samchain/econo-pairs-v1 huggingface dataset:
In addition, although in normal circumstances monetary policy should be able to deal with aggregate shocks, it may not be the case in situations in which monetary policy is already operating at the effective lower bound. As the comparative analysis reveals, all other mature currency unions have centralized fiscal tools allowing governments to take actions when difficulties arise in a particular state or in situations of an aggregate recession. Despite several measures taken in response to the crisis, the EU still lacks fiscal tools to cushion against asymmetric or large systemic shocks that may arise in the Euro area. At the latest European Summits, a consensus seems to be emerging for a small budget within the EU’s regular budget, earmarked for specific support for member states in the form of loans seeking to promote competitiveness and convergence, in particular in the areas of innovation and human capital. While such a budget may be a first step towards more ambitious instruments, we should realise that its limited size would not make 9/11  it a suitable tool for smoothing the adjustment costs for countries experiencing a severe shock. And nor would it contribute to improving the design of fiscal policy at the euro area level in the event of a widespread recession. By contrast, a centralised fiscal capacity could contribute to both aims through temporary fiscal transfers for countries experiencing a particularly adverse shock. Several proposals have been discussed.

Andréa M Maechler: Developments on the financial markets and Swiss National Bank’s experience with negative interest in Switzerland Introductory remarks by Ms Andréa M Maechler, Member of the Governing Board of the Swiss National Bank, at the media news conference of the Swiss National Bank, Berne, 16 June 2016. *  *  *  I will begin with a review of developments on the financial markets, before commenting on our experience of negative interest in Switzerland. I shall conclude with some remarks about important innovations affecting financial market infrastructure relevant to the SNB. Situation on financial markets Let me start with developments on the financial markets. Risk sentiment deteriorated markedly at the beginning of 2016 due to weak economic data worldwide and a sharp decline in oil prices. Volatility increased temporarily during this period, leading to significant losses on the equity markets (slide 1). In mid-February, investors’ risk appetite returned for a time, thanks to a stabilisation of oil prices and, in particular, improved economic data in the US, China and the euro area. However, by the beginning of June, investor confidence had once again come under pressure due to concerns about a possible exit of the UK from the EU. With the exception of the US and the emerging markets, the major share indices are trading significantly lower than at the beginning of the year. This turbulence caused many market participants to seek refuge in safe investments. Yields declined substantially on the major government bond markets.
It is naturally difficult to establish the point at which price movements of this kind need to be considered as excesses. In the past, long periods of rising prices were always followed by corrections. The hefty reaction of risk markets to the tapering debate can be read as a sign of the instability of certain asset prices. In Switzerland, for instance, the low interest rates have stimulated activity in the mortgage and real estate markets, where, for a number of years now, we have seen considerable momentum which can only be partially explained by movements in fundamental factors. As a result, imbalances have built up. For example, mortgage volumes have grown significantly faster than GDP for many years, as can be seen in chart 9. The SNB has issued repeated warnings about the risks for financial stability associated with these developments. This is the background to the Federal Council’s activation of the countercyclical capital buffer (CCB) at the beginning of this year, upon the proposal of the SNB. The CCB has been in force since the end of September and its primary aim is to increase the resilience of the banking system against these risks and to combat excessive credit growth. Since low interest rates can be expected to persist in Switzerland for some time yet, we are keeping a very close watch on developments in the mortgage and real estate markets. Waning motivation for reform measures: Lower interest rates mean more favourable refinancing costs for banks, companies and governments.

It also means allowing more dynamic structures to evolve within the organisation to support specific strategic business use cases, such as our cloud centre of excellence. In an era of disruption, efforts to reduce the complexity of financial products and services to the average person could become more challenging. A key reason for this is the dramatically increased access to financial solutions for people from every walk of life, whether they are suited for them or not. To reap the promise that such access brings of opportunities to reduce inequality and improve standards of living, it is imperative that individuals are sufficiently confident and capable of making wise financial decisions. This brings me to the fourth strategic priority of the Bank – which is building financial capability among the Malaysian public to navigate opportunities and risks in the changing financial landscape. It has long been our conviction that encouraging a population that is both financially and digitally literate is a necessary and vital condition to harness the full potential of fintech and contain its risks. To that end, the Government recently launched Malaysia’s National Strategy for Financial Literacy which includes a specific focus on helping consumers protect themselves against fraud and exploitation, and embrace innovation more confidently in the digital era. In the area of remittances, our work to improve conditions for the use of formal remittance channels by leveraging on technology, particularly by workers and small businesses across the country, has led to substantial reductions in the cost of remittances.
Perhaps the best indicator of their vigilance against money laundering is the number of reports of suspicious transactions made to the Joint Financial Intelligence Unit (JFIU). These numbers suggest that institutions are certainly improving, as both the number of reports, and the number of institutions making reports, has been increasing over time. The number of reports made to the JFIU rose from only 264 in 1992 to 4210 in 1997. Our own on-site examinations also suggest that the level of awareness, and the training of staff, is improving. So, overall, institutions are doing well. However, there is always room for improvement, and I would urge those with responsibility for this area not to relax their guard. This brings me to my concluding remarks. I started out today by talking about the important elements of a control system, and how banking supervisors assess the effectiveness of institutions’ controls. I discussed some of the common threads of recent “problem bank” cases, and the control issues they highlighted. Finally, I stressed the importance of controls in the area of money laundering prevention. While I hope this was of interest to you, and at least gave you a slightly different perspective on some familiar issues, I think I should end by saying that I certainly lay no claim to having all the answers. Please do not sit back and expect the banking supervisors to issue guidelines telling you exactly what you need to do.

