samchain/econo-pairs-v1 huggingface dataset:
Specifically, we announced that we do not intend to raise Bank Rate at least until the unemployment rate falls to 7%, provided there are no material threats to either price or financial stability.1 All nine MPC members agreed to set monetary policy in future according to this framework of forward guidance. That does not mean Bank Rate will automatically rise when unemployment falls to 7%. Nor is 7% a target for the unemployment rate – it should ultimately fall well below that level. Before the Great Recession, the UK’s unemployment rate stood at just over 5%. The 7% threshold is instead a staging post along the road to recovery. When unemployment reaches 7% the MPC will reassess the state of the economy and the appropriate stance of monetary policy. Our forward guidance provides you with certainty that interest rates will not rise too soon. Exactly how long they stay low will depend on the progress of the recovery and in particular how quickly unemployment comes down. What matters is that rates won’t go up until jobs and incomes are really growing. The knowledge that interest rates will stay low until the recovery is well established should give greater confidence to households to spend responsibly and businesses to invest wisely. It may seem that unemployment doesn’t have far to fall, from the current 7.8% to the 7% threshold. The MPC’s central view, though, is that this could take some time – for three reasons.

The important thing to recognise is that we now have tools other than interest rates that can be used to contain risks in the property and financial sectors. These so-called macroprudential tools were not available to us before the crisis and we are now fully prepared to deploy them if that were needed. The Bank of England is now in a position, for example, to supervise lending to specific sectors more intensively, to make recommendations to banks and building societies to restrict the terms on which new credit is provided, or even to raise capital requirements on mortgage or other types of lending. 6  In June 2013 the Financial Policy Committee concluded that there was scope for banks to reduce their holdings of liquid assets in the near term, and recommended a relaxation in liquidity requirements in order to strike the appropriate balance between achieving resilience and reducing possible impediments to the supply of credit to the economy. That relaxation was subject both to banks meeting the minimum capital threshold, and to additional firm-specific considerations. Today the Prudential Regulation Authority (PRA) has agreed with that recommendation, and is announcing how it will be implemented. The PRA will be making a more detailed statement today and writing to individual firms in due course. 6  BIS central bankers’ speeches  Having these in our toolkit – and if necessary using them – will help us to keep interest rates low to secure recovery without creating risks that make that recovery ultimately unsustainable.
35  All speeches are available online at www.bankofengland.co.uk/speeches  35  Chart 14: Adoption rates of basic ICT technologies Percentage of companies 45 2002  40  2007  35  2015  30 25 20 15 10 5 0 0-1  2  3  4  5  Number of technologies adopted Sources: ONS Research Databases and Bank calculations. Notes: Basic ICT technologies refer to computers, internet, websites, e-purchases and e-sales. Chart 15: Adoption rates of advanced ICT technologies  Percentage of companies  40 35  2011  30  2015  25 20 15 10 5 0  0  1  2  3  4  5  6  Number of technologies adopted Sources: ONS Research Databases and Bank calculations. Notes: Advanced ICT technologies refer to: mobile access to emails, documents and software, websites with online ordering, fast broadband access and electronic data interchange sales. 36  All speeches are available online at www.bankofengland.co.uk/speeches  36  Chart 16: Employee usage of computers Density  0.03  2002 0.025  2008 2015  0.02 0.015 0.01 0.005 0  0  10  20  30  40  50  60  70  80  90  100  Percentage of employees using computers Sources: ONS Research Databases and Bank calculations.

