samchain/econo-pairs-v1 huggingface dataset:
In shaping the macroprudential policy framework, six aspects can be identified as guiding principles: First, macroprudential policy should be pre-emptive and strongly counter-cyclical. Early identification of risks is an essential first step in the policy-setting process supported by early warning indicators and models to predict potential sources of systemic risk. Macroprudential policy should then act forcefully to smoothen the financial cycle avoiding that it reaches a dangerous peak. Second, and relating to the first, macroprudential policy should rely on the concept of the financial cycle in order to assess the position of the economy, predict its development and appropriately calibrate the use of macroprudential instruments. The concept of a financial cycle is therefore crucial for the rationale of macroprudential policy, justifying the need for dedicated policy instruments. To effectively tame the financial cycle, a time-varying dimension is crucial in the design of policy instruments – that is, the instruments must be adjustable over the cycle. Counter-cyclical capital and liquidity requirements are thus important tools. Third, the real estate component in the financial cycle is of paramount importance. This implies that instruments in the macroprudential policy toolkit should contain borrowerside tools to influence the demand for credit, in addition to capital-related measures conditioning bank credit supply. Financial asset prices are admittedly difficult to tame with targeted policy intervention.

This latter aspect is particularly compelling in a currency union with shared monetary policy, where macroprudential policies represent an additional and potentially powerful element to cushion conditions specific to member states. This underpins several principles that should guide macroprudential policy that I would like to address in the remaining of my remarks. 5  Hartmann, P., K. Hubrich, M. Kremer and R.J. Tetlow (2015) “Melting down: systemic financial instability and the macroeconomy” mimeo, February. 6  Allen, L., T.G. Bali and Y. Tang (2012) “Does systemic risk in the financial sector predict future economic development?“ The Review of Financial Studies, vol. 25, No. 10, October, pp. 3000–3036. 7  Giglio, S., B.T. Kelly and S. Pruit (2015) “Systemic risk and the macroeconomy: an empirical evaluation”, NBER Working Paper No. 20963, February. 8  Hiebert, P., I. Jaccard, T.A. Peltonen and Y. Schüler (2016) “Characterising the financial cycle: a multivariate and time-varying approach”, ECB-IMF Conference on Macroprudential Policy Frankfurt, 26–27 April 2016. 9  Borio, C., M. Drehmann and K. Tsatsaronis (2012) “Charaterising the financial cycle: don’t lose sight of the medium term!”, BIS Working Paper No. 380, June. 2  BIS central bankers’ speeches  Principles of Macroprudential Policy The ultimate objective of macroprudential policy is to prevent and mitigate systemic risk, which includes strengthening the resilience of the financial system and smoothening the financial cycle, in order to preserve the effective provision of financial services to the real economy.
In every meeting with you, I will highlight the need of strengthening the control on the business of the institutions you are governing. In addition to the fact that only this way the personal philosophy of each of you with regard to the development of the institution will come true, this process is vital to the well-functioning and safety of its business, even more given its rapid growth. In this context, the control structures should act rightly and extend to all the bank’s activities. Given the absence of a good collection, processing and reporting process of the business data, the control process on the institution’s activity finds itself jeopardized. The process of the banking sector’s data collection and processing has improved over the recent years as a result of investments in modern technological systems. In many cases, however, it is observed that the adoption of these systems is made only partially and hastily. Their full potential is not used and the banks’ personnel may not be fully familiar to their use; hence, weakening the necessary human control on these systems. Consequently, the control process on the institution’s activity is segmented, and the process of data collection, processing and reporting at the required quality and time is hampered. As a result, you being heads of commercial banks and us the system’s regulatory authority, risk to take decisions on data which are not fully accurate and furthermore are “old”. Being present in different banks and in different levels, a final solution should be found to this issue.

