samchain/econo-pairs-v1 huggingface dataset:
Light inflation targeting in Romania  Drawing the line after more than a decade of inflation targeting, I would say that we have managed to deliver steady disinflation and anchor expectations, even though the frequent occurrence of exogenous shocks led to high volatility in inflation and the occasional missing of annual targets. All central banks are familiar with supply-side shocks related to a surge or fall in commodity prices, but in Romania we have also had to deal with large (and not necessarily predictable) adjustments in administered prices and frequent changes in indirect taxation. Some of the latter were inherent to EU membership (i.e. alignment of some excise  BIS central bankers’ speeches  1  duties), but others were related to an erratic tax legislation. In such an environment, two features of the inflation targeting framework as implemented in Romania appear as particularly relevant: •  First, the focus on the medium-term achievement of the inflation objective, rather than hitting the target all the time. This approach allows for sustainable price stability without incurring the cost of excessive volatility in output and employment. •  Second, the ex-ante definition of a set of escape clauses that limit the central bank’s responsibility in attaining the annual target:  3. 1. Marked increases/decreases in commodity prices  2. Natural disasters and other similar exceptional events that induce cost-push or demand-pull inflationary effects  3.

Mugur Isărescu: Transition – how to secure a stronger economic future for the constituency? Speech by Mr Mugur Isărescu, Governor of the National Bank of Romania, in the panel on “Transition: How to Secure a Stronger Economic Future for the Constituency?”, during the annual meeting of the IMF and World Bank Constituency, Kyiv, Ukraine, 4 June 2016. *  *  *  Ladies and Gentlemen, In my address I would like to focus on the challenges in conducting monetary policy in a way that will contribute to securing a stronger economic future for countries in our constituency. Obviously, my account is shaped by Romania’s experience, but I hope it will still keep you interested, as it may be relevant for other small to medium-sized emerging economies. 1. Brief account of monetary policy regimes in Romania  At the time when the National Bank of Romania had to choose a strategy for conducting its monetary policy, i.e. in the early nineties, monetary targeting was actually the only feasible option. Not only did the low forex reserves preclude a fixed exchange rate arrangement, but, even if possible, the alternative was not suitable given the widening external imbalance. However, by the end of the decade, monetary targeting had reached its operational limits given the break in the relation between monetary aggregates and inflation, a phenomenon which matched developments elsewhere in the world. At that point, we took into account pegging the exchange rate, but neither the hard nor the soft version was deemed appropriate.
The Small Ponds are the relatively modest financial markets of capital-importing emerging countries. Past experience suggests that as big fish enter the small pond, this can cause ripples right across the international monetary system, never more so than in today’s financially interconnected world. This paper considers the BFSP problem. It plots the evolution of the international financial network over the past quarter-century. And, within that, it assesses recent shifts in portfolio  BIS central bankers’ speeches  1  choice by international investors which may have accentuated today’s BFSP problem (Section 2). More speculatively, it then considers potential future trends in portfolio choice and assesses their implications for tomorrow’s BFSP problem (Section 3). If recent trends are continued, the BFSP problem may become more acute over time. In the race between capital market deepening in emerging markets and capital diversification in advanced economies, the latter may gain the upper hand (or foot). The BFSP problem during 2010 may have been the thin end of a sizable wedge. That, in turn, may intensify the debate on appropriate policy responses, such as the pace of capital liberalisation and the case for capital restrictions (Section 4). 2. Today’s BFSP problem  A useful panorama on financial globalisation is provided by mapping the evolution of the global financial network over time. The topology of this network provides a simple, graphical visualisation of liberalisation patterns.

