samchain/econo-pairs-v1 huggingface dataset:
8 Let me conclude with some remarks on the ongoing process of significant market correction that global finance is experiencing since several months, with its episodes of high market volatility and financial turbulences. The last G7 meeting in Tokyo was a good occasion to exchange views on the underlying causes of the recent turbulences and on the areas where significant improvements will have to be brought about in global finance. The communiqué of the G7 that Ministers and Governors signed captures pretty well the large consensus we have at present on both the methodology and the six domains where we agree action will be necessary. This large consensus is very important because the challenges that we have to cope with are global and the solutions themselves can be nothing but global and very closely harmonised between the economies that are making up the global economy. I think particularly of the two vast continental economies that are on both sides of the Atlantic. On top of stressing the absolute necessity to work very actively, and very united together, to draw the right lessons from the present market correction – which, according to our agreed methodology, we will do when receiving the definitive report of the Financial Stability Forum on the occasion of the next spring meetings of the Bretton Woods Institutions in Washington – I will make three remarks. First, the international community is able to produce a right and pertinent diagnosis of the global finance’s situation.

2  Ecinci, Kalemli-Ozcan and Sorensen (2007), Financial integration within the EU countries: the role of institutions, confidence and trust, NBER working paper. BIS Review 17/2008  1  Research presented this afternoon also threw a positive light on the role of financial integration with respect to Central and Eastern European countries. In fact, this contrasts a bit with some previous literature that argued that developing and emerging market countries are less able to reap the benefits of financial integration. One paper argued that foreign banks appear to allocate credit more efficiently than domestic banks in this region. 3 And, accordingly, another finds that financial integration has helped convergence and economic growth in Central and Eastern European countries. 4 Financial integration is also of key importance for the performance of the tasks of the Eurosystem. First, a well-integrated financial system enhances the smooth and effective transmission of monetary policy throughout the euro area. Second, financial integration is relevant for our task of contributing to the safeguarding of financial stability. Integrated markets reinforce the shock-absorption capacity of the system, as they are more liquid and offer better opportunities for financing and risk distribution. Finally, without prejudice to the main objective of price stability, we support the general economic policies of the European Union. What is the current state of European financial integration? Here I will be very brief today, as I have characterised this already at various occasions in the past and as financial integration is not a fast-moving process.
Banknote character ‐ speech by Andrew Bailey | Bank of England  Page 3  Conclusion Winston Churchill, Jane Austen, JMW Turner. These are the figureheads who grace our other banknotes, and through their leadership and cultural contribution, they helped shape the vibrant society that is modern Britain. The person chosen to feature on a currency, can embody the spirit of a nation. In his remarkable achievements, Turing did just that. And in doing so, showed us the way to the future. As the artist Anthony Gormley remarked, Alan Turing "unlocked the door between the industrial and the information age”. And although Turing was under appreciated in his lifetime, we can now see how accurate this description is. Alan Turing was a gay man, whose transformational work in the fields of computer science, codebreaking, and developmental biology, was still not enough to spare him the appalling treatment to which he was subjected. By placing him on this new £ banknote, we celebrate him for his achievements, and the values he symbolises, for which we can all be very proud. Andrew Bailey Governor, Bank of England  Sign up for latest updates  Banknote character ‐ speech by Andrew Bailey | Bank of England  Page 4

