not only looking to replicate our experience in Johor Bahru. Indeed, we acknowledge the different challenges and opportunities presented in Sabah, which is why an important and distinct focus for Greenback Kota Kinabalu will be the wider use of technology to deliver remittance solutions in Sabah. Here in Sabah, people still often need to travel a great distance to send money home. This is 1/3  BIS central bankers' speeches  costly, cumbersome and at times, risky – made even more challenging by Sabah’s geography and remoteness of some parts of the state. Technology offers new possibilities to overcome these difficulties, while significantly improving user convenience. Although remittances through electronic channels is not new, the take-up rate of electronic remittances has been relatively slow. In 2017, the share of electronic remittances accounted for only 12% of total remittances. This in turn has limited the potential to make remittance services much more efficient and accessible to our communities, including here in Sabah.

Changes in prudential regulations, arising from the adoption of the new Basel III requirements, whose implementation has yet to be completed; possible rule changes that restrict banks’ business model (the so-called structural measures); far-reaching changes in the regulations governing the resolution of weak institutions and changes also in supervisory practices, with the foreseeable increase in capital requirements derived from stress tests, the development and deepening of Pillar 2, and the inclusion of macroprudential considerations, among other factors. In Europe, in particular, the reforms take on a special dimension following the start-up of a new unified regime for the prevention, management and coverage of banking crises. Following the approval last year of the Regulation setting up the single supervisory mechanism, preparations for which are – as I shall later mention – well under way, the political agreement reached last week on the single resolution mechanism allows us to envisage the start-up of an effective banking union in Europe. It is difficult to overstate the importance of the steps taken here, in light both of their scope and their speed. The combination of unified supervision, with the adoption of common rules of conduct for vulnerable institutions, the creation of the European resolution agency, with significant executive capacity, and the establishment of pan-European bank riskmutualisation mechanisms all mark a huge step forward for the monetary union and, by extension, for European integration.
The shift from the previous low inflation rate was rapid and took us and other forecasters by surprise. High inflation has multiple and global causes. Pent-up demand and a rapid shift from services to goods made it difficult to adjust supply in the short term. This, combined with fiscal and monetary stimulus, pushed up prices. The rapid economic recovery after the pandemic pushed up the prices of raw materials, inputs and transport at a time when production had not yet recovered. Russia's invasion of Ukraine drove up the prices of energy, cereals and other agricultural products. Energy prices then spread to the prices of transport and other inputs. One question to ask is whether we will return to the environment of low inflation and low interest rates that characterised the economy before the pandemic. Our assessment is that inflation will fall back rapidly in 2023 and that it will be around 2 per cent next year, see Figure 1. Long-term inflation expectations as measured in surveys are just above 2 per cent, which supports our assessment, see Figure 2. However, there is considerable uncertainty and unforeseen events always occur. Nor do we know whether several years of high inflation has affected companies' pricing behaviour. Moreover, there is the risk that the deteriorating geopolitical  3 [30]  situation may have a fundamental impact on economic conditions for a long time to come.

The industry experienced a compound average growth rate of 27 percent in terms of net contributions between 2005–2010, with family takaful driving the growth at 28 percent for the same period, to dominate more than 80 percent of the total takaful market in 2010. The strong growth momentum is expected to continue, underpinned by the rising affluence of Malaysian amidst strong economic fundamentals. Given the large untapped market that still exists with only 54 percent of the population having a life insurance or family takaful policy, the takaful industry is poised to benefit in the years ahead. Today’s launch is thus an important step in our overall strategy to further elevate the growth and development of the takaful industry. ING Public Takaful Ehsan is the 3rd licensee to launch out of the 4 family takaful licences awarded recently, making up to a total of 11 takaful players now operating in Malaysia. The initiative for strengthening competition in takaful industry is premised on our quest to unlock the enormous growth potential that lie ahead. There are 3 dimensions from which strong opportunities for growth can be harnessed in the takaful industry. First, is the opportunity to penetrate the remaining underserved areas in family takaful. One such area is medical and health, which in 2010 constitutes only 9 percent of new family takaful business.
Prasarn Trairatvorakul: Bank of Thailand’s policy direction in 2012 Speech by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at the Bank of Thailand, Bangkok, 27 January 2012. *  *  *  Good afternoon, honorable guests and members of the press, 2012 is a special year because it is the Bank of Thailand’s (BOT) 70th anniversary, a mark of extensive experience for an institution. Faced with numerous challenges to monetary policy and financial institutions policy implementation, the BOT has through the past 70 years upheld the institutional value that our policies must be based on sound principles, yet embracing enough flexibility to accommodate the changing environment. Our ultimate goal is to promote Thailand’s long-term economic and financial stability. Our policy direction in 2012 will continue to reaffirm our long-held determination to strengthen the country’s economic resiliency and the well-being of the Thai people. Notwithstanding short-term economic obstacles that have weighed on current sentiments, the Thai economy’s main challenge has remained the same since my address last year. This major challenge is how we all can become more proactive since idleness during a time of rising competition could easily cause us to fall behind. As such, all parties should always be ready to improve oneself and to prepare for uncertainties that may occur in the future. In this same spirit, the BOT has modified our strategy to fit the changing environment and is willing to work with all parties to ensure that the Thai economy can continually expand in line with its potential.

