samchain/econo-pairs-v1 huggingface dataset:
Ivan Iskrov: Bulgaria and the Francophonian movement Speech by Mr Ivan Iskrov, Governor of the Bulgarian National Bank, at the opening of the 13th Annual Meeting of the Governors of the Central Banks from the Francophonian countries, Sofia, 12 May 2006. *  *  *  Dear Governors, Dear Ladies and Gentlemen, Welcome to Bulgaria, one of the oldest countries in Europe! It is a pleasure and honour for me to open the 13th Meeting of the Governors of the Central Banks from the Francophonian countries. I am also very much flattered by the fact that this meeting is for the first time held in a country from Central and Eastern Europe and it is precisely the Bulgarian National Bank's privilege to host such an event. This is also the year of the centennial anniversary of the birth of Leopold Cedar Senghor - the founder of the Intergovernmental Francophone Agency and the conceptual father of the Francophone Movement (La Francophonie). Tomorrow, the conceptual father of our gatherings and ECB honourable President, Jean-Claude Trichet, will join us. The fact that the BNB hosts this meeting is not only the result of the formal acceptance of Bulgaria to the Francophonian community in the early 90-ies of the past century. The French language and culture made their way into the country already in the first half of the XIX century when we were still part of the Ottoman empire.

Of course, striking the right balance between these three principles is a process related to the economic and political traditions of individual countries. The issues I touched upon are important for the operation of any modern central bank. Today, I am particularly happy with the fact that these issues will be discussed within the club of the Francophonian central banks, where we have a very broad set of traditions, experience and knowledge. I believe that we are going to have a useful and fruitful discussion. Thank you for your attention! 2  BIS Review 42/2006
Ranee Jayamaha: Impact of IT in the banking sector Speech by Dr Ranee Jayamaha, Deputy Governor of the Central Bank of Sri Lanka, at the Trans Asia, Colombo, 22 January 2008. *  *  *  Introduction The rapid advancement in Information and Communication Technology (ICT) has had a profound impact on the banking industry and the wider financial sector over the last two decades and it has now become a tool that facilitates banks’ organizational structures, business strategies, customer services and other related functions. The recent “IT revolution” has exerted far-reaching impacts on economies, in general, and the financial services industry, in particular. Within the financial services industry, the banking sector was one of the first to embrace rapid globalization and benefit significantly from IT development. The technological revolution in banking started in the 1950s, with the installation of the first automated bookkeeping machines at banks. This was well before the other industries became IT savvy. Automation in banking became widespread over the next few decades as bankers quickly realized that much of their labor-intensive information-handling processes could be automated with the use of computers. The first Automated Teller Machine (ATM) is reported to have been introduced in the USA in 1968, and it was only a cash dispenser. The advent of ATMs helped both to improve customer convenience and reduce costs, as before ATMs, withdrawing funds, accounts inquiries and transferring funds between accounts required face-to-face interaction between bank staff and customers. 1.

The second challenge thrown up by digitalisation is the unbundling of the value chain. In the past, the value chain – from payment initiation, through authorisation and clearing to complaints processing – was largely concentrated in the hands of a single entity. Thanks to technical innovations, however, payment service providers are now unbundling and reconfiguring the value chain. For instance, they are taking the products of specialised providers – e.g. relating to FX transactions, payment guarantees or ‘mobile wallets’ – and combining them. Established providers of payment services are having to adapt to this unbundling. They are having to cooperate with new players, invest in their value chains and simultaneously satisfy demand for ever faster and easier payment methods. The central banks, too, face a challenge: they need to develop the core payment infrastructure in such a way that the unbundling of the value chain can be successfully navigated – without new risks being created. As a result, we are seeing many central banks adapting their RTGS systems. For example, retail payments are increasingly being settled via RTGS systems (something which for a long time was unique to Switzerland), longer operating times are being introduced and settlement times are being shortened. These are major international trends, and we in Switzerland will have to think about how we wish to position ourselves. There is also the question of how to integrate the new players – the fintechs – into the payments infrastructure.
4/5  BIS central bankers' speeches  Financial cycles have become increasingly important. I think that our framework has strengths that we should preserve. Central bank independence is increasingly coming under attack around the world – not just in the United States, but also in Italy, for example. How much does that worry you? The independence of central banks is of key importance and should not be called into question. Whatever the criticism may be, every other regime in which the central bank is closer to the finance ministry is much worse than the current system. But not everybody seems to agree. There may be populists who dream of something different. But most politicians are very conscious of the need to keep monetary and fiscal policy separate. Any other approach can quickly turn dangerous. 5/5  BIS central bankers' speeches

