samchain/econo-pairs-v1 huggingface dataset:
This could happen when expectations are not only forward looking, but have a high degree of inertia, due to, for example, high levels of indexation or lack of credibility. In contrast, when expectations are well-anchored to an inflation target, becoming also more forward looking, the monetary policy adjustment required to achieve stable and low inflation is milder and the sacrifice ratio declines, reducing the volatility of both inflation and output. 4 Of course, achieving credibility is not an easy task and can be done through different avenues. Certainly the conquest of low inflation, as occurred in developing countries, increases the belief in policymakers’ competence and commitment to controlled inflation. This allows stable inflationary expectations and reduces inflation persistence. An inflation target, with the necessary institutional support such as an independent central bank with a clear mandate to price stability, helps in this regard. It establishes an explicit commitment to keep inflation low and stable through time, and a strategy to adjust to deviations, including the time horizon in which this will be achieved. Indeed, among developing countries, those  4  For a model on this issue see De Gregorio (2007). BIS Review 74/2008  3  that adopted inflation targeting regimes have had lower inflation and output volatility than the rest (figure 3). Of course, this evidence is only suggestive and the direction of the causality could be the reverse, with more stable economies being more prone to implementing an inflation targeting regime.

Opting for the central bank as a national macroprudential authority can be warranted by the experience accumulated in the field, especially in the case of a dominant position of the banking sector, and by the possibility of a quick implementation of adopted measures (since the institution is responsible for identifying systemic risks and, at the same time, has available the macroprudential tools to put into practice the measures considered adequate). Some disadvantages of having supervision integrated in the central bank are manifest in this case as well, such as the backfiring of potential errors in the area (be they real or merely perceived as such by the public) on monetary policy credibility or a keener interest in politically capturing the institution as a result of the substantial rise in central bank powers. As Klaas Knot has showed more than once, the key argument in favour of creating a board is that it enables the pooling of the expertise of all financial market supervisors and of the government; the drawbacks would be more diffused accountability and the risk of delayed implementation of recommendations, given the involvement of several institutions. A prominent role of the central bank in the board (either by chairing it or through the number of members assigned) might mitigate the risk of inaction.
In 2017, the Bank of Albania, in cooperation with the Ministry of Finance and Economy and the World Bank explored options for developing the secondary market of Government securities and improving the functioning of the primary market. This project will help in the Government securities trading, increasing the investors’ base, and forming a yield curve that is a representative one for the economy. Such a curve enables a better management of liquidity for all the financial agents, as well as a better monetary policy transmission to financial markets. I would like, however, to underline that the development of markets is a long process, which requires cooperation by all economic and financial agents in the economy. *** Turning to the contribution of the Bank of Albania in the overall improvement of the financial and economic context, I would like to present now our work with regard to safeguarding and promoting financial stability. The main aspects of our work consisted in strengthening the stability 5/9  BIS central bankers' speeches  of the banking system, enhancing its resilience to shocks and adoption of international standards. 3. Financial stability and banking system performance In 2017, the activity of the banking system was stable and supported the safeguarding of the financial stability. As at the end of 2017, the share of its assets stood at 92.5% of the Gross Domestic Product (GDP). The main financial indicators of the banking sector activity improved, and the net financial result of the banking sector grew considerably in 2017.

The highest body responsible for the Bank of Albania, the Supervisory Council has paid attention not only to complying with the legal obligations of the Bank, but also to strengthening the institutional governance, as an essential precondition for enhancing its credibility. In 2017, the Medium-term Development Strategy of the Bank of Albania, together with the medium-term budget, was updated. The Medium-term Development Strategy of the Bank of Albania sets out the main objectives for the 2018–2020 period. It establishes the priorities in the main functions of the Bank of Albania and development of auxiliary services. Thus, the Bank of Albania has adopted the model of a number of banks of the European System of Central Banks, which have a twofold strategic planning system: (i) a major planning process, once in 3-5 years; and (ii) a yearly update. The span of the application ensures adequate planning support for the guiding medium-term budget of the Bank of Albania for 2019 and 2020. For the first time, this year the capital expenditures and the projects included in the budget were preliminary approved by the Capital Expenditure Committee, a body established as a control measure over major expenditure and investments. With a view to strengthening the internal audit process, the Audit Committee was established in 2015 and is composed of three members of the Supervisory Council. In 2017, this Committee exercised its duties with a view to support the strengthening of internal and external control lines. It met regularly, without the presence of the administrators, with the Inspector General.
These thanks would not be complete without expressing publicly what I have already had the opportunity to say in private to the members of the management and staff of the European Monetary Institute: without their personal commitment, their spirit of innovation, their boundless ability to find the happy medium - and not just a practical compromise between the concerns of our central banks - nothing would have been accomplished. What can I say to you know by way of farewell? There is little point in giving you the “final score” at this stage - the match is not over yet ... Recommendations on how to cope with the challenges which are looming on the horizon? You will deal with them effectively, I am convinced, without my advice. But perhaps you will accept some reflections on the ability and the limits - of monetary policy to meet the expectations of our fellow citizens who, while appreciating the confirmation (or renewal) of price stability, are looking for stronger growth and, above all, more jobs. I share their concern unreservedly. The current level of unemployment in the majority of our countries is ethically unacceptable; it is leading to the BIS Review 67/1997  -2-  erosion of the social fabric and, because of the waste it represents, it is a clear signal that the economy is not functioning properly. Reducing unemployment must be the prime objective of action by the authorities. But what should be the role of monetary policy?

