samchain/econo-pairs-v1 huggingface dataset:
The revision of the supervisory methodology on the qualitative assessment of the corporate governance in banks, of the functioning and independence of their committees, of the internal audit structure in assessing the risks and their functioning continued during 2017. In this project, we partnered with the European Bank for Reconstruction and Development. Notwithstanding the progress made in reducing the non-performing loans, attention has been paid to the achievement of banks’ annual objectives regarding the situation of non-performing loans and the compilation of the Recovery and Resolution Plans for larger borrowers. Banks report regularly to the Bank of Albania on the level of their relationships with every borrower, as well as the expectations and plans on future developments, in compliance with our requirements. With assistance from the World Bank and the International Monetary Fund, a regulatory framework, aiming to encourage the collaboration and coordination of banks for addressing common borrowers, is being compiled. Special attention is being paid to the consolidating processes with the expected merger of two banks in Albania and the strategic plans on the re-positioning in the market depending on the dominant short and long-term factors. In parallel with the work to improve the regulatory framework and the adoption of the best international standards, high priority has been given to on-site examinations. During 2017, fourteen full-scope and partial examinations were performed in banks, non-bank financial institutions, and savings and loan associations.

Thomas Jordan: Innovation and entrepreneurship - key success factors in a changing business environment Summary of a speech by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the Award ceremony 2018, De Vigier Foundation, Solothurn, 30 May 2018. * * * The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). For many decades, Switzerland has been among the world’s most successful economies. If it is to maintain this position in future, openness to new technology will be essential. In addition to taking over technologies created elsewhere, Switzerland will need to ensure that domestic companies are able to develop their own market-ready innovations. Various factors can facilitate success on this front, whether in established companies or startups. Above-average operating conditions – including low bureaucratic hurdles for the set-up and day-to-day running of companies, reliable patent law and ready access to financing, for example – are crucial. Another important parameter is open market access, not least for foreign competitors; barriers to entry for new firms are extremely harmful to economic wellbeing. The education system is also a significant determinant of a country’s innovative potential. Switzerland invests heavily in high-quality education, both at university level and in the form of specialist vocational training schemes, which helps explain its status as a global leader in research and development. And finally, it is vital to promote a culture of entrepreneurship.
At the EMEAP forum, monetary authorities have, as I mentioned earlier, examined the whole spectrum of central banking functions quite comprehensively and have identified issues where monetary co-operation would be beneficial. 46. Before going into these issues, let me just make two points about the approach that should be adopted in Asian monetary co-operation. First is that Asian monetary co-operation must be considered within the context of global monetary co-operation. In other words, we should not, and I believe we are not trying to, build Fortress Asia. I do not believe that this is in the best interest of Asia. It is essential that we work within the international monetary and institutional framework as much as possible. Let us not forget that the international monetary order is still largely determined by the G-3 currencies. Asian economies cannot on their own, or without the help of others, determine the fate of the G-3 currencies, even though we may have views about the future system. BIS Review 91/1997  - 10 -  47. Second is that, given the great diversity of the economies in the region, being at very different stages of financial development, Asian monetary co-operation should proceed with flexibility and at a pace comfortable to those wishing to take part in it.

