samchain/econo-pairs-v1 huggingface dataset:
A number of banks have therefore frozen headcount and some have BIS Review 48/1998  -4-  felt obliged to lay off staff. Some branches have been closed. This is an unfortunate aspect of the adjustment process that Hong Kong is currently undergoing. However, not all the moves are purely defensive. Banks are also trying to find ways of delivering products and services to customers more cheaply and efficiently, for example through telephone call centres, electronic banking and segmentation of the branch network. There is also more emphasis on using the branch networks to cross-sell other products such as unit trusts and insurance so as to build up non-interest income. Geographically, ambitions to expand in the region have obviously been dampened by the financial crisis. But there is a wide recognition that the Mainland of China offers substantial opportunities for banks in Hong Kong both to develop new business and to expand their relationship with existing customers. Underlying all the banks’ strategies at present must be the recognition that the Year 2000 issue has to be tackled successfully. This is an issue of basic business survival. I believe that banks in Hong Kong are aware of this and are working actively to meet the HKMA’s deadline of end-December 1998 to achieve Year 2000 compliance. How is Hong Kong’s position as an international financial centre going to be affected by what is happening in the region? It is clear that the number of foreign institutions in Hong Kong will shrink to some extent.

I am sure that the Hong Kong banking sector will not only survive the process, but also go on from strength to strength in the future. BIS Review 48/1998
Going forward, and despite an impact from the war on the sectors previously mentioned, a continued downward trend in the overall unemployment rate is projected over the following years, converging closer towards full-time employment conditions in 2024, owing to the projected ongoing economic expansion and the expected manageable impact from the war. The latter is supported by survey data from the European Commission, where employment expectations by businesses across services and industry remained broadly unchanged since the outbreak of war. Turning now to inflation, the Harmonised Index of Consumer Prices (HICP) increased by 7,7% during the period January-July 2022 compared with 0,9% in the corresponding period of 2021. During the period under review, the surge in the domestic HICP, is mainly attributed to the sizeable adverse consequences of the Russian invasion of Ukraine and also due to the ongoing consequences of the pandemic. More specifically, the energy component of HICP is the largest contributor to the surging trend of domestic headline inflation (with around 45% share on HICP) during the period under review mainly due to the developments related to the Russian invasion of Ukraine which resulted to the exceptional soaring in the prices of oil and gas in international markets. Food prices also registered sizeable yearly increases (7,1% during Jan-July 2022 Vs -1,3% in the corresponding period of 2021) in the aftermath of the latest ongoing geopolitical tensions. At the same time, the remaining components of the HICP such as services, non-energy industrial goods also recorded significant yearly price increases.

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.
Chart 4: Pre-crisis growth in UK banks driven by  Chart 5: Losses predominantly global  overseas assets  Sources: Office for National Statistics and Bank of England. Sources: FSA regulatory returns, published accounts and Bank of England calculations. Data for 2008H2-2011H1. Goodwill impairments are calculated on a pro-forma basis and may be subject to error. Impairments and write-offs are taken from FSA regulatory returns. Due to sampling and definitional differences, these may not match those disclosed in published accounts or in the Bank of England’s Bankstats. No financial crisis is exactly like another – it is now a cliché to compare them to Tolstoy’s unhappy families – and I’m certainly not suggesting that domestic lending is unimportant or that the risks involved are entirely immune from domestic interest rates. But I do think that the effect is less marked the more financially open an economy and that the spillover effect of monetary policy – its impact on financial stability relative to that on inflation – may not be that large. If so, you’d have to pay quite a high price, in terms of output and inflation, for interest rates to be of any material help in containing independent swings in financial risks. More careful studies bear this out. In 2010, my predecessor Charlie Bean estimated that, even had UK Bank Rate been 100bp higher from 2005 this would’ve reduced banks’ balance sheets only by 3% by 2008.