For small businesses, a key barrier was a lack of trust in non-bank channels. For migrant workers, going to a formal business premise and submitting to a customer due diligence process was intimidating and discouraged some workers from approaching formal remittance channels. This insight allowed us to focus on new ways of allowing workers to conduct remittance without physically visiting an office, such as through mobile channels. Another solution that proved to be very effective was bringing MSB services to the workplace. As a group and in their own familiar surroundings, we found that workers were more comfortable in dealing with formal MSB companies face-to-face. I am also pleased to inform that as previously announced, the Bank has finalised guidance that will allow money service business companies to conduct e-KYC for on boarding customers. This in turn will facilitate an end-to-end electronic process for performing remittance transactions below specified limits without a customer having to physically visit an MSB office. For small businesses, our outreach programs were opportunities we could use to explain the regulatory framework for MSB companies and avenues for redress, thereby increasing confidence in the use of formal channels. Had we focused only increasing or providing information on access points, we would not have achieved the results that we did. Second, small ideas can make a big difference. As I alluded to earlier, language barriers presented considerable challenges in getting our messages across to migrant communities. To overcome this, the industry identified Greenback “ambassadors”, who were individuals from countries of the migrant communities.
Ladies and Gentlemen, the development of the local bond market is central to Government’s strategy for diversification of the economy for one key reason. All businesses, including state owned enterprises, require finance, covering both equity and debt, and ranging from short-term to long-term. In the absence of a properly functioning local bond market, those in need of capital and qualified enough have had to turn to international financial markets to finance their local projects with the attendant exchange rate risk. Similarly, those seeking a competitive return on their investments that also meet their maturity preferences but are unable to find these features locally, have always sought out alternative avenues offshore in foreign currency, thereby creating pressures in the foreign exchange market. Therefore, Government’s involvement in improving the local bond market has been deliberate. Ladies and Gentlemen, Government’s participation in improving the functioning of the local bond markets has seen the establishment of appropriate market infrastructure that facilitates cost-effective and secure trading, and a transparent price discovery process. Further, Government’s decision to bring to market longer term bonds in 2005 have proved to be positive and catalytic for the local bond market as this has resulted in an extended yield curve that has provided a benchmark for pricing longer dated security issues by the private sector and banking industry.

Ladies and Gentlemen, arising from our core responsibility for financial system stability, Bank of Zambia is deeply concerned about the proper functioning of the local bond market, in terms of its security, liquidity, transparency and ability to withstand contagious disruptions emanating from other jurisdictions. In this regard, Bank of Zambia has two broad responsibilities. The first is that of enhancing the price discovery process by promoting transparency in our own policy actions. The second is that of ensuring that the banks, as providers of liquidity, perform their proper role in supporting the trading process by making sound credit decisions. We therefore applaud this initiative from the Development Bank of Zambia and encourage the board and management not to rest on its laurels. The eyes of the outside world – local and international investors and other key stakeholders are paying close attention, and expect Development Bank of Zambia to deliver, and inescapably so, in terms of adherence to world class corporate governance standards and ensuring safe and sound operations. On these two responsibilities, I wish to remind Development Bank of Zambia board and management that the business world and stakeholders out there today do not hold two different sets  BIS Review 35/2007  1  of standards for effective corporate performance, a set for private sector businesses and another for state owned enterprises. Ladies and Gentlemen, we similarly welcome the role of financial advisors and intermediaries such as Standard Chartered played in bringing to market of this initiative.
Monetary policy affects inflation through its impact on the exchange rate and thereby resource utilisation in the economy, but also through its influence on demand and inflation expectations. It may appear strange that inflation is calculated to be close to the target of two per cent, despite the fact that resource utilisation has fallen rapidly and is so low during the forecast period. There are two explanations for this. Firstly, the connection between resource utilisation and inflation is weaker now than before. I mentioned this in my introduction. And this is probably because a changeover to a credible monetary policy that is aimed at stabilising inflation will lead to the connection between resource utilisation and inflation weakening. Stable inflation  6  BIS Review 66/2009  expectations close to the inflation target quite simply provide less scope for other variables to affect inflation. 4 But the connection is not negligible. The expansionary monetary policy in the world as a whole, the large GDP growth in the world during the years 2004-2007 and the increasingly high resource utilisation finally led to substantial rises in energy, food and other commodity prices in the world market, and thereby also to rising consumer prices. The forecasts now being made both by international organisations and by ourselves indicate that inflation in the world over the coming years will be positive, despite the low resource utilisation, but slightly lower than was normal a few years ago.

