samchain/econo-pairs-v1 huggingface dataset:
However, the fact that we presently cannot see any general overvaluation in the housing market does not rule out the possibility that some households may have based their decisions on overly optimistic estimates. For example, they may have interpreted the currently very low interest rates as a more or less permanent state, rather than as an exception. These households could of course run into problems when interest rates normalise. One question that might at least be worth reflecting on in this context is whether such over-optimism among some households could be an undesirable “side-effect” – albeit a temporary one – of the successful low-inflation policies in many countries. What has happened in the past ten years is that interest rates have come down fairly dramatically at the same time as the real economic performance in many areas has been remarkably good compared with previous periods. It presumably cannot be ruled out that this situation has lulled some households into a false sense of security, causing them to make overly optimistic investment decisions that subsequently prove to be less well-founded. To the extent such over-optimism exists, though, it should, as I mentioned, be a temporary phenomenon that disappears as households gain more experience of how the economy functions under a low-inflation regime. That households – and lenders – must endeavour to base their decisions on realistic estimates is something that we have recommended many times recently, but it is worth repeating.

If the offices cannot be let, this income does not materialise and the company that made the investment may be forced into bankruptcy. A household, instead, pays its interest with income from other sources. Moreover, in the early 1990s the prices of commercial properties had been pushed up over a long period without any corresponding increase in rental income. The price rises were obviously driven by expectations of a continued strong upswing in prices in the future. When it eventually became clear that these expectations were not going to materialise and it became more difficult to let the premises as economic conditions weakened, the prices fell dramatically. Today, though, the situation in the commercial property market is significantly different. There has not been a prolonged price upswing of the kind seen in the housing market. In connection with the equity market decline in 2000, demand for office premises weakened again and rents and prices in the market for office properties began to drop. The price fall appears today to have moderated and in some regions prices of office premises have risen. Vacancy levels are still high, though, which has contributed to restraining a more general upswing in rents and prices. At the same time, property companies’ earnings and ability to pay are good. Our assessment therefore is that the commercial property market does not either pose a threat to the stability of the financial system.
If that is indeed how things turn out, we will have weathered the international storm as well as anyone could reasonably have expected. 4  BIS Review 19/2002

Caleb M Fundanga: Trends in central bank governance Opening remarks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the official opening of the seminar on “Trends in Central Bank Governance”, Livingstone, 28-29 February 2008. *  *  *  His Honour the Vice President Her Grace the Mayor of Livingstone The Chairperson Central Bank Governors and Deputy Governors Board Members of Central Banks Resource Persons Distinguished International Participants Ladies and Gentlemen On behalf of the Bank of Zambia and indeed on my own behalf, I would like to extend a very warm welcome to you all to this important seminar on “Trends in Central Bank Governance.” To our colleagues from outside Zambia, I wish to extend a special welcome to you to Zambia, in particular to Livingstone, our tourist capital especially at this time of the year. Like the rest of Zambia, Livingstone is a city of tranquility with an easy-going African charm. Apart from the famous Victoria Falls, there are many other tourist spots such as the Mukuni Cultural Village, curio markets, the Game Park, the National Museum, railway museum, e.t.c. I therefore urge you to find time or indeed stay an extra day or more to sample this special menu that Livingstone can offer. Like other participants, I am glad to be part of this rare gathering of imminent experts.
The capital adequacy, liquidity coverage and profitability ratios of the sector are above the EU average levels. In spite of the complicated macroeconomic environment, bad loans continue to decrease. Therefore, we are well prepared to deal with the new challenges. Our good starting position must be supported by adequate actions. The evolution of macroeconomic processes and the change in the interest rate cycle definitely require closer attention to credit risk, especially in the housing loan segment. The increasing interest rates, combined with the witnessed dynamics of the volume and price of debt, require careful attention to the government bonds portfolio as well. 2  As regards the BNB, the answers will come primarily with the use of the macroprudential tools that we have available. This will be done, as it has been done so far, in compliance with the requirements for clear articulation and predictability. If there is no dramatic change in the situation, we will continue to announce the measures one year before they are put in place. These measures will still be focused on banks’ capital. At this stage, we do not plan to expand them to borrowers. In the end, please let me say a few words about the accomplishment of the strategic tasks whose timeframes are becoming shorter and shorter. In the next 18 months, these tasks will be mostly aimed at completing Bulgaria’s accession to the euro area. The BNB has provided the necessary organisation with regard to the issues within our competence.