And it has also enabled the growing incorporation of the population (particularly the female population) into the labour market to be compatible with further cuts in the unemployment rate, which stood at 8.5% on average in 2006, the lowest level since the late 1970s and practically on a par with the euro area average rate. The behaviour of employment denotes changes of some depth in the Spanish labour market, such as the marked fall in the structural unemployment rate, which may be interpreted as an increase in the scope available for generating employment without wage pressures arising. The counterpart to an employment-intensive growth pattern has been modest increases in actual productivity. It is difficult to offer an accurate diagnosis of the reasons for this, given the difficulties of measuring and estimating productivity in the presence of significant structural changes, such as the composition effects arising from the concentration of growth in sectors that are relatively less dynamic productivity-wise. But what are possibly being reflected here are shortcomings in the quality of factors of production and in the characteristics of the business sector. BIS Review 67/2007  3  That said, the responsiveness of supply is not proving sufficient to counter the pressure of expenditure on price formation. On one hand, compensation per employee quickened somewhat in 2006, but to a lesser extent than did wage settlements, as a result of the changes in composition and the factors boosting labour market flexibility that I referred to earlier.
Banks are now at a critical phase in the credit cycle. After years of high quarterly profits, low delinquency rates and comfortable capital ratios, it is easy to forget the fundamentals of sound lending. And, as any good coach will tell you, it’s the fundamentals, the basics, that make or break your performance. The most important of the fundamentals is maintaining rigorous credit standards, especially in an environment of increased competition for new and existing customers. Experience teaches us that the worst loans are often made in the best of times. And because things are awfully good at the moment, I can’t help but remind bankers and supervisors alike that the sun doesn’t always shine so brightly. 1  BIS Review 32/2000  Indeed, sometimes it even rains. To paraphrase Mark Twain, reports of the business cycle’s demise are greatly exaggerated. In circumstances this favorable, loan officers must make doubly certain that there is every reason to believe that the loans they make are collectible. This is especially important for younger bankers who, given the length of this expansion, have never experienced a serious recession and may mistakenly view current conditions as ordinary rather than as exceptional. Lending granted on that erroneous basis would have grave consequences for the industry’s ability to weather weaker economic conditions which are, to be sure, inevitable. From a supervisory perspective, I believe it is time for us to exercise an extra measure of caution.

Indeed, it is evident to me, as a former commercial banker and now as a supervisor, that only if we work together, each meeting our responsibilities and reinforcing the other, will we be able to successfully manage and supervise a rapidly evolving, ever-more complex financial services industry. BIS Review 32/2000  8
In terms of the effect it's going to have on rate raising on both sides of the Atlantic, what do you see as the ramifications for interest rate policy first perhaps for Federal Reserve and then for the ECB? For the Federal Reserve I wouldn't dare comment. I don't think they would like it too much and it's not my job. As far as the eurozone is concerned, so far I would say we can look through. It all comes against a backdrop of a very strong growth momentum, very broad. This recovery, this expansion is the strongest we had for at least 10 years. In terms of its breadth across the board, across sectors, across economies, that's the broadest we had for the last 20 years, I would say. The starting point is a very good one and the economy is quite resilient. There are two reasons why bonds go up, why yields go up or the rates on those bonds go up and yields go up and interest rates go up; One, the economy is going very, very well – or sometimes the economy is going very, very badly. Then the ECB perhaps has to step in again. Do you fear the ECB has to take more action to offset the negative effects of a potential trade war? That's not a discussion we're having today. The discussion we're having today is on how the mix of our instruments will have to change in the future.

We do not have the instruments for fine-tuning the exchange rate. In Norges Bank’s submission of 27 March 2001 to the Ministry of Finance on the new guidelines for economic policy, we indicated that when monetary policy is aimed at low and stable inflation, this is the best contribution monetary policy can make to stability in the krone exchange rate over time. The interest rate affects price inflation through a number of channels, including the krone exchange rate. A stronger krone curbs inflation. If we take steps to counteract an appreciation of the krone when there are pressures in the economy, we reduce the possibility of keeping inflation at bay and there is a greater risk of pronounced fluctuations in the economy. Maintaining stability in the internal value of the krone must thus take precedence. As long as other countries pursue a policy of low and stable  BIS Review 49/2002  7  inflation, stability in the international value of the krone is dependent on low and stable inflation in Norway The implementation of monetary policy is delegated to Norges Bank. This implies that Norges Bank sets the interest rate on the basis of our understanding of the regulation, as indicated in the Bank’s submission to the Ministry of Finance in March last year. Our interpretation places emphasis on the Government’s rationale behind the regulation, on the objective as formulated in the first paragraph and on our knowledge about the relationships between the interest rate, the krone exchange rate, output, employment and inflation.
4  BIS Review 59/2004  Developments in recent years With hindsight, we can certainly see that the Riksbank has not always succeeded in predicting inflation correctly and that monetary policy therefore could have been conducted somewhat differently on a number of occasions in the past ten years. This applies, for example, to 1995 and perhaps also to 1999-2000, even though the latter period’s probably too low interest rates did not have any consequences since the upswing in the economy and inflation was broken when the equity price bubble burst. This has also been the case in the past few years. Since the second half of 2003 inflation has been below target, and it is likely that it will continue to be so for at least another half year or so. This suggests that interest rates could have been lower in primarily 2002 and 2003. One conclusion from this is that we must deepen our understanding of factors such as productivity and of the impact on international prices of tough global competition. In these respects we are essentially in the same boat as other forecasters. As far as we can see, no Swedish forecasters have presented forecasts that have differed markedly from our own. In discussions with colleagues abroad, moreover, I have noted that all have been surprised by the low international inflation in the past year.

