samchain/econo-pairs-v1 huggingface dataset:
For all its problems and obstacles, the year has laid bare the degree to which financial institutions and banks are prepared for unexpected circumstances. The resilience of banks and other financial institutions, and their so-called ability to adsorb the shocks the epidemic has brought about, suggest that rehabilitation of the Russian financial sector is an accomplished fact. This is why recent months have seen — despite the difficulties — the financial sector evolving and carrying on with providing support to the economy, as borrowing from banks has been on the rise, and the stock market has been growing at a faster pace. Our current priority is to strike the right balance between the objectives of supporting economic recovery and long-term projects as part of our national development agenda. It is essential to ensure that a maturing financial market relies on the principles of trust and competition and — this is of paramount importance — the principle of customer interest protection (rather than only on a short-term gain strategy). You are aware that lending continued this year, unlike in prior times of crisis. More so, we have seen record growth in mortgage lending, which is the point the Speaker has made. For all these welcome developments, our central focus should remain with the real target, which is to make housing more available to people, and not to stage a kind of race for records.

Our housing market has indeed a lot of growth potential: it is true that mortgage lending has yet to become as common as it is in many other countries. However, we should bear in mind, first, that mortgage debt has been taking years to accumulate there and, second and most important, the accumulation of this debt should tally with a rise in household incomes. Hence the need to prevent the emergence of a bubble in this market and the real risks this bubble would carry, in order of priority, for people, developers and banks. This sector needs a long-term development 1/4  BIS central bankers' speeches  plan based on market principles. I cannot agree more with the Speaker on this subject: the government’s concessional lending programme indeed helped stave off market failure at times of crises. At this point in time however, we are seeing that demand for mortgage loans is in a way increasingly translating into a stampede, leading to unjustified price growth in several regions. Ultimately, developers and banks stand to take advantage of this programme, rather than consumers. It would do no harm to support them; however, our key objective is the availability of housing. We should focus increasingly on targeted support programmes, which includes the efforts to support the overall supply and demand balance. Let me explain: there are more and more consumers willing to make use of low rates and take out mortgage loans. They could service the debt, but they have no money for the down payment.
In that context, and fully consistent with the priorities of Her Majesty’s government, the Bank of England will work to build a responsible financial globalisation that first protects and serves the UK real economy, and then secures the UK’s traditional role of supporting global prosperity through an open global economy. II. The UK Financial System is a National Asset and a Global Public Good  Having a large financial sector brings substantial benefits to the UK. 4  Financial services accounts for 7% of output and is a source of over 1 million jobs, two thirds of which are outside London. It contributes around £ or 11%, of annual tax revenues. 5  Financial services are the UK’s most important exports, running a trade surplus of around £ or 3% of GDP. The rest of the economy runs a deficit almost twice as large. Being at the heart of the global financial system reinforces the ability of the rest of the UK economy, from manufacturing to the creative industries, to compete globally. And it broadens the investment opportunities for UK savers, giving them the potential to earn better risk-adjusted returns. But the UK’s financial system is more than a national asset. It is also a global public good. 6  The UK is the leading internationally active financial centre. It has the largest global share of cross-border bank lending and foreign exchange trading, the second largest asset management industry, and the fourth largest insurance industry in the world.

Figure 2 Commodity prices (*) (index, 2009=100) 240  240  210  210  180  180  150  150  120  120  90  90  60  60  30  30  06 Edible oils  07  08 Sugar  Meats  09 Dairy  10  11  Cereals  WTI oil  (*) Except for WTI oil, FAO indexes are used. Source: Bloomberg. 6  BIS central bankers’ speeches  Figure 3 Inflation  (annual change, percent)  CPI  Core CPI (4)  10  10 6  6  8  8  6  6  5  5  4  4  4  4  2  2  3  3  0  0  2  2  -2  -2 1  1  -4  -4 0  0  05  06  07  08  U.S.A. Emerging Asia (2)  09  10  11  05  06  07  Eurozone Emerging Europe (3)  08  09  10  11  Latin America (1)  (1) CPI anc Core CPI include: Brazil, Colombia, Mexico and Peru. (2) CPI includes China, Indonesia, Malaysia, South Korea and Thailand. Core CPI includes South Korea and Thailand. (3) CPI includes Czech Rep., Hungary, Poland and Russia. Core CPI excludes Russia. (4) Uses definition of each country. Sources: Bloomberg, CEIC Data and statitics institutes of respective countries.
As the risks associated with a high level of debt are so high, it should be in the countries’ interests to shoulder a greater responsibility for improving their own situation. This brings me to the second aspect I would like to discuss today, that is how the problems of highly-indebted countries are handled. Sustainable solutions require responsibility It is now obvious that some European countries need support from the IMF and the EU and it is good that this possibility exists. However, focusing too much on various support measures undermines the incentives for the countries themselves to find sustainable solutions to their problems. I suspect that at least one reason for the comparatively weak results achieved so far with regard to budget consolidation and reforms at the national level is that altogether too much energy has been expended on support facilities and too little on what is needed to improve the preconditions for an economically strong Europe. However, I am not a fanatic who claims that budget consolidation is the one and only solution. The least painful way to strengthen a country’s public finances is to work with structural reforms that benefit the country’s economic growth. This may relate to reforms of the labour market and the pension system, reforms of the fiscal-policy framework and, in some cases, fundamental institutional reforms.