A degree of humility is appropriate given the lack of experience as to how markets will respond when economic conditions eventually cause investors to anticipate exit. When asset purchases are anticipated to end or when asset sales begin to be anticipated, this will affect term premia in ways that cannot be precisely predicted in advance. That said, I do expect the repricing will prove manageable. We will seek to communicate so as to avoid generating sharp shifts in term premia and in long-term interest rates. Also, we will play close attention to ensure that financial institutions are managing their interest rate risks appropriately. The third set of costs is the impact of higher short-term rates on the Federal Reserve’s earnings and balance sheet when exit occurs. When we ultimately raise short-term interest rates, this will squeeze the Fed’s net interest margin. Also, when the Fed sells long-term assets, there is some prospect for losses on these sales depending on the level of long-term interest rates at the time when such sales occur. This means that the Fed’s earning could fall sharply or even turn negative in a given year. We look at this issue very closely to understand the risks here. The good news is that a very large proportion of our liabilities – those associated with currency outstanding – has no interest cost. This mitigates the risk of a sharp net interest margin squeeze.
According to a report from the U.S. Department of Labor’s Bureau of Labor Statistics, the median tenure of workers ages 25 to 34 is only three years – less than a third of the tenure among people aged 55 to 64 years old. 1 And, according a Future Workplace “Multiple Generations@Work” survey, 91 percent of “millennials” (that is, a person born between 1977 and 1997) expect to stay in a job for less than three years. Job-hopping can speed career advancement. Getting a promotion in the process of changing jobs allows employees to avoid the “dues paying” that can keep workers in a painfully slow rise up the corporate ladder. Job hopping can also lead to greater job fulfillment. A 2012 survey by Net Impact 2 found that 88 percent of all workers considered “positive culture” important or essential to their dream job, and 86 percent said the same for work they found “interesting.” The same survey found that millennials are the least satisfied in their careers. I also recognize that firms are no longer just competing with others in the financial sector for talent. With skills that can be adapted across multiple industries, the talent pool that was once specialized for financial firms is now spread thin. This puts pressure on the firms and gives talented workers the advantage of being selective in their roles. They demand more from hiring managers and sense other opportunities out there if they’re not satisfied.

4  BIS central bankers’ speeches  We expect banking organizations of all types and sizes to have the capacity to analyze the potential impact of adverse outcomes on their financial condition. Stress testing can be a means to carry out such analysis. Certain portions of existing supervisory guidance – which cover capital planning and management of funding and liquidity risks – discuss using stress testing or addressing potential adverse outcomes in order to enhance risk management practices. This guidance is applied commensurate with an organization’s size, complexity and risk profile. For example: •  Community banks – those with below $ billion in assets – are not expected to conduct the type of stress testing required or expected of larger banking organizations, as indicated in recent rulemakings, proposals and guidance. A community bank may still employ certain other types of simpler stress testing to augment their risk management – as many community banks have been doing for some time. •  In contrast, regional banks – which are typically those with assets between $ and $ billion – are indeed required to conduct a company-run stress test on an annual basis. Still, regional banks are not subject to many other stress testing requirements imposed on larger firms, such as going through a supervisory stress test or conducting an additional stress test each year. Moreover, our reviews of those company-run stress tests are focused primarily on the quality of the processes those firms employ and not necessarily the results.
The criticism of a Swedish membership of the Eurosystem has often concerned the possibility of being able to conduct an independent stabilisation policy under these circumstances. This is based on a supposition that the Swedish economy could for some reason become out of synch with the economic developments in the euro are, what is termed an asymmetric shock. An independent monetary policy and currency, in addition to fiscal policy, gives us the opportunity to stabilise our economy ourselves a form of shock-absorber that will be lost if we have a joint monetary policy steered by inflation and economic prospects throughout the entire euro area. This was the primary reason why the Calmfors Commission, which examined the consequences for Sweden of participation in the third stage of EMU, concluded that Sweden should wait before joining the Eurosystem until the Swedish labour market and wage formation showed sufficient flexibility to be 1 able to manage a serious shock. It is often forgotten that one of the points of the EU is that the union shall function as an insurance; that the countries are strong standing together than they are standing alone. In practice, it is also the case that when the Swedish economy has come out of synch with the euro area, this has not been due to shocks over which we had no control, but to mistakes made in our own economic policy.

