samchain/econo-pairs-v1 huggingface dataset:
After five years of independent conduct of monetary policy, the Banque de France has earned a high degree of confidence, as witnessed by the solidity of the franc and the relative level of French longterm interest rates. The Bank is proud to have been able to transmit this confidence to the euro, along with other central banks forming the core of the European Exchange Rate Mechanism. Nineteen ninety eight was a successful year for European integration: the remarkable convergence of European economies enabled the historic decision by heads of state and government to commit eleven countries to the road to the euro. The date of 4 January 1999 marked a first technical success in the changeover from national currencies to the euro. The major challenge now facing the euro area as a whole is to permanently guarantee good economic and financial performances. It is no longer a question of victoriously overcoming an obstacle, but of efficiently managing the monetary, fiscal and structural areas over the long term. This is naturally indispensable in order to ensure cohesion, stability, prosperity and consequently a reduction in unemployment in the euro area, i.e. in an area with 291 million inhabitants. And this is also a contribution necessary for the stability and prosperity of the world economy, within which Europe will play a central role, like the United States.

Gent Sejko: Aiming for a secure financial system and the key role of deposit insurers Welcome address by Mr Gent Sejko, Governor of the Bank of Albania, at the IADI's ERC Regional Committee Meeting, Tirana, 4 April 2019. * * * Dear ladies and gentlemen, Dear Mr Boccuzzi, Dear Guests, Good morning and thank you for giving me the opportunity to warmly welcome you all to Tirana and the Bank of Albania and address this international gathering. It is a particular pleasure to have you here at the premises of the Bank of Albania today and to host the meeting of the Europe Regional Committee (ERC) of the International Association of Deposit Insurers (IADI). After this opening meeting, the agenda will then continue with the Technical Assistance Workshop for the rest of today and tomorrow. I hope you will enjoy it and, most importantly, hold interesting and constructive discussions. I take this opportunity to thank the International Association of Deposit Insurers (IADI) and the Albanian Deposit Insurance Agency (ADIA), who have made it possible for this event to be held in Tirana. Throughout the development of ADIA, IADI’s contribution and input has been undeniable in setting standards. In this regard, IADI has played an important role as a forum for deposit insurers from around the world to gather and share knowledge and expertise. The IADI has also provided intensive training and educational programs and has produced research and guidance on matters related to deposit insurance.
People do not spend as much as before when their wage drops, and they spend more if they have higher wages. While this is intuitive and apparently well explained, everything is related to wage flows and to wage dynamics. We hold that we should account the stock as well, meaning the cumulative gap between current levels and past reference levels of income. Cumulative wage gap is a better predictor of inflation than output gap because it is observable and it refers to past consumption and price levels; while output gap is nonobservable and it makes conservative assumptions for the future. Past wages are the minimum potential wages in the mind of wage earners. We assume that people judge their consumption decisions based on the relation between their current wages and their past wages, adjusted for inflation. The cumulative real wage gap, instead of nominal wage, is the explanatory variable in our new Phillips Curve. The dependent variable is the inflation gap, which refers to the gap between inflation and the inflation target (or, in the absence of a target, an average value of inflation over a longer time-span). Inflation gap is a more relevant variable for policy makers than the inflation rate because it puts inflation in relation to a desired level. A negative inflation gap means more demand-side measures are needed. A positive inflation gap means that the risk of overshooting is already present and policy tightening is required.