In the Asian pragmatic and patient way, and using the wise words of the late Deng Xiaoping, we cross the river by groping for the stones. I am confident that in the end, we will be able to build a robust and efficient Asian monetary network that would contribute to monetary and financial stability, and economic prosperity in Asia, and in turn contribute to global financial stability and prosperity. 61. I cannot end this lecture without paying tribute to the tremendous support and co-operation that the Hong Kong Monetary Authority has received since its formation only four and a half years ago. I want specifically to acknowledge the unstinting support of the People’s Bank of BIS Review 91/1997  - 13 -  China and the Bank of England. Without their guidance the Hong Kong Monetary Authority would not have become a reality. The Bank of Japan, the Bundesbank and the Federal Reserve Bank of New York have also been generous in their support when we went around the international financial centres to explain the unique concept and practice of “one country, two systems”. All our fellow central banks and monetary authorities in EMEAP, SEANZA, and BIS showed us great kindness and support during the sensitive transitional period to the resumption of sovereignty by China in 1997. Indeed, the Hong Kong Monetary Authority is itself the fruit of monetary co-operation. 62. When asked what comes after 1997, we used to give the very simple reply: what comes after 1997 must be 1998.
The monetary policy strategy of the Eurosystem in retrospect The ECB Governing Council had three main objectives in mind when it decided to announce a new monetary policy strategy for stage three of EMU in October 1998. First, the strategy should facilitate transparency and accountability, helping the public to understand and assess monetary policy decisions. Second, it also should promote credibility and confidence among euro area citizens that the Eurosystem would keep a clear focus on its constitutional assignment of maintaining price stability. And third, the monetary policy strategy was important for internal decision-making. It should constitute a conceptual framework for structuring information and provide guidance and consistent decision criteria to policymakers, who are constantly confronted with alternative paradigms, limited information and difficult views about the current state and prospects of the economy. Next year will be the 10th anniversary of the creation of the ECB and the announcement of the monetary policy strategy of the Eurosystem. In retrospect, the monetary policy strategy – together with a strong institutional set-up- has provided the right foundations for an effective and successful monetary policy in the euro area. The Governing Council of the ECB has demonstrated that it is well-equipped to take prompt and swift action in order to secure price stability over the medium-term. At the same time, it has retained the appropriate degree of flexibility to respond to shocks and to take into account the unique uncertainties facing the euro area.

Indeed, one of the key benefits of globalisation over the past several decades is that the freer flow of goods and services, people and capital, ideas and information, has served as a vehicle for the transmission and diffusion of new technologies across borders. Other things equal, this should have accelerated catch-up between countries operating at and inside the technological frontier. 65  Other things, however, have not been equal. Penetration rates of new technologies, once adopted, tell a different tale. They suggest that, over time, there has been a divergence between frontier and non-frontier countries. In other words, the intensity with which new technologies have been used has expanded more rapidly in frontier (especially Western) economies than in non-frontier (non-Western) ones. This will have retarded catch-up between the two blocs. It is a less encouraging story about the diffusion of innovation. With the intensive and extensive margins of diffusion pushing in opposite directions, which has won out? It seems to have been the forces of divergence: slower rates of penetration of new technologies have more than counter-balanced faster rates of adoption across countries. This has shown up in levels of productivity between frontier and non-frontier which, since around 1980, have if anything diverged. Chart 7 illustrates that. It compares levels of productivity across 44 countries since 1950 relative to the frontier country (the US). Convergence prior to 1980 has given way to divergence subsequently.
Also, for firms with non-viable business models, an orderly market exit should be available, since this would result in a more efficient allocation of resources. To achieve these aims, the introduction of improvements in the operation of in-court and outof-court insolvency procedures would be desirable for greater efficiency and speed. In this same respect, in the case of the income support measures for the workers and households most affected by the crisis, their possible extension should be combined with an improvement in active labour market policies and in the training available to unemployed persons and workers, in order to maintain their employability and facilitate their reallocation within the labour market and avoid long-term unemployment. Apart from these short-term actions, an ambitious structural reform agenda is urgently needed, to increase the economy’s potential growth, which was already low before this crisis. And, at the same time it is necessary to design a credible strategy for a gradual sustained reduction in fiscal imbalances, to be implemented when the pandemic is over and the economic recovery has firmed. Such a strategy is particularly important and appropriate for a country like Spain, which has faced this crisis with public finances in a more vulnerable position than in other European economies.