This applies, for example, to the need for consolidation and which strategy is best for finding solutions to the debt crisis in the euro area as quickly as possible. The question of what role the central banks should play in counteracting an excessive expansion of credit and indebtedness is also often debated, and the members of the Executive Board of the Riksbank also have different opinions about this. I don’t find this strange at all, on the contrary it is entirely natural. Hopefully, this debate will contribute to constructive solutions going forward. Thank you. BIS central bankers’ speeches  13
In autumn 2012 we expect an interest rate of close to 3½ per cent, while market participants expect an interest rate of around 2¾ per cent 3. The deviation is considerable, but not exceptionally large. Our interest rate forecast seems to have the greatest effect on market interest rates in the year ahead. The difference is greater slightly further out. Differences may indicate that the central bank and market participants at times have divergent views regarding developments in the Norwegian economy. How does the market react to the publication of the interest rate forecast? For example, market participants may believe that a higher interest rate level in Norway than in other countries will result in a stronger krone exchange rate because it may be profitable to invest in Norwegian kroner and borrow in other currencies. Our projections are based on the assumption that the exchange rate will over time adjust so that the return on investments in Norwegian kroner will be the same as the return on investments in foreign currency – the so-called uncovered interest rate parity assumption. A positive interest rate differential will then reflect that the krone is expected to depreciate over time. At the same time, we seek to take account of the fact that risk premiums on investments in Norwegian kroner may vary over time. The interest rate forecasts have been useful – and it is an advantage, not a weakness, that the uncertainty surrounding the forecasts is well known.

Limitations on loan-to-value and loan-to-income ratios, which are applied in Norway, are examples of rules that can have a stabilising effect. Minimum capital requirements for financial institutions and liquidity and funding structure requirements are other examples of rules that will make high credit growth more expensive for financial institutions, and thereby for customers. Rules to ensure that shareholders and creditors bear the cost if banks suffer substantial losses or have to be wound up will have a similar effect. Financial vulnerability can build up more quickly in periods of expansion, partly because financial institutions then have a stronger inclination to take risk. This implies that regulations should be countercyclical, having the strongest effect when the risk of a buildup of imbalances is greatest. It is important that the rules function as automatic stabilisers in the economy. Discretionary use of instruments is considerably more demanding. But it may nevertheless be advisable to introduce such instruments, such as capital requirements that vary over time with the rise in debt and asset prices. The Basel Committee, which assesses new rules for financial institutions and which includes members from major countries, has proposed the introduction of a time-varying capital buffer requirement over and above the minimum capital requirement. Financial corporations with a capital buffer judged to be insufficient would be subject to restrictions on dividends and other payments to shareholders and employees.
Another big myth about Bulgaria was the imminent “collapse” of our banking system (because of the “avalanche” of bad loans and the “dependence” on foreign banks which would have run away in panic and withdrawn their capital from Bulgaria). None of all these apocalyptic prophecies has happened. Our banking system kept sizable buffers and demonstrated impressive for the whole EU ratios of capital adequacy and liquidity. Given the high level of domestic depositors’ trust (only in one year, until March, total deposits increased by over BGN 5 billion), the dependence on foreign sources of funding diminished considerably – at end-March less than 13% of total attracted resources comes from parent banks abroad, as opposed to nearly 1/4 at end-2008. Ultimately, unlike some of the more advanced economies, no bank in Bulgaria needed to be rescued. And the very frequent headlines about “bad” loans do not reveal the true picture in Bulgaria as compared with the other economies in the EU. The reason is that the legal framework, financial reporting standards and regulatory practices in the various countries are rarely the same, and this seriously hampers any comparisons across countries (as an example, some countries directly write off and keep off-balance sheet a large part of their non-performing loans).

