samchain/econo-pairs-v1 huggingface dataset:
Being gradual is less important than being orderly As William Brainard famously argued more than 50 years ago, gradualism is appropriate in a situation where we face large uncertainty. viii However, the Brainard principle was formulated before monetary economics understood the importance of inflation expectations. Research at Banque de France shows that a central bank facing instrument uncertainty is bound to be overly cautious if it fails to appreciate that being gradual runs the risk of moving inflation expectations adversely. ix We can be gradual, but we should not be slow and delay normalization until higher inflation expectations force us into aggressive interest-rate hikes. What remains essential however is to be orderly, in order to avoid undue market volatility and ultimately economic volatility. Like a gradual normalization, an  Page 6 sur 8 orderly one has a time dimension, as we should avoid putting risks on financial stability through unnecessarily brutal interest rate changes. x But it also has a cross-country dimension, as it also implies avoiding within the euro area unwarranted country-specific spikes in borrowing costs that only emerge from the echo chamber of financial markets. In this respect, our new Transmission Protection Instrument (TPI) is a very powerful tool for an orderly path forward. II.C. How to deal with surprises: a reaction function So far, so good about being orderly or predictable… but uncertainty means surprises, and we have had to deal with many bad ones on inflation figures.

Mexico’s transformation from a nation racked by repeated financial crises to one enjoying healthy economic growth, low inflation, and remarkable financial stability owes in no small part to tireless efforts of Dr Carstens and his colleagues in central bank and Mexican government. 7. I have had the privilege of interacting with Agustin at many international meetings over the last two years, at the BIS, IMF, FSB, and others. When Agustin speaks, people listen. His interventions at meetings are always insightful – balanced, thoughtful, and reasonable. He is an articulate spokesperson for the challenges and concerns of emerging market economies. And occasionally a well-meaning and constructive critic of policies in the advanced economies. And Agustin does all this with an abundance of grace, courtesy, and respect for everyone around him – a gentleman even by the high standards of central bankers. 8. Ladies and gentlemen, please join me in warmly welcoming Dr Agustin Carstens. BIS central bankers’ speeches  1
The benefits of global financial integration Financial integration brings benefits to the Malaysian economy. Being a part of the global financial system facilitates trade and investment flows between Malaysia and the rest of the world. It has allowed foreign investors to invest in Malaysia with full confidence that the profits from such investments can be easily repatriated back to their home countries. Malaysian exporters and importers can freely trade with the world in full confidence that they could conveniently receive and make payments in any currency they wish in a quick and efficient manner. At one time, the lack of banking relationships made it necessary for BNM to established bilateral payments arrangements with central banks in many other developing economies to facilitate payments for trade between Malaysia and those economies. The expansion of correspondent banking has now made such arrangements largely redundant. The globalisation of finance has allowed Malaysian corporates to tap global sources of funds to support their investments and operations in other parts of the world, hence broadening their economic opportunities. It has allowed Malaysian fund managers to invest in other markets to diversify their investments and increase the yields to their unit holders. It has allowed foreign funds to invest in our financial markets, adding depth and liquidity to these markets. It has allowed foreign financial institutions to operate in our markets and our financial institutions to operate in foreign markets. Therefore, our engagement with the global financial system brings real benefits to the economy.

Therefore, maintaining our focus on ensuring the resilience and competitiveness of our economy and financial system will serve us well as we sail the stormy global seas. BIS central bankers’ speeches  9
The reason why I have chosen a European focus is simply that there are already institutional arrangements in place which can be used as a platform for bringing us closer to the goal of supra-national supervisory frameworks. In my view though, the underlying challenges of financial integration are of a global nature. Therefore, even if it may not be possible to achieve the same solutions outside Europe, it should be of wider international interest to at least move in the direction of enhanced cooperation between supervisory authorities. I hope that I have been saying here today can serve as inspiration for further discussions on this issue. Considering that financial integration is already widespread and that the process of revising present regulatory structures will most certainly be demanding and protracted, we need to get to work. Returning to what I said in the beginning, history shows us the importance of having proper regulatory structures in place. Therefore, it would be highly unfortunate if the appropriate measures have not been taken before the next major financial crisis occurs. For once, it would be encouraging to see pre-emptive policy actions rather than a crisis being the catalyst for such actions. Thus, in the same way as the international community is facing increasing challenges to cope with the negative externalities in the environmental area, the financial regulators have to face the consequences of financial integration.