Is the market not better handled by the private sector without public intervention? According to the law, the Riksbank is to promote a safe and efficient payment system. Like most central banks, the Riksbank is heavily involved in large value payments, running and providing credit to the RIX-system, where payments can be made in central bank money. Here the central bank role is simple to explain. But why should we be involved in the small value payments handled in the card market? Safety problems, although they may be important, are usually not systemic in nature. And in a well-functioning market, economic efficiency should be attained by the market itself, without public intervention. In my view, central bank involvement is appropriate only in the cases of market failure, coordination problems of some magnitude or the presence of obstacles outside the market itself. Usually, they 2 relate to efficiency rather than safety. Typically, we would ask questions such as 1. Are there legal and regulatory impediments to market development and innovation? 2. Are market conditions competitive? 3. Are security and operating standards and infrastructure arrangements efficient? 4. Are settlement services, however provided, safe and efficient? To answer these questions, we follow the market for retail payments and we try to exchange information and cooperate with other relevant public and private bodies. In the card payment market, issues of competition, pricing and security are of particular importance. I shall comment shortly on the first two of these.
The Consumer Education Programme seeks to provide relevant information to consumers about insurance products, their costs and benefits, processes and documentation involved in the insurance cycle, and more importantly, the rights and responsibilities of the various parties to an insurance contract. It is also to promote greater awareness among consumers about the means and avenues for redress in the event of dispute or dissatisfaction with any insurance product or service. This Consumer Education Programme for the insurance sector will extend over a 10-year horizon and will be undertaken on several levels under a step-by-step approach to reach out to the various target groups. Similar to the Consumer Education Programme for banking, the insurance education programme has been given the acronym: “InsuranceInfo” (or “InfoInsurans” in Bahasa Malaysia). Over time, it is envisaged that the acronym and the programme will become readily recognizable in the public domain. In its first year, the Consumer Education Programme will focus on the wide dissemination of information in 12 priority areas that have been identified. These include issues on the fundamentals of insurance and takaful products and services, highlighting the important terms and conditions, rights and obligations under a policy contract as well as the redress avenues available, and the common insurance and takaful products. With participation from the insurance associations, Bank Negara Malaysia has produced 12 booklets that set out the important information for consumers in these areas.

These booklets can be obtained from the principal offices and branches of insurance companies and takaful operators, as well as from selected branches of banks that have bancassurance arrangements with insurers. Ladies and Gentlemen, In addressing the challenges of financial education, collaborative partnerships are important. No single organisation can be expected to meet all the demands for consumer education. While Bank Negara will continue to actively engage the insurance industry in the development, production and dissemination of educational materials and initiatives, the process needs to be driven by the industry. Insurance intermediaries provide the direct link to the insuring public and therefore is an essential part of the efforts to increase familiarity on insurance by the community. With approximately 147,000 agents currently in the market, the agency force can contribute significantly towards raising the level of financial literacy among Malaysians through InsuranceInfo. Similarly, the various consumer associations, through their direct contact with consumers, have an important role to play in promoting an active consumer movement by providing useful guidance to consumers in dealing with issues relating to insurance and takaful matters. Their wide network, close proximity, and good relationship with consumers can contribute towards the successful implementation of the Consumer Education Programme. Just as the rapid deployment of new information technology has expanded the scope of financial services, so too, has it increased our options for meeting the challenges of financial education.
To conclude this part of my address, let me stress the importance of building on the balanced budget obtained in 2001 by introducing improvements into the structural aspects of general government conduct. Public spending must be increasingly efficient, so that it contributes to increasing the economy's stock of capital and productivity. Moreover, the necessary adjustments should be made so that due attention to the growing demands that will be made of the public sector as a result of the ageing of the population (to cover pensions, health, care for the aged, etc.) will not lead in the long run to situations jeopardising public finances. Financial stability I shall devote the second part of my address to financial stability. From this perspective, I shall discuss the main consequences of some of the earlier-mentioned shocks the international financial system underwent last year. I should like to begin with some reflections drawn from the crises experienced by certain emerging countries. First, let me mention the importance of compatibility between the exchange rate regime chosen by a country and its overall economic policies and institutional structure. No exchange rate regime can, on its own, protect an economy from financial crises if it is not accompanied by appropriate and coherent policies.

