samchain/econo-pairs-v1 huggingface dataset:
Jean-Pierre Danthine: Taming the financial cycle Speech by Mr Jean-Pierre Danthine, Vice Chairman of the Governing Board of the Swiss National Bank, at the 30th SUERF Colloquium, Zurich, 5 September 2012. *  *  *  Introduction The global financial crisis has been weighing heavily on the world economy since 2007. The crisis was severe. In most advanced countries, the recovery has been weak in historical comparison. Many of these economies are struggling hard to regain the jobs lost during the last four years (slide 1).1 The crisis originated in the bursting of a house price bubble driven by an excessive credit expansion in the US, which eventually pushed the global financial system to the brink of collapse. In some countries, such as Spain or Ireland, the crisis was further compounded by the bursting of their own housing bubbles. In this regard, the current crisis is an excellent example. Historical evidence shows that the macroeconomic cost of an asset price bubble that bursts is particularly severe when the property market is affected. Moreover, such events tend to be more costly when the bubble is financed through credit and when leveraged financial institutions are directly involved.2 Switzerland has been less affected by the recent crisis and has recovered more quickly from it. There is no room for complacency, however. The recovery has been boosted by a thriving housing market and strong credit growth. In the wake of this, the medium-term risk to financial stability has been increasing.

Christian Noyer: Evolution of the regulation in Europe and in the United States – convergence or divergence? Keynote address by Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, to the Paris-Europlace Financial Forum, New York, 18 April 2011. *  *  *  Strengthening financial regulation has been high on the agenda of the G20 since Pittsburgh in October 2008. Much has already been achieved both at the international level especially through the Basel Committee for Banking Supervision but also on national level with the Dodd-Frank Act in the US and the pending regulation for market infrastructures in the European Union. It is fair to say that the evolution of the regulation in Europe and in the United States has not always followed the same path in the past. At a time when our regulations are completely revisited and when many restructurations are taking place in the finance industry, rigorous consistency on both sides of the Atlantic is clearly needed if we want to avoid regulatory arbitrages and uneven level playing field which would be the seeds for inefficiencies and future disappointments. In my remarks today, I will briefly discuss the achievements on reforms of financial regulation. Then I will highlight some existing discrepancies between European and US regulatory frameworks that should be addressed. I. Regarding achievements in financial regulation: What has been completed so far?
Figure 2 Long-term interest rate  (Central Bank instruments, percent)  9  9  8  8  7  7  6  6  5  5  4  4  3  3  2  2  1  1  0  0 03  04  05 5-year BCU  06  07  08  10-year BCU  09  10  11  10-year BCP  12  13  14  5-year BCP  Source: Central Bank of Chile. BIS central bankers’ speeches  9  Figure 3 Labor force participation by gender (percent) 90  90  80  80  70  70  60  60  50  50  40  40  30  30 96  98  00  02  Men, Chile  04  Men, OECD  06  08  Women, OECD  10  12  Women, Chile  Source: OECD. Figure 4 Inflation indicators (*) (annual change, percent) 5  5  4  4  3  3  2  2  1  1  0  0 11  Jul. CPI  12 CPIEFE  Jul. 13  EES one year ahead  Jul. 14  Jul. EES two years ahead  (*) As from January 2014, new indexes are used with annual base 2013=100, so they are not strictly comparable with earlier figures.

Meanwhile, although a weaker domestic economy could amplify capacity gaps and ease inflationary pressures, we cannot rule out that its effects on the exchange rate may offset the price effects, at least temporarily, thus delaying the convergence of inflation. Let me now share with you some concluding thoughts. Final thoughts Domestic output and demand have been weaker, and more persistently so, than we expected a few months back. The sharper fall in investment coupled with a more marked deceleration of private consumption, so we lowered our growth forecast for this year below the range we projected in June. Annual inflation, on the contrary, has been in line with expectations and we continue to see its present high level as temporary. As from June, the Bank has cut the monetary policy rate by 50 basis points, taking it to 3.5 percent, and has reiterated that it will consider the possibility of making further reductions to the MPR in line with the evolution of domestic and external macroeconomic conditions and its implications on the inflationary outlook. No doubt the results and projections presented today show a weak performance of the Chilean economy. We have made significant corrections to our output forecast that respond to the combination of external and internal factors, some of them foreseen, some unexpected. Within the latter, it is obvious that the widespread deterioration of private sector expectations has played a major role. The true magnitude of such role is difficult to determine, but it is certainly big, particularly when it comes to projections.
The deficits are currently large in all of the vulnerable countries, but while Ireland and Spain have been able to show a balance or surplus during the years prior to the crisis, Italy and Portugal have shown a deficit throughout. (Slide: General government net lending in Portugal, Ireland, Italy and Spain). A common precondition for the ability of these countries to renew their loans at a manageable cost is the credibility of their fiscal policy consolidation plans. The example of Ireland points to a credible consolidation plan with concrete decisions on large cuts in public expenditure being able to reverse an upward trend in interest rates, while the greatest pressure is currently on Portugal, where the ten-year rate rose last week. (Slide: Government bond rates of Portugal, Ireland, Italy and Spain, compared with those of Germany). The more favourable the conditions for the development of domestic and foreign demand, the greater are the chances that good GDP growth will be able to reduce the problems in public finances. Those countries that have not had large falls in asset prices, including Italy, do not risk suppressed domestic demand in the same way as, for instance, Spain and Ireland, where property prices have fallen substantially. With regard to demand from abroad, the problems are made more severe by wages and prices having grown faster in these countries than in the euro area as a whole since the euro was introduced.

