samchain/econo-pairs-v1 huggingface dataset:
There is no doubt that monetary policy has had beneficial effects on government finances; monetary policy has unavoidable implications for public budgets. The same kind of indirect support occurred during the easing cycle in the early 2000s, when our main refinancing rate was reduced to 2% – a very low level at the time – and was maintained at that level for more than two years. The fiscal ramifications of monetary policy that we see today (and in the early 2000s), however, differ fundamentally from the deliberately coordinated strategy of monetary financing that we observed in some countries in the 1970s. Today the use of any central bank instrument has to be justified solely on the basis of the central bank’s narrow price stability objective, and not on any fiscal consequences thereof. Borrowing from the theory of monetary regimes, it is the dominance of the central bank mandate over the objective governing fiscal conduct that differentiates the setting of monetary policy today from anything we saw prior to monetary union. The ECB continues to have the necessary institutional independence, the financial resources and operational capacity to take all appropriate measures, if and when needed, to counter upside or downside risks to price stability in a truly symmetric fashion. It could be argued that there are multiple channels through which the central bank could take on tasks and obligations that pertain to the fiscal authority, and some of these channels are both more subtle and less apparent than outright financing of public deficits.

Also, insufficient financial sector policy reaction on the side of governments exacerbated the detrimental dynamics and represented itself as a source of risk and uncertainty during the crisis, ultimately fostering dynamics of self-fulfilling prophecies. The ECB’s non-standard measures In this environment the ECB took bold and decisive action. The disruptions in banks’ short-term funding led to a strong tightening of credit standards to both businesses and households. This threatened to undermine bank lending to the real economy with risks of a severe credit crunch. In turn, the transmission of monetary policy became seriously impaired. And, central banks were less effective in steering term money market rates via the setting of their policy rates. Ultimately, the interest rate set by the central bank did no longer reach the real economy across the euro area in the same way. The size of the shocks and the extent of global and intra euro area adjustments required exploiting the ECB’s full toolkit to implement a wide range of non-standard measures. Here, we always had to keep in mind the importance of the banking system for the financing of the economy. In the euro area, two-thirds of external financing – and even a larger share for small- and medium-sized enterprises – originates from banks. Our measures included the provision of unlimited funding support to banks at maturities up to three years, the extension  6  The Japanese experience since the 1990s was widely seen as an exception.
The capitalist system depends on owners of capital to promote sustainable value creation through market discipline. Is it simply short-term profits that matter? Are there other social or environmental purposes that must be safeguarded? To this end, the Securities Commission’s Malaysian Code for Institutional Investors articulates the stewardship 3/5  BIS central bankers' speeches  role that shareholders ought to play. Ultimately, shareholders need to clarify that – we need more than just the bottom line – immediate profit is not everything. (b) Situation Let us move on to the second element – the “situation”. The system of values creates and maintains various situations. The situation represents the environment or immediate setting in which financial industry professionals operate. This is a broad subject. Today, I wish to focus on two types of situational incentives. Firstly, remuneration structures. And secondly, the attitudes toward speaking up. Remuneration plays a significant role in influencing behaviour, including ethical choices. Admittedly, the task of designing and implementing a remuneration system to encourage professionalism and integrity is not straightforward. However, the intuition is simple and attainable: financial institutions should avoid the folly of rewarding A, while hoping for B. In other words, we cannot hope for or expect ethical behaviour so long as we continue rewarding people for acting otherwise. In this regard, the Bank is currently phasing in requirements consistent with international standards to align remuneration with prudent risk-taking – with a focus on material risk takers.

