samchain/econo-pairs-v1 huggingface dataset:
In this respect, as implied by the fiscal rule, it is assumed that the fiscal space created by the stronger than expected economic activity leading to better than expected performance in budget revenues since the second half of 2009, would be used mostly to reduce the government debt stock; therefore, the goals set out in the MTP be implemented through institutional and structural improvements in 2011 and onwards. In other words, it is assumed that tax adjustments would be consistent with the inflation targets and automatic pricing mechanisms throughout the forecast horizon. Accordingly, it is envisaged that the rising debt-to-GDP ratios would gradually reverse course starting in 2011, and hence the risk premium would not display any significant changes throughout the forecast horizon. Against this background, assuming that liquidity measures are normalized gradually over the short term and that policy rates are kept constant at current levels for some time followed by limited increases starting in the last quarter of 2010, with policy rates staying at single digits throughout the three-year forecast horizon, the medium-term forecasts suggest that, with 70 percent probability, inflation will be between 7.2 and 9.6 percent with a mid-point of 8.4 percent at end-2010, and between 3.6 and 7.2 percent with a mid-point of 5.4 percent by the end of 2011. Furthermore, inflation is expected to decline to 5.0 percent by the end of 2012 (Figure 34). Despite the upward revision in the output gap, it is expected that the economic recovery would be gradual.

A significant development relating to the Zambian financial sector was the decision to relocate the function of the Registrar of Banks and Financial Institutions to the Bank of Zambia from the Ministry of Finance and National Planning where it was previously located. This decision was taken in an effort to enhance regulatory oversight of banks and financial institutions starting from the licensing stage. Currently, all applicants have to be evaluated in line with relevant provisions of the Banking and Financial Services Act (BFSA) and international best practice such as the Basel Core Principles on Effective Banking Supervision. The intention is to ensure that only applicants who meet these stringent criteria enter the financial system in Zambia. This is crucial for fostering confidence and stability in the financial system. Mr Chairman, you may be aware that in the early stages of the reforms, a number of commercial banks faced serious problems and were subsequently liquidated. The closures were in part a consequence of the reforms. The reforms also highlighted some weaknesses in corporate governance arrangements at most failed banks. However, following improvements in the regulatory and supervisory frameworks, no bank closure has been recorded since 2002 and the banking sector has recorded significant growth. The growth in the sector can also be attributed to prudent fiscal and monetary policies aimed at achieving sustainable macroeconomic stability. This has been accomplished under a stable political environment and liberalised market conditions.
Zeti Akhtar Aziz: Policy and regulation of financial inclusion Welcoming remarks by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the UNAG Asia Regional Forum on Policy and Regulation of Financial Inclusion, Kuala Lumpur, 6 May 2009. *  *  *  Introduction It is my pleasure to welcome you to the United Nations Advisers Group Asia Regional Forum on Policy and Regulation of Financial Inclusion. This conference takes place at a time when the world is confronted with addressing many issues that have emerged from the current global financial and economic crisis. Whilst significant attention and efforts are being channelled to resolving the financial crisis and creating an enabling environment for the resumption of growth and job creation, we must not lose sight of the financial inclusion agenda. Financial inclusion is vital for creating balanced sustainable economic growth. It provides the opportunity for all members of society to benefit from economic progress. It allows for a shared prosperity, an aspiration that is encapsulated in the United Nations Millennium Development Goals. The Central Bank of Malaysia is most honoured to be given the opportunity to host this forum which is being held in Asia for the first time. We are most honoured to have Governor Nout Wellink, President, of the Central Bank of Netherlands. We are also pleased to have present Mr. Jacques Toureille, UNAG Advisor, who will be delivering the keynote address by Her Royal Highness Princess Maxima on her behalf.