From the position of the BNB and in view of the goals for controlling inflation, it is very important that the country does not assume significant additional permanent expenditures, which are not backed by permanent revenues. There are two groups of risks associated with such an approach: (i) the risk of an inflationary spiral and (ii) the need for painful fiscal adjustments in the near future, whether in terms of revenue, i.e. by increasing taxes, or by cutting costs. Along with external factors, this would lead to a significantly more complicated macroeconomic environment for the Bulgarian banks. In terms of the external factors and their further complication and deterioration because of the war in Ukraine, most important will be the decisions of the big leading central banks, primarily the ECB in our case. There are already clear statements about three things that will happen during the third quarter of this year: (i) the ECB will effectively end net asset purchases from the beginning of July; (ii) subsequently the ECB intends to raise its key interest rates; and (iii) will do it again in September so that by the end of the quarter we will move away from negative interest rates. Obviously, in the following months and at least a year ahead we will be facing the challenge to find the very difficult balance between the measures to control inflation and the measures to prevent recession. How is our banking sector meeting the new challenges? Our starting position remains very good.
But equally I think they can see that when a bank is failing it is in everyone’s interests to resolve the situation quickly and cleanly. I hope that they will be reassured by the extensive safeguards we are now proposing, including the guarantee that no creditor will be made worse off in such a split than they would have been in a conventional insolvency and protection of netting and set-off. Finally, the financial turmoil has also revealed the need for better international crisis management. The experience of Lehmans has shown once again the problems that arise in the insolvency of a large international bank with operations in many countries. We also saw in late September and early October the danger emerging, of the banking equivalent of the old beggar thy neighbour policy on currency depreciation, as individual countries began to guarantee their own banks’ debt. On the other side, recent events have also demonstrated how effective international action can be: the coordinated interest rate cuts on the 8th of October; the provision of dollar liquidity by central banks and the adoption of national measures to support banks at international meetings during the weekend of 11/12 October. International groups such as the Financial Stability Forum (FSF) have already started to take action. It has begun to develop a practical checklist of issues and principles that should guide the management of a distressed cross-border institution.

Despite last year’s narrowing current deficit, Albania’s external position remains a constant structural weakness. The Albanian banking system is considered to have adapted commendably to this complex situation. I would like to underline that we have done an immense amount of work so far. Therefore, I take this opportunity to congratulate all central and local managing units of banks operating in Albania. During this period, the Albanian banking system has continued to expand its activity and lending to the economy. Financial soundness and profitability indicators have improved and system’s activity capitalization is in a good position. The banking sector remains the main actor of financial intermediation in Albania, whose financing continues to rely mainly on public deposits. The main problem of the banking system has been the growing non-performing loans share, which has also reflected the active policy of the Bank of Albania to enhance the transparency of banks’ balance sheets. Credit risk remains the primary risk to our banking sector. In response, the banking sector has established adequate reserve funds to buffer major shocks on the borrowers repayment capacity and market equilibrium. Stress tests support our conclusion on banking system resilience. The presence in this room of both the business community and the banking system suggests me to refer once again to the need for sincere cooperation of mutual benefit. With a few exceptions, I think this cooperation has been present and operational and has certainly supported in particular the country’s economic activity over the past years.
This is not surprising because other countries’ currencies also fluctuate. Exchange rate fluctuation is a structural feature of open economies like Norway that have their own currency. The Norwegian krone does not stand out as particularly unstable. On the contrary, in countries like Sweden, the UK, Switzerland, Australia, Canada and New Zealand, exchange rate fluctuations are as wide - or wider - than in Norway. There is a cost involved for businesses in hedging against fluctuations in the krone. However, a krone that is stable - but too strong - also entails costs in the form of low activity. Similarly, a krone that is stable - but weak - is a source of high inflation. The capital outflow through the Petroleum Fund contributes to both curbing the appreciation of the krone and maintaining its stability. When inflation in Norway is expected to be broadly in line with that of other countries, the exchange rate will normally also return to its normal range following periods when the krone has been particularly strong or particularly weak. This may provide a basis for stable exchange rate expectations. Normally, the interest rate is set with a view to achieving inflation of 2½ per cent at the two-year horizon. Norges Bank operates a flexible inflation targeting regime, so that weight is given to variability in inflation as well as to variability in output and employment. Monetary policy affects the economy with a lag.

