samchain/econo-pairs-v1 huggingface dataset:
To pretend that retail depositors can be treated in the same way as unsecured creditors in a business as complex and opaque as some of today’s banks is wholly unrealistic. The upper limit on deposits that qualify for 100% insurance has sensibly been raised, and the Government has made clear that a longer term reform of deposit insurance is also under review. Third, central banks operate as lenders of last resort. We need to be able to lend against good, albeit illiquid, collateral, and at a penalty rate, without destabilising further any bank to which we lend. Reform of deposit insurance will go a long way to achieving this. But in an age of instant communications, where the news of a facility for Northern Rock was leaked even before it was officially announced, it may be difficult to adopt the quiet methods used by central banks in the past. We will, however, explore ways to restore the use of discretion in central bank operations. Finally, it is worth remembering that, unlike the cases of BCCI and Barings a decade or more ago, or the problems with pensions and life insurance more recently, not a single depositor has lost a penny. I hope, however, that the three lessons I have identified will be incorporated in future legislation. It is equally important that the Bank is not distracted from the job of setting interest rates to meet the 2% target for CPI inflation.

At the turn of the millennium, they were 2%. Back in 1990, they were 4%. Why have these real interest rates fallen so much? The primary explanation is the high rates of saving in other parts of the world. Japan has been a net saver for more than a quarter of a century. Following the Asian crisis in the mid-1990s, many of Japan’s neighbours also raised their national saving rates. That group includes the country which is now the world’s biggest saver – China. And more recently, after the tripling of oil prices, they have all been joined by the oil-producing nations from Saudi Arabia to Norway. The savings of these countries, evident in their trade surpluses, have flooded into world capital markets. Faced with what Ben Bernanke has called a “glut” of savings, borrowers in the rest of the world have been able to attract long-term loans at remarkably low interest rates. Those rates of interest have, in the developed world, encouraged borrowing and spending, and reduced saving. From the United States to Australia, and also here at home, we have increasingly spent more than we earn, resulting in large and expanding trade deficits. Our own trade deficit is more than 3% of GDP, but that is dwarfed by the United States, with a trade deficit of more than 6% of GDP. The response of central banks in the developed world to these changes was predictable.
This must be done without haste, but no stone should be left unturned. Improved regulation appears to be necessary in several domains, from rating agencies to risk management, the organisation of financial markets and even the question of compensation. As a contribution to this debate, I would like to make two sets of remarks. One has to do with the fluctuations of financial systems. The other concerns financial supervision. Financial systems that operate in the context of a developed market economy are, by nature, subject to cyclical forces. Some are a consequence of the business cycle. Credit activity is an obvious example, as credit demand is heavily influenced by economic activity. Others are from within financial systems. For instance, financial institutions’ equity position moves in line with asset prices specially in a fair value world where fluctuations result in capital gains or  BIS Review 143/2008  3  losses. This effect tends to be exacerbated when financial intermediaries actively manage their balance sheets to target a preferred degree of leverage. The challenge for the authorities is to assess whether and to what extent regulations reinforce these dynamics and impact the entire financial system. With these questions in mind, work is being undertaken to examine the impact of prudential standards. It is also on this basis that the accounting adjustments that I mentioned earlier have been made. We will have to set up supervisory systems that are more suited to economic developments. The need to develop a “macro-prudential” policy is now under debate.

Indeed, some sort of an intellectual vogue is flourishing, which contends that, in light of past experiences, any banking crisis is bound to have severe adverse economic consequences. You have those, the optimists, who predict a Swedishtype of crisis. And you have those, the pessimists, who allude to Japan's "lost decade". If referring to the past is of any use, it is precisely to learn from past errors. As a result, any comparison is bound to be misleading. Not only is today’s economic situation critically different. It is also addressed very differently. Let me insist on one key difference, which has to do with policy reactions to the crisis. They have been extraordinarily rapid, massive and vigorous. We have learnt from past crises, especially from the long adjustment Japan has been through after the burst of the asset price bubble in the late 80s. Let me also mention that macroeconomic policy instruments are available and could be used should output decline dramatically. The outlook for financial regulation A major consequence of the crisis already apparent is the growing consensus around the need for a fundamental review of the foundations of financial regulation. The crisis has also rekindled concerns about the structure of supervision. As you know, at the French President’s instigation, huge efforts are made to think about what is termed now a “new Bretton Woods”. Beyond these ambitious words, I do believe it to be useful to take a fresh look at the existing financial regulation.
As a result, equity capital is eroded by around 3 ½ percentage points of risk-weighted assets. Yet despite this assumed marked worsening in the global economic weather, the FPC judged that UK households and businesses would continue to be supported by our banking system. 2  BIS central bankers’ speeches  2. Financial conditions and macroprudential policy  The improvement in the price and availability of credit is one sign of the normalisation of the UK financial environment. Another is that, after seven years of deleveraging, aggregate credit to the UK private non-financial sector has begun to grow again (Chart 2). This has not been a debt-fuelled recovery. Aggregate private credit growth is modest compared to pre-crisis conditions, and is just now coming into line with nominal GDP growth (Chart 3). Chart 2: Credit growth in the private sector is recovering Private non-financial sector credit growth (oya)  Sample average  25 20  Per cent  15 10 5 0  1967 1968 1970 1972 1973 1975 1977 1978 1980 1982 1983 1985 1987 1988 1990 1992 1993 1995 1997 1998 2000 2002 2003 2005 2007 2008 2010 2012 2013  -5  Source: Bank of England.