The enhanced disclosure rules in turn aim to encourage the effective exercise of market discipline through increased provision of information. Our approach to third country branches will aim to ensure that they are operating to standards that give branch policyholders an equivalent level of protection to policyholders of an EEA-headquartered undertaking. The three pillars of Solvency II not only provide a robust foundation to support the safety, soundness and resilience of individual insurers, but also in turn support stability in the system. The financial services sector is more interconnected than ever before. Risks to the financial system can affect all firms; we therefore need to ensure that our analysis is rigorous not just within sectors but at a cross-sectoral level. With a number of mixed financial groups undertaking insurance, banking, asset management and any number of other activities in BIS central bankers’ speeches  1  multiple locations across continents, it is vital for firms and regulators alike to understand the interconnections and dependencies not only between different firms but within them as well. This is just one reason why it is so crucial to get the new regime right. The introduction of consolidated group supervision under Solvency II will ensure supervisors and firms have greater clarity in their overall view of group business, and are able to recognise and therefore manage risks that would not otherwise be visible.
The second issue concerning resolution I want to say something about is the allocation of losses to creditors and to the official sector from support operations. The formal position varies between support for insured deposits and for other creditors. Deposit insurance, and risk-based premia Insured deposits are, of course, insured. It is often assumed that governments stand behind such schemes. But governments do not have pick up the final tab. Such schemes are ultimately paid for by the banks themselves. Whether schemes are funded or not, governments have a legal right to make recoveries from the residual banking industry over the succeeding years. There is, still, a question of the basis of the levy. This arises most clearly in a system which guarantees 100% repayment up to some meaningful amount (now £ in the UK). While it has many merits, complete cover affects the dynamics of the market place in a potentially unhelpful way. It makes it easier for banks to pay up for deposits. The implied signal that a bank offering a high return would be taking greater risk than others, as it would have to, does not matter to the depositors. They are covered, and so are induced to place their money wherever they can achieve the best returns. That is a recipe for imprudent risk taking. One possible way of addressing it would be to make such risk-taking banks pay a higher levy into the insurance scheme.

•  In lending against a wide class of collateral, the central bank must apply appropriate haircuts, and must be capable of valuing the assets and of managing them in the event of a counterparty default. Our haircuts are published and include various addons for particular risks. And the underlying assets accepted as collateral should have a viable underlying market. BIS Review 144/2009  1  •  As a means of effecting the delivery of insurance, secured loans (repo or collateral swaps) are preferable in most circumstances to outright purchases, as during the life of a loan central banks can update the value of the security, the collateral margins and other terms that control the risk to them. •  Such lending against wider collateral should routinely be for sufficiently long maturities to help forestall panic by avoiding rollover risk for the firms without exposing central banks to risk by tying them in for unduly long periods. •  Permanent facilities providing bilateral liquidity insurance should routinely be made available only to commercial banks (and other authorised deposit takers). They unavoidably need such insurance because their deposit liabilities are money, giving them a vital role, as monetary institutions, in the economy and financial system. •  But such public facilities should not be available to banks where in the judgment of the central bank there are serious question-marks over their viability or solvency. (As I shall discuss later, that need not exhaust our menu for providing liquidity to individual firms in support operations.
The third step is the resolution of banks, applied by the Bank of Albania in view of the new mandate. Similar to recovery plans, the resolution plans drafted by the Bank of Albania aim to identify the legal and structural obstacles and difficulties with financial resources that banks face, toward resolvability. In this regard, the resolution plans are one of the key instruments to facilitate the Bank of Albania’s resolution implementation. This year in April, the Bank of Albania approved a bylaw that defines the content of resolution plans. Then banks were required to report a broad set of data for drafting these plans, based on the model of the European Banking Authority and we are currently in the process of drafting them. The drafting of the banks resolution plans is complicated, which includes complex and cross-border issues that must be implemented and coordinated within a short period of time. Hence, the resolution planning is an on-going process and a long-term mission to remove obstacles against the possibility for resolution action in banks. This planning does not mean drafting an annual plan that is stored somewhere in some shelf and it is dusted off only when its implementation is necessary; instead, it is the beginning of a long process of restructuring all aspects of the banking business that may hinder this process.