And the Basel Committee is developing the capital framework to ensure implicit offers of contingent support by banks, for example to their SIVs, will be properly capitalised. Interconnections created by derivatives are being reduced and made transparent. Requirements are being imposed, and incentives created, for banks to centrally clear derivative trades, helping to replace the complex web of bilateral deals with a central model. Trade reporting and margining requirements are being strengthened. More broadly, overall disclosure has been enhanced on the key risks arising from business models, sources of funding, market risk measures and loan forbearance policies.5 Through such initiatives, complexity and obscurity are being replaced by simplicity and transparency. A fairer financial system That goes some way towards increasing the effectiveness of market discipline. But that discipline will never be felt fully if markets believe that creditors and shareholders will be bailed out in a crisis because banks are too big to fail. Expectation of bail out was validated comprehensively last time. The US authorities sought to make Lehman Brothers a test case of moral hazard. Instead, this exception proved the rule. AIG was rescued within twenty four hours. As Barney Frank observed, the free market lasted for a day. This “heads-I-win-tails-you-lose” environment for the world’s largest banks struck right at the heart of the sense of fairness in our societies. It simply had to be fixed. Tackling the rampant moral hazard at the core of the system has not been easy but, at the Brisbane Summit, G20 Leaders marked a watershed in our efforts.
Similarly, from a longer perspective, in nominal terms, the ratio between private consumption and private national disposable income is close to its historic average. Overall, an increase in the current account deficit could entail unwanted risks, which is particularly important in a context where sudden changes may occur in macroeconomic conditions, which could precipitate difficult adjustments to the national economy. In the past, most of the crises that the country endured were preceded by high and persistent current account deficits, an excessive increase in borrowing, and important currency mismatches. However, today’s economic policy framework is more advanced, including a rule that governs fiscal policy and cushions the impact on public expenditure of both copper price fluctuations around its long-term trend and the ups and downs of the business cycle. It also includes a floating exchange rate regime that puts currency risks under the light allowing an early response to sudden changes in external conditions. And it contemplates proper financial regulation and supervision to prevent the incubation of excessive risk. Accordingly, the Board estimates that it is paramount to closely monitor those factors that are behind the current account deficit, in order to avoid the incubation of imbalances that may affect the future performance of the economy. Another risk factor we have identified is the dynamic of the real estate sector. In mid year, we called the attention to the evolution of real estate prices, with a focus on some districts.

But even if we believe these factors to be important some key questions remain open. For instance, why did this time emerging markets recover relatively quickly from the global shock, while advanced economies stagnated? Was it due to better policies, or to the new relevance of China for their external demand, or to another factor? We need to know more of the ultimate causes of this two‐ speed recovery, and more research on this front would be helpful. 1  IMF, Regional Economic Outlook, May 2013. BIS central bankers’ speeches  1  Despite the likely role of pull factors, the fact that these phenomena coincided with the timing of the monetary expansion in advanced countries suggests there is a link between them. In fact, many believe that this “push factor” played a major role, and recent research lends some support to this view.2 This afternoon we will be discussing one avenue through which low interest rates in advanced countries may channel capital toward emerging markets: carry trade flows, whose relevance will be addressed in a presentation by Craig Burnside. The likely role of push factors is not a total surprise, since the recovery of advanced economies in the context of a deleveraging process requires a rebalancing of global demand toward emerging economies. This rebalancing needs the right price signals and quantity responses. Two presentations this morning by Philippe Bacchetta and Gian Maria Milesi‐ Ferretti will touch on the topic of global rebalancing and external adjustment to the crisis.
The Central Bank will continue to provide Late Liquidity Window Facility such that banks may borrow from the  8  BIS Review 4/2008  Central Bank against collateral, and lend to the Central Bank without any limit within the hours mentioned above. iii)  In case of a temporary or permanent liquidity shortage, the Central Bank will continue to carry out its liquidity management through one-week repo auctions. When there is liquidity shortage in the market, the Central Bank will announce the amount of repo auction for that day on Reuters’ “CBTF” page at 10.00. As long as no extraordinary fluctuations are observed in the market, the Central Bank, while determining the amount of the auctions, will endeavor to maintain the average auction interest rate; a)  At maximum of 1 percentage point above the borrowing rate of the Central Bank announced for the intra-day transactions to reduce fluctuations in O/N interest rates, in cases where the liquidity shortage in the market is envisaged temporary and when the technical interest rate cut explained in paragraph 45 is not applied,  b)  Approximately at the mid point of the O/N borrowing and lending rates of the Central Bank, in cases where the liquidity shortage in the market is envisaged permanent and the technical interest rate cut explained in paragraph 45 is applied.