Switzerland is a good example of this: thanks to the inclusion of the major political players in government responsibilities, and to the extension of direct democracy processes even to financial matters, a deeply rooted culture of stability has developed. It is this which provides the foundation for the stabilising effect of the well designed and constitutionally anchored debt brake. This has made a decisive contribution to ensuring that federal government finances are in good shape despite the financial and economic crisis. As a general rule, any efforts to establish a sustainable fiscal policy in countries with debt problems can ultimately only bear fruit if they succeed in fostering a broad-based culture of stability. BIS central bankers’ speeches  1
We need professionals who can develop fintech solutions, instead of merely being users of it. Given the intellect and work ethic of our students and professionals, I am confident that this is an objective we can achieve without difficulty. 34. As mentioned, fintech is, comparatively speaking, a nascent industry. That is why insights about the industry, such as the kinds of jobs available, the skillsets required, and career path, remains largely a mystery to outsiders, let alone fresh graduates and new joiners. We want to help these new comers gain industry knowledge and practical industry experience. Of course, we have not forgotten about existing banking practitioners. It is equally important, if not more, to upskill practitioners and deepen their fintech knowledge. 35. In order to do this, we have joined hands with the industry and local universities to launch the Industry Project Masters Network (IPMN) scheme. Starting from September this year, months-long internship opportunities will be provided to some master students for them to gain hands-on experience in areas including AI and federated learning. By the end of this year, we will also launch a new fintech module for the Enhanced Competency Framework to raise the professional competencies of existing banking practitioners. 36. A collective effort with the banking industry as well as our strategic partners will enable us to nurture home-grown fintech talent and maintain our competitive edge as an international finance centre. Nurturing ecosystem with Funding and policies 37.

We understand that good ideas alone would not come to fruition without either one of the following: funding support and a conducive environment that allows mistakes and failures. In fact, numerous success stories in history prove that trial and error is necessary for innovation. To encourage banks to try more, in turn stimulating innovation in the banking industry, we are going to channel our focus on two areas: funding and policies. 38. Today, I am excited to announce that the HKMA is doing preparation work to further upgrade 4/5  BIS central bankers' speeches  our Fintech Supervisory Sandbox. To begin with, we are exploring the possibility of providing funding support to qualified fintech projects. Our discussion with the Innovation and Technology Commission has just started, and I hope to share more details with you in due course. We hope the enhanced Sandbox could speed up the launch of innovative financial products and solutions, ultimately reducing their Time to Market and facilitate banks in making commercial gains while serving the public. 39. To ensure that no banks, regardless of their size, will be left behind in the cascading wave of innovation, the HKMA will join forces with our strategic partners, including the Hong Kong Science and Technology Parks (HKSTP) and Cyberport, to introduce utilities and necessary support to banks to speed up their technology adoption. 40. Through supportive measures, we want to foster an encouraging environment, in which all stakeholders, be they banks, non-banks, or the academia, can trust and flourish. Closing 41.
RFAs are largely untested and swap lines may only be used in very specific situations between specific countries. There is no evidence the formal GFSN deters countries from holding reserves. 19 The extra reserves that EMEs have accumulated over the past two decades have reduced the sensitivity of Capital Flows-at-Risk to Push factors by almost 50%. But this extra insurance has come at a domestic high cost, both to finance and because reserves can crowd out domestic investment.20 And it has global externalities, with the vast accumulation of safe assets distorting yields, building global imbalances and increasing the risks of a global liquidity trap.21 Chart 14: Components of the global financial safety net as a per cent of global external liabilities 12 10  Per cent of global external liabilities  IMF Permanent (rhs)  IMF Temporary (rhs)  RFAs (rhs)  FX Reserves (lhs)  Per cent of global external liabilities  8  3  2  6 4  1  2 0  0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016  Sources: IMF, central bank websites, RFAs, Lane Milessi-Ferretti (2007) External Wealth of Nations dataset and Bank calculations. Notes: FX reserves exclude gold. 19  See Scheubel, B, L Stracca and C Tille (2019), Taming the global financial cycle: What role for the global financial safety net?, Journal of International Money and Finance 94: 160–182.