Furthermore, banks and Financial Institutions in Zambia have in the past lamented the low levels of banking and economic knowledge among graduates from tertiary institutions as well as the borrowing public in general. It is therefore gratifying to note that this evening, we celebrate and showcase the depth of the entrepreneurial talent that is flourishing in our schools of higher learning. It is also heartening to see these young men and women putting up high quality business proposals of a diverse range of projects. This speaks well for the inventiveness of our learning institutions and is a very welcome development indeed. Ladies and Gentlemen, this initiative represents a major milestone in developing linkages between the industry and tertiary institutions which is key in bridging the gap between expectations of employers and those of the labour force. It is also testimony that we have financial institutions and business entities that are willing and committed to promoting private entrepreneurship among young people in our country at the level of start-up businesses. Once again, I commend the sponsors and their partners for this important initiative. I am certain that your efforts will go a long way in contributing to the building of an entrepreneurial society in Zambia. This is a task not only for you but for everybody. I wish to urge in particular, the education system in Zambia to enhance their efforts in promoting positive attitudes towards entrepreneurship in the institutions of higher learning.
But, in practice – owing to the success of the inflation targeting regime in the past quarter of a century – we don’t have recent data from a period of high inflation. Either we have to re-commission models  Page 8  from an earlier period (when economic structures were very different on many dimensions) or we have to rely partly on judgement as a complement to empirical analysis. In framing those judgements, we need to take a view what is driving intrinsic inflation persistence. In other words, we need to understand the structural economic behaviour underlying the propagation of the fundamental shock: we need a ‘story’ to explain what is driving economic outcomes, in particular price and wage behaviour. This brings me back to the energy price shock. The deterioration in the UK’s terms of trade owing to higher energy prices has adverse consequences for UK domestic real incomes. Because the UK now has to pay more for what it is importing from the rest of the world (notably natural gas) relative to what it is selling (mainly services), in aggregate domestic real incomes have suffered. This dent in real incomes is the result of a change in relative prices – that is to say, it is the real consequence of a real shock to the UK economy.

What are the repercussions that banks are exposed to? The weak economy results in a deterioration in the quality of loan portfolios, and the collapse of stock prices has an adverse effect on profits. Banks not only suffer losses on their own securities portfolios. The stock market slump also has an impact on earnings from commissions and services. Lucrative services in investment banking, such as those in connection with IPOs or mergers, are less and less in demand, and the reluctance on the part of many investors – with the resultant lower turnover – cuts into the income from commission business. In the wake of falling stock prices, profits in asset management are declining as well. This is because a part of the fees and commissions levied on the assets under management is value- or performance-based. This year, the big banks recorded profit setbacks in most areas compared with year-earlier quarters, in some cases even considerable losses. This was especially due to the poorer results from trading for own account and to a decrease in investment banking business (new issues, mergers and acquisitions). Particularly insurance business accounted for these losses. In traditional banking business, notably in retail banking, the big banks recorded satisfactory results, however. The BIS equity ratios disclosed by the big banks clearly exceed the required minimum.
While we should be proud of our many achievements these years past, we must also be ready to listen to others, particularly and attentively so to the European institutions which, lest we forget, have been buying us time so that we can see through our adjustments. It is not the time for pessimism, but nor is it for complacency. What we must do is fruitfully use the time we have. Thank you. BIS central bankers’ speeches  7

