samchain/econo-pairs-v1 huggingface dataset:
And are the authorities in the latter countries prepared to relinquish the responsibility for an essential part of their financial system to the home country of the parent bank? These are not just abstract issues, as can be seen from the fact that Nordea, domiciled in Sweden, is now the largest bank in Finland and that Swedish banks own the major part of the banking systems in the Baltic states. Thus, it seems that the supervision of international bank groups could lead to problems of coordination and duplication. On the whole, there appears to be no lack of incentives to supervise cross-border banking operations. The problem is rather that in certain cases the rule system prevents the most active countries for exercising supervision, so that this is liable to fall between two stools. On the other hand, an excessively generous right to supervise can lead to the burden of supervision being unduly heavy for individual banks. That could hamper integration as well as efficiency. Formalising crisis management is more difficult than other parts of the work on stability. Discussing crisis management can be perceived as sensitive and troublesome because to some extent it concerns the state’s willingness to assist the financial sector with liquidity. The dividing line between whether or not this should be discussed openly often runs between countries that have experienced a financial crisis and those that have not. Those which have lived through a crisis are generally in favour of a transparent process.

The work on financial stability is undertaken in three main ways. One concerns the rules and regulations that set the bounds for the operations of financial companies. Another is the continuous surveillance of the system that is performed by Finansinspektionen (Sweden’s Financial Supervisory Authority) as well as by the Riksbank. Thirdly, the state needs to be able to manage any crises that nevertheless occur. The work on stability calls for highly developed cooperation between the Finance Ministry, Finansinspektionen and the Riksbank. The laws governing financial operations are enacted by the Riksdag, with the finance ministry as an important agent. More detailed regulations are issued by Finansinspektionen, which also monitors their observance. The Riksbank’s contribution to the work on rules and regulations consists in the first place of submitting opinions; in addition, the Bank participates in international efforts to develop the regulatory framework. The role of the Riksbank in surveillance work is central and focuses on the functioning of the financial system as a whole and the risks that may arise. The identification of risks in the system as a whole means, moreover, that the individual institutions and the financial infrastructure have to be scrutinised. It is primarily Finansinspektionen but to some extent also the Riksbank that need to keep a continuous eye on the individual banks. Due to the central functions of the banks, a crisis in the banking system might swiftly have serious consequences for the payment system as well as for the supply of credit.
This is to supplement the central banks’ instruments in such a way that – alongside the maintenance of price stability – central banks can also make a greater contribution to financial stability than they have done in the past. The specific tools being referred to here are the macroprudential instruments that have attracted increasing interest in recent years, and that have been introduced in many countries. Such instruments can be used in a supplementary manner, as required. In the case of Switzerland, the SNB has a statutory mandate to pursue a monetary policy serving the interests of the country as a whole, to ensure price stability and in so doing, to take due account of the development of the economy. Within this primary framework, it also has the task of contributing to the stability of the financial system. There is no contradiction between these tasks if target hierarchy is observed. As far as financial stability is concerned, the SNB works closely together with the Swiss Financial Market Supervisory Authority and the Federal Department of Finance to create a regulatory environment that promotes stability. The SNB concentrates on the macroeconomic and macroprudential aspects of regulation. For the macroprudential tasks, a new instrument was created this year – the countercyclical capital buffer. According to the relevant regulation, this buffer can be activated by the Federal Council following a proposal by the SNB.

