samchain/econo-pairs-v1 huggingface dataset:
Figures differ across countries – with the lowest numbers in the Czech Republic (around 20 percent) and the highest in Romania (above 50 percent) – but the tendency is the same. Referring to the benefits of euro adoption, one of the prominent ones, namely the lower financing costs, is no longer obvious. The incomplete institutional setup of the European project in general and the European Monetary Union in particular – weak fiscal rules and the lack of any transnational instruments that would have enabled monitoring cross-border private capital flows – gave rise to a number of vulnerabilities which the recent crisis has exposed. To be more specific, what sets the European Union apart from the other industrialized economies is precisely the fact that the initial banking crisis which hit everybody here gave birth to fears of sovereign default, which reinforced banking system vulnerability and sapped investor confidence further, thus deepening the recession. The consequence of all that was the financial fragmentation issue, which is precisely the reason why the lower financing cost benefit of euro adoption, seems to have vanished. Another unfortunate consequence was that the benefits brought about by commercial integration were significantly diminished by lack of growth in the euro area. The fixes proposed to the institutional architecture of the European Monetary Union, such as the setup of the European Stability Mechanism and even that of the Banking Union, brought 2  BIS central bankers’ speeches  about direct costs of adopting the euro.

Euro adoption and Banking Union For a non-euro area country the issue of participating in the Banking Union is intrinsically linked to that of euro adoption. After the crisis broke out, all non-euro area EU countries in Central and Eastern Europe with floating exchange rate regimes, as well as Bulgaria, shifted to a wait-and-see approach as regards euro adoption, even though, in most of them, the Maastricht criteria were already fulfilled or within reach. This state of affairs may appear paradoxical, given that, shortly after these countries’ accession to the European Union, their euro adoption target dates were very ambitious, despite the scant progress at the time in fulfilling the Maastricht criteria – 2008 in Hungary, 2008/2009 in Poland, 2009/2010 in the Czech Republic, 2010 in Bulgaria and 2014 in Romania. None of these deadlines were met. Currently, virtually all new Member States outside the euro zone lack a euro adoption target date, which is indicative of a substantial shift in approaching the euro changeover as a whole rather than their inability or difficulty to comply with the reference values of nominal convergence. How did this change come about? This shift in approach occurred amid euro adoption benefits becoming less obvious, to which added the increasingly evident costs. This is also reflected by the Flash Eurobarometer, which indicates a significant decline in the number of those who believe that adopting the euro is beneficial for their country.
I would like to emphasize once more that the whole legal framework of the banking system is a topic largely discussed nowadays, not only in Albania, but in international levels as well. Nowadays, risk management has turned into a primary issue and is in the focus of national and international institutions. In this way, regulatory systems are advised to be reviewed and elaborated to be better adapted to current developments and to financial system’s perspectives. The financial system does not operate in the vacuum. It functions under real conditions and our task is to adapt to best experiences. I think our task is to identify the best practices and to try to adjust them to the real conditions of our economy, because by adjusting them to the whole regulatory framework and banking activity, we come to a motif and motivation: the European Community. I am confident that you will use this seminar to find out joint elements in the activity of your institutions, as well as to identify the distinctions. I think it would be valuable to identify also the cases that represent what is regarded as the “best practice” in deposit insurance area. In this way, it would contribute to the achievement of the objective to standardize the regional insurance practices and to create a clearer vision on the insurance activity performance in the future. The activity of the Albanian Deposit Insurance Agency is new. As such, its capability of operating in extreme cases is not proved yet.

