samchain/econo-pairs-v1 huggingface dataset:
4/7  To offer an overall view of the scale of the measures adopted by the ECB, the size of the Eurosystem’s balance sheet has more than tripled since the crisis broke in 2008, up to figures close to 40% of GDP. The scale of its balance sheet currently exceeds that of the Federal Reserve and the Bank of England, although it is far below the size of the Bank of Japan’s balance sheet, namely 90% of GDP. This extensive range of measures has been effective in easing financial conditions, in reducing financial fragmentation, i.e. the existence of greatly differing financing conditions in different jurisdictions for borrowers presenting similar risks, and in preventing the period of negative inflation rates that the European economies experienced from turning into a deflationary spiral. Our estimates indicate that the package of monetary policy measures adopted since mid2014 will have had a cumulative effect in the 2015-2017 period, for the euro area as a whole, of 1.7 pp on the level of GDP and of 1.5 pp on the level of prices. According to these calculations, the monetary policy measures may be viewed as responsible for around 50% of the nominal GDP growth recorded in this period. In sum, for the first time in the 10 years that have elapsed since the international financial crisis broke, we may declare the current cyclical juncture of the euro area to be sound and that we have left the risks of deflation behind.

Regulation should only be considered if the objective is abundantly clear and if there is overwhelming evidence that market participants lack the incentives or the capability to adequately manage these risks themselves. Rather than seeking regulation, market participants, central banks and regulators should focus on strengthening an already active dialogue with the aim of furthering our understanding of new types of risk associated with modern financial markets. BIS Review 44/2006  1
Source: Capital IQ, SNL, published accounts, Laeven and Valencia (2010) and Bank calculations. (***) Denotes null hypothesis of mean equality rejected at the 1% significance level. (a)  The classification of bank distress is based on Laeven and Valencia (2010), updated to reflect failure or government intervention since August 2009. (a)  The classification of bank distress is based on Laeven and Valencia (2010), updated to reflect failure or government intervention since August 2009. (b)  For the purposes of the leverage ratio calculation, total assets have been adjusted on a best-efforts basis to achieve comparability between institutions reporting under US GAAP and IFRS. (b)  Total assets have been adjusted on a best-efforts basis to achieve comparability between institutions reporting under US GAAP and IFRS. Chart 6: Risk-based capital ratios of FDIC-insured banks, end-2006  (a)  Source: FDIC and Bank calculations. (a)  Sample has been truncated to remove outlier observations with very large risk-based capital ratios. BIS central bankers’ speeches  29  (a)  Chart 7: Leverage ratios of FDIC-insured banks, end-2006  Source: FDIC and Bank calculations. (a)  Sample has been truncated to remove outlier observations with very large leverage ratios. Chart 8: In- and out-of-sample performance of different models of bank risk (100 (a)(b)(c) observations)  Source: FDIC and Bank calculations. (a)  Different models estimated using 10,000 random samples of 100 observations each. Samples are rejected if there are no observations of bank failure. The different models are used to predict bank failure for approximately 4,300 banks out-of-sample.

Banks and licensed agencies, despite being safer, are more expensive than the alternative unofficial means to the point of inducing many emigrants to stick to the latter means. In a comparative study of Manuel Orozco, 2003 looking at transfer costs across different countries, show that banks appear to charge less than money transfer companies. These latter tend to be costlier because of higher transfer charges and disadvantageous exchange rates they face. Moreover, some research shows that transaction costs of transferring remittances via money transfer companies in the South-Eastern Europe are higher than the region risk. Banks becoming aware of this comparative advantage, have introduced lower transfer charges while offering at the same time new financial products and services to encourage and attract savings of this segment of clients. However, I retain that although banks have the opportunity to be cheaper than money transfer companies, remain quite bureaucratic and less flexible compared to money transfer agencies, not to mention their inadequate geographical  1  Year 1997 represents a year of chaos for the Albanian economy and society, as a result of the collapse of pyramid schemes and 1999 the year of Kosovar crisis. 2/5  coverage of rural areas where more than 60 percent of population lives. Therefore, despite recent promising developments, banks have not gained much market share of remittances in Albania.
In this context, the path consistent with the end-year target and the uncertainty bands defined for the end of each quarter of 2008 are given in Table 1. Table 1: Inflation path consistent with the end-year target and the uncertainty band March  June  September  December  Uncertainty Band (upper limit)  9.10  8.50  8.30  6.00  Path Consistent Target  7.10  6.50  6.30  4.00  5.10  4.50  4.30  2.00  with  the  Uncertainty Band (Lower Limit)  In case of realizations of the end-of-quarter figures outside the band, the Central Bank shall submit an open letter to the Government disclosing the reasons of the deviation and the measures already taken and to be taken for convergence to the target, and share this letter with the public. Recently, the Overview chapter of the Inflation Report has been restructured in line with accountability principle. Accordingly, the Central Bank has started using Inflation Report to share its view pertaining to inflation and monetary policy outlook and the necessary measures to be taken to keep inflation close to the target. Thus, besides being the main communication tool of the Bank, the Inflation Report has therefore assumed an important role with respect to accountability principle as well. Accordingly, there will be more references given to the Inflation Reports in the case of possible open letters in forthcoming periods.

