samchain/econo-pairs-v1 huggingface dataset:
Jean-Claude Trichet: EMU and the euro - successes and challenges Speech by Mr Jean-Claude Trichet, President of the ECB, delivered at the conference “The Euro Five Years After”, Amsterdam, 12 October 2004. *  *  *  Ladies and gentlemen, it is a great pleasure to share some thoughts on the European Monetary Union with the distinguished attendance gathered in this conference by the European Commission and the EU Presidency. The establishment of the new currency - first in book-entry form and successively in its full physical embodiment - has made western Europeans fully part of a more integrated area and is substantially contributing to reinforce their European identity. More recently, the enlargement of the Union, and in particular the inclusion of the new democracies of Central and Eastern Europe, has represented yet another grand contribution of Europe to the diffusion of free institutions, the safeguard of geopolitical stability and peace, and the promotion of economic progress on a global scale. We have decided to build a larger and peaceful Union of people to which the rest of the world can look for encouragement and example. It is around these themes that I will organise my few remarks today. My purpose will not be that of communicating a sense of complacency over past achievements. I will try to convey in my words the visionary drive towards action that still inspires the process of institutional transition in our Continent.

We also need in the Euro area sound public finances and bold reforms. These two goals are closely correlated to the extent that a number of structural reforms in the domains of public administration and social protection would diminish overall public spending. We encourage the Eurogroup of Ministers of Finance to proceed resolutely in this direction under the presidency of Gerrit Zalm today and of Jean-Claude Juncker tomorrow. Third, let me say simply that I find the present enlargement a formidable success for all our democracies that have voluntarily created together a new concept of a union of sovereign states which has no precedent in history. Of course we have many challenges associated with the fact that we are 25 today and more tomorrow. But we should not lose sight that we will all “10” and “15” greatly benefit from the success of our ideas. Fourth, we are living in demanding times. The world is changing. Europe is changing. Future changes look rather unpredictable. I would consider this unpredictability as the very mark of history in the  BIS Review 59/2004  5  making. And I will never forget what Jean MONNET noted in his memoirs: “Those who decide not to start any enterprise because they are not assured that things will move in strict conformity with their plans are condemning themselves to absolute immobility.
This represents 6.3% of the entire takaful and insurance industry funds assets and an increase of 11% as compared to the end of 2006. In terms of net contributions, RM1.2 billion was recorded in the first half of the year, an increase of 36% from the same period of last year. BIS Review 95/2007  1  Second, there is growing international consensus on the need to have a strategic direction for an orderly development of the global Islamic finance industry. The ten-year blueprint on the development of Islamic finance, a joint initiative by the Islamic Financial Services Board and Islamic Development Bank, has laid down guidelines on the strategic steps to be taken by several specific jurisdictions for this purpose. It is envisaged that with more orderly development of Islamic financial services, including takaful, a more comprehensive Islamic financial system will evolve in more jurisdictions. The number of takaful operators, which currently stands at more than 100, is set to increase. Third, dramatic growth of the global sukuk market can potentially become a key supporting factor for the strong growth of takaful and retakaful industry. Sukuk is increasingly becoming an important investment avenue for the takaful industry. Today, the global sukuk market, denominated in international currencies, is estimated to have exceeded USD50 billion [including domestic sukuk issuance]. Although the size of the market is modest by global standards, the sukuk market is experiencing remarkable growth, increasing at an average rate of growth of 40% per annum.

Mario Draghi: Structural Reforms, inflation and monetary policy Introductory speech by Mr Mario Draghi, President of the European Central Bank, at the ECB Forum on Central Banking, Sintra, Portugal, 22 May 2015. *  *  *  Accompanying charts can be found at the end of the speech. Summary Structural and cyclical policies – including monetary policy – are heavily independent. Structural reforms increase both potential output and the resilience of the economy to shocks. This makes structural reforms relevant for any central bank, but especially in a monetary union. For members of monetary union resilience is crucial to avoid that shocks lead to consistently higher unemployment, and over time, permanent economic divergence. It therefore has direct implications for price stability, and is no less relevant for the integrity of the euro area. This is why the ECB has frequently called for stronger common governance of structural reforms that would make resilience part of our common DNA. Structural reforms are equally important for their effect on growth. Potential growth is today estimated to be below 1% in the euro area and is projected to remain well below pre-crisis growth rates. This would mean that a significant share of the economic losses in the crisis would become permanent, with structural unemployment staying above 10% and youth unemployment elevated. It would also make it harder to work through the debt overhang still present in some countries.
Whilst in Switzerland disturbances affecting, in particular, the demand for central bank money “for reasons still unknown” have increased in recent years, the ECB faces additional uncertainties at the beginning of Monetary Union in terms of the effects of the shift of regime to a single monetary policy in Europe. It is difficult to assess whether conventional and reliable macroeconomic relationships are changing as a result of the introduction of the euro. In view of these uncertainties, but also in general, it is unwise to rely on a few indicators or only one when making monetary policy decisions. Indeed, to date our studies have  BIS Review 99/1999  2  revealed that the M3 monetary aggregate shows clear signs of stability and healthy indicator properties. This provides a sound basis for the prominent role given to the M3 monetary aggregate. Monetary policy instruments and the operational framework of the Eurosystem The operational framework of the Eurosystem has proved to be an effective instrument for steering money market interest rates and for limiting fluctuations. The Eurosystem controls money market interest rates by means of either the provision or withdrawal of liquidity in the banking system. Open market operations play an important role in the context of monetary policy strategy. The weekly main refinancing operations give an indication of the Eurosystem’s monetary policy and provide the largest share of liquidity. Longer-term refinancing operations provide the banking system with longer-term liquidity (three months).