As you are aware, finance can be looked at as the oil that lubricates smooth economic growth and therefore any impediments to accessing this important resource has an adverse impact on the country’s economic growth prospects. The Study and this Conference have come at an opportune time when we are focusing on enabling all Zambians to be empowered financially and ultimately economically so that we reduce the high levels of poverty in the country. I have no doubt that the findings of the study, will stimulate profound discussions which will shape the efforts going forward on financial inclusion and promulgate the financial inclusion agenda to all Zambians. Distinguished Guests, Ladies and Gentlemen, It will, however, take deliberate policies and long-term commitment from all stakeholders beyond the study for us to ensure financial inclusion of women. It will further require constant review of the policies, re-assessment of priorities, and adequate financial resources to effectively implement interventions to promote women’s access to finance. This entails integration of gender-specific perspectives at the design stage of policies and programmes to provide for inclusion of clauses more equitable access to financial assets and services by women. In the past few decades, the state of the financial sector in Zambia has been characterised by low financial intermediation that witnessed limited access to financial services particularly for the rural population and the low-to-middle income earners, high cost of funds and underdeveloped money and capital markets.
Normalized 7  consumption, lower inflation and restored real household income will enable us to make progress in their recovery, over and above other efforts that may be made to strengthen them. This is another good reason why we must continue firmly in the process of inflationary convergence. It is vital not only for improving the welfare of households, but also to give them the tools to face the difficult times that the future might bring. There are many other challenges, of course, about which this Congress has constantly shown its concern. On one side, that of fostering greater investment and growth, which are also vehicles for improving well-being through employment and household income. On our side, we reiterate that monetary policy has done and will continue to do everything in its power: by reducing the volatility of the cycle and fostering a macroeconomic environment conducive to economic development. At the same time, the country must also address some very pressing issues. How to improve our productivity, how to face the challenges of a world in constant change and, particularly, how to overcome the impact that the pandemic had on such significant aspects as education. Dear Senators, the Central Bank has maintained a monetary policy that has played an important role in the process of resolving macroeconomic imbalances, helping inflation to decrease and move towards the 3% target. If this path is maintained, we will soon begin to reduce the Monetary Policy Rate. However, this task is not over.

Figure 2  Activity gap by different methods (*)  Other gap metrics (*)  (percent)  6 4 2 0 -2 -4 -6 -8 -10 -12 -14 -16  (percent)  10.0  4.0  Capacity utilization Electric power generation (right axis)  3.0 2.0  5.0  1.0 0.0  0.0 -1.0  Range of models  -5.0  -2.0 -3.0  02  04  06  08  10  12  14  16  18  20  -10.0  22  -4.0 15  (*) For details on its calculation, see box II.1 in June 2023 MP Report. Source: Central Bank of Chile. 9  16  17  18  19  20  21  22  23  Figure 3  Commodity prices  (index, 2018-2023 average=100)  Real exchange rate (RER) (4)  4.0  122  3.5  115  3.0  108  2.5  101  2.0  94  1.5  87  (% of GDP, quarterly)  Foods (1)  180  Transportation costs (3) Oil (2)  140  100  60  20  (index, 1986 average=100)  19  20  21  22  23  Average of last 15 years  80  1.0 18  RER  18  19  20  21  22  23  10 11 12 13 14 15 16 17 18 19 20 21 22 23  (1) FAO food price index. (2) WTI-Brent average.
This is not about to happen in Switzerland, which has the best record of price stability in Europe! The fear of losing our monetary independence was misplaced as well. Over the past five years the SNB has demonstrated that it can act decisively and independently, often well before the ECB. Given its openness, Switzerland was badly affected by the world slowdown. The situation was made worse by the fact that our main trading partner, Germany, was itself severely hit, and to compound our difficulties, the worldwide capital overhang had a very adverse effect on our exporters, many of whom are specialized in the production of capital goods. Special circumstances require special action. From March 2001 to April 2003, the SNB cut interest rates aggressively, lowering the target range for our reference rate, the three-month Libor, by 325 basis points, from 3.5% to just 0.25%. If anything, the differential between Swiss and euro interest rates has slightly widened, putting all fears of a rapid loss of our interest rate advantage to a rest. What about the stability of the external value of the Swiss franc? Here, I must say, our fears proved not just to be unfounded, but the reality turned out to be even more favourable than we could have hoped for. The exchange rate of the Swiss franc against the euro ended up being much steadier than expected, in fact even steadier than it used to be against the German mark, not to mention the French franc and the Italian lira.

