samchain/econo-pairs-v1 huggingface dataset:
Consequently, the banking sector’s liquidity, in excess since 2002, declined gradually during 2015 to reach dinar billion 1833 by the end of the year (a decline of 33 percent), after relative stability in 2014 (dinar billion 2731 by end 2014). With a milder recession in the hydrocarbon sector in 2014 and an upturn as of 2015, economic activity strengthened during these two years despite the external shock. Growth was 3.8 percent and 3.9 percent respectively (2.8 percent in 2013) and inflation rose from 2.9 percent in 2014 to 4.8 percent in 2015. To face the external shock and the resulting drop in fiscal oil revenue, the Government initiated a programme of spending rationalisation in 2015, notably through the prioritisation of investment projects. In 2016 fiscal consolidation further included a relatively low reduction in current expenditure (-3.3 percent) and a more substantial reduction in capital spending (-16 percent), totalling a 9 percent reduction in public spending. Furthermore, the 2016 budget includes an upward adjustment of the tax on energy products (petroleum, diesel, electricity and gas). This is aiming at reducing public finances’ vulnerability to oil price decline and lies within the strategic objective of ensuring medium term fiscal sustainability. Moving ahead, the gradual fiscal adjustment should also rely on increasing non-hydrocarbon revenue. 2.

Latest Eurostat's flash estimate data revealed that Cyprus HICP is expected to reach 9,6% in August 2022 compared with 3,3% in August 2021. 4/6  BIS - Central bankers' speeches  Taking into consideration the said inflation developments, we expect that our domestic short-term inflation outlook will continue to remain, overall, at very elevated levels, similar to the euro area inflation developments, amid the ongoing significant uncertainty and volatility resulting from the Russian-Ukraine war. More specifically, Cyprus HICP inflation for 2022 has been revised upwards in our most recent projections, reaching 8,4% compared with 7,0% in the CBC June 2022 economic bulletin. Banking sector Now let's consider the developments in the Cyprus banking sector. Data from the sector demonstrates that despite the negative international economic environment, the Sector is proving resilient, exhibiting a solid and healthy financial standing. The solvency position, as measured by the Common Equity Tier 1 ratio was edging up to 17,5 percent in the second quarter of 2022, a level higher than the respective European average of 15,2 percent. The Liquidity Coverage Ratio, indicating the availability of liquid funds against deposit outflows over a 30 day stressed period, stood at the level of 320 percent in July 2022 which is more than 3 times higher than the minimum requirement of 100 percent, placing Cyprus amongst the most liquid banking sectors in the Union, where the average LCR amounts to 168 percent.
Challenges for Monetary Policy in the current IMFS Figure 1: The US dollar continues to be as important today as it was during the Bretton Woods era  Chart 1: Trade war is the top tail risk affecting global investors July 2019 June 2019 March 2019  Trade war Monetary policy impotence China slowdown Bond market bubble A credit event Iran Populist policies US politics Market structure Equity market bubble European elections Brexit 0  10  20 30 40 Percentage of respondents  50  60  Sources: Bank of America Merrill Lynch Global Fund Manager Survey. 17  All speeches are available online at www.bankofengland.co.uk/news/speeches  17  Chart 2: Global economic policy uncertainty has reached record highs Index 375 350 325 300 275 250 225 200 175 150 125 100 75 50 25 2019  US implements first China-specific tariffs Paris attacks  Iraq invasion 9/11 Madrid bombings  USS Cole bombings  1997  1999  London bombings  2001  2003  Ukraine / ISIS  Transatlantic aircraft plot  2005  2007  2009  2011  2013  2015  2017  Source: Baker, S, Bloom, N and Davis, S (2015), ‘Measuring economic policy uncertainty’, NBER Working Paper No. 21633. II.

