samchain/econo-pairs-v1 huggingface dataset:
4  BIS central bankers’ speeches  And the microprudential framework has indeed been strengthened post-Crisis. The Basel III reforms will go quite some way to make banks more resilient and financial systems safer. •  The quantity and quality of capital have been increased. •  There is for the first time, a global liquidity standard. •  There will soon be a direct cap on bank leverage. •  Systemically important banks will be subject to higher loss absorbency and more intrusive supervision. Besides these reforms, I would add that traditional microprudential limits that apply “through the cycle” are just as important in helping to maintain financial stability. If volatility in the real estate sector has repeatedly been shown to contribute to financial imbalances and distress: •  does it not make sense to put limits on financial institutions’ exposures to real estate? •  does it not make sense to require that loan-to-value ratios for property loans be less than 100%? •  does it not make sense to require the loan underwriting process to incorporate an assessment of the debt service ratio? I do not know if the Global Financial Crisis could have been avoided if interest rates in the US had been higher in the preceding years as some have argued. •  I do suspect though that if there had been prescribed loan-to-value ratios and debtservice ratios, the sub-prime problem may not have grown to such proportions.

Investment plans for 1997 appear to be less ambitious on the whole compared with capital spending plans at the same period in 1996. Nevertheless, the business leaders polled in January were more confident about future activity than they were a few months earlier. This could mean that previously postponed investment plans may be implemented in the coming months. However, plans for increasing output capacity remained few and far between, owing to the spare capacity currently available, and depend on stronger growth in demand. Retail sales in January were up markedly over December 1996, and only slightly down on the exceptionally high level recorded a year earlier. Employment levels remained stable in nearly all industrial sectors. They showed only a slight change in the services and retail sectors, but there were further falls in the building industry. BIS Review 23/1997
commercial banks’ claims on the Riksbank, amounts to SEK 435 billion. The liquidity surplus would therefore be about SEK 70 billion even if the entire bond portfolio was sold. 17 Another argument sometimes put forward in favour of large bond holdings is that the central bank’s purchases would increase the supply of safe assets in the economy, and that there is otherwise a shortage of such assets. 18 The Riksbank’s bond purchases result in that government bonds with a specific maturity disappear from the market and are replaced by Riksbank certificates with a maturity of one week. 19 The Riksbank then takes over some of the maturity transformation that the market otherwise tries to achieve on its own, and helps to reduce the interest rate risk in the outstanding portfolio of government securities. This argument isn’t particularly convincing either. If it is considered important to have short maturity on the national debt in normal times, this should be dealt with when the government bonds are issued, and it is then a question for the National Debt Office. Furthermore, the conversion from government securities to Riksbank assets does not seem to increase the supply of safe assets in Sweden; the interest rate on (short-term) government securities is lower than the repo rate which means that the market price of government bonds is higher than the price of Riksbank certificates with the same maturity.

We all know that stable conditions make it easier to arrive at wise economic decisions. When wages and prices chase each other in an unpredictable way, and both interest rates and the exchange rate fluctuate widely as a result of this, with a certain amount of luck or smartness it is sometimes possible to do good business. But most people surely realise that this is not the best setting for either long-term investment or for those who have to live on an earned income or a pension. The head of the US Federal Reserve, Alan Greenspan, has formulated his view of what monetary policy’s objective should be in roughly these words: inflation should be so low that economic agents do not have to worry about it. Limited room for employment policy Why, then, are there those who still argue that higher inflation would be a good thing? I believe this is mainly because they perceive a conflict between price stability and low unemployment. This perception in turn has its roots in a short-run, cyclical perspective. When economic activity is rising or falling on account of transitory demand fluctuations around a long-term trend, this negative relationship does exist. Rising demand for goods and services generates increased demand for labour and lower unemployment; this tends to be accompanied by rising wages and higher inflation. The opposite also applies. But this does not mean that higher inflation results in permanently higher employment and lastingly lower unemployment.
The resolution committees of the failed banks have Central Bank deposits totalling nearly 1 billion euros. Those balances will be paid out in the months and years to come. If they are deducted from the reserves, together with other funds that will likely be withdrawn in the next 12 months, there are 1.4 billion euros left. This is sufficient to cover the instalments that must be paid on the Treasury’s foreign loans in the winter of 2011–2012, which total 1.4 billion euros. But the foreign exchange reserves would then be exhausted, and the situation would be difficult, to say the least. On the other hand, this will not be allowed to happen. In my opinion, if such a situation appears imminent, we must take action according to Plan B, which I discussed earlier. In addition, it is highly likely that we will be successful in realising some of the foreign claims held by Central Bank of Iceland Asset Management. I would like to take this opportunity to announce for the first time that, in recent months, the Central Bank has purchased, on the secondary market, bonds from the series maturing during the winter of 2011–2012. The purchase has a nominal value of 116 million euros and was executed on favourable terms. Because of this transaction, the reserves can now cover the loan payments. Furthermore, it will end up reducing the Treasury’s foreign debt at lower expense than would have been achieved otherwise.

