samchain/econo-pairs-v1 huggingface dataset:
Michael Gondwe: 50 years of central banking in Zambia – repositioning for the future Speech by Dr Michael Gondwe, Governor of the Bank of Zambia, at the official launch of the 50th anniversary celebrations of the Bank of Zambia, Lusaka, 10 May 2014. *  *  *  •  Deputy Governor – Administration  •  Senior Directors and Directors  •  Representatives from Commercial banks  •  Members of Staff and Former Members of Staff Present  •  Members of the Press  •  Ladies and Gentlemen  I would like to extend a warm welcome to you all on behalf of the Bank of Zambia and indeed on my own behalf, to the official launch of the Bank of Zambia’s 50th Anniversary Celebrations, since its establishment on 7th August 1964. The theme for the Bank of Zambia’s jubilee celebrations is “50 Years of Central Banking: Repositioning for the Future”. This is indeed a momentous year for our country, as it will also mark the commemoration of Zambia’s Golden Jubilee. Distinguished Colleagues, the Bank of Zambia has during the last 50 years gone through different phases of transformation and development. I am proud to say that the Bank has, from the time of establishment in August 1964, matured into an institution whose roles have changed to respond to the growing and changing demands of an emerging economy and deal with complexities of globalisation.

This will not – and should not – diminish the happiness of the occasion. Indeed, much of the history of Bank Negara Malaysia is the history of timely, productive, and often courageous response to crisis, and examining that history gives cause for optimism in our present circumstances. In my comments today, I shall touch only briefly the current crisis. Instead, I shall reflect on the achievements of Bank Negara during the decade or so that followed the last great crisis – the Asian financial crisis of 1997-8. As I hope I shall demonstrate, these achievements are more than of merely historical interest. It is clear to any observer that Bank Negara Malaysia has been a driving force in the building of this country. To speak only of its purely central-banking functions, Bank Negara has fully discharged its responsibilities through keeping inflation under control and maintaining stable interest and exchange rates, despite rapid economic growth. This has been crucial in supporting rising living standards and an increasingly diverse external trade. As adviser to the Government, the Bank has played a key role in formulating economic policies. The Bank has also been at the forefront of financial-sector development, in particular through building efficient and advanced payment systems. This work has stimulated a diverse financial system, with impressive growth in stock-market capitalisation and other non-bank activity. All of this is indeed impressive, and reason enough for celebration. But Bank Negara's contributions to the well-being of the country go somewhat beyond the more conventional central bank functions.
However, the usefulness of such disclosure depends very much on the level of breakdown in the risk disclosure. Furthermore, the US President’s Working Group on Financial Markets recommends (a) a reporting framework for large hedge funds to disclose more meaningful and frequent market risk information to the public, and (b) a requirement on public companies to disclose information about their material financial exposures to HLIs. A challenge here is for other authorities to take similar steps to require such standards of disclosure, as this would help to avoid the possibility of regulatory arbitrage. At the market level, a working group set up by the G10, and led by Jean-Pierre Patat of the Banque de France, studied the feasibility of collecting and disseminating aggregate positions data in the foreign exchange market. I believe the initiative, if implemented, could have helped smaller and open markets in better understanding their currency markets and the accumulation of highly concentrated positions. However, in November 1999, the G10 Governors decided not to proceed further with work in this area. In making this determination, the G10 found that there were a number of practical limitations to the proposal, including the difficulty in obtaining compliance, the unfeasibility of producing the data in a timely manner, and the substantial costs involved. The demise of this initiative left a vacuum in the area of transparency on market concentration. This is unfortunate and the international community should explore other alternatives to bridge the information gap.

