samchain/econo-pairs-v1 huggingface dataset:
Despite weak growth, the fiscal balance improved significantly in 2004 and again this year. This has not escaped the attention of international observers. The recent assessment of the Maltese economy by the IMF, for example, commends the progress achieved in strengthening macroeconomic management, including the substantial reduction in the fiscal deficit. Looking ahead, I am pleased to note that the Budget for 2006 bears the hallmark of continuity. Operating within the constraints represented by the natural upward creep in spending on health, pensions and welfare programmes, on the one hand, and the need to avoid increasing the burden of taxation on a slow moving economy, on the other, the Government has charted a course which envisages a continuation of the process of fiscal consolidation, leading to a further reduction in the deficit to GDP ratio to below 3 per cent. This is an ambitious target whose attainment will depend crucially on a rigorous implementation of all the Budget measures, together with an intensification of efforts aimed at cutting costs and collecting taxes. On the monetary front, the financial markets have so far considered the level of domestic interest rates as appropriate and inflation remains moderate. Monetary stability is also being promoted by participation in ERM II, which is proceeding smoothly. Allow me at this point, Mr. President, to reiterate the reasons behind the Bank’s advice to the Government to maintain the value of the Maltese lira constant against the euro within ERM II at the rate prevailing prior to entry in the Mechanism.

Possible market-turning events Previous soft phases of the insurance cycle have ended, sometime quite dramatically, with a major loss. Examples include Hurricane Andrew in the early 90s, Asbestos, Pollution and Health losses in the mid-90s and “9/11” in 2001. Whilst it is understandable that some in the industry talk of the need to have naïve capital and capacity cleared out of the market, restricting supply and supporting premium above the technical price level, there is a sense that, this time, things may be different. Many believe that further capital is “waiting in the wings” to invest in the sector in the event that prices rise. Nonetheless, it is sensible to plan on the basis that a significant, market-turning event might occur at some point. Taking this as the starting point, we think there is an opportunity for firms to think through what issues might then arise and to consider what steps can be taken now to plan for these events, not least because we know some firms will be very keen to respond to any improvements in market conditions which might arise after a large loss event. We are publishing today a consultation paper setting out our expectations of firms in planning for these types of extreme insurance loss events; focussing on some of the governance, risk management, capital management and reporting capabilities that we think firms need to consider.
This is partly explained by cyclical factors. By this I mean the plentiful supply of unutilised resources - not least all those who had lost their jobs during the economic crisis that ravaged Sweden in the early 1990s. That lessened the risk of the upswing in production soon leading to the economy reaching its potential output. But as far as we can judge at present, the more favourable trend also has to do with an economy that is functioning more efficiently. Sooner or later, however, demand growth that is unduly strong and persistent will generate economic imbalances, whereupon price and wage increases usually tend to accelerate. In time, such a development is liable to turn into a recession, with falling output and rising unemployment. Rapidly rising inflation is often - though not always - an indication that the economy has been expanding too rapidly and that economic policy has not been sufficiently tight. Economic overheating and rising inflation were in fact a recurrent problem in the 1970s and ’80s. Restricting economic activity when times are good has often proved difficult. But sooner or later it has had to be done in ways that were then more dramatic. Production and employment have then fallen and unemployment has risen. BIS Review 72/2001  1  Towards the end of last year we judged that it was time for economic activity in Sweden to start slowing down to the growth rate that is commensurate with a stable long-term trend.

