samchain/econo-pairs-v1 huggingface dataset:
In this sense, the Authority also contributes to the soundness of the Bank’s counterparties. It is also the Authority which ensures that only sound institutions are licensed to enter the Maltese market. Furthermore, confidential supervisory information available to the Authority could be useful to the Bank as an input into its overall analysis of the financial system, enabling it to respond to liquidity and related constraints that could set off negative ripple effects. The potential for synergies between the two institutions prompted them to sign two Memoranda of Understanding in 2002 to provide for enhanced co-operation, including through the establishment of a Standing Committee. This cooperation framework has contributed to the general soundness and stability of the financial system. The profitability of our banks, for example, has remained stable with an average return on assets after tax of 0.8% in 2003, the same level as that recorded by European banks. Furthermore, bank liquidity and capitalization levels have both remained strong. Liquid asset holdings as a percentage of short-term liabilities were close to 53% at the end of 2003, compared to a minimum threshold of 30%. Meanwhile, the banks’ aggregate capital adequacy ratio, defined as the ratio of own funds to risk-weighted assets, currently stands at 23%, compared to a minimum of 8%. In the insurance sector and collective investment schemes steady growth continues to be registered. This positive performance notwithstanding, there remains scope for further improvement in the framework through which the Bank and the Authority seek to safeguard the health of the domestic financial system.

In particular, the activities and institutions which the Bank and the Authority will be expected to monitor will become more complex as the number of financial intermediaries with a presence both in Malta and in other countries, either directly through the establishment of branches or subsidiaries, or indirectly through the provision of cross-border services via the internet or otherwise, continues to grow in the light of the incorporation of EU passporting rights in Maltese legislation. The coming into effect of Basle II and, at the EU level, CAD III will be significant factors in this regard. At the same time, the tendency of companies to seek multiple listings in different securities markets means that interest rates and stock market valuations in one country will increasingly mirror those in other countries, even though the underlying economic fundamentals of that country might warrant some divergence in such variables. Indeed, as has been the experience of other countries, the trend towards consolidation and merger activity in the various segments of the market, from banking and the selling of insurance and investment funds to the provision of payment services and trading facilities, will lead to a situation where the institutions to be supervised will vastly exceed the financial resources and technical expertise available to supervisors and central banks.
First, how do we ensure that we have legislative and supervisory frameworks in place to support development of safe private sector innovation that could respond to these challenges? Here, it is clear that we need to ensure that new ways to pay and new forms of electronic money are offer equivalent protections to existing ones. And second, what is the right role for central banks in provision of the money we use to transact? I’m looking forward to the discussion. 8  All speeches are available online at www.bankofengland.co.uk/news/speeches  8

In particular, we have found it useful to be a member of the Alliance for Financial Inclusion (AFI), a network of policymakers from developing countries, where we are able to work alongside other policymakers to advance financial inclusion globally. BIS central bankers’ speeches  1  Additionally, AFI is a platform where members could share experiences and learn about policies that have been successfully implemented by others. ASEAN member countries, such as Myanmar, who are not a member of AFI, may wish to consider becoming a member to stay connected and expand the network of financial inclusion collaboration. Financial integration as the building block to unlock growth Finance is an important component of any economy. Its development and greater financial integration will be the catalyst and foundation upon which an economy will progress and grow. Central to this, is a well-developed financial infrastructure that can appropriately serve effectively at every stage of an economy’s development. Myanmar is on the cusp of a remarkable period. It is blessed with a strategic location in the greater Mekong region with a young, productive and rising demographic base, as well as the beginnings of an emerging and rapid development process. This economic transformation of Myanmar will most likely require investment at a rapid pace. McKinsey Global Institute estimates that around USD650 billion worth of investments are needed for this transformation over the next 15 years, of which USD320 billion is solely for infrastructure building.
For a MPE strategy, the successful implementation will require effective coordination of the different resolution actions undertaken by home and host authorities. Each key host authority needs to be open about its plans. The home authority needs to reciprocate, ensuring a joined-up, collaborative approach with no surprises. For both SPE and MPE resolutions, the FSB has stipulated that firm-specific cooperation agreements (COAGs) must be agreed amongst home and host authorities. The FDIC/Bank of England joint paper last year is by no means the only example of intensified co-operation preparing the way for those COAGs. Over recent months there has been marked convergence in how the world’s key authorities plan to approach resolution. This will become more apparent as more jurisdictions, including crucially the member states of the EU, legislate the KAs into their local statutory regimes.14 Preferred paths, and fall backs My exposition of how the resolution work programme will be taken forward has made it clear that, as I at least envisage it, for each SIFI there will be a preferred path. There are two points to make about this. First, I favour the term ‘preferred path’ over ‘presumptive path’ because I am concerned that too many people – perhaps particularly amongst asset managers – slip into thinking, and even demanding, that a ‘presumptive’ path should offer certainty, with no room for the RA to exercise any discretion in the public interest. I think that that is unrealistic.

