samchain/econo-pairs-v1 huggingface dataset:
I note from the very elaborate programme for this meeting that you will in the next three days cover a wide spectrum of issues some of which will focus on factors that constrain SMEs access to finance and some of which will focus on what needs to be done to change this situation. The meeting is, therefore, an opportunity for us to face a number of challenges that characterize this sector. These will include revisiting strategies and approaches to SME financing currently in use as much as it will require a review of current institutional arrangements through which finance is directly delivered to SMEs, on one hand, and those which indirectly obstruct or facilitate this flow of resources, on the other. However, I believe that probably the greatest challenge before this assembly is to attempt to narrow the gap between analysis of the problem and the implementation of measures and actions that work. Meetings, workshops, seminars, etc. on SME financing are plenty at national, regional and international levels. Some of you have had the opportunity to attend several of these meetings in the past. Indeed, some of you have become experts at talking about the subject. Barely two weeks ago, the Bank of Zambia held a financial sector forum here in Lusaka at which views of various stakeholders on what needs to be done to address binding constraints to the SME sector were considered. The fact that the discourse on SME financing continues underpins two significant positions.

There are factors which exist outside the financial system and beyond SMEs which nonetheless affect resource flows. These might include poor infrastructure, bureaucracy which makes it difficult to carry out business, an unattractive tax regime and unclear or unfavourable government policies. Acquiring an appreciation of these factors and appropriately dealing with them can help to foster the efficient use of available financial resources by SMEs, increase their success in the application of credit and therefore give positive feedback to financing institutions which itself encourages them to lend more to the sector. Let me conclude by wishing you all a fruitful three days of deliberations and to reiterate my challenge to you to attempt narrowing that undesirable gap between the identification of problems and the delivering of practical solutions that will enable the flow of appropriate and sustainable financial resources to SMEs to enable them to play their wealth creation and development role in Africa. For me, the SME sector can be a great engine for economic development in Africa. Meetings like this can help in making them become just that. But we must also go beyond just paying lip service to the sector and show true and real commitment to making the sector strong on our continent. I suspect that to go beyond lip service might, in some instances require a paradigm shift on the part of financiers, governments and the players in the SME sector itself. I thank you for your attention!!! BIS central bankers’ speeches  3
As Mundell said in 2012: “The euro is more than just the icing on the cake on the single European market and the European Union (EU), it is the glue that keeps the core of Europe together.” Still, an argument frequently heard against the euro is that a currency cannot exist without a state. True, the government prerogative of coinage came to be accepted as an essential attribute of sovereignty, tying the state to the money supply; but actually the state may manipulate the unit of account to the benefit of its own finances, for instance by monetising the debt, and such manipulations were not always, to say the least, in the interest of the people. As a result, it seems to me that the key ingredient of monetary stability is not the state but the independence and credibility of the issuing institution: the central bank – and this principle is firmly established in the euro area, as well as in French law for the Banque de France. However, safeguarding our independence requires more than a series of legal provisions. As any political construct, the euro will thrive if and only if the citizens of the euro area member states are convinced that the Eurosystem delivers, year after year, on its mandate, which is to preserve price stability. This is also the reason why we are subject to accountability rules, requiring regular testimonies to the representation of EU citizens, namely the European Parliament and the National Parliaments, and the publication of our minutes and our results.

Over recent years, central banks and economic research have paid increasing attention to these issues. Indeed, the experience in Japan over the past two decades underscores how harmful bursts in asset price bubbles can be for macroeconomic stability, and how difficult it is for policy-makers to mitigate these costs. Indeed, there are quite a number of historical episodes when a collapse in asset prices triggered sustained deflationary trends and problems of financial instability. When discussing asset prices and monetary policy, four questions come to mind: •  First, is it possible to identify the emergence of an asset price bubble in the markets? And if so, how? •  Second, assuming that a bubble has been identified, what can policy-makers do about it? What are their choices and dilemmas? •  Third, what is the concrete situation in equity and housing markets in the euro area at present? •  Finally, what role do asset prices play in the ECB’s monetary policy and what challenges could they pose? How to identify a bubble? Answering the first question is both easy and tricky at the same time: I think, we can all agree that it is very difficult to identify bubbles, not least since we need to distinguish asset price changes that are justified by changes in fundamentals, such as technological advances or changes in risk preferences, from those that are due to misalignments or “irrational exuberance” - to quote a prominent central bank colleague.
By contrast, the European periphery countries have adopted the euro; they no longer have a national currency and therefore can no longer devalue, at least against their main trading partners within the euro area. Ruling out devaluation has pros and cons. On the one hand, the eradication of devaluation risk eliminates one element of financing costs that may rise rapidly in a financial crisis, even if the currency risk simply morphs into a credit risk. Moreover, ruling out devaluation avoids “beggar-thy-neighbour” competitive devaluations that can trigger trade wars and protectionism, and weaken the growth outlook (Chart 18). And, without a devaluation option, peripheral euro area countries cannot fall into a vicious debt-devaluation spiral. Devaluation increases the real value of the outstanding foreign currency-denominated debt burden in domestic currency terms and may thus worsen the economic and fiscal outlook of a country under stress. Any resulting loss of market confidence may trigger further weakening of the domestic currency, thereby exacerbating the problem and creating a steady downward spiral of devaluation and rising debt burden. On the other hand, devaluation offers some scope to improve external price competitiveness and thus boost growth via better export performance. The benefits of any such devaluation will be greater for countries that have an export-based model of economic growth, relying on price competitiveness to build market share. This is typical of the “Asian Tigers”, but may be less relevant for mature European economies where export performance is driven by other factors, such as quality or branding.