In addition to encouraging trends in the global economy, the stabilisation of output growth in the euro area has contributed significantly to this. However, the most recent industry and consumer surveys also give positive indications with regard to economic activity in the euro area. Therefore, it is likely that economic activity will accelerate in the second half of 1999 and the year 2000. When assessing the risks for price stability, the ECB does also monitor the external value of the euro. The weakening of the effective exchange rate of the euro, which remained at around 8% between the start of the year and early September, lent itself to an increase in import prices denominated in euro. Taking into account all available information, the outlook for the preservation of price stability remains favourable. However, recently inflationary risks have increased slightly. In the coming months it will therefore be necessary to monitor developments in the monetary aggregates and credit aggregates. In addition, the short-term effects of the increase in oil prices and exchange rate developments on consumer prices need to be taken into account. The latter factors should not affect the outlook for price stability as long as wage increases remain moderate. The wage round for the year 2000 will, however, play an important role in future price developments. On the basis of this current assessment of the monetary, financial and economic situation, the Governing Council of the ECB left the central bank interest rates unchanged at yesterday’s meeting.
The first and most obvious of those is Brexit. The challenge is to keep finance capable of serving the economy through Brexit, whatever form Brexit takes. 4  Reported in Brooke et al (2015). 4  All speeches are available online at www.bankofengland.co.uk/speeches  4  The first condition for that: UK banks must be able to withstand any economic shocks arising from Brexit. In our judgement, that condition is met. Even the most severe economic scenarios for Brexit are encompassed within the scenario we’ve tested the banks against in our annual tests. They can pass that test. So they can pass the Brexit test too. But that’s not enough in this case. Because barriers to delivering wholesale financial services across the Channel could disrupt the end users in the real economy. The UK is a net provider of such services to the EU, so end users there stand at most risk of disruption. But end users in the UK would also suffer some disruption. UK investors invest in funds domiciled in the EU and 10 million UK policyholders have insurance policies with EU insurers. 77 branches of EEA banks operate in the UK, providing services that benefit end users in both the EU and the UK. That’s why, from the very start, we have overseen contingency planning across the financial system. And because it would be difficult, by March 2019, for all financial institutions to complete all the steps necessary to avoid disruption, we called for an implementation period.

And this resilience had a reason. It created the confidence for banks to finally get lending again …  It has allowed some turbulence to be withstood too. Cast your minds back to July 2016. In the wake of the referendum, markets were pricing in a severe downturn in the UK economy and property markets. 3  Financial crises often lead to a long run reduction in GDP, with a persistent decline in output relative to pre-crisis trends. Bank estimates based on the impact of historical financial crises in a sample of advanced economies, reported in Brooke et. Al. (2015), suggest that the average cost of a financial crisis has been 73% of GDP, which translates to a cost of roughly £ per capita if a financial crisis had taken place in 2016. 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  Bank and property company share prices were consistent with a rise in unemployment to 7.5%, falls in residential and commercial property prices of 15-20% and a cumulative 4% reduction in GDP growth. But banks had been tested – in public – against a shock twice as severe as that. So confidence in the banking system was maintained. Remarkably by past standards, banks’ funding costs moved very little. We were able to do the opposite of what regulation had typically done in the past: we could release, rather than build, bank capital. Banks didn’t need to rein in. And credit continued to flow.
These are characteristics that are important to society, but that the individual user does not necessarily prioritise in their choice of payment solution. The question is whether something important will be lost if cash dies out and we do not introduce CBDC? Is central bank money crucial to confidence in the monetary system? Could CBDC provide more than cash can offer, in the form of a greater range of uses and more innovation? Chart 5 Central bank digital currency in Norway Declining cash use is not the only motivation for Norges Bank’s research into CBDC. The precautionary principle is also an important factor. We want to be prepared to be able to introduce a CBDC if the payment system develops in a different direction than we can foresee today. We must take account of changes in the payment solutions offered, including different forms of money. Libra will not be the last initiative of this kind. We must also take structural changes in banks’ payment infrastructure into account. We must think through the effect these changes may have on competition, contingency solutions and national governance and control of the payment system. Norges Bank’s research has now been in progress for almost four years. The prospective introduction of a CBDC is still some way off. The lack of urgency reflects our view so far that there is no acute need to introduce a CBDC. The introduction of a CBDC could have considerable consequences in a number of areas. Our decision must be well-informed.