In democracies, that is rightly debated thoroughly to ensure that it has  3  This serious faultline in the international financial system was highlighted to the international community by a 2001 G10/Financial Stability Forum report explaining that officials did not then have the tools to manage the orderly wind down of a large and complex global financial institution (LCFI). 4  The Basel Committee on Banking Supervision’s Core Principles for Effective Banking Supervision (2012) require ‘the operational independence, accountability and governance of the supervisor [to be] prescribed in legislation and publicly disclosed, [with] no government or industry interference that compromises the operational independence of the supervisor.’  2  BIS central bankers’ speeches  legitimacy and is subject to the right checks and balances.5 The key process is, of course, the vetting and passage of legislation. That process is well underway in the key jurisdictions. Establishing the statutory regime In November 2011, the G20 leaders endorsed the Financial Stability Board’s Key Attributes for Resolution as an ‘international standard’. That term of art means that all the jurisdictions of the G20 are committed to incorporate the Key Attributes (KAs) regime into their domestic legislation. The US has largely done so. The EU is very close to doing so, through its Recovery and Resolution Directive. Switzerland has largely done so. Between them, this will account for the home countries of 24 of the 28 globally systemic banks listed by the FSB and the Basel Supervisors Committee last year.
ELA as part of general crisis management and resolution  Should a financial crisis occur, there are a number of measures that may be used by authorities to limit the consequences of the crisis. In addition to ELA, examples of these measures are financial support to protect the solvency of institutions, brokering of private sector support to or acquisitions of troubled institutions, management of deposit insurance schemes and insolvency procedures for financial institutions. In general, these measures may be undertaken by different authorities. A consequence of this is that cooperation between authorities is an important element of crisis management. The authorities must have a common strategy for how the crisis should be managed in order to avoid excessive support to the financial sector. Excessive support may lead to undue costs to taxpayers and to unsound incentives for the financial sector. In this context, it is important to emphasise that these effects can arise from all kinds of official support. Thus, the authorities must limit the support that is  1  BIS Review 42/2000  offered. Support may be warranted only when there is a considerable risk for a systemic crisis that may lead to a severe decline of real economic activity. Typically, real economic activity is affected by a breakdown of payments systems or restrictive granting of credit, a credit crunch. Traditionally, ELA provided by central banks has been seen as a measure to deal with pure liquidity problems in banks that essentially are solvent.

The possible need for speedy assistance necessitates that a central bank must have internal procedures for managing requests for liquidity support and doing so very rapidly. To accomplish this, central banks need to have a detailed crisis plan that can be put in place within very short notice. The crisis plan should include the following types of information: Organisational structure •  A division of responsibilities for analysis, information, decision-making, etc. •  Staffing requirements for different tasks, with substitutes. Analysis plan •  A description of the information necessary to make a decision about whether or not a systemic crisis may occur. •  Necessary information about systemically important individual banks. Information strategy •  A plan for informing and coordinating information and decisions with the other domestic agencies involved in the crisis. •  A plan for informing authorities in other countries about the situation. •  A plan for communicating with the financial markets. •  A plan for spreading information to the public and media (ex ante and ex post transparency). Plan for implementing ELA •  A clear description of the routines which must be followed and the legal requirements which must be met for ELA. Legal procedures, for example contracts, for lending against other collateral than what is normally eligible •  An inventory of the instruments available for implementing ELA. •  Guidelines for acceptable collateral and appropriate haircuts.
Three-month Nibor is a so-called reference rate, used as a basis for the pricing of many financial contracts in Norway, such as loan contracts and interest rate swaps. In its capacity as a reference rate, Nibor is a key element linking the key policy rate with the interest rates facing households and enterprises. Chart: … and on to mortgage rates The interest rates paid by households and enterprises on their bank loans are set to cover banks’ costs as well as to provide a return on equity for the banks’ shareholders. A large share of banks’ costs consists of the cost of wholesale loans to fund retail lending. Prices for these loans will typically be formulated as a premium on top of three-month Nibor. Changes in Nibor will thereby affect banks’ funding costs and lending rates for households and enterprises. Reference rates are used to hedge against future changes in the general interest rate level. The pricing of bank bonds can serve as an example. When the interest rate on a bond is set at the reference rate plus a fixed risk premium, both the bank’s interest expenses and the bond purchaser’s interest income will depend on the level of the reference rate – and thereby on the general interest rate level. When the two parties agree to the contract, they can then focus on the contract’s specific conditions, such as the credit risk associated with the issuing bank. Internationally, Libor and Euribor are important reference rates.

