samchain/econo-pairs-v1 huggingface dataset:
Gent Sejko: Economic and financial developments in Albania during 2017 and objectives for 2018 Address by Mr Gent Sejko, Governor of the Bank of Albania, at the end-of-year meeting organised by the Albanian Association of Banks, Tirana, 21 December 2017. * * * Honourable AAB Chairman, Dear banking system executives, Dear friends and colleagues, As always, it a pleasure for me to be together with banking system executives in Albania, in this annual end-of-year event organized under the auspices of the Albanian Association of Banks. In my address, I would like to briefly focus on highlights that have characterised the economic and financial developments in Albania over 2017, as well as on some of our objectives for 2018. Albanian economy The Albanian economy seems to be experiencing an overall positive moment of recovery, from both the global and the regional perspective. Economic activity continued to grow reflecting the favourable financial environment, improvement of confidence, impulses generated by employment gains and the high levels of foreign direct investments, as well as the positive momentum in the economies of our trading partners. In terms of aggregate demand, growth was driven by the expansion of private consumption and investments, and the improvement of the balance of trade with abroad, especially in the third quarter. In response to the improvement by around 10.5% of the trade deficit in goods and services, the current account deficit fell to 4.6% of the GDP in the third quarter, one of the lowest levels in the last decade.

strengthening banking supervision and guaranteeing financial system stability, one of the fundamental objectives of the Bank of Albania activity. As in the past, we will be constantly in search of the best international rules and practices that aim at having a financially sound banking sector, capable of supporting economic development in Albania. De-euroization of the Albanian economy. The measures that we have jointly designed will enter into force in the first half of 2018. Therefore, we should also try together to maximise the expected results, translating them in practice in greater confidence and higher use of the national currency in the economy. 2/3  BIS central bankers' speeches  continuous communication with the sector, regarding Bank of Albania’s decision making. The dialogue with the banking industry is considered as a crucial factor in helping to identify the problems, guaranteeing the implementation of the legal framework, and overcoming the challenges. increasing financial inclusion and deepening financial education. Alongside with the regulatory and supervisory role, financial education is and will continue to be another important aspect of our everyday work. We consider it as one of the main pillars of the economic and social development of Albania. Concluding, I would like to reassure you that, the Bank of Albania will continue to be a serious and devoted partner. I wish you a successful and prosperous year for you and your families. Thank you! 3/3  BIS central bankers' speeches
While tightening cycles by the Fed can pose challenges for EMEs, these need not be disruptive. The combination of stronger U.S. growth, improved EME fundamentals and effective Fed communications can limit the stresses caused by the onset of tightening. The experience will vary across EMEs, but EMEs as a group are better equipped today to handle the challenge than they were in the past. As always, what I have to say today reflects my own views and not necessarily those of the Federal Open Market Committee (FOMC) or the Federal Reserve System. The U.S. economic outlook Since the end of the Great Recession more than five years ago, the U.S. economy has grown at a disappointing 2.3 percent annualized rate. Several times over that period, it appeared that growth was strengthening, but each time such hopes were subsequently unfulfilled. We appear again to be at a similar junction. Real GDP growth accelerated over the last two years, rising at a 2.7 percent annual rate. However, the first quarter of 2015 is expected to be quite weak with growth only at around a 1½ percent annualized rate. What does this portend for growth going forward? Despite the weak performance of the first quarter, I believe that the growth prospects for the U.S. economy over the remainder of 2015 will improve. I expect that the first quarter weakness will prove to be largely temporary.

Since the recent financial crisis, central banks worldwide have been engaged in a broad rethinking of how to better fulfill their mandates. Let me close with a final thought. The largest problems that countries create for others often emanate from getting policy wrong domestically. Economic recession or financial instability at home is often quickly exported abroad. Equally important, growth and stability abroad makes all our jobs at home easier. This illustrates the externalities in the work we do, with more effective fulfillment of our domestic mandates helping to bring us collectively to a better place. Thank you for your kind attention. 6  BIS central bankers’ speeches
18  This is even called the Greenspan’s conundrum, after the name of the former Chairman of the US Federal Reserve. 19  FOMC (Federal Open Market Committee): the decision-making authority on interest rates in the Management Board of the US Federal Reserve. 20  Hannoun H. – ibidem. 21  Tytell I., Wei S-J. “Does Financial Globalization Induce Better Macroeconomic Policies?”, IMF Working Paper 04/84, May 2004. 22  The DIT strategy is applied in most developed countries outside the euro area and the USA. However, in the case of the euro area, one may talk of the de facto DIT strategy, and in the case of the USA – the current Chairman, Fed Ben Bernanke, is a zealous DIT enthusiast, so its implementation in the USA soon is not out of question. BIS Review 32/2006  7  Admittedly, the impact of the DIT strategy on lowering inflation is a subject matter of discussion 23 ; however, empirical evidence exists that implementation of the DIT strategy improves macroeconomic outcomes (lower costs of stabilising inflation, decreased influence of price shocks and output shocks on inflation, thereby — decreased effect of past inflation on the current inflation, which reduces inflation persistence) 24 . Empirical research also suggests that the DIT strategy facilitates stabilisation of long-term inflation expectations 25 .