A key objective for this is to mitigate the problem of ‘rolling bad apples’ within the Malaysian financial industry. Conclusion Business ethics has become a popular topic in the world of finance. We must be careful not to pay lip service to the hype. We must be careful not to pretend that it can be addressed with simplistic solutions. We must instead take a holistic, thoughtful and realistic approach in building a culture of professionalism and ethics. Allow me to conclude here by leaving you with three key messages– First – we cannot afford to underestimate the power and danger of “bad barrels”. The evidence demands that we focus carefully on cultivating a “system” and designing “situations” that encourage continuous ethical behaviour. This is a shared responsibility. As I have said, regulators play a crucial role in articulating the letter of the law. But it is the private sector leadership that determines whether its moral spirit will be pursued. Second – we must not neglect the uncomfortable reality that there are “bad apples” out there. A clear message needs to be sent out, that the financial industry does not have room for these. Fair, proportionate and transparent disciplinary action will be central in communicating this message. Finally – the entire financial sector must embrace the language of ethics and objectivity. Just like in any human relationship – trust, honesty and integrity are moral values which must permeate through the business.
BIS Review 23/2009    Although there are factors that look worse than in the 1990s  International economic activity  Uncertainty over global financial crisis    There are many more that look better now…  17  So why will things go better this time?   Not a ” home-made” crisis    Surplus on current account    Sound public finances    Better conditions for both fiscal and monetary policy    Lower interest rates to start with    Updated regulations, focus on borrowing and capital  Comparison of recoveries after different recessions, GDP Sweden Level, index=100 final quarter before recession begins 115  115 2008 Q1 2000 Q3 1996 Q1 1990 Q2  110  110  105  105  100  100  95  95  90  90 -4  -2  0  2  Note. Broken lines represent the Riksbank’s forecasts. Legends refer to quarter when recession begins.

Anita Angelovska-Bezoska: Workshop on fintech - opening remarks Opening remarks by Ms Anita Angelovska-Bezoska, Governor of the National Bank of the Republic of Macedonia, at the NBRM Workshop on Fintech, Skopje, 28 May 2018. * * * Dear Mr. Jay Tikam, Dear colleagues, It is my great pleasure to open the NBRM workshop on a topic that has been attracting a rising interest by regulators, supervisors and central bankers, i.e. a workshop on fIntech organizations that, by combining new business models and innovative technology, gradually change the shape of the financial services segment. The main idea of this workshop is to become better acquainted with this rather new but very important topic. It has been organized with the support of the European Fund for Southeast Europe, for which we are thankful. Although in continental Europe, fintech companies account for just a small share of the markets for banking, payment services and asset management, still they are on the rise as they are rapidly entering the markets and competing with banks. According to Ernst&Young’s Fintech Adoption Index, one-third of the consumers utilize at least two or more fintech services and they are increasingly aware of FinTech as part of their day-to-day activities.
If costs go too high and Hong Kong suffers an absolute loss of competitiveness (as opposed to there merely being shifts in relativities between sectors), then an adjustment process kicks in to restore competitiveness. Since we have a fixed exchange rate, this adjustment occurs through downward pressure on domestic costs and prices. We have seen this process very clearly and effectively at work over the past three years or so; for instance, the loss of competitiveness inflicted on Hong Kong by the currency depreciations elsewhere in the region in 1997 was made good largely through internal deflation within the space of about 18 months. At risk of my labouring the point, look at cities such as London, Paris, Zurich, Tokyo and New York. In absolute terms they are expensive places, but they all generally thrive. The citizens don't hang their heads in shame at being in a high cost and high earning environment. Indeed, many relish it. But none of the businesses there can afford not to search continuously for greater control of costs, for higher productivity, for new products and markets, and so on. Competitive pressure may be intensified by globalisation and by the emergence of significant competition even from third world cities, where basic costs are hugely lower, but the very survival of the wealthy cities has not been seen to be seriously threatened on that score.

The robust recovery momentum on the global scale has resulted in a strong expansion of Thai exports across product categories and export destinations. In addition, the Thai tourism sector has grown consistently with steady increases in the number and quality of tourists. Therefore, it is not surprising to see businesses associated with exports of goods and services enjoying the benefits from the improved external demand. Domestic demand growth, however, is still proceeding at a gradual pace. Despite a continuous recovery, private consumption growth remains well below that of GDP, registering within the 3 percent range. And until recently, private investment growth had concentrated mainly in the export sector. Overall, the large current account surplus of 10.5 percent to GDP last year summarizes the pattern of economic recovery and reflects the imbalance between the external and domestic demand. Second, the rural economy has been exposed to more adverse shocks than its urban counterpart. Specifically, several populist measures including the controversial rice pledging scheme were withdrawn, together with adverse weather conditions such as severe droughts in 2016 and floods in 2017 as well as declines in global prices of key export crops especially rubber and rice, all constituted negative income shocks to farmers. In addition, rural entrepreneurs, which are mostly SMEs, tend to be less 2/10  productive and might not be able to compete with larger firms who are better equipped with capital and technologies.
In part, this is because domestic firms will be enabled to participate more readily in external trade because of the absence of exchange rate risk. According to an estimate of this trade boost effect if Iceland were a member of the euro area (see Chapter 8), goods trade relative to GDP could increase by 4–11 percentage points and, as a result, GDP per capita could rise permanently by 1½–11%. •  Research shows as well that the increased trade between member countries with a common currency could cause the business cycle in those countries to become more symmetric over time, so that OCA criteria are met to a gradually increasing degree. •  The use of money is subject to considerable economics of scale; for instance, in connection with currency issuance, the cost of providing monetary services (such as monetary policy and payment intermediation), and cross-border foreign exchange transactions. Other things being equal, participation in a larger currency area would lead to a more efficient and less expensive monetary system. •  In addition, small countries in a currency union can save foreign exchange reserves to a greater degree than is possible with an independent currency. •  The domestic foreign exchange market is small, undeveloped, and relatively expensive to trade in (see Chapter 12). Euro area membership would provide access to a large, deep financial market without exchange rate risk. This would facilitate risk diversification domestically.

