samchain/econo-pairs-v1 huggingface dataset:
They were nurtured by a consistent macro policy framework built and maintained in the last two decades. The challenge for central banks The Chilean experience illustrates that for forward inflation targeting to work, central banks need to develop the right set of tools—data sources, models and judgment—to formulate and communicate a policy path that is coherent with such convergence. As the local and world economy evolve, the relevance of all these tools needs to be kept constantly in check. Over time, economies are subject to major changes, especially in the case of emerging economies, and this may alter well-established relationships. The current focus in the relevance of the Phillips curve and price dynamics is a good example of this. But the extent to which structural changes involve a permanent change in the responsiveness of prices to output gaps or one-off changes delaying inflationary responses for some time is equally relevant, especially for policymaking. This also applies to structural changes that are especially relevant for emerging countries, like demographic transition or the lengthening of international value chains. 3  Central Bank of Chile October 2018  The quantity and quality of data available to make monetary policy decisions may also change substantially over time. The traditional dominance of regular economic surveys is increasingly challenged by growing administrative datasets and big data. In this regard one should never forget that data is only an instrument to capture true economic behavior.

Debt service has not risen by the same proportion, due to rising  BIS Review 41/2007  1  incomes and easier credit terms, and arrears are at a low. However, some borrowers have stretched their capacity to the limit and the most indebted group has seen its debt grow substantially as a proportion of income and assets in recent years. Conditions will not need to change much to cause them serious difficulties. The bulk of household debt is in the form of CPI-indexed mortgage loans, making low inflation critical. Household debt in foreign currency was very low, but has been increasing. High levels of foreign currency-denominated debt could prove questionable for households with no income in foreign currency. Since house prices are currently buoyant, they are likely to rise by less than general inflation or even fall in nominal terms. Household equity could shrink under such conditions. Business profitability appears to have been strong in 2006, in spite of a massive increase in financial expenses from exchange rate losses on foreign borrowing, higher interest expenses and a substantial increase in interest-bearing debt. Debt of listed companies grew as a ratio of equity and the same is probably true of other businesses. Higher debt levels leave them more vulnerable to a contraction in the economy. Equity prices have soared in Iceland in recent years. One explanation for the increase may be that Icelandic companies were undervalued by the markets, for example by international comparison, and another that bold investment ventures have driven up their value.
8  BIS central bankers’ speeches  Chart 7: Euro-area GDP growth picking up a little; US growth moderating 6 US  Euro area  4  0 -2  Per cent  2  -4 -6  Jun 15  Jan 15  Aug 14  Mar 14  Oct 13  May 13  Dec 12  Jul 12  Feb 12  Sep 11  Apr 11  Nov 10  Jun 10  Jan 10  Aug 09  Mar 09  Oct 08  May 08  Dec 07  Jul 07  Feb 07  Sep 06  -8  Source: Bank calculations. The same cannot be said of the global economy, which has slowed even relative to the MPC’s modest expectations in the summer. There are some positives. The broadening of euro-area growth has offset the effects of a moderation in US growth on UK-weighted demand (Chart 7). In addition, to the extent that renewed sharp declines in oil prices are predominantly supply driven, they should support growth, though sustained spillovers to tightening financial conditions would mean to a lesser degree than usual. Since August, downside risks to growth in emerging market economies have begun to crystallise. This has triggered sharp drops in risky asset prices, rises in risk premia, and falls in the expected path for policy rates across advanced economies, including the UK.

