samchain/econo-pairs-v1 huggingface dataset:
How well can the insurance sector manage such risk? And if bankinsurance linkages are strong (e.g. through financial conglomerate groups) can we be sure that the risk has really passed out of the banking system? Similarly, the role of hedge funds in financial systems has recently begun to receive a good deal of attention from central banks and regulators. The extent to which they increase the volatility of financial markets has long been the subject of debate. But increasingly this largely unregulated sector has become a major provider of credit – thus transferring risks out of the regulated banking sector and into a part of the financial system that is far from transparent. Macro prudential policy cannot afford to ignore these innovations. 10  BIS Review 106/2006  Finally, as the debate on hedge funds has also shown, financial stability analysis cannot stop at national borders or in particular jurisdictions. A hedge fund based in the Caribbean is capable of moving markets half way round the globe. In these circumstances, macro prudential policy must take into account the possibility of shocks originating outside our domestic financial systems in today’s global, integrated financial marketplace. It also requires central banks and regulatory agencies to cooperate to develop policies to mitigate these risks. In conclusion I come back to the question with which I started: is macro prudential policy simply a new name for some old ways of thinking? By now it should be clear that my answer is that it both is and it isn’t.

This type of crude stress test is quite helpful for a sense of how solid the system’s capital buffer might be, but it doesn’t allow you to take into account second and third round effects. If NPLs have risen to 20 percent of total assets, then there are likely to be a lot of other things happening in the economy at the same time, all of which could have additional implications for banks’ financial soundness. As a result, stress testing is moving increasingly in the direction of scenario analysis. This involves economists constructing scenarios for the outlook on GDP, interest rates etc. and tracing through these changes in terms of their impact on the key measures of banking system soundness including profitability and capital adequacy. This approach involves some quite advanced economic modelling techniques and is still in its early days. However, the recent revamp of the Bank of England’s financial stability report that I mentioned earlier was designed to give a larger role to this type of analysis. A final issue that I’d like to discuss is that macro prudential analysis cannot stop with the banking system or at the borders of a particular jurisdiction. In the past it might have been reasonable to think that systemic risk was something that began and ended with the banking system.
Although it had been tough, it is heartening to note that many developing countries have, since of late, been able to do so. But the challenge is becoming more and more intense by the day, and policymakers have to be constantly alert to developments on several fronts simultaneously, in order to continue with the same momentum. Investments have to be boosted; institutions need to be strengthened; infrastructure has to be improved; regulation has to be strengthened. In addition, all this has to happen at the same time. In the meantime, global challenges and risks loom large. Some of the downside risks are so intense and serious that those could even threaten the very foundation of the present growth momentum, and drag the developing nations as well as the entire world economy towards recession! There are many such dangers lurking. The current financial market turmoil could trigger a more pronounced global slowdown. The unbelievably high and volatile oil prices and the resulting inflationary pressures could lead to severe BOP problems, disrupt capital inflows and cause large global imbalances. The aging population, the intensification of resistance to globalization, the havoc that may be caused by global warming and the danger of terrorism could all lead to serious repercussions to the sustainable growth models that the economic planners are attempting to implement. But the good news is that there is sufficient evidence to indicate to us, that many developing countries are implementing a number of structural changes order to face upto these growing threats.