Today, a central bank in a small open market economy, which would wish to turn a blind eye on the developments in the external environment and focus solely on the developments in the national economy, is doomed to failure. Secondly, globalisation changes the wage and price setting mechanisms in the national economy, which have an impact on the domestic inflation. Globalisation (the growing openness of economies) — through the growing share of countries with low manufacturing costs in the global output ― increases the margin and wage pressures, in consequence lowering the inflation. At the same time, globalisation drives up commodity prices, and thus contributes to — at least temporarily — increased inflation. Thirdly, increased international migration of workforce changes the situation on local labour markets. Where the workforce outflows, the wage pressures increase; in the case of an inflow of workforce, the wage pressures go down. Fourthly, globalisation changes the functioning of financial markets and increases the uncertainty as to the impact of decisions made by the central bank on these markets and on macroeconomic variables. Fifthly, globalisation has an impact on the central bank’s perception of the economic environment and the monetary policy strategy it applies. A fast transfer of the economic know-how (flow of the economic knowledge and analytical methods) changes the methods of economic analysis by central bank economists, as well as the way decisions regarding the monetary policy are made. Sixthly, globalisation increases the risk of speculative bubbles on the assets market.
In order to preserve favourable bank lending conditions, the modalities of the new series of quarterly targeted longer-term refinancing operations (TLTRO III) were also changed, eliminating the 10 bp spread established on the interest rates applied to them and extending their maturity from two to three years. Finally, in order to support the bank-based transmission of monetary policy, a two-tier system for reserve remuneration was announced, such that part of banks’ holdings of excess liquidity will be exempt from the negative deposit facility rate. These decisions aim to counter the worsening growth and inflation outlook by means of a package of measures that complement one another, easing financial conditions by a different route. The resumption of net purchases, without a defined time limit, also has an important signalling effect with respect to the Governing Council’s commitment to meet its inflation aim, which is particularly relevant in the current context of inflation expectations at risk of becoming de-anchored. In addition, the period of time over which the net asset purchases and the reinvestment of existing assets will continue is anchored to the normalisation of interest rates, thus enhancing the consistency and complementarity of the different measures and their dynamic adjustment to inflation. In a setting of heightened uncertainty, this automatic adjustment of the expectations about the future path of monetary policy in the face of potential changes in the macroeconomic environment is particularly desirable.

This increase in the Spanish dependency ratio amply exceeds that projected for the European Union as a whole, where it will rise by a factor of 1.6 in the same period, according to Eurostat. This change in the age composition of the Spanish population will affect a very wide range of economic factors. The most obvious is perhaps the challenge it represents to Spain’s welfare state. The increasingly higher proportion of older people puts upward pressure on the expenditure of the pension, health and dependency system, which poses a challenge to its financial sustainability that must be faced soon. 14  See the 2014 report entitled ERAC Peer Review of the Spanish Research and Innovation System, commissioned by the European Commission. 16/18  But the issues associated with population ageing are not limited just to the public expenditure of the welfare state. Their implications encompass many more facets of the economic arena and range from the potential growth of the economy to the management of economic policy. Firstly, I would like to point out the close connection between population ageing and the long-term growth of the economy. As we have seen, the latter is affected by changes in employment and in productivity, which in turn is inextricably linked to technical progress. Thus, it is important to extend people’s working life to stop the employment rate from falling and thus sustain Spain’s capacity for long-term growth.
The extraordinary (by historical standards) degree of monetary policy easing by central banks was followed by a fall in volatility in financial markets. Markets appeared to come to take comfort from their own mantra of “low-for-long”  3  High frequency trading is a subset of automated or algorithmic trading where the emphasis is more on the speed of execution than the complexity of the algorithm. Low frequency algorithms tend to be more complex mathematically, with less emphasis on computational time. The goal to reduce execution times to small fractions of a second is the subject of Michael Lewis’ book “Flash Boys” (Lewis (2014)). 4  The finance literature emphasises that the performance of markets in financial assets is driven substantially by changes in the wealth of the marginal investor, which is the market maker or broker-dealer (Nelson et al (2015)). BIS central bankers’ speeches  3  rates which in turn incentivised a “search for yield” (to be clear, “low for long” has not been in the phraseology of central banks). Studies of the US Treasury market have indicated that the Federal Reserve’s programme of Quantitative Easing (QE) caused a reduction in the liquidity premium return for holding those bonds. Part of the effect of QE programmes is to improve market conditions for the targeted asset classes but also to see the trickle down to other asset classes as market conditions change more generally (Christensen et al (2013)).