In such a scenario, it will be even more important for all institutions with financial stability responsibilities - be it the central bank, supervisory authority or other government agency - to co-ordinate their efforts in the area of system oversight and to share any information which could be relevant to the proper fulfilment of their respective functions. Indeed, whereas until recently the prevailing concern related to the choice of institutional arrangement for the supervision of the financial sector, it is now sometimes argued that it is not the institutional framework which matters most, but rather the existence of adequate mechanisms guaranteeing the exchange of information and policy co-ordination between the entities responsible for overseeing systemic stability and those that monitor the health of individual financial institutions. Beyond that, it is claimed, any institutional set-up can work. Likewise, any one can fail. While this conclusion might be valid from a national point of view, it does little to address the question of whether information exchange and policy co-ordination relating to financial sector developments affecting the EU as a whole would be more appropriately addressed by a supranational EU institution with supervisory responsibilities, or whether such tasks are best handled by the national authorities of member countries. This issue has certainly gained in importance in recent years with the increased recognition of the links between supervision and monetary policy.
A tight legislative corset hampers flexible and innovative reactions to the different contingencies a financial crisis might throw up. The financial market crisis has demonstrated that the SNB’s liquidity management framework is up to its task. The SNB repo auctions allow for quick and flexible action, at different maturities, and facilitate both the provision of and withdrawal of liquidity. The secured repo market in Swiss francs, which was introduced in 1998, has proved very useful in recent months, as it has granted access to liquidity in the secured money market to banks with good collateral. The SNB conducts its auctions with a large group of counterparties and regularly encourages eligible banks to participate in the repo auctions. The SNB even permits banks domiciled abroad to participate in its repo auctions. Shortly before the financial market crisis, the SNB expanded its repo baskets by including more currencies. Nevertheless, the lessons from the financial market crisis will be taken as an opportunity to review the tool box of instruments and, if necessary, improve it. The crisis has also demonstrated the limits of central bank intervention. Only in the short term can central bank intervention safeguard financial stability . Ultimately, it is market participants themselves who must overcome the crisis, by enhancing transparency, reestablishing markets for illiquid assets, rebuilding confidence among banks, writing off bad debt, recapitalising balance sheets and running down excessive leverage.