Instead, there are many reasons to believe that more stable economic performance over time also leads to conditions that foster high growth and employment. Moreover, a simple comparison of unemployment data between the periods before and after the shift in regime proves rather misleading. This is because of the attempts in the 1970s and 1980s to meet the target of full employment through a policy that was unsustainable in the long run - it was exactly because of this that the change in regime was implemented. As I mentioned earlier, this policy involved Sweden devaluing the krona as soon as we were hit by a cost crisis that resulted in weaker developments in exports and employment in the private sector. The devaluation of the krona restored competitiveness by lowering real wages for a number of years until excessive increases in prices and wages compared with abroad once again eroded the scope that had been created. The other way in which unemployment could be kept down was through a sharp increase in public sector employment. From having comprised 15 per cent of the labour force in 1960, the proportion of the employed accounted for by the public sector rose to just over 30 per cent by the end of the 1980s. So even though jobs were being lost in the private sector, employment held up through increased employment in the public sector. However, neither the decreases in real wages due to the devaluations or the increased public sector employment could solve the problems in the long run.
33 It is also worth remembering that monetary policy works in part through channels that are unaffected by low rates, including its effect on the exchange rate, which provide further support by boosting labour income. 34 Bank staff estimate that such behaviour has reduced GDP by only 0.1% in total since 2007. A far more important determinant of the sustainability of defined benefit pensions is future productivity growth. 32  23  All speeches are available online at www.bankofengland.co.uk/news/speeches  23  That said, there are arguments for the “risk management” approach advocated by Charles Evans among others to minimise the risks of hitting the effective lower bound (ELB). 35 This approach calls for easing policy more aggressively than would be prescribed by the central outlook for activity and inflation when policy rates are close to their lower bound. The additional easing provided by such a strategy removes some of the downward bias to inflation outcomes introduced by the ELB. If it is understood by a sufficient proportion of agents, and affects their expectations, it becomes even more powerful. As well as considering monetary policy tactics within the current framework, an open question is whether the framework itself should be adjusted to embed a commitment to hold rates lower for longer to provide additional stimulus at the lower bound.

13  All speeches are available online at www.bankofengland.co.uk/news/speeches  13  The weakness in investment has weighed on growth in the potential supply capacity of the UK economy, through lower growth in the capital stock and reduced process innovation. Brexit-related uncertainties may have dissuaded companies from expanding supply capacity or entering new markets. And companies have spent considerable time and resources planning and preparing for various contingencies, limiting their ability to produce output and take strategic decisions that would boost innovation and productivity. 15 The MPC has repeatedly emphasised that monetary policy cannot prevent either the necessary real adjustment as the UK moves to its new trading arrangements or the weaker real income growth likely to accompany that adjustment. Monetary policy does, however, have a role to play in supporting the economy during the adjustment process. The balance of Brexit’s effects on demand, supply and the exchange rate meant the MPC faced a trade-off between the degree of support it provided to jobs and activity on the one hand and how fast it would return inflation sustainably to the target on the other. Once again it was in a unique position relative to other major central banks, which were in positions of “divine coincidence” in which both output gap and inflation rate pointed the policy stance in the same direction (Charts 9a and 9b).
A current example are bad loans, or to use a more technical term, non-performing loans, NPLs for short. Banks in the euro area carry a total of € billion in such loans on their balance sheets. And this is an issue. Having large stocks of NPLs on their balance sheets prevents banks from doing their job. They have a hard time financing our economy. ECB internal research has shown that banks with high stocks of NPLs indeed lend less than others. It is thus important that banks resolve their NPLs quickly and decisively. And this is not just for the sake of the economy and the greater good. Failing to deal with NPLs also hurts the banks themselves. High levels of NPLs require constant attention. And this takes time and energy. So getting rid of NPLs would enable managers and staff to use their time more productively. They could improve business models, shore up profits and make their bank more resilient. So, failing to deal with NPLs hurts the economy and of course it hurts the banks. That’s why we consider NPLs a top priority. Getting rid of NPLs by restructuring, working out or selling them requires a joint effort by banks, politicians and supervisors. Banks have to put in place the right strategies and execute them. Politicians have to improve the judicial and legal systems to allow a swift resolution of NPLs. And we supervisors? Well, last year we published guidance on how to deal with NPLs.