The “crypto winter” caused by the crashes of Terra-Luna followed by Celsius Network, by no means signifies that cryptos are over; it’s more of a weeding-out process. The share of stablecoins that are, in principle, backed by mechanisms to stabilise their value has risen fivefold in 20 months. Ensuring a lasting future for stablecoins – which is a legitimate goal – means remaining vigilant with regard to the associated risks. Because, in reality, the name covers a wide range of different forms: -  “crypto-backed” stablecoins, where the word “stablecoin” is a misnomer  as the coins are backed by other crypto-assets; or algorithmic stablecoins, a category to which Luna belonged; -  stablecoins backed by a basket of assets held in reserve, for example  commodities or monetary assets, such as money market funds and commercial paper; in reality these are similar to investment tools and should be treated as such; -  last, stablecoins backed by bank deposits denominated in a single  currency, which are designed to be used as global payment instruments. Page 4 of 5 Regardless of what form they take, stablecoins are, at this stage and in the majority of cases, denominated in dollars and have been developed outside Europe. Their widescale use within Europe would therefore pose a dual challenge, for our strategic autonomy and for our monetary stability; indeed this is one of the reasons why the Eurosystem has launched an investigation phase on a retail digital euro.
Expectations about house prices, which had started to lose momentum in 2006, changed and prices began to fall, in a much more unfavourable macroeconomic setting and with financial institutions much more cautious about extending credit given the rise in bad debts and provisions, and the tightening of funding conditions. In view of these problems, the Government and the Bank of Spain began to take decisive measures to tackle this “classic” crisis based on credit to the real estate market and to the abrupt change in cycle, as well as to the changes in the markets. Firstly, to address the uncertainty on funding markets, a programme was set up that would allow banks to issue debt with the backing of the State and the ECB started to inject liquidity allowing full allotment. Secondly, the Fund for the Orderly Restructuring of the Banking Sector (FROB) was created in 2009. With the FROB we anticipated the need to equip  BIS central bankers’ speeches  1  ourselves with an instrument to carry out a far-reaching restructuring of the savings bank sector. The scale of the savings bank restructuring process has been huge. Of the 45 previously existing savings banks, only 17 remain. The aims of the process were very clear. First, to take advantage of the concentration processes to restructure assets and correct the excessive fragmentation of this sector. Second, to reduce the excess capacity in the savings bank sector.

The process of concentration and restructuring was making good progress as from last summer, when the second episode of mistrust – the Irish crisis – struck around November 2010. The public debt markets tightened immediately and there was a resumption of mistrust about the Spanish banking sector, doubts over the quality of its assets, the speed of savings bank restructuring and the possible need for further public funds to redress bank balance sheets, which in turn further strained the risk premium of the Kingdom of Spain. Although there are important differences between Spain and Ireland in several dimensions, the market perception of potential similarities between both economies, however distorted this is, impacted us. In anticipation of further problems, the government and the Bank of Spain, in its capacity as banking supervisor, understood the necessity to speed up the strategy we had pursued to tackle the difficulties experienced by part of the Spanish banking system. We insisted all the more on the need for institutions to be fully transparent concerning potentially problem lending. Early this year we obliged all savings banks to disclose their exposure to real estate developers, their non-performing loans, and the portion of normal exposures under surveillance, their coverage and information as to what collateral is backing such lending (land, housing under development, completed housing, etc.). They were also asked to publish information on foreclosures, by collateral class, and on exposure to households via house mortgages, along with the attendant loan-to-value ratios, although this is not an area for concern.
And, to the extent the Bank’s actions were influential, the financing costs of high-emissions firms should rise, sending a powerful wakeup call. But indiscriminate ‘portfolio decarbonisation’ of this kind cannot be the best strategy for investors like the Bank seeking to incentivise economy-wide transition to net zero, for two key reasons:  15  MPC Remit statement and letter and FPC Remit letter | Bank of England 7  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  7    First, the high-emissions firms whose bonds we would be selling are the ones we most need to be at the vanguard of emissions reduction. But selling their bonds doesn’t destroy them as assets, it simply transfers them to other investors. And if investors seeking to incentivise transition are all decarbonising, those left holding the bonds are by definition going to be those with a weaker commitment to net zero;    Second, simply selling anything with a high carbon footprint penalises those with strong and credible emissions reductions plans just as much as it does those with no such plans. The net effect therefore is likely to be to reduce, not increase, economy-wide incentives to reach net zero.16 And our end state portfolio, consisting exclusively of firms with low and stable emissions, would by definition play little material role in driving future emissions reduction. I draw two conclusions from this. First, engagement beats disengagement.