There could still be a number of setbacks; we have already witnessed periods of apparent improvements in recent months, only to see the crisis return in full force. Thus it is still difficult, at this point of time, to draw conclusive lessons for the future. 2. Objectives and instruments of monetary policy  Before I delve into the subject of the financial market crisis, let me begin by reminding you of the objectives and instruments of monetary policy. These will be important things to keep in mind later on. The objectives of monetary policy can be neatly summarised as stability, stability and stability. To be more precise – the objectives of monetary policy are price stability, economic stability, and financial stability. We can order these three stability objectives according to the time lag between the specific monetary policy action and the effects of that action on the particular objective. The longest lag between action and reaction is to be found in the transmission of monetary policy to prices. Thus, monetary policy should aim at price stability in the long run. Under long run, I understand a horizon of up to a number of years. In the medium term, with a horizon of one to two years, monetary policy can be used for smoothing economic cycles. And in the short run, immediate action may sometimes be required to safeguard the stability of the financial system. We can also order the three stability objectives according to the degree to which monetary policy is responsible for the eventual outcome.
At the core of a financial system of any country must lie an efficient and effective payment system as a means for clearing and settling payments. In modern economies, this function is already highly mechanised to support a sound and stable financial sector. It is vital that a real time settlement system for inter-bank funds transfer be implemented to reduce the credit and settlement risk in the financial system. It must be able to handle scripless debt securities trading, processing and settlement on a model that reduces counterparty risk. 4  BIS Review 51/2004  Conclusion As Islamic finance advances forward to become an important integral component of the international financial system, efforts need to continue to strengthen further both the international architecture and to enhance international cooperation and collaboration as well as to develop the domestic financial system to meet the changing requirements of a highly dynamic and rapidly evolving environment. Malaysia will continue to play an active role in this process. In our quest to build a viable and sustainable Islamic financial system, the aim is to contribute to the channeling of capital flows to productive investments, create wealth and promote trading activities, with the activities undertaken not just among Muslims but with the rest of humanity, Insyaallah. On that note, I wish you a successful conference. Thank you. BIS Review 51/2004  5

In this regard, it gives me much pleasure to officiate at this workshop for the Board of Directors, whose objectives are twofold: i.  to raise the Directors’ awareness about the Bank of Zambia Risk Management Framework; and  ii. by so doing, secure the Directors’ unwavering commitment to embedding risk management culture in the Bank. Going forward, Risk Management Department has lined up similar workshops targeting the various categories of staff ranging from the Executive to unionised staff. The workshops are designed in such a manner that they address both the strategic and practical issues involved in the risk management process. Ladies and Gentlemen It is not my intention to give a long speech, but allow me to urge the Directors to take this workshop seriously, for it is my expectation that at the end of this workshop, Directors will be better placed to not only understand the Bank of Zambia Risk Management Framework fully, but also provide guidance to the Bank on risk management issues. In conclusion, I wish to thank you for finding time from your busy schedules to attend this workshop. I urge you to ask as many questions as you could possibly can, in order to get the best out of it, as well as make the workshop more lively and interactive. With these few remarks, it is now my honour and privilege to declare the workshop officially open. I thank you! BIS Review 119/2006  1
1/4  BIS central bankers' speeches  More will be done if necessary, of course, but the diagnosis that was reached yesterday by the Governing Council is that a little less is necessary today because growth is stronger and Europe is doing better. And to make this quite clear, how much will the ECB disburse in, say, 2017? The decision that was taken yesterday is to extend our asset purchases for a further nine months by buying € billion per month of various financial instruments, which makes an additional € billion euro. That’s the decision: we will add € billion to the € billion per month planned for the first three months of 2017, making € billion, so for the whole of 2017 that comes to slightly less than € billion extra compared with what we are doing already. And since March 2015? Asset purchases today come to around € trillion in total, so if we add 1,500 and 800 it means that, at the end of next year, we’ll be at just over € trillion. Yes, and you realise that with this € trillion growth is good, average, but it’s not stronger. What would happen without this € trillion? Well, without it, if the ECB wasn’t doing what it’s doing, growth would be between 0% and 1%, inflation would be close to zero and unemployment wouldn’t be falling in the euro area. But as you know, unemployment is now falling fairly quickly in the euro area.

