samchain/econo-pairs-v1 huggingface dataset:
For the statisticians among you: I have voted in 38 MPC meetings since I joined the Bank. In this time there were 9 occasions when I did not vote with the majority – 7 times I voted for a rise when rates were maintained, and twice I voted to maintain rates when they were reduced. In concluding this section on debt, I should say that I am moderately encouraged by the present trends. The rates of increase in domestic debt have recently slowed, and continue to do so [Chart 7]. I do take some comfort from this adjustment, which now seems to be in train. In policy terms I would like it to continue so that leverage continues to adjust downward as incomes rise. And if there were signs  of a reacceleration in debt per capita, it would once again weigh on my mind, and perhaps, if I were still there, on my policy decision. Chart 7: Annual growth rate of household debt Per cent  24 21  Unsecured borrowing  18 15 12  Total borrowing  9 6  Secured borrowing 3 0 94 95 96 97 98 99 00 01 02 03 04 05  Source: Bank of England  Labour market Throughout my time on the MPC we have been thinking about the reasons behind what seems to be a remarkably benign labour market environment with little pressure for higher wages, and yet with levels of unemployment that are at their lowest since the mid-1970s.

BIS Review 81/2005  1  Chart 1: Fan chart, current GDP projection based on market interest rate expectations  Source: Bank of England, November 2005 Inflation Report  Four significant issues In contributing to the forecast rounds and when voting I have considered the likely course and impact of a whole range of important developments and trends. Today I would like to make a few observations on four such areas, which for me have been particularly fascinating. For each I will comment on the key monetary policy issues that seem most relevant. The first is oil – a continuing interest for me having started my career in that industry - and clearly of immense significance today. The second is debt – and in particular the rise of household debt, perhaps because I have studied debt as a practitioner in my banking life, and have observed its impact on borrowers and lenders. The third is the labour market – in part because the subject encompasses broad issues affecting all of us such as globalisation and the entry into the modern world economy of Asian countries. And fourth, something both highly topical today and of fundamental relevance for all our futures, is the area of longevity and pensions. I shall keep my remarks to the key issues which each of these raise for me in relation to monetary policy. Consequently, I will try not to trespass on political or social issues, or on your lunch break.
The first is a key part of how we underpin financial stability, namely how we assess and test for stress. One of the important innovations since the financial crisis has been stress testing – it is critical, and needs to be thorough and cannot be sidelined when the consequences may be awkward. But, there are some difficult issues surrounding how to set the parameters of stress tests – how much stress to assume? We tend to calibrate stress tests on the basis of history plus something, but the something can be hard to judge. As a case in point, this is what we did in the FPC's work on Liability Driven Investment after 2018. Now, we know that this sort of approach does not pass the Black Swan test, one in which the future is not implied by the past and thus not forecastable. On its own a stress test is very useful and an essential part of the toolkit. But we know that we cannot envisage and design tests that capture all possible future states of the world, and we should not pretend that we can. Instead, we must stress up to the point where it is sensible for regulation to create the protection we want, and – this is crucial – we must have other approaches that cover the world of risks beyond that point. These approaches are bank resolution tools, and central bank intervention tools of the type we had to use last autumn.

Let me end with the short version of the main points: 1: I don't believe we face a systemic banking crisis; 2: We must ensure that financial stability continues to mean that monetary policy takes into account financial conditions but does not have to aim off for instability; 3: This requires robust structures for financial stability policymaking;  5/6  BIS - Central bankers' speeches  4: Central bank balance sheets will remain larger than pre-crisis for financial stability reasons; 5: We don't know yet where central bank balance sheet reduction will need to stop in terms of the necessary level of reserves; 6: This will in part depend on the desired future size and make-up of banks' liquidity buffers; 7: Stable coins will need to have the characteristics of, and be regulated as, inside money; 8: The key question on retail digital money is can we envisage a demand for it, but we should guard against failure of imagination; and be able to accommodate it within the regulatory framework; 9: If retail digital money is part of the future, it would be better not to disturb the need to have both inside and outside money – so we cannot rule out a need for CBDC; 10: We will need to revisit the protection of inside money in the form of deposits, especially in smaller banks; 11: Stress testing the financial system is crucial, but stress tests will not always deal with Black Swans – that's why resolution and other policy intervention tools must be in place; 12: Non-Bank Financial Intermediation is a very large and heterogeneous landscape – it presents surveillance challenges of both breadth and depth; 13: NBFI leverage and inter-connectivity can be hard to map; 14: NBFI issues are often inherently cross-border in nature.
Currently, this scheme counts 6 member banks. The number of cards in circulation has increased by 9 times during 2006, compared to 2004. The addition in cards number counts 127,552 cards compared to 2005, i.e., about 56 percent. Parallel to increased number of cards, the number of ATMs and POSs has also increased, respectively by 130 and 404. International integration and cooperation The Bank of Albania’s obligations stemming from the SAA relate to the meeting of the economic criteria of Copenhagen, guaranteeing the right of establishment and freedom of services for banks and other communautaire financial services, liberalizing capital movement and current payments between Albania and the EU, and approximating Albanian legislation to that of the acquis communautaire in these areas. One of the most important developments during 2006 regarding the approximation of national legislation to that of the acquis was the drafting of the Law “On Banks in the  10  BIS Review 80/2007  Republic of Albania”. This Law has adopted the largest part of the provisions of the 2000/12/EC Directive, with regards to initiation and continuation of credit institutions activity. On 8 November, 2006, the European Commission published the Albania 2006 Progress Report. The European Commission evaluated in the report the policy followed by the Bank of Albania in terms of cooperating with international financial institutions and maintaining inflation under control, contributing to keeping a steady macroeconomic environment in the country.

