samchain/econo-pairs-v1 huggingface dataset:
But we can also consider a broader, “net” measure of the external tax, knowing that commodities importing countries also export goods and services, whose price is also increasing and we can refer to this net measure as the “terms of trade shock”. I.2 Measuring globally the terms of trade shock Let us first look at the more comprehensive - and net - measure of the external tax, the terms-of-trade shock. This measure takes into account price changes in all traded goods and services. i  Page 4 of 14  Two lessons can be drawn from these charts. First among advanced economies the United States does not suffer a negative terms of trade shock, as it is a net exporter of fossil energy. Second the heterogeneity across European countries is not insignificant. In 22q3, the terms-of-trade-shock amounts to -1.8% of GDP in France compared to the same quarter of the previous year. The shock is larger in other major Euro area countries. Both lower fossil energy dependence and a smaller share of the manufacturing sector mitigate the magnitude of terms-of-trade shocks in France, both upwards (2020 with depressed energy prices) and downwards (since 2021). France is also a net exporter of transport services and wheat, that benefited from the past recent sharp price increases. Conversely, the shock is of larger magnitude for Spain, which is more dependent on energy imports and does not benefit from the rise in prices of transport service exports.

Particularly, the role of media is vital in this campaign, which through the transmission power to the public, has the skill to affect the mentality and communication pattern of the public at large. School, is another key factor for the establishment and cultivation of a new mentality. School may help for disrupting this 55-year chain and not transmitting it to the young generation. On behalf of the Bank of Albania, I invite all the participating institutions, and more broadly, to join us in this meaningful and demanding commitment to educate the Albanian public, with a view to abandoning forever the use of these outdated terms in the economic and financial interactions, and definitely turning it into a linguistic relict. I warmly thank you for the insofar contribution and allow me to recall once again that our currency is neither “old” nor “new”, but simply Lek! 2/2  BIS central bankers' speeches
Andrew Hauser: Between feast and famine – transparency, accountability and the Lender of Last Resort Speech by Mr Andrew Hauser, Executive Director for Banking, Payments and Financial Resilience of the Bank of England, at "The Lender of Last Resort: An International Perspective", a conference sponsored by the Committee on Capital Markets Regulation, Washington DC, 10 February 2016. *  *  *  I am grateful to Nicholas Butt, Ronnie Driver, Tarkus Frost, Nicholas Govier, Rachel Greener, Andrew Lavender, Tim Taylor and Caspar Worthington for their help in preparing these remarks. Introduction Of all the actions taken by central banks during the financial crisis, some of the most contentious involved the extension of huge sums in liquidity assistance to banks and other financial institutions. Those actions helped prevent global economic and financial meltdown. But they also triggered intense public debates around the globe about the appropriate scope and nature of central bank powers. One strand of this debate is led by those who feel that central banks lent “too much”, too often or too freely during the crisis, using public money – so the allegations go – to support institutions of dubious solvency, sometimes in secret, protecting bankers from their own mistakes, and thereby stoking moral hazard for the future. The main policy conclusion from such thoughts is that central banks’ Lender of Last Resort (LOLR) activities should be constrained.

So the risk of central banks having “too little” scope to carry out LOLR is real. At the same time, the public has a legitimate interest in avoiding “too much” LOLR. We cannot afford for financial institutions to view liquidity support as a substitute for prudent financial management: central banks must not be “lenders of first resort”. And lending to institutions that are in need of capital rather than liquidity is the wrong solution. Given the uncertainties involved, neither outcome can be avoided with certainty. But it is right to seek robust safeguards against them. BIS central bankers’ speeches  1  A well-designed LOLR framework must therefore get the balance right between lending “too little” and “too much”: –  To help avoid “too little” LOLR, central banks must be given clear responsibilities and the tools and powers needed to carry them out, including the ability to lend to individual institutions, covertly if necessary to maintain financial stability. –  To help avoid “too much” LOLR, central banks must have strong risk management, be ring-fenced from special interests (in public or private sectors), have a clear public mandate specifying their scope for action, and be subject to strong transparency and accountability requirements. There are powerful parallels between these design challenges, and those for monetary policy. Like monetary policy, LOLR is vitally important to an economy’s health, but involves intrinsically complex, technical judgments – including the solvency or otherwise of potential borrowers, the pricing, scale and maturity of loans, and the appropriate collateral.
9  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  9  Figure 1B: Improvement in performance after adding Governance scores  Figure 1A naturally led us to ask whether there are other measures which can better anticipate problems at smaller banks and building societies. We know that the quality of governance is vitally important, so we repeated our experiment, adding PRA supervisors’ judgements about the quality of a firm’s governance. We found that adding judgements about governance reduced our false alarm rates more often – and by more – for small firms than for large. This of course doesn’t mean governance isn’t important at larger firms – the opposite is true in our view. But it does suggest that supervising governance can be even more important for small firms. Source: Bank of England and Bank calculations. Notes: Balance sheet data as of July 2007, taken from historical regulatory returns (see Sebastian J A de-Ramon, William B Francis and Kristoffer Milonas, ‘An overview of the UK banking sector since the Basel Accord: insights from a new regulatory database’, BoE Staff Working Paper No. 652 (2017)). Supervisors’ scores for Governance from historic FSA records (see Joel Suss and Henry Treitel, ‘Predicting bank distress in the UK with machine learning’, BoE Staff Working Paper No. 831 (2019)). To test the robustness of our findings to definitional choices, results are shown for two different definitions of “Large” and six different definitions of distress.