In view of the short time available to me - plus the fact that you cannot contradict me - I shall be brief. You may perhaps feel that I am being dogmatic: if so, please bear with me. I should like to make four observations. 1. There is not doubt whatsoever that monetary policy can bring inflation under control. When monetary policy is not flanked by the appropriate budgetary policy, and when labour markets - but also goods and services markets - are not flexible, bringing inflation under control will take time. It will take time, and it can also entail costs - which could otherwise have been avoided. But even so, these costs would still be less than the (very high long-term) cost of not dealing with inflation. Let us not forget that while the rich and the powerful can protect themselves from any loss of purchasing power of their money - and in many cases can even benefit from such a loss - the weak and the not-so-rich will always be the losers. Inflation has always been a major source of social iniquity. In addition, it prevents the economy from functioning properly, by falsifying the signals which are given by prices. The speculative boom in the real estate markets in some of our countries at the end of the 1980s caused serious damage - and we are still paying the price. 2.
I would now like to discuss three questions in particular. The first is whether CSR is a stable concept or one that is still evolving? This concept broadly stems from that of sustainable development, which is defined as development that meets present needs without compromising the ability of future generations to meet their own. Its blueprint was set out at the 1992 UN Conference on Environment and Development in Rio de Janeiro (the first Earth Summit). It is based on the principle of development that is economically efficient, socially equitable and ecologically sustainable. CSR, whose initial objective was accountability, still largely appears to be an evolving paradigm closely linked to the current transition towards a new economic model. BIS Review 132/2008  1  In this respect, Rio brought to the fore the need for an ISO standard at the company level in order for companies themselves to take account of their impact and change their processes as part of a preventive approach. The UN addressed this dimension and brings together, under its aegis, the initiatives of the major companies that adhere to a relatively general charter. The Johannesburg World Summit on Sustainable Development (also known as Rio Plus 10 or the Second Earth Summit), largely focused on companies wishing to take centre stage in the protection of the planet and adopt a proactive role. The ethical dimension of CSR lends strength to the questions of stakeholders and employees as to how their funds are used.

This would imply that the taking into account of CSR in management models would result in a certain form of self-regulation, for example with recognised codes of conduct. Different incentives are contributing to this, such as pressure from direct stakeholders and NGOs and regulatory incentives, in particular in terms of reporting. Lastly, I would like to say a few words about the Banque de France. I wish to stress that, as a company, CSR is of great importance. Its current sustainable development strategy combines a two-pronged approach: an Environmental Footprint Reduction Programme and a review of its tasks in the light of sustainable development. In this respect, the Banque de France will, for example, seek to develop the financial culture of the public, spread best practice in the fight against money laundering, encourage economic and financial research in new fields, such as the development of “carbon finance”. I attach great importance to these subjects, and my wish is to see the Banque de France adopt its own sustainable development charter, which formalises its commitments. This should be achieved by the end of this year and will no doubt further enhance the actions of the Banque de France. In the light of this collective awareness of the environmental (finitude and fragility of natural resources), economic and societal implications, central banks perform their task of preserving financial stability while taking into account and anticipating events. This approach, as recent developments have shown, has to be increasingly systemic and co-operative, involving companies, banks, governments and central banks.
Public finances were hit hard when the banking sector had to be rescued in the wake of a bursting housing bubble, in which housing prices and bank lending had chased each other’s tails to form an unsustainable spiral. This was why these countries quickly encountered major problems in managing the growth of their sovereign debts, despite their relatively good position at the outset. An excessive build-up of debt – irrespective of whether it takes place in the private or the public sector – leads to problems sooner or later. Events in the euro area in recent years provide a frightening illustration of this. It is clear that the euro area is facing major challenges, not only for individual countries but for the EMU as a whole. The ECB, the EU and the IMF have implemented a range of support measures to come to terms with the acute problems. A number of new decisions and measures have also been announced within the EMU over the course of the year. However, it is important to point out that responsibility for managing these problems primarily lies with the politicians in the respective countries. Decisions are required at the national level, not only to resolve the problem of weak public finances but also to improve competitiveness (see Figure 6).