•  Macroeconomic stability is of primary importance, but definitely the financial stability is also of as much crucial importance. Given the importance and the current level of economic and financial development of the country, this priority assumes extraordinary importance. Furthermore, the rapid credit growth is an argument for more prudence, particularly with regard to its quality. Being fully aware of our role as a decision-making and regulatory institution, we have decided to raise our vigilance in this regard, establishing the Financial Stability Department as a first step. •  Once more, the Bank of Albania emphasises its objective for further consolidation of the banking system. This process, which was present during 2006, should further continue in the current year. Our intention is that the banking system becomes a unity of sound institutions: that are supported by powerful shareholders, experienced in banking industry; that apply best standards of accountability in management; that carry out a balanced activity with well-managed risks; that are able to be faced with and develop under the open market competition provided by an open and integrated market into the international financial market; that support the economic development of the country and that transparently provide efficient and qualitative banking products and services to the public. I would like to thank the Albanian Parliament once more for the good understanding and constant support it has given to the Bank of Albania. Thank you for your attention. 14  BIS Review 80/2007
For the SNB, as Switzerland’s central bank and monetary authority, the ECB’s project raised the issue of whether the Swiss franc should be included as a settlement currency on the  9  In October 2000, the SWX-Repo was integrated into Eurex under the name Eurex-Repo. 10  Markets in Financial Instruments Derivative: This European law aims to increase competition and consumer protection in investment services. As of 1 November 2007, it replaced the Investment Services Directive. 11  SIX Group Media Release, 15 March 2011. 4  BIS central bankers’ speeches  T2S platform. Although the formal decision was solely the responsibility of the SNB, in the spirit of the “Gemeinschaftswerk” the central bank consulted all stakeholders (including the SIX Group) before reaching an informed decision. On the basis of the stakeholders’ costbenefit analysis, which highlighted the complexity of the market infrastructure challenges confronting the Swiss market, the SNB decided not to include the Swiss franc as a T2S settlement currency at this stage12. That said, though Switzerland decided to stand back from this process, T2S will nevertheless impact the Swiss market and accelerate structural reforms of Switzerland’s FMI, which will in turn affect our money market operations. After all, securities denominated in foreign currencies are accepted as collateral on the Swiss repo market. In fact, collateral denominated in euros account for about 50% of the posted securities. In the future, settlement of these securities and potentially also of the securities denominated in other eligible currencies will involve some use of the T2S infrastructure.