This forum brings together some of the best minds from different parts of the world with diverse experiences in the field of financial inclusion. I am certain that this forum will enhance our understanding of the vital issues confronting the financial inclusion agenda, and will contribute towards the formulation of new ideas in addressing the important issue of regulation and policy that will ensure the sustainability of an inclusive financial system. The financial crisis and its implications on the poor The year 2009 will likely to be a difficult year for most countries. As we enter the third year of this financial crisis, there is already a synchronised recession in the advanced economies. For most of the emerging economies however, the full effects of the crisis on their domestic economies will be felt this year. It is important to note that the financial systems in most emerging economies continue to remain sound and more importantly continue to function, providing credit and supporting the economy. The collapse of external demand has however, adversely affected the more open emerging economies. The issue of equal concern however, is the more disproportionate impact these developments will have on the poorer economies. Similarly, the disproportionate effect these developments are having on the poorer segments within a particular economy. This crisis thus brings to the forefront a number of issues concerning financial inclusion.
In July the euro countries signed an agreement to establish a permanent rescue funding programme, the European Stability Mechanism (ESM), which will replace the EFSF in the middle of 2013. Sweden has strong public finances In this context it is worth pointing out that public finances in Sweden are relatively strong. This is partly the result of the problems we faced and succeeded in managing in the mid1990s. Regulations regarding expenditure ceilings, surplus targets and balance requirements for the municipalities have contributed to the good situation we have now. Our strong public finances also mean that there is no need for the fiscal policy tightening in Sweden that several other countries will have to implement. Important questions at the September meeting The turbulence on the financial markets has increased uncertainty regarding international economic developments in the coming period, and ultimately regarding developments in Sweden. I shall conclude with a few words on the problems I consider we will thus need to discuss at the next monetary policy meeting in early September. Sweden affected through foreign trade… International economic developments affect developments in Sweden in two main ways: through foreign trade and through the financial markets. Exports are dependent on developments in world trade. During the summer we have seen lower growth than expected, particularly in the United States. Lower international growth usually also leads to lower growth in Swedish exports.

Both banks have also been able to improve their leverage ratios considerably; yet in an international comparison based on a number of commonly used definitions, they are still below the average of large global banks. As my colleague Thomas Jordan has explained, economic and financial conditions for the Swiss banking sector continue to be challenging. For this reason, it is vital for the big banks to continue improving their capitalisation, and in turn their resilience, particularly as regards the leverage ratio. This is especially important because the leverage ratio is growing in significance as a measure of bank resilience. In times of crisis, in particular, the leverage ratio often becomes the focus of market attention. In the SNB’s view, the top priority for the big banks is the consistent and rapid implementation of the “too big to fail” (TBTF) regulations. The focus should be on the following areas: First, the credibility of risk-weighted asset calculations based on banks’ internal models should be strengthened. As outlined previously, risk-weighted ratios yield a different picture of a bank’s capital situation than leverage ratios. In this context, the SNB is currently supporting FINMA in an examination of whether and to what extent risk-weighted assets based on banks’ internal models differ from those based on the standard approach, which is model-independent. If this examination reveals no substantial inexplicable differences, this would strengthen market confidence in the model-based approach. Conversely, if there are any substantial differences that cannot be explained, corrective measures would need to be considered and implemented.
Households’ gross disposable income fell by 8.8% year-on-year in the first half of 2020. In parallel, lending to households has fallen off in recent months as a result of the decline in new lending business. The reduction has been more marked in the consumer credit segment, while new financing for house purchases fell less sharply. Overall, although the moratoria on loans, which affect 7% of the outstanding balance of lending to households, have checked the decline in lending to this sector by reducing the volume of loan  5  repayments, its year-on-year growth rate dipped to -0.8%, compared with the 0.3% increase in February. This has entailed an increase in the financial pressure borne by households. Thus, for the household sector as a whole, the debt-to-gross disposable income (GDI) ratio rose by almost 4 pp in the first half of the year to 95%. Once again, the intensity of this increase in debt will foreseeably ease to some extent with the GDI data for Q3. The increase in household saving not earmarked for debt service (a consequence of the heavy decline in consumption) appears to have been channelled to bank deposits, which posted a year-onyear increase of 7.1% in July. However, updated information on the distribution of this saving within the household sector is not available, making it difficult to assess to what extent this development is softening the greater degree of financial pressure for certain groups of households.