Efforts are now underway in a variety of contexts to try to secure better coordination in these various initiatives, but it has to be admitted that in an ideal world they would not be quite so clustered together. That said, I would be the first to acknowledge that Basel II requires heavy investment in risk management systems and IT infrastructure, as well as radical changes in the risk management culture at some banks. However, this is a healthy development. I suspect that banks would have in any case needed to make most of the so-called "Basel II-related" investment if they wanted to stay at the top of their game. By agreeing to accept banks' internal risk management systems as the basis for the calculation of regulatory capital requirements, the Basel Committee has provided a powerful incentive for banks to upgrade their risk management systems. But this is only what they otherwise would have needed to do to be able to compete with the best. There are, however, some quite specific challenges for Asian banks in using the more advanced approaches under Basel II. One of the most important is the availability of data. Historically, many Asian banks have not collected the data needed to develop the type of models needed for IRB purposes. Some are only now starting to do so, and it will be several years before they have sufficiently rich data that it can begin to inform their credit risk management processes.
If one thing is clear from that brief and incomplete survey, it is that, sadly, the repair of the credit system will take time. Stopping this happening again: the Financial Policy Committee So will the even broader task of putting in place better “rules of the game” for the financial system. For all the measures in train internationally on banks’ capital, resolution regimes, over-the-counter derivative markets, central counterparties, shadow banking and so on, they will I fear eventually be found wanting. Conditions change. One generation’s reforms are eventually overtaken by the evolution of the structure of the financial system or by temporary bursts of misplaced exuberance. At its simplest, that is why the government has established the Bank of England’s new Financial Policy Committee – to ensure that the moment when the financial system’s resilience is critically impaired does not get overlooked; that it is anticipated and appropriate action is taken. A standing body, meeting regularly, transparently, and backed by powers to take decisions on regulatory measures – the FPC is the body charged with being on the case. It won’t be perfect, but it can be much better than the pre-crisis regulatory regime. The initiative to create the FPC is necessary, because both macroeconomic policymakers and financial regulators have had to learn some tough lessons. On the one hand, we all need to be attentive to the effects that easy monetary policy globally can have on risk-taking behaviour.

Better, sometimes, to try to address a bubble at its source. This could be unpopular, but such is the job of taking away the punchbowl. We will explain our decisions. I cannot emphasise enough that the FPC will not indulge in attempts to micromanage the banking system or the allocation of credit. Nor will we be excessively activist, trying to fine-tune credit policy. This is about stability, which is an absolute precondition for steady improvements in economic activity and employment. The goal is to make the financial system resilient, to contain destructive “busts”, and to do so without impairing the contribution that the financial sector makes to the economy’s medium-term growth. Can the FPC help right now? The benefits of the new regime for stability will take time to come through. That might leave you asking what the FPC could do to help right now. Indeed, with credit conditions so tight, it has been asked whether the FPC should be easing regulatory constraints on banks. The aim would be to encourage them to loosen lending conditions, helping recovery. And, it is suggested, that would be consistent with the FPC’s remit because it could reduce threats to stability from the risk of borrowers defaulting. At its September 2011 meeting, the FPC concluded that such a step would in fact be counterproductive – endangering stability and jeopardising recovery. Given the precarious starting position of UK banks when the crisis broke, their capital adequacy is still being rebuilt. And banks are still operating in an extraordinarily risky international environment.
The state, as the ultimate backstop, was then forced to step in to bail out a number of banks, not just to ensure the means of providing credit in the economy but also, crucially, to back up the claims that these banks had issued as money to a large part of the population. Banks responsible for close to half of the UK’s personal current accounts6, holding some £ were rescued by the state.7  There has as a result been a major programme to tighten the prudential controls on deposit taking banks and to increase the size of the deposit guarantee that is paid for by the industry, which has reinforced further the reliability of commercial bank money and shifted the burden of backstopping that reliability from the state towards the private sector. Looking to the future  The shift towards transacting in private commercial bank money has accelerated greatly in recent years, driven by technology and by changes in the way we live. It is not possible to transact in central bank money over the internet or by using one’s smartphone. As a result, cash use is declining fast in the UK. In 2008,  4  The 1844 Bank Charter Act gave the Bank of England a monopoly on the issuance of Bank notes in England and Wales. It followed a number of failures of ‘country banks’, who had issued their own notes.

From the Bank of  BIS Review 50/2009  1  Zambia’s point of view, the objective of financial stability remains key in all our activities. Financial stability depends to a large extent on the existence of robust risk management systems of financial institutions. It is therefore, important that risk management systems should keep pace with financial innovation. I have no doubt that the banking sector will rise to this challenge. Once again, thank you for the opportunity to witness this important event. 2  BIS Review 50/2009
Calculations by the Riksbank and other central banks suggest that a reasonable time perspective when formulating monetary policy is the coming twelve to twenty-four months. Our simple rule of action is accordingly that if inflation one to two years ahead looks like being above the target, then normally the repo rate should be raised and  2  BIS Review 24/2001  vice versa. But we also attach some importance to our policy’s effects before as well as after this time horizon. In view of the uncertainty in this respect, some differences of opinion — in our Executive Board as well as in the public debate — as to what policy’s time perspective should be are only natural. If it is feared that inflation will, for instance, shoot up beyond the target horizon, then there may be grounds for acting particularly early. In my opinion, however, the clear target horizon has stood us in good stead in recent years. It has made policy easier to understand and foresee. It has also been beneficial internally by forcing us to be specific and have good arguments for departing from the rule of action. There have, moreover, been a number of occasions when our ideas about prospects in the longer run were faulted by new developments. One example is when rising activity and inflation in 1997–98 were broken by the Asian crisis and the associated fall in international prices.

