samchain/econo-pairs-v1 huggingface dataset:
Our plans for a deposit insurance scheme which will provide a safety net for small depositors in the event of a bank failure - are progressing well. Consultations on the technical details are continuing, and we expect to be able to introduce the necessary legislation in late 2002. The aim of all these measures - and the first duty of any banking regulator - is to maintain and improve the stability and strength of the system as a whole. During these times of difficulty, there is a further impetus to seek, where possible, to alleviate some of the burdens carried by the community, if only for the purpose of safeguarding the asset quality of the banks. A balance needs to be drawn between efficiency, profitability and prudent risk management - which are the essential ingredients of banking stability - and concessions to the individual customer, however desirable these may seem. But banks in Hong Kong have shown that, by balancing the two in an imaginative and sensitive manner, these aims are not incompatible. Banks have, for example, generally been careful so far to ensure, in their setting of fees and charges, that vulnerable groups are not excluded from basic banking services. They have - far more perhaps than has been acknowledged - been both forbearing and constructive in their treatment of mortgage-holders facing difficulties; in particular, they have responded positively to our recent measures to enable them to be more flexible in offering relief to homeowners in negative equity.

Of course, it is not so for any economy, and is still less so for Hong Kong, which is going through structural transformation. The nominal exchange rate is relevant, but more relevant is the real effective exchange rate (REER), which also takes into account the inflation rate and the trade patterns. The REER for the Hong Kong dollar has depreciated by around 13% since the crisis period in 1998. During the same period, the REERs for other Asian currencies have appreciated by various degrees, reflecting both a rebound in nominal exchange rates as well as higher domestic inflation. Hong Kong's competitiveness can also be measured by our economic achievement in terms of real GDP growth over the past few years. Here again the figures show that Hong Kong, with an annual average of around 3% growth in GDP between 1997 and 2000, has not performed badly compared with other economies in the region. And remember, these other economies have had their currencies devalued substantially. The sharp deceleration in growth this year is due mainly to the slowdown in the major industrial economies outside the region, not because of our competitive position, and certainly not because of the strength of our currency. All of us within the region are affected to one degree or another, and some, such as Singapore, Taiwan and Korea, have been badly affected because of their strong dependence on exports of electronics and computer parts. Hong Kong has done rather less badly so far, though we are still slowing down.
In the same way as leaning against the wind with the policy rate can be justified by monetary policy reasons, so too can a policy that leans against the wind with regulations. How, then, would this time-varying application of regulations look in practice? One possibility is to raise the capital adequacy requirement, which would raise the interest rate margin and thus the lending rate. Higher capital adequacy would also lead the banks to increase their buffers and thus improve their resilience to loan losses. Another alternative to increase the interest rate margin would be to require a larger proportion of own funds from borrowers by setting a ceiling for leverage – such as, for example, the ceiling recently proposed by Finanzinspektionen – or amortisation requirements. Raising the requirements for own funds will primarily strengthen borrowers’ buffers against falling prices, even if lower indebtedness will also reduce the banks’ risks. In contrast to capital requirements, the regulations on loanto-value and amortisation requirements mean that it will not only become more expensive but also more difficult to raise loans. This latter suggests that such regulations could be analysed in terms of more explicit supply limits. However, today I have decided to discuss loan-tovalue and amortisation requirements in terms of a “shadow interest rate” in order to illustrate the connection between quantitative regulations and monetary policy. Rather than regulations, an economist may be more used to thinking in terms of Pigovian taxes as regards handling negative external effects.