Uncertainty and capital adequacy Ease of exit is a consequence of the good risk management that pillar 2 requires of firms: risk management that is forward looking and prepares for unpalatable scenarios by structuring the balance sheet and business model appropriately. Good risk management is also about organising the firm in a way that allows the adequacy of the  Goldilocks and the three pillars: how much capital is just right? ‐ speech by Anna Sweeney | Bank of England  Page 4  capital base to be sensibly assessed, and the judgement about any need for intervention to be made in a timely way. In any balance sheet there will be risks that can be quantified, and there will be uncertainties that cannot. Uncertainties emerge for example, from reliance on unobservable assumptions or indeed concentration of exposure to any single risk factor on either side of the balance sheet. Another pertinent example is reliance on matching adjustment for illiquid assets: market prices of such assets are not directly observable and the calibration of the matching adjustment benefit relies on further splitting that unobservable spread into unobservable credit and liquidity components: so heavy reliance on the resulting matching adjustment is a source of material, inherent uncertainty. The greater the exposure to uncertainty, from any source, the less confidence we can have in the adequacy of the capital determined by a quantitative model.
First, Regtech benefits banks: In today’s sessions, banking leaders have told us how Regtech is important to their institutions. It enables banks to achieve higher quality risk management and compliance outcomes. It reduces costs. It frees up staff from repetitive manual tasks for more value-adding work. The use of Cloud-based Regtech technology, for example, gives banks the flexibility to adapt to changes in regulation and risk management, while maintaining superb quality in risk management and compliance activities. 6. Secondly, Regtech benefits customers: In our “Path Forward” panel, Mr Deniz Güven from Mox Bank spoke of how Regtech had significantly speeded up the bank’s end-to-end account opening process. Mr Victor Lam also cited how iAM Smart, a personalised digital services platform in Hong Kong, can support Regtech use cases such as remote onboarding. That was echoed by Mr Tat Lee of WeLab Bank and Mr Werner Schlossmacher of Credit Suisse in the “Pulse of Regtech” session. They talked about how banks can leverage alternative datasets to improve the loan application process and enhance the evaluation of product suitability. We also heard how they have designed solutions that put customer experience at the centre – by respecting customer needs, eliminating duplication, offering the most suitable products and, most importantly, keeping customers protected. The use cases discussed in those sessions showed that Regtech offers exciting opportunities that go beyond a compliance tick-box exercise and greatly improve customer experience and satisfaction. 7.

To quote Mr David Bailey, “data and Regtech go hand-in-hand and data must be at the heart of any Regtech conversation”. Good quality data means Regtech can be used to build effective models and generate decision-making insights. It is vital to build trust with your customers if you want to acquire sufficient quality data. You then need to store and transform that data according to a solid set of data governance rules, identify data which is relevant, and use it in an intelligent and responsible way. Third, proper risk management remains as important as ever. In Hong Kong, we are proud of our banks with their long histories, but we recognise that their legacy infrastructure can potentially hold back Regtech adoption. One key takeaway from today is the reminder that Rome was not built in a day. Banks can start on a small scale, for example by conducting a Proof of Concept (PoC) in a business unit or implementing Regtech in a Cloud-based environment in a newly established part of their business. As a regulator, I must point out that when navigating technologies and determining how to put Regtech to use, it is essential that banks adopt a robust risk assessment framework to evaluate and manage the associated risks. This resonates with Ms Jane Fraser’s suggestions that banks should be mindful of risks such as data security and third-party operational risks that come with new technologies, and that the sandbox provides a valuable means to test new Regtech solutions.
Labourers might receive partial payment for their efforts in kind, or at large mills, in scrip that could only be used for purchases in the company store. The monetisation of the economy, based on secure monetary values, severed many of these ties of dependency. With money in their pockets, accepted as legal tender everywhere, the farmer or labourer was able to choose. This is also freedom. Nor did the party receiving payment, e.g. the town merchants to know more about the customer than that he had money in his pocket and could pay for the goods. Eitrheim, Ø. and L.F. Øksendal (forthcoming): On secure monetary values and freedom. 6  BIS central bankers’ speeches  In Norway, the aim of shielding the monetary system from the government was already embodied in the Constitution of Norway adopted on 17 May 1814. The drafters of the constitution formulated the following in Article 75(c): “It devolves upon the Storting ... to supervise the monetary affairs of the Realm”. This provision strongly censured the Danish King’s monetary policy during wartime. In future, representatives appointed by citizens, not the Crown, were to have final responsibility for the monetary system.27 The King’s scope for taxation by means of inflation was curtailed. The Storting, which was supposed to meet every third year, was not equipped to assume day-to-day responsibility for the monetary system. “Someone” had to do this on behalf of the Storting. That “someone” became Norges Bank, which was established in 1814.

