samchain/econo-pairs-v1 huggingface dataset:
Let me now inform you further on the monetary policy implemented by the Bank of Albania. 2. Bank of Albania’s monetary policy  The primary objective of the Bank of Albania is to achieve and maintain price stability. In quantitative terms, the Bank of Albania aims to keep the CPI inflation at around 3.00%. The inflation target is set to be achieved in the medium-term period, while the actual inflation may be subject to short-term deviations from the target, due to unexpected shocks or shocks independent from the monetary policy. Monetary policy decisions are forward looking and in line with market principles. In 2013, the weak inflationary pressures were reflected in lower annual inflation, which averaged 1.9%, ranging close to the lower bound of Bank of Albania’s tolerance band. It pursued a downward trend during the year, being more pronounced in the second half of the year. Unprocessed foods inflation accounted for around 90% of the headline inflation, hence determining the direction and fluctuation of the CPI inflation. From the viewpoint of macroeconomic factors, consumer prices have reflected, first of all, the weak demand for goods and services, a factor that has generated low inflation over the last two years. Increase in demand, which was significantly below Albania’s production capacity, 2  BIS central bankers’ speeches  generated weak pressures for rise in the labour and production costs, and in the profit margin. Supply-side factors also influenced inflation on the downside.

It will continue to be stimulating for the economy in the period ahead, as stated in our public communications. I must underline, however, that not all things can be solved by the monetary policy, and the central bank alone cannot achieve all. Many economies are facing the difficult situation of sluggish economic growth and low inflation rates. These conditions require all authorities at home to coordinate active policies and approach a new economic thought. This approach should aim at establishing a favourable climate for investments, boosting demand, increasing productivity in competitive sectors, supporting technology development, improving education level and implementing reforms in the labour market. In particular, I would like to draw the attention on the implementation of FSAP recommendations, to develop further the Albanian financial system and enhance its stability. I think that 2014 poses new and difficult challenges for sustainable and all-embracing economic growth. These challenges require long-term solutions and the work to face them must continue, without delay. Thank you. 6  BIS central bankers’ speeches
Banks must not be able to reduce capital below a minimum level even if they extend loans that, according to the models, seemingly involve low risk. Second, regulation must to a lesser extent contribute to amplifying cyclical fluctuations. With losses now rising, as a result of the abrupt and pronounced turnaround, banks must increase equity capital. Consequently, the rules governing capital requirements amplify cyclical fluctuations. The rules must therefore require banks to build up strong capital buffers over and above the minimum requirement in normal times. Then the banks would not have to  4  BIS Review 60/2009  increase capital when a turnaround occurs, but on the contrary be able to absorb losses. This will counteract the need for banks to ration credit in adverse periods. Many Norwegian banks do not have sufficient buffers today to safeguard their own, their shareholders’ or the economy’s best interests. Third, banks’ funding methods make them vulnerable. Earlier, the two main sources of bank funding in Norway were retail and wholesale deposits. In recent years, banks have borrowed heavily in both domestic and foreign markets. During the crisis, this proved to involve high liquidity risk for banks. In the future, in regulations and in practice, deposits must again take precedence as the largest funding source for banks. We also anticipate that bonds collateralised by high quality mortgages will become important. The credit swap arrangements can be seen as building a bridge to such a market.

It means measures to reduce disruption to financial markets if a bank is wound up. And crucially it means agreement between the authorities in the countries in which these global banks operate on how they should be resolved if they fail. We have made a lot of progress on too big to fail. But we are not yet there. I do not think we can say with confidence now that we could resolve a failing global giant. Getting agreement on international standards to end Too Big to Fail is perhaps the most important regulatory priority for the G20 Summit in Brisbane in November this year. When you stand back and look at the progress of this unprecedented programme of international financial reform, on the capital and liquidity framework, on inter-connectedness, on shadow banking and on too big to fail, a huge amount has been achieved. 4  BIS central bankers’ speeches  If we can get the progress that G20 leaders committed to this year by the Brisbane G20 summit in November we will have “completed the job” of agreeing most of the key international standards and rules. And, in many areas, we will have gone a substantial way to implementing them. And I am very pleased to say that the Bank of England has played a key role – and in many areas a leadership role – in moving this programme forward. And I hope we can continue to do this as, increasingly, we move into the implementation phase. IV. Have we succeeded?
Because after the recent crisis, no one can have missed noting how much Sweden is affected by financial developments in other countries. So it is a major step forward that there is now international agreement on the need for tougher bank regulation. The reform package that has been agreed is called Basel III, and the proposed regulations will appear both in EU directives and Swedish legislation. In brief, the Basel Committee’s proposals entail tightening the regulations in four important respects. Firstly, the banks must hold more capital. Secondly, this capital must have better quality. Thirdly, a minimum requirement for the banks’ liquidity is being introduced, and this is completely new. There has been no regulation on this previously. Fourthly, there are stricter requirements regarding the banks’ risk management. This is what I will talk about today. It has not been easy to reach agreement on these issues. The process has been punctuated by negotiations and compromises all the way to the end. The reform package has nevertheless been produced relatively quickly, given the complexity of the issues and the many different interests involved. Some would probably say too quickly. But we at the Riksbank welcome the fact that the work was completed quickly. When the first spark of a crisis appears, awareness dawns at first slowly and only to a few, then the spark becomes a blaze and the drama begins.