Ajith Nivard Cabraal: Harnessing sustainable growth in emerging markets Keynote address by Mr Ajith Nivard Cabraal, Governor of the Central Bank of Sri Lanka, at the 2nd World Management Summit 2008, Karachi, Pakistan, 11 March 2008. *  *  *  As salaam Aleikum, Ayubowan, Good Morning. Mr. Chairman, Distinguished Delegates, Ladies and Gentlemen, At the outset, I wish to thank the organizers of this World Management Summit for inviting me to deliver the keynote address. I am also greatly touched by the wonderful hospitality accorded to me in this very interesting and historic city of Karachi. Mr. Chairman, I consider it a privilege and honour to share my thoughts and views on a very timely topic, “Harnessing Sustainable Growth in Emerging Markets” at this important forum. I hope I would be able to plant a few seeds in your distinguished minds so that such seeds may be nurtured by you in your deliberations to follow. As a first step, let us examine the current global and regional trends in relation to World Economic Growth, so that we could deal with this topic in a wider perspective. As we know, over the past few years, the global economy has been experiencing one of its’ strongest sustained periods of growth, since the early 1970s. This expansion is projected to be very strong even after accounting for the impact of the recent financial market turbulence. Significantly, this growth has, as its foundation, the strong results of the emerging markets which have been leading the way.
Following the adoption of an expansionary bias in December, the policy rate has been cut 75bp, acting promptly upon the prospects of a softer economy. In the April monetary policy meeting, while adopting the last 25bp cut in this series, the Central Bank Board signaled that it could consider some further policy easing if economic prospects remained subdued. This is reflected in the evolution of market expectations (Figure 8). Compared to a neutral real rate of 1%-1.5% Chile´s monetary policy continues to be one of the most expansionary among comparable economies. Figure 8 MPR and expectations (percent)  5  5  MPR  4  Financial asset prices, December 2016 Report (*)  Financial asset 4 prices, March Report (*)  3  3 EES Financial asset prices (17 April)  FBS  2  2 14  15  16  17  18  19  (*) Constructed using interest rates on swap contracts up to 10 years. Source: Central Bank of Chile. 16. As usual with forecasts, this macroeconomic scenario is exposed to risks. External risks include political and policy risks, especially concentrated on fiscal and monetary policy decisions in the US. China remains a concern although its authorities appear to have successfully managed a gradual deceleration without a major disruption thus far. External risks are particularly relevant for a small open economy like Chile´s. Upside risks essentially emerge from a more robust expansion of the world economy and additional improvement in terms of trade. 17.

These institutions will hold meetings with the representatives on behalf of Norges Bank. Region North is covered by Kunnskapsparken in Bodø. Companies in the north are reporting lower demand and deteriorating profitability. The same tendency can be observed in most industries with the exception of retail trade and construction. The krone exchange rate, combined with a costly wage settlement, has contributed to weakening competitiveness in internationally exposed industries. As a result, demand and turnover in sectors that supply goods and services to this industry have fallen markedly. Retail companies have recorded growth in turnover and solid profits in recent months, and our contacts expect this situation to continue over the next months. Some activity growth is being reported for the construction industry. The increase in activity primarily reflects higher public sector demand. Workforce reductions in both the public sector and manufacturing industry have been reported. More workforce reductions and lay-offs are planned for the period ahead. Developments in the Norwegian economy may prove to be weaker than projected in the October Inflation Report. In spite of the interest rate cuts and a stimulatory central government budget, overall economic policy has been tight because the krone has been strong. The weakening of the krone since January has, however, led to an easing of monetary policy. Several years of deteriorating competitiveness will, nevertheless, have a dampening impact on growth in the period ahead. The business confidence survey for manufacturing industry shows that manufacturing leaders’ sentiments about future developments are negative.
There were risks of the crisis’ effects being greater than assumed in the main scenario in June, so that weak demand and low inflation in the rest of the world would lead to an even lower price rise in the Swedish economy. All in all, these considerations meant that in the June report the Riksbank’s overall assessment of inflation in the coming years was adjusted downwards. As the rate of inflation twelve to twenty-four months ahead was judged to be below the target, the Riksbank considered that, at least for a time, there was room for a somewhat more expansionary monetary stance. The repo rate was therefore lowered 25 basis points. 4. What has happened since the June report? Let us now look at what has actually happened since the beginning of the summer. Low pressure from international prices During the summer the Asian crisis has got worse and the uncertainty about its future course seems to have grown. More countries in the region are now expected to show a fall in output during the year. One of the main factors behind the deterioration is the weak Japanese economy. The knock-on effects of the Japanese crisis in other parts of the world are highly uncertain, as is the outlook in such countries as Russia and China. An impact from the Asian crisis is now discernible in economic growth in the United States and the United Kingdom.