The Conference Report summary of the legislation’s key provisions, provided in plain English by the Senate Banking Committee, states that it seeks to end “the possibility that taxpayers will be asked to write a check to bail out financial firms that threaten the economy by: creating a safe way to liquidate failed financial firms; imposing tough new capital and leverage requirements that make it undesirable to get too big; updating the Fed’s authority to allow system-wide support but no longer prop up individual firms; and establishing rigorous standards and supervision to protect the economy and American consumers, investors and businesses.”8 While there is much to criticize about Dodd–Frank, I cotton to those blunt statements on ending too big to fail. For, if after the myriad rules and regulations are written and implemented we have not eradicated too big to fail from our financial infrastructure, reform will have failed yet again. I have spoken to this topic on several occasions.9 If you pull up a copy of the Sept. 28, 2009, Wall Street Journal, you will find an article I wrote with my colleague Harvey Rosenblum about the interference too big to fail poses for the effective conduct of monetary policy. In looking at regulatory reform and implementing Dodd–Frank, I think a key point worth repeating is that the distinction between “commercial banks” and “the shadow banking system” is a false one. The two became intertwined beginning with the bypassing of Glass– Steagall strictures by Sandy Weill and Citicorp and the deregulatory initiative of Gramm– Leach–Bliley.
This market has since been liberalised to allow foreign corporations to raise funding in both domestic and foreign currency. In these recent few years, there has been a number of successful Reminbi bond issuance from our market to finance investment opportunities in China. Various other key financial infrastructures were also put in place to enhance the efficient functioning of the intermediation process of the overall financial system. This included the infrastructure to support robust payment and settlement systems. In 2012, we introduced onshore settlement of Reminbi transactions in our real time gross settlement system RENTAS via a local onshore settlement institution. As part of the development of our domestic financial infrastructure the Malaysia Deposit Insurance Corporation was establish to provide a comprehensive deposit insurance and insurance benefit system for the banking and insurance sector. This institution not only imposes discipline for risk management by the financial institutions through the imposition of differential premiums based on the risk profile  BIS central bankers’ speeches  1  of institutions, but it also is the resolution authority in the event of failure of a financial institution. Underpinning the financial sector growth was also the development of a more robust surveillance, regulatory and supervisory framework. As the Malaysian financial system evolved to become more complex, sophisticated and diversified, the regulatory and supervisory approach has correspondingly evolved from detailed and prescriptive rules to a risk-based approach that combined greater supervisory judgment and intensity with highlevel principles of sound practice.

Zeti Akhtar Aziz: Reflections on financial reform – Malaysia’s experience Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the 2013 China Business News (CBN) Annual Meeting and Finance Summit “Reflections on financial reform – Malaysia’s experience”, Beijing, 8 December 2013. *  *  *  It is my honour and pleasure to be invited to speak at this 2013 China Business News Finance Summit. As the globalisation of finance intensifies, the world is becoming increasingly more inter-connected and integrated. This has largely been due to the trend towards increased financial liberalisation by most parts of the world. It has been maintained that such deregulation and liberalisation would facilitate the development of more efficient and robust financial systems and that it would result in a more efficient allocation of financial resources across borders. While such financial liberalisation may indeed bring such wide ranging benefits, it also brings with it increased risks that needs to be effectively managed. It was for these reasons that Malaysia adopted a conscious effort to put in place the financial and economic pre-conditions so as to enable us to benefit from such financial reforms involving the deregulation and liberalisation of our financial system. Allow me to share our experience in pursuing this agenda. Following the Asian Financial Crisis, Malaysia embarked on strategies for an orderly development of the financial sector.
In the 1930s, the British economist Lionel Robbins stated that:  1  In Agnar Sandmo (2006): “Samfunnsøkonomi – En idéhistorie (Economics – a history of ideas)”, Universitetsforlaget, p. 224. BIS Review 109/2010  1  “Economics is the study of the use of scarce resources that have alternative uses”. 2 This definition may seem rather abstract – and does not perhaps capture aspects of the subject that are important today. To illustrate the breadth and application of the subject, an alternative may be to list some of the questions that an economist can contribute to elucidating or provide a decision-making basis for. The issues of relevance today may for example include the following:   Is it economically profitable to build a power line through Hardanger? How should we weigh the value of untouched nature against the cost of using alternative power supply systems?   How can CO2 emissions be reduced while minimising the impact on living standards and employment? While engineers have valuable knowledge about the technological aspects, economists can analyse how pricing and taxation can be used to reduce emissions    What are the consequences of increasing oil revenue spending in Norway? Over the past 10–20 years, a theme at the forefront of economic policy debate in Norway has been how fast we should spend petroleum revenues. Both gas and oil are nonrenewable resources and this places the management of these resources in a particular position. How can we ensure that many generations benefit from this wealth?

