samchain/econo-pairs-v1 huggingface dataset:
Around the same time, Queen Elizabeth granted a monopoly on the writing of assurance policies to Richard Candeler, who led the newly-created Office of Assurances. The Office introduced a system of fees – with the Office receiving a fixed percentage per £ insured 8 – for the production of physical written policies. Both through the creation of the Office and Court of Assurances, and the receipt of customs duties from insurers, the Privy Council in the 16th century – as approved by the monarch – cemented the role of the state in exercising a judicial function and creating an environment of policy registration and anti-fraud conducive to commerce. So, as I see it, this first phase of engagement between the British state and the insurance sector was effectively a trade: dispute resolution services were provided by the state, and insurers contributed some revenue to it in return. Indeed, in the early stages this revenue went directly to Candeler himself. Despite the tight state controls around who could write insurance, the nature of risks being underwritten was granted little oversight – so much so that, for many, the practice of insurance became synonymous with gambling in the 18th century. Perhaps – and I say this with some trepidation here at Lloyd’s – some of the most egregious examples of such behaviour were evident in the marine market. By this point, London had emerged as a centre of excellence in marine risks, due partly to its strategic location on famous shipping routes.

In addition, the industry itself has failed to co-operate to enable it handle mega risks and stop the externalisation of insurance funds. Unlike the Bankers Association of Zambia (BAZ), whose existence and strength is cemented by the banks themselves, the insurance industry has a very loose arrangement about how it should promote a common front. There is neither a written nor binding memorandum of understanding among the insurance companies to foster cooperation on some of the thorny issues confronting the insurance industry today! However, I must acknowledge here, that there is an organisation called the Insurers Association of Zambia (IAZ), whose membership is compulsory but which may not be very strong in guiding its membership. BIS Review 74/2004  1  Ladies and Gentlemen, from my observation, the insurance and pension industry in Zambia is facing many challenges. These include: 1)  Amendments to the Insurance Act of 1997 and the Pension Schemes Regulation Act of 1996 so that laws and regulations that impose stricter corporate governance practices and structures in all institutions managing pension and insurance funds are introduced;  2)  The Investment Act must be harmonised with the Insurance/Pensions Acts in such a way that all insurance companies formed or already formed must have local ownership/equity partnership. This would greatly contribute to minimising capital flight and huge repatriation of dividends;  3)  Need for the establishment of a national re-insurance company to avoid capital flight;  4)  Insurance companies need to harmonise their operations so that clients benefit from fair competition.
If monetary policy were to need to be more expansionary we can extend the purchases of government bonds, or cut the repo rate further and lower the repo-rate path. We also have the possibility of introducing a programme of loans aimed at companies similar to the ECB’s TLTRO or the Bank of England’s “Funding for Lending Scheme”. Moreover, we can intervene on the foreign exchange market. How do complementary monetary policy measures work? Regardless of which measure one chooses, the effects of complementary monetary policy can be divided into two main lines; one is that they contribute to reducing interest rates in general and the other that they increase the amount of money in the economy. The purchases of government bonds reduce the supply available in the market, which leads to an increase in the price and a decrease in the yield. When government bond yields fall, investors find it more attractive to seek higher-risk assets, which pushes down interest rates and raises prices there, too. This is usually called the portfolio balance channel. When the price of the assets rises, the wealth of those who own the assets also increases, which contributes to stimulating consumption and investment. More liquidity among the banks may also lead to increased lending. All in all, complementary monetary policy thus functions in roughly the same way as normal repo-rate cuts.