I fear that what I am  15  Report of the Technical Committee of IOSCO on Trading of OTC Derivatives (2011). BIS central bankers’ speeches  7  saying will seem novel. In fact, this emphasis on their role as systemic risk managers was a clear lesson from the very few instances of clearing houses failing over past decades.16 If I may quote from the post-87 crash Report of the Hong Kong Securities Review Committee: “When everything else is stripped away, the most pressing issue is the management of risk. The focus of this is ......increasingly, the central clearing houses – indeed [their] prudent operation is perhaps the single most important objective for the market authorities and regulators.17” What does this mean in practice? My personal view is that, amongst other things, it means that CCPs should not outsource their core risk management functions; they should monitor the robustness of their clearing members; and they should monitor risks from the business that their clearing members are bringing to them as an indication of incipient fragility. Amongst other things, that means collecting and analysing information from clearing members on large positions taken by their customers. In 1987, it was the long positions of a trader that bankrupted the Hong Kong clearing house. Some elements of the clearing house regime are clearly for the authorities to determine.
From mid-2014 onwards, the international monetary policy environment began to change. On the one hand there were increasingly clearer signs that the US was about to adopt a tightening stance, whereas in the euro area a loosening of monetary policy was becoming more and more likely. The euro subsequently depreciated markedly against the major currencies. As a result, by the beginning of 2015 the minimum exchange rate was no longer sustainable. To retain control over our monetary policy, we therefore decided in January 2015 to change tack. In that exceptional situation, we had to weigh up the pros and cons of using alternative unconventional instruments. It became apparent that we would have to lower interest rates below zero given that various other central banks had already done so. This was the only way we could limit the appeal of the Swiss franc. When we discontinued the minimum exchange rate, we thus also imposed negative interest of –0.75% on banks’ sight deposits held at the SNB. This then brought the level of interest rates in Switzerland back down below that in other countries. Coupled with our willingness to intervene in the foreign exchange market as necessary, the negative interest rate has taken the pressure off the Swiss franc and prevented a sharp drop in inflation.

Our gratitude also goes to you, our shareholders, for your loyalty to the SNB and your faithful support. Thanks also to our young guests from the Cantonal School of Graubünden for their interest in monetary policy and the SNB. I would like to thank you all for your attention, and I look forward to talking with as many of you as possible over refreshments later. Page 7/8  Chart 1  Chart 2  Page 8/8
Some analysts in other countries have claimed that the market has already downgraded its ratings for the Icelandic banks some way below those issued by international ratings agencies. They claim that the ratings agencies cannot avoid moving into line with these market perceptions sooner or later. In a recent interview with [business paper] Viðskiptablaðið, I mentioned that if the financial institutions act appropriately, the outcome could turn out much more favourable for them. Once all the explanations have been made and the reforms are finished or close to completion, the market will be more likely to move into line with the rating agencies’ outlook, and not vice versa. Since then, Standard & Poor’s has issued sound ratings for Glitnir. Secondary market terms for Icelandic bonds improved as a result. The ratings companies have better knowledge of the Icelandic economy and financial sector that most other institutions that discuss them. I have mentioned a number of issues here which Icelandic financial companies cannot avoid addressing. But in this respect we must not just preach to the banks. We need to take a critical look at ourselves and the other regulatory and supervisory agencies, monitor compliance with regulations and create a solid framework for the financial sector. It must be ensured that the institutions involved in these tasks can compete for capable staff who can soon tackle delicate issues and enjoy the confidence and respect of the markets.

A credit register will narrow the information gap that exists in the Maltese banking system by reducing asymmetric information between borrowers and lenders. It also improves risk management thereby contributing to a better performing loan portfolio and as a result, a lower cost of capital. Ladies and gentlemen, let me close with a few concluding remarks. As you are well aware, the banking sector across the Euro area is passing through regulatory and supervisory changes that are sometimes viewed as expensive and imposing unnecessary burdens on the sector. This is a short-sighted assessment. Though dividend pay-outs may be lower in the short-run, their sustainability will be strengthened in the longer term. Similarly, higher bank capital does not necessarily lead to lower volumes of loans over the long run. Instead, a higher capital base mitigates balance sheet risk, lowers bank funding costs, hence allowing banks to charge a lower risk premium on their loans, to the advantage of both lenders and borrowers. The crisis has uncovered various shortcomings in corporate governance in the banking sector, mainly in areas like risk management and internal controls, compensation, corporate structures and transparency. Some Maltese banks have yet to adopt a number of necessary risk oversight practices that would ultimately benefit the banks and their stakeholders. What needs to be stressed is that reputation is a key asset of Malta’s financial system which cannot be taken for granted. Efforts to safeguard financial sector reputation need to be ongoing and undertaken by all concerned in the financial sector.
We have developed our petroleum resources largely in parallel. The opening of a new gas pipeline from mid-Norway to Easington – Langeled – in October this year is yet another example of the tight bonds between us. Comparing our two countries we find strong similarities - both are affluent, growing briskly, and experiencing low unemployment. Both are open economies with a significant public sector. The UK economy is, however, nearly eight times larger than the Norwegian economy and with a very large and well-developed financial sector, while Norway on the other hand has a much larger oil sector. Challenges in an oil economy Norway ranks as the world’s third largest oil exporter after Saudi Arabia and Russia and the eight largest oil producer. Petroleum activities have contributed substantially to Norway’s GDP, exports and government revenues since the late 1970s. Petroleum activities give Norway an economic base that is not available to many other countries. But oil and gas also present Norway with considerable economic policy challenges. The experience of other countries that have received large, unexpected income from natural resources is not encouraging. Societies that suddenly gain access to huge wealth stemming from natural resources have a tendency to spend the money and then fall into decline. Spain in the 17th century provides a good example of this, as the historian David Landes observed. 1 The colonisation of South and Central America gave access to a wealth of natural resources, not least gold.