Terms of trade are projected to improve significantly this year, contributing to a larger current account surplus than would otherwise occur, but the improvement will reverse to an extent in 2017 and 2018. The sizeable current account surplus of the past few years will therefore shrink significantly during the forecast horizon and will have nearly disappeared by 2018. Rapid growth in domestic demand under conditions of full utilisation of resources has often proven dangerous to Icelanders. Other things being equal, such a situation calls for monetary and fiscal tightening. Our initial position is unusually good this time, as can be seen in a strong current account surplus, a central government surplus and declining government debt, and inflation that is still below the target. But the tug-of-war between large pay increases and the  BIS central bankers’ speeches  1  global tendency towards deflation will determine how much and how rapidly this situation deteriorates in the coming term. In my speech at the Central Bank’s Annual General Meeting, I expressed considerable concern about the unrest in the labour market and the consequences that it could have for economic stability. In the speech, I noted that wage pressures that jeopardise the inflation target are generally considered a sign of both demand pressures in the economy and excess demand in the labour market, which must be met with tighter monetary policy. However, this was not consistent with a slack that was just about to disappear and a sizeable current account surplus.
2/4  BIS - Central bankers' speeches  There is also uncertainty surrounding geopolitical developments and the impact on the supply side if events on the ground worsen and they create further energy and commodity price shocks and disruptions. In such case, inflation and output would be worse than projected in 2023 and 2024. On the other hand, if there is an improvement in geopolitics, energy prices may fall as rapidly as they rose. Therefore monetary policy has to act in the middle of a lot of uncertainty in a number of areas, hence monitoring and pacing is still very important. Domestic economic developments Let me now turn to domestic economic developments. The Cyprus economy, continued to record noteworthy GDP growth, despite the outbreak of the war. Real GDP growth in Cyprus expanded by about 6 percent during the first half of 2022, mainly driven by a faster than expected recovery in tourism-related activities and, to a lesser extent, by growth in information and communication activities and in professional services. At the same time, weakness in the Cyprus GDP performance could be expected to become visible towards the end of 2022 and the first half of 2023, primarily owing to the anticipated worsening in the international economic outlook, which also has an impact on the domestic developments. For 2023, GDP growth is expected to reach 2.5 per cent. In terms of inflation, the Harmonised Index of Consumer Prices (HICP) reached 9 percent in September 2022 compared with 3.6 percent in September 2021.

Jarle Bergo: Oil revenues, monetary policy and economic cycles Lecture by Mr Jarle Bergo, Deputy Governor of Norges Bank (Central Bank of Norway), at the Telemark University College, Bø, 13 November 2002. The text below may differ slightly from the actual presentation. The lecture is based on the assessments presented at Norges Bank’s press conference following the Executive Board’s monetary policy meeting on 30 October and on previous speeches. *  *  *  Petroleum activities constitute an important part of the Norwegian economy. A sound economic policy and high oil prices have contributed to the highest current account and budget surpluses that have been recorded in any OECD country. In 1998 when oil prices were down to USD 10 per barrel, we also recorded a surplus that came to 4 per cent of GDP measured in terms of government net financial investment. Societies that suddenly gain access to wealth have a tendency to spend the money and then fall into decline. Access to an abundance of natural resources can result in slower growth. The explanation may be that time and resources are spent on grabbing as large a share as possible of the acquired wealth. Historical experience therefore suggests that it is important to have decision-making systems to provide protection against individual groups gaining strong control over Norway’s petroleum wealth. In addition we must maintain and develop incentives to acquire knowledge and engage in innovative work.
The charts in Figure 5 show the realized and estimated cash flows from the Federal Reserve’s securities portfolio. The length of the darker bars show the actual amounts of Treasury securities and agency debt and MBS principal that matured or paid down; only the amounts 9  I discussed dispersion as a means to evaluate the efficacy of monetary control and transmission in an earlier speech. See Potter, “Money Markets at a Crossroads: Policy Implementation at a Time of Structural Change,” April 5, 2017. 10 ON RRP take-up also remains well below early expectations: before lift-off, median expectations for the level of ON RRP demand three years following liftoff was around $ billion. 11 See Potter, “Gradual and Predictable: Reducing the Size of the Federal Reserve’s Balance Sheet,” October 11, 2017, for a discussion of balance sheet normalization. 12 Statement Regarding Reinvestment in Treasury Securities and Agency Mortgage-Backed Securities, September 20, 2017. 4  above the cap were reinvested. Since October 2017, the Federal Reserve’s domestic securities portfolio has decreased by nearly $ billion to about $ trillion.13  The lighter bars in Figure 5 show the projected cash flows through the end of next year. Notably, the caps reached their maximal values this month. Going forward, reinvestment of Treasury securities will nearly exclusively occur in the middle month of each quarter. As had been expected in the design of the caps, principal repayments from the agency MBS portfolio have now begun to come in below the level of the maximum cap.