Swedish fiscal policy constitutes one of the external preconditions for monetary policy. However, fiscal policy in Sweden does not need to be tightened to the same extent as fiscal policy in other countries. The Government is assuming in its Spring Fiscal Policy Bill that public finances will weaken further by one percentage point to a deficit of –2 per cent in 2010, while we at the Riksbank believe that the deficit will stop at –1 per cent. After that, we are assuming, as is the government, that there will be a gradual improvement in public finances of around one percentage point a year. If fiscal policy is different from our expectations, this may affect the picture of resource utilisation and inflationary pressures, and this could be a reason to adjust the forecast for the repo rate in the future. Concluding remarks Debt crises in several areas in the world around us have illustrated the importance of sustainable public finances. The large deficits in public finances in the wake of the financial crisis tend to lead to higher interest rates and will force tighter fiscal policy to be conducted, which will subdue growth abroad. This is a factor which means that in our most recent Monetary Policy Update we assume that GDP growth in Europe will be relatively weak over the coming years. There is also a risk of a more dramatic development. Greece has recently been the primary object of speculations regarding the sustainability of public finances. But Greece is not the only potential problem.
In this framework, pricing goods and services produced by the public sector rationally and enhancing the quality of fiscal discipline is crucial in terms of the predictability of inflation. Another channel, which affects inflation and inflation expectations, is the incomes policy of the public sector. One of the main determinants of expectations for price and wage inflation in Turkey is the increase in wages made by the public sector to its own employees. Wage increases in the public sector may set a precedent for the private sector. In this context, the consistent trend of the incomes policy with the inflation target is significant in terms of achieving the inflation-targets more easily and quickly. One of the main components of total demand is the public sector’s direct purchase of goods and services. Therefore, while evaluating developments regarding the inflation outlook, the Central Bank carefully monitors public expenditures as well. The Central Bank takes into consideration the budget projections while setting the inflation targets and the monetary policy perspective and hence, makes various assumptions regarding the channels mentioned above. In case of an unpredicted development in one of the channels, the policy stance needs to be updated. Monetary Policy Committee meetings and the decision-making process The Monetary Policy Committee will continue to meet once a month in the upcoming period as it has done since 2001 and as stipulated by Central Bank Law. The meeting will continue to be held in two sessions.

Table 1: Inflation path consistent with the end-year target and the uncertainty band  March June  SeptemberDecember  Uncertainty Band (upper limit)  11,2  8,7  7,3  6,0  Path Consistent with the Target  9,2  6,7  5,3  4,0  7,2  4,7  3,3  2,0  Uncertainty (Lower Limit)  Band  The difference between the targets and forecasts In last year’s policy statement regarding the general framework of the inflation-targeting regime, it was stated that the inflation target would only be changed in the event that sharp and long-term deviations from the target are expected or the medium-term targets no longer make sense due to factors beyond the control of monetary policy. It was also stated that temporary shocks would only change inflation forecasts rather than inflation targets and the points of reference to be used by economic agents would be inflation forecasts for the short-term and the inflation target for the medium-term. This policy approach was put into practice after the supply-side shocks of 2006. The inflation forecasts were updated in July and it was announced that inflation would stand well above the end-year inflation target; however, the target for end-2006 was not changed. Accordingly, the economic agents have taken the inflation forecasts announced by the Central Bank for end-2006 as a point of reference instead of the end-year inflation target for 2006. In fact, inflation expectations for end-2006 are in line with the Central Bank’s forecasts.
In the near term, however, a lower numerical target implies a slightly less expansionary monetary policy as actual inflation is somewhat closer to target. But because the inflation targeting regime is flexible, with weight given to developments in output and employment, the effect on the key policy rate in the short to medium term will be marginal. Let me conclude. The global economy finally appears to have recovered from the prolonged weakness that followed the financial crisis. Growth has also strengthened in Norway after the decline following the oil price collapse. The outlook for the Norwegian economy suggests that the key policy rate may be increased this year for the first time in seven years – this is a good sign. 1 See for example Wheeler G. (2014): “Reflections on 25 years of Inflation Targeting”, Reserve Bank of New  Zealand, speech delivered on 28 November 2014 and Norges Bank (2017): “Experience with the monetary policy framework in Norway since 2001”, Norges Bank Papers 1/2017. 2 See Ministry of Finance (2018): “New regulation on monetary policy,” Press release of 2 March 2018, or Meld. St.  8 (2017–2018). Ny forskrift for pengepolitikken. (White Paper from the Ministry of Finance. In Norwegian only.) 3 See Norges Bank (2018): “Modernisation of the Regulation on Monetary Policy”,Norges Bank´s letter of 28  February 2018 to the Ministry of Finance. 4/4  BIS central bankers' speeches