Already in 1972, representatives from 113 out of the UN’s 132 member states convened in Stockholm for the first international conference on human environment. Their decisions, enshrined in a declaration, action plan and five resolutions seemed to be a clear demonstration of their firm decision to fight environmental degradation. From then on, numerous meetings, conferences, agreements, protocols and declarations ensued, the Climate Change Convention was forged, the Kyoto Protocol was adopted, but the outcomes fell short of targets adopted in these documents. It wasn’t until 2015 when heads of states and representatives of 197 countries, being aware of the real possibility that the world was approaching a climate tipping point, adopted the Paris Agreement and committed to make sincere and ambitious efforts to drastically cut their greenhouse emissions to prevent further global warming. The agreement, later ratified by 189 countries, did not only result in those countries’ pledges on GHG emissions, but also in their understanding that engaging in climate change mitigation and adaptation should include a grand coalition of public and private entities devoted to achieving the same goal. Central banks around the world were fully prepared to join this coalition. Mark Carney, then Governor of the Bank of England, was one of the first central bank governors who on the eve of the Paris summit sent a warning message to his peers in his seminal speech about the tragedy of the horizon, a tragedy caused by “climate change, which might threaten financial resilience and longer-term prosperity".
It is also possible that the increase in debt is partly an adjustment  4  BIS Review 51/2004  to an economy with - compared with before - better functioning financial markets, low inflation and expectations of relatively low interest rates in the future. Most indications also suggest that the majority of households would be able to service their debt even if interest rates were to rise sharply. Nor does it appear likely that banks and mortgage institutions would risk incurring losses that would appreciably affect their capital bases. This wasn’t the case either during the financial crisis at the beginning of the 1990s. While the banks’ losses during the crisis were largely propertyrelated, they did not stem from lending against collateral in housing but from loans secured by commercial properties. And prices of commercial properties have this time not at all shown the same development as prices of residential property. On the contrary, they have fallen during the economic decline and have still not recovered. What remains then are the effects on the economy in general. In this respect it is perhaps first a question of whether the build-up in debt and developments in house prices should prove unsustainable, that the prices therefore should fall and that this on the whole should result in a decline in the real economy in general. The risk of this happening is of course related to your view of residential property prices.

Our assessment in May was that economic growth in the United States would slow at the end of this year, chiefly due to the assumption that fiscal policy would be less expansionary. Coupled with gradually rising interest rates, it was judged that this would dampen private consumption and housing investment somewhat. Despite the slowdown, however, the economic outlook was expected to be mainly bright over the coming years. Data for the second quarter indicates that private consumption has slowed somewhat earlier than anticipated. It is possible that this is partly due to the high oil price, which has lowered households’ real incomes. Even though more recent data from the United States has given a mixed impression, I think there is reason to be somewhat less optimistic about developments in the United States in the period ahead than indicated in the assessment in May. Growth this year of almost 4½ per cent now appears likely. In 2005 and 2006 there is reason today to expect about 3½ per cent annual GDP growth. Growth in the euro area was judged in the latest Inflation Report to increase gradually this year following a very weak development in 2003. New information during the summer broadly confirms this outlook. In Germany it is mainly net exports that are contributing positively to GDP growth, while in other countries, notably in France and Spain, it seems to be domestic demand that is growing relatively quickly.
This sound performance of foreign sales, along with the marked cut in the rate of increase of imports, has seen the external sector make a positive contribution to GDP growth for the first time since 2001, partly cushioning the slowdown in national demand. Net external demand is therefore providing a buffer of support against the widespread weakening trend. On the supply side, the fact that the sharp adjustment in employment is taking place just when labour costs are posting high increases is of particular relevance. This is because collective bargaining is taking on board the deterioration in inflation expectations and because the activation of indexation clauses is passing through last year’s inflation deviation to wages. Unfortunately, there is a risk that this will occur again in 2009, potentially causing second-round effects in an economic situation in which the behaviour of employment is very important, as I stated, for regulating the cyclical downturn in the economy. Furthermore, this increase in wages has not been accompanied by productivity gains on a similar scale. Therefore, the increases in unit labour costs continue to be higher than those of our trading partners. If, moreover, business margins were to continue widening as they have in the past, the difficulties for the economy of competing abroad would increase, undermining one of the potential sources of recovery. Inflation posted a rapid increase in the first half of the year, despite the loss of momentum of activity.