The result is a staggering bank restructuring cost of an estimated 25% of GDP for the crisis-hit economies in Asia. 1  The Manila Framework Group is a forum comprising senior finance and central bank officials from 14 economies, namely, Australia, Brunei Darussalam, Canada, China, Hong Kong SAR, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, the United States of America. Senior representatives of the International Monetary Fund, the World Bank, the Bank for International Settlements and the Asian Development Bank also attend the meeting. The Group meets twice a year. 1  BIS Review 24/2000  Since the outbreak of the Asian financial crisis, economies all over the region have taken important strategic steps to promote conditions that foster a full and speedy recovery. But recovery cannot be sustained unless it is accompanied by thorough structural reforms. It is encouraging to see that notable initiatives are taking place in Asia where extensive programmes are in progress to restructure and recapitalise banks. There are also efforts to tackle the problems posed by over-stretched and highly indebted corporations. But there is a risk that the problems that were so evident then will be swept under the carpet in the face of rapid growth. It is crucial that the reform momentum should not be allowed to falter, as it could undermine the fledgling recovery.
9  The effective loan rate on mortgages is 3.5% and on business loans 2.9%, compared to CPI inflation of 3.1% at present. In the early stages of the 1990s recovery, bank base rates fell to 5.25% in early 1994 but rose to over 6% at the end of the year. Typical loan rates would be 1-2% above this level. 8  BIS Review 134/2010  I believe it is an open question on how serious a constraint the financial sector will prove to be on the recovery. But there has been some recent encouraging evidence. Over the last few quarters, the Bank’s regular surveys have been pointing to an easing of credit conditions. And the CBI’s quarterly Industrial Trends Survey has showed a sharp fall back in the proportion of companies citing access to external finance as a constraint on output, exports and investment. As Chart 9 show, these indicators have returned to around pre-crisis levels from the very elevated and unprecedented levels we saw at the peak of financial crisis in late 2008 and early 2009. BIS Review 134/2010  9  The importance of the supply side All these factors – the global economy, the impact of fiscal tightening and the effects of the continued adjustment in the financial sector – will have a bearing on the growth of the UK economy through the recovery and hence on monetary policy. But there is another element which is crucial to the progress of the recovery which we need to acknowledge.

Last but not least, other than the monetary policy, there is still a concern over the structural problem of the Thai economy in the medium and the long term. Given the tight labor market and increasing wage costs, we need to improve the country’s infrastructure and productivity. This involves the upgrading of technology and innovation to move Thailand up the value chain. The well-being of workforce, as well as quality of education and training are also crucial to increase competitiveness ahead of the AEC integration. This cannot be done by only one party. Long-term coherent vision and concerted efforts among all agencies, both public and private, are needed. Ladies and Gentlemen, To close my remark this evening, I believe that the JCC will have a big role in shaping Thailand’s future and I hope that with the long history of partnership between Japan and Thailand, we will continue our close cooperations in all aspects in the years to come. Thank you. BIS central bankers’ speeches  3
But they do not say anything about preparedness regarding liquidity in foreign currencies. This is particularly important to us in Sweden. Around 50 per cent of the banks’ funding is through the markets, and a large part, around two thirds, through the international markets. This requires that we at the Riksbank can provide the banks with liquidity in foreign currency when funding runs short. We must therefore hold liquid funds in our foreign currency reserves, and this costs money. The Riksbank is thus supplying an insurance – an insurance that the banks know they can use but don’t pay a premium for. This type of problem is not dealt with in the Basel regulations, or anywhere else for that matter, but it is something we need to discuss here in Sweden. So although I hope I have made it clear that neither Finansinspektionen nor we at the Riksbank – nor our international counterparts – have been idle, there is still a lot of work that remains to be done to make the bank system less vulnerable and more resilient. Both globally and here in Sweden. And at the same time we must continue our daily work on maintaining financial stability. We at the Riksbank are constantly trying to refine our analysis so we can detect at an early stage any risks that could threaten the stability of the system. And we must be clear in communicating the risks we see.

The monetary reform in 1965 replaced the earliest Lek banknotes with new ones, in a ratio of 10 to 1, by changing at the same degree the value of prices, wages and, of any other financial operation. Since then, most of citizens have not been adopted yet with this change and are used to communicate with the outdated term “old lek”, driving to confusion in both the communication of prices of goods and services and the accurate reading of economic and financial indicators. Even before the launching of this awareness campaign -postponed due to the difficulties caused by the restrictions imposed to tackle the Covid-19 pandemic situation – the Bank of Albania has been attentive in encompassing this message in its educational publications and programmes, such are: Global Money Week, or the campaign on the issue in circulation of the new banknotes. Recently, we have conducted the measurement on the use of terminology “new lek” – “old lek” on a national level, through the inclusion of dedicated questions in the survey on measuring financial literacy of the Albanian population structured pursuant to the model of International Network of Financial Education (INFE, OECD). The analyses of these questions provides information on the degree of wrong use of terminology by: location-residential, age-group, gender, education, employment and average level of income, as well as the settings where it is more frequently used; aimed at adopting the campaign undertaken by the Bank of Albania on the elimination of the outdated terms “new lek”- “old lek”.
For Mervyn, I am guessing that one hundred years may not seem like a long time, given that the Bank of England is over 300 years old, but I am sure he will graciously allow us our moment. We are also joined by many other friends and associates of the New York Fed, and a great number of our current and former staff. For 100 years the Federal Reserve has been an essential contributor to American economic prosperity and stability and that record is reflected in this fascinating exhibit. Rather than focus on its achievements during my brief remarks this evening, I thought I’d highlight what I think makes the institution that I have the honor of leading, the New York Fed, such a remarkable place within this extraordinary System. First, we are a bank within government. That means we not only have researchers, supervisors and market analysts, but we also provide banking services and possess significant operational capabilities. We accept deposits, make loans and operate the System Open Market Account for the Federal Open Market Committee. When exigent and unusual circumstances require extraordinary operations, be it in a financial crisis or to implement  BIS central bankers’ speeches  1  unconventional monetary policies, we stand ready. Our operational capabilities complement our more conventional central bank policy role in a way that is, I think, very special within the Federal Reserve System. Second, the New York Fed is a vital component of the international role played by the Federal Reserve System.