Caleb M Fundanga: Bank of Zambia’s Information Dissemination Programme Speech by Dr Caleb M Fundanga, Governor of the Bank of Zambia, on the launch of the Bank of Zambia Information Dissemination Programme, Lusaka, 28 May 2007. *  *  *  Governor, kindly give brief introductory remarks On behalf of the Bank of Zambia Board, management and staff, and indeed on my own behalf, I wish to sincerely thank the Zambia National Broadcasting Corporation (ZNBC) for this opportunity to launch the Bank of Zambia Information Dissemination Programme. This programme is part of our comprehensive strategy to inform the general public and all our stakeholders on the role of Bank of Zambia in the economy. What is the primary role of the Bank of Zambia? Just to remind the listeners, the Bank of Zambia’s primary role is to formulate and implement monetary and supervisory policies that will ensure price and financial system stability. Our vision, in this regard, is to become a World Class central bank. What is your general assessment of the recent performance of the Zambian economy? In the past few years, the Zambian economy has performed relatively well, recording positive real Gross Domestic Product (GDP) growth, with inflation and interest rates coming down. Specifically, what have been the developments in output? During the period 2001-2005, growth in real GDP averaged 5.0% per annum. More recently, in 2006, it is estimated that the economy grew by close to 6%, marking the eighth consecutive year of positive real growth in output.
Chart 19: ROC curves for individual and combined regulatory tools (96 bank sample with LTD)  Hit rate  1 0.8 0.6 0.4 0.2 0 0  0.2  LR  0.4 0.6 False alarm rate RWCR  LTD  0.8  1  LR + RWCR + LTD  Sources: Buckmann, M., Kapadia, S., Kothiyal, A. and Bank calculations. 50  All speeches are available online at www.bankofengland.co.uk/speeches  50  Table 5: Current international macroprudential tools (taken from Grace, Hallissey and Woods (2015))  Country Poland  Instrument used Series of measures to limit FX-lending incl. higher DSTI ratios for FX-loans, higher risk weights for FX-loans. Borrowers can only borrow same currency as income (Jan 14). 80% LTV cap with mandatory mortgage insurance, capped 25 year loan term, maximum total debt service ratio  Canada  of 44%. Time varying. Canada has taken four macroprudential policy measures since 2008 to tighten to these requirements. New Zealand Sweden  UK Australia Norway  Proportionate LTV cap at 80% (2013), temporary restriction. Core funding ratio of 75% in 2010. 85% LTV cap (2010). Higher capital for mortgages (2013). 1% CCB on domestic exposures (2015). 3% SRB and 2% Pillar 2 for 4 systemic banks (2015) Proportionate LTI cap at 4.5 times. 0.5% counter-cyclical capital buffer from June 2017, with expectation of increasing to 1%. Increase in risk weights for self-verified mortgages and non-prime home loans in 2004. LTV cap of 90% (Mar 2010), reduced to 85% (Dec 2011). Countercyclical capital buffer of 1% from June 2015.