10  Importantly, in addition to the ECB measures, others that have also been conducive to the flow of bank funding to the economy during this crisis are the public guarantee programmes implemented by national governments and the decisions of both macroprudential and microprudential authorities to allow financial institutions to make use of their capital buffers. In particular, the public guarantee programmes would help explain the disparate performance of credit between households and firms in Spain: while the rate of decline in credit to households has increased slightly, credit to productive activity has grown at rates over 7%. More than 40% of all new credit granted to firms comes under the guarantee programme, which reflects its importance in explaining these developments. The ECB also approved a second block of measures, relating to the asset purchase programmes, designed to stabilise financial markets in all euro area countries and neutralise the downward pressures on inflation stemming from the contractionary effects of the pandemic. Since end-February, financial conditions had tightened in the euro area, with both corporate and sovereign risk spreads widening considerably. This widening of spreads implied an increase in financing costs both for governments and firms, which acted as a channel for transmission of the pandemic crisis to the real economy. The spread widening in the euro area was uneven: countries that started from weaker fiscal positions, with higher debt levels, and those that were most affected by the first wave of the pandemic witnessed a much more pronounced increase in their financing costs.
Norges Bank has recently completed a survey of banks’ costs in connection with providing payment services. We have received detailed responses from seven banks, two large and five smaller banks, that account for 38 per cent of the volume in the payment system. We have examined banks’ direct costs and indirect costs such as those connected with personnel, operation of computer systems,  BIS Review 66/2002  3  business premises, machinery, inventory, etc. Development costs related to new products have been included and spread over the economic life of the service. The survey is described in an article that will appear in the next issue of Economic Bulletin which will be published in December. It will also be available on our website in December. 4. Transaction volume and total costs 1000  1988 1994 2001  800  600  7 6 5 4 3  400  2  200  1 0  0  No. of transactions, in millions  Total costs, in billions of 2001 NOK  In 2001, banks spent NOK 5.9 billion to produce one billion payment and cash transactions, compared with NOK 6.3 billion to produce less than half the number of transactions in 1994. 5.

In addition, a monopolist may have few incentives to engage in product development. In most cases, therefore, efficiency will be higher with several competing producers of payment services. A genuine possibility that new participants may enter the market may prevent monopolists from taking out a monopoly profit. This may also encourage the producer to maintain a high level of operating reliability and to further develop the services. Strong customers may also contribute to reducing the power of the large producers. Customers’ bargaining power normally depends on their size, and small banks can collaborate and form alliances to increase their bargaining power as buyers. However, the majority of the banks’ customers will not have bargaining power vis-à-vis banks, so it is important that there are many banks competing to supply payment services to customers. Efficiency in the Norwegian system Overall, the Norwegian system for retail payment services is fast, reasonably priced and safe. 3. Productivity gains in the 1990s Per cent  20  15  10  20  Financial services  15  Financial services, average  Mainland Norway  10  -5  0 '0  98  96  94  0  92  0  90  5  88  5  -5  Retail payments are settled in Norges Bank twice a day. Depending on the time of day that the payment is made, the funds will be available in the payee's account on the same day that payment is made or the next working day.
Stress tests have thus contributed to an increased resilience of the financial system: (i) Stress tests shore up banks’ capital positions by serving as a basis for calculating additional capital requirements (“Pillar 2 Guidance” or P2G); (ii) the publication of individual stress test results, which is accompanied by the disclosure of individual bank data, ensures transparency and enhances market discipline; (iii) regular stress test exercises under the aegis of the supervisory authority encourage banks to develop their internal risk management processes and information tools. 3/7  BIS central bankers' speeches  The comparison over time of the aggregate results of the stress tests conducted by the EBA and the ECB testifies to the increased soundness of European banks. In the event of an adverse scenario, the 2018 stress test showed that the banks’ solvency ratio would be 9.9%, i.e. 100 basis points higher than the level obtained by the stress test conducted in 2016. However, we must be careful not to become complacent: risks are increasing and, while some recent events have confirmed the relevance of the instruments deployed (see in particular the H2O incident), the fact that they ultimately proved benign does not mean that in a stressed market environment the outcome would not be less favourable. It is therefore vital to continue to shore up the resilience of the financial system  2. We should not take it for granted that the financial system has been sufficiently reinforced 2.1 VULNERABILITIES ARE EVOLVING AN INCREASING  Global macroeconomic risks have increased markedly.