Having said that, I would still venture to identify the root cause of the Global Financial Crisis. In so doing, it is inevitable that one has to simplify and generalise matters considerably so as to draw some conclusions. 2. In my view, regardless of the causes of the global imbalances, both the Global Financial Crisis in 2008 and the current European sovereign debt crisis have been driven by excessive leverage in private and public sectors alike in the major industrial economies, resulting in dangerously high levels of debts. In 1980, the average debt level of the 18 major industrial economies was at 165% of GDP. In 2010, the ratio rose drastically to 320% of GDP. In the US, the debt-to-GDP ratio remained stable at 150% from mid-1950s to early 1980s, but the ratio rose sharply and steadily to slightly under 300% in 2010. 3. Why did households, companies and governments borrow so much more than before in the past decade or two? Some put the blame on financial innovation, such as securitisation, which made it much easier to obtain finance or gearing. Some suggest that declining real interest rates in the US and other major economies since the 1990s have increased the ease and affordability of debts and leverage. Some others believed that the Great Moderation beginning in the mid-1980s has nurtured a euphoric view that economic prosperity, job security, income growth and continued rise in asset prices could be taken for granted.
The Latin American debt crisis in the 1980s, the Mexican crisis in 1995 and the turbulence that started in Asia in the autumn of 1997 are some examples of the financial crises in recent decades. While the circumstances behind the various crises differed, they did have certain features in common. The extensive problems have usually arisen out of a combination of inadequate credit assessments by lenders and investors and shortcomings in economic policy. In an initial phase, credit stocks have risen rapidly in connection with hopes of a high return and the perception of low risks, partly because investors trusted the financial system and the regulatory apparatus. A characteristic example is the developing countries that were transformed in the 1990s into emerging markets—the risks seemed to be virtually non-existent. When the inflow of credit reduced interest rate differentials with the rest of the world, this strengthened the notion that investment in these countries carried relatively small risks. Exchange rate policy often contributed to the problem. Investors and creditors expected exchange rates to remain fixed. Cross-country interest rate spreads encouraged the use of foreign-currency loans for investment in domestic assets, often without matching the maturities of assets and liabilities. The countries’ central banks were expected to carry the exchange risk and convert at the predetermined rate. At some stage, however, there has been a reappraisal. Signs that the economies were less robust than expected have led to a sudden change in the perception of risk.

The second condition may be even more stringent. Ultimately, what makes a reserve currency is the ability to serve unconditionally as a store of value. The country must therefore develop deep, liquid and unfettered financial markets. It also entails an ability to offer “benchmark” safe assets that keep their value in all circumstances, and may serve as vehicles for reserve accumulation. Typically, only government debt will be used as a reserve asset. So, being a reserve currency also means that “foreigners” will permanently hold a large part of Government debt and their judgment will ultimately prevail as to the true solvency of the Government. Being a reserve currency therefore implies constraints as much as it brings benefits. That may be the reason why countries, including China, would proceed cautiously on the road towards full reserve currency status. There is a distinction between being a reserve currency, on the one hand, and a global currency, on the other. The first concept refers to the currency as a store of value; the second may concern only its role as a medium of exchange. These are two different attributes. A currency may be widely used in transactions without being considered for reserve accumulation. This distinction maybe relevant when looking at the composition of the special drawing rights (SDR). As you know, this is the “basket currency” that serves as a unit of account for the IMF and, to a limited extent, as medium of exchange between its member countries.
In order to reduce the intermediation costs of the banking system and provide additional support to core liabilities, we raised the remuneration rates on TL required reserves by 50 basis points each month in September, October and December 2015. Additionally, we made some adjustments to the coverage of reserve requirements on 9 January 2016. Accordingly, some funds at participation and investment banks were made subject to reserve requirements and the coverage of non-core liabilities was expanded. BIS central bankers’ speeches  3  Chart 7. Maturities of Non-Deposit Liabilities (Percent)  Chart 8. ROM Reserves, FX Deposit Facility and External FX Liabilities of the Banking Sector Due in 1 Year (Billion USD)  Source: CBRT. Source: CBRT. In the road map released in August, we also included some measures to enhance the flexibility of the foreign exchange liquidity management. To this end, we hiked the transaction limits for banks at the CBRT Foreign Exchange and Banknotes Markets on 1 September 2015. Consequently, the sum of FX deposit limits allocated to banks and gold and foreign exchange assets held at the CBRT under the reserve option mechanism (ROM) reached a level that is considerably above the external debt payments of banks which are due within one year (Chart 8). Moreover, in the “Monetary and Exchange Rate Policy for 2016”, we announced further steps to strengthen the stabilizing feature of the ROM. All these measures taken in line with the road map have increased Turkey’s resilience against global volatility.