That’s part of the political discussion; that’s not for us to decide. Very finally, the Eurozone budget – which is an idea wanted by the French President, Emmanuel Macron – seems to face a lot of opposition. Do you think it’s a good idea? Is it necessary and what could overcome this opposition? It is not an easy discussion. It’s a fundamentally political discussion that’s about sharing money, that’s about sharing sovereignty. It’s good the discussion has started. It’s good that ministers and leaders are discussing ways to make the Eurozone more resilient and to make the Eurozone stronger. Given the amount of uncertainty that we see around us in the world, all of us in Europe, in the Eurozone, have a duty to make our system stronger. It’s good that that the discussion has started, finally. 3/4  BIS central bankers' speeches  Even if it’s being delayed, even if it might not happen in this mandate of Emmanuel Macron? No one expects that discussion to be easy, so there is lower-hanging fruit such as completing the banking union. We would certainly hope that the capital markets union would feature more prominently on the agenda and also that the rules, the fiscal rules and the macroeconomic rules we’ve been working with, can be improved, can be made more credible. Fiscal union is not lowhanging fruit; it is difficult, it will take time, but it’s good that that discussion has started. 4/4  BIS central bankers' speeches
When Governing Council members adopt monetary policy decisions and perform other functions of the Eurosystem, they are not acting as representatives of their countries or respective central banks, but rather on a personal and independent basis with the obligation to safeguard the interests of the Union as a whole. Membership of this decision-making body is personal and inalienable. 2  The President of the EU Council or of the Eurogroup and one European Commission member may attend Governing Council meetings, albeit without the right to vote. Quorum and voting regime at the Governing Council Governing Council decisions are generally adopted by consensus. If its members have to resort to voting, the Statute provides specific voting rules for each subject, although the general rule is voting by simple majority. Governing Council meetings require a quorum of two-thirds of the members having a voting right. Therefore, 14 voting rights would be needed out of a total of 21 (the Executive Board Members hold six voting rights and the other 15 voting rights are rotated among the 19 governors).3 If the quorum is not met, the President may convene an extraordinary meeting at which decisions may be taken without regard to the quorum. The ECB can adopt its decisions by simple or qualified majority, weighted simple or qualified majority, or unanimously. In accordance with Article 10(2) of the Statute, the unweighted simple majority regime is the default procedure generally applicable and takes into account the rotation system.

The supervisory model is relevant from many standpoints, since it may have a bearing on how efficiently and effectively the goals pursued are attained and ought to resolve possible conflicts of interest across the different areas supervised. In this connection, it should be noted that, after the 2008 global financial crisis, some countries have changed their supervisory models, broadly speaking, by adopting more integrated models and increasing the role of central banks. Among these integrated models I wish to highlight one structured around two separate bodies: a central bank,13 charged with prudential supervision, i.e. the solvency of banks, securities firms and insurance companies, and a second body to oversee all intermediaries’ conduct and protect the investors and customers of various financial products and services. 11  The Directors General, the staff representative and the General Secretary of the Banco de España also attend the Governing Council’s meetings in a non-voting capacity. In addition, the General Secretary acts as the Governing Council's secretary. 12  For a more detailed discussion on this matter, see F. Restoy (2016), La organización de la supervisión financiera, or J. Segura (2018), “La supervisión financiera”, Chapter 3 of Reguladores y supervisores económicos independientes: el caso español, coordinated by J. Segura. For a recent description of supervisory models around the world, see D. Calvo, J.C. Crisanto, S. Hohl and O. Pascual Gutiérrez (2018), “Financial supervisory architecture: what has changed after the crisis?”, FSI Insights on policy implementation, No 8.