Thomas Jordan: Bank regulation – what went wrong? What will improve? Summary of a speech by Mr Thomas Jordan, Vice-Chairman of the Governing Board of the Swiss National Bank, at the Forum für Universität und Gesellschaft, Berne, 24 March 2010. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  The financial crisis has caused enormous damage. Massive losses were recorded in the global banking system. Many countries have gone through the worst recession since the Second World War. Government rescue measures had to be implemented to stabilise the financial system. Existing bank regulations were not able to prevent the crisis, nor were they able to at least contain the damage to such an extent that government rescue packages would not have become necessary. While before the financial crisis, there was considerable uncertainty about possible shortcomings in bank regulation, these have now become apparent and will have to be tackled. In addition, the provision of implicit state guarantees has made the need for action even more urgent. Big banks – believing that they will receive government assistance if they run into problems – have even stronger incentives now to take on excessive risk. This increases the risk of another crisis and erodes the fundamental principle of the market economy – competition. Once again, in the future, banks will have to bear their own risks. The failure of a bank should no longer jeopardise the stability of our financial system.
The outcome of the monetary analysis confirms the assessment of low inflationary pressure over the medium term, as money and credit growth continues to slow down. Against this background, we expect price stability to be maintained over the medium term, thereby supporting the purchasing power of euro area households. Let me now explain our assessment in greater detail, starting with the economic analysis. Available data and survey-based indicators continue to signal an improvement in economic activity in the second half of this year. In particular, the euro area should benefit from the inventory cycle and a recovery in exports, as well as from the significant macroeconomic stimulus under way and the measures adopted to restore the functioning of the financial system. Taking into account all available information, in the second half of this year, quarterly real GDP growth rates could be back in positive territory. However, uncertainty remains high as a number of the supporting factors are of a temporary nature. Looking through the volatility of incoming data, the euro area economy is expected to recover at a gradual pace in 2010, as it is likely to be affected over the medium term by the process of ongoing balance sheet adjustment in the financial and the non-financial sector, both inside and outside the euro area. In the view of the Governing Council, the risks to this outlook remain broadly balanced. On the upside, there may be stronger than anticipated effects stemming from the extensive macroeconomic stimulus being provided and from other policy measures taken.

Furthermore, increases in indirect taxation and administered prices may be stronger than currently expected owing to the need for fiscal consolidation in the coming years. Turning to the monetary analysis, the annual growth rates of M3 and loans to the private sector declined further in September, to 1.8% and -0.3% respectively. These concurrent declines support the assessment of a moderate underlying pace of monetary expansion and low inflationary pressures over the medium term. In the next few months, the annual growth rates of monetary aggregates will most likely be affected downwards by base effects that are associated with the intensification of the financial turmoil one year ago. More fundamentally, however, the growth of M1 and M3 continues to reflect the current constellation of interest rates. While the narrow spread between the rates on different short-term deposits fosters shifts in the allocation of funds to the most liquid assets contained in M1, the steep slope of the yield curve also encourages such shifts from M3 to longer-term deposits and securities outside M3. The annual growth rate of bank loans to the non-financial private sector turned slightly negative in September, with annual loan growth to both non-financial corporations and households declining further and being negative. At the same time, the monthly flows of loans to households remained positive and even increased, while those of loans to nonfinancial corporations were negative. In the case of households, the latest data provide further confirmation of a levelling-off at low rates.
Australia is one example. Fluctuations in commodity prices entail changes in countries’ terms of trade, which measures the ratio of export to import prices. Changes in the terms of trade have an impact on the exchange rate, which in turn dampens the impact on profitability. The exchange rate acts as a buffer. In the 1990s, the  BIS Review 20/2002  1  fluctuations in Norway’s terms of trade were especially wide. Changes in oil prices were an important reason for this. The krone exchange rate has not fluctuated much compared with other countries. The Petroleum Fund acts as a buffer against fluctuations in the oil price, because the Fund’s capital is invested abroad. This contributes to stabilising the krone exchange rate. We must, nevertheless, be prepared for fluctuations in the krone that are more in line with the fluctuations observed in other countries. Changes in the global economy can affect the krone exchange rate. The exchange rate may also react to and contribute to curbing the effects of domestic disturbances. The floating exchange rate is by and large a well-suited instrument for absorbing unforeseen disturbances to the economy. A stronger krone may, for example, prevent demand pressures from translating into higher price inflation. As history and the experience of other countries have taught us, the real economic losses associated with eliminating high inflation and curbing inflation expectations are considerably higher than those associated with a variable nominal exchange rate.

