samchain/econo-pairs-v1 huggingface dataset:
You must aspire to grow from the informal to the formal and from SMEs to large corporations. You must not just wait for the targeted funds (which have a role to play) also seek to access other relevant products in the market. Seek to be informed. Make yourselves visible. Message for banks and other financial service providers •  Explore the women’s market segment as a viable and profitable segment;  •  Create innovate products that respond to the needs and wants of the women’s market segment;  •  Find new ways of mitigating risk;  •  Promote greater workplace diversity and promote more women into senior management positions; and  •  Assist women to be more financially literate. On our part, Bank of Zambia will continue to create an enabling environment through policies, legislation and regulation that facilitate greater financial inclusion of women. Chairperson, once again, allow me to applaud the sponsors, led by ZAFWIB, for successfully organizing this important event on the Month of the Woman Entrepreneur for the 8th consecutive year as well as for holding this year’s annual conference. As Bank of  4  BIS central bankers’ speeches  Zambia, we are delighted to play a positive role as it is a unique opportunity to build relationships amongst various stakeholders.

Although its fundamentals suggest that it should start to weaken in the short term, it cannot be ruled out that it will continue to be stronger than expected, particularly because of the financing capacity provided by remaining liquidity and the decrease in the level of household debt during 2021. Such a scenario may also emerge if strong global cost pressures increase. This would exacerbate the inflationary problem, triggering a stronger monetary policy reaction by various central banks in the short term, but increasing the likelihood of a global recession in the medium term. The lower part of the MPR corridor accounts for scenarios where inflationary pressures dissipate sooner than expected. It is possible that the contraction in activity and demand will be stronger, either due to weaker investment or faster adjustment in private consumption. Nor can it be ruled out that the external scenario will see a reduction in global cost pressures and inflation easing in most economies, Chile included (figure 13). 6  There are also scenarios where the economy would face more significant changes, which would place growth outside the range of the central scenario projections. One such event could occur if the unfolding Russian invasion of Ukraine proves much more damaging for the world economy. It could also occur if global financial conditions worsen even more significantly, for example, in a scenario where inflation leads to a much larger than expected tightening of monetary policy in the main economies.
However, there would not be any explicit exchange rate target; instead, the objective would be to mitigate excess volatility due to temporary capital flows and to smooth out short-term fluctuations in the exchange rate. The institutional framework would be the same as it is now, based on an independent monetary policy committee that takes decisions on the application of the Bank’s policy instruments, releases statements explaining its decisions, and gives account of its policies to Parliament and the nation through other channels. This system is broadly in line with best practice abroad and has worked well. Under normal conditions, interest rates on Central Bank transactions with financial institutions would continue to be the Bank’s main monetary policy instrument. Foreign exchange market intervention is also a monetary policy instrument, as I have mentioned, and other instruments can also be used, such as reserve requirements and direct intervention in the bond market. Their efficacy is generally less certain than with interest rates, however, and as a result they are used less often. The MPC would be entrusted with a capital flow management tool or tools to affect carry trade, of the type I mentioned a moment ago.

Given the interconnectedness of financial activities and systems, an effective cyber defence strategy requires close co-operation and sharing of cyber intelligence. A good model for such co-operation among banks in the US is the Financial Services – Information Sharing and Analysis Centre, or FS-ISAC. 4/9  BIS central bankers' speeches  It is the global financial industry’s go-to resource for cyber threat intelligence analysis and sharing. I am pleased to announce that FS-ISAC will set up in Singapore the industry body’s only cyber intelligence centre in the Asia-Pacific region. This centre will help our financial industry better monitor cyber threats and provide better intelligence support. It will also help deepen the capabilities of the cyber security community here. INFRASTRUCTURE for an Innovation Ecosystem The second key thrust of Singapore’s FinTech agenda is to facilitate the infrastructure necessary for an innovation ecosystem and the adoption of new technologies. We need an ecosystem where people can connect and collaborate, and ideas can flow and multiply. We need common standards and inter-operable systems so that innovations can be scaled up quickly and their potential benefits fully realised. W want a hundred flowers of innovation to bloom but also want to ensure they make a garden. To facilitate such an ecosystem, MAS started with itself: Last year, we formed within MAS a new FinTech & Innovation Group under a Chief FinTech Officer – probably the first regulator in the world to do so.
In this presentation I will cover various dimensions of the sovereign debt problem, and conclude with some observations that are of particular relevance to Malta. The effectiveness of monetary policy In the wake of risk re-pricing by the markets, financial institutions have tended to unwind their holdings of public and private sector debt. This can be seen in Chart 1, which shows the resulting reduction in the leverage of Euro area financial institutions. It is true that deleveraging reduces financial imbalances and corrects past excesses in the banks’ accumulation of assets. However, the process also slows down the return to normal macroeconomic growth. The assets-to-equity ratio in the euro area (shown as the blue line in Chart 1) stood at 14.9 in March 2012, almost three percentage points below its peak of 18 in 2008. (By way of comparison, the same ratio for Malta’s domestic banks has been lower and more stable, as can be seen from the red line. It stood at 10.1 in March, almost unchanged from 10.2 in 2008. I will come back to the Maltese situation later.) The European Central Bank (ECB) has sought to avert a credit crunch and a bank funding crisis via a number of measures, including the two 3-year Longer Term Refinancing Operations (LTRO) launched last December and February. These have been provided on a full allotment basis and at the average Marginal Refinancing Operations (MRO) rate over the three year term.