And do the authorities themselves have arrangements in place to produce comprehensive assessments of the operations and the risks of these groups? Under the prevailing regulatory structures I am afraid that the answers to both of these questions are likely to be no. Policy actions are needed As I have tried to illustrate so far, financial integration gives rise to several challenges related to the supervision of cross-border banks. Most importantly, I have argued that the present  BIS Review 83/2007  3  supervisory arrangements are not designed to prevent the cross-border externalities that financial crises may result in. This, of course, is a growing problem in an integrated world. Furthermore, I have argued that there are deficiencies in how the supervision of internationally active banks works in practice, which can partly be explained by limitations in legislation and partly by supervisors not being sufficiently coordinated. In my opinion all this gives us good reasons to reflect on how to take actions for revising the present regulatory frameworks. We need to find ways for countries to cooperate closely and establish mechanisms for coordination and conflict resolution. Motives for a coordinated financial supervision Most of what I have said so far is probably pretty uncontroversial both in terms of the analysis of the challenges of integration and of the need for action. However, it may be more difficult to reach agreement on how to move forward. A number of alternative solutions have been brought into the debate.
If the authorities succeed in developing a system for resolving failing banks, perhaps we can take one step back with regard to other detailed regulations. The work on reforms that has been engaged abroad must be followed up in Norway. A national bank resolution authority must be designated. It should be placed in a unit under the Ministry of Finance. This is not a natural role for a central bank. Among Norges Bank’s key tasks is the management of Norway’s foreign exchange reserves. This responsibility has followed the Bank since its establishment in 1816, first in the form of silver and gold reserves. Later, reserves were expanded to include bank deposits and securities in various currencies. Norges Bank was charged with managing the Government Petroleum Fund when the first capital transfers were made to the Fund in 1996. This was a natural extension of our responsibility for managing foreign exchange reserves. The aim of the Government Pension Fund Global, as it is now called, is to ensure that the income from our oil and gas resources will also accrue to future generations. The Fund is the nation’s family silver. It is no longer held in Norges Bank’s vault, as it was during the periods of the silver and gold standards. The Fund is invested in fixed-income securities, equities and real estate across the world.

The views supporting Islamic finance state that Islamic financial institutions are more resilient to external shocks. Profit and loss sharing feature of the transactions in Islamic finance provides a protection to these institutions, apart from the capital. This feature of the Islamic financial institutions could transfer a negative shock on the asset side to the liability side. Furthermore, due to the fact that the investors (depositors) take on some part of the risk and do not have deposit insurance, they have more incentives to exercise tight oversight over these institutions. In addition, as compared to conventional banks, they have held a comparatively larger share of their assets in reserve accounts for the liquidity management. Thus, even if Islamic financial institutions have risky investments, these buffers make them more resilient to the negative external shocks. On the other hand, the opposing views claim that Islamic finance does not need to improve the financial stability. According to this view, profit and loss sharing feature of Islamic finance transfers the credit risk from Islamic institutions to their depositors, and therefore, motivates the excessive risk taking incentive of Islamic banks. While capital value and earnings of customers are not guaranteed in Islamic finance, this feature may increase moral hazard and motivation for excessive risk taking without adequate capital. 2  BIS Review 124/2009  During the recent financial crisis, Islamic financial institutions have demonstrated significant resilience. They have been less affected compared to the conventional financial institutions thanks to prohibitions on excessive leverage.
Introduction This brief examines monetary policy implementation and its outcomes in the third quarter of 2010. The brief also reviews other economic and financial sector developments. In the conclusion, it provides an inflation outlook for the fourth quarter of 2010. Monetary policy The focus of monetary policy during the third quarter of 2010 continued to be the achievement of the end-year annual inflation target of 8.0%. Consistent with this inflation outturn, annual overall inflation was programmed at 7.3% for end-September 2010. To achieve this, the Bank of Zambia utilised largely Open Market Operations to maintain reserve money within the programmed growth path. This was to be supported by the  BIS Review 148/2010  5  auctioning of Government securities and the maintenance of the fiscal deficit within the programme limits. Inflation Quarterly overall inflation increased to 1.6% in September 2010 from the 1.0% recorded in June 2010, but was slightly lower than the 1.7% recorded in the third quarter of 2009. This outturn was mainly attributed to the rise in food inflation to –0.1% from the –1.7% recorded in the previous quarter, as non-food inflation slowed down to 3.2% from 3.7% during the same period. However, on an annual basis, overall inflation was little changed at 7.7% in September 2010 when compared to the 7.8% recorded in June 2010, but was above the projected 7.3% for the period.