In other words, shocks will be easier to absorb and manage if the fundamentals are sound beforehand. There is an important choice to be made on where to set the degree of resilience, in other words where in the bad tail of the distribution of outcomes. The answer depends on the objective, in this case the public policy objective, and in our work this is one of the key innovations of macro-prudential policy over the last decade. It is not just to prevent the failure of institutions, but rather to ensure for banks that at the chosen level of resilience they can support lending to the economy, to firms and households. Of course, there are points in the tail of the distribution beyond the chosen point and it is for those that we have resolution tools. There is a gross cost to resilience, for banks the cost of increased capital 1/3  BIS central bankers' speeches  and liquidity buffers. But that cost should be suitably offset by the benefits, to the economy and to firms themselves. Setting the chosen point of resilience must of course be consistent with the cost-benefit case1. Putting this notion of resilience into practice in the world of financial stability has been the work of the post global financial crisis years, and will never be done in the sense that we must allow for and respond to innovation. There are two central planks to this work: first, to provide a strong counter-cyclical capacity.
Digital convergence of telecommunications, computers, and the media is fast conjoining many new products and services to replace the old ones. For these reasons, inflexible and highly prescriptive regulations and rules may be inhibitive to innovation. In addition, with the entrance of more non-bank players in the payments industry, overseeing these players could be more challenging as a different regulatory approach may have to be adopted. Regulators would need to be conversant with the business dynamics and operational arrangements of these new players while, at the same time, these players have to adapt quickly to the regulators’ supervisory approach and requirements. The regulators’ dilemma in achieving a proportionate regulatory framework, in particular to promote the growth of electronic money, remains a challenge. This give rise to the need to balance trade-offs between impacting public confidence and promoting innovation and  BIS Review 69/2010  3  competition. Let’s take the example of the provision of a more lenient regulatory regime. While this would promote the entry of new players in the market, it may also lead to the payment systems being used for illicit purposes. Regulators may as well get the major stakeholders to understand this dilemma. By doing this, hopefully the regulators will be able to apply a more stringent regulatory regime to protect public interest, but at the same time do not unduly affect the viability and growth of electronic payments.

Concluding remarks Regulators play an important role in ensuring that effective regulations are in place to maintain the integrity of the payment system as well as to promote user confidence, particularly for new payment services. At the same time, it is also recognised that migration to electronic payment brings immense benefits to the country. Hence, a regulatory environment that would allow innovation to thrive has to be balanced against the objective of safeguarding public interest and confidence in the payments infrastructure. This balancing is required to ensure continued acceptance and usage of the various payment systems and instruments. The emergence of payments processors, such as Spare Change, Boku, Paymo, to facilitate payments for virtual goods and services over online social networks, such as Facebook, Bebo and MySpace, as well as person-to-person transfers among users, are developments which regulators are monitoring very closely. If their operations involve virtual currencies that enable payment for virtual goods and services, do they pose a risk to the safety and reliable functioning of the payment system? Should they be regulated? At what stage should they be regulated? Are regulatory concerns in these new payment innovations warranted if they exist only in the virtual space? How should they be regulated as they operate without geographical boundaries? In addition, should virtual currencies be allowed to be used to purchase real good and services or be exchanged for real world currency? I or we do not have answers to these questions. But these are the issues that regulators and market players are grappling with.
Ingimundur Friðriksson: The impact of monetary policy Speech by Mr Ingimundur Friðriksson, Governor of the Central Bank of Iceland, at the University of Akureyri, Akureyri, 3 October 2007. *  *  *  Iceland’s economy has been characterised by strong imbalances in the recent past, and still is. The current expansionary episode was driven by large-scale investments in the aluminium and power sectors that were launched several years ago, and in structural changes in the mortgage loan market that led to a surge in credit-driven private consumption. Disposable income has also grown at an exceptionally fast pace. Just over a year ago, inflation measured 8½%. The current measurement is just over 4%, while underlying inflation is likely to be in the range 6-7%. In spite of overheating and excess demand, the inflation rate has thus been slowed down. Primarily, this result has been achieved with tight monetary stance. Without it, inflation would have been much higher, with all the exchange rate volatility, erosion of living standards and disruption to business operations that this would have entailed. Many claims have been made recently about the inflation target and the Central Bank’s recourses for attaining it – or the lack of them. The problem now is not the framework of monetary policy or its implementation, but rather the lack of necessary support for the Central Bank’s measures. The tight monetary stance will be maintained and tightening is also needed elsewhere, in fiscal policy and lending decisions by financial companies.