He is supposed to explain both what is happening and what would happen if such and such an action were taken.” 10 However, as he also points out: “The purpose is not that he should reach a conclusion of the type: this is how you should act now! … Any economically important decision must also be based on a number of human, ultimately political, assessments that the expert, the economic scientist, is by no means more qualified to decide on than other good citizens.”10 It can often be difficult to distinguish the object, ie exercise objectivity, from the perception of that object, ie subjectivity. Ragnar Frisch discusses this too. In an article written in 1936, he draws a line from the natural sciences through to the social sciences, where “… the difficulties of arriving at such unconditionally valid results become greater and greater. The reason for this is first and foremost that the whole system of ideas on which the natural sciences are based becomes increasingly more diffuse as one approaches the social sciences.”10 When I was a student here at the University of Oslo at the beginning of the 1970s, there was a fairly broad consensus that the problem of unemployment had been solved once and for all. The belief was that the economy could be fine-tuned through government management, control and regulation. A similar optimism prevailed with respect to economics in the years prior to the financial crisis.
The Riksbank then put considerable energy into explaining what inflation targeting was all about and this probably contributed to the relatively quick acceptance of this policy. Now the inflation-targeting policy is much more established, but there is of course still a need for clarity and structure. So although I have highlighted some of the problems regarding drawing parallels between theoretical analysis and practical monetary policy, this should not be interpreted to mean that I do not think that theory has a role to play. I am convinced that, used wisely, it can provide good support when explaining and assessing monetary policy. But exactly how theory can be used in the practical work, and exactly where the optimum balance lies between diversification and clarity, or between the degree of freedom and structure in an uncertain world is something that every central bank must try to ascertain. I can assure you that this is something we have considered at great length at the Riksbank. It is also an important part of the work on reviewing the decision-making process that I mentioned earlier. I do not believe it is possible to capture everything with the aid of two aggregates. Now and then something is likely to disappear on route. New challenges – the importance of managing systemic risk I have so far only discussed “traditional” complications in the step from theory to practice. I have given examples of challenges we have faced more or less continuously since inflation targeting was introduced.

Lorenzo Bini Smaghi: On the occasion of the inauguration of the Euro Exhibition in Rome Speech by Mr Lorenzo Bini Smaghi, Member of the Executive Board of the European Central Bank, at the inauguration of the Euro Exhibition, Rome, 3 April 2009. *  *  *  Dear Fabrizio, Ladies and Gentlemen, It is a pleasure for me to be here in these wonderful premises of Banca d’Italia in Rome to celebrate with you the occasion of the 10th anniversary of Stage Three of the Economic and Monetary Union (EMU) and of the adoption of the euro. We are also here to inaugurate “The Euro Exhibition”, presenting the euro banknotes and coins through a range of innovative features, which we hope will be appreciated by the public in Rome. 1. First 10 years of the euro  On 1 January 1999 the Third Stage of EMU began with the irrevocable fixing of the exchange rates of the currencies of the 11 Member States initially forming the euro area. Monetary authority for the new currency was transferred to the Governing Council of the European Central Bank. The euro became the currency of over 300 million citizens of Europe. The number of countries participating in the EMU grew over the years. Today, euro banknotes and coins are legal tender in 16 of the 27 Member States of the European Union, and used by almost 330 million citizens in the euro area. Slovakia has recently become the 16th member of the euro area.
The FPC was able to do so because of its policy I mentioned a moment ago: it maintained a non-zero UK CCyB resting rate in normal times, which was its assessment of the financial system before the pandemic struck.10 A regulatory buffer is said to be usable if banks will dip into it when faced with shocks – that is, they will willingly allow their capital (or liquidity) ratios to decline below it – without taking actions that could have undesirable consequences either for micro-prudential resilience or for macro-prudential stability, including restricting lending to the real economy in a way that amplifies the initial adverse shock. In practice, there is an observable spectrum of usability (Chart 3). 10  See Bank of England’s December 2019 Financial Stability Report (pg 8) 6  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  6  Chart 3: Spectrum of usable and releasable buffers  At the more usable end are management buffers: firms can dip into these with no regulatory consequences, although even here they may be reluctant to do so. That reluctance may stem from their internal risk appetite and/or because the market judges that regulatory buffers are insufficient to absorb losses. At the other end is the Capital Conservation Buffer (CCoB): use of this regulatory buffer triggers distribution restrictions which firms may prefer to avoid if they believe reductions in dividends (for example) are viewed as a sign of weakness by investors.