with perfectly controlled deficits and levels of public debt, which logically places limits on the growth of public debt markets. This contradiction is known by economists as the “Triffin dilemma”. It was first identified in relation to the U.S. balance of payments deficits and the value of the dollar, but it can also be applied to fiscal equilibrium. The economy needs a growing volume of risk-free assets, but the more they are issued, the more risky they become. We cannot totally side-step this dilemma, but we can avoid making it worse. It is clearly not good for major developed countries to find themselves in a situation where their solvency is put into question, or to allow markets to think that under certain circumstances, they may be unable to honour all their commitments. But this is what we have done in Europe, against the better judgement of the ECB, by introducing the principle of private sector involvement. The idea is attractive in theory. However, its consequences for financial stability are extremely negative. There has never been any doubt about whether the United Kingdom or the United States would honour their debts. Today they are enjoying very favourable interest rates compared with Spain and Italy even though the latters’ fiscal fundamentals are better. I know that some attribute this difference in borrowing conditions to the actions of the UK and U.S. central banks. I do not agree.
Mr. Carse reviews the progress being made towards global regulation Address by Mr. David T.B. Carse, a Deputy Chief Executive of the Hong Kong Monetary Aurthority, at the Bankers’ Association for Foreign Trade 75th Anniversary Annual Meeting held in Florida on 6/5/97. I am pleased to be here this morning to talk to you about the Hong Kong perspective on the trends in global regulation. I have been asked particularly to talk about our experience of being a host supervisor - in other words, what it is like to be on the receiving end of consolidated supervision. This is quite appropriate because, although the Hong Kong Monetary Authority is the home supervisor for a number of local banks with overseas operations, the distinguishing characteristic of Hong Kong is that it is the host to almost 500 banks from over 40 different countries. This is in keeping with its role as one of the leading international financial centres in the world with the third largest representation of foreign banks and the fifth largest total of external assets. Hong Kong after 1997 Of course, Hong Kong’s other distinguishing characteristic is that it will experience a reversion of sovereignty to China in less than two months’ time. This has naturally aroused much interest and speculation among the foreign banks based in Hong Kong about the legal and regulatory environment which will apply after the handover on 30 June, and I will therefore try to explain to you briefly the main features of the arrangements that will apply.

In particular, the Hong Kong Monetary Authority, which I represent, has the legal powers, monetary instruments and financial resources - including $ 63 billion of foreign currency reserves - to fulfill its role as the central bank of Hong Kong and to maintain the value of the HK dollar. During the four years of its existence, the HKMA has built up a good working relationship with the People’s Bank of China which has made it clear in public that it will not take over the role of the Monetary Authority in Hong Kong after 1997. The separate role for Hong Kong after 1997 is underscored by its separate membership alongside China of international organizations such as the Bank for International Settlements and the Asian Development Bank, and its participation in the IMF’s New Arrangements to Borrow. BIS Review 55/1997  -2-  Of course, what matters is not what I say but what the market actually thinks. Judged by this criterion, there is genuine confidence about the future. This is shown by the consistent stability of the HK dollar; the strength of the stock market, though it has its ups and downs in line with expectations about US interest rates; the growth in HK dollar deposits of about 20% over the last year; and the decline in the margin of our 10-year Exchange Fund Notes over US Treasuries to around 50bp compared with 90bp at the end of 1996.
But, it may be a slight overstatement to declare that Asia as a whole has become resilient to shocks and disturbances today. In a sense, the impressive heights of Asian international reserves may be construed less as an indication of fundamental strength than as an indication for needed progress toward modern monetary policy framework. In addition to that, the size of accumulated global financial vulnerabilities that may unwind in the near future is by most measures unprecedented; the extent and the whereabouts of the risk concentration are unclear. And as a result, circumstances of greater macroeconomic adversity may yet again put to test emerging markets’ ability to adjust. The pressing and practical challenges emerging Asia faces in the near term are three-fold. Indeed, the three challenges are inter-related. They are “hot money” inflows and large inflows in general, pressure for rapid domestic currency appreciation, and finally, the potential loss of monetary autonomy in the sense of independent interest rate policy. Having done the right thing over the past 10 years, Asian emerging markets have become darlings of international investors and have had ample access to funds at favorable cost – although the more powerful underlying reason may ironically be a medium-term flight from US dollar assets since 2002. With large capital inflow comes pressure for these currencies to appreciate. In this experience, some currencies appreciate faster than others. In fact, those that surrender most of their monetary autonomy or maintain restrictions on cross-border capital flows need not feel immediate pressure to appreciate.