This stock of vacant homes will shrink when fewer are foreclosed upon and more of these homes are sold or rented out. 2  BIS Review 137/2010  On the sales side, even though low mortgage interest rates and falling home prices have together boosted housing affordability to its highest level in 40 years, the current pace of sales is quite sluggish. Impediments to home sales include tight lending standards, a weak job market and continued uncertainty regarding the future path of home prices. The large decline in home prices that occurred between 2006 and 2008 is also important. This decline reduced the amount of equity that owners have in their homes, making it difficult for people to come up with the funds needed to “trade-up” and move into better homes. In addition, the steep decline in home prices put many families at risk of mortgage delinquency and, ultimately, losing their homes to foreclosure. With lower home prices, many families now owe more on their mortgage than their home is worth. This means that they cannot refinance or sell their homes easily if they experience a financial crisis, such as a job loss or a serious illness. Recent developments on foreclosures have been mixed. While RealtyTrac reports that foreclosure completions in the United States exceeded 100,000 for the first time in September, it is important to remember that foreclosure is a lengthy process in most states.
Now let us now turn briefly to the possible financial relationship between the Albanian banking system and the production foreign investments flow. Undoubtedly, the positive influence foreign direct investments have on economic growth depends largely on their recipient countries’ circumstances. It requires a substantial level of financial system development as a crucial precondition. A developed financial system improves the efficiency in allocating the resources and it further enhances the country’s capacity to absorb the FDI. The entry of new investors will orient the concentration of market segments to large-size businesses. Their impact, along with the lending capacity of our banking market, are believed to be the crucial proof for their success in Albania. In more concrete terms, the circumstances in Albania are such that there is an asymmetrical distribution of total assets between banks in the market. The reference is only to banks, since in terms of total assets, the banking system shares more than 90 per cent. Other non-bank financial institutions play a more insignificant role than the commercial banks. As far as the latter is concerned, there are many qualitative banks in the market, whose presence is an attractive factor for absorbing the FDI. On the other hand, the concentration of assets and banking loans in a few commercial banks bears the risk of creating an oligopolistic environment where only a few banks establish the terms for new loans. Such a situation would increase the investment cost in the public and private sector and in households, as well.

The banking system’s stage of development and the FDI flows in economy have mutual influences on each other. Hence, if Albania attracts stable and long-term FDI flows in the following years, their impact on the further development of the financial system will be considerable. Furthermore, the demand for banking products both from domestic and foreign companies will grow. 4  BIS Review 102/2007
Since then the number of persons born abroad has increased by just over 15 000. Demographic changes and changes in the demand for labour are examples of structural changes that may affect employment in the long term, which monetary policy cannot do. Globalisation Another long-term change that has been under way for some time but has recently achieved a higher level of intensity can be summarised in the concept of globalisation. The question is how the increased economic integration of the trade in goods, services, capital and financial markets will affect the Swedish labour market. Will jobs disappear and wages have to adjust downwards? Globalisation could certainly entail downward pressure on Swedish real wages, but both data and historical experiences so far indicate that this will not happen. In the long term, Swedish and, for instance, Chinese wages will probably converge, but this does not necessarily mean falling real wages in Sweden. However, it is likely that the distribution of income has already been affected in terms of growing gaps between those with and without higher education. The main explanation is usually considered to be technological developments, particularly the increased use of computers, which have led to increased  2  See Forslund A, N. Gottfries and A. Westermark, "Real and Nominal Wage Adjustment in Open Economies”, Working Paper 2005:23, IFAU, p. 28. 3  See Lindbeck, A., The welfare state and social norms. In: B. Swedenborg (ed.) Why are the Swedes so sick?, SNS Förlag, Stockholm 2003, pp. 78-87.