In facing them, we need a visionary industry and creative solutions that will lift our economic potential and improve lives of our people. Such solutions must be built on the strongest foundations the strength of our technical capability, our financial strength and our uncompromising stance towards professional ethics and standards. With these foundations firmly in place, the industry can bridge new horizons and expand beyond traditional borders. BIS central bankers’ speeches  5
BIS central bankers’ speeches  19  Table 2 Projected equity home bias for G20 countries(a) (2010–50)(b)(c) Advanced G20  2010  2020  2030  2040  2050  USA  0.51  0.44  0.36  0.24  0.09  UK  0.53  0.47  0.41  0.33  0.22  Germany  0.41  0.33  0.26  0.17  0.03  France  0.53  0.46  0.38  0.27  0.13  Italy  0.45  0.39  0.34  0.31  0.23  Japan  0.81  0.75  0.67  0.60  0.51  Canada  0.59  0.53  0.46  0.35  0.22  Australia  0.70  0.62  0.53  0.41  0.26  Weighted average  0.56  0.49  0.41  0.30  0.16  Un-weighted average  0.57  0.50  0.43  0.34  0.21  Argentina  0.55  0.48  0.38  0.25  0.09  China  0.96  0.93  0.87  0.79  0.67  South Africa  0.78  0.74  0.68  0.58  0.45  Mexico  0.88  0.82  0.75  0.66  0.54  South Korea  0.82  0.74  0.68  0.61  0.51  Brazil  0.92  0.87  0.80  0.72  0.61  Turkey  0.87  0.81  0.73  0.64  0.52  Russia  0.97  0.91  0.83  0.73  0.62  India  0.99  0.98  0.95  0.89  0.80  Indonesia  0.97  0.95  0.91  0.84  0.75  Weighted average  0.93  0.89  0.84  0.77  0.68  Un-weighted average  0.87  0.82  0.76  0.67  0.56  Weighted average  0.65  0.62  0.61  0.57  0.49  Un-weighted average  0.74  0.68  0.61  0.52  0.40  Emerging G20  Total G20  Source: IMF International Financial Statistics, IMF WEO database October 2010, S&P Global Stock Markets Factbook (2010), updated and extended version of dataset constructed by Lane and Milesi-Ferretti (2007), Thompson DataStream, UN Census Bureau, Penn World Tables and Bank calculations.

This would tend to push water uphill – a countervailing capital flow substitution effect; and    Third, a change in the composition of the global market portfolio as emerging economies account for a larger slice of the pie – a capital flow income effect. By combining these three factors, we can form a proximate picture of the emerging pattern of global capital flows. These projections are based on the same restrictive set of modelling assumptions. Nonetheless, they provide a transparent window on possible emerging patterns. Are the forces of financial deepening in emerging capital markets sufficient to outpace the reduction in advanced country portfolio home bias, lessening the BFSP problem? Or does portfolio reallocation by advanced economies risk swamping embryonic emerging capital markets exacerbating this problem? Chart 13 looks at the ratio of annual average capital flows to G20 emerging markets relative to their market capitalisation over the period 2010 to 2050. It is the analogue of Chart 2, using projections of both numerator and denominator. The highest and lowest annual inflows over the projection period are also shown to capture potential annual variation in capital flows. Chart 14 plots annual gross capital inflows to emerging markets over the same period. 5  Non-G20 market cap is assumed to grow in line with the forecast for total G20 market capitalisation.
Christian Noyer: Basel II – new challenges Speech by Mr Christian Noyer, Governor of the Bank of France, before the Bank of Algeria and the Algerian financial community, Algiers, 16 December 2007. *  *  *  I am very pleased and honoured to be here and I wish to wholeheartedly thank my friend Mohamed Laksaci for inviting me to speak on the subject of Basel II. This subject is topical for two reasons: first, we have already entered into (or, in some countries, are about to enter into) the operational implementation of the new capital adequacy framework, which requires a greater-than-ever involvement of banks and supervisors; second, the current financial market turmoil raises questions as to the best way to implement this framework. In view of its topical nature, I will present a few thoughts on “Basel II: New challenges”, while attempting to focus on the practical aspects of the implementation of the new capital requirements. In this respect, and before moving on, I would like to thank the Bank of Algeria for its participation in the Group of French-Speaking supervisors, created at the meeting of Governors of central banks of French-speaking countries in June 2004 in Paris, which coincided with the Basel Committee on Banking Supervision’s publication of the New Basel Capital Accord. I know that this Group is appreciated by many of its members as it enables them to exchange experiences and information and promotes best banking supervisory practices.