2  BIS central bankers’ speeches  The sharp rise in the monetary base reflects the scale of the injected liquidity. On the other hand, the banks’ tendency to hold on to their liquidity has resulted in a growth rate in bank loans (and investments) that is considerably slower than that of the monetary base. The result is that the growth rates in bank loans (represented by the green line in the chart) as well as in M3 have been substantially slower than that in the monetary base. A return to a fully functioning monetary transmission process will increase the volume of lending that would support the resumption of economic growth. This, however, remains a challenging task while tensions continue in the sovereign debt markets. Importance of a prudent fiscal policy The creation of the euro reduced the cost of borrowing, as credit spreads narrowed and the exchange rate risk on intra-euro area borrowing was eliminated.1 The reduced cost of financing public as well as private debt led to higher government debt and private sector leverage. With the benefit of hindsight, it is clear that the first seven years of the euro would have been an ideal time for governments to engage in fiscal consolidation. Instead imbalances and vulnerabilities were further aggravated. 2 In some Member States, institutional characteristics also played a major role.
In short, it looks as if events in financial markets are beginning to affect the terms offered to retail borrowers. This should act as a brake on consumer spending and investment. But the size of this effect is highly uncertain, partly because so far it seems to be focussed on certain groups. Much may depend on whether recent developments shake consumers’ confidence in future income growth and employment – and so far that does not seem to have happened. What about possible longer term effects on the price and availability of credit? Over the past three years, competition and financial innovation have put steady downward pressure on the rates at which banks have been prepared to lend, at any given level of Bank Rate. Between 2003 and the beginning of this year, 2-year-fixed mortgage rates fell by around 50bps relative to the wholesale interest rates they are usually priced off. This is one reason why credit has gone on rising so strongly, despite increases in official interest rates. At this stage, we can only speculate about what will happen next. My guess is that over the next 3-5 years, we will see a sustained – though not necessarily complete – reversal in these trends, as banks re-appraise the risks around certain business models and complex financial instruments. This would increase the cost of credit to final borrowers, for any given policy rate.

China alone has been responsible for a third of the growth in global oil demand over the past four years. Meanwhile supply has struggled to keep pace – partly because of policy decisions by oil producing economies, but partly because it takes quite a long time for investment in extra production capacity to come on stream. What are the risks that oil prices will stay around their current level for a time – and maybe go even higher? It’s hard to say – but the market is not discounting the possibility of even higher oil prices. Options prices point to an increase in near-term uncertainty – and an increasing concern about further large price rises. 3  Using US consumer expenditure deflator to adjust for inflation. BIS Review 136/2007  3  There are risks on the downside too: the last time the world economy slowed significantly, oil prices slumped. Could a slowdown in the world economy cause oil prices to collapse again? Projections for the growth in oil demand over 2007 and 2008 have been revised downwards a little recently. But much may depend on the pattern of any slowdown – and in particular whether China continues to expand strongly even as the US economy slows. What’s the likely impact of higher oil prices on the UK economy? Twenty or thirty years ago, sharp increases in energy prices coincided with much higher inflation and much lower growth.
In other words, most of the deviation in CPI inflation from the inflation target is explained by interest rates falling more than they have risen during the period. When this effect is discounted, there remains a deviation of two tenths of a percentage point from the inflation target. Although this deviation should not be ignored, it can hardly be called a major failure. From a broader historical perspective and with a realistic attitude to the precision of monetary policy, I think that one can stick out one's neck and say that an average CPIF inflation rate of 1.8 per cent is a pass rate, perhaps even a pass with distinction. Calculations of costs in terms of number of unemployed must be taken with a rather large pinch of salt This leads me in to the discussion on the costs to the real economy of inflation on average undershooting the target. One calculation has been presented by my former Executive Board colleague, Lars E.O. Svensson, who arrived at an average cost corresponding to 38,000 persons unnecessarily unemployed.3 Another figure regarding the costs of the monetary policy conducted that has attracted some attention is that 60,000 fewer people would have  2  Support for this use of underlying inflation measures, combined with an inflation target defined in terms of the CPI, was expressed in the assessment of the Riksbank's monetary policy 2005-2010 carried out by professors Goodhart and Rochet in 2011. 3  Svensson (2013a,b).