Figure 1: Financial Services Value Chain  At present, the most significant changes are taking place at the front-end, where innovative payment service providers (PSPs) are providing new user interfaces for domestic retail and cross-border payment services through digital wallets or pre-funded eMoney. 8  Other aspects of the customer relationships are being opened up. For example, aggregators are providing customers with ready access to price comparison and switching services. This will increase further when aggregators gain access to banks’ Application Programme Interfaces (APIs). 9  These new entrants are capturing potentially invaluable customer data which can be used to target non-bank products and services. 10  8  For example, more than 80% of incumbent financial institutions thought their customers were already using FinTech companies to make payments whilst nearly 70% thought they were doing the same for fund transfer and around 60% for personal finance. Only 50% thought their customers were doing so for traditional deposits and savings. See PWC “Global FinTech Report” (2017). 9 The second Payment Services Directive (PSD2) will allow, conditional FCA authorisation and customer authority, non-banks to access customers’ bank account data. In the UK, the Competition and Markets Authority has required that the UK’s nine largest banks adopt an open banking standard for APIs by early 2018.
Examples are the slowdown in international economic activity which became evident during the second half of 2011 and the fall in inflation at the end of 2013 and the beginning of 2014. It is easy to verify that these events were difficult to predict – and not merely something that everyone but the Riksbank was aware of in advance – by examining how forecasters in general viewed developments at the time. Thus, I think it is quite clear that the current low inflation is not a logical and predictable consequence of the repo rate not being held at 0.25 per cent after the crisis. As I mentioned at the start, there is an international debate on to what extent the central banks’ policy rates should be used as a complement to macroprudential measures to try to prevent lending and housing prices from rising too quickly, or more generally to counteract the build-up of financial imbalances. This is an important discussion and it would be very unfortunate if the critics’ alarmist but incorrect conclusions regarding the Swedish experiences, which can roughly be summarised as ”don’t try this at home – you may burn down your house”, were to be regarded as a truth in the debate. It is important that monetary policy is evaluated. But one condition for drawing the right conclusions is that the evaluation is based on a correct description of what has actually happened. The recent criticism has, in my opinion, become alienated from actual events.

Such an occurrence can affect other economic agents. They may face illiquidity and even insolvency, affecting market interest rates, in turn leading to changes in trading activities and a disruption in market confidence Payment systems are an essential component in preventing such occurrences and a technical mechanism for the central bank to step in order to challenge contagion or potential contagion. The interest of central banks in financial stability was largely triggered by the Herstatt incident of June 26, 1974. German banks processed Deutsche Mark payments to Herstatt bank in exchange for US Dollars, to be delivered through Herstatt correspondent account in New York. Regulators, deciding to close the bank for lack of solvency immediately, failed to appreciate the time-zone difference between Frankfurt and New York, leaving transactions half-completed. German banks did not receive their US Dollar payments. Although the Herstatt incident did not lead to a financial-stability crisis, it made central banks aware of the risk and they started developing a continuous linked settlement platform, whereby commercial banks manage settlement of foreign exchange amongst themselves on a payment versus payment basis. Cooperation in this area led central banks to share experiences covering other areas of payment systems and financial stability. Well-functioning markets depend on the willingness to develop adequate solutions to ensure smooth functioning of payment systems. Ironically, part of the problem stems from the very fact that technological advances speed up the payment systems and make them more reliable. This in turn enables banks to economise on liquid balances.
Tony Latter: Banking and development Address by Mr Tony Latter, Deputy Chief Executive of the Hong Kong Monetary Authority, at the 2001 APEC Economic Outlook Symposium held in Hong Kong, 28 June 2001. *  *  *  I should like this morning to address three particular aspects of the broad topic of banking and development. One is the contribution of banking – or the financial sector more generally – to the economy in terms of activity. The second is the role of banks as providers of cross-border finance for development. The third is the implications of the internet revolution for the development of banking itself. Contribution of banking to the economy Our very distant ancestors survived without money, let alone banks. With the passage of centuries and the growing complexity of barter, physical money emerged as a useful unit of account, a medium of exchange and a store of value. Still later, banks emerged as intermediators between, on the one hand, those with holdings of money surplus to immediate need and attracted by the prospect of earning interest, and, on the other, those willing to pay interest in order to be able to accelerate their spending. With the further passage of time various other means of intermediation, such as marketable securities, also developed. A key point here is that banks only emerged because of the evident utility in the service they provided.