Minouche Shafik: The interaction of monetary and macroprudential policy Speech by Ms Minouche Shafik, Deputy Governor for Markets and Banking of the Bank of England, at the IMF panel on “Revisiting Monetary Policy Frameworks”, Lima, 10 October 2015. *  *  *  I would like to thank David Aikman, Angus Foulis, Grellan McGrath and Alex Varadi for input to the preparation of these remarks and Don Kohn for comments on an early draft. •  The “lean or clean” debate used to be one of the most contentious in monetary policy until the crisis. Should monetary policy “lean against the wind” in the expansion phase of the credit cycle? Or should it remain solely focused on delivering the inflation target and “clean up” after the credit cycle contracts? The crisis taught us that cleaning up afterwards is a very expensive proposition. But are we confident enough in macroprudential tools to prevent the emergence of unmanageable risks during the credit cycle? The debate remains very much live, in part because macro-prudential policies are still nascent and we have not yet accumulated sufficient evidence through a credit cycle to make definitive judgements about optimal policy. “Lean versus macropru” remains an area in which perfectly reasonable people can have very different opinions. •  At one end of the spectrum there are those – such as Lars Svensson – who argue that the cost-benefit calculus is likely to be tilted heavily away from directing monetary policy at credit bubbles.
Svein Gjedrem: Ten years of inflation targeting strategy in Poland compared with the experience of other countries Presentation by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), at the conference "20 years after the collapse of the socialist economy. Transformation, economic growth and convergence in Poland and other Central and Eastern European countries ", National Bank of Poland, Warsaw, 5 June 2009. *  *  *  Thank you for the invitation to speak at your conference. It is a pleasure for me to be here in Warsaw on this occasion. Norges Bank was given an inflation targeting mandate in 2001. Inflation expectations have been well anchored around the 2.5 per cent target rate in recent years. We practice flexible inflation targeting. The credibility of our inflation target has enabled monetary policy to support a stable economic growth path. However, like other countries, Norway was hit by the international economic downturn that followed the financial crisis. The estimated growth rate for 2009 is minus one percent. Preceding the downturn, we went through a long period of low CPI inflation. Headline CPI in Norway is strongly affected by fluctuating energy prices. An inflation measure that instead includes trend energy prices, CPIXE, illustrates how the inflation rate gradually has been approaching our target of 2.5 per cent. In this – until the fall of 2008 – rather benign macroeconomic environment, rising property prices, high credit growth and a low saving ratio posed a policy challenge – as in many countries.

While most countries have leveraged on the existing legal or regulatory frameworks developed for consumer protection in general, there is a need to recognise the limitations of such general frameworks in addressing consumer protection in the context of promoting a more inclusive financial system. A consumer protection regime that relies on full disclosures may mean very little to consumers that have neither the capacity to understand the disclosures, nor the ability to exercise the appropriate choice between the products being offered. Existing consumer protection frameworks may need to be adapted to address the specific needs of the more vulnerable groups. Finally, the development of a financial education programme is vital to enhance financial capability for consumers to participate effectively in the financial system that is dynamic and fast evolving. We are now in an environment that is seeing the proliferation of financial products and services and the emergence of electronic finance. Greater financial literacy will also ensure that the financial industry will be responsive to the more discerning demands. Being ill equipped or having a lack of understanding of the nature of the products could increase vulnerability to misselling by financial institutions or to fraud and scams. Proficiency in financial knowledge will contribute towards greater empowerment and competent financial decisions. Studies have shown that financial education that is made available at an early age, in the school education system, will strengthen this potential and enhance the greater financial inclusion.