They claim these involve too much cost. But these are the rules of the game. The fact is that we at the Riksbank have spent considerable time estimating the effects of the regulations to be introduced. Next week we will publish some our estimates of the effects in our Financial Stability Report. And our calculations show – even if they, like all estimates are somewhat uncertain – that the negative effects will be fairly limited. Above all, the costs for the banks are expected to be slightly higher. It is expensive to create new systems and establish new routines to manage risks and money flows. Holding more capital means that one ties up money that could otherwise have been lent out and generated interest income. And the same applies to holding more liquid assets; there is a cost in the form of lower interest income than one would have had if the funds were instead lent out. The banks will probably pass on a small part of these costs to their customers in the form of slightly higher lending rates. But here we are talking about changes of some few tenths of a percentage point for the average customer – perhaps slightly more for households and less for companies. One can probably also expect a dampening effect on the banks’ profits, and it is fairly natural that the required rate of return for bank shares will decline as the banks become more secure. The banks may also experience increased costs for long-term funding.
Regions with a higher concentration of college graduates tend to be more innovative, have higher living standards and experience more rapid economic growth.2 So a college education plays an important role in helping individuals prosper, as well as in strengthening the broader economy. More recently, though, rising costs, increasing student debt and widespread reports of recent college graduates not being able to find good jobs have raised some troubling questions about whether going to college is still a good investment. In fact, some of our own research, including material that we discussed at our last press briefing, has shown the dramatic increase in student debt over the past decade.3 In today’s briefing, we’re going to take a  2  See, for example, Edward L. Glaeser, Jose A. Scheinkman, and Andrei Shleifer (1995) “Economic Growth in a Cross-Section of Cities,” Journal of Monetary Economics, 36, 117–43; Gerald A. Carlino, Satyajit Chatterjee, and Robert M. Hunt (2007) “Urban Density and the Rate of Invention,” Journal of Urban Economics, 61, 389–419; and Jaison R. Abel and Todd M. Gabe (2011) “Human Capital and Economic Activity in Urban America,” Regional Studies, 45, 1079–90.

According to Eurostat’s flash estimate, euro area annual HICP inflation was 0.3% in November 2014, after 0.4% in October. Compared with the previous month, this mainly reflects a stronger fall in energy price inflation and a somewhat lower annual increase in services prices. Taking into account the current environment of very low rates of inflation, it will be important to assess the broader impact of recent oil price developments on mediumterm inflation trends and to avoid spillovers to inflation expectations and wage formation. Against the background of recent oil price developments, it is crucial to recall that forecasts and projections are based on technical assumptions, especially for oil prices and exchange rates. On the basis of information available in mid-November, at the time the December 2014 Eurosystem staff macroeconomic projections for the euro area were finalised, annual HICP inflation was foreseen to reach 0.5% in 2014, 0.7% in 2015 and 1.3% in 2016. In comparison with the September 2014 ECB staff macroeconomic projections, they have been revised significantly downwards. These revisions reflect mainly lower oil prices in euro terms and the impact of the downwardly revised outlook for growth, but they do not yet incorporate the fall in oil prices over the past few weeks following the cut-off date for the projections. Over the coming months, annual HICP inflation rates could experience renewed downward movements, given the recent further decline in oil prices. The Governing Council will continue to closely monitor the risks to the outlook for price developments over the medium term.
As part of such a resolution process, regulators are working to ensure that systemically important firms have viable recovery plans and that such firms have “living wills” that can help guide how such firms can be managed through a resolution situation. Second, to reduce the likelihood of disruptive and highly costly failures, regulators around the world are evaluating whether bail-in forms of capital might be used to help recapitalize firms when they would otherwise lose their viability, or, alternatively, to help facilitate the orderly wind-down of a firm. Bail-in capital might consist of a well-identified tranche of debt that would convert to equity only if and when a particular set of trigger conditions were met. Such triggers might include breaching a certain level of regulatory capital and/or a regulatory determination that without conversion the firm would no longer be viable. One considerable challenge is how to define a set of triggers in a way that is sufficiently transparent and objective so that the bail-in process does not act as a catalyst and precipitate a run on other firms that might appear to have similar characteristics. In principle, however, by helping to recapitalize the firm, bail-in capital could help to forestall the need for a forced, rapid liquidation of assets and this might help to facilitate the orderly wind-down of a large, global firm that otherwise could not otherwise be easily resolved.