Another example, which has recently led to new legislation in the United States, is the role of analysts in investment banking. An analyst has the task of providing investors with advice, but if the bank is more interested in gaining business for its corporate finance activities than safeguarding the investor’s interests, the analyst’s assessment may be influenced by this. Here there should traditionally be a “Chinese wall”, but this has in some cases been fairly low and probably eroded considerably over time. Before I go on to more bank-specific issues, I would like to say a few words about conflicts of interest in general, and how these can be handled - to the extent that they should be handled. I shall then move on to more specific conflicts of interest between different types of banking operations, particularly given the developments in the United States. Finally, I shall draw some conclusions concerning Sweden. The fact that different people have different interests is quite natural. A buyer and a seller usually have different interests in a business transaction. A difference of interest is actually one of the most important driving forces in a market economy. A difference of interest only becomes a conflict of interest when one person or organisation has to take into account several different interests and can promote one at the cost of another. Conflicts of interest are thus based on an agency relationship. BIS Review 47/2004  1  These conflicts exist in almost all businesses.
The Committee believes it critical to complement the more risk reflective capital requirements with the added incentives of supervisory review and market discipline. The second pillar of the new framework focuses on the need for banks to conduct their own assessments of the amount of capital they should hold relative to their risk. Supervisors will be expected to review and respond to these assessments. I believe that discussions between bankers and their supervisors will create added incentives for management to assess its risks carefully. No longer will the emphasis solely be on whether a bank complies with regulatory minimums. Rather, banks will be expected to manage their economic needs and operate with a capital buffer at levels above the regulatory minima. Accordingly, there will be a need for strong capabilities by banks and supervisors alike to evaluate banks’ level of risk appropriately. Market participants also will play an important role in evaluating the adequacy of bank capital. Greater disclosure of key risk elements and capital by banks will provide important information to counterparties and investors, who need these data to develop an informed view of a bank’s risk profile. By bringing greater market discipline to bear through enhanced disclosures, I believe the third pillar of the New Accord, the market discipline component, can produce significant benefits. It will help to encourage banks to manage their risks prudently and, by supplementing official supervision, thereby also improve financial stability. 3.

6 Seven awkward questions, 17/01/19 - https://www.bankofengland.co.uk/speech/2019/sam-woods-secondary-competition-objectivefive-years-on 3  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  3  That is the purpose of the Consultation Paper (CP) we’re launching today: we want to ensure there are ‘no surprises’ from the regulator whether you’re a new bank, a mid-tier bank or on the path between the two. We want to give you the map that gets you up the mountain. To be clear, not all firms will aspire to reach the summit, and that’s just fine. Many will find a sustainable position part way up. But we hope – for those firms with lofty ambitions – that over time the mountain can accommodate many more firms at increasingly high altitudes. The Covid-fog Now, when we embarked on writing this CP – to draw together all the various expectations of growing firms into one coherent guide – we didn’t expect the next major test of the banking sector to come so soon and on such a scale. But I am pleased to say that the banking industry has risen to the challenge of the Covid stress - both in terms of maintaining critical services to customers, and in helping to support individuals and to fund businesses large and small through their period of stress. The crisis is by no means over, but the first phase has shown the capacity of the sector to contribute to the greater good.
Therefore, a scenario of recovery in net exports such as that described requires Spanish firms to push ahead with the improvement in competitiveness made by them in response to the sharp ongoing adjustment in the structure of world trade due to the entry of new competitors. At the same time, the slower momentum of final demand should manifest itself in a certain slowdown in imports, curbing the leakage of spending out of Spain. However, as I indicated in September, it is precisely in the external economic environment where the main factors of risk to the macroeconomic scenario outlined above are to be found. If the recent bout of financial instability and of heightened international uncertainty were to significantly affect the buoyancy of Spain’s export markets, the capacity of external demand to contain the adverse impact of a slowdown in domestic spending would be diminished and, accordingly, the efforts required to improve competitiveness would be even greater. Domestically, the continued dynamism of employment and the gradual normalisation of the property market are fundamental for keeping income expectations and, consequently, agents’ spending plans on a mildly slowing course. In any event, the Spanish economy is witnessing a process in which construction investment is diminishing in importance as the engine of growth. Therefore, it is essential to have a sufficiently flexible mechanism of resource allocation to enable industrial activity and services to take over from construction, furthering the change in output composition that has been taking place in the last few quarters.