Basically, there is now a broad consensus that low inflation is good for economic development and accordingly contributes to gains in prosperity. While it is true that in certain situations the economy can be stimulated by means of low interest rates, this works only if there are unutilised resources. Taken too far, it is liable to result in bottlenecks that push prices and wages up. There is then a risk of households and firms gradually starting to act in the belief that inflation will continue to be high — inflation expectations become firmly fixed on this. In other words, in the long run monetary policy is not capable of influencing growth. What does underlie a country’s economic development and thereby its prosperity are such factors as the labour force, a willingness to invest and technical progress. The best the Riksbank can do is promote an economic development that is more stable, with smaller fluctuations around the long-term trend. It therefore seems to me that the economic debate is somewhat lopsided. The long-term issues you work on in the Riksdag (Sweden’s parliament) ought to attract more attention. The Riksbank’s doings get more than their fair share. Convincing people in Sweden about the value of low inflation really should not be difficult. After all, what did we get out of letting inflation take off in the 1970s and ’80s? Recurrent devaluation cycles and a level of prosperity today that is considerably below that in many other countries.
The proposed Digital Operational Resilience Act (DORA) – on which a provisional agreement was reached on 10 May under the French presidency before its formal adoption by co-legislators in the near future – will increase the operational resilience of the financial sector. In addition, specific assessments have been conducted in conjunction with banks and the ECB to prepare actively for the eventuality that cyber crisis management processes might need to be activated. At the national level, the Paris Resilience Group, chaired by the Banque de France, has been closely monitoring the situation of the main financial players and market infrastructures since the start of the conflict. ** Thank you for your attention, and I shall pass the floor now to Jean-Paul Faugère, Vice-Chairman of the ACPR, who will go into more detail on the insurance sector, and then Alain Ménéménis, who will present the activities of the Sanctions Committee that he chairs. References i  Banque de France, Suivi mensuel des défaillances, April 2022. OPINION OF THE EUROPEAN CENTRAL BANK of 24 March 2022 on a proposal for amendments to Regulation (EU) No 575/2013 as regards requirements for credit risk, credit valuation adjustment risk, operational risk, market risk and the output floor. iii F. Villeroy de Galhau, Europe in motion for climate transition: snapshot, video and scenario of risks, speech, London, March 2022. ii

The vetting should ensure that divergences from the fiscal rules can be identified and corrected at a very early stage. Moreover, earlier this year, 25 out of 27 EU Member States signed the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, more generally known as the Fiscal Compact. The Compact further improves the EMU framework by introducing a cyclically adjusted balanced-budget rule which the participating countries need to transpose into national legislation. Finally, a temporary crisis resolution mechanism was created, the European Financial Stability Facility (EFSF), which will remain active until July 2013 despite being replaced by a permanent organisation this autumn, the European Stability Mechanism (ESM). With a combined maximum firepower of € billion, these two mechanisms will help to build effective firewalls to stem contagion from the crisis. What has been achieved so far is impressive. Prior to the crisis, very few would have expected that Member States would reach a consensus on such fundamental changes in the way EMU works. But these changes are not enough. EMU now needs a longer-term vision to confront its challenges. BIS central bankers’ speeches  5  3.3. The way ahead – deeper integration  In order to restore confidence, policy-makers in the euro area need to resolutely push ahead with fiscal consolidation, structural reforms to enhance competitiveness and European institution-building. Recently, the President of the European Council, in close cooperation with the Presidents of the Eurogroup, the European Commission and the European Central Bank, put forward proposals for a genuine EMU.
On the other hand, and as has been made apparent by the financial crisis, the world lent to the US, to a large extent to finance overvalued houses that were sold to families that could not afford them. Now we see confirmation that such an expansion was not a healthy one. Real-estate boom and financial crisis For several years, housing prices spiraled up in a number of developed economies (figure 3). There were lengthy debates whether a bubble was forming, that is, if prices were beyond what could be warranted by fundamentals (housing services provided by homes). For example, the World Economic Outlook of September 2004 (Terrones, 2004), analyzed what could happen if interest rates increased. This was three years before the collapse, which occurred within the context of a mild increase in US interest rates. First were subprime mortgages and banking losses, then the monoliners and Bear Sterns followed suit, as did mortgage credit providers (Freddie Mac and Fannie Mae), insurance companies, other  1  This is Bernanke (2005)’s well-known saving glut, although it seems to apply mainly to China, because the fall in investment dominated in the rest of Asia (Laxton and Milesi-Ferretti, 2005). 2  See De Gregorio (2007). The depreciation would be larger if it did not consider that, as the US liabilities are in dollars, the depreciation reduces its debt (valuation effect; see, for example, Gorurinchas and Rey, 2007). Calculations are similar to those in Obstfeld and Rogoff (2007). 2  BIS Review 124/2008  investment banks, and so on.