If oil prices fall to such a low level that investment on the Norwegian shelf comes to a halt, a weaker krone would contribute to facilitating the restructuring in the business sector and the rest of the Norwegian economy. Historically, a stable krone exchange rate has been the nominal anchor in the Norwegian economy. Labour costs among trading partners provided an important reference. Now, the inflation target is the nominal anchor. The Norwegian krone has appreciated by 2½ per cent since the beginning of 2002 and by more than 8 per cent since the spring of 2000. High interest rate differentials and oil prices have played a part in this development. At present, the krone exchange rate is close to the levels in 1990-92 and 1996. The cost-competitiveness of Norwegian manufacturing companies has deteriorated by 10 per cent since 1996. This is due entirely to pay increases awarded by manufacturing industry’s organisations and companies. Underlying this cost inflation is a tight labour market that reflects high growth in employment in public and private services as well as extensive working hour reforms in recent years. The increase in labour costs is important when Norges Bank assesses the outlook for price inflation and sets interest rates. Excessively high wage growth, both in manufacturing and other industries, will affect the internationally exposed sector through two channels. First, high wage growth will reduce earnings and employment. Second, the interest rate will be increased.
Many other countries have applied macroprudential measures. The institutional framework and the formulation of the measures vary. Macroprudential policy will by its nature vary across countries. The credit cycle and systemic risk vary over time and across countries. That being the case, neither banks nor other economic agents should be surprised that macroprudential policy in Norway differs from that of surrounding countries. In many countries, the central bank has a prominent role in macroprudential policy. Monetary policy objectives and macroprudential objectives are not the same. Monetary policy is aimed at securing low and stable inflation and is the first line of defence against cyclical fluctuations. Macroprudential policy is aimed at strengthening the resilience of the financial system and curbing financial vulnerabilities that build up in the economy over time. Macroprudential policy and monetary policy nevertheless share many features. In Norges Bank, we can build on the experience of monetary policy when providing advice on the size of the countercyclical capital buffer for banks. Both macroprudential policy and monetary policy must be based on an assessment of the state of the Norwegian economy and developments in credit, inflation, output and employment. The buffer works through banks, as does monetary policy. The analysis of the capital buffer therefore has much in common with the analysis we perform when setting the key policy rate.

i  Lagarde, C., Challenges along Europe’s road, speech, 11 May 2022 Villeroy de Galhau, F., The Eurosystem and its monetary policy: from an “impossible dilemma” to a possible roadmap for normalisation, speech, 6 May 2022 iii QJE paper by Fahri and Maggiori (2018) iv See the Council conclusions on achieving the EU’s economic and financial strategic autonomy in an open economy: one year after the Commission’s Communication. v Villeroy de Galhau, F., Capital Markets Union: unleashing Europe’s potential, speech, 30 November 2021 vi ECB report on RIE : only 60% of extra-euro area exports of goods were invoiced in euro in 2020 vii Recent research by Amiti, Itskhoki and Konings (2020) viii See the document Trade and investments in energy in the context of the EU common commercial policy ix Quote available here https://www.imf.org/external/np/exr/center/mm/eng/mm_sc_03.htm ii
The trap many European countries fell into was accumulating debt and spending borrowed money in good times, leaving them without the fiscal muscle to pursue a rational countercyclical policy in the face of crisis. This has made the economic downturn even heavier to bear. A number of European countries have experienced stagnation or a fall in GDP – some have faced a considerable decline in nominal GDP. As a result, debt to revenue ratios have increased, further reducing the ability to escape the debt crisis. The unrest surrounding Europe is not making matters any easier. The Russian economy is struggling. There is war in the Middle East and Libya. And on top of high levels of debt and mass unemployment, countries all over Europe are now facing terrorist threats and a refugee crisis. Only a few north European countries – including Norway – still have room for manoeuvre in fiscal policy. These countries have a savings surplus and export capital. But there are few northern European countries, including those within the EU, willing to finance southern Europe’s expenses over the tax bill – be it for refugees or for investment. With a common currency, euro area countries cannot rapidly adjust relative intra-area wages and prices. And there is no European federal government to enforce large-scale transfers from the north to the south. Building up even more debt is rarely the way to resolve a debt crisis.

Chinese authorities now appear to be doing just that. In the 1930s, many countries resorted to devaluations, tariff barriers and regulation of crossborder capital movements to protect their own manufacturing industry. But this was the wrong medicine. World trade fell, and the international division of labour went into reverse. This led to lower income for everyone. In his letter to The Times, Hayek made the following comment: “.... the right way [...] to proceed is [...] to abolish those restrictions on trade and the free movement of capital which are at the present impeding even the beginning of recovery.” Today, the global system of trade and cross-border investment is again under pressure. In both Europe and the US, influential groups have argued in favour of erecting new walls and barriers to the international exchange of goods. This is a recipe for yet another downturn. Norway is a small open economy with substantial wealth invested abroad. As a nation, we are completely dependent on a functioning international system of free trade and investment. In the short term, major economies have less to lose from closing themselves off. We trust that they will not, after all, abandon the global economic system that has been built up over the past 70 years. Hayek or Keynes? The current situation on our continent – Europe – has much in common with the 1930s.