•  Any short-term international capital flows that occur must be carefully examined to determine their direction and nature. In addition, the ratio of usable external reserves to short-term debt must be kept at reasonable and internationally accepted levels. •  Weak banking systems have been the most important contributors to past crises. A sound and transparent banking system is an absolute requirement for avoiding future crises. Risk-taking strategies should be appropriate to a market system. Off-balance-sheet items and cross-border lending should be under tight discipline. An independent supervisory authority is the best guarantee of efficient, sound, and effective banking supervision. BIS Review 50/1998  -3-  •  Last but not least, the pursuit of sound macroeconomic policies in a low-inflation environment is an essential precondition for building public and market confidence. Confidence also requires that both public and private sector institutions be guided by strong, high quality governance and accepted ethical rules.
The fact that the financial system has been comparatively stable in the present situation has a variety of explanations. One is more highly developed methods for risk management. Another is that the sophisticated markets for derivatives have made it possible to spread risks more efficiently to those who are better equipped to carry them. A third is that banks, financial institutions, legislators and supervisors have drawn important lessons from the periods of turbulence in the 1990s. A fourth, more direct explanation is that the highly inflated share values have not been used to any sizeable extent as collateral for bank loans. The interim reports from Swedish banks have also confirmed that the Swedish financial system is developing in a stable manner with good profitability. The major stock market fall around the world has, however, drawn attention to the life assurance companies and the diminishing value of their share portfolios. It has been asked how pensions are affected, whether life assurance companies can encounter problems with solvency and whether this can have repercussions in the stock market in that these companies are forced to sell shares. A further question is whether Swedish banks that own life assurance companies can be hit by developments. These matters are considered in the Inflation Report we are publishing today. Our overall conclusion is that the problems for life assurance companies are unlikely to be seriously harmful for the Swedish economy.

But even excluding those price increases, inflation had moved up on account of, for example, a growing tendency for wage costs to rise too rapidly. With a quick global economic recovery, there was a risk of the Swedish economy becoming excessively strained too soon in the upward phase, so that inflation would start rising again. During the summer, however, the perspective has changed and it looks as though the recovery in the world economy has recently slowed. Probable explanations for this are the widespread financial turbulence and the concern about the mounting security policy risks. Most of the evidence therefore points at present to the international economic upturn being slower and more protracted. The Swedish economy, which, as I said, has coped fairly well to date, cannot of course ultimately remain immune to developments in the rest of the world. Pronounced stock market fall Thus, the developments in financial markets have heightened the uncertainty about the future paths of consumption and investment, both in the rest of the world and in Sweden. If the international stock  BIS Review 59/2002  1  exchanges were to go on falling or the effects of the decline to date turn out to be more extensive, the scenario for the Swedish economy could become considerably less favourable. A closer look at stock markets shows that since the high in spring 2000 there has been a major fall around the world.
Both eyebrows were raised. This was bad news. In central bank circles at the time, the double eyebrows was career-defining for all of the wrong reasons. Most of my subsequent 25-years has been managing that decline as gracefully as possible. Fifteen year later, I returned to pre-MPC on the other side of the table. There was now no cigarette smoke, but otherwise the format of structured presentations remained the same. Indeed, most of the main MPC processes remain much the same as at inception. That, I would say, is a sign of success. While MPC procedures have evolved for the better, and the standard of presentations I now receive is far-higher than those I used to give, the foundations of the MPC have remained essentially unmoved. It is no coincidence that durability in monetary policy processes has been accompanied by improved macro-economic outcomes. Since 1992, inflation has averaged 2% - exactly in line with target (to one decimal place) and 6 percentage points lower than in the preceding 25 years. The volatility of output has fallen by around half over the same period.6 Contrary to everyone’s expectations, inflation-targeting has lasted and delivered a twin-win, with greater stability on both the nominal and real sides of the economy.7 Given the UK’s previously chequered monetary history, this truly is a transformation. Of course, there is a question about how much of this improved performance reflects good luck rather than good monetary management.

This year’s theme, “Promoting Financial Inclusiveness”, is also very topical for us in Zambia. Only two months ago, Zambia hosted the Smart Partnership Dialogue that brought together  BIS Review 118/2008  1  over 500 delegates from different parts of the world (including current and former Heads of State and Government) to discuss several developmental issues under the theme “realisation of national visions”. The conference had a session focusing on financial inclusion. Chairperson, in recognition of the importance of the financial sector towards national development, the Zambian Government formulated a five year Financial Sector Development Plan (FSDP). The FSDP is aimed at addressing various weaknesses in the Zambian financial system, among them being the low financial intermediation and limited access to finance and financial services. As a matter of fact, in recognition of the key role that financial inclusion plays in the development of the financial sector, the Bank of Zambia has in its strategic plan for 20082011 adopted financial inclusion as one of the strategic objectives. In order to determine the existing gaps in the provision of financial services in the Zambian economy, a market knowledge study called the “Finscope Demand – Side Survey” was conducted in 2005 to review the inclusiveness of the Zambian financial system under the auspices of the FSDP.