RTGS Renewal Crucially, to deliver these priorities, and to facilitate innovation, we need strong, resilient foundations. That is why the Bank is undertaking an ambitious and exciting Programme to renew RTGS. For those not familiar with RTGS, it is a critical piece of national infrastructure and the backbone of UK payments. Our vision is to develop an RTGS service which is fit for the future, increasing resilience and access, and offering wider interoperability, improved user functionality and strengthened end-to-end risk management of the UK’s High-Value Payment System. This is a challenging but necessary Programme which is a key priority not just for the Bank but for the UK payments industry as a whole. The way payments are made has changed dramatically in recent years, reflecting changes in the demands of households and companies, changes in technology, and an evolving regulatory landscape. We need to respond to this and, in collaboration with the industry, develop the next generation of RTGS that delivers a world-leading payments service. Innovation can only thrive when firms and end users are confident they are operating in a safe and secure environment. So at the heart of the Programme is the desire to make the new service materially stronger and more resilient to an increasingly complex and sophisticated environment. Our current system has, and meets, targets of 99.95% availability. This must continue regardless of the shocks, whether traditional BCP or cyber.
For instance, maximum penalties under general offence that normally applies for non-compliances with requirements under Part IV of the AMLATFA (that is on reporting obligations by the reporting institutions) have been increased from RM250,000 to RM1 million. Cooperation and collaboration among regulators, supervisors, law enforcement authorities and reporting institutions are vital for an AML/CFT regime to be effective Needless to say, preventing and deterring money laundering and terrorism financing is only possible if there is a working partnership between all the law enforcement authorities, regulators, supervisors and the private sector. Without that, our efforts will be futile. Hence, for an AML/CFT regime to be sound, cooperation and collaboration is not an option but a vital requirement. Having said that, it is important for me to stress that having a comprehensive AML/CFT framework alone is not enough. What is more important is how effective are our implementation and its impact in reducing money laundering and criminal activities. At the end of the day, the test is on how good we are in achieving the ultimate objective of an effective AML/CFT regime, that is to ensure that the financial system and the broader economy are protected from threats of money laundering and the financing of terrorism, thereby strengthening financial sector integrity that contributes to the safety and security of the country. Before I end my speech, let me recap the following key points: i. Crimes and money laundering could pose significant threat to our financial system, economy and society;  ii.

Throughout my whole first term of office I followed these principles, and today I would like again to state that my second term of office will be governed by the same principles. I have permitted no political interference in the activities of the Bank, which is a fundamental principle underlying the Law on the BNB and the Treaty on the accession of Bulgaria to the EU. I will not allow any political meddling in the work of the BNB in my next term of office. I highly appreciate the first words of the newly elected Speaker of the 41st National Assembly at our first meeting: „Mr. Iskrov, we are well aware of the Law on the BNB, of BNB’s key role for the financial stability in the country, and in spite of our disagreement with the early timing of your reelection, no one questions the independence of the central bank. This is a question of principle, on which there is no argument”. These were Ms. Tsacheva’s first words, and I am really grateful to her for them. BIS Review 104/2009  1  Independence should certainly not be an excuse for idleness or work not done. I would emphasise once again, just as I have so far worked with two Bulgarian Governments and all legitimate political parties and their representatives regardless of the political spectrum they belong to, so they too can count on BNB’s expert advice and support in the future.