The other method, applied by the majority of central banks including the Riksbank, is to forecast how the economy will evolve over the next couple of years and adjust monetary policy accordingly. One complication here is that something unexpected can always happen, causing the economy to move in a different direction than that expected. For this reason the central bank must take account of different risks when setting the policy rate. The forecasts are produced by experts through the use of various statistical methods and models. The results are often presented in the shape of a main scenario and one or more alternative scenarios. A monetary policy that is based on forecasts requires more information about the economy than a rule-based policy, and according to its critics there is a risk that forecasters will overestimate their ability, perhaps leading to poorer results than would have been the case with a less complicated approach. Advocates of the method, on the other hand, say that we should make full use of the knowledge that we nevertheless have. Since a forecast-based monetary policy requires the analysis of many more variables than is the case for a simple rule, it is more difficult for external players to predict how the central bank is going to act. For this reason a forecast-based policy places high demands on the bank’s openness and transparency in relation to external parties, as well as on its ability to communicate. There are also other advantages associated with a forecast-based monetary policy.
Stefan Ingves: Strengthening bank capital – Basel III and beyond Keynote address by Mr Stefan Ingves, Governor of the Sveriges Riksbank and Chairman of the Basel Committee on Banking Supervision, at the Ninth High Level Meeting for the Middle East & North Africa Region, jointly organised by the Basel Committee on Banking Supervision, the Financial Stability Institute and the Arab Monetary Fund (AMF), Abu Dhabi, United Arab Emirates, 18 November 2013. *  *  *  As prepared for delivery Good morning everyone, and thank you for the opportunity to speak about what – among the myriad of recent regulatory initiatives – has probably been the most important: strengthening bank capital. Strengthening bank capital is not simply about asking banks to hold more capital. Rather, it is a broader objective that involves ensuring the functioning of the entire capital regime. The Basel Committee’s approach has therefore been to work extensively on the consistent implementation of the regulatory capital framework. The ultimate goal is to implement Basel III so that it strengthens the quantity, quality, consistency and reliability of bank capital ratios around the world. Quantity and quality of capital As you know, a set of requirements designed to raise the quantity and quality of bank capital lies at the heart of the Basel III reforms. Not only were minimum capital requirements raised, but the increases in capital requirements were focused on where they were needed most: in going-concern loss-absorbing capital, or Common Equity Tier 1.

This means that, if such effects materialize, they can only rely on their own mechanisms, resources and instruments, which may prove not up to the task, a situation not unlike the one in some of the Eurozone countries during the recent crisis – the very event the Banking Union idea sprang from. The strong presence of foreign banks in the banking systems of non-euro area countries also generates opportunity costs for not participating in the single resolution mechanism. A solution for dealing with an ailing bank, which takes into account only home country’s interests, is definitely a sub-optimal outcome from the perspective of a host country. What I can say based on Romania’s recent experience during the Cypriot crisis is that, even though in the end the issue of the Romanian branch of the Bank of Cyprus was solved in a satisfactory manner, having in place a single resolution mechanism would have considerably improved the situation by enhancing home-host coordination during the resolution process and by preventing the restriction of access of Bank of Cyprus’ Romanian depositors to their funds. Open issues regarding the Banking Union An open issue regarding the single resolution mechanism refers to the treatment of residual losses to be covered from public funds before the required amounts have accumulated to the single resolution fund.
Here in the UK, the Bank of England has adopted a new code for banks prescribing deferred variable performance payments, introducing the ability to reduce deferred bonuses when subsequent performance reveals them not to have been fully deserved, and paying bonuses in stock rather than cash. The deferral of bonuses awarded today allows them to be reduced before they are paid if evidence emerges of employee misconduct, error, failure of risk management or unexpectedly poor financial performance by the individual, their team or company. We are continuing to refine our approach. The Bank has just completed a consultation on a requirement for variable remuneration to be clawed back after payment and will consult later in the year on new standards for bonus deferrals. These provisions will apply not only to employees who are judged culpable directly, but also to others who could reasonably have been expected to identify and manage risks or misconduct but did not take steps to do so, and senior executives who could reasonably be deemed responsible by establishing the culture and strategy of the organisation. Where problems of performance or risk management are pervasive, bonuses should be adjusted for whole groups of employees. Of course, no compensation package can fully internalise the impact of individual actions on systemic risks, including on trust in the system. 19 To do so, market participants need to become true stakeholders. That is, they must recognise that their actions do not merely affect their personal rewards, but also the legitimacy of the system in which they operate.