Inflation targeting is thus much more demanding than a fixed exchange rate regime with regard to the central bank’s analytical work and its ability to communicate its policy. Whether this is something that should be regarded as a disadvantage or not is of course a question of judgement. For the Riksbank, the transition to inflation targeting heralded the start of a fairly comprehensive increase in competence in the field of economics. The number of PhD economists at the Riksbank has risen sharply in recent years and our research in areas related to monetary policy has expanded considerably. Financial stability Let me now move on to the other central component of an efficient payment system. This concerns the stability in the financial system; particularly in the financial institutions that supply payment services, i.e. primarily the banks. Financial stability is currently regarded, parallel to the price stability target, as the main task of a modern central bank. The financial system has essentially three main tasks: converting savings into financing, managing risk and providing efficient channels of payment. Let me give a basic example. A bank receives savings from households which it then lends to other households or to companies that need to invest. Banks are specialists at valuing, monitoring and managing credit risks in the households and companies to which they lend.
BIS central bankers’ speeches  3  Second, we took additional non-standard measures to ensure that our interest rate decisions were transmitted effectively to the broader economy, despite the volatilities in the financial sector. If banks cannot easily access the money market or other sources of finance, they may not extend credit to households and companies, to the detriment of economic growth and employment. At the outset of the crisis in 2007, the ECB reacted immediately to the rapidly worsening liquidity conditions and heightened credit risk, particularly in the interbank markets. When stress in the financial markets re-emerged in the autumn of last year, the Governing Council of the ECB again took a series of measures to enhance the provision of liquidity to the banking system and to actively support lending, notably introducing two very long-term refinancing operations with a maturity of three years, which were conducted in December last year and in February this year. The exceptionally long maturity of these operations gave banks a longer horizon for their liquidity planning. It is also helping them to deleverage in a balanced and orderly manner over the medium term, thereby avoiding “fire sales” of assets and a downscaling of longer-term lending. At the same time, it is crucial that all the crisis measures taken by the ECB to ensure monetary stability in the euro area – the standard and the non-standard – do not create adverse incentives for market participants or unanchor inflationary expectations.

Peter Praet: The role of the central bank and euro area governments in times of crisis Speech by Mr Peter Praet, Member of the Executive Board of the European Central Bank, at the German Federal Ministry of Finance, Berlin, 19 April 2012. *  *  *  I would like to thank Maximilian Freier and Gianluigi Ferrucci for their contribution in the preparation of this speech. Introduction Since 2007, we have constantly been confronted with exceptionally tense financial and economic conditions. When the tensions in the financial markets first emerged in the summer of 2007, they were perceived as a liquidity shock. However, the collapse of Lehman Brothers in September 2008 – the first climax of the crisis – revealed more fundamental fragilities in the global financial system. The accumulated credit excesses, paired with the complex cross-country linkages in the financial markets, quickly exacerbated the financial market tensions on the other side of the Atlantic, transforming them into a crisis of global dimensions. The resulting Great Recession of 2009 affected virtually all industrialised countries and caused other weaknesses in the economic and financial system to be crystallised. Specifically, the severe economic contraction worsened the fiscal positions in many countries around the world, particularly in those that already had sustained public or private debt imbalances before the crisis. The subsequent tensions in some sovereign debt markets have spilled back into the financial markets. As safe assets, sovereign bonds play a key role in financial systems.
But the belief that we could avoid the adjustment by pushing up our pay would lead to a self-defeating process of higher wages offset by higher prices. It is the task of the MPC to ensure that the process of adjustment does not lead to a persistent rise in inflation. Bank Rate was raised in order that inflation will come back to its 2% target, and future action will depend upon how those risks to the inflation outlook materialise. The month by month path of interest rates required to bring inflation back to target is a matter of judgment. There is certainly room for reasonable people to disagree about the level or timing of changes in interest rates. There is no absolute truth here, and it is vital that the MPC keeps an open mind at all times. That in essence is my letter to you and all the members of the Birmingham Chamber of Commerce. Achieving the inflation target is, I believe, in the long-run interest of manufacturing no less than the rest of the economy. I recognise that the burden of changes in interest rates often falls disproportionately on manufacturers and other exporters as increases in interest rates push up the sterling exchange rate. And that comes on top of a secular decline – fifty years ago almost 40% of GDP was produced  2  BIS Review 9/2007  by the manufacturing sector. Today that share is around 14%.