Remarks at a farewell dinner in honour of Benoît Cœure, member of the ECB Executive Board Speech given by Mark Carney, Governor of the Bank of England  European Central Bank, Frankfurt 17 December 2019  I am grateful to Clare Macallan and James Benford for their assistance in preparing these remarks. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches  Before I begin, I must emphasise that those who might be searching for cryptic central bank signals about future policy will be disappointed. I am speaking in the MPC’s quiet period, and my comments have no bearing whatsoever on the decision the MPC will announce on Thursday. This wonderful evening celebrates an extraordinary individual. There should be, and will be, great joy and immense gratitude. But as with all such occasions there is also the melancholic feeling of an end of an era, the passing of the ancien regime. Certainly, central banks face many challenges:   Markets prone to severe bouts of illiquidity;    A global economy that risks falling into a low growth, low inflation rut caused by deep structural forces, limited policy space, and growing concerns over the fracturing of the global trading system;    Innovations in private payments encroaching on central banks’ very raison d’être, the provision of money; and    A growing climate crisis that will affect every aspect of finance. So it is tempting to ask: Après Benoît le déluge?
Natural disasters tend to depress economic activity initially, but once the recovery and reconstruction efforts get underway in earnest, such disasters actually serve to lift economic activity. Looking beyond the storm effects—which will make interpreting near-term economic data releases more difficult—the economy remains on a trajectory of slightly above-trend growth at 1/7  BIS central bankers' speeches  about 2 percent, and the fundamentals supporting continued expansion are generally quite favorable. Low unemployment, sturdy job gains (recognizing the near-term negative impact of the storms), and rising wages (even at a pace below previous expansions) are lifting personal income. Household wealth has been boosted by rising home and equity prices, and household debt has been growing relatively slowly, contributing to a healthy household balance sheet. Thus, consumer spending should continue to advance in coming quarters. Business fixed investment outlays are also likely to continue to rise. With the supply of labor tightening, there are greater incentives for businesses to invest in labor-saving technologies. Investment spending should also benefit from a better international outlook and the improvement in U.S. trade competitiveness caused by the dollar’s recent weakness. The softer dollar and solid growth abroad also suggest that the trade sector will no longer be a significant drag on economic growth. Turning to the outlook for inflation, I have been surprised by the persistence of the shortfall from the FOMC’s 2 percent long-run objective.

There is a natural demand for good banking services in all countries and if you, the authorities and policy-makers, set up a reasonable framework for banking, I am convinced that you will soon see applications for new banks or for existing banks to change their structures, activities or mode of operations. In achieving an efficient banking system, the authorities are faced by a number of questions: What is the optimal number of banks? In modernising a banking system you would like to have a “reasonable number” of banks – not too few but not too many. In many countries the lifting of the old and restrictive regulations leads to an influx of a large number of mostly small “family-owned” banks but many of these tend to have overoptimistic plans for their activities and are closed rather soon leading to consolidation of the banking sector. Some depositors and other counterparties could suffer losses from dealing with these banks. Are such events necessary steps in the development or could they be avoided? In my experience, some countries after scrapping their old regulations became ultraliberals and provided licenses for banking on too lenient grounds. They did not properly evaluate the prospects for the banks to conduct profitable business in a competitive environment and they set the requirement for basic minimum capital far too low. But having said that I would warn against doing the opposite – to let the authorities decide how many banks there ought to be and then distribute a fixed number of licenses.
But if there are cross-border banks that operate in all parts of the union, they can offset any losses made in the recession-hit region with gains in another, and can continue to provide credit to sound borrowers. In the US, both credit and capital market integration have played an increasingly important role in smoothing local shocks over the past decades.13 For example, following the oil price collapse in the mid-1980s, almost every bank in Texas failed, creating a state-wide credit crunch. One reason for this was that out-of-state banks were banned from the Texas market, so the balance sheets of local banks were completely concentrated on their home state.14 But since then there has been major integration in the retail banking sector, with the number of multi-state banks increasing from around 100 in the early 1990s to more than 700 today. 15 This has significantly weakened the relationship between local capital and local credit supply. 16 And as a result, the volatility of business cycle shocks among US states has become smaller.17 Overall, it is estimated that around 70% of local shocks are smoothed through financial markets in the US, with capital markets absorbing around 45% and credit markets 25%. In the euro area, by contrast, the total figure is just 25%.18 Private risk-sharing of course has its limits. Faced with large common shocks that affect the whole monetary union, the benefits of diversification can break down, as happened to some extent in the US during the crisis.