In addition, unprocessed food prices have continued to exert some upward pressure on overall price increases in recent months. Excluding the more volatile HICP components of energy and food, the rate of increase in consumer prices in March remained at 1.1% - i.e. unchanged from the rate observed in February and marginally lower than that recorded at the turn of the year. In conclusion, at this point in time the general outlook for price stability remains favourable. Although the lower effective exchange rate of the euro and the rise in oil prices may lead to some upward pressure on headline HICP inflation in the coming months, the current economic situation is likely to contribute to containing this upward pressure. At the same time, current monetary developments and other available indicators do not point to inflationary risks over the medium term. On the basis of this assessment the Governing Council decided to keep the ECB’s interest rates at their current levels. In addition to reviewing the main monetary, financial and other economic indicators, the Governing Council considered a report prepared by the ECB’s Banking Supervision Committee on “The effects of technology on the EU banking systems”. The report assesses the extent to which technological developments have taken place and are expected to occur in the EU banking systems, the main categories of banking risks affected by these developments and the strategic responses that EU banks are devising. The Governing Council agreed to publish the report, which will be made available in due course.
Measuring productivity in service industries is difficult. The chart shows that according to the national accounts, productivity growth is very volatile. If we smooth the data somewhat, it appears, however, that productivity growth has been relatively high through the 1990s, following low growth at the end of the 1980s. At the very end of the 1990s, however, productivity growth was weak. 10  BIS Review 47/2001  One source that may be used to analyse developments in distributive trades is Norges Bank’s database Sebra which contains figures for all limited companies that have turned in valid accounts to the Brønnøysund Register. The figures, from 1988 to 1999, show that profitability in this industry has been positive since 1993. Both measures of profitability show a slightly falling trend from the peak year 1994 to 1998. In 1999, it appears that profitability improved again. The increase in profitability from the end of the 1980s to the mid-1990s reflects a structural development in the industry since the 1980s. The most important changes were the emergence of chains and the development of shopping centres. When the upturn came in the mid-1990s, a better structure was in place. Both the chains and the shopping centres have increased their market shares. This structural development has probably made it possible to maintain satisfactory profitability at the 2 same time that profit margins have declined. Operations became more efficient. Profitability has been satisfactory despite lower mark-ups on the cost of goods. In 1998 and 1999, however, profit margins increased somewhat.

A track record of low inflation over several years has provided Norges Bank with a  2  BIS Review 47/2001  better basis for implementing monetary policy. The new guidelines do not imply a significant change in the conduct of monetary policy. The key rate is set on the basis of an overall assessment of the inflation outlook. Higher interest rates curb demand for goods and services and reduce inflation. Lower interest rates stimulate economic growth. Lower interest rates have the opposite effects. If evidence suggests that inflation with unchanged interest rates will be higher than 2½ per cent, the interest rate will be increased. If it appears that inflation with unchanged interest rates will be lower than 2½ per cent, the interest rate will be reduced. There is symmetry here. It is equally important to avoid an inflation rate that is too low, as it is to avoid an inflation rate that is too high. A change in interest rates is not expected to have an immediate effect on inflation. Our analyses indicate that a substantial share of the effects of an interest rate change occurs within two years. Two years is thus a reasonable time horizon for achieving the inflation target of 2½ per cent. Hence, the key rate is set with a view to achieving an inflation rate of 2½ per cent two years ahead.
Lushnja is one of the main regions of the Albanian agriculture the recovery of our economy should start from – and holding this meeting here today is not mere coincidence. 2  BIS central bankers’ speeches  Bank of Albania’s analyses have been paying increasing attention to developments and related perspectives in this sector. As we speak, 47% of the Albanian population and around 49% of the labour force lives in rural areas and engages in agriculture-related activities. According to the latest data for 2012, around 24% of the land area is used to cultivate different agriculture cultures. However, despite the vast resources concentrated in agriculture and the important role it plays as the main source of income for a considerable part of the population, only 20% of gross added value comes from this sector. The low share in economy in proportion to the considerable number of the population involved in agriculture indicates the low productivity in this sector. The latest data show that the exports of “food, beverages and tobacco” account for 6.2% of total exports. Livestock and agricultural products share 0.78% and 2.3% in total exports, respectively, whereas agroindustry shares 3%. Fier district represents a considerable part of production factors in agriculture. The latest data show that Fier shares 18% in total agricultural land, thus being classified as the district with the highest share in the country. In 2012, more than 56 thousand farms were registered in Fier, the highest number on a country-level.

It is simply a case of adapting the implementation of this strategy to an environment characterised by interest rates close to zero and a Swiss franc once again in the role of a safe haven. Contrary to certain reactions aired in the media, the action to counter the rise of the Swiss franc against the euro is not a form of competitive devaluation, which would inevitably work against the interests of our country in the long run. Rather, it is a key operational tool which, under the given circumstances, helps us perform our mandate with regard to price stability, in other words to preserve our economy from both inflation and deflation. The outlook for 2009 The year 2009 will see the steepest decline in Switzerland’s GDP since 1975. Exports, normally the driving force of our economy, will continue to be weak, and the lack of confidence in the corporate sector will weigh on investment demand. Moreover, all signs point to a further slackening of consumption in view of growing uncertainty about households’ purchasing power. All in all, the outlook for the near future is anything but bright. Switzerland does not constitute a special case – all industrialised countries are faced with a similar downturn, especially those with high exposure to foreign trade.
The ultimate goal of entry into the euro area is an ambitious one and, for this reason, it is necessary to start preparing for this prospect well in advance. Broadly speaking, the prospect of EU membership should encourage accession countries to make all the macro and microeconomic adjustments necessary to join the euro area. In this way, EU accession may set in motion a virtuous cycle of long-term  4  BIS Review 92/2001  sustainable economic growth. As the experience of current euro area participants shows, accession countries may encounter difficulties, and even sometimes feel frustration, during the different stages of this process. However, these difficulties should not discourage accession countries from going ahead with the project of entry into EU and, later on, the euro area. Undoubtedly, EU enlargement poses great challenges to both the accession countries and to the European Union itself. Creating the right economic and political conditions and adjusting the European institutions for the eventual integration into the EU of all accession countries is certainly an enormous task. However – and here I come back to what I mentioned at the beginning of my speech – the project of European integration should not be regarded just as a stimulating exercise of facing up to never-ending “challenges ahead”, but rather as a historic opportunity to deepen and extend the idea of Europe.