Real wages almost stood still during the period 19801993, but over the past ten years they have increased by an average of almost 3 per cent a year (see Figure 6). The foreign trade deficit transformed into a surplus and the same had happened with the government deficit. Open unemployment increased in connection with the crisis of the 1990s, from levels around 2.5 per cent to around 9 per cent. Since then, unemployment has fallen to a lowest level of just over 4 per cent in 2001. At present, unemployment is at a higher level than it was prior to the 1990s crisis. Out of a working-age population (20-64 years) of just over 5.3 million, around 900,000 persons are outside of the labour force. 245,000 are unemployed. This means that just over 4.1 million people are employed and that just under 1.2 million have no job. 1 The biggest problem in the Swedish labour market is thus, in my opinion, not open unemployment, but the fact that the number of those outside the labour force, that is, the number of people of working age who are not employed, has increased substantially since the 1990s crisis. In connection with the crisis, this share increased by 8-9 percentage points. It has since fallen by around 4 percentage points between 1995 and 2002, to increase once again in recent years (see Figure 7).
The evidence in credit creation is so far mixed, which is not in my view a mark of the failure of policy since this operates with a lag. But it does indicate that all of us should go on looking for changes that will help. The distribution and information issues around SME lending identified by Kate and her colleagues are one such area, and in my view more focus needs to be put on the consequences of debt overhangs linked to commercial property in those parts of the market where there are problems. Thank you  4  BIS central bankers’ speeches

Monetary policy decision We have decided to leave the current Libor target range unchanged and to continue aiming for the middle of the range. This decision is based on the following considerations. Our analyses show that, following the slowdown in the global economy, the outlook for inflation has improved, if we disregard the temporary rise that will occur over the next few months as a result of the rise in oil prices. Moreover, the turmoil affecting the international financial markets and the uncertainty with respect to the extent of possible fall-out on the rest of the economy all call for prudence. The risk of a rise in inflation has not been dispelled; of that there can be no doubt, given the rise in oil prices, the weakness of the Swiss franc against the euro, and the high level of capacity utilisation. Nevertheless, we do not consider this to be a matter of urgency and view an adjustment in our policy as unnecessary under the current circumstances. It is evident that we will continue to keep a very close watch on developments in the situation. Inflation forecast graph I will now turn to the final part of my remarks. What is our inflation forecast? The dashed red curve on the graph represents the new forecast. It relates to the period between the fourth quarter of 2007 and the third quarter of 2010, and maps the future development of inflation on the assumption that the 2.75% level remains constant over the forecasting period.
That underlying balance sheet strength has meant, despite some sharp gyrations in their share prices, the cost of UK banks funding themselves has scarcely budged since the referendum. That means the cost of credit to companies and consumers should not be expected to rise either. And nor, with balance sheets strong, is there any reason for banks to constrict credit to customers. This time the credit rug will not be pulled. So while the past few weeks have been a drama, there is no reason to expect this to turn into a crisis, or at least a financial one. Second, even though the economy is unlikely to crash, it is likely to slow, perhaps materially, in the quarters ahead. While companies and consumers might not be slamming on the brakes and going into reverse, as in 2008, some are likely to be going down a few gears, perhaps even moving into neutral. External economists expect the UK economy to tread water over the  15  Carney (2016). BIS central bankers’ speeches  11  next few quarters. That means the amount of slack in the UK economy is likely to begin steadily rising in the period ahead, perhaps causing unemployment to rise. The main reason for that likely slowdown is uncertainty. And with uncertainty having risen sharply, caution may once more become the watchword for companies and households, as it has for most of the period since the crisis. This increases the incentive to delay making and executing plans.

Not because I have dramatically revised my assessment of inflation prospects but rather because resource utilisation is still rising and a shift can be discerned in the risk spectrum. We will have to bear these things in mind so that the development of production and employment can remain stable. 3  BIS Review 109/2000