These have enabled banks to obtain long-term funding at beneficial interest rates, which may temporarily be as low as -1%, on the condition that the participating banks maintain their supply of credit to the real economy in the context of the COVID-19 crisis. To reinforce this measure, the ECB also eased the collateral eligibility criteria for banks in its refinancing operations, thus increasing the volume of funds they may obtain. These measures have been highly successful. In the June TLTRO-III operation, participating banks received liquidity totalling € trillion, an all-time high in Eurosystem refinancing operations. The available evidence suggests that participating banks are using a significant portion of the funding received to continue to provide liquidity to the real economy. In short, the measures taken by the ECB under its refinancing operations are playing a key part in preserving the supply of bank credit. And, in an economic setting as difficult as the present one, they are helping to hold interest rates on bank loans at historically low levels and to support the vigour shown by new bank lending since the start of the crisis. Indeed, in Spain the volume of credit to the non-financial private sector has expanded again after ten years of deleveraging and posted year-on-year growth of 2.5% in the summer months.
Finance must serve the good and is no longer about greed and selfinterest. Raising the impact of Islamic finance to the economy and society through stronger leadership, values and ethics Islamic finance has always been subjected to higher overarching objectives that place ethical and moral conduct at its centre. The Maqasid Shariah first articulated by al-Ghazali in the 12th century and developed further by later scholars, speaks towards preservation of religion, life, family, mind and property with the ultimate aim of prevention of harm and attainment of benefits. At the onset, such objectives entail the prohibition of any unethical or unlawful conduct in Islamic finance while putting in place features of an embedded governance that support the highest level of integrity and good conduct within Islamic finance. This is achieved through the branch of Shariah of Fiqh Muamalat which governs business and financial relationships in the Islamic economy. The main objective of Islamic economics itself is the human well-being, a concept that not only cuts across the necessities of Maqasid Shariah, but also extends towards a more 1/4  BIS central bankers' speeches  comprehensive social and economic aspiration for the betterment of the material and spiritual well-being of a society. Islamic finance therefore naturally has the potential to take the lead striving towards an ethical, moral and also sustainable model for finance in the global financial system. In developing the Islamic financial system, these unique propositions are drawn out further from underlying Shariah principles.

Structural measures As a complement to the efforts to date regarding systemic banks, the authorities in several countries have adopted or are considering adopting reforms involving changes to banking business models, with legal restrictions on the size of credit institutions or the activities they may pursue. Examples of this are the Volcker rule, introduced in United States; the measures considered by an independent commission chaired by John Vickers in the United Kingdom; and the proposals of a group of experts chaired by the Governor of the bank of Finland, Erkki Liikaanen, in the European Union. Broadly, these measures seek to restrict the size of banks or to simplify their structure, segregating specific activities which are considered essential, such as taking deposits, from potential losses in other banking business areas, especially those related to trading. These reforms might help reduce the complexity and size of banks, and their interconnectedness with the so-called shadow banking system. They would thus contribute to facilitating bank management and supervision, and, where necessary, to simplifying bank resolution. However, these proposals and the measures considered have so far remained outside the coordination of the Financial Stability Board. As a result, the main jurisdictions have drawn up their proposals in isolation, and there are significant differences between them. For instance, there is no consensus on the boundaries of the activities to be segregated or on the legal procedures to do so.
The subsequent housing crash was exacerbated by the sharp reversals of mortgage lending 3/6  BIS central bankers' speeches  standards and home equity withdrawal, which together contributed to the severity of the Great Recession. Today, these factors seem less important because lending practices in the housing market have been much more stable in recent years. The importance and complexity of financial conditions also underscore the need for caution in following any mechanical monetary policy rule. For example, the most well-known rule—the Taylor Rule—does not explicitly take financial conditions into account in terms of its monetary policy prescription. In that rule, the federal funds rate depends only on the deviations of output from its potential and inflation from the Federal Reserve’s 2 percent objective, and on the level of the real short-term interest rate consistent with a neutral stance of monetary policy. Because the interactions can shift between financial conditions and the economic outlook—as well as between financial conditions and the federal funds rate—the absence of financial conditions in this rule can cause it to perform poorly as a guide for monetary policy. As a case in point, consider what the 1999 variant of the Taylor Rule indicated as the appropriate monetary policy setting in September 2008, just prior to the failure of Lehman Brothers.