Residents are also allowed to purchase, through authorised financial institutions, shares quoted on foreign stock markets, and are permitted to transfer foreign exchange abroad to pay for purchases of such securities. 3. By the same token, non-residents are allowed to buy and sell Turkish securities quoted on the Turkish stock market. They are also allowed to buy and sell Turkish government securities through intermediary institutions operating in Turkey. 4. A substantial part of the controls on capital movements were removed, greatly easing inflows and outflows of credit. Turkey has accepted the provisions of Article VIII of the Articles of Agreement. 5. To avoid excessive risks for the banks, new regulations were adopted governing the foreign exchange position of the commercial banks. The banks are free to set their own rates for buying and selling foreign exchange. Our foreign exchange system, described above, is very convenient for foreign capital flows. Now let me describe the main characteristics of our financial system. Even though our efforts to liberalise the financial system did not begin until 1980, the Istanbul Exchange Market has existed and operated since 1858. It grew out of the activities of Non-Muslim bankers in the Galata district of Istanbul. These operators, mostly Levantines, Jews, Armenians, and Greeks, used to risk their own capital by extending credit to the government, secured by pledges of future tax collections.
18 See the Communique of Finance Ministers and Central Bank Governors, on which the Bank sits, March 2018, https://g20.org/sites/default/files/media/communique_-_fmcbg_march_2018.pdf. 19 See page II of the executive summary of the Financial Stability Report November 2017, https://www.bankofengland.co.uk//media/boe/files/financial-stability-report/2017/november2017.pdf?la=en&hash=F6D65F714A7DC28394BC4FCC9909CCD39E28AD10. 7  All speeches are available online at www.bankofengland.co.uk/speeches  7  Other reforms that form part of Basel III, as well as other elements of the post-crisis regulatory framework, will be implemented as part of the forthcoming new Capital Requirement Directive and Regulation. These are likely to be implemented in around 2020-21. Table 1 sets out the pipeline of policies to be implemented. New risks  Turning now to the identification and handling of new risks. Regulators must avoid the temptation to keep on fighting the last war while failing to recognise other, new risks. The last war was mainly focussed on the inadequacy of bank’s capital and liquidity, the inadequacy of frameworks to tackle too big to fail, and the lack of individual accountability. And these issues are and will continue to be important in any future prudential regulatory regime. But the world has also changed since. As my colleague, Lyndon Nelson, has recently set out, technology is transforming the payments and banking industry and, together with opportunities, it brings with it new risks. 20  And his answer to fighting this new war  was that PRA-regulated firms need to be on a WAR footing; that is, they should be able to withstand, absorb, and recover from operational shocks.

Decisions about whether or not to make an adjustment will be made on the basis of a careful weighing up of evidence of benefits and costs. In doing this we need to bear in mind that regulatory costs will often be easier to quantify than the financial stability and safety and soundness benefits. And depending on the case we may need to look beyond the banking system to capture all of the costs and benefits. For instance, unintended consequences of bank regulation might be felt not in the banking sector but in financial markets, financial infrastructures, and other parts of the financial system. Principle 3: we should aim to match a dynamic adjustment to the problem that has been identified. If we identify an unintended consequence of a particular regulation we should first seek to adjust that regulation to deal with the consequence. Similarly with any new risks that emerge. For instance, if a new risk that is identified is threatening the stability of the system as a whole it would seem appropriate to look to use a macroprudential tool to reduce that risk. Adjustments we have made already  The Bank has already made several changes to the regulatory framework that can be thought of as dynamic adjustments. Two such changes have been made to the leverage ratio requirement. In response to a recommendation by the FPC, central bank reserves have been removed from the calculation of the denominator of the leverage ratio since summer 2016.
That distinction has become the standard framework within which to analyse the optimal constitution of central banks. But such a distinction presumes the existence of a  16  Source: compiled by the Central Bank of Iraq, based on data collected by the United Nations World Food Program. BIS Review 5/2004  11  policy instrument that is uniquely available to the central bank. That instrument is the level of official short-term interest rates. But when interest rates are constrained at their lower bound of zero, the position is much less clear. Indeed, I shall argue that in such circumstances both instrument and goal independence are impossible. Rather when interest rates are at their zero lower bound, policy relies on successful cooperation between central bank and finance ministry. I shall assume that, when interest rates are zero, monetary policy takes the form of open market purchases or sales of government securities using central bank money. A well-known policy prescription, which has become known as unconventional monetary policy, is that the central bank should buy long-term Government bonds rather than the more conventional shortterm bills. The Bank of Japan did indeed follow this prescription. The logic of such a proposal is as follows. Long-term bonds are likely to contain a significant premium to compensate investors for their lack of liquidity - the fact that, in practice, investors face significant costs when switching between bonds and goods.