Following this process, the Commission bancaire will take a formal decision as to whether or not to authorise the institutions in question to adopt the advanced approaches of Basel II on 1 January 2008. For institutions with foreign entities, this authorisation is granted, where appropriate, following an exchange of information with the host supervisors, i.e. where the institutions’ subsidiaries are established. While many counties, such as France, have entered into the effective implementation phase of Basel II, the recent financial turmoil has once again drawn attention to this framework, leading some observers to call into question its overall rationale. This turmoil has new characteristics as it is a credit crisis in a market environment with particular implications concerning contagion channels. Risk transfer operations, in particular securitisation, and the interaction between funding liquidity and market liquidity risks have played new or at any rate greater roles than before. I am nevertheless convinced that the reform of the capital adequacy ratio rightly remains a crucial element in the regulatory response to the problems facing us today. I would now like to explain why I am convinced of this. 2. The current financial turmoil confirms the need to concretely implement Basel II. This turmoil may very legitimately raise questions about several of the major provisions of Basel II, such as the use of rating agencies or the internal approaches developed by banks to assess credit risk.
Captive risks will differ from traditional insurance, and they also vary significantly between different types of captives, depending on ownership and structure, scope of business and nature of risks insured. Managing these risks cannot simply be addressed at an institutional level. Macroprudential 3/4  BIS central bankers' speeches  measures might have relevance in certain circumstances. For example, a pure captive insurer that merely underwrites the risks of its parent may pose low financial and consumer risks, but if the parent is an economically significant entity, with critical financial linkages, a different regulatory response and approach might be warranted. To a large extent, our ability to design suitable regulatory frameworks for captives remains constrained by the paucity of data on captives. This needs to be addressed as a matter of priority. Broader measures need to be taken, both at a national and global level, to collect better data on captives to understand their nature, evolution and impact on macro-financial developments. Increased efforts by governments to tackle profit shifting and tax base erosion (BEPS) have been another factor behind recent regulatory developments. Significant changes have taken place affecting offshore financial centers in the past decade, shaped by heightened expectations for enhanced transparency and exchange of information between tax authorities. These winds of change are likely to pick up speed for captives. And they will change the way captives have operated in the past. Very likely it would pave the way for the transformation of offshore financial centers.

I thought that it is worth talking about the role of captives in the shifting sands of business in the 21st century. I would like to share some thoughts on what the future holds for captives as we contemplate the changes taking place around us. Responding to risk in the 21st century – the role of captives Major risk events often strike without prejudice. Typhoons do not discriminate in the havoc that they wreak. Terrorist attacks affect innocent bystanders who happen to be at the wrong place at the wrong time. Organizations across the globe, no matter what their purpose, have been targeted by cyber-attacks. From the National Health Service in the UK, to schools in China, to chocolate factories in Australia, organizations large and small, for-profit or non-profit, have borne the brunt of ransomware attacks. Thanks to globalization and advancements in technology, the impact on businesses is also more far-reaching and larger in scale than ever before. The malware WannaCry hit 200,000 computers in 150 countries. Attacks on multinational transport companies based in Europe stranded cargo at ports in India. The losses from these events are large. Cyber theft cost the global economy more than $ billion in 2016. Lloyd’s of London estimates that a global-scale cyber-attack could rack up losses of $ billion, similar to a catastrophic natural disaster such as U.S. Superstorm Sandy in 2012. Unsurprisingly, risk awareness is now growing across the entire spectrum of businesses.
Banks can now draw US dollar liquidity from their central banks with increased frequency if needed. To this end, since 20 March we have been conducting our US dollar repo auctions on a daily rather than a weekly basis, and will continue to do so until at least the end of April 2023. Through their cooperation, the participating central banks ensure that US dollar liquidity is distributed throughout the system, thereby jointly helping to secure global financial stability. Let me now turn to the implementation of our monetary policy on the money market. Banks’ sight deposits and the liquidity on the Swiss franc money market are increasing due to our liquidity assistance. To ensure that secured short-term money market interest rates remain close to the SNB policy rate and do not decline, we are absorbing sufficient sight deposits through the weekly issuance of SNB Bills as well as with daily repo auctions. In addition, we are selectively conducting overnight repo transactions. Our flexible set of monetary policy instruments allows us to keep secured short-term money market rates close to the SNB policy rate also in the current situation. I would now like to hand back to Thomas Jordan. Conclusion  Ladies and gentlemen, allow me to conclude. Within the framework of its mandate, the SNB will use all of the resources at its disposal to ensure price stability in Switzerland and to contribute to financial stability. Thank you for your attention. We are ready to answer your questions.