Figure 4 shows that the dispersion between various unsecured and secured overnight rates—another metric that could reflect the efficacy of policy pass-through—has declined and that these rates have largely converged within the upper  3  portion of the target range since the end of last year. 9 This is due, at least in part, to a large increase in the supply of Treasury bills, which supported the rise in repo rates to levels closer to unsecured rates. This also suggests that the framework continues to perform well along this dimension and perhaps is improving in effectiveness as reserve levels decline. Consistent with the broad availability of higher-yielding alternatives, ON RRP take-up remains muted, falling to a record low of $ million in early September. 10  Balance Sheet Normalization Let me turn now to the second part of normalization: the balance sheet. 11 The Federal Reserve’s balance sheet grew markedly over the past decade as a result of large-scale asset purchase programs, which were undertaken to support the economic recovery by easing financial conditions to a greater extent than could be achieved solely through reducing the federal funds rate. Starting late last year, the Federal Reserve began a program to reduce its securities holdings by reinvesting principal maturities only to the extent that they exceed gradually increasing caps. 12 This gradual and predictable approach is intended to reduce the balance sheet’s size at a measured pace while supporting good market functioning and mitigating the risk of sharp or outsized asset price reactions.
The Basel Committee’s report also showed that banks must develop approaches that better account for credit risk under distressed market conditions. A key lesson of the LTCM episode is that credit and market risk cannot be seen as completely distinct, but are liable to interact and reinforce each other under highly stressful conditions. The use of more rigorous stress testing, therefore, could have given banks better warning of the types of exposures they faced. Together with this January 1999 report, the Basel Committee issued a sound practices document setting forth guidance for banks and supervisors on these topics. For example, these sound practices called upon banks to: •  establish clear policies governing their involvement with highly leveraged institutions;  •  adopt credit standards addressing the specific risks associated with these institutions;  •  establish meaningful measures of potential future exposure as well as credit limits incorporating the results of stress testing; and  •  monitor exposure on a frequent basis. I am pleased to report that the Basel Committee’s recommendations on highly leveraged institutions have been reinforced by the recommendations of subsequent efforts, including reports by the President’s Working Group on Financial Markets and the Counterparty Risk Management Policy Group. There is clearly widespread agreement among both the private sector and the official community about the steps that firms need to take to address the weaknesses in risk management identified in the LTCM episode. The key remaining issue is the strength of the private sector’s resolve to implement these measures.

This issue is topical also because it is the right time to step up the pace in Europe. Indeed, we have clearly succeeded in building a Monetary Union, but this is not sufficient. It is urgent to make concrete progress on Economic Union, on which we have not yet delivered. We are living in a time of unique historic opportunity: first, the economic context is now favourable to move forward, since euro area growth should be at least 2.2% in 2017; “when the sun is shining, it is time to fix the roof”. Second, after the recent elections in France, Germany and the Netherlands, we have a “democratic alignment”, in terms of the calendar and probably in substance, for the four years to come. Lastly, the Brexit vote and the election of Mr Trump in the United States have come as external stimuli, showing how important it is to breathe new life into European integration so that we Europeans take our destiny into our own hands, as Chancellor Merkel rightly said in Munich last spring. In my remarks today, I will explore three economic concentric circles: first the Economic Union, by presenting the accelerators that are needed to make concrete progress; second the Financing Union, by focusing on one of these accelerators, which might be of particular interest to your community of banks and financial institutions; and third the Banking Union, which is a key part of the Financing Union and which has to be completed.