However, this analysis does not give the Governing Council of the European Central Bank cause to worry excessively about the debt servicing costs of the whole euro area or its member states. Instead of monetary policy interest rates, the debt servicing costs of countries are still primarily influenced by the credibility of their fiscal policies – this is also reflected by the very different interest rates of public debts within the euro area. The government bond purchase programme that started last spring may understandably cause concern regarding the goals of central banks. However, that step had a specific goal, which was related to the situation in the financial market and not to fiscal policy. Central banks are not allowed to finance the state budget and no such financing has occurred within the Eurosystem during the crisis. It must also be emphasised that the liquidity provided to the markets as a result of these purchases has been eliminated by opposite transactions throughout the entire period. This also indicates that the euro area’s central banks regard the key monetary policy goal – price stability – as superior. Although the reorganisation of the state budget is a serious challenge for many European countries, there are other people and measures for solving this problem. Monetary policy will not be imprisoned by it. In conclusion, the containment of inflation is the only goal of the euro area’s central banks in shaping their monetary policy.
For example, the combination of a cold winter and a dry summer contributed to a 26 percent rise in electricity prices, as measured by the consumer price index, in 2018. Negative supply shocks thus lead to lower output but higher inflation. This poses a dilemma for monetary policy. Should the policy rate be raised to curb inflation? Or should it be lowered to stimulate the economy? Chart: Quarterly growth Norway, autumn 2018 With our flexible inflation targeting regime, we will not usually change the policy rate if a supply shock is transient. One example is the decline in agricultural production in Norway in 2018 as a result of an unusually hot and dry summer. Production fell by 40 percent in the third quarter. Even though Norway’s agricultural sector is small, the fall in production led to a decline in economic 2/7  BIS central bankers' speeches  growth between the second and third quarter. We assessed the decline as transient, and the policy rate was not changed. However, if such an event leads to a persistent rise in inflation in the next round, this may affect the policy rate. So far, more unstable weather has only had short-term effects on output, employment and inflation in Norway and other advanced economies. Wide fluctuations have been observed in food and energy prices in particular1, but there have up to now been few instances of physical climate change influencing macroeconomic developments in these countries.

This is important to ensure a sustained supply of human talent to support the long-term growth of Islamic finance. To meet this requirement, a complete training infrastructure has been established. Islamic Banking and Finance Institute Malaysia (IBFIM), which is an industry-owned training institute, will now focus on providing technical programmes in Islamic finance. The recently launched International Centre for Education in Islamic Finance (INCEIF) will provide professional certification as well as postgraduate programmes. The INCEIF flagship programme, the Certified Islamic Finance Professional certification programme, is scheduled to begin on 1 June 2006. For leadership development programmes, ICLIF will play its role in developing leaders to serve the industry, providing facilities for education in Islamic finance to not only support the development of the domestic Islamic financial system, but to also position Malaysia as an international centre for education in Islamic finance. And in so doing, this will contribute towards the global development of Islamic finance. Industry players therefore have the opportunity to assist their staff to acquire the necessary skills at these institutions. The Islamic financial institutions also require forward-looking leaders to steer the industry in the more demanding and challenging environment. Ladies and Gentlemen, The huge potential in Islamic finance can only be realised if sufficient resources and drive are accorded to it. In conclusion, let me take this opportunity to congratulate the AmBank Group on the initiative to establish its own Islamic banking subsidiary and provide the necessary resources and support to ensure its success.
Both the county administrative court and Finansinspektionen (the Swedish financial supervisory authority) have made their assessments on the basis of what they should take into account, that is to say the company and owners' interests and the customers' interests respectively. However, I feel that this episode indicates that it is very unsatisfactory that we in Sweden do not have a clear legal framework that can manage this type of situation and I assume that these difficulties will quickly be repaired. Let me emphasise at the same time that we do not envisage any problems regarding financial stability right now. The fact that we have highlighted developments in house prices and household indebtedness has nothing to do with financial stability. It is because we are concerned about future inflation and growth. Developments in asset prices can in certain situations be a sign of risks to inflation and the real economy that need to be taken into account. One problem is that it may be difficult in the forecasting and analysis work to know how to interpret major fluctuations in house prices and prices of other assets. One reason for this is that the models used to make forecasts do not have sufficiently sophisticated descriptions of the financial sector and its interplay with the real economy. The problems are particularly great when house prices and credit growth have over a long period developed in a manner that is not sustainable in the long term.