This phenomenon has gained some interest in international media over the last couple of years. Let me give you some figures: The value of cash in circulation in relation to GDP has decreased steadily from approximately 10 per cent in 1950 to around 1.5 per cent today. Over the past decade even the nominal amount of cash in circulation has decreased, which is quite unique. The decrease has been substantial, between the peak in 2007 to 2016 the number of outstanding notes and coins decreased by more than a third. Most of this * I would like to thank Erik Lenntorp for his help in writing this text  1 [4]  decline has taken place in the last two to three years, driven partly by changing consumer habits, partly by our ongoing changeover of banknotes and coins. Value of banknotes and coins in circulation SEK billons (annual average)  Cash in Circulation/GDP  120  12,0%  100  10,0%  80  8,0%  60  6,0%  40  4,0%  20  2,0%  0  0,0% 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Nominal value (SEK bn, left scale) Value in relation to GDP (per cent, right scale)  Note: Banks’ holdings are excluded. Sources: Statistics Sweden and Sveriges Riksbank. Although there are many drivers explaining the move from cash to electronic payments, I would like to highlight two actions by the Riksbank.
I note from the very elaborate programme for this meeting that you will in the next three days cover a wide spectrum of issues some of which will focus on factors that constrain SMEs access to finance and some of which will focus on what needs to be done to change this situation. The meeting is, therefore, an opportunity for us to face a number of challenges that characterize this sector. These will include revisiting strategies and approaches to SME financing currently in use as much as it will require a review of current institutional arrangements through which finance is directly delivered to SMEs, on one hand, and those which indirectly obstruct or facilitate this flow of resources, on the other. However, I believe that probably the greatest challenge before this assembly is to attempt to narrow the gap between analysis of the problem and the implementation of measures and actions that work. Meetings, workshops, seminars, etc. on SME financing are plenty at national, regional and international levels. Some of you have had the opportunity to attend several of these meetings in the past. Indeed, some of you have become experts at talking about the subject. Barely two weeks ago, the Bank of Zambia held a financial sector forum here in Lusaka at which views of various stakeholders on what needs to be done to address binding constraints to the SME sector were considered. The fact that the discourse on SME financing continues underpins two significant positions.

Individuals, therefore, need to be supported to understand the risks associated with using financial products and services that are accessed through digital means so that they can better protect themselves against these risks. Given the rate at which technology evolves, this can be daunting for the average consumer to keep up with which is also precisely why financial education is so critical. 2/4  BIS - Central bankers' speeches  13. One of the more striking results from the 2021 FCI Survey is the low level of digital financial literacy observed, which is deeply concerning. One in three individuals surveyed stated that they would be willing to share their bank account passwords or PIN numbers with close friends. This increases the risk of online fraud, including being used knowingly or unknowingly as 'mule accounts' to perpetrate fraud. Almost twothirds of individuals surveyed do not pay attention to the security features of a website before they perform online transactions (such as to check if the page for making payment is legitimate and can be trusted). As a result, individuals are far more likely to be deceived into providing their banking credentials through a fake website that enables scammers to use their information to commit fraud. Using mobile devices and apps inappropriately has also led individuals to fall victim to fraud such as phishing, hacking, and data theft. 14.
Zeti Akhtar Aziz: Enhancing corporate governance practices in the Malaysian financial sector Keynote address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the official launch of the Financial Institutions’ Directors Education (FIDE) Forum, Sasana Kijang, Bank Negara Malaysia, Kuala Lumpur, 12 June 2012. *  *  *  It is my great pleasure to be here this morning at the launch of the Financial Institutions’ Directors Education (FIDE) Forum. The establishment of this Forum, an initiative by the founding directors of the FIDE program will contribute to further the efforts to enhance corporate governance practices in the Malaysian financial sector. Many of you have made invaluable contributions to the conception and development of the FIDE program and its ongoing refinement. The program is not only unique and highly effective, but it is delivering palpable change and contributing to higher standards of corporate governance in our financial industry. This in turn is supporting stronger, and more resilient financial institutions. Following the recent global financial crisis, corporate governance practices in the financial industry have come under significant scrutiny. There has been increased pressure on the management, boards of financial institutions and on regulators to significantly improve the governance practices in the financial industry notably on the incentive systems, accountability and controls. The problems that led to the build-up to this however, are not new.