The current account surplus increased to US $ million from a surplus of US $ million recorded the previous quarter, reflecting an increase in the merchandise trade surplus coupled with the narrowing of the services and income accounts deficits. Supporting the current account was the merchandise trade surplus which rose by 74.8% to US $ million in the quarter under review following an increase in exports as well as a decline in imports. Merchandise export earnings edged upward by 18.7% to US $ million, on account of increases in both metal and non-traditional export earnings. Metal export earnings recorded a 20.0% rise to US $ million during the reviewed period, following a rise in copper export earnings although earnings from cobalt fell. Cobalt export earnings declined by 0.5% to US $ million in the third quarter of 2010 due to a 13.8% drop in the average realised price to US $ per mt from US $ per mt ton in the second quarter. This was despite the increase in cobalt export volumes by 15.4% to 2,318.14 mt in the third quarter of 2010. During the reviewed period, non-traditional exports (NTEs) increased by 13.2% to US $ million. This was principally due to an increase in export earnings from cane sugar, cotton lint, electrical cables, fresh flowers, fruits and vegetables, and electricity products. Merchandise imports declined by 6.1% to US $ million during the reviewed quarter.
The Swedish banking system is special It is thus important to put the Swedish banking system into perspective. The total domestic and foreign assets of the four major banking groups amount to 400 per cent of Sweden's GDP. In other words, out banking system is huge. Relatively speaking, it is on a par with the banking system in the United Kingdom, for example. The Swedish banking system is also highly integrated, which means that problems in one bank can easily lead to a crisis of confidence for the entire system. If we were hit by a financial crisis, the costs to society could thus be very high. With this in mind, I intend to focus in more detail on two vulnerabilities in the Swedish financial system that are interlinked. The first is the indebtedness of the Swedish households. The second is the banks’ funding in foreign currencies and their dependence on the currency-swap market. The Swedish mortgage market has structural weaknesses An issue that has been widely discussed recently is the indebtedness of the Swedish households and the risk of a fall in housing prices. Experience in several countries has shown that indebtedness and the development of housing prices are the main explanations of why some countries are hit harder than others during economic crises.

There were in fact transitional regulations that initially meant that the banks were not able to calculate so liberally, but these were the regulations that would apply in the longer term and thus those that the banks and investors, and often the authorities, primarily focused on. Given that the banks, in Sweden and in other countries, only needed a small amount of capital, and given that it was often assumed that they were backed by government guarantees, it was highly profitable for them to take substantial risks. The banks themselves carried only a small part of these risks, while it turned out that the banks’ customers and the taxpayers had to carry the major part. In several countries – Spain, Ireland and Denmark for example, in addition to the United States – we have seen how substantial falls in the prices of the banks' assets, mainly in the form of mortgages, have led to major economic problems. The point is that the risk capital that the banks and their shareholders provide is limited to the value of the share capital. But society’s risks are greater than this. A mainstream assessment in economic research is that a national crisis in the financial system costs the economy around 60 per cent of GDP. In Sweden, this would be equivalent to over SEK 2 000 billion, or  BIS central bankers’ speeches  1  more than SEK 200 000 per Swede.
But it is worth highlighting that the litigiousness and uncertainty associated therewith may ultimately harm the end-customer too. Banks may react to legal uncertainty in two ways: first, by limiting or reducing the number of transactions, which ultimately restricts access to credit; and further, by making newly arranged transactions dearer in order to cover the legal risk-related contingencies. Applied to the real estate market, legal uncertainty ultimately results in greater housing affordability difficulties, paradoxically something it is sought to protect against. The financial crisis has given rise to more demanding legislation which requires that banks not only report but also act impartially, transparently and professionally, taking into account the rights, interests and needs of their customers and going beyond mere formal transparency. Clearly, the Law on Real Estate Lending is a good example of this change. It is a little over 18 months ago that this legislation was approved. The Banco de España views it most favourably, although it is too soon to draw firm conclusions. By introducing various bank-customer safeguard and protection measures, the Law restores and ensures legal certainty. As I have said, such certainty is vital for the proper functioning of the mortgage market. In this connection, I wish to stress that customer protection, far from being a disadvantage for the functioning and profitability of banks, is a centrepiece of any banking business model that is to be viable and sustainable in the long run.