The explanation must instead be sought among more long-term structural factors. This is reflected in particular in the fact that employment has not recovered since the heavy fall in connection with the crisis at the beginning of the 1990s, despite historically high economic growth. Another sign that the unemployment problems have a structural nature is that there are large differences between regions and between professions. Although monetary policy is common for the Swedish economy as a whole, unemployment figures are twice as high in certain regions of the country as in others, and certain professional groups have twice as many people collecting unemployment benefit as others, and these differences appear to persist over a long period of time. This indicates that the problems are partly related to a low level of mobility in the labour market. The long-term solution to problems of this nature lies outside of the field of monetary policy. Let me now explain in a little more detail why it is so important for us to also follow asset prices, such as house price developments and household indebtedness. It is important both in view of the Riksbank's task to promote financial stability and of the monetary policy objective to maintain price stability. Aspects of household indebtedness and house price developments In addition to maintaining price stability, the Riksbank is responsible for promoting a safe and efficient payment system. This requires, for instance, a safe and efficient banking system. The banks’ activities are closely interwoven with the rest of the financial sector.
This slowdown has been reflected in a fall in equity prices – including a sharp fall in the previously hugely overblown “tech-heavy” NASDAQ index; and this in turn has contributed to a typically rapid escalation in the florid language of commentators, from slowdown, to downturn or recession, to possible slump (though I haven’t yet seen meltdown as we did in 1998), which many of the commentators appear to regard as near-synonyms. Of course it is always possible that it will come to this – no-one has a crystal ball – and it goes without saying that we are all watching what’s happening very carefully. But that is not my own view of the most likely outcome, nor that of my central bank colleagues from around the world when we met in Basel a week ago. We met in the wake of the Fed’s move to cut interest rates which was widely welcomed as timely and appropriate, demonstrating sensitivity to the possibility of a spiralling decline in financial market and business and consumer confidence. We noted, too, that in announcing its move the Fed had made a point of emphasising its expectation of continuing relatively strong productivity growth, giving it more room for manoeuvre than it would otherwise have.

I would not venture to suggest how these – and all the other developments we look at – will influence our next forecast in February; and it would be pointless to anticipate possible future policy decisions. I would be surprised if they radically altered the broad prospect of relatively steady progress over the next two years. But I can assure you of one thing: if the prospect – or the balance of risks around it were to change significantly – either in the context of our February forecast or subsequently – we will promptly react to that change. Despite the fact that we left interest rates on hold again last week, we have certainly not gone to sleep! We cannot guarantee that we will always remain as close to the symmetrical inflation target as we have been in recent years – the uncertainties as I have explained are too great for that degree of confidence. But that remains our aim. And I will be happy to report back to you again at your next dinner. Let me, Mr President, just conclude by congratulating you and the Chartered Institute on your achievements – not just over the past two years though I do congratulate you on that, especially, if I may, on your introduction of your new Chartered Banker qualification. But I congratulate you more broadly on your achievements over the whole 125 years since your foundation.
This rising tide of responsibilities is not confined to monetary policy. Around 80% of central banks have some role in setting new macro-prudential tools. 12  The Bank of England is among the over 50% of central  banks fully in charge of doing so. In the US, responsibility is shared across agencies, including the Fed. In the European Union, responsibility is also spread across agencies, including a number of central banks. In the run-up to the financial crisis, micro-prudential policy was increasingly located outside central banks. Since the crisis, however, that trend has reversed (Chart 3). The ECB has assumed responsibility for supervising the euro area’s largest banks. The Federal Reserve’s supervisory responsibilities have been expanded and enhanced. And in the UK, micro-prudential supervision has returned to the Bank. 13  The most recent chapter in central banks’ evolutionary history has been increased openness and transparency about their actions, monetary, macro- and micro-prudential. This shift was a natural  9  Consistent with that, the historical evidence suggests that institutions, such as central banks, are essential elements of statecraft (Acemoglu and Robinson, 2012). 10 See for example, Cukierman et al (1992), Grilli et al (1991), Crowe and Meade (2007), Arnone et al (2006), Dincer and Eichengreen (2014), Bodea and Hicks (2015) and Garriga (2016). 11 The Cukierman et al (1992) index, updated and expanded by Garriga (2016). 12 Claessens et al (2016), discussed in Blinder et al (2017).

Operating profit also rose at a higher rate in 2003, helped by both increasing interest- and non-interest incomes, and falling operating expense. Meanwhile, the growth of loan* portfolio maintained its momentum well at the rate of 5.6 percent at the end of 2003 compared with 4.9 percent a year earlier, in tandem with the robust economic recovery. On the stability front, the banking sector’s average provisioning was well above the required provision by about 35 percent, and capital to risk-weighted asset ratio remained comfortably above regulatory requirement in 2003, with a ratio of 13.7 percent for Thai banks and 20.5 percent for foreign banks. Moreover, the non-performing loans continued a declining trend with the ratio of 12.8 percent to total loans in 2003, compared to 15.7 percent in the previous year. The number is still high, admittedly; but one only needs to recall that we started with an NPL ratio of nearly 50 percent right after the crisis to realize that we have come a long way. The remaining NPLs do not pose a significant downside risk because of the over-provisioning and the continued robust performance of the economy. However, we will not be complacent. Regulations will be forthcoming to further expedite the resolution of the remaining NPLs - an issue that will be revisited later. BIS Review 43/2004  1  At the same time, banks have made substantial progress on productivity, with improvements on many fronts. Operating costs have been drastically cut by means of organizational restructuring and work process re-engineering.