And it is that attitude, ability and esprit de corps that will no doubt allow us and the System to meet the important challenges on the road ahead. I will focus briefly on a few such challenges: The first will be on the monetary policy front. The Federal Reserve has engaged in a set of unconventional monetary policies in recent years. These policies have been necessary because the FOMC could not ease monetary policy further by conventional means – the federal funds rate was constrained by the so-called “zero lower bound”. Exit from these unconventional set of policies is certainly feasible – the ability to pay interest on excess reserves gives us a viable tool to manage monetary policy even with an enlarged balance sheet, and the New York Fed is prepared to execute on this mission, as we always are. But we do have to be a bit humble about what we don’t know. There will undoubtedly be communications and operational challenges and unexpected consequences. We will need to be sufficiently agile so that we can best achieve our dual mandate of maximum sustainable employment in the context of price stability. The second challenge for us at the New York Fed, and within the regulatory community more generally, will be in staying the course and implementing a regulatory regime in which no institutions are “too big to fail” (TBTF). TBTF is wrong for several reasons. It creates an unfair disparity between large and small institutions.
In other words, according to the exercise, the balance sheets published by Spanish banks reflect, on average, the risks arising from their investment with greater rigour than that seen in the other jurisdictions, with fewer valuation flaws or provisioning shortfalls being detected as a result. This is a particularly positive outcome as it arises from the application of a methodology – common to all the banks analysed – based on objective observations and which, unlike the stress test, does not depend on the design of debatable macroeconomic scenarios or working hypotheses. In any event, the stress test also provides positive results for the Spanish banking sector which, in virtually all cases, exceeds fairly comfortably the minimum capital thresholds set. Only one bank evidenced a very small capital shortfall as at 31 December 2013, and this has now been more than covered following the capital increase made by the bank in the first half of 2014, which gives it a solvency level in line with the sector average. Accordingly, Spanish banks may be said to have comfortably passed the test, evidencing both high quality of disclosed financial information and considerable resilience to adverse macroeconomic developments. Naturally, there is no room for complacency, and the results should not be taken as conclusive proof of the unquestionable and generalised health of our banks. The challenges are manifold, and I shall refer to some of them later.

Dimitar Bogov: Activities and developments in EU payment systems Address by Mr Dimitar Bogov, Governor of the National Bank of the Republic of Macedonia, at the Seventh International Conference on Payment and Securities Settlement Systems, Ohrid, 6–9July 20414. *  *  *  Ladies and gentlemen, esteemed colleagues, It is a great honor and privilege to open the seventh conference on payment and securities settlement systems. This conference has had an international character for several years now, and this year, the list of participants and guests is even broader. Apart from the National Bank of the Republic of Macedonia, we must give due credit to the Central Bank of the Netherlands and the Central Bank of Portugal for making this conference a success. Without their support and active participation, the quality of the conference would not be at the same level. Therefore, I would like to acknowledge the traditional cooperation of the National Bank of the Republic of Macedonia with the Central Bank of the Netherlands and the Central Bank of Portugal, and at the same time to salute this year’s participation of the representatives of the central banks from Central, Eastern and Southeastern Europe, as well as representatives of the Committee on Payment and Settlement Systems at the Bank for International Settlements, Euroclear and Commerzbank. To us, the perennial active participation of the representatives from the domestic payment system is of great importance as well. Esteemed colleagues from the financial sector!
of ops Covid Corporate Financing Facility (CCFF) per week US dollar swaplines  Audio/video calls bank wide (RHS) Attendance in Threadneedle Street office (LHS)  3000  40 2500  30  Calls per day  Attendance 11 Mar: Bank rate cut 19 Mar: Bank rate cut 23 Mar: Lockdown begins  14000 12000 10000  2000 8000  20  1500 6000 1000 4000  10 500  2000  0 28 Feb  13 Mar 27 Mar  10 Apr  24 Apr  08 May 22 May  0 Mar.20  0 Apr.20  May.20  Source: Bank of England Source: Bank of England  What have we learned? Some (very) tentative lessons  The Covid-19 crisis is very far from over. The medical and economic challenges we face are huge and potentially persistent – and many are not for central banks to resolve. Against that backdrop, I have covered only one aspect of our actions during the crisis: the steps we took to prevent the initial shock, and the uncertainty that came with it, from threatening monetary and financial stability. Let’s take the good news first. The central banking response was bigger, faster, and more comprehensively co-ordinated with domestic and international partners than ever before. We deployed the tools developed since the GFC – extending the dollar swap lines, the CTRF, the TFSME and asset purchases.