We need to walk the talk and address the question of “how”. 4. Let me begin with the concrete actions we at the HKMA are taking. Our action plan is guided by the green and sustainable banking initiative unveiled in May 2019. We have been making significant progress since then. 5. As one of the largest reserves managers globally, we embrace responsible investing. ESG principles are now an integral part of our investment criteria, processes, and asset allocation. 6. As a banking regulator, we are working together with banks to manage climate risk. Being a good corporate citizen is important, but for banks there is the added dimension of managing the climate-related physical risk and transition risk associated with the projects and businesses they are funding. We have already developed a common assessment framework to help banks to assess their individual “greenness baseline”. In June this year, we issued a white paper that sets out our initial thoughts on the supervisory approach to addressing climate-related and sustainability issues. This will pave the way for setting our supervisory expectations for banks’ implementation. 7. Managing climate risk brings new opportunities in green finance. The IFC estimates $ trillion in climate investment opportunities in emerging markets over the next decade. Today Hong Kong is already a green finance centre with a vibrant and efficient ecosystem that matches the demand and supply of green financing. But more needs to be done in this fast-growing space. 8.
Total contributions and refunds during this period amounted to Rs.16 billion and Rs.13 billion, respectively. The total investment portfolio consisted mainly of government securities at 98 per cent, while the total income for the first half of 2006 amounted to Rs.25 billion. The Central Bank also manages the Public Debt to ensure that the Government's financing needs and its payment obligations are met at the lowest possible cost over the medium to long term, consistent  BIS Review8/2007  5  with a prudent degree of risk. During 2006, the Central Bank took several measures to strengthen the management of public debt by: •  Increasing the capital requirements, introducing a risk based supervision system and supervision activities to strengthen the Primary Dealer System and financial sector stability  •  Introducing on-line data reporting to enhance the transparency in trading government securities  •  Facilitating capacity building of market players  •  Permitting subscription upto 5 per cent of Treasury bonds by foreign investors  •  Assisting the government to raise foreign currency commercial debt through syndicated loans from the international market  •  Developing a comprehensive debt consolidation strategy  •  Introducing a new debt instrument named Sri Lanka Nation Building Bonds for the Sri Lankan working community living abroad thereby offering them an opportunity to contribute funds towards infrastructure development in the country.