The need for an enhanced framework for crisis prevention and management  I do not need to remind you of the long list of financial crises emerging market economies have gone through in the last two decades. Against this background, the international community must, on the one hand, enhance crisis prevention and, on the other hand, design and implement better procedures for crisis resolution. BIS Review 62/2002  3  2.1. Authorities must reflect, in conjunction with the financial industry, on building up a suitable system of surveillance and crisis prevention. The objective of strengthening crisis prevention is shared by the private sector and by official community given the magnitude of potential losses; indeed, in some cases, restructuring costs for banking crises have reached more than 40 % of GDP. Building on international standards and codes is instrumental in establishing an appropriate institutional, supervisory and regulatory framework in the financial sectors of all market economies. The value of international standards is now widely recognised, insofar as they contribute to spreading international best practices and codes of good conduct, very closely linked to the globalisation process and the expansion of international capital flows. Indeed, the conduct of sound national economic and financial policies stands for a primary protection against potential financial contagion. Much has already been achieved with the design of more than seventy internationally agreed norms.
The Bank finds itself in a position rather like that of a church whose congregation attends weddings and burials but ignores the sermons in between. Like the church, we cannot promise that bad things won’t happen to our flock – the prevention of all financial crises is in neither our nor anyone else’s power, as a study of history or human nature would reveal. And experience suggests that attempts to encourage a better life through the power of voice is not enough. Warnings are unlikely to be effective when people are being asked to change behaviour which seems to them highly profitable. So it is not entirely clear how the Bank will be able to discharge its new statutory responsibility if we can do no more than issue sermons or organise burials. Whatever the ultimate shape of the structure and regulation of the banking system – and, as many of you have said, we need to think carefully to get this right – change will be necessary. The costs of this crisis are not to be measured simply in terms of its impact on public finances, the destruction of wealth, and the number of jobs lost. They are also to be seen in the lost trust in the financial sector among other parts of our economy.

Third, as regards the euro area and the sovereign debt crisis, of which the euro area is currently the epicentre, the euro area central banks, and the ECB in particular, have been permanently calling for sound economic policy management, in particular in the fiscal domain, for structural reforms and for reinforced economic governance. As independent institutions that are devoted to stability and that are medium- to long-term oriented, we are an anchor of stability and confidence. This is especially valuable in the turbulent market environment that we are witnessing and that is characterised by acute tensions of some sovereign signatures which are causing negative spillovers on others. Only a few weeks ago, the central bankers were all meeting in the BIS headquarters in Basel in our Global Economy Meeting. Reporting to the press afterwards, I stressed that we were all very closely “united in purpose”: each of us in our own economy, with its different features and challenges, striving to solidly anchor inflation expectations, preserve stability and consolidate confidence. Meeting here in Washington, authorities have the opportunity to display the same unity in purpose to address their economic challenges at home, prevent negative spillovers for the global economy and consolidate confidence in the world recovery.
26  Given the uncertainties I have described and the serial disappointments we have had in recent years  in forecasting the impact of unemployment on pay growth, there is in my view a not immaterial risk that the trade-off is not as it currently appears and that domestic inflation pressure will undershoot the Committee’s collective expectation. In my view the low level of domestic pressure on inflation now, the absence of second round effects from the deprecation of sterling, and inflation expectations around their historical averages, make it possible to wait 24  I have quoted the shorter-term measure for regular pay, rather than total that I use elsewhere, as the inclusion of bonuses in total pay leads to more short-term volatility in that series. 3-month-on-3-month annualized growth for total pay was 2.1% in August but had been above 3% earlier in the year, and has risen well above 4% at two points in the preceding three years without signaling sustained higher wage growth. 25  Job to job flows within a quarter have been at about 2.5% - which is what they averaged over 2005-07 before falling down below 2% in 2009 – since early 2016. Similarly, the MPC’s swathe of surveys have been pointing to recruitment difficulties for some time, for example the REC survey has indicated below-average staff availability since 2013 – and significantly so since mid-2014.

Philipp Hildebrand: In the focus of the Swiss National Bank - economic outlook and monetary policy Summary of a speech by Mr Philipp Hildebrand, Member of the Governing Board of the Swiss National Bank, at the WGZ-Bank, Luxemburg, 9 September 2005. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  The world economy expands at a robust pace but the growth rates of the important economic blocs diverge considerably. In spite of the accommodative monetary policy in most industrial countries, inflation and inflation expectations remain well contained which may, among other things, be due to the process of globalisation and the credibility of central banks. Switzerland, small and extremely open, benefits from a recovering global economy. The conditions for returning to a path of modest expansion look favourable. However, there are certain risks that may affect the global and the Swiss economy negatively. Most importantly, high oil prices and the devastating effect of the hurricane „Katrina”, as well as the possibility of increasing long-term interest rates have to be mentioned. A persistently high price of oil could act as a brake to demand dynamics and growth prospects could also be threatened by soaring long-term interest rates, an effect that could be amplified through the housing channel. In the foreign exchange markets, structural and cyclical factors continue to determine the value of the US-dollar. 1/1
Without a proper legal system, it becomes harder to trade in almost any financial instrument. Two distinct effects may be considered. On the one hand, yields may rise and consequently asset prices fall. In other words, asset yields may incorporate a “legal risk premium”. It is interesting to note that under the Basel II system legal risk is a part of operational risk, which implies that it is taken seriously by the regulators. On the other hand, an inefficient legal system may simply lead business to move elsewhere, namely influence the quantities rather than prices. The importance of the legal environment was recognised most notably in the January 2007 Bloomberg-Schumer report, “Sustaining New York’s and the US’s global financial leadership”, which reported that “a firm and predictable legal environment was the second most important criterion determining a financial center’s competiveness.” An efficient legal system does not, of course, always imply more (and more restrictive) rules. A balance needs to be struck between restrictive rules and a lighter approach, which may be important for the overall competitiveness of financial centres. The current debate about the competitiveness of the US marketplace (in particular in relation to its British competitor) emphasises that this balance is not always easy to find. 3. Financial globalisation and innovation  Let me now turn to some issues related to the impact of financial globalisation and innovation on legal systems.