The UK’s Senior Managers Regime (SMR) gives teeth to voluntary codes by incentivising firms to embed them and by reestablishing the link between seniority and accountability. The Bank’s findings suggest that the global macroprudential responsibilities of AEs will likely extend to the oversight of market-based finance given its potential for major cross-border spillovers. 28  See Carney, M (2017), ‘True Finance – Ten years after the financial crisis’. 20  All speeches are available online at www.bankofengland.co.uk/speeches  20  Reinforcing the best of resilient non-bank financial intermediation Over half of investment funds have a structural mismatch between the frequency with which they offer redemptions and the time it would take them to liquidate their assets.29 Under stress they may need to fire sell assets, magnifying market adjustments and triggering further redemptions – a vicious feedback loop that can ultimately disrupt market functioning. Two-thirds of investment funds with structural mismatches are domiciled in the US and Europe so, as is the case for banks, ensuring leverage and liquidity risks are managed in funds investing abroad is both a national asset and a global public good. System-wide stress simulations are currently being developed, including at the Bank of England, to assess these risks.30 And authorities are beginning to consider macroprudential policy tools to guard against the build-up of systemic risks in non-banks. Regulators currently have far less sight of risks within funds compared to the core banking system, particularly synthetic leverage arising from funds’ use of derivatives.
Back then, I convinced the EU officials, particularly Romano Prodi, the President of the European Commission, who visited Bucharest in January 2000, to have confidence in Romania’s capacity to fulfill the accession conditions by 2007. That decision on Romania’s entry into the European Union was a historical one, and gave further impetus to the transformation and modernization of the Romanian society in its entirety. The tumultuous years with ups and downs in the first postcommunist decade were followed by seven good years (2000–2006), featuring substantial reforms, robust economic growth and gradual disinflation. In this context, the wager made in 2000 was won: Romania, like Bulgaria, managed to become a EU member state in 2007, in the second enlargement wave, only three years after the group of countries the accession of which we are now celebrating. And the medium-term development strategy adopted back then proved to be an effective roadmap for Romania’s European integration. Romania has been an EU member for more than 10 years already – a long time for important lessons to be learned. So allow me to share with you at least some of them, especially those that cover the complex topic of economic convergence. Having clear prospects for entering the EU favored Romania’s real convergence, acted as an anchor and a catalyst for reform, and led to great strides towards a functional market economy. This does not mean, however, that it was all a joyride, as we had our share of tough decisions to make.

In this regard, Banco de España does not consider necessary to accelerate the implementation timetable, although we believe that banks should make reasonable efforts to comply with the liquidity ratio as soon as possible. To sum up: We support banking prudential regulations incorporating liquidity ratios such as those proposed. We are aware that this will entail a major effort for banks, mainly because it demands changes in their management of this risk. Spanish banks must be active in improving balance sheet structures. I would like to conclude my comments on Basel III by referring to the importance of ensuring that it is implemented in a consistent way across institutions and across countries. This objective is framed in a project undertaken by the Basel Committee to ensure that the benefits of having risk-sensitive regulation, like Basel III, are not achieved at the cost of an extremely complex legislation which, apart from other problems, brings about results that are not comparable across banks. The Banco de España agrees with this initiative. We are in favor of simplifying current regulations, seeking an appropriate balance – indeed, always a difficult balance - between simplicity, comparability and risk sensitivity. So, we view very positively the transparency exercise carried out by the Basel Committee, with the publication of the results of the comparative analysis of banks’ calculations of risk weighted assets, both in the banking and in the trading book.