This is essential in enabling it to react to new challenges, and to smooth the economy in the event of a crisis. Thus, budget soundness is not an end in itself, because it fosters employment and prosperity. Fiscal policy thus pursues a similar goal to monetary policy. By creating favourable conditions for lasting and balanced economic growth, they both foster a prosperous society. The economic policy goals of monetary and fiscal policy are closely intertwined – or even overlapping. In both of these economic policy areas, sustainability is key: Fiscal policy can only ensure the lasting achievement of its goals if public finances remain healthy over the long term. Monetary policy, for its part, should focus on the medium to long term, because any economic stimulus motivated by short-term considerations carries the risk of raising inflation expectations. To recap: The goals of fiscal and monetary policy overlap to a large extent, which means that in normal times there should be no tension between the two policies. Nevertheless, there is a strong complementarity between fiscal and monetary policy, as their operations have a reciprocal impact as regards both the financial markets and the real economy. Let’s look at the financial markets first (cf. chart 2). Monetary policy steers a reference interest rate on the money market, which is used as a basis for the valuation and trading of securities such as government bonds on the financial market. If monetary policy is credible and succeeds in ensuring price stability, inflation expectations are low and well anchored.
This may result in higher margins. A tighter labour market may lead to higher wage growth. In addition, the increase in energy and commodity prices is pushing up producer costs at home and abroad. Although the Bank in principle neither found it desirable nor anticipated that inflation was as low as it actually has been, we have deliberately accepted an inflation rate that is below target for a period. In a period of increased cross-border labour flows, substantial technological advances, changes in competitive conditions and new trading patterns, we may, with our very open economy, have to accept a somewhat greater variability in inflation and deviations from the target, as we have witnessed over the past two to three years. This leads me to how monetary policy should be assessed. Section 1 of the Regulation on Monetary Policy states: •  "Norges Bank’s operational conduct of monetary policy shall... be oriented towards low and stable inflation. The operational objective of monetary policy is annual consumer price inflation of approximately 2.5 per cent over time. •  In general, the direct effects on consumer prices resulting from changes in interest rates, taxes, excise duties and extraordinary temporary disturbances shall not be taken into account." A reasonable interpretation of the regulation is that when we look ahead, the interest rate should be set with a view to reaching the inflation target of 2.5 per cent within a reasonable, but flexible, time horizon.

For macroeconomic policies, there is an important  3  Claro, Sebastián. Presented at the V Chile-China Entrepreneurial Meeting, Centro Cultural de Carabineros, Santiago, 10 June 2011. For transcript, see Central Bank of Chile website: www.bcentral.cl. 4  See Ministry of Finance of Chile website: www.hacienda.gov.cl. 2  BIS central bankers’ speeches  challenge in facing a period of temporarily high terms of trade, and the improved external financing conditions that become available as a result. The experience of many countries shows that the best policy mix is sound fiscal discipline, prudent financial regulation, and a monetary policy framework that combines price stability and flexible exchange rates. A sound fiscal policy not only smoothes the business cycle and helps minimize foreign exchange fluctuations, but also avoids commitments to spending on outlays that depend on uncertain future income. Fiscal policy in Chile has been moving in that direction for decades, the importance of which cannot be overemphasized. Sound banking supervision is key for several reasons, among others because the intermediation of large capital inflows – in a context of upward pressures on asset prices – may lead to excessive risk taking. The reversal of these conditions has hit particularly hard in previous financial crises, where risktaking by financial institutions prompted aggressive deleveraging, with strong implications for credit and output. For this reason, in circumstances like these it is extremely important to closely monitor the prices of key assets and risk-taking patterns in the financial system. Finally, regarding monetary policy two issues are worth noting.