At the end of the process, Banca d’Italia and Deutsche Bundesbank were selected to implement Bank of Albania’s project. Banque de France and National Bank of Romania are also part of the team for certain components of the project. We feel privileged, certainly, by this close partnership with these two major central banks. Relations with these two institutions date back to quite early in the history of the Bank of Albania. 1/2  BIS central bankers' speeches  Whether multilaterally or bilaterally, they have assisted for many years the Bank of Albania achieve its objectives and operate like a modern and reliable institution. I am therefore optimistic about the success of this next project, irrespective of the relatively tight agenda and deadlines. Now, let me briefly introduce you to the main components of this project. It will involve eight departments at the Bank of Albania and will address important issues, grouped as follows: 1. Banking Supervision and Financial Stability 2. Monetary Policy and Statistics 3. Internal Audit 4. Payment Systems 5. Other central banking functions such as human resources and European integration For each component, measurable results have been envisaged, which will be translated into regulatory documents, guidelines and specific recommendations related to policies. All outcomes will aim to approximate the final product at a higher level to standards and models of the European System of Central Banks.
The Chancellor recognised that - barring some fundamental and unforeseen change in economic circumstances - it was unrealistic to think that a decision could be made during the lifetime of the present Parliament and that could extend to May 2002. But he stressed that in the meantime the United Kingdom should prepare - both for the euro’s introduction on the Continent on 1 January 1999 and for our own eventual participation. This statement was the first by a British Government to accept the principle of monetary union. It implied that the United Kingdom is to be regarded effectively as a “Pre-In”. It recognised that the single currency will affect us whether we are in or out of it, and that it is clearly in our national interest to do all that we can to help ensure that the euro is successful. This, in my view, provides a solid foundation for a continuing, positive and constructive relationship between the United Kingdom and other EU member states, including those participating in the first wave of the euro. And that must be in the interest of both sides: just as we benefit from a stable and prosperous Europe, so too the Continental European interest lies in a stable and prosperous Britain - and that mutual interest above all is the thing we must all hold on to. To allow the euro to become a divisive factor in the broader relationship between European Union member states would be to cut off our collective nose to spite our collective face!

It would only add to potential tensions within the euro area if the global economic weakness had a disproportionate impact on some member countries as against others. Although, therefore, the present international climate is less than ideal for the euro’s introduction, that does not alter my conclusion that the new currency will indeed prove to be a stable element in an uncertain world, and that continuing growth of the European economy will help to ensure that the present slowdown does not develop into global recession. And that is clearly in everyone’s interest. BIS Review 88/1998
The financial institutions can continue to play a bigger role in contributing towards reducing crime and corruption, especially through the reporting of Suspicious Transaction Reports (STRs). To date, the STR received from reporting institutions have contributed to about 300 ML/TF investigations. The STRs, which is “trigger alert” for any ML/TF activities going through the institutions, has steadily increased (52% annually) due the overall improvement in compliance practice among reporting institutions. I wish to stress that having strong AML/CFT practice is not only pertinent to ensure the country’s AML/CFT risks are carefully managed, but it is also important for the financial institutions to lower the cost of doing business arising from AML/CFT investigations and cases. Concerted effort by law enforcement agencies has resulted in an average annual increase of 86% in cases under prosecution and forfeiture without prosecution. Without having adequate controls and system in place, financial institution will face challenges in responding to the increasing demand from law enforcement agencies. In addition, it is also observed that international financial institutions have strengthened AML/CFT monitoring of their counterparts, and are taking actions, such as enhanced due diligence or cease correspondent relationship, if the need arises. These would not only affect the cost of doing business, but also has an impact on the level of competitiveness at both domestic and international levels. Concluding remarks To conclude, I believe that the sharing of new trends and developments would tremendously benefit all of us today to have a better perspective of this global issue.