Different views on macroprudential tasks Judging by the consultation responses to the Financial Crisis Committee's partial report, opinions are relatively divided as to what role macroprudential policy should play with regard to the development the Riksbank has tried to manage in recent years. There is a possibility that excessive debt could result in a conspicuously weak macroeconomic development without any threat to the stability of the banking system. Some of those consulted consider that macroprudential policy does not have a role to play in reducing these types of risk, given that they do not present a clear threat to the stability of the banking system.21 With this type of solution monetary policy would not obtain the support from macroprudential policy needed to be relieved of "leaning against the wind". Indeed, my impression is that macroprudential policy is often assumed to focus on the stability of the banking system. This means that risks in the credit and housing markets that do not clearly threaten the banking system, but could nevertheless lead to major macroeconomic problems, would risk being overlooked. There is a lot that remains to be investigated and decided on before a practical framework for macroprudential policy is in place. My impression is that, compared with many other countries, we have if anything fallen a little behind.
In addition, the Federal Reserve developed a term deposit facility to drain banks’ reserve balances.14 This playbook of draining reserves back to reserve scarcity to support the transmission of interest on reserves into market rates is standard among central banks. If policymakers had chosen to do so, the Federal Reserve could have made such a term reserve draining approach work to help control money market rates in the United States.15 So, why did the Federal Reserve not follow this approach of large-scale reserve draining? As the balance sheet continued to grow as a result of asset purchase programs, it became apparent that such reserve draining operations would have been very large in comparison to the size of private money markets. As a result, they probably would have had lasting effects on the structure of those markets – for example, by reshaping the structure of term money market activity according to the structure of the Federal Reserve’s operations. These lasting effects could have been especially large if the balance sheet did not run off quickly. For this reason, the Federal Reserve instead pursued offering an overnight investment opportunity that could, with sufficient capacity, intensify competition in money markets and, without necessarily draining reserves, enhance the transmission of IOR into other overnight money market rates. This approach entailed a twist on a traditional Federal Reserve tool, reverse repos: Instead of running quantity-based, term operations aimed at altering reserve levels, the Desk would run interest-rate-based overnight operations aimed directly at influencing market rates.

Despite the increasing non-performing loan portfolio, banks have sufficient capital to address this phenomenon. I would like to elaborate more on this latter point. The performance of lending has become the focus of attention for policy-makers and economic agents. The slower economic growth was followed by sharp deceleration in lending. The reasons are quite understandable: on the one hand, businesses have reduced their demand for loans due to uncertainties relating to the sale of their own products; and on  BIS central bankers’ speeches  1  the other hand, banks have been pursuing a more conservative approach to lending, being uncertain about the success of different business plans. Global theory and practice suggest that the investment and credit cycles progress in line with the performance of aggregate demand. In other words, we will see a stable recovery of lending only when economic growth recovers at a steady pace. However, as we have already stated, we believe that there is room within the Albanian reality for a better performance of lending. Channelling savings into profitable investments and supporting businesses with lending are the reasons for the existence of the banking system. We have been constantly emphasizing this message, and we have taken concrete steps, which have lowered the banking system’s financing cost and provided incentives for lending through an adequate regulatory environment.
They include a successful stabilisation policy, whereby inflation was reined in even though capacity utilisation has been high, as well as an efficient labour market, where unemployment has been lower than for several decades without leading to higher inflation. A number of occasional factors also contributed: the dollar has been strong when this was needed to restrain inflationary impulses; a reduction of employers’ health insurance contributions has helped to hold wage costs down; and so on. Some years ago, the general opinion among economists was that these cyclical factors, together with an efficient labour market, sufficed to explain much of the good performance. Recently, however, this view has been modified. The strong productivity growth, which is unusual so far into a demand-driven upswing, has raised the question of the extent to which the advances in IT may have played a part as well. 1  BIS Review 18/2000  Compared with earlier decades, productivity growth in the United States, as in most other industrialised countries, was weak from 1970 up to the mid-1990s. Yet this was a period when computers with a steadily growing capacity were being introduced on a wide front. As Robert Solow, the Nobel laureate, observed in 1987, “You can see computers everywhere except in the productivity statistics”. In the closing years of the century, however, productivity growth in the United States showed clear signs of climbing back to the levels in the 1950s and 1960s.