When these young economists returned home, they had learned that another world was possible. They had received key inspiration about the proper business of a central bank and the proper conduct of monetary and credit policy. Today, the Bank has a Research Unit. The research is useful but it is a drop in the ocean compared with the research taking place in the wider world. But the Research Unit is important for ensuring that we are vigilant. It is the Bank’s bridge to the academic world inside and outside Norway. Internationally recognised scholars visit the Bank on a weekly basis to relate the latest news from the research front and challenge our perceptions and ways of thinking. The actual presence of in-house researchers with specialist expertise in central banking sharpens the minds of other Bank staff. The Research Unit ensures that as an institution the Bank does not isolate itself and become inward-looking and self-satisfied. The third measure is to ensure that the Bank’s governing bodies and Bank staff work together as a team. Most of the literature on “making good decisions” focuses on the composition of the governing board (external vs. internal and governance by experts vs. general governance expertise) and work structure (collegial committees vs. individualistic committees). Just as important is how the governing board manages to make the most of staff expertise. If an institution like the central bank slowly slips into mediocrity, it will not be discovered until it is too late. 12  BIS central bankers’ speeches
Trade unions base their wage negotiations on expectations regarding price inflation and developments in employment over the next few years. Expectations play an important part in financial markets. Equity prices and exchange rates may fluctuate widely as a result of changes in the expectations of market participants. Because expectations are of such importance to economic planning and decisions, it is essential that there is confidence in the nominal anchor. This makes it possible to achieve nominal stability with smaller disturbances in the real economy and lower unemployment. BIS Review 7/2001  1  Although nominal stability is a prerequisite for sound developments in the real economy over time, conflicts may develop in the short term. Such conflicts may occur if there are disturbances on the production or supply side of the economy which give rise to higher price and cost inflation that does not actually reflect increased pressures in the economy. Examples of such disturbances are cost-push shocks resulting from negotiations, or weaker productivity growth. When disturbances of this type occur on the supply side of the economy, there may be a trade-off between fluctuations in nominal prices and wages and fluctuations in production and employment. A trade-off of this kind is illustrated in Chart 2. The chart shows that using strong instruments to achieve an inflation target or exchange rate target in the short term results in more pronounced fluctuations in the real economy.

However, there are many types of shock where there is no conflict between stable nominal developments and stable developments in the real economy. For example, a sharp decline in overall demand may give rise to a deflationary recession. In such a situation, an expansionary monetary policy may contribute to both nominal and real economic stability. Whether disturbances arise on the supply side or the demand side, it should be possible to use the interest rate to influence economic developments. The interest rate is an instrument, rather than a target variable. A passive monetary policy will lead to both price and exchange rate instability and to greater fluctuations in production and employment. However, an active monetary policy does not imply attempting to fine-tune economic developments. We must be mindful of the uncertainty associated with economic developments and the effects of monetary policy. Normally, interest rate changes should be made gradually to allow us to acquire more information, for example about the effects of previous interest rate changes. 2  BIS Review 7/2001  Uncertainty and credibility According to Norges Bank's mandate, monetary policy is to be aimed at maintaining a stable krone exchange rate against European currencies, based on the range of the exchange rate maintained since the krone was floated on 10 December 1992. In the event of significant changes in the exchange rate, monetary policy instruments will be oriented with a view to returning the exchange rate over time to its initial range.
More competitiveness gains from the past depreciation may yet be realised, and in any event, unlike for much of Montagu Norman’s time, our exchange rate will remain flexible. Nonetheless, sustained borrowing from abroad to consume at home is hardly a recipe for a balanced and sustainable expansion. Borrowing to invest, improve productivity, competitiveness and incomes is. Amidst much commentary about an unbalanced recovery, it should not be forgotten that business investment has accounted for more than a quarter of GDP growth over the past six months. The MPC’s forecasts rely on continued rapid growth of business investment over the next few years, leading to a revival in productivity and real wages, which in turn will allow consumption to grow without an unsustainable decline in household savings. Creating the right conditions for investment is thus essential. In a world of corporate caution this will likely require interest rates consistent with our guidance. The Bank is well aware that such a monetary stance could encourage other risks to develop. For instance, there is evidence of growing vulnerabilities in financial markets. Across asset classes, implied volatilities are well below their long-term averages. Spreads in high yield and peripheral bond markets have collapsed. And covenant-light loans are the new normal. While the banking system is much more robust to spikes in volatility, end investors may not have fully absorbed the extent to which financial reforms will distribute shocks across the financial system.