Caleb M Fundanga: Fostering entrepreneurship amongst young people in Zambia Remarks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the VentureComp launch by Intermarket Banking Corporation, Lusaka, 12 January 2010. *  *  *  The Managing Director Intermarket Banking Corporation, Mr Subhrendu Chatterji Mr Joseph Toubi, Executive Vice President, Business Development & International Relationship, Afriland First Group Representatives from the Securities and Exchange Commission Representatives from the Pension and Insurance Authority Representatives from Lusaka Stock Exchange Representatives from Commercial Banks and other Financial Institutions Distinguished Invited Guests Members of the Press Ladies and Gentlemen. I am honoured for the invitation to officiate at this important launch of the business plan competition – VentureComp 2010. Allow me to begin by commending Intermarket Banking Corporation for its commitment to providing innovative products and services on the market. I have noted that the bank has brought an array of products and services that specifically target the small and medium scale enterprises and in some cases business start-ups. This is commendable and should be emulated by other banks. I am reliably informed that VentureComp 2010 is a business plan competition for students in all Universities, Colleges and other Institutions of higher learning. The spirit of the competition is to foster entrepreneurship amongst our young people and highlight the numerous opportunities available in the area of business. It is also interesting to note that the best business plan will be rewarded with start-up capital for immediate realization of the idea behind it.
Financial Conditions Index *  *For further details on financial conditions index, see CBT Research Notes in Economics No.12/31. Source: CBRT. Chart 14. Chart 15. July 2013 Inflation Forecasts and Realizations (Percent)  Inflation Forecast and Realizations Excluding Unprocessed Food, Tobacco and Alcoholic Beverages (Percent)  * Shaded region indicates the 70 percent confidence interval for the forecast. Source: TurkStat, CBRT. * Shaded region indicates the 70 percent confidence interval for the forecast. Source: TurkStat, CBRT. BIS central bankers’ speeches  7  Chart 16. Chart 17. Core Goods and Services Prices (Annual Percent Change)  Core Inflation Indicators SCA-H and SCA-I (Annual Percent Change)  Source: TurkStat. Source: TurkStat. Chart 1.2.5. Chart 1.2.6. GDP and Final Domestic Demand (Seasonally adjusted, Billion TL, 1998 prices)  Export-Weighted Global Economic Activity Index* (2008Q2=100)  Source: TurkStat, CBRT. * For methodology, see Inflation Report 2010-II, Box 2.1 “Foreign Demand Index for Turkey”. Source: Bloomberg, Consensus Forecasts, CBRT. 8  BIS central bankers’ speeches  Chart 20. Oil and Import Price Assumptions Oil Prices (USD/bbl)  * Shaded area indicates the forecast period. Source: Bloomberg, CBRT. Import Prices (USD, 2010=100)  * Shaded area indicates the forecast period. Source: TurkStat, CBRT. Chart 21. Inflation and Output Gap Forecasts  * Shaded region indicates the 70 percent confidence interval for the forecast. BIS central bankers’ speeches  9

Politicians cannot make beautiful declarations about providing their citizens with the best possible financial services at the lowest possible prices without facing the consequences of that. In practice, this might mean stopping the nurturing of national champions. At the moment it is quite obvious that in banking no significant cross-border deals can be made without the silent approval from concerned governments. No wonder, banking integration is slow. BIS Review 22/2004  3  To conclude: in order to gain the full benefits of financial integration, we must build a regulatory framework which minimizes the costs and barriers of cross-border expansion. This does not have to mean less regulation, but certainly more efficient and harmonized regulation. Again, there must be an efficient process to continuously update banking regulation to take account of developments in banking activities, instruments and structures. At the same time, we must adjust our supervisory and crisis management arrangements so that we can deal with this new banking landscape in an adequate way. We have had enough of declarations. Let us now move to attack the real political problems. 4  BIS Review 22/2004