samchain/econo-pairs-v1 huggingface dataset:
One problem with these compensation strategies is their symmetry, understood as the central bank’s commitment to react equally to below-target inflation deviations (which, as we have seen, are the really problematic ones in the current setting) and above-target deviations; i.e., following a period of above target inflation, the central bank would have to reduce inflation below the target, which would require depressing economic activity and employment. Given that a commitment of this type may not be fully credible, it has recently been proposed that these strategies should be temporary: the central bank would normally operate under a traditional inflation targeting regime, but, in the event of a crisis with low inflation and interest rates close to the lower bound, the strategy would be to compensate in future for the “lost inflation” in this period.11 In recent years, various central banks have initiated monetary policy strategy reviews (including the ECB and the US Federal Reserve). In fact, the Federal Reserve has recently announced the main results of its strategic review, which, among other changes, has led to the adoption of a new average inflation targeting strategy, albeit with an undefined timeframe for calculating the average inflation that is to be stabilised. 11  See, for example, Bernanke et al. (2019).

Having served as Board Member between May 2003 and April 2006, Mr. Durmus Yilmaz was appointed Governor of the Central Bank of the Republic of Turkey on 18th April 2006. Mr. Governor, the floor is yours. 2  BIS Review 119/2009
Our own experience in Malaysia with the Centralised Credit Reference Information System or CCRIS that is managed by Bank Negara, and the experience in other developed and developing countries where SMEs form the backbone of the economy have shown that greater access to credit information has in fact contributed to greater access to financing and reduced loan processing times. By enriching the information available to financiers to support credit risk assessments, the asset quality of financial institutions are also improved, thereby reducing the cost of financing to borrowers and enhancing the capacity of financial institutions to continue extending credit to deserving SMEs. Allow me to elaborate the benefits to SMEs, with particular reference to the SME Credit Bureau: Firstly, the Bureau assists the SMEs to build track records. One of the key factors in credit evaluation is the historical conduct of accounts. SMEs that have no previous banking history would not have the “reputational collateral” that would otherwise give them easier access to financing. The SME Credit Bureau will be able to address this information gap by collecting and disseminating information from a wider base, including trade credit data that captures the dealings between SMEs and their suppliers. In this manner, SMEs which have no financial relationships with banks, but which have strong credit standing among their trade creditors and suppliers, will be rewarded through favourable ratings that can be used to support financing applications when the need arises.

Mohd Razif bin Abd Kadir: SME Credit Bureau in the financial landscape of Malaysia Keynote address by Mr Mohd Razif bin Abd Kadir, Deputy Governor of the Central Bank of Malaysia, at the SME Credit Bureau Seminar, Kuala Lumpur, 27 May 2008. *  *  *  It gives me great pleasure to be here with you this morning. I would like to express my appreciation to the Credit Guarantee Corporation or CGC, for inviting me to deliver the keynote address. It is encouraging to see many financial institutions and small and medium enterprises (SMEs) in the audience. The Bureau is also Malaysia’s first, under a joint initiative of CGC and Dun and Bradstreet Malaysia Sdn. Bhd., a subsidiary of Dun and Bradstreet Corporation in the US, which has vast experience in establishing and operating credit bureaus globally. The development of a strong and dynamic SME sector is a priority on the national economic agenda. The reasons for this are clear when one considers that 99.2% of the total business establishments in Malaysia are SMEs. The SME sector currently employs about 5.6 million people, and contributes about 32% of gross domestic product. Given its economic potential, the Government has accorded significant emphasis to developing and strengthening the SME sector, to enhance its contribution to the economy. The Government took a major stride forward in June 2004 with the establishment of the National SME Development Council.
Let me also note that the question of the appropriate longer-run balance sheet size, the point at which the Federal Reserve holds no more securities than necessary to implement monetary policy efficiently and effectively, is a related, but distinct policy judgement upon which the FOMC has made no decision as yet. We will be monitoring that broad range of indicators to search for evidence that we’re approaching the “steep” slope—and I have confidence that our data and analytics will help us to assess this effectively. 29 We have also conducted a new Federal Reserve survey specifically designed to support our efforts to obtain a high-quality estimate of where aggregate reserve scarcity might occur, and the preliminary survey results strongly support my view that reserve scarcity is some way off. 30 Finally, I am confident that the Federal Reserve has the effective tools and is prepared to take measures as appropriate to ensure that short-term rates remain wellcontrolled and efficiently transmit the stance of policy into broader financial markets. For example, another technical adjustment to the IOR rate, as discussed in the May FOMC meeting minutes, could be used to foster trading in the federal funds market at rates well within the FOMC's target range. Concluding Remarks I remain highly confident that the FOMC’s framework for the normalization of the stance of monetary policy—both in the overnight market and the balance sheet—will continue to proceed smoothly, without unnecessary surprise, disruption, or volatility in financial markets.