Operational risk has become a much greater concern for CCP supervisors and regulators in recent years and we increasingly need to see higher standards of resilience in the face of operational and cyber risk. Recovery and resolution regimes for CCPs need to take more account of threats to CCPs from this direction. Whether this should mean more loss absorbing capital at CCPs, access to member resources in the event of non-default losses or some combination of the two is a matter of ongoing discussion. But given the role CCPs play in the financial system, we need to think more about how we would resolve a CCP that had suffered a major operational failure, without entry into insolvency. Similar issues arise in the context of the resolution of systemically important banks. Having published guidance on resolution strategies for CCPs in 2017, the Financial Stability Board’s FMI Cross Border Crisis Management group is now focused on two issues that remained outstanding; namely the adequacy of financial resources for resolution and the treatment of equity in resolution. Bank resolution  The Lehman Brothers episode with which I started today exposed brutally that insolvency is not an option for large cross-border banks that perform critical economic functions. One of the main objectives of the post crisis reforms has been to put in place bank resolution regimes that enable the authorities to stabilize a failing bank by bailing in its debt holders to restore solvency and regulatory capital.
Due to this distinctive feature of the Icelandic financial system, even the short-term benefits to households and business from a more accommodative monetary stance could prove to be minimal or even negative. However, a tight fiscal policy can contribute to a softer landing. Buoyant demand and soaring business profits have generated revenues for the Treasury this year far in excess of forecasts. A similar position could be on the cards in 2006. It is vital for both central and local government authorities to respond to this boost in revenues not by easing their restraint on the expenditure side, but rather by planning to achieve increased surpluses, which appears to be the aim behind the budget currently before Parliament. As announced recently, a change will be made to monetary policy implementation whereby interest decisions will be made on six fixed, preannounced dates next year. Three will coincide with the publication of Monetary Bulletin. On all these dates, the Board of Governors will announce its decision at a press conference, irrespective of whether the policy rate is changed or not, together with supporting arguments. This change will make monetary policy even more transparent. The Central Bank can thereby be said to have increased its formal interest rate decision dates from four to six, because the publication dates for Monetary Bulletin were already recognised as such in effect. Nonetheless, the Board of Governors can of course decide to change interest rates in between the preannounced dates if this is considered justified.

Davíð Oddsson: The Central Bank of Iceland’s commitment to price stability Speech by Mr Davíð Oddsson, Chairman of the Board of Governors of the Central Bank of Iceland, at a seminar organised by the Iceland Chamber of Commerce, Reykjavik, 5 December 2005. *  *  *  On December 2, 2005 the Central Bank of Iceland raised its policy interest rate by 0.25 percentage points before last weekend. I do not expect that decision came as a surprise. Some people may well have read into what the Bank wrote in connection with the policy rate hike in September that the increase this time would be greater, by 0.50 or even 0.75 percentage points. No such decisions were embodied in those writings, although the Bank made a clear commitment that it takes its mandatory role seriously and would not flinch at following it with full force. Those declarations stand firm. Monetary Bulletin, which was published on the Central Bank’s website last Friday, includes a detailed account of the Bank’s assessment of economic and monetary developments and prospects, and the arguments underpinning its decision to raise the policy interest rate now. The scenario that we faced on September 27 has changed in several ways. Uncertainty about wage settlements has been dispelled, although admittedly at considerable cost. The consumer price index fell somewhat at the last measurement. House price inflation has slowed down and there are signs that a turning point has been reached.
The real krone exchange rate may move more in the short term than is necessary in the long term. The krone may be expected to depreciate at a later stage because a higher real interest rate, combined with expectations of a depreciation of the krone, contribute to 4 convergence between the expected real return on capital invested in Norway and in other countries. Moreover, there may be additional fluctuations in the krone exchange rate if market expectations concerning the use of petroleum revenues deviate from what is actually the case. Given today's  2  See e.g. Clarida, Richard, Jordi Galí and Mark Gertler (1999): “The Science of Monetary Policy: A New Keynesian Perspective”, Journal of Economic Literature, Vol. 37, no. 4, 1661-1707. 3  I refer here to a more detailed discussion in my lecture entitled “The Role of the Central Bank”, given at a conference hosted by the Power and Democracy Research Group and FAFO Institute for Applied Social Science, Oslo on 6 September 2002. 4  See Svensson, Lars E.O. et al. (2002): “Norges Bank Watch 2002 - An Independent Review of Monetary Policy and Institutions in Norway”. Research Report 17/2002, BI Norwegian School of Management. 4  BIS Review 2/2003  exchange rate, it would appear that foreign exchange operators have already factored in a substantial increase in the use of petroleum revenues. Cyclical divergence is reflected in the interest rate differential between Norway and Germany and the US. What makes the current situation unusual is the extremely low foreign interest rates.

And, I would like to invite all of you to tomorrow’s dinner to commemorate its achievements in the past quarter of a century together. Ladies and Gentlemen, May I take this opportunity to wish all of you a successful and fruitful deliberation, and an enjoyable stay in Thailand. Thank you. 2  BIS Review 88/2007