Also, it is noteworthy that, during this time, lending in the domestic currency has increased; this is translated into a success for both the transmission of the monetary policy and the soundness of the financial system and the private sector. The monetary policy decisions have helped the economy by not causing adverse effects on the banking system soundness indicators. An accommodative monetary policy, potentially, has side effects; but, they have not materialised thanks to the duly and prudential management of the monetary policy intervention. In our daily work, we pay special attention to maintaining a sound system and our decisions take into account potential implications on the banking system at home. In perspective, the short-term shocks of the past have turned into stable equilibriums in the medium term and the non-traditional policies, which are turning into conventional instruments of policy making in our partners, have encouraged a new behaviour among economic and financial agents. These changes affect the Bank of Albania’s ability to stimulate the economy and mitigate the effects from economic shocks during times of difficulties that may arise in the future. The researches will assess whether we are experiencing a new equilibrium or other problems exist in the transmission of accommodative policies, and whether the resilience and reactions against these shocks remain similar to the pre-crisis periods.
They should be expected to be responsible and active, searching for information and understanding the risk profile of products, especially those with a greater degree of complexity. With an approach based on these principles they will be able to take their decisions responsibly, assuming levels of debt that are reasonable, not only in the light of their sustainability at present, but also in the future. However, consumers must not only have access to information, they must also be able to assess it. Institutions must play a role in this respect, offering their customers the products that best suit their needs and informing and advising them accordingly. In addition, in recognition of the importance of raising the acumen of bank customers, the Banco de España is developing a project to educate, through the lnternet, the users of financial products and services. The project’s first phase will be available at the beginning of next year. Allow me, like every year, to conclude by referring to other aspects of the management of the Banco de España. As part of our ongoing effort to increase the transparency and improve the communication of the Bank’s activities, this year’s Annual Report includes an additional chapter on the management of the Banco de España in 2003. This chapter summarises the main tasks performed and the organisational changes made at the Banco de España. I should like to stress that the Banco de España has continued to press ahead with the reforms necessary to adapt the institution to its new challenges.

On this front, a study conducted by the Hong Kong Government in conjunction with TMA earlier concluded that there are no major legal or regulatory obstacles to transactions involving wholesale Islamic financial instruments in Hong Kong. 13. However, there is a need to refine the tax regime in Hong Kong in order to provide a level playing field between sukuk and conventional bonds. Owing to Shariah requirements, structuring sukuk often involves the originator setting up a special purpose vehicle for the purposes of issuing sukuk to sukuk holders, and multiple transfers of underlying assets between the originator and the sukuk issuer in order to generate profits. These complex structures, which are not required for conventional bonds, may incur additional tax and stamp duty expenses for the sukuk issuers. 14. I am pleased to see that an amendment bill to address this issue has been introduced into Hong Kong’s Legislative Council and is now in the final stages of enactment. 3  2  Source: Institute for International Finance. BIS central bankers’ speeches  The bill, once passed, will enable sukuk to enjoy tax treatments similar to those currently afforded to conventional bonds. This would be a significant milestone in the development of a sukuk market in Hong Kong. 15. Apart from providing a level playing field, equally important is the active participation of market players, including non-Islamic arrangers, issuers and investors in the Islamic capital markets, as they will be the ones who lead market development in the future.
01.04.2022  Conference "Rebuilding Social Capital: the role of central banks” Banco de Portugal Pablo Hernández de Cos Governor  Thank you very much Pedro. Thank you, Mario for the invitation. And congratulations to all the staff of the Banco de Portugal for this commemoration. The Banco de Portugal has indeed built an excellent reputation among the central bank community over all these years. It is surely a good starting point for the Banco de Portugal to rebuild social capital here in Portugal. As Lucrezia said, the topic of the conference — the role of central banks in building social capital — is a rather complex question. I will try to simplify it a bit, perhaps too much. I will approach the topic from one angle, which is related to the reason for the specific institutional setting that we, central banks or supervisors in general, have as compared to other public authorities, which is essentially one of independence, or autonomy, if you prefer. It is interesting to go back to the original reason why we want central banks and supervisors to be independent. This is based on the evidence that we have on the determinants of longterm growth, which points to the importance of the quality of institutions. Good quality of institutions is important in particular to allow long-term considerations to be incorporated into the decision-making process. This is, for me, the most relevant argument justifying independence of central banks.