In our case, about 46% of women participate in the labor force. Why activity rate of women on the labor market is low? According to a World Bank survey, about half of the inactive women reported that they do not seek employment because of family or caring responsibilities – twice the share of women stating this reason in the EU28. Another economic impact is also visible through the income channel. For example remittances, which are very important source of disposable income in the region including our country, plunged across the board last year. According to the UN study, the decrease was more prominent among women than men; especially among women in rural areas, and among women 35–44 years of age. Although wage data is still not available to see how the COVID crisis has affected this wage gap that existed even in the pre-crisis period, some indicators point out that probably the wage gap has widened throughout this period. For example, in North Macedonia assessment is that the wage gap has hovered throughout the range of 16–20%, which is already large. Apparently, the crisis has hit women and men unevenly, which is a natural consequence of the fact that it did not hit all the sectors equally. It had more pronounced effect on the services, especially services dependent on social interaction, and informal economy where women tend to be presented more. For example, in our country these sectors employ about 27% of all employed women and about 25% of all employed men.
Regarding the monetary policy implementation, the main pillars of the Central Bank’s approach are its transparency, its accountability and its predictability. We, as a Central Bank, always favor a forward-looking approach. Given the increasing importance of its economic presence and close relations with the countries worldwide, it is crucial that Turkey improve its domestic markets to contribute to the efficient allocation of world resources. With this in mind, we will continue to implement structural reforms and our disinflation program to realize robust economic fundamentals. Final thoughts In closing, I would like to comment on what seems to be important in building a more robust and healthy global financial system and the world economy. The ongoing process of globalization, along with the revolution in information technology, is likely to continue in the future. One consequence of this trend is the intensifying competition at the global level. In this context, to benefit from this trend countries all over the world should react positively. The soundness of individual financial systems clearly affects the resilience of the international financial system as a whole. We should devote our efforts towards creating a healthier global environment by minimizing the volatility of international capital flows and the risk of contagion. More effective supervision and surveillance of banking systems is of the greatest importance in today’s international banking environment and the emphasis of the recent supervisory changes has been moving from the “rules-based” method of supervision towards a “risk-focused” supervision.

Conclusion Building the foundations on which Islamic finance has been able to advance forward has been vital to its viability, competitiveness and sustainability in this challenging global financial environment. With its integration into the international financial system, it would strengthen further the global economic and financial inter-linkages and in so doing would open new frontiers towards achieving more balanced global growth and greater shared global prosperity. Thank you. 4  BIS Review 4/2006
Fundamental reforms after the 1990s crisis provided stability This is something which in many respects we can thank the crisis at the beginning of the 1990s for. The Lindbeck Commission, appointed in December 1992, noted that the Swedish crisis of the 1990s was not just a result of an unlucky combination of an international economic downturn, overly generous lending and individual policy errors, but in fact had much deeper roots.1 In their assessment it was to a large extent a “political and institutional crisis”, which exposed weaknesses in the way the political system worked. What they meant by this was that there was an underlying “systemic error” in the Swedish economy – a built-in bias towards systematically overly expansionary economic policy, which meant chronic problems with excessively high inflation, recurring cost crises and growing national debt. The Lindbeck Commission therefore advocated a policy which followed certain predetermined principles, or a “rule-based” policy.2 Several important institutional and structural changes were implemented in connection with the crisis and in the following years to create greater stability and sustainability in economic policy. One of the more comprehensive reforms was that monetary policy was more directly focused on keeping inflation low and stable, instead of, as previously, indirectly by maintaining a fixed exchange rate. Sweden thereby became one of the first countries to adopt inflation targeting. The price stability target was later written into the law and the interest rate decisions were delegated to an independent Executive Board.

Time to start a discussion about the target variable Set against this background, it is my belief that it may again be time to open up a discussion about the target variable. One option, which I personally find appealing and fairly natural, is to face up to the consequences and allow an inflation measure upon which interest rate changes do not have such a direct impact to not only be the “steering” variable but also the target variable. The indices which come to mind first in that case are the CPIF and HICP. One  12  The exact course of the policy rate path is obviously crucial in terms of how much and how long CPI inflation will deviate from CPIF inflation. A policy rate rise implemented more quickly leads, all things being equal, to a greater but briefer deviation than an equally large but more protracted policy rate rise. BIS central bankers’ speeches  5  advantage of the latter index is that it is an internationally comparable measure, but the differences compared with the CPIF are quantitatively not particularly large. It is worth pointing out that this would not lead in practice to any particularly major change in monetary policy. After all, the Riksbank already typically aims for a CPIF inflation rate of around 2 per cent within the forecasting horizon. It is also worth emphasising that the purpose of changing the target variable would not be to make it easier for the Riksbank to hit the inflation target.