To assess the importance of these risks for the industry, I will now outline the latest developments in lending and private sector indebtedness. I will follow by outlining the situation of the banking industry, and will conclude with a more forward-looking analysis of its resilience and the challenges it faces in the current environment. Recent developments in lending and private sector indebtedness  After recording strong growth in 2020, in Spain bank lending to the resident private sector fell slightly in 2021. By sector, lending to non-financial corporations (NFCs) and sole proprietors declined, offsetting the more expansionary behaviour of lending to households, especially loans for house purchase. This pattern intensified in 2022 Q1, when lending overall contracted (-0.5% year-on-year) while loans for house purchase accelerated somewhat (to 1.4%). 3  Overall, thanks to the recovery in turnover and more moderate growth in debt in 2021, the financial situation of the business sector has improved, although on average it is still more vulnerable than before the pandemic. Thus, average debt and debt burden ratios fell in 2021. The percentage of highly-indebted firms1 also decreased across the board, down to almost pre-pandemic levels both in the sectors moderately affected and largely unaffected by the health crisis, although it was still 7 pp higher than in 2019 in those severely affected. In the case of households, favourable labour market and income developments are also contributing to the recovery in their economic and financial situation.
18  All speeches are available online at www.bankofengland.co.uk/news/speeches  18  While this menu of policies may at first appear disparate and unconnected, every action is consistent with the FPC’s objective function by reducing GDP-at-risk, without undue impact on the central GDP forecast. This ensures that: -  the financial system is strong enough to continue lending to households and businesses when economic shocks occur;  -  macroeconomic downturns are not made worse because of unsustainable debt burdens, and the financial system supports the economy. The FPC’s structural mortgage market requirements The FPC’s housing tools are a textbook example of how the FPC reduces GDP-at-risk while minimising any negative impact on the central forecast for GDP by choosing targeted, efficient policy tools. 𝑇  min ℒ𝑡 ≡ 𝐸𝑡 {∑ 𝛽 𝑖 [𝑓(𝐺@𝑅𝑡+𝑖 ) − 𝜙𝑦𝑡+𝑖 ]} 𝜌𝑡  𝑖=0  In 2014 the FPC introduced an ‘LTI flow limit’, a 15% limit on the share of new mortgages that banks could extend over a loan-to-income ratio of 4.5 times a borrower’s income, and an Affordability Test requiring lenders to assess whether borrowers could still afford their loan if the mortgage rate rose to 3pp above its reversion rate.17 This is a structural macroprudential intervention designed to remain in place through housing market cycles.18 The FPC’s housing tools are based on analysis of how much this policy would reduce GDP-at-risk in the steady state, relative to any impact on GDP.

We have nowadays in our countries the same financial institutions and the same behaviour of such financial institutions in response to a centralized business development policy, growing cross-border interaction among businesses and households, similar trends in social life. Monetary and supervisory authorities in different countries in the region, to a large extent have responded to such developments with establishing formal cooperation with home country supervisory authorities, particularly in the area of banking system supervision, by signing bilateral Memoranda of Understanding (MoU). The fact that our countries are at the borders of the European Union (EU) has caused an increased presence of EU financial institutions, including banks. Hence, the MoU’s have been signed with these EU countries supervisory authorities. The quality of cooperation varies in different countries but one can say with reasonable confidence that the willingness of the host countries to cooperate has not always met the same interest from our counterparts. To an extent this is expected, because the assets of their banks in our single countries sometimes represent only a fraction of their total assets. Nonetheless, they should take notice of our concern that this cooperation is very important for us, particularly in cases where these foreign banks dominate our local markets. The liberalisation of the financial markets in Albania has been a desirable move. We consider the inflow of foreign capital an important factor to upgrade the level of our banking system, improve its efficiency and the quality of its products, by improving competition conditions in the marketplace.
Only when board directors understand that they are accountable not only to shareholders but also to customers and society more broadly through the regulatory agency can we be confident that effective governance and internal controls will be put in place. In short, banks need to own the common goal and to promote the appropriate culture, values and practices across the firm, which are to put the safety of the bank and the interest of depositors and customers ahead of the banks’ own commercial interests, just as the old fashioned bankers did in the past. Only when this happens will bank managers and employees change their mindset from “what can we get away with” to “what is the right thing to do”. Only when this happens can the banking industry regain the trust and respect that bankers used to enjoy in the not so distant past. 22. I am a pragmatist and not blind to the challenges that lie ahead in achieving what I have just described. However, I am also an optimist. Looking to the owners of banks, whilst shareholding may be diverse, there are “clusters” of shareholders, such as pension funds and sophisticated institutional investors, who understand that short-termism tends to produce negative outcomes over time and as such should be prepared to counter such tendency.