To my mind, the answers will invariably call attention to three imperatives – a rethinking of value; a rethinking of risk; and a rethinking of human capital. Allow me to briefly address these in turn. Key Message 1 – Rethinking value through a renewed focus on the fundamentals of Shariah First, rethinking value. The industry must elevate the fundamentals of Shariah to realise its full promise. The business models of Islamic financial institutions should be guided by the 1/4  BIS central bankers' speeches  overarching objectives of Shariah (Maqasid Shariah) – which are to preserve and advance the common interest of society at large, by preventing harm and maximising benefits. This is now more important than ever to steer growth and development on a more sustainable path. In Malaysia, the industry with the support of the Central Bank, is taking concrete steps to drive strategies aimed at increasing the positive impact of finance on society. This is outlined in a Strategy Paper on Value-based Intermediation (VBI), which was released in July last year. The commitment to adopt VBI is a significant step by the industry to clearly identify Islamic finance with sustainable practices, as it should. It has also set in motion initiatives that will raise the bar for processes, practices, offerings and conduct that promote sustainable businesses and communities. We expect that over time, the adoption of VBI will have a significant impact on business models of Islamic financial institutions, including the drivers of profitability and risks.
Željko Rohatinski: What 2010 may hold for the Croatian economy Address by Dr Željko Rohatinski, Governor of the Croatian National Bank, at the business conference “Big Plans Day”, organised by the Lider business weekly, Zagreb, 26 October 2009. *  *  *  After a turbulent 2009, the year 2010 is expected to be mostly a year of stagnation (viewed statistically), without major structural changes in the real and financial sectors. More important than the statistics, however, is that no significant changes are expected in the modalities of economy functioning, as there are no substantial changes in the economic policy. But this does not mean that 2010 is going to be a “calm year” and that the “status quo” will be restored and maintained by itself, particularly in the context of current domestic developments which may postpone the country’s exit from recession. The three key determinants of our economic situation in the coming year are the following: (1)  Stagnation in Croatia’s most important partner countries in the European Union and in the region will curb export demand, while, given the poor propulsiveness of our export demand, an “active” improvement in the current account can hardly be expected. Goods and services exports could go up about 5.5% (dropping by 18.1% in 2009).

A rational domestic demand and import policies will be required (with a 5.3% rise in imports, given the oil price growth), in order to keep the current account deficit at about 6.5% of GDP (EUR 3 billion), the same as in the current year. Of course, this implies a continuation of heavy dependence on foreign sources of financing in 2010. (2)  Given stagnation in direct and portfolio investments (EUR 2.1 billion in 2009 vs. EUR 2.3 billion in 2010), this would mean that: −  the current account deficit will have to be financed by foreign borrowing;  −  the external debt-to-GDP ratio will increase from 83% last year and about 93% in 2009, to about 100%, which is feasible, but will certainly not improve the country’s credit rating, and the question is to what extent the global downward trend in interest rates can carry over to this country. This is all too important, as we know that in 2010:  (3)  −  total debt repayments (EUR 8.3 billion in principal and EUR 1.4 billion in interest) will amount to EUR 9.6 billion (EUR 10.8 billion in 2009); and  −  total utilisation of foreign sources of financing will stand at EUR 12.6 billion (13.5 billion in 2009). The anticipated fiscal deficit reduction, in terms of consolidated general government (including HAC), from HRK 15 billion to HRK 12.1 billion, i.e.
In the short term, effectively manage the risks of Brexit As part of their tasks, the ACPR and the Banque de France closely monitor two main types of risk associated with the prospect of Brexit: those that could threaten financial stability and those that could undermine customer protection. It is important to avoid the cliff-edge that would arise from a No Deal Brexit. The economic consequences would naturally be far more serious for the United Kingdom than for the rest of the European Union. At this stage, our analysis, like that of the ECB, which as you know jointly carried out an in-depth technical study with the Bank of England, has not identified any major risks to financial stability. In the words of Mr Draghi: “It would really take an extraordinary amount of lack of preparation to materialise the financial stability risks that might come from a hard Brexit.1 The clearing of interest rate derivatives nevertheless deserves particular attention, as the UK clearing houses have a virtual monopoly in the sector. In the event of a No Deal Brexit and without taking any specific measures, this could represent a systemic risk. Therefore, should it unfortunately be necessary, we support the solution adopted by the European Commission to temporarily recognise the equivalence of the UK legislative framework under EMIR 1 and to authorise the United Kingdom’s clearing houses to continue providing clearing services to European financial institutions until EMIR 2 comes into effect.