The SIC payment system, whose technical and operational components are handled by a subsidiary of the SIX Group, is also a product of the “Gemeinschaftswerk”. In contrast to this successful public-private partnership, in other countries most large-value payment systems belong to the central banks. On an functional level, vertical integration thus appears to be more complete in Switzerland than in other European markets. In Germany and the United Kingdom, for example, the private firms which dominate the FMI (Deutsche Börse Group and London Stock Exchange Group, respectively) do not operate the national payment systems. Conversely, on an organisational level, in the 1990s and early 2000s demutualisation occurred in most European countries, shifting governance away from a “user-owned,” “usergoverned” model towards an investor-centric structure. The changing world of FMIs As I have inferred, the world of FMIs and their stakeholders is in a state of flux. It is hence crucial that we consider how such changes influence the Swiss market and how they will do so in years to come. A mere glance at the news headlines illustrates the extent to which established financial and economic entities are evolving as never before. There are several examples of shifts in the landscape of trading venues, which stem from various factors, such as regulatory changes, e.g. MIFID,10 the trend towards demutualisation and increased international competition.
We left most of these problems behind us when we began making forecasts based on market expectations, as reflected in the so-called implied forward rates. This was because market expectations in most cases provide a much more realistic forecast for the future development of the repo rate. The changeover from a constant repo rate to the markets’ expected interest rate path was also a natural step on the route to publishing our own forecast for the repo rate. We then began talking more systematically about future interest rate developments by commenting on the plausibility of the interest rate path given by market expectations. In my opinion this was when we took the major step towards increased clarity with regard to our view of future interest rate developments. The method of basing forecasts on market expectations is not without its problems, either. One problem concerns how expectations are measured. Other problems are related to communication regarding the interest rate path. Let me explain what I mean here. Changes in the policy rate have a direct effect on the shortest interest rates in the economy. Monetary policy can therefore also affect financial market expectations of future short-term interest rates. It is these expectations that the implied forward rates are meant to capture. The implied forward rates can be interpreted as the financial markets’ ”average” forecast for the future repo rate.

If, for instance, the annual interest rate for government bonds is higher for long durations than for short ones, this could be interpreted as the market expecting the repo rate to be raised. One problem when interpreting implied forward rates in this way is that they do not solely measure expectations of the repo rate. They may also contain premiums that can be regarded as compensation  2  BIS Review 6/2007  for differences between securities with regard to duration, credit risk and degree of liquidity. Estimating the size of these premiums can be complicated and can be done in different ways. 5 It is therefore not possible to calculate market expectations of repo rate developments in a clear-cut manner, which may create confusion. Another problem is that the implied forward rates may vary substantially in the short term. The question is therefore when market expectations should be read. A further problem that is sometimes highlighted is that there may be a risk of the central bank allowing itself to be steered by financial market agents when inflation forecasts are based on implied forward rates. 6 Personally, I am convinced that this is not normally any great problem. When we have had a different opinion from the market, we have said so. On these occasions we have also influenced market pricing. This was the case, for instance, with the monetary policy decisions we made in December 2005 and June 2006.
However, the literacy rate of the project beneficiaries had increased to 97%, very much higher than the national average, by 2005. •  The Survey 1997 revealed that 80% had crossed the poverty line within 6-7 years of joining the project, while a further 2% had increased income, but was still in poverty (1997). By 2005, the poverty levels measured in terms of the threshold income used by the Department of Census and Statistics of Sri Lanka had increased, but still  23  When the project formed limited liability people’s companies at a later stage, all the positions of directors were filled by women having been elected by the shareholders. Not a single man could get elected as a director. Since the constitution required having at least two male directors, two women directors elected by shareholders had to step down to pave the way for two males in terms of the constitution. 24  One such partner of the Isuru Project, viz., Thrift and Credit Cooperative Societies or SANASA, has since formed its own specialized bank under the name Sanasa Development Bank. 25  The first survey conducted in 1997 surveyed a sample of 1425 beneficiaries, while the second survey conducted in 2005 had a sample size of 5238 beneficiaries. The first report is in the form of an unpublished internal document (Survey 1997), while the second one has been published under the title Report on the Impact Assessment Survey of the SFLC Project 2005 (Survey 2005).

The mandatory savings scheme was intended to inculcate in the beneficiaries the value of thrift as an integral part of making any sustainable livelihood 18 . This is because without learning how to save, an individual is unable to learn how to spend wisely. Accordingly, each member of the group was required to save per week a minimum of Rs. 5 19 in a group savings account which later served as an insurance against unexpected future eventualities such as family illnesses or crop or business failures. Group members were encouraged to meet in rotation in one of the member houses at least once a week so as to ensure group cohesiveness and facilitate member education programme. At these meetings, they were encouraged, guided by the change agent, to discuss among themselves freely why they were poor, what skills they were lacking for gainful enterprise, the working of the free market system and how they could benefit by being integrated to the market system. These meetings also gave them vital training on how they could conduct meetings democratically and listen to each other without being offended or having to embarrass others when a disagreeable opinion is made. Groups were chaired by a member who was also selected by rotation and records of group meetings were kept by a member who functioned as its secretary.
It is still not wholly clear - to me at least - quite why the storm struck suddenly when it did. Most crises of this sort have their origins in some evident macro-economic policy failure. At least in hindsight there are usually fairly clear tell-tale signs of expanding fiscal deficits and/or lax monetary policies, classically accompanied by evidence of imbalance in the form of accelerating inflation or a rapidly deteriorating balance of payments. There were such signs, perhaps most notably in Thailand; but they were not for the most part particularly pronounced in Asia. Some of you perhaps understand better than I do why the initial infection proved to be so contagious. It was after all your money! In fact through the first half of the 1990’s, and in some cases for much longer, the countries in question had been remarkably successful. They attracted, by their very success, huge inflows of capital from the rest of the world, where yields had fallen, in the hope of achieving higher returns. There is no question that this capital inflow made a very big contribution to the remarkable economic expansion in Asia and hence to the global economy; but with the benefit of hindsight, the accelerating scale of the inflow, and particularly the forms that it took, became an important part of the problem. It was not all in the end productively employed.