It has contributed to our now being in a situation where household indebtedness and house prices have increased at a more rapid rate than can be regarded as sustainable in the long term. Our assessment at the monetary policy meeting in February was that a slightly earlier increase in the repo rate would reduce the risk of an abrupt adjustment in house prices and household indebtedness further ahead, which might have adverse consequences for both inflation and the real economy. One could say that, bearing this risk in mind, we discussed the appropriate timing of an interest rate increase that we anyway considered necessary with regard to the inflation target. I and my colleagues on the Executive Board of the Riksbank have pointed out in several different speeches that this procedure does not mean that we have introduced other objectives for monetary policy in addition to the price stability target and the aim to contribute to subduing fluctuations in the real economy. We expressed this quite clearly in the special document on monetary policy strategy we published prior to the summer. It therefore surprises me when I still see monetary policy described in some contests in a way that implies that we have other objectives besides price stability when making decisions on the repo rate.
By countries, the biggest correction goes to the Brazilian forecast, which the market expects to post a GDP drop of 0.7 in 2015, its worst in several years. The greater relative strength of the United States, plus the ever closer beginning of its monetary policy normalization, has prompted a substantial appreciation of the dollar in recent quarters. For sure, news about the situation of the US economy plus the Fed’s statement has caused important swings in the dollar price in the past few weeks. This has reflected in large movements in most currencies around the world. As for the Chilean peso, in the middle of March it was trading above 640 units to the dollar, to later drop to near 620 pesos per dollar at the statistical cutoff of this Report (figure 3). The peso depreciation cycle that began in 2013 stands out as the longest in the last decade and it occurs in the context of a gradual economic slowdown and not a sharp recession. This is one of the main reasons behind inflation remaining above 4 percent. The data indicate that the pass-through coefficient from the exchange rate to inflation has been in line with historic patterns, although in the upper part of available estimates. Besides, the peso depreciation has had different timing than most emerging or commodity exporting economies.

This Policy Document sets six principles or outcomes which financial service providers are required to deliver in their dealings with financial consumers. Key of which includes the requirement for the board and senior management to set clear expectations on fair treatment and ensure that these expectations are embedded in the institution’s corporate culture and core values. The existence of such rules coupled with effective enforcement when these rules are breached is essential, given that failures of corporate governance have been at the root of many wellknown cases of institutional failure. A recent example being the successful conviction of the operators of the infamous Genneva gold investment scheme for illegal deposit taking, which has landed its former directors and advisers in jail. And certainly there are many more. Let us all work together to weed out and prevent such nefarious schemes from taking root in Malaysia. Role of Financial Practitioners Most financial decisions at the individual level are determined by a person’s behaviour and mindset. In view of the uncertain economic conditions we are faced with, you play an important role in nurturing strong relationships with consumers to facilitate positive behavioural changes in them. Given the right intervention, motivation and self-discipline, we can elevate the level of financial literacy of any individual while promoting healthy financial attitudes and behaviour. In relation to this, I would like to extend my sincere thanks to the MFPC committee members for its effective support and partnership with the Financial Education Network1 or FEN.
The four distinct phases of the recent crisis were as follows:   The initial disruption in money markets in the summer of 2007 – I will call this the “what are these securities worth?” phase;    The abrupt takeover of Bears Stearns by JPMorgan Chase – I will call this the “unusual and exigent” phase;    The 30 days following the bankruptcy of Lehman Brothers – I will call this the “panic” phase; and    The period from mid-November 2008 to early May 2009 – I will call this the “viability of large U.S. banking organizations” phase. One consistent theme that emerges across all these phases is that central banks must have the ability to respond quickly and flexibly in a crisis situation. This ability is crucial in preventing the emergence of an adverse feedback loop between instability in the financial system and weakness in the real economy. Another theme that emerged as these phases played out, however, was that an ability to move with speed and flexibility comes with the challenge of ensuring that accountability and transparency keep pace with the actions being taken. The need for accountability and transparency is especially true when central bank actions are being used to innovatively fill holes in a regulatory and legal framework that has not kept pace with the evolution of the financial system. Phase 1: What are these securities worth?

In this  2  BIS Review 81/2010  context, it is useful to recall an unease articulated by former Federal Reserve Board Chairman Alan Greenspan in 1996 2 : “Clearly, sustained low inflation implies less uncertainty about the future, and lower risk premiums imply higher prices of stocks and other earning assets…. But how do we know when irrational exuberance has unduly escalated asset values...?” This uncertainty about the link between underlying fundamentals and current asset valuations is crucial to interpreting this initial phase of the crisis. For example, one relatively benign interpretation of what was playing out was that the financial system was experiencing a liquidity problem driven by a maturity mismatch in the shadow banking system. The liquidity problem was unusually severe because of the collapse of the shadow banking sector and the resulting pressures that collapse placed on the balance sheets and liquidity positions of the traditional bank sector. Nonetheless, the situation was fundamentally viewed as a liquidity problem rather than a solvency problem, meaning that any potential credit losses were likely to be small and easily absorbed. An alternative darker view was that the global financial system was overexposed to land prices in the United States, through the home sale and mortgage refinancing boom that had taken place in the last four years.
With a floating exchange rate and unchanged interest rates, an increase in wage growth of one percentage point will eventually translate into a comparable increase in price inflation, unless this increase is based on higher productivity. The interest rate increase must be adjusted accordingly. First, the nominal interest rate must be increased to maintain the real interest rate. Second, the real interest rate must also be increased in order to prevent inflation from accelerating. When wage growth reaches a level that is inconsistent with the inflation target, the result will be higher interest rates, lower employment and higher unemployment. Similarly, when wage growth is lower than the level consistent with the inflation target, the result will normally be lower interest rates, higher employment and lower unemployment. The sharp growth in labour costs in recent years is a source of higher unemployment. When real wage growth is higher than productivity growth, corporate profitability declines. As a result, businesses will recruit less and shed more labour. In the public sector, we will see a growing conflict between budget limits and service production requirements. A monetary policy that is oriented towards low and stable inflation will contribute to stabilising aggregate demand and output. As a result, the central government budget will not normally have to be used actively to stabilise the economy.