BIS Review 5/2004  5  while the peg was being defended, they were soon lowered to more sustainable levels. The expectations that had been built into forward exchange rates were proved correct. Chart 1: Exchange rates and monetary policy in Brazil, Jan 1998-Dec 1999 50  $  Per cent  0  45 40 35  0.5 Spot exchange rate (rhs)  Overnight interest rate (lhs)  30 25  1 1.5  20 15 10 5  Implied forward exchange rate (rhs)  0 Jan-98 May-98 Sep-98  2 2.5 3  Jan-99 May-99 Sep-99  Source: JP Morgan and Banco Central do Brasil  In the literature on target zones for exchange rates, it is assumed that raising interest rates is a successful method for supporting the exchange rate because of uncovered interest parity. But this ignores the possibility that raising interest rates to defend a fixed exchange-rate regime will simply call into question the durability of the regime itself and raise the probability that the peg or target zone will be abandoned. In such circumstances an increase in interest rates may lead to a fall in the exchange rate. A second example of the same phenomenon is the pressure on sterling during 1992 and its forced departure from the Exchange Rate Mechanism on 16 September of that year.
Our welldeveloped social security system also fulfilled its role as an automatic stabiliser. Discretionary fiscal policy, by contrast, played a relatively minor role. One reason for this is that we have a federal system with extensive decision-making powers in the hands of the people. Another is the extensive global integration and openness of the Swiss economy. This means that much of the impact of any fiscal programmes designed to stimulate the economy would have been felt abroad rather than in Switzerland. There are certainly positive sides to the fact that fiscal policy in Switzerland was not used actively, or to a large extent, for crisis management – as is evident if we think of the problems of sovereign debt currently afflicting other countries. Yet we should not forget that monetary policy had to bear the lion’s share of the adjustment burden in its place. As I mentioned before, article 6 of the National Bank Act constitutes the foundation stone of our independence. However, the principle that the SNB should be an independent central bank is actually established at the highest level of all, in article 99 of the Swiss Constitution. This shows the importance attached to the independence of the SNB by the constitutional  2  These findings were taken into account when the European Monetary Union was founded. Under the Maastricht Treaty, a country planning to join the union must have an independent national central bank.

Philipp Hildebrand: The independence of the Swiss National Bank Speech by Mr Philipp Hildebrand, Chairman of the Governing Board of the Swiss National Bank, at Avenir Suisse, Zurich, 21 June 2011. *  *  *  The speaker would like to thank Peter Kuster for his support in preparing this paper. In addition, his thanks go to Rita Kobel Rohr for her helpful comments when drawing up the speech. Is the independence of the Swiss National Bank so extensive that it stands outside the reach of our democratic system based on the separation of state powers, on checks and balances? The topic of central bank independence is a matter of discussion beyond the borders of Switzerland. Around the world, a debate has started on the limits to power, in general, and the independence of central banks, in particular, and in some cases radical demands have been made.1 Because many central banks found themselves obliged to resort to large-scale unconventional measures during the financial crisis, it is not surprising that the debate is raging now. Central banks are indeed very special institutions. They hold the banknote-issuing monopoly and provide the domestic money market with liquidity. Consequently, they can never really be short of money. In Switzerland, the state has conferred the banknote-issuing monopoly on the SNB. This means that it always has the requisite means for meeting its obligations in Swiss francs. However, that does not stop it from making losses. As you know, the SNB had to report a large annual loss in 2010.