Jan F Qvigstad: Comments on Lars E O Svensson's lecture "Policy expectations and policy evaluations – the role of transparency and communication" Speech by Mr Jan F Qvigstad, Deputy Governor of Norges Bank (Central Bank of Norway), at the conference "Ten Years of Riksbank Independence", Stockholm, 11 September 2009. *  *  *  Introduction It was a great pleasure to accept the invitation to discuss professor and fellow central bank deputy governor Lars Svensson’s lecture in connection with the tenth anniversary of Riksbank independence. In his lecture, Lars Svensson discussed communication, credibility and monetary policy evaluation. He looks at general issues for central banks seeking to influence key rate expectations, using the Riksbank as an example. 1 I will not venture to remark on the Riksbank’s assessments but will offer my comments on the same issues in the light of Norges Bank’s experience of interest rate forecasts. There are a number of similarities between the communication strategies of the Riksbank and Norges Bank. And underlying these strategies is a model developed by, among others, Lars Svensson. In his lecture today, he described how to arrive at an interest rate path that “looks good”. He showed, as he has on many previous occasions, that this can be formalised by finding the interest rate path that minimises a given loss function. When does the interest rate “look good”? Svensson raises the issue of whether monetary policy is well balanced, not only ex-post but also ex-ante.
It is also worth mentioning that during the property crisis at the beginning of the 1990s, it was not the households that caused problems for the banks. As I mentioned earlier, the Riksbank, like many other central banks, conducts a flexible inflation-targeting policy. In addition to taking account of price stability, monetary policy may in certain cases wish to take into account developments in the real economy as a whole. This can mean, for instance, conducting a less aggressive interest rate policy and thereby allowing inflation to return to the target gradually after a disturbance to avoid excessive fluctuations in production and employment. In connection with the build-up of household debt and price trends in housing, there could be a situation where households may have based their decisions on incorrect expectations and the trend may have proved unsustainable, or that we see a tangible risk of this situation arising. This could lead to an adjustment process, where house prices fell heavily and there was a decline in the real economy as a whole. We explained in a clarification of monetary policy published in 1999 that, if we choose to take these considerations into account, we will clearly motivate our decision. If flexible inflation targeting functions well, it leads to smaller fluctuations in production, without this causing average inflation to rise. The scope for conducting such a policy is determined by households’ and companies’ confidence in monetary policy.

I am confident CIFF would embed a culture that places unequivocal commitment to professionalism and ethics that would raise the prestige of the Islamic finance industry and its practitioners. 2  BIS central bankers’ speeches
So, most of the US home owners in negative equity or with low credit scores have not been able to benefit from the all-time-low mortgage rates (which once dropped to as low as 3.55%). At the same time, the low interest rates cause a great deal of harm to savers, whose deposits have been earning virtually no interest at all. There are millions of savers, including households, pensioners, corporates and investment funds that have remained prudent and have avoided falling into the excessive leverage trap. These prudent savers have been punished badly in the past four  BIS central bankers’ speeches  3  years under the “low-for-very-long” policies. With a sharp drop in recurrent interest income, the behaviour of this group may have changed by scaling down their consumption or investment. This offset, at least partially, the potency of low interest rates and QEs. (b) Secondly, these policies create moral hazard: The suppression of interest rates and the injection of huge amounts of liquidity through QEs create considerable moral hazard in several ways. It delays the necessary adjustments in the debt overhang through deleveraging by households, corporates and governments. If one agrees that excessive leverage is the root cause of the latest crises, deleveraging across the board is the only way to escape the trap. It is hard to imagine why the problem of excessive leverage can be overcome by adding more debt to the system.

In 200 and 500 Lekë banknotes, the portraits of Naim Frashëri and Ismail Qemali have been notably improved. 1/2  BIS central bankers' speeches  The designs on both the obverse and the reverse of the banknotes have been reconfigured and enriched with new or improved security features. The dominant colours have been preserved, but they have been given a fresh look, with more vivid and balanced colours for the eye. The design composition of each banknote is in harmony with the rest of the series. The overarching goal was to create a series of banknotes that are modern and easy to use, still in balance with tradition. The personalisation, versus unification, of some of the security features for each denomination is a new approach. The reduced dimensions make the banknotes more user friendly. Special attention has been paid to features for the visually-impaired. The nominal value on each side of the banknote is easier to read, the dimension of each denomination are different, and the raised print that may be felt on the edges of banknotes has been kept to help identify different banknotes. For the first time in Albania, the new series introduces polymer banknotes. This plastic material, which is more durable than cotton paper, was selected to be used for the 200 Lekë banknote, taking into account the higher frequency of changing hands and a lower paper quality evidenced in this denomination over the years.