In most countries central banks play an important role in financial stability. Because of their monetary policy function, central banks have an indepth knowledge of the financial system. They are independent anchors for monetary stability. They also have a clear interest in financial stability because of its beneficial impact on the macroeconomic environment. And, last but not least, central banks are the ultimate source of liquidity. For all these reasons, central banks often have an explicit mandate in the area of financial stability. But typically this mandate is formulated in very general terms, and it would have been written before growing recognition of the key role of macro-prudential oversight. Financial stability is not and cannot be exclusively an issue for central banks, namely the ECB and the European System of Central Banks. It must be shared with micro-prudential supervisors. They have a key role, because stable institutions are an essential and necessary condition for achieving financial stability. This is also the reason why the ESRB and the ESAs will form together a European System of Financial Supervision (ESFS). So in the analysis of systemic risk, the three ESAs will also have an important role to play, both on their own and within the ESRB. In collaboration with the ESRB, they will develop a set of indicators to identify and measure systemic risk. On their own, they will further draw up guidelines and recommendations for individual financial institutions to take account of the systemic risk they pose.
So is it fear of stigma about breaching buffers, or is it precautionary capital raising in the face of uncertainty and/or concerns about capacity to rebuild depleted capital? For the UK, we can disentangle these effects in two ways. First, unlike some other studies, the Bank team’s analysis controls both for banks entering the pandemic with differing levels of headroom to minimum requirements, and for the profitability of banks when entering the crisis. Each of these should go some way to mitigating this concern. Second, the stress tests run by the Bank in May 2020 projected major UK banks’ CET1 ratios to fall but remain well in excess of minimum capital requirements. And, ‘reverse stress tests’ carried out by the FPC in August 2020 showed that the economic outcome from Covid-19 would need to be much worse than the central projection in order for it to deplete regulatory capital buffers.21 So while uncertainty was high, banks appeared resilient against scenarios that were materially more adverse. Moreover, the empirical results reported under the second approach on the value of releasing the CCyB, both from the UK and abroad, should not be affected by this challenge as this action converts a regulatory buffer into a management buffer. This would not have altered banks’ concerns about breaching minimum requirements. Taken together, these all point more to fear of stigma from breaching regulatory buffers being the main driving factor. Policy implications Effective regulators are forward looking, looking ahead to the next crisis.

3  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  3  preliminary lessons learned earlier this month.4 Also this month, the Financial Stability Board submitted an interim report to the G20 on lessons learned for the financial system as a whole.5 A major lesson that has emerged so far is that the banking system has remained resilient through the Covid19 pandemic while continuing to provide credit to the real economy. This is, in part, due to the substantial increases in capital and liquidity held by banks as a result of the adoption of the post-Global Financial Crisis reforms, and represents a major vindication of those reforms. If I can use the analogy of a fire, one did break out in the banking system following the onset of the pandemic, but because the locus was well fire-proofed – with capital and liquidity – and because both the monetary and fiscal firefighters were alert and acted quickly and decisively, the fire was put out before it could take hold. But it was not obvious that this would have been the case at the outset. In particular, it was by no means certain that the regulatory capital buffers built up ex ante by banks as a result of those reforms, and designed to allow them to lend to the real economy whilst absorbing losses, would actually be used in that way.
The way you will monitor and communicate information to the public is very important. In this context, I would like to underline that the Bank of Albania shall be very open to assist. To this aim, we have recently made the Bank communication office functional, thereby meeting one of short-term FSAP recommendations. I avail myself to this occasion to stress that our immediate plans are to provide a more contemporary communication approach, in particular in the context of preparing and launching educational and training packages, targeting different interest groups. From the moment we were acknowledged to FSAP recommendations, our institution started listing them by priority and by institutional right. As also monitored by you, we broadly discussed in the Forum organized in the first days of December the issue of establishing a Monetary Policy Committee. With regard to banking market developments, the Bank of Albania sticks to its engagements to augmenting the opportunities of commercial banks in the securities market. In more concrete terms, starting from September the Bank of Albania charged a fee for the operations carried out in its windows, and in early December the two-level securities register was placed into function. Pursuant to FSAP recommendation and with a view to enhancing daily liquidity management, the intra-credit regulatory basis was amended. The new bill “On Banks in the Republic of Albania” is complete and ready to be presented to banks for discussion.

Of great interest in any survey of its role in nation-building is Bank Negara’s promotion of forms of financial intermediation that are of special relevance to Malaysia's needs and culture. The Bank has been a pioneer in the promotion of microfinance, and a leading participant in the national agenda to promote a strong SME sector. Considerable funding and expertise have been devoted to these activities in recent years, with the result that the share of SME financing in total business financing has increased from 31% in 2000 to 44% in 2007. The experience and networks established in this field have been of great value in the Government's efforts to mitigate the effects of the current global financial crisis, which have included the recent launch of a substantial Micro  BIS Review 12/2009  1  Enterprise Fund. Like many other economies in this region, Malaysia is a land of small businesses, but the attention that has, during years of stability, been given to strengthening channels of finance to the smallest of enterprises offers lessons for all economies at this time of pervasive credit crisis. Bank Negara has also taken a prominent part in the development and advocacy of Islamic finance, which has seen rapid growth in the country since 2003, with annual growth rates in Islamic banking assets and insurance assets approaching 20%, and Malaysia now accounting for about 70% of all global sukuk issues. Islamic finance is increasingly recognised as an important alternative channel of financial intermediation, and not only within primarily Islamic communities.
A first report will be presented by summer 2021 to the Governing Council,  which will then decide whether to extend the analytical work by carrying out an investigatory phase. In the end, the challenge is to determine whether and in what way a central bank digital euro is necessary. Key areas of analysis include a consideration of ways to prevent a digital euro from leading to excessive conversion of bank deposits into CBDC, which could disrupt bank 3/4  BIS central bankers' speeches  refinancing and banks’ capacity to lend to the real economy, in turn destabilising the financial system and financing of the economy. A report published by the Bank for International Settlements and seven central banks in October 2020 stressed that three foundational  principles must govern any CBDC-related decisions: do not compromise overarching public policy objectives such as monetary and financial stability; organise coexistence with other forms of public and private money; and promote innovation and efficiency in the financial system. If the decision were taken to introduce a central bank digital euro, this currency would also have to help to strengthen the sovereignty and competitiveness of the European payment market, while interacting smoothly with EPI. Finally, we believe there is a form of continuity between a retail CBDC and an interbank CBDC: logically, a retail digital euro should be able to rely on a CBDC for interbank settlement purposes to support optimal circulation.