Ardian Fullani: Recent economic and monetary developments in Albania Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the press conference on the Monetary Policy Decision of the Bank of Albania Supervisory Council, Tirana, 28 March 2012. *  *  *  Today, on 28 March 2012, the Supervisory Council of the Bank of Albania reviewed and approved the Monthly Monetary Policy Report. Based on the analysis of Albania’s latest economic and monetary developments and following discussions on their performance outlook, the Supervisory Council of the Bank of Albania decided to cut the key interest rate by 0.25 percentage points, bringing it down to 4.25%. This decision was motivated by the further decline of the balance of inflationary pressures as well as the need for increased macroeconomic stimulus to the economy under the conditions of a more prudent fiscal policy for the period ahead. The Supervisory Council deemed that, following the successive easing of the monetary policy, the latest key interest rate cut will provide more appropriate monetary conditions to meet the inflation target and stimulate economic activity in Albania. Let me now proceed with an overview of economic developments and main issues discussed in today’s meeting. *** Annual inflation in February was 0.6%, recording sharp decline from 1.6% recorded a month earlier. The rapid deceleration of inflation was a result of the annual drop of food prices during this month and the high base of comparison with the corresponding month a year earlier.
Quite apart from our own Hong Kong-specific initiatives, there are movements for reform at the international level, resulting from a very different experience in the more developed economies, which we cannot ignore. This point brings me to my second observation: the need to move with the times. The past year has seen a plethora of ideas and proposals for reforming financial regulations, and interventions by government that were unprecedented in their nature and scale. Even in economies less deeply affected by the latest crisis, including Hong Kong, it has been necessary to deepen government involvement, for example in more extensive deposit guarantees or in more intense supervision of banks' risk management – although it is gratifying that so many of the tools that we have been able to rely on, including the apparatus and contingency arrangements for ensuring liquidity, have been developed in a pre-emptive rather than a reactive way. On the various emergency measures, I am quite sure that in the fullness of time, these will either be turned into standing arrangements or withdrawn, hopefully through smooth exit strategies. But, current sentiment is clearly demanding much closer regulation and supervision of banks over the longer term. Quite what form this will take remains to be agreed on in international forums, although the thinking already seems to be towards improvements in the level and quality of banks' capital; new global standards for measuring, managing and supervising liquidity risk; and macro-prudential supervision to reduce the pro-cyclical dynamics of financial markets.

This policy, now a cornerstone of our prudential arrangements, pre-dates even the foundation of the HKMA and evolved out of a productive dialogue between HKAB and the supervisor. It has survived strong political pressure for relaxation and market pressure for innovative credit risk transfer through securitisation. The policy – now nearly two decades old – fits in well with the macroprudential approach which, particularly in the light of the recent crisis, supervisors in other jurisdictions now consider to be essential to banking stability. The fact that no such policy existed in the advanced financial systems is remarkable enough. But what is more remarkable is the level of initiative of the Hong Kong banking sector itself in seeing the importance of systemic stability and giving it precedence over the profitability of individual institutions. We might therefore observe, in the light of this and of our experience over the past year, that Hong Kong has got it broadly right in the relationship between the supervisor and the banking system. However, this should not lead us to the complacent conclusion that there is nothing much that needs changing. And indeed, no such conclusion is in our minds. Both the  BIS Review 116/2009  1  Carse Report and the recent reports to the Financial Secretary on the Sale of Lehmanrelated products see room for development and improvement in the way we carry out our work.