has sought to overhaul the banking regulatory framework and banking standards in the aftermath of the Global Financial Crisis. Some of the reform measures have been designed to address the problems arising from the misalignment of interest amongst the key stakeholders in banking. While some bankers may think, rightly or wrongly, that these reform measures represent a degree of overkill, the public sector firmly believes that the current regime of “heads you win, tails I lose” must not be allowed to continue. What I mean here is the regime in which bankers pocket huge bonuses in good times (or even in bad times as in the case of AIGFP and Merrill Lynch) and when the banks run into trouble the public sector, for fear of a systemic failure, comes to the rescue with a bailout using public funds. This is clearly unacceptable. So the choice is obvious. New regulations dealing with capital buffers, liquidity management, leverage, bankers’ compensation, ringfencing of deposit-taking business from riskier operations etc. have been introduced. Also notable are the measures specifically designed to mitigate the moral hazard arising from “too-big” or “too complex” to fail situations. Separately, there is a trend of regulators seeking to beef up their efforts to ensure that banks do not constantly place their own commercial interests ahead of those of their customers. Protection of consumers and investors is nothing new but it has recently attracted considerable public support that more is needed. 20. For sure, regulators will continue to pursue further changes in banking.
It is pleasing to note that the leasing sector has a bright future in Zambia as evidenced by its growth. Since the liberalisation of Zambia’s financial sector, the contribution to private sector credit of leasing companies has increased. In the period December 2001 to December 2006, total leases increased from K67,161 million to K206,972 million, representing an average annual growth rate of about 25.2 %. At the same time, the performance of the leasing sector was satisfactory as on average, leasing companies maintained adequate capital and reserves relative to their risk profiles and the sector has been consistently profitable. Notwithstanding this improved performance of the leasing sector, I am aware of a number of constraints the financial sector in general is facing, including the low financial intermediation, limited access to financial services for the rural population and low-to-middle income earners, high cost of funds, lack of product diversity and underdeveloped money and capital markets. To redress these impediments to economic growth and as an integral part of the pro-poor growth strategy, the Government’s objective is to enhance financial intermediation and improve access to financial services both in urban and rural areas. To this end, a five year Financial Sector Development Plan (FSDP) was prepared in 2004. This Plan aims at promoting the development of a financial system that is stable, sound and market-based to support efficient resource mobilization, which is necessary for economic diversification, sustainable growth and poverty reduction. Currently, the key recommendations of the FSDP are under implementation.

This positive economic growth has been broad-based, extending beyond the recovery of the mining sector and has withstood adverse shocks, such as, droughts and increases in oil prices. For example in 2006, real GDP growth was largely driven by the mining, construction, and transport sectors. Other sectors that registered positive growth were agriculture, tourism, manufacturing, wholesale and retail trade and the services sectors. Ladies and Gentlemen, bringing inflation down to single digits has been Government’s goal for a long time. Therefore, it is pleasing to note that last year inflation fell to its lowest level in 30 years. At end December 2006, the annual rate of inflation had fallen to 8.2 % compared to the annual target of 10% and the 15.9% outturn in 2005. In January 2007, it remained in single digit level of 9.8%. These unprecedented developments in inflation have been due to continued implementation of prudent monetary and fiscal policies, coupled with increased food supply. In line with lower inflation and yields on Government securities, the average commercial banks’ lending rate declined further to around 28 % in December 2006 from about 34 % in December 2005. In January 2007, it slightly declined to about 27 %. Mr Chairman, clearly, there is a need for commercial banks to do more to reduce lending rates in order to influence a substantial expansion of private sector credit. Lower lending rates will contribute to the reduction in the cost of doing business in Zambia.
This led the main central banks to introduce various measures to provide liquidity to their banking systems at times of market malfunctioning. In addition, asset purchase and medium and long-term financing programmes were launched that avoided a systemic crisis which would have led to the failure of a large number of banks and, undoubtedly, to an enormous crisis in the real economy, as during the “Great Depression” in the 1930s. Even so, the severity of the recession led to a very sharp contraction in demand, and ultimately to inflation rates that were too low and incompatible with the mandate of the central banks of the main advanced economies. This situation forced them to reduce the interest rates determined by monetary authorities to historic lows. Some central banks, such as the ECB and those of Japan, Sweden, Denmark and Switzerland, reduced rates to negative levels. 5/7  In fact, one of the factors that has influenced the actions of central banks most in recent years has been the difficulty of reducing interest rates when they are already at very low levels. Interest rates that are too low may mean that there is no incentive for financial intermediation, since, for example, it is more profitable to store money in cash than to deposit it in the banking system. What should we do then when rates are very low and the economy still requires greater monetary stimulus? Central banks have made two main proposals in this respect.