It ties up resources without providing the extra capacity in stress that regulators wanted them to provide, and had assumed they would when determining how to prepare the system to absorb shocks. If a regulatory buffer is instead perceived as similar to a minimum requirement and firms take actions to avoid dipping into it, these actions might be harmful to the real economy and, as last year’s Bank analysis showed, to the banking system. Thus it is essential to have a well-designed regulatory buffer framework which can make fresh resources available when they are most needed. The early Covid stress gives us an opportunity to investigate how the current framework behaves and how practically usable regulatory buffers may be. Given the effectiveness of the fire-fighting I mentioned at the outset, bank capital ratios did not approach their Capital Conservation Buffers, so we cannot probe directly how banks would have behaved had capital ratios fallen inside that regulatory buffer. However, there are at least three approaches we can look at. Approaches to analysing capital buffer usage Approach 1 – What do banks and investors say about buffers? The first approach involves asking banks what constraints they face in practice in dipping into buffers and how they manage their capital positions. In broad terms, they told us that expectations of capital instrument and debt investors and concerns about the actions of credit ratings agencies are a major constraint.
These suggest that the unprecedented fall witnessed in business turnover in recent months will have significantly raised firms’ levels of financial vulnerability. In the non-financial business sector as a whole, the percentage of firms whose net worth is less than half their net debt is estimated to have risen from less than 20% pre-pandemic to somewhat over 25%. This percentage will have increased more significantly at SMEs (by around 6 pp) than at large corporations (around 2 pp) and, by sector, most sharply in tourism and leisure (over 15 pp), motor vehicles (over 10 pp), and transport and storage (around 7 pp). 1.3  Macroeconomic projections of the Banco de España  The high uncertainty over the future course of the health crisis made it advisable for the latest Banco de España projections released on 16 September to envisage several alternative scenarios. This had been the case in the two previous forecasting exercises, also influenced by the pandemic. Two scenarios were set out, the essential differences lying in how it was assumed the epidemiological situation would evolve both in the final stretch of September and in the following quarters and, consequently, in the severity of the restrictions on mobility and activity that it would be necessary to deploy to contain the pandemic. The design of scenario 1 thus considered a relatively favourable epidemiological path in the short term.

Finally, let me once again welcome our guests, the experts from the Czech Republic, who will pass on the Czech experience in the realization of the decade-long EU project – the establishment of the Single European Payment Area – SEPA. I believe that today’s panel discussions will encourage all stakeholders in the national payment system of Macedonia in creating realistically achievable integration initiatives in the area of cross-border payments in euros, which would open new opportunities for Macedonian companies and citizens for effective and cheap payments in the economic exchanges with the European Union. BIS central bankers’ speeches  1
The eurozone’s current economic and financial difficulties are due in part to the fact that, together with the US, the UK, and Switzerland, the euro area was one of the sources of the financial crisis that began in mid-2007 and peaked in autumn 2008. In the beginning, the crisis had little to do with flaws in the design of the euro area. Ensuing developments unveiled those flaws, however. When all is said and done, the flaws stem from the fact that, even though the euro area is referred to as an economic and monetary union, the economic and fiscal aspects were largely missing (see Chapter 15). Furthermore, the EU regulatory framework for cross-border banking operations is severely flawed in that EU-wide operational freedom was coupled with national supervision and deposit insurance – and, in the case of non-euro countries in the EU, national liquidity facilities. This made it much more difficult to address problems in the banking system at the peak of the financial crisis. To some degree, this may explain why the European banking system was not sufficiently restructured at that time and to a lesser extent than, for example, in the US. The banking system was therefore more vulnerable when the sovereign debt crisis struck several euro area countries as a result of prolonged lack of fiscal discipline (see Chapter 15), economic policy, and the financial systems of the countries affected.

BIS central bankers’ speeches  9  •  Possible improvements to the monetary policy framework, including a longer target horizon for policy formation, which offers greater flexibility to take account of longer-term risks to price stability, including those due to financial stability risk. •  Changes to the financial system should also aim at improving monetary policy transmission. This option has the advantage that Iceland retains monetary independence and a flexible exchange rate and can therefore respond to future idiosyncratic shocks. Another advantage is that a domestic run on the Treasury and/or solvent banks would be manageable. Furthermore, there is reduced risk of financial instability due to excessive capital inflows and a subsequent run on the external funding of the banking system and the Treasury. The disadvantages of this option lie in the fact that the possibilities for external trade without exchange rate risk will remain limited, and the domestic financial system will continue to be more expensive and less integrated with the global financial system than it would otherwise be. In that case, prudential rules restricting domestic financial institutions’ cross-border operations will be needed. The feasibility of this option is also dependent on support for the necessary reforms. But even though that condition is fulfilled, it is not likely that excess exchange rate volatility will disappear, as it is also rooted in the inherent volatility of asset prices and the small size of the domestic foreign exchange market.