I will focus on how these principles can be put into practice, first through how regulation can address new risks, and then how central banks can foster innovation, with the example of central bank digital currencies. I. New risks, new rules? No corner of the financial system is left untouched by digital technologies, a look at the agenda of this Fintech Festival tells it all: payments, decentralized finance and open banking, crypto-assets, central bank digital currency, quantum computing, etc… These technologies bring competitive pressure and such innovative pressure is healthy: it challenges inefficiencies, helps improving services, brings down costs. Fintechs are key players in the modernisation of the financial sector and I expect banks in particular to seize more systematically the opportunity to participate to this transformation. Can I quote Joseph Schumpeter? He wrote that “most of the creations of the intellect or fancy pass away for good after a time that varies between an after-dinner hour and a generation. Some, however, do not.” Fintech has clearly made it pass the after-dinner hour; it is getting close to the generation mark. I am convinced central banks are instrumental in making sure digital innovation can bring long-lasting benefits. Here, the emergence of decentralised finance raises new challenges for usual regulatory frameworks. Left unchecked, it could result in increased volatility, lack of traceability or clear accountability, concentration risk on certain technical infrastructures, insufficient customer and investor protection, to name a few.
In particular, a recent report by Lord Grabiner indicated concern that the Bank’s systems and controls have not always kept pace with the changing role of the Bank. Today we are publishing the results of a thorough Review 11 of our MI function. From it I would highlight three key points that will remove some unconstructive ambiguities around the gathering of MI: •  First the Bank has published a “Market Intelligence Charter” which explains in clear language the terms of the Bank’s engagement with market participants, and its rationale for gathering MI. •  Second the Bank is strengthening the set of policies (including escalation, recording and compliance policies) that govern MI, and expanding the training accompanying those policies. •  Third, the Bank will establish a Bankwide executive level committee to oversee and agree the priorities for the Bank’s MI programme to ensure it retains flexibility, focus, and relevance to the policy challenges of today and tomorrow. In addition, a dedicated MI Division will co-ordinate, synthesise and disseminate MI around the bank. The ability of the Bank’s MI function to provide information to senior policymakers over the past 8 years, as the first waves of the crisis first rushed onto the Bank’s doorstep, and then as solutions flowed back out across the system, has been vital to our effectiveness. The staff who do this work are a credit to the institution.

The key point is that even though interest rates had been the marginal tool of monetary policy for several decades, monetary policymakers never forgot that this was only one manifestation of the central bank’s unique ability to create narrow money. And when the effective lower bound was reached, stimulus could continue to be provided by expanding central banks’ balance sheets in new ways. Someone recently said to me that Quantitative Easing (QE) is “like magic,” as if central bankers are sorcerers with the capacity to conjure up economic miracles. I wish. In fact QE works through the more prosaic channels of reducing longer-term interest rates in the  1  2  Bagehot (1873). BIS central bankers’ speeches  economy, and encouraging private sector investment in riskier assets by reducing the supply of long-duration government bonds, a phenomenon we call portfolio rebalancing. But the underlying point that the effect of this new monetary policy tool is less intuitively understood is well taken. That makes effective communication and accountability important to monetary policy and indeed all central bank policies. These points were made very clear by Kevin Warsh’s recent review of transparency and the MPC. As a result, this August the MPC will begin publishing the minutes of its policy meetings and the Inflation Report at the same time as its policy decisions, giving markets and the public a clearer understanding of what underlies the judgements we make.
Ardian Fullani: Imagine the future – for a better economic cooperation. Economic chamber’s and bank’s responsibilities Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the 10th Vienna Economic Forum, Vienna, 7 May 2014. *  *  *  Dear Ladies and Gentlemen, Dear colleagues and participants of the Vienna Economic Forum, I am honoured and delighted to return and speak to such a constructive and important economic forum, discussing with you the economic development topics, which affect the present and the future of our economies. The topic of this forum is very important for the economies of the South East Europe. It creates the proper environment, which enables the examination of the problems faced by our economies during the crises. We can certainly draw few lessons from what we have learned during the recent years, following the global economic and financial crises. These discussions and the harmonization of economic policies will help us to project a strong coordinated economic structure for the long term future of our economies. It is particularly important to converge here in Vienna and discus the cooperation issue because one of the obvious outcomes (lessons) of the developments during the recent years is that the economic developments in particular for small open economies of the South East European region, are not local or regional anymore. Just like the flu, it is rather unexceptional and highly transmittable from one economy to the other, from one sector of the economy to the other.