In managing this crisis, MAS has focused on maintaining the strength of Singapore’s financial system, based on three key pillars: first, maintaining sound financial institutions; second, ensuring well functioning markets; and third, maintaining confidence of investors. Let me touch on these in greater details. 1  In July 2009, IMF upgraded its 2010 world GDP growth forecast from 1.9% to 2.5%. Its 2009 world GDP growth forecast was lowered slightly to -1.4% from -1.3% previously. BIS Review 91/2009  1  Strengthening resilience – what MAS has done Given the openness of our financial system and the severe downturn in our economy, Singapore’s financial system cannot be insulated. MAS focused on maintaining the soundness of financial institutions in Singapore. We intensified supervision of financial institutions through close monitoring of their financial soundness, holding regular discussions with the board, management, and auditors of financial institutions, and for foreign financial institutions, having constant dialogues with their home regulators and head-office auditors. Stress testing major financial institutions is one of our supervisory tools that is used regularly even before the crisis. In this crisis, we have given stress tests an added emphasis, and the latest stress tests of banks and life insurers were conducted in Q1 2009. As the banks and insurers here were well-capitalised and financially sound, the objective of the stress test was not to ascertain what recapitalization amount was needed, because the need did not arise.
This is a great challenge for our trade, even more so amid the current deconstruction of overarching paradigms and a slow, if any, emergence of new central banking principles. Such principles need fundamental research as a foundation to help redesign the policy frameworks of central banks and to guide our corrective actions. This is an exceptional opportunity to address the challenges of shaping policy responses in an increasingly integrated and changing world, particularly from a perspective of countries that are or aspire to become members of the European Union and the euro area. I hope I can raise a few relevant issues with the potential to provoke a constructive discussion and obtain much needed research insights. Allow me to briefly summarize the main points for my discussion, structured here in three interrelated topics. First, real and financial cycles exhibit some regular patterns relevant for designing policy responses in open economies exposed to frequent shocks. Second, it is of major importance for the future of the euro area to advance the institutional design in order to make all of the envisaged protective mechanisms operational and enhance setting the right policy mix, which encompasses both EU and national policies. Finally, such a policy mix should pay a particular attention to careful coordination, given the interdependences among different national and supranational policies and immense potential for cross border policy leakages. I will elaborate briefly on each of the mentioned topics. 1.

Boris Vujčić: Challenges for policy responses within the European Union in the context of post-crisis reconstruction Keynote speech by Mr Boris Vujčić, Governor of the Croatian National Bank, at the international conference “Economic and Financial Cycle Spillovers: Reconsidering Domestic and Cross Border Channels and Policy Responses”, organized by the National Bank of the Republic of Macedonia, Skopje, 7–8 April 2016. *  *  *  I would like to thank Saša Cerovac and Ivana Herceg for their help in preparing these remarks. Dear Ladies and Gentlemen, I am truly honoured to be invited as a keynote speaker at this conference that gathers central bankers and policy makers in the region to discuss issues raised by the heightened levels of distress and volatility in financial markets. With two episodes of severe distress behind us, the global financial crisis, followed by the euro-area crisis, many observers share a conviction that today we might be observing the seeds of a new similar incident waiting to happen. Some point to possible bubbles in asset markets, some to distorted business models in (parts of) the financial industry, and quite a few of them see a new crisis lurking behind emerging market developments, which may start the latest episode of a “ crisis trilogy”, as recently pointed out by Andrew Haldane from the Bank of England 1. To circumvent the reoccurrence of a lengthy and costly crisis, we need to improve our understanding of the processes underlying crisis episodes and adjust our policies accordingly.