And such incorrect expectations may then lead to unwarranted increases in housing prices and household indebtedness. But I would like to point out that it is genuinely difficult to know what will be a “normal” or average level for future mortgage rates. It is not at all certain that the Riksbank’s long-run assessments of the repo rate are more correct than those of households or other market agents. A low repo rate is necessary, despite the risks I have observed that there are risks linked to holding a low repo rate over a long period of time, and that monetary policy should in principle take these risks into account. But at the  9  At the Riksbank, we usually say that the average repo rate in the longer run can be expected to be in the interval of 3.5 to 4.5 per cent (see, for instance, the Riksbank 2013b, p. 47). Short-term mortgage rates are usually 1.5 to 2 percentage points higher. Households’ expectations of short-term mortgage rates five years ahead are now around 4 per cent. And market agents’ expectations of the repo rate five years ahead are around 3 per cent. See Figure 5 and Figure 6. BIS central bankers’ speeches  7  most recent monetary policy meetings I have nevertheless advocated cutting the repo rate even lower. There are several factors behind this stance.
34 Even once allowance is made for subsequent balance sheet inflation, this evidence implies that economies of scale in banking may cease at double-digit dollar billions of assets. Evidence from banking mergers offers little more encouragement. There is no strong evidence of increased bank efficiency after a merger or acquisition. 35 And there is little to suggest cross-activity mergers create economic value. 36 That rather chimes with recent crisis experience. Of the bank mergers and acquisitions which have taken place recently, the majority have resulted in the merged firm under-performing the market in the subsequent period. Of course, all econometric studies have their limitations so these results do not close the case. Nonetheless, the uniformity of the evidence is striking. (b)  Economies of scope  Turning from economies of scale to economies of scope, the picture painted is little different. Evidence from US bank holding companies suggests that diversification gains from multiple business lines may be more than counter-balanced by heightened exposures to volatile income-generating activities, such as trading. 37 This mirrors the evidence from Charts 4 and 5 and from the Great Depression. Internationally, a recent study of over 800 banks in  31  Santomero and Eckles (2000). 32  For example, Calomiris and Hubbard (1995). 33  Saunders (1996), Berger and Mester (1997). 34  Amel et al (2004). 35  For example, Berger and Humphrey (1997) based on a survey of over 100 studies. 36  For example, De Long (2001). 37  Stiroh and Rumble (2006).

The growing importance of Islamic finance Indeed, Islamic Finance has grown most significantly in the last decade, posting double- digit rates since 2007, at close to 20%, compared with growth of 4% in the “conventional” financial sector. It has now reached a volume of $ 2 trillion, which is a very significant figure that represents around 1% of total global bank assets. The surge of Islamic Finance is apparent both in Islamic countries and also, in European markets, with the establishment of Islamic banks and the development of the Sukuk market for private and official issuers under some European jurisdictions. The prospects for Islamic finance are also positive, given the extensive scope for the financial inclusion of a population in a number of countries, with very low rates of bank access and usage. The regulatory challenge of Islamic finance The further development of Islamic finance will nonetheless depend on implementing the necessary financial reforms to ensure its integration into the wider financial system. Here, I think that the challenges are twofold: FIRST, in Islamic jurisdictions the challenge is to continue developing the architecture of Islamic finance in areas such as payment systems and supervisory and resolution regimes. In particular, it would seem vital to advance towards the standardisation of Islamic finance regulation, breaking the existing jurisdictional heterogeneity, in order to take advantage of a wider international market. The SECOND challenge refers to the integration of Islamic finance into the wider financial system.