It’s also been aided by domestic polices, including the Funding for Lending scheme, a series of regulatory actions to improve the strength and resilience of our banking system and, more recently, the Government’s Help-to-Buy policies. I fully recognise that the ability of many SMEs – perhaps many of you here today – to access credit at reasonable rates still remains impaired. But even here my sense is that some progress has been made. That’s the message from surveys of small businesses, from reports by the Bank’s Agents, and indeed that I get from my own conversations with many businesses around the country. We’re not there yet – and the Funding for Lending scheme remains in place to encourage banks to lend more to companies, particularly SMEs – but we have taken a step in the right direction. For households, the improvement has been more marked. Interest rates of new mortgages, especially those for fixed-rate mortgages and those with higher loan-to-value ratios, have fallen by well over a percentage point since the summer of 2012. Unsecured personal loan rates have fallen by even more. The greater ease with which many families can access credit has fed through to the housing market, which until recently had been in a state of deep freeze. Housing transactions fell very sharply in the wake of the financial crisis and subsequently flat lined. Nominal house prices moved sideways for several years. But over the past six months or so, there’s been some thawing.
Moreover, these institutions might be in a stronger position to cope with a cyclical downturn in Norway or a crisis situation than banks concentrated in Norway. At the beginning of the recession at the end of the 1980s, the Norwegian financial system plunged into a deep crisis. The debt consolidation that was necessary in the business and household sectors contributed to a sharp and prolonged downturn. In the long term our financial system may, in my opinion, suffer in the absence of restructuring and growth capabilities. However, the overall picture is that we are better prepared this time. Households are not grappling with the same debt burden and our financial industry is in better balance. An oil-dependent economy The fall in oil prices has resulted in a substantial loss of revenues in Norway. Since 1997 this has resulted in a decline in export earnings corresponding to about 5.5% of total national income. This represents the same decline in our disposable income as between 1985 and 1986, when oil prices fell by close to 50% over a few months. This time, however, the current account balance has deteriorated by a smaller margin. Growth in imports has been slower than 12 years ago. The value of non-oil exports has increased this time, while it fell in 1986. But the effect on the external account has been substantial this time as well. BIS Review 20/1999  6  The fall in oil prices has weakened Norway’s terms of trade.

However, we must take into account that in the long run the krone exchange rate cannot deviate substantially from the level implied by economic fundamentals. We must therefore to some extent expect a change in the krone exchange rate in response to major changes in our terms of trade. 11  BIS Review 20/1999  Norges Bank’s mandate has been formulated in the light of the experience of a fixed exchange rate policy earlier in the 1990s. This experience does not imply that the central bank is to conduct a traditional fixed exchange rate regime, with established fluctuation margins and the obligation to intervene, as reflected in the mandate. Norges Bank will orient monetary policy ‘towards maintaining a stable krone exchange rate against European currencies’. However, it is taken into account that the krone exchange rate will vary. The Exchange Rate Regulation therefore states that ‘in the event of significant changes in the exchange rate, monetary policy instruments shall be oriented with a view to returning the exchange rate over time to its initial range’. We must learn from the situation that arose in the autumn of 1996 and winter of 1997 when strong appreciation pressures prompted Norges Bank to reduce its key rates. Norges Bank’s first response to such appreciation pressures is to provide advice concerning changes in the budget. Norges Bank will orient its instruments towards maintaining a stable krone exchange rate. We must not allow ourselves to be blinded by daily exchange rate quotations.