On the basis of that guidance, we scrutinise the banks’ strategies and provide feedback. So we are keeping a close eye on how banks are addressing the problem. And today, we have published an addendum to our guidance. This addendum will help to ensure that NPLs remain a problem of the past once they have been dealt with. To that end, it lays out how we expect banks to provision for new NPLs. More specifically, it refers to exposures that are newly classified as non-performing as of 1 April 2018. The addendum is not a binding document, but it specifies our expectations and will thus serve as a starting point for our dialogue with each bank. Conclusion Ladies and gentlemen, Rest assured that I have not exhausted the topic of my speech. But I may well have exhausted you. So I will conclude quickly and painlessly. First, banks are important for the economy, particularly here in Europe. That said, it might be good to add a bit more capital market to the mix; but that is a topic for another day. Second, banks must be able to fail. If they are not, the economy will suffer in the long run. But if banks fail, they must do so in an orderly manner. If not, financial stability will suffer in the short run. The new European resolution framework helps to make orderly failure possible. Third, failure is the least desirable outcome, of course. We need banks which are profitable and resilient in the first place.
Conversely, at the height of the crisis, financial conditions tightened sharply even as the Federal Reserve aggressively pushed its federal funds rate target down toward zero. As a result, monetary policymakers need to take the evolution of financial conditions into consideration. For example, when financial conditions tighten sharply, this may mean that monetary policy may need to be tightened by less or even loosened. On the other hand, when financial conditions ease—as has been the case recently—this can provide additional impetus for the decision to continue to remove monetary policy accommodation. While I agree with Hélène in most respects, there are a few points where I am less convinced. While the global financial cycle complicates policymakers’ ability to guide financial conditions in their own economies, I’m not persuaded that the trilemma has been replaced by a dilemma—that is, essentially an “either/or” choice between an independent monetary policy versus an open capital account. While there is no panacea to insulate countries from financial spillovers—particularly when policy in some areas is constrained by the effective lower bound on interest rates—I think a combination of exchange rate flexibility, a credible monetary policy framework, sufficient foreign exchange reserves, and a strong financial system can help mitigate the effects of such spillovers. Moreover, it strikes me that market participants have become more discriminating over time about the circumstances of different countries, rather than painting all EMEs with a similar broad brush.

After 1 January it gradually declined again in a few weeks to a level of around USD 1.08. So, we have no reason at all to be dissatisfied with that level. It is about the level at which the euro had stood for more than a year. And now - to take a very short outlook, between 6.15 and 6.30 today - the euro rose from USD 1.08 to USD 1.0865. I hope that answers your question. Question: I have a question concerning your inflation target. Can we draw the conclusion that from now we have some kind of informal bottom on your inflation target? Duisenberg: No, you cannot draw this conclusion. We are sticking to our definition of price stability which says that we regard price stability as being an increase in the rate of inflation of below 2%. And BIS Review 39/1999  2  what I said today is that the present situation and the prospects for the increase in the rate of inflation are such that they seem, for as far as we can look forward, also to remain well below that ceiling of 2%. So, inflation is not a danger, which enabled us to, let me say, to pay more attention to the second area of objectives of the European Central Bank - that is to support the general economic policies of the European Community.