With the high level of household debt, the rate increase will likely have a greater impact on private consumption than earlier. However, the strength of this impact is uncertain. This suggests a cautious approach to interest rate setting – a strategy we are now pursuing. 7/7  BIS central bankers' speeches
4  BIS central bankers’ speeches  Would it compete with cash or with bank deposits? The CBDC and “narrow banking” But which would it be – an actual bank account, with all the extra services such things entail, perhaps including the payment of interest; or simply “e-cash” – something that can only be used for retail transfers and doesn’t receive any interest? This is an important question. If all it did was to reduce the demand for physical cash, it’s not clear the macroeconomic effects of a CBDC would be that significant. It’s possible the retail payments system might become more efficient. It’s also true that, were a CBDC fully to displace paper currency, that would open the door to the possibility of materially negative interest rates (Buiter (2009), Rogoff (2014), Haldane (2015)). But that would require explicitly abolishing cash, not just introducing an electronic alternative. As long as it’s possible to hold something with a guaranteed nominal return of zero there’s a similar lower bound on all other forms of money, whether reserves at the central bank or a more widely available CBDC. Leaving aside the question of whether or not you should actively get rid of banknotes8, a purely cash-like version of a CBDC would mainly involve substituting one zero-yielding liability of the central bank for another. It seems to me that the more material effects of a CBDC would arise if it provided competition not just for banknotes but for commercial bank deposits as well.

This was mainly attributed to the seasonal inflationary pressures associated with food prices during this time of the year, as well as pass-through effects of the exchange rate depreciation. Distinguished Media Practitioners, you will also be interested to note that the Bank of Zambia has been refining its monetary and supervisory tools. The Bank recorded a shift in its Monetary Policy Framework in 2012 from the strict use of monetary aggregates to short-term interest rates, to better anchor inflation expectations. To this effect, the Bank of Zambia introduced a Policy Rate in April 2012 to, among other things, enhance communication of monetary policy direction to the public and introduce transparency in the way commercial banks and other financial institutions price their products. Ladies and Gentlemen, owing to the general decline in the rate of inflation over time, interest rates are expected to decline. However, commercial banks’ average lending rate rose to 16.4% in December 2013 from 16.1% in December 2012 largely reflecting upward adjustment in the Bank of Zambia Policy Rate. The adjustment in the Policy Rate was aimed as containing inflationary pressures attributed to removal of fuel and maize subsidies during the year. In 2013, the average lending rate increased to 17.0% at end-March. As the cost of borrowing is a key factor in facilitating sustainable economic growth and enhanced financial inclusion, it is one of Bank of Zambia’s objectives to see commercial banks’ lending rates eventually trending down significantly.
Eva Srejber: Sweden and European integration Speech by Ms Eva Srejber, Deputy Governor of Sveriges Riksbank, at the IBC Euroforum: Nordic Banking, Stockholm, 3 June 2002. *  *  *  Let me begin at once by stating the limits I intend to set for this subject in my speech: I intend to focus on financial integration within the EU and to discuss how companies and individuals can benefit from the advantages created by integration in this field. My starting point is, thus, that greater integration in the financial area mainly brings advantages, but there is cause to seek to analyse the forces behind such a development. As different public rules and regulations play an important role for developments in the financial sector, there is also reason to discuss a number of questions of a policy nature that are already on the agenda for a strengthened co-operation within the EU. This is largely a matter of achieving a balance between providing scope for product development and efficiency in the production of financial services in Europe, and creating the right conditions for stability and predictability in the financial system. From white paper to financial action plan Ten years ago, 1992, was the final date for realising the common market in the EU on the basis of the programme in the white paper presented by the European Commission in 1985.