I hope that this will be a successful conference and all of you will have a fruitful and productive discussion. 9. Thank you very much. 2/2  BIS central bankers' speeches
Nevertheless, the intent of the Central Bank to maintain inflation at mid-single digit levels, which was made clear through action as well as through communication, enabled the Central Bank to change the mindset of the people that Sri Lanka is typically an economy with double digit inflation. The change in the mindset was visible in improving inflation expectations. Since February 2009, inflation has remained in single digits, and 105 consecutive months of single digit inflation is considered an achievement in the recent history of Central Banking in Sri Lanka. 14  Infeasibility of Monetary Aggregate Targeting However, Sri Lanka’s achievement of single digit inflation for 105 consecutive months had little to do with monetary aggregate targeting. From July 2009 to September 2017, the year-on-year broad money growth was, on average, 17.1 per cent. Year-on-year inflation during the same period averaged 5.2 per cent. Based on the earlier discussed Fisher’s Quantity Theory of Money, the gap between these two figures, that is 11.9 per cent, must reflect average real economic growth during this period. However, real economic growth averaged only 6.0 per cent during this period. If the argument is reversed, there is a gap of 11.1 per cent between broad money growth and real economic growth. According to the Quantity Theory, this should reflect average inflation during the period, which was not the case.

These include most notably a lack of funds for saving, cost, distance from the nearest branch, a lack of education and the absence of the financial infrastructures needed to improve the availability of financial services. It is indeed here where new technologies can contribute decisively to overcoming or lowering these barriers. Technology can reduce many fixed costs, traditionally associated with the development of financial services, while providing for a greater adaptation of supply on the basis of each society’s idiosyncratic characteristics. Unsurprisingly, then, the technological proposals linked to financial inclusion hail from different areas. We can find them in traditional financial institutions, in the new fintech companies, in telecommunications corporations and in the large technology consortiums known as bigtech. As to scope, one of the activities concentrating the bulk of the initiatives is payments. Thus, in the past decade we have seen so-called mobile money – i.e. transactional services offered mainly by mobile operators – become commonplace. Adding to these, more recently digital wallet solutions have emerged with multiple functionalities and specific proposals for international remittances. Aside from the progress in payment solutions, developments on intermediation markets are providing for improvements in the financing of those groups with a greater degree of financial exclusion, such as microenterprises and small agricultural producers. However, these developments are not spontaneous or uniform from one country to another.
By contrast, in firms with low levels of cultural capital, formal policies and procedures do not reflect “the way things are really done.” Misconduct results from the norms and pressures that drive individuals to make decisions that are not aligned with the values, business strategies, and risk appetite set by the board and senior leaders. Employees do not speak freely when they have concerns, and directors and senior managers do not find out about improper conduct until it is uncovered by the authorities. Rules may be followed to the letter, but not in spirit. All of this increases misconduct risk and potentially damages the firm and the industry over time. To be clear, I am not saying this is easy. Culture is difficult to assess because it is not a single, point-in-time metric, but a multi-dimensional concept with different implications for different parts of an organization. This complexity suggests that no single metric, solution, approach, or template will work for every firm in every circumstance.5 Consider the different roles of key players in mitigating misconduct risk and building and sustaining a healthy culture. The board of directors, senior management, staff, investors, industry groups, and the official sector might all see and assess aspects of a firm’s culture differently. Today, I will focus on a few of these stakeholders. Boards of Directors In 2017, the New York Fed hosted a culture measurement workshop that included a panel of board members from various financial firms.