The third point in developments in the Turkish economy is that tight fiscal policy and sound debt management brought substantial improvement to the debt dynamics, which was in the centre of concerns together with inflation four years ago. So, the gross public debt declined from 107.5 percent in 2001 to 74.6 percent by the second quarter of 2005. The Maastricht criterion on gross public debt may be met in the near future. These achievements on the macroeconomic front, the improvement in the debt dynamics and the positive outlook for growth have brought more resilience to shocks and contributed to financial stability. Volatility in the financial markets has decreased; maturities are now longer; derivatives markets finally begin to develop. 5  The World Bank. Own calculations. 3/8  6  Though it is essentially a political decision, the negotiations between the EU and Turkey would not have started at all if we had not made all these achievements. Distinguished participants, Turkey’s membership implies an expansion of the EU market. The Turkish economy is among the biggest 20 economies in the world. It is the largest economy in Eastern Europe, the Balkans and the Middle East, second in the Black Sea Basin and sixth among emerging market economies. Unlike most of the new member states at the start of negotiations, Turkey already has a functioning market economy, which is far advanced in meeting the economic chapters of the acquis communautaire.
It would be preferable, in my view, for policymakers to admit the uncertainties they face in this new environment and be humble about what they can achieve within it. The productivity challenge Even if the economy is changing in ways that we do not yet fully grasp, there are certain facts that remain immutable. Most importantly, we know that what ultimately matters for longterm prosperity – and increases in standards of living – is productivity. That’s the case in any economy with limited resources. But it’s even more important in an economy with demographic challenges, where a shrinking workforce has to support a growing retired population. And that is, of course, the case in the euro area today. It’s well documented that productivity growth in the euro area has long been lacklustre in an international context. Since the early 1990s euro area labour productivity growth per person employed has been falling behind the US, and that has continued during the crisis. Since 2008, euro area productivity has averaged only 0.2% per year, while US it has increased by around 1.0% a year over the same period. 8 In the US this is also seen as a low figure, and recently it’s been debated there whether the productivity slowdown seen in the US over recent years isn’t simply the outcome of the mismeasurement I highlighted earlier. This is based on the observation that the productivity slowdown has been associated with marked declines in employment, whereas typically the latter would tend to raise productivity.

Measures to promote growth would certainly be instrumental in ensuring the smooth future functioning of our economy, but they would also allow us to develop a climate of confidence necessary for today’s investment and consumption decisions. Their impact on the economy would thus not be negligible. As for monetary policy, its role in this area can only be to provide price stability, an essential factor for confidence and macroeconomic efficiency. Dawn of a new era Ladies and gentlemen, as the President of the Bank Council indicated earlier on, the National Bank is at an historic turning point today. As of tomorrow, our institution will be governed by new legislation. The new National Bank Act will enter into force in less than 24 hours. Our operational framework, our range of instruments, our organisation and our duty of notification will all be affected. Likewise, our mandate will be - perhaps not modified - but at least made more explicit. Article 5 of the new Act stipulates that “The National Bank shall pursue a monetary policy serving the interests of the country as a whole. It shall ensure price stability. In so doing, it shall take due account of the development of the economy”. The objective of price stability is not new. In fact, the National Bank has always been guided by this goal in its activities.