Since the introduction of the euro, private customer prices of cross-border payment services have not decreased and in too many cases, the payee has been charged with some costs even though the payer has been requested to bear all costs. Furthermore, as the service provided in the case of cross-border payments is still poorer than that for domestic transfers in terms of the speed of the transaction, the higher price is not justified by better quality. In a report published by the Eurosystem in September 1999, it was emphasised that consumers should be able to transfer money as rapidly, reliably and cheaply from one part of the euro area to another as is now the case within each Member State. However, it was also acknowledged that this objective was far from being reached. Since the publication of this report, substantial progress has been made in preparing the ground for a more efficient handling of cross-border retail payments. The banking sector has agreed on so-called straight-through processing standards, which will allow the automated execution of cross-border payments. Furthermore, the Euro Banking Association has announced the development of a payment system specifically designed for low-value cross-border payments. In addition, the European Credit Sector Associations have taken two initiatives to further improve the prices and quality of cross-border customer payment services.
Thus, in the adverse scenario described above, the fraction of banks that maintain their capital adequacy ratio (CAR) above 10% would represent 57% of the system's assets. Under the severe scenario, the figure would be 50%. There is a contrast with 2012, when the fraction 9  of banks with CARs over 10% accounted for 85% of the system's assets in the severe scenario (figure 15). All this points to the need to enhance the sector’s resilience via higher capital levels, a situation that has been acknowledged in other jurisdiction. Along these lines, the bill that modernizes banking legislation contributes to the strengthening of domestic banks’ capital requirements. As a matter of fact, one of the main milestones in terms of financial regulation was the sending to Congress of the bill that modernizes banking legislation. This incorporates international standards and expertise. One of its proposed tools is the cushion of countercyclical capital, which seeks to increase the resilience of the banking system to absorb potential losses and reduce the volatility of financial cycles. In this sense, it is essential to identify local financial cycles, taking into account not only external factors but also the idiosyncrasy of the Chilean banking system. These elements are addressed in a special chapter of this FSR. Because the Central Bank of Chile will be in charge of implementing this policy, the Board will continue to focus its efforts on its proper application, taking into account both its benefits and the potential direct and indirect costs of this tool.

Figure 13 90-day delinquency rate (percent of loans)  6  12  Clearing houses and family subsidies (right axis)  5  10  4  8  3 Banks  6  Retail  2  4  1  2  0  0 11  12  13  14  15  16  17  Source: Central Bank of Chile using SBIF, SUSESO and SVS data. 19  Figure 14  Capital adequacy ratio by country (*) (percent)  30  30 Ireland  Sweden  2017  26  26  Luxembourg New Zealand Norway  22  22  Denmark Germany France Czech Rep. Brazil Colombia Belgium Hungary Japan Switzerland México Peru Turkey Israel Canada Chile  18 14  U.S.  U.K.  18 14  10  10 10  15  2011  20  25  (*) Dotted line marks 45-degree angle. Green diamonds correspond to Latin American countries (red for Chile). Source: Central Bank of Chile using IMF (FSI) data.
Denny H Kalyalya: Financial access and sustainability of financial services in Zambia Paper presented by Dr Denny H Kalyalya, Deputy Governor Operations, Bank of Zambia, at The Zambia Institute of Chartered Accountants Annual Business Conference, Livingstone, 7-8 August 2008. * 1.0  *  *  Salutation  • The Guest of Honour • Chairperson • Distinguished participants • Ladies and Gentlemen It is an honour and privilege for the opportunity to make a presentation to this important ZICA Annual Conference. Before going any further allow me to convey the Governor’s sincere apologies for not being able to come due to prior commitments. He did also send his good wishes for a successful conference. 2.0  Introduction  In my brief intervention, I will endeavour to address the question of financial access and sustainability in Zambia. It is generally recognized that the financial sector plays a critical role in the mobilization of development finance and stimulation of economic growth and development in general. An efficient, broad-based and dynamic financial sector is an essential element in the attainment and maintenance of high rates of economic growth and sustainable development. Through their services, banks and non-bank financial institutions (NBFIs), they provide an efficient mechanism for the allocation of savings and investment and they enable financial transactions to take place at minimum cost. To discuss the issues of financial access and sustainability in Zambia in a little more detail, our presentation is organized as follows.

This certainly helps create an environment that facilitates economic growth and the population’s welfare. This is the main contribution that our institution can make to the development of our country, and the Board of the Central Bank of Chile is firmly committed to fulfilling this role. Thank you. BIS central bankers’ speeches  7  Figure 1 Current account balance $ billion) 300  300  200  200  100  100  0  0  -100  -100  -200  -200  -300  -300  -400  -400  00 Spain  02 Portugal  04 Italy  06 08 10 Greece Germany  France  Source: International Monetary Fund. Figure 2 Incidences on y-o-y CPI inflation (*) (percentage points) 5  5  4  4  3  3  2  2  1  1  0  0  -1  -1  -2  -2 10  Jul. 11  Energy (8.7%) Core CPI services (40.0 %) CPI  Jul. 12  Foodstuffs (18.9%) Core CPI goods (32.4 %)  (*) In parentheses, shares in 2009 CPI basket. Sources: Central Bank of Chile and National Statistics Institute (INE).