The relationship between labour input and future pensions has weakened. The link is especially weak in the contractual early retirement scheme (AFP). For most workers, the annual pension does not depend on when they choose to retire, as long as they are between 62 and 67 years of age. Nor does the age of retirement affect the size of the national insurance benefits after the age of 67. Hence, the earlier an employee retires, the higher the total pension benefit will be. A clearer link between labour input and future pensions may be achieved in a defined-contribution pension scheme. The total pension for individual employees will then be determined by the employee’s contributions and the return on these contributions. The annual pension is determined by the individual’s age of retirement and the total contribution. For every extra year of employment, the employee increases his pension wealth. In addition, the total pension wealth will be spread over a shorter retirement period. This means the longer a person remains in employment, the higher the annual pension will be. 12  BIS Review 11/2002  The main principle is that there should be a clear link between labour input and pensions. Such a link may also be established in a system where the individual receives an annual pension that is stipulated in advance. Sweden has recently implemented a pension reform that ensures that annual pension benefits increase in relation to the number of years the individual has worked.
Caleb M Fundanga: Global financial and economic crisis and its effect on the Zambian economy Speech by Dr Caleb M Fundanga, Governor of the Bank of Zambia, to the SADC Group of High Commissioners and Ambassadors Meeting, Lusaka, 9 July 2009. *  *  *  Chairperson Your Excellencies High Commissioners and Ambassadors from SADC Resident in Zambia Distinguished Guests Ladies and Gentlemen It is a great honour and privilege to be invited this afternoon to share Zambia’s experiences given the unfolding global financial and economic crisis. In discussing this topic, I will begin by highlighting, albeit briefly, the origins of the current global economic crisis. I will then underscore the effect of the crisis on the Zambian economy before I look at the policy responses, the challenges and then conclude. Origins of the crisis As Your Excellencies are already aware, the genesis of the current global economic crisis has been traced to the collapse of the sub-prime mortgage market which started between 2002 and 2006. This was when lending to the household sector in the United States of America (USA) was growing at a rate far beyond that of the broader economy (i.e. growth in GDP). The rising delinquencies in the subprime mortgage market triggered turbulences in the subprime mortgage – backed securities market leading to a financial crisis which quickly spread to other advanced economies. Subsequently, the financial crisis created a recessionary economic environment in which global trade, stock market indices, and commodity prices, such as copper and cobalt, declined significantly.

Gent Sejko: Bank of Albania’s achievements in 2021 and challenges for 2022 Address by Mr Gent Sejko, Governor of the Bank of Albania, at the end-of-year meeting with the media and the Governor's Award ceremony, Tirana, 20 December 2021. * * * Dear ladies and gentlemen, After a hard period due to the pandemic while we all had to keep the physical distances, this reunion at the Bank of Albania premises to spend some time together as the year end approaches, embodies a special value. Overall, the end-year meetings accompanying the holiday season, serve as a balance to recall the achievements of the year we are preparing to leave behind, coupled with the challenges that lay ahead in the next year. The two past years were challenging to the entire globe, and particularly to Albania, as we before the pandemic had to deal with the devastating earthquake of November 2019. The todaymeeting makes us optimistic and gives hope that in the future we will have the possibility to communicate and collaborate in normal conditions and out of concerns and restrictions triggered by the pandemic. The shocks faced over the last two years affected sharply our way of living, tested the economic, monetary and financial equilibriums of the country and the stability of growth sources. They show that the sustainability of the economic and financial stability depend on the work of monetary institutions coupled with the ability and capacity of the entire society to act swiftly and efficiently in this fight against the pandemic.