Over time, we expect stronger governance within insurers to reinforce associations between financial reporting and fundamental economic factors, as intended by IFRS. In Malaysia, the finalisation of IFRS 17 is indeed timely in the light of current reforms being undertaken by Bank Negara Malaysia to further develop the domestic insurance market. This will see greater competition and complexity in the insurance sector, alongside a renewed impetus for growth through channel diversification and digitalisation. In this environment, the implementation of IFRS 17 will have an important role in improving the quality of information provided to the market on how these developments impact the performance of insurers, and in strengthening foundations for sound governance and risk management. This in turn will promote the effective functioning of insurance markets to serve the economy. Early preparation is key So then, where do we stand today? With less than two and a half years before the implementation date sets in, how prepared are insurers to implement IFRS 17? The answer is not encouraging. A recent survey published in January this year by a software firm covering some 240 insurance companies spread around the world, found that a startling 92% of insurers had yet to start putting solutions in place. Among those that have started, a vast majority are still only in the initial stages of planning.
If the parent bank of a cross-border banking group defaults, it is getting more and more unrealistic to assume that the foreign subsidiaries could continue their business as usual. It would take time to establish all the necessary competence to transform such a subsidiary to an independent bank. Also, the possibilities for the host country to successfully ring-fence the assets is diminishing given the speed at which funds can be transferred across borders. When there still is a clear legal difference between branches and subsidiaries with clear consequences for supervision, the distinction becomes less important both in practical and in economic terms. Fifth, and as a consequence of this merger activity, the banking market in some countries is dominated by foreign banks. In the ten new EU member states, about 70 per cent of the banking sectors are foreign owned. In Estonia, foreign groups account for more than 90 per cent of all lending. My worry is that the next financial crisis in Europe could have serious cross-border implications and not be bounded by national borders. As a central banker, I see it as a major responsibility to be prepared for such an event, both in terms of handling the acute problem and in finding more long-term solutions. One reason why this cross-border development is more pronounced in Europe than in many other parts of the world is the long-term project of creating a single market for financial services in Europe. Let me be clear here. I strongly support this project.

Since the beginning of the 1990s, Norway, like Sweden and Finland, has become more closely integrated into Europe. The EEA Agreement, which provides for the free movement of labour, capital, goods and services, has enhanced efficiency in many industries. The recent WTO rounds have covered a broader range of goods and services and the number of member countries has increased. Almost all countries are now members or observers, and the issues are broad-ranging. Trade policy has paved the way for the change in the international division of labour which has brought benefits to Norway and the other Nordic countries. Third, the tax reform in 1992 was a crossroads. It made it possible to finance the welfare state with a substantially lower loss of efficiency and wealth creation than previously. The key was to reform the deduction schemes for personal and company taxation and to introduce more equal tax treatment of companies across industries and aim at neutral taxation of capital income and interest. Marginal taxes could be lowered. The tax deductibility rate for interest was considerably reduced for households. It became more advantageous to save and less advantageous to borrow. The pressure on our tax system has also been reduced because public spending control has improved over the past 10-15 years. BIS Review 15/2007  15  Fourth, Norwegian credit markets have undergone structural changes.
The global economy has weakened and this is already affecting Singapore. Downside risks have grown, and some of these risks may have prolonged effects. We need to be alert but there is no need to be alarmed. There are pockets of resilience that should provide a degree of support to the global economy. The Singapore economy is in for a rougher ride but is well placed. Our economic fundamentals are robust and policy buffers are healthy. Asia’s growth, digital transformation, and the resilience in modern innovative services play to Singapore’s strengths. While external headwinds will slow Singapore’s pace of growth in the short term, domestic economic restructuring is proceeding well and will enable the economy to emerge stronger. The financial sector is a good example. Growth will be slower than last year given the sector’s exposure to the external environment. But the relentless effort by financial institutions to promote innovation, harness technology, transform jobs, and upskill the workforce, will position the sector well for the future. MAS will continue to closely partner the industry to make Singapore the leading global financial centre in Asia, supporting the region’s growth and creating good jobs for Singaporeans. Let me stop here and we will be happy to take your questions. 1 10 / 11  BIS central bankers' speeches  1 This refers to growth in the finance and insurance industry, excluding holding companies. The unadjusted  growth rate for the sector, published by DOS, was 5.8%.

The benefits for monetary policy clearly outweighed the costs of  Page 3/4  Zurich, 22 September 2022 Thomas Jordan  News conference  the side-effects. Without negative interest, price stability could not have been ensured and economic developments would have been significantly less favourable. Negative interest will remain an important monetary policy instrument, which we will use if needed. Ladies and gentlemen, thank you for your attention. I now hand over to Martin Schlegel, who will speak about the mortgage and real estate markets. Page 4/4