Limitations in practice The problem is that it is difficult to apply this model for rules and regulations fully when there are many different national peculiarities which are hard to do away with. This has therefore provided some scope for the authorities also in the host countries to apply supplementary provisions, which have in practice impeded cross-border competition. Such provisions are often attributed to some form of general good, which can be hard to define - and for which it is even harder to disclose a hidden protectionist background. Another problem with the legislative work within the EU is that it has been so difficult to continuously modernise the rules and regulations and adapt them to new market conditions. The legislators have in several cases been one step behind the market, which has meant on the one hand that new products and operations may not have been encompassed by the new freedom of movement on the single  market, and on the other hand that the protection the legislation aims to provide has been undermined. This problem came under particular focus last year, with regard to the securities markets within the EU, and a Committee of Wise Men headed by former EMI head Alexandre Lamfalussy proposed a simplified procedure for the entire legislation process. As you know, directives are adopted by the Council of Ministers and the European Parliament in a co-decision procedure, which is in itself a complex process and even more so when the directives include detailed provisions on what is to be regulated.
For example, the 1-year forward rate, 9 years ahead has declined sharply over the past year, falling from around 5 percent in December 2013 to just under 3 percent currently. What can explain such a large shift in forward rates at such a long time horizon? Third, when U.S. monetary policy is normalized, how fast should we raise short-term interest rates? In other words, what is the appropriate path back to the long-run equilibrium real federal funds rate, shallow or steep? In my view, the paper reaches five major conclusions – conclusions that I find myself broadly in agreement with: •  There are many factors that influence the level of the equilibrium real short-term interest rate. Real potential GDP growth may be one factor, but the real equilibrium rate is also affected by financial conditions, uncertainty and risk aversion, financial market performance (e.g., bubbles and busts) and the degree of restraint exerted by the stringency of banking and financial market regulation. •  There is little evidence supporting the so-called “secular stagnation” view that the equilibrium real short-term rate will persistently remain near or below zero. •  The equilibrium real short-term rate is non-stationary. Thus, it will not necessarily revert back to some long-run average value. •  U.S. and global markets are integrated to a significant degree. As a result, the equilibrium real short-term rates both here and abroad will tend to move together.

William C Dudley: Remarks at the 2015 US Monetary Policy Forum Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the 2015 US Monetary Policy Forum, New York City, 27 February 2015. *  *  *  Jonathan McCarthy, Paolo Pesenti and Joseph Tracy assisted in preparing these remarks. It is a great pleasure to have the opportunity to comment on this year’s Monetary Policy Forum paper, “The Equilibrium Real Federal Funds Rate, Past, Present and Future.” Let me preface my remarks with the reminder that 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. I think this is a timely topic because it is relevant to several questions that are particularly important in the current environment. First, if one were to use a Taylor-type rule as a guide to assess the stance of monetary policy, what equilibrium real federal funds rate would one currently use in the formula? Given the performance of the economy in recent years, I think it would be very hard to justify the typical assumption of a 2 percent rate. Second, what will this equilibrium real rate be in the future? This is particularly germane right now given that short-term forward interest rates derived from the Treasury yield curve have come down sharply since late 2013.
On that note, I wish you a successful and productive Convention. Wabillahi taufik walhidayah. Assalamualaikum warah matullah hi wabarakatuh. BIS Review 95/2007  5

Attachments to top business newspapers in South Africa and training our journalists in economics at the University of Zambia should give us the comfort that a specialization is being built from which we can confidently tap into and exchange ideas and analysis. One of the challenges for our writers has been a lack of specialization. As such, they have had to understand all subjects broadly rather than in-depth to help them to communicate more authoritatively. As they are being strengthened through various training interventions, we should therefore be able to see a marked improvement in their performance. In this vein, I am told that the American Centre and the Canadian High Commission have also been keen stakeholders in training our journalists in this area and to this end have worked closely with ACCA over the past two years in delivering one week workshops on key topical areas. The partnerships demonstrate that there are a number of interested stakeholders that all have a common goal – good, reliable and timely information. The announcement of the national budget is round the corner. It is that time of the year when many differing analysis are made. Don’t take these analyses at face value – examine them in your own right and come up with alternative lines of reasoning so that the public can have a holistic view of the effects of the budget pronouncements. We would indeed expect this for any other economic, business and financial pronouncement.