For large value payment system, RENTAS, the systemically important payment system for transfer and settlement of high value interbank funds and scripless securities transactions, is continuously being enhanced to support cross-border payments and settlements. In this regard, a Payment versus Payment infrastructure for interbank settlement of USD/RM trade transactions was implemented in 2006 in collaboration with Hong Kong Monetary Authority and a cross-border link with Euroclear was established in 2012. In addition, RENTAS has also been equipped with the capability to support Renminbi denominated funds and securities transactions. On the retail payment front, measures are also geared towards enhancing the efficiency, accessibility and quality of retail payment infrastructure and services. To this end, Bank Negara Malaysia has focused on creating the enabling environment to accelerate the country’s migration to electronic payments (e-payments), to enhance economic efficiency and increase our competitiveness. This has been done by establishing a conducive pricing and incentive structure, enhancing the e-payment infrastructure and promoting awareness and confidence in the use of e-payments. These initiatives to modernise our financial system has already begun to yield results bringing about the desired cost savings. In concluding my remarks, let me congratulate SWIFT on this occasion of the expansion of their operations here. I also wish the management and staff of the Kuala Lumpur Corporate Services Centre every success in your endeavours and look forward to its contribution to our economy as we advance forward in this significantly challenging and rapidly evolving economic environment. 2  BIS central bankers’ speeches
This was not an isolated incident and sadly, many more companies could fall victim to cyber-attacks. Last month, a report by cyber security consultancy CGI Group and Oxford Economics estimated that severe cyber-attacks have cost shareholders losses exceeding £ billionsince 2013 as a result of falling share prices. And this does not even include the damage from lost consumer confidence which is not easily rebuilt. These cases of cyber-attacks serve as a wake-up call to risk managers, as lagging behind in the latest technology is no longer an option. Missing the boat can bring dire consequences, not only tobusinesses but also to the overall safety and soundness of the socio-economic and financial system. Recognising this, technology risk has been one of the top priorities of Bank Negara. Allow me to share some of the Bank’s efforts thus far: a. In March this year, Bank Negara began testing current institutional capabilities in managing cyber threats. Malaysian banks were required to participate in the National Cyber Drill exercise, and the results showed that the millions invested on modern security countermeasures have paid off, with our banks remaining resilient. Notwithstanding this however, the key message is that we must be vigilant. We must be alert. We must be prepared. b. A key tool in identifying IT security vulnerabilities is the practice of penetration testing or “pen-testing”, where a simulated attack is carried out on IT systems by “ethical hackers”.

As reported in a recent post on our new Liberty Street Economics blog, they find no evidence to suggest that a wage-price inflation spiral is getting underway. However, we will continue to monitor expectations for medium-term inflation very closely. To sum up, economic conditions have improved in the past year. Yet, the recovery remains moderate and we still have a considerable way to go to meet the Fed’s dual mandate of full employment and price stability. Regional economic conditions So, how is our region doing? As some of you may know, the New York Fed produces Indexes of Coincident Economic Indicators to help monitor the performance of the region. Based on these measures, the downturn in economic activity in New York ended in November of 2009, and since then activity in New York State and New York City has been recovering steadily at a moderate pace. Regional employment trends Let me turn specifically to employment trends in the region. In particular, I want to describe our region’s experience during the recession and recovery. Nationally, the Great Recession, which began in December 2007, has been the deepest economic downturn since World War II. When employment finally bottomed out in February 2010 – about seven months after the official end of the recession – the country had lost almost 6.5 percent of its jobs and the unemployment rate had more than doubled. Many people lost their jobs or saw their hours or income cut, and the duration of unemployment for jobless workers reached a historical high.