While it is true that the contributions to the monetary policy decision-making process that have been made by economic expertise and econometrics can scarcely be overestimated, the fact remains that to some extent monetary policy is still a matter of trial and error. It is some consolation in this context that we have a continuous supply of new information. If our policy happens to be unduly restrictive, for instance, this will show up in weaker inflation and vice versa. The direction of policy can then be adjusted. This is relevant not least with respect to the new economy. It seems unlikely that the mechanisms I talked about earlier would cause economic relationships to change overnight. Presumably it would be more a matter of gradual changes that we can incorporate in the foundation for decisions. Then it is naturally the case that our decisions invariably involve taking some degree of unavoidable chance as the risks associated with alternative strategies are weighed in the balance. The economy’s cyclical position is important here. It is generally agreed at present that economic prospects for the coming years are unusually bright. Most forecasters count on stable growth of between at least 3 and 4% this year and next, followed it seems by the continuation of a favourable trend. In this situation, when resource utilisation is rising rapidly, a transition from low to more normal interest rates can hardly constitute a sizeable threat to activity. That was how the Federal Reserve reasoned, for example, in a similar situation in 1994.
In other words, we aren’t hoping for the best, we’re preparing for the worst in several ways. First, we’re ensuring that our banks are ready for Brexit. In recent years we have subjected major UK banks to severe but plausible stress tests. In our 2017 stress test, UK GDP fell by 4.5%, commercial real estate prices by 40%. UK house prices dropped by a third, Bank Rate increased by 4 percentage points and unemployment rose to 9½%. In addition, there was a major emerging market shock and substantial additional misconduct costs. The FPC found that UK banks would have been able to withstand that stress and still have more than adequate capital to maintain lending to households and businesses (Chart 7). In the FPC’s judgment, our stress test last year also encompassed an appropriately wide range of UK macroeconomic risks and associated losses that could be associated with Brexit. Moreover, we judge that the UK banking system has the capacity to absorb not only the consequences of a “no deal no transition” Brexit, but also the losses that could be associated with intensifying trade tensions, a further sharp tightening of financing conditions for emerging markets, and substantial additional misconduct costs. Second, liquidity is an important part of our contingency planning for Brexit. UK-based banks (and CCPs) currently have around £ billion of borrowing capacity at the Bank through collateral pre-positioned in our facilities. That broadly matches the Bank’s peak lending to the financial system during the crisis, and liquidity positions have improved significantly since then.

Distinguished Ladies and Gentlemen, the contribution of financial services to individual entrepreneurs as well as small and medium sized businesses cannot be over-emphasised. As you are no doubt aware, following the liberalization of the financial sector in the early 1990’s, the financial sector in Zambia has evolved rapidly spurred by increasing competition. Similarly, policies and the legal and regulatory frameworks have been developed to take into account the fast changing liberalised environment. These developments have resulted in a considerable increase in the number of banks and other financial service providers. Therefore, the banking sector has over the last few years, witnessed significant growth in consumer lending. As a matter of fact, on a sectoral basis the “personal loan” category has been the largest recipient of total credit in the recent years and accounted for 22% in November 2009. Small and Medium Enterprises have also significantly benefited from credit expansion. The resultant credit expansion has no doubt brought significant benefits to the economy as resources are increasingly channeled through to the lower end of the market. However, most of the credit extended by banks and microfinance institutions is targeted at individuals in formal employment or already established enterprises. Only an insignificant amount is extended to start-up initiatives or the informal sector. This has been exacerbated by the inability of entrepreneurs to articulate and sell bankable projects through robust business plans.