This topic might be less familiar to some—the terms are newer and the assessment frameworks are less developed—but I believe it is critically important. Both the official sector and many of your firms have put considerable emphasis on improving corporate cultures and reducing misconduct risk, but we continue to see striking cases of misconduct both in the U.S. and abroad. Clearly, more needs to be done. Many of the insights I will share today are drawn from interactions with industry participants and members of the official sector through outreach and industry conferences and workshops on the topic, including events hosted by the Federal Reserve Bank of New York. 2 I am confident that continued commitment and collaboration will contribute to better outcomes in this vital area. Before proceeding, I’ll emphasize that I am speaking for myself and not the Federal Reserve Bank of New York or the Federal Reserve System. Influencing Culture from Multiple Perspectives Prudent risk management is a fundamental aspect of the business of banking, which means it is a critical factor in the effective oversight of banks. Supervisors focus on financial resilience by requiring firms to maintain sufficient capital and liquidity and emphasize operational resilience by promoting effective corporate governance, risk management, and recovery planning.3 In my view, misconduct risk—defined as the potential for behaviors or business practices that are illegal, unethical, or contrary to a firm’s stated beliefs, values, policies, and procedures—is an integral part of an effective risk management framework.
In the last three years, potential growth has averaged a little more than 2% a year for the years 1994, 1995 and 1996. We can do better. We believe that our economy's potential non-inflationary growth is around 2.5% in the medium term, and this can be exceeded given the capacity for growth to catch up. The requirements for investment are financing terms, self-financing, competitiveness, and medium-term growth. We believe these requirements exist today. If I had to sum up briefly the message of the Monetary Policy Council, I would say: “The investment plans exist. The time has come today to implement them. Let us invest. It is the surest way for us to contribute to non-inflationary growth that creates jobs and thus to help in the fight against unemployment.”  * *  *  French monetary policy is in line with the European strategy of the President of the Republic and the Government, and therefore with the creation of an economic and monetary union on 1 January 1996. The advance towards the single currency was decisively confirmed at the European Summit in Dublin, where an agreement was reached on the legal status of the euro, on the new European Monetary System and on the stability and growth pact intended to guarantee fiscal discipline in the Monetary Union.

Thus, when the Monetary Policy Council makes interest-rate decisions, it bears in mind first the objective of preserving the purchasing power of the currency, for and on behalf of all French people, and second, its corollary, namely the creation of monetary, financial and competitive conditions that will allow our economy to achieve its full potential for sound and sustained growth, for job creation and therefore for combating unemployment. Central Banks cannot “command” growth. Growth is the fruit of the labour of men and women, of the efficiency of employees, workers and engineers, of the imagination and skill of business leaders, and also, more broadly, of the influence of European and international business conditions. It is stimulated, in the medium and long term, by structural reforms that liberate initiative, strengthen the dynamism of the economy, combat unemployment effectively and encourage the creation of the greatest possible number of jobs for a given level of wealth and growth. However, it is up to Central Banks to create the best possible monetary and financial conditions, through the credibility and stability of the currency. These conditions now exist in our country and the Monetary Policy Council is convinced that the time has come for firms and households to invest. In many sectors and firms, the financing exists. The self-financing rate of the entire French productive sector is above 100% overall. Interest rates as a whole are at historic lows. The French economy has substantial BIS Review 2/1997  -6-  potential for growth in the medium term.
Unfortunately, the ratio between the resolved and withdrawn banks does not favour the first ones, but this situation should be reversed. We expect that the ongoing reform of supervision in the Bank of Russia will lead to a shift towards consulting supervision, wherein the Bank of Russia will be able to offer banks reasonable measures to remedy a problematic situation at an early stage. Certainly, consulting supervision is feasible only if a commercial bank is honest with the Central Bank and does not try to conceal real problems. Despite the problems I have mentioned, the revocation of licences has affected 4.3% of banks’ assets - over the past four years we have revoked more than 300 licences, or one third of all licences. The impact on the banking system at large is clearly able to be seen. On the whole, we estimate that the banking sector experiences no systemic risks, but remains resilient and capable of building up lending. Now we can say that a new economic cycle has begun: the economic downturn is over, some industries are growing at an outstripping pace, real wages have begun to grow, and demand is recovering. We believe it to be important that the banking system has now recovered from the shocks of 2014-2015. This is evidenced by return, profit and capital stock figures, as well as other data. Banks are well-positioned to develop their business and build up lending.

However, retail sales were quite weak in March, suggesting that the tax increases that occurred at the start of the year may be beginning to have a material effect. After a long period of being a drag on the economy, the housing market is now providing lift to economic activity, with upward trends evident in housing starts, home sales, and home prices. To see why this is so important, in 2009 residential investment exerted a  BIS central bankers’ speeches  3  0.4 percentage point drag on GDP growth, while in 2013 it is likely to provide a boost to growth on the order of 0.5 percentage point – a swing of nearly a full percentage point. In addition, rising home prices can create positive spillovers to the rest of the economy as higher home prices lift household wealth and reduce the number of homeowners with negative equity. Business investment in equipment and software, another component of private final demand, strengthened in the fourth quarter, and shipments and orders for nondefense capital goods suggest further growth in the first quarter. Moreover, indicators of the U.S. manufacturing sector, including the ISM manufacturing index and most Federal Reserve regional manufacturing indexes, point to continued moderate growth in the sector. So why isn’t the U.S. economy growing more quickly? The most important reason is the sharp shift in federal fiscal policy from mild restraint in 2012 to much greater restraint in 2013.