Peter Praet: It is urgent to agree on an ambitious timetable for completing the Banking Union Contribution of Mr Peter Praet, Member of the Executive Board of the European Central Bank, for the magazine of the Eurofi conference in Malta (5-7 April 2017), 4 April 2017. * * * In less than half a decade, the EU moved from decentralized banking supervision and resolution to the Single Supervisory Mechanism and the Single Resolution Mechanism, based on the Single Rulebook. This is part of an overarching effort to create a sound institutional framework for financial integration in Europe. There still are a number of legal, institutional and political problems to overcome before a European bank can operate in the Banking Union as it operates in its domestic market. Several dimensions need to be taken into account in institutional design. First, private risksharing. The financial system is a private risk sharing device, but we have learned the lessons from the financial crisis in terms of budgetary costs, when excessive risk-taking by the private sector was eventually borne by the public sector. Not to revert to the old world of implicit government guarantees for risky behaviour of financial institutions entails making banks equally liable across countries for the amount of risk they want to take into their respective balance sheet. The general principle of the new European rules such as the Bank Recovery and Resolution Directive is to absorb bank losses by bailing-in shareholders and uninsured creditors.
Currently, the leading candidate is so-called Contingent Capital bonds (CoCos), which convert from debt into equity in certain states of the world. It seems to me that to serve the purpose of GLAC for large and complex firms, such instruments would need to convert when a firm was still fundamentally sound, which is to say that they should have high capital triggers. For a large and complex firm, a low capital trigger would be dangerous, as funders and counterparties would be likely to flee before reaching the point at which the firm would be recapitalised through the CoCos’ conversion. Moreover, high-trigger CoCos would presumably get converted not infrequently which, in terms of reducing myopia in capital markets, would have the merit of reminding holders and issuers about risks in banking. BIS central bankers’ speeches  5  “Macroprudential” and the Financial Policy Committee Bringing this together, policies on trading-book capital requirements, loss-absorbing capacity, resolution and shadow banking can all contribute towards addressing the stability-threatening problems of myopia identified in the literature. And the higher effective capital requirements that this package can deliver might potentially affect incentives by exposing debtholders to risk; and, via reducing return on equity, by harnessing the energies of shareholders in monitoring the terms of distributions to managers. In that sense, quite technical things might have significant effects over time on behaviour and the structure of the financial system. That assumes that lessons from this crisis endure.

In 2006 the fiscal deficit ratio dropped below the 3% reference value for the first time in several years, with the structural balance net of temporary measures shedding around 3.7 percentage points since 2003. The debt ratio also trended downwards and is expected to fall below the 60% limit by 2009. As the base effect of the energy price hikes started to abate, moreover, the HICP inflation rate has stayed below the EU reference value since last November. Meanwhile, the Maltese lira continued to trade at the central parity rate against the euro in ERM II and the long-term interest rate converged further towards the reference value. As for the economic recovery, although this partly reflects stronger demand in Malta’s main trading partners, it also owes something to the reforms implemented in recent years. These included measures aimed at increasing participation in the labour market and improving its functioning. School curricula have been modified and training opportunities broadened. There has also been heavy investment in ICT infrastructure and education, as well as better targeted financial and technical support to SMEs, including a privately-managed venture capital institution. On the fiscal front, steps have been taken to reform the pension system and to avoid abuse of the social benefit system and tax evasion. In some areas, however, the pace of reform has been modest and the Central Bank of Malta has repeatedly called for the remaining weaknesses to be addressed.
However, in acknowledging this growth and the important contribution of mobile banking to extending financial services to the poor, consumer protection should be taken as an integral component of any business model that is developed. To this end, the Bank of Zambia working with other key stakeholders such as the Communications Authority will play its role in ensuring that the provision of an enabling regulatory environment is carefully balanced with the need to protect consumers. Mr. Chairman, the Celpay conference on mobile banking could not have come at a more opportune time when the country is facing numerous challenges arising from the impact of the recent financial and economic crisis. Due to the underperformance of various sectors of the economy during the period of the crisis, provision of financial services was somehow curtailed while non-performing loans has been on the rise. In order to ameliorate the effects of this downturn and further improve financial inclusion, it is imperative to develop cost effective innovative products such as mobile banking. It is therefore expected that this conference will come up with solutions that will enhance the extension of banking services to the poor and at affordable rates. Ladies and Gentlemen, recent statistics on telecommunications indicate that there are about three million subscribers across the three mobile networks currently licensed to operate in Zambia. This extensive coverage obviously offers a great opportunity to enhance the standards of living of our people.

As we embrace mobile banking, the primary objective of Zambia’s mobile banking framework should be to empower the millions of citizens who do not have access to conventional banking. The essential spirit of mobile banking should be financial inclusion. In this regard, facilitating mobile banking will contribute to the distribution of resources to productive activities such as farming as well as directing resources to areas where there are most needed. In addition the policy framework should be flexible enough to allow the industry players to explore various business models. To this end the National Payment Systems Act of 2007 has provided a platform for businesses involved in mobile banking and money transmission to be designated. The need for effective regulation to ensure a stable financial sector and protection of consumers is vital. Nevertheless, regulation should facilitate and not impede development and must create an optimal, dynamic and agile banking environment. As Regulators we must therefore be open minded to new market solutions while the developers need to constantly engage the regulator in their product development. In stressing the need for effective regulation, I must emphasise the need for providers to observe the mandate and requirements of their licences. Mobile services providers must not perform banking services as this is the domain of licensed banks. Finally, I also wish to stress that mobile service providers and mobile banking solutions developers need to have in place robust business continuity plans that will ensure minimum disruption to services in the event of disasters.