In our experience, inflation targeting is capable of producing a sufficiently strong nominal anchor for the economy, and consequently also of stabilising the exchange rate, obviously in the absence of large external shocks. Hence, in favourable circumstances, inflation targeting will allow us to achieve price and exchange-rate stability simultaneously. Should circumstances become less favourable, the simultaneous achievement of both will be difficult no matter which monetary strategy is adopted. That is why we do not consider ERM2 to be a policy regime superior to the current regime. In line with this stance, we have agreed with the government to stay out of the ERM2 mechanism for the time being. We plan to introduce ERM2 after conditions for meeting all Maastricht criteria within a two-year timeframe have been established. There is still a number of issues to be discussed, let me address two of them. First, is inflation targeting compatible with ERM2? Second, what is the impact of policy debate about the modifications to the SGP on our forthcoming effort to meet the Maastricht criteria? As far as the compatibility of the two regimes is concerned, namely inflation targeting and ERM2, the specific arrangements have not yet emerged from our ongoing debate. We believe that relying on the economic analysis and intuition rather than on background legal documents as a guide, there is no need to modify the current strategy significantly. It will be able to deliver both price and exchange-rate stability. However, monetary policy alone cannot guarantee the smooth progress of adopting the euro.
Gent Sejko: Bank of Albania – strengthening governance and recent other challenges Introductory statement by Mr Gent Sejko, Governor of the Bank of Albania, presenting the Annual Report 2015 to the Parliamentary Committee on Economy and Finance, Tirana, 29 March 2016. *  *  *  Honourable Chair of the Parliamentary Committee on Economy and Finance, Honourable Members of the Committee, It is my special pleasure to present, in this hearing session with the Parliamentary Committee on Economy and Finance, the Annual Report of the Bank of Albania for 2015. In 2015, the Bank of Albania has worked to successfully fulfil its objectives stemming from the Law “On the Bank of Albania”, as well as all the other obligations arising from relevant sublegal acts and relations with our international partners. I would like to start my presentation, focusing on the activity of the Supervisory Council of the Bank of Albania. 1. Decisions of the Supervisory Council  At the beginning of 2015, the management team of the Bank of Albania was rendered complete. Thus, thanks to the support of the Assembly of the Republic of Albania, the vacant positions in the Supervisory Council were completed, the Governor, the Second Deputy Governor and Inspector General of the Bank of Albania were appointed. During 2015, the Council met 15 times and approved 98 decisions. Of them, 63 consisted in acts approved for the first time, and 35 in amendments to existing acts.

Following are some of the strategic objectives of the Bank of Albania: -  maintaining price stability around 3%;  -  strengthening financial stability;  -  strengthening banking supervision;  -  enhancing financial market security and efficiency;  -  enhancing and approximating institutional capacities to the European model. To materialise the strategy, the medium-term budget has been prepared for the financial management of the institution in the upcoming three years. Approval of the new organisational structure of the Bank of Albania The new structure of the Bank of Albania adapts the activity of its units to the needs and new process imposed by economic developments and changes in the banking legislation. Moreover, it aims at improving the institution’s management and strengthening the internal control. The establishment of the specialised unit to monitor and manage the operational risk is a crucial step in this regard. Also, the new structure aims to strengthen the vertical and horizontal control in compliance with international best practices, models and standards. Strengthening cash security and management systems The Supervisory Council and other administrative structures have reviewed the entire regulatory framework for the security and protection of physical values and information at the Bank of Albania, enhancing both human and technology-related elements. A series of decisions have been made to strengthen the security measures and physical monitoring of the premises where cash is stored and processed, in the form of banknotes and coins.