It is sometimes claimed in the media that there is a link between the Riksbank’s closure of its depots and the increase in cash transport robberies. I would doubt that claim. First and foremost, it must be remembered that approximately 85 per cent of the cash transports that are attacked are on their way to ATMs, and the Riksbank has never been involved in these transports. Only a very few transports to or from our offices have been the target of robberies. Furthermore, the large increase in the number of robberies took place while the Riksbank still had a network of cash depots throughout Sweden. One possible explanation for the increase in the number of cash transport robberies, which has been suggested by the Swedish National Council for Crime Prevention (BRÅ), is that criminality may to some extent have been transferred from robbing banks and post offices to robbing cash transports. Other possible explanations, according to BRÅ, are that cash transport robberies yield much larger amounts than bank and post office robberies, while increased security in post offices and banks may have discouraged prospective robbers. I think that we should ask the question of why Sweden has so many more cash transport robberies than other countries, not just other Nordic countries, but the majority of European countries. There have occasionally been suggestions put forward in the general debate that if one tried to reduce the use of cash in society, the number of transports to ATMs could be reduced.
During the years the interest rate has gradually been cut, expectations according to implied forward rates have substantially overestimated the level of the repo rate. After the interest rate raises began one and a half years ago, there has rather been a tendency for the repo rate path to be slightly underestimated. As the economy is constantly exposed to unexpected shocks, it is not at all strange that forecasters revise their assessments. This applies to the major banks, the National Institute of Economic Research, the Ministry of Finance and also to us at the Riksbank and our interest rate forecasts. The major uncertainty means that we forecasters should be very cautious when making statements about the future, but this should not restrain us from saying how we think the future will look. Secondly, it is difficult to determine what will be a normal level for the interest rate a couple of years ahead, that is, the interest rate that prevails in a normal phase of the business cycle. As we can see in the diagram, the paths for forward rates have flattened out and the view of what is a normal rate has gradually been revised downwards over time (Figure 9). The Riksbank has stated that a normal level for the repo rate is probably somewhere in the interval 3.5 to 5 per cent. But experiences show that the repo rate can lie outside of this rather broad range for fairly long periods of time.

And operational reforms designed to address the deficiencies in the Bank’s pre-crisis lending tools and flag 5  clearly that the Bank was ‘open for business’ , have left the Bank capable of lending to a wide range of banks and non-banks, against many different types of collateral, at lower prices, and through a broad range of facilities. As of 2016, members of the Bank’s Sterling Monetary Framework – our main liquidity-providing tool – had pre-positioned over £ of collateral with us, including 30% of the UK’s total stock of household mortgage loans. Only a fifth of that collateral had been drawn against, through the Funding for Lending Scheme and other Bank facilities. Even after accounting for the Bank’s sizeable haircuts, that leaves well over £ of available credit: a much higher proportionate level of contingent exposure for the Bank than typically incurred by commercial banks through undrawn facilities. So our balance sheet may expand in both scale and riskiness at times of heightened liquidity stress: the Bank of England’s role as financial firefighter has shifted permanently upwards (Chart 5). 5  See http://www.bankofengland.co.uk/publications/Documents/news/2012/cr2winters.pdf; and the Bank’s new framework at http://www.bankofengland.co.uk/markets/Documents/money/publications/liquidityinsurance.pdf. The reforms are summarised in a speech by the Governor at http://www.bankofengland.co.uk/publications/Pages/speeches/2013/690.aspx. 6  All speeches are available online at www.bankofengland.co.uk/speeches  6  The third key driver behind our new risk framework has been the strong public demand for greater accountability and transparency from central banks since the financial crisis.
·  Second, let me say a word concerning the current move towards a uniform body of accounting standards and the implementation of International Accounting Standards (IAS) for listed companies. Such a move is expected to bring about greater transparency and comparability in financial reporting. However, it is crucial that all the impact of such a major reform be carefully identified and analysed. In fact, as a Central Banker and a banking supervisor I have already expressed concerns on the potential impact of some of the proposed standards (namely IAS 32 and 39) on the balance sheets of credit institutions: the rationale for an extensive fair value approach needs to be pondered against the principle of prudence and the risk of introducing artificial volatility in banks’ earnings and equity. These risks clearly show that the debate here is not only a technical one, and that standard setting bodies need to engage in a continuous dialogue with all interested parties, among them Central Banks and banking regulators. In this context, the recent decisions by the European Commission to re-examine this question is welcomed. More generally, any project of reform has to be precisely studied in order to take duly into account financial stability concerns and to prevent risks of hidden and counterproductive effects. * *  *  Ladies and Gentlemen, I will have only one concluding remark. Financial Stability should not only be an expression for appropriate use in speeches to enrich our rhetoric.