18.11.2020  Opening address of the conference “Consumers and the postCOVID mortgage market” ADICAE Margarita Delgado Deputy Governor  Good afternoon. I would like to thank ADICAE for kindly inviting me to address you on the opening of this conference on the post-COVID mortgage market. Allow me a minor comment regarding the conference title: I fear it is still too soon to talk about the mortgage market situation after COVID, although there is evidently no lack of will to do so. The latest science news on the progress of the different vaccines gives us hope that we may shortly look to the future without seeing the pandemic on the horizon. Let us trust this will be so. In any event, beyond the effects this health crisis may be having in the short term, housing affordability has been a very relevant subject in Spanish society for decades. Worldwide, we are one of the countries with the highest homeownership percentages, and the mortgage market has unquestionably been a decisive factor in making such housing affordability possible. This conference is directed at consumers, although if you will allow me the technical detail, national accounts treats house purchases as “investment”, not as consumption. This is clearly the case and, almost always, this is the most important investment that we “consumers” make in our lives. Given the importance and scale of this purchase, the authorities should watch over individuals’ interests.
We would like the guidance to be relevant not only to Basel Committee member countries, but to non-member countries as well. We would therefore value your feedback. As we take our work forward in the Basel Committee, and as the IFSB conducts its own work in preparing its exposure draft, I believe we would all benefit from keeping a sense of proportion. Clearly,  4  BIS Review 38/2005  we cannot have the same expectations for the governance of a large, complex bank that we have for a much smaller bank. When the Basel Committee issues supervisory guidance, we typically say that supervisors’ expectations should be commensurate with the size, complexity and risk profile of the institution. That applies equally here. My hope is that we can raise the bar for the governance of the banking industry as a whole, while concentrating our supervisory resources on the governance of the most complex and sophisticated institutions. Conclusion I realise that I am all that stands between you and a marvellous gala dinner, so I will keep my closing remarks very brief. I would just like to emphasise that sound corporate governance should be considered a key element of a bank’s ability to understand and manage its risks. As supervisors, we should direct our resources to helping banks improve their controls, culture and clarity in respect to risk management. In so doing, I believe that we will help achieve our objective of a stable and healthy banking system that contributes to the proper functioning of the economy.

It is gratifying that SAMA has achieved its objectives of its monetary policy. The average inflation rate has remained at less than 1 percent over the last 20 years, and these stable conditions have contributed to sustained economic growth of 3% over the period. The exchange rate of the Riyal has also been maintained over the period of Rls. 3.75 per US Dollar, while the rates of exchange against other major currencies have moved within manageable limits. These positive indicators together with the uninterrupted full convertibility of the Riyal since 1961 and no restrictions on payments from and to the Kingdom, have created a stable business environment for the private sector as also for the inflow of capital for domestic investment. Since its establishment in 1952, a major responsibility of SAMA has been to maintain financial stability and promote growth of the national banking industry. As far as SAMA's objective of maintaining a stable financial system, its achievements have been equally remarkable. SAMA has followed prudent policies aimed at creating a sound, stable, and efficient financial system. Such a system has been characterized by freedom of capital flows, open investment climate, availability of ample liquidity, competitive environment and a modern payment system. Over this long period, sound laws and regulations and timely supervisory actions have ensured that Saudi Banks have stayed strong with adequate capital, efficient management, fit and proper directors and managers and sound internal control systems.