But this disentangling is done, or is at least attempted in this paper, and the pieces of evidence that are provided in it point precisely to the importance of the financial reform. Let me give you some results that in my opinion are relevant: i) we find that banks with higher capital ratios suffered less in terms of, for example, increases in CDS spreads; ii) we also find that strongly capitalised banks showed greater increases in lending than other banks, and, iii) a third result is that the uptake of the public support measures was higher precisely in those banks that had higher capital ratios. The interesting thing about this evaluation is that at the same time there might be some lessons to learn. We are already highlighting some pieces of the regulatory reform that might not be working as intended and let me focus on one issue on which Claudio has also worked in depth in recent years, which is to understand whether capital and liquidity buffers are  2  usable as envisaged. We wanted banks to have higher levels of capital precisely to be used in a situation of crisis. So, if in the end we observe that this capital is not being used, there is a problem, and we might need to modify some parts of the legislation. The evidence is that banks might have been hesitant to use the regulatory capital buffers had it been deemed necessary in practice.
Interest rates are quite low by historical standards, while the equity component of household net worth is improving, as shown in Figure 7. And we have seen some positive improvement in real disposable income. Given all that, one would normally anticipate that housing would be improving. However, lower interest rates are only helpful if credit is available. Figure 8 shows that the number of purchase loans to prime borrowers has been declining, while the subprime market  2  BIS central bankers’ speeches  is dormant.2 The left side of Figure 9 shows the distribution of all home-purchase loans by credit score in 2006 (before the financial crisis) and in 2010.3 It is striking how the distribution of purchase mortgages has changed. Credit standards have tightened, as evidenced by a shift to borrowers with higher credit scores. Given what has happened to housing prices, and unemployment, lenders are presumably more cautious in lending. Far fewer loans are going to borrowers with credit scores below 625, and many more purchase loans are going to borrowers with credit scores above 750. In 2006, about 15 percent of the purchase loans were to borrowers with credit scores below 625, but by 2010, this fraction had fallen to only 3.5 percent. The decline in loans to borrowers with sub-625 scores has not completely resulted from the decline in subprime lending. The right side of the figure shows the credit-score distributions among prime loans, and a similar rightward shift in the distribution is apparent.

The second key question is, how concerned should we all be about a flare-up in inflation – and aren’t the measures the Fed has taken inflationary? Many have expressed concern that Federal Reserve policy actions that expanded our balance sheet dramatically will cause inflation. I firmly believe that in the short run inflation is likely to remain quite low – and that in the longer term we have the tools, and the steadfast commitment, to address inflationary pressures. Indeed, while monetary policy works with lags, I would note that it has been more than two years since the Fed’s balance sheet expanded dramatically. Since that time, core inflation  1  Of course, the views I express today are my own, not necessarily those of my colleagues on the Board of Governors or the Federal Open Market Committee (the FOMC). BIS central bankers’ speeches  1  has fallen and core inflation measures using the CPI or PCE indexes are at something like 50 year lows. Today I will briefly address the role of the low inflation rate for the economy and policymaking. In doing so, I will discuss why inflation concerns have not materialized to date, and why I expect core inflation to remain below 2 percent over the next several years. Question 1: Housing and the economic recovery The economic recovery officially began in the third quarter of 2009, according to the organization responsible for dating our recessions – the National Bureau of Economic Research (NBER).