These doubts are reflected in a significant increase in risk premia for sovereign debt in these countries, which has prompted them to establish major cost-cutting programmes. This situation is weighing on financial markets, despite the relatively favourable reports of economic recovery at the global level. Indeed, current market uncertainty has reached a high level, although it remains lower than that observed during the recent crisis. To give an example, the VIX index (which measures uncertainty on the equity market) and the CDX index (which measures credit risk) are both rising again. However, they are still significantly lower than at the end of 2008, i.e. at the peak of the subprime crisis (cf. chart 1). The uncertainty associated with the fiscal situation of certain European countries has also triggered another rise in tension on the interbank market for US dollars. To counter this, several central banks, including the SNB, have reactivated swap facilities in cooperation with the Federal Reserve in order to provide dollar liquidity that may be required for the smooth functioning of the markets. In Switzerland, the interbank market has remained calm. Indeed, the ample supply of liquidity has reduced Swiss franc interbank rates. As can be seen in chart 2, risk premia on the Swiss franc interbank market have also declined. They fell by more than a half in May while, during the same period, US dollar risk premia on the interbank market in the US rose again. Alongside the uncertainty, investor risk aversion has grown over the last few months.
Frankly, I understand that the general public is not familiar with concepts like overheating or positive output gap, but I believe that annual growth rates to the tune of 20% for retail sales and in excess of 10% for wages are more than self-explanatory. Still, with all the obvious signs – even for non-economists – that the economy is growing fast, we are criticised for not fighting deflation. The recent experience has made us painfully aware that – despite the large amount of information provided through a wide range of communication vehicles – our messages get through to a much lesser extent than we had thought. Therefore, we should enhance our efforts in escaping the professional jargon and trying to be as accessible as possible when explaining to the public the rationale behind our monetary policy decisions. If I were to conclude on Romania’s experience with inflation targeting, I would say that it worked quite well, even though the concept of inflation targeting has not been immune to criticism, especially in the post-crisis period. I would mention here Axel Weber, who suggested in 2015 that inflation targeting is a simplistic framework that could not stabilise the value of money in a complex and constantly evolving economic environment. However, his opinion is not shared by other well-known economists.

The single most influential act for banks was the introduction of the Second Banking Coordination Directive, which provided a passport for banks to offer services across the European Union. Liberalisation in the EU financial services sector is already very extensive. What we see now is an ongoing adjustment of the regulatory environment implemented in the 1980s and early 1990s. In effect, it allows other driving forces to have a more profound effect on the financial system. One of these factors, which has been facilitated by liberalisation, is the trend towards globalisation. This trend is occurring in most private sectors of the economy. As companies and individuals requiring financial services are becoming more globally oriented, they demand appropriate financial services. Globalisation is expected to increase competition in most areas of financial services, and it may also be able to realise economies of scale and scope. At the same time, globalisation has opened up new markets for banks, particularly in trading, asset management and investment banking activities. Finally, the wealth of individuals has increased, and a larger proportion of the population is making portfolio investments. This is partly a result of the ageing of the population, which has, in itself, increased the average wealth of people. At the same time, it is also due to changes in pension systems in a number of countries from a “pay-as-you-go” to a funded basis. The prospects for the future are for more of such change, as reflected by the recent proposals for pension reforms in Germany and France.