I will begin by highlighting the challenges raised by the accelerated digital transition of our payment system, seen from the perspective of an authority tasked with safeguarding monetary and financial stability (1), before going on to discuss how we at the Banque de France are playing our part in tackling these challenges (2). I/ Challenges Major innovation in the field of payments has clearly accompanied the increasing digitalisation of the ways in which we consume and behave, fuelling the emergence of a dynamic and enhanced new ecosystem. As I see it, this raises three types of challenges for the safety and efficiency of our payment system. A. Ensure that the rise of “decentralised finance” contributes positively to the safety and efficiency of our payment system When I say decentralised finance, I am talking about the new trend towards the tokenisation of financial assets, such as the creation of new tradable assets associated with new rights, for instance utility tokens, and the development of crypto-assets. These offer opportunities to improve our payment systems and solutions, particularly for cross-border payments, but also for securities issuance and settlement systems. They could also help to expand the array of financing tools available to businesses. But they also pose risks that could undermine the efficiency and safety of these systems. These risks must be mitigated and controlled.
A reduced correlation – or even a lack of it – could simply be a consequence of the effective monetary policies of central banks which have succeeded in anchoring inflation expectations to price stability. 11 Direct effect of globalisation on domestic inflation The two more direct effects of globalisation on world and domestic inflation dynamics have been more visible but have partly offset each other, and the relative impact may be changing over time. On the one hand, raw materials and basic commodities, notably oil and other sources of energy, have become scarcer relative to world demand, leading to substantial upward pressure on prices. [see Chart 1] For example, Brent crude oil prices have increased almost tenfold over the last nine years, reflecting to a very large extent the impact of rising demand, especially in emerging market economies [see Chart 2], although supply-side factors have also played a role during some periods. On the other hand, the integration of a large reserve of low-cost, skilled labour in the international economy and the increasing production of manufactured goods in emerging market economies have put downward pressure on import prices of manufactured goods as well as on wage demands in industrial economies. As a consequence, the prices of a wide range of manufactured goods have been declining since 2000. This is reflected in the unit value of imports of manufactured products in the euro area, which in mid-2007 was virtually at the same level as in 2000.

Gent Sejko: Do crises change economic fundamentals in SEE Speech by Mr Gent Sejko, Governor of the Bank of Albania, at the Conference “Do crises change economic fundamentals in SEE?”, hosted by the Bank of Albania, organised in cooperation with the South East European Studies at Oxford, Tirana, 30 October 2015. *  *  *  Your Excellency Prime Minister, Dear Governor Hamza and senior central bank representatives, Your excellencies ambassadors, Dear guests, friends and colleagues, I am delighted to welcome you to the annual conference of the Bank of Albania organised in cooperation with the South East Europe Studies at Oxford. It is a pleasure to see that this cooperation brings together old and new partners. This has been a tough year full of challenges for the Albanian economy, consequently for the work of the Bank of Albania. The full recovery of economic growth and its further improvement in the future are and remain one of the top priorities of our work for the year. The prolonged crisis has impelled us and homologous institutions across the world to review many of the economic axioms, which we had taken for granted for a long time. It is not by accident that the main topic of the conference focuses on the causality and solutions for long-term problems we are facing during this period. Over the five year period, the Albanian economy has been growing in positive territory, yet, below its potential.