Managing huge volumes of data, carrying out machine or deep learning requires investing in human and automatic data technology, in training and hiring data analysts and scientists. Indeed, Big Data requires novel and significant human resources, and this has to be anticipated and properly managed. d)  The appetite for real time intelligence, the “short-termism” that can be inflated  by the Big Data Revolution, entails risks that “bad data chase good ones”, thereby impeding the understanding of economic and financial developments by the general public and the media. We must do our best to kill fake news, and there is also economic fake news. But, in a society of communication more than of information, delivering data of good quality, which will always be a trademark of central banks, can hardly be the only answer. Central banks need to make their publications clearer, more readable, and more visible. In particular, if we want sound data to be shared and used, we should speak to each and every one and not just to experts. We should be more “B to C” and not only “B to B”: this is a cultural shift beyond mere technology change. e)  Central banks and I would say public authorities in general can no more work  in silos. Data sharing is a must. In France, we have an excellent cooperation with the national statistical institute and we do share on a day-to day basis many data between supervisors and central bankers but the issue is deeper and wider.
The real economy would also be stimulated directly by the fact that exporting and import-competing sectors would be affected positively by the short-term real depreciation that would arise due to the short-term sluggishness of the price level. As the price level moves up towards the price level target, the real exchange rate will, however, return to its neutral level. Does this method represent a competitive devaluation? The answer is that this is no more of a competitive devaluation than any other form of monetary policy expansion. Note that if the zero lower bound for the interest rate did not exist, the central bank could reduce the real interest rate by reducing the nominal rate. This nominal rate reduction would lead to a depreciation of the currency. The currency depreciation in part (2) achieves the same currency depreciation directly instead of indirectly via a reduction of the nominal interest rate. The method is thus no more of a competitive devaluation than a reduction of the nominal interest rate would be, if such a reduction were possible. It is quite simply a method that entails a certain degree of monetary policy expansion, but by using means other than the policy rate. Every measure that managed to increase expectations of the future price level would in fact also automatically lead to a weakening of the currency. Using the exchange rate as a policy instrument should therefore not be seen as more controversial than using any other method that leads to expectations of a higher future price level.

I myself am convinced that the central bank’s credibility can best be served by an open and transparent discussion of all of the available alternatives. This discussion should be held in good time before any of these alternatives may be needed, but in the hope that none of them will be needed. With a broad understanding that forceful measures are available, and with a readiness by the central bank to resort to these methods if the situation should so require, the general public and the market need not fear that the central bank will lose control of the situation and of inflation expectations in a situation with a zero interest rate. 10  BIS Review 19/2009  Appendix How the current output gap is determined at the zero lower bound  BIS Review 19/2009  11  12  BIS Review 19/2009  How the current exchange rate depends on the expected future price level  BIS Review 19/2009  13
Ranee Jayamaha: Recent economic developments, challenges and strategies – proactive strategies in reducing inflation Speech by Dr Ranee Jayamaha, Deputy Governor of the Central Bank of Sri Lanka, at the Central Bank of Sri Lanka, Colombo, 25 May 2007. *  *  *  Inflation is a common enemy. Its impact will be felt by every single person in a country. Managing inflation and reducing inflationary expectations cannot be achieved by the Central Bank of Sri Lanka (CBSL) alone. It can only be done collectively and with cooperation from all stakeholders. Who are these critical stakeholders ? CBSL, the government, banks and financial institutions, fund managers/traders/dealers operating in various markets, investors both local and foreign households and consumers. 1. Central Bank of Sri Lanka  Given its prime objective of maintaining price stability, CBSL has been proactive in the conduct of monetary policy, which is the instrument through which this purpose can be achieved. CBSL sets monetary targets taking into consideration growth prospects of the economy, liquidity requirements necessary to facilitate growth and inflation at a desired level. The ultimate aim is to keep inflation at desirable levels and reduce inflationary expectations. CBSL, at its disposal, has a limited number of instruments to conduct monetary policy. The current framework places greater reliance on market-based instruments, such as changes to the policy interest rate and conduct of open market operations. Accordingly, CBSL has announced its monetary policy strategy and targets at the beginning of 2007.

Reducing inflationary expectations The self-fulfilling prophecy that inflation is continuing to rise will eventually result in high inflation. All stakeholders are informed that action has been taken to reduce inflation by relevant authorities and that there is hope of bringing it down. In essence, inflation is eroding the value of assets, wealth and profits of the financial institutions, businesses, investors and public at large. Inflation can only be beaten with adequate commitment by all stakeholders. 4  BIS Review 55/2007