It is also our intention to change the supervision of the banking institutions from “compliance based’’ systems to a “risk focused” systems, whereby a corrective action plan is consistently applied across the industry. This will necessitate banks to develop integrated risk management systems and strengthen internal controls and procedures, in line with more advanced prudential requirements. Banks will also be required to set up integrated risk management mechanisms and begin ‘stress testing’ to assess their resilience to internal and external shocks, in order to facilitate the identification of risks and to initiate corrective measures. The supervision and regulation of non-bank financial institutions will also be strengthened by enhancing the minimum capital requirement of such institutions. This will facilitate the non-bank financial institutions to enhance resilience and expand their business activities. Accordingly, the existing finance companies will have to increase their core capital to Rs. 100 million by 31 January 2007 and to Rs. 200 million by 30 June 2008. Further, the regulatory framework of registered leasing establishments will also be further strengthened by carrying on comprehensive on-site examinations of selected leasing establishments and spot examinations of the others on a regular basis. In addition, in order to enhance the orderliness in the business of money changing, the minimum annual turnover required to be considered for the renewal of the money changing permits will be increased from US dollars 120,000 to US dollars 600,000 with effect from 1st January 2007.
The far-reaching and rapid expansion of central banks’ powers, coupled with a consistent failure to achieve inflation targets due to persistently low inflation, has exposed central banks to growing criticism from many quarters in recent years. Central banks are increasingly entering the political arena and making decisions that have large distributional effects. Their critics say they are deciding on matters that should be left to democratically elected representatives. Some have even questioned central bank independence itself, the pillar of central banking over the last few decades. There are two types of concerns about central bank independence. The first is that central banks have gained too much independence, something that is at best irrelevant but at worst damaging to the economy. The fact that central banks are struggling to raise inflation demonstrates that they are unable to fulfil their mandate, so it would clearly be better to subordinate them to the 3/7  BIS central bankers' speeches  government, even to the extent of financing its budget. Central banks have been criticised for failing to predict the sustained post-GFC weakness of the economy and for being incompetent. Other brickbats relate to financial stability, an objective that is much more blurred and difficult to grasp than price stability. If, for example, a central bank were to succumb to the temptation to impose too stringent requirements on the financial sector, it would at the same time put excessive demands on society as a whole, without sufficient accountability to the government.

Jiří Rusnok: The changing world of central banking Keynote speech by Mr Jiří Rusnok, Governor of the Czech National Bank, at the conference of the Czech Economic Society, Prague, 17 May 2021. * * * Ladies and gentlemen, members of the Czech Economic Society, esteemed guests from the Czech Republic and around the world: Let me start by thanking the organisers for inviting me to this conference. It is an honour and a pleasure to be here today to communicate some thoughts about central banks. I will split my address into two thematic parts. In the first, I will talk about central bank independence, about the central banking paradigm from the historical perspective, and about some of the challenges that central banks face today. In the second, I will try to shed some light on the humdrum reality of our monetary policy decision-making during the Covid crisis. I say that with tongue in cheek, because, as you know, real-life decision-making is fortunately never humdrum. Let’s turn the clock back a few decades and briefly remind ourselves how central banks gained their independence and what consequences it had. This will help us understand the framework in which central banks have long been operating and the it is now facing. How did central banks gain their independence? Central bank independence stands on theoretical and empirical foundations.
We are expecting that the measures taken by us and other authorities, both in Sweden and abroad, will contribute to the Swedish economy  BIS Review 23/2009  3  beginning a recovery next year. We are therefore expecting to begin raising the interest rate again towards the end of 2010, and fairly quickly, to just over 3 per cent at the end of our forecast period. Sharp deterioration in world economic activity… The main reason why we cut the repo rate and adjusted the interest rate forecast in this way is that economic activity has weakened both in Sweden and abroad – much more than we had expected in the assessment we made in December. To return to my ice skating metaphor – we were once again in a situation where conditions had changed so quickly that it was also necessary to change course significantly and at once. Households’ and companies’ expectations of future economic prospects are now as low as they were during the crisis in the 1990s. And since last autumn in principle all types of confidence indicators around the world have fallen substantially. Almost all statistics on economic activity published since our December assessment have been worse than expected. The situation looks particularly gloomy in the United States and the euro area, but prospects have deteriorated more or less around the world.

With effect from 2010, CPI inflation will also rise, according to our forecast. Once again interest rate changes have had a powerful impact, but they are now pushing in the opposite direction. In 2010 we are expecting to raise the repo rate again. Mortgage rates will then cease falling and begin to rise instead. At the same time, energy prices will begin to rise slightly. The repo rate will then be raised fairly rapidly, from a level of around 1 per cent to around 3 per cent at the end of the forecast period. The fact that I am now talking about the forecast for the CPIF should not be interpreted to mean that we have changed the monetary policy target. Our target is still that CPI inflation shall be 2 per cent. But we are also constantly studying a number of other measures of inflation. In this situation with exceptionally large changes in the repo rate –first down to just below one per cent and then rapid increases at the end of the forecast period – it is very important to openly and clearly illustrate the direct consequences this can have on the CPI. However, in the longer term, beyond the horizon for our forecast, the repo rate is assumed to be stable and then the rate of increase in the CPI and the CPIF will coincide.