The origins of the crisis lay in problems on the US housing market, but after the bankruptcy of Lehman Brothers in September 2008 the situation developed into a global financial crisis. GDP in the world as a whole fell for the first time since the 1940s (see Figure 2). There was also a dramatic fall in global trade (see Figure 3). This was then followed by a couple of years in which the global economy began to recover, and global trade increased (see Figure 3). However, it did not take long for clouds to gather on the horizon again. Problems with major budget deficits and sovereign debts became apparent in several countries in the euro area,  BIS central bankers’ speeches  1  primarily in Greece, but also in Ireland, Italy, Spain and Portugal (see Figure 4). In Europe, the financial crisis was followed by a debt crisis. However, the reasons why the various countries were hit by problems were not always the same. In Greece, for example, public finances were far too weak at the outset to cope with such a severe downturn as that brought about by the financial crisis. But countries like Ireland and Spain also suffered serious problems, despite their relatively strong public finances at the outset. How could this happen? The problems on the US housing market originally triggered the global financial crisis. But problems also arose on the housing markets in several other countries, such as Spain and Ireland (see Figure 5).
Mugur Isărescu: Recent developments in central bank governance Panel presentation by Mr Mugur Isărescu, Governor of the National Bank of Romania, at the "Central Bank and Supervisory Governance" conference, organized by the National Bank of the Netherlands, Amsterdam, 12 February 2016. *  *  *  Ladies and gentlemen, It is a great honour to address the audience during this high-level conference on a subject of special interest to all of us, the recent developments in central bank governance leading to heated debates every time they are brought to the fore. Mr. He has done a wonderful job in structuring the challenges of nowadays’ central banking and in outlining the importance of effective governance arrangements in order to meet these challenges – his presentation is a testimony to IMF’s unique ability to draw upon a vast set of worldwide institutional experiences. I, in turn, will draw mainly upon a narrower, but hopefully no less relevant, set of institutional experiences, gathered during my tenure as Governor of the National Bank of Romania. In my address today I intend to deal with the issue of recent developments in central bank governance by looking at: 1. The central bank objectives as the starting point in designing its governance framework; 2. How the NBR dealt with the financial stability as an objective, from an institutional point of view; integrating or separating monetary policy and supervision; 3. A short history of institutional developments within the NBR for ensuring financial stability; 4. The internal control layers in the NBR; 5.

Although underpinned by the straightforward proposition that capital requirements should be more sensitive to risk, the new Basel proposals are frequently referred to as a 'package'. I would describe the components as, first, some very difficult technical thinking, which has addressed questions regarding the purpose of capital that were barely even thought of back in 1988. The second component is, unsurprisingly, pragmatic compromise. The result is, I think, a reasonably coherent whole; I know that those involved have tried to think about the sum of the parts as well as the individual parts. And it is this question of the overall, long-term impact of the new Accord that I would like to focus on today. The Bank of England has as two of its three core purposes maintaining the stability of the financial system and seeking to ensure the effectiveness of UK financial services. Both are relevant to the discussion of capital adequacy. The Bank, participating in the discussion of the New Accord as a member of the Basel Supervisors Committee, has looked at the proposals, not only from the perspective of financial stability but also with regard to the efficiency of the banking system. My intention this morning is to start by discussing how the principle of risk sensitivity has been translated into the New Accord. I want then to consider the question of whether the proposals have in some cases achieved too little risk sensitivity and the implications of this for the level of risk capital in the system.
more than the World Bank - and even, in some cases, as a lender of last resort, v outside the framework of the International Monetary Fund (IMF) and any collective rules. However, the renminbi's share is likely to  Page 3 sur 6 remain small, even in the medium term: its internationalisation will be structurally held back by its very limited convertibility. vi More broadly, the BRICS – in particular President Lula's Brazil - are expressing their wish to de-dollarise their economies, or even to create a common currency. Utopia? European countries, while having shared foundations, know better than anyone how long it would take to give birth to a single currency. Nonetheless, these political premises call for vigilance, because they would lead to fragmentation rather than monetary diversification, but also because they resonate with other, more economic arguments. Other, shorter-term forces are at work. The supply of safe global dollardenominated assets depends on the United States’ fiscal capacity, while demand for these assets is set to grow. Yet, the recurring US debt ceiling crisis - this year was particularly acute - may erode international investors' confidence in dollar-denominated assets, making Triffin's dilemma more topical than ever. In addition, the fight against inflation in the United States has led the Fed to rapidly raise its rates since 2022, which has potentially difficult consequences for the financial stability of the many countries that are de facto dependent on the US dollar.

In 2016, there were over 500 confirmed cases of measles, five times higher than at the turn of the century. If we turn from public health to economic and financial health, the costs of a lack of public trust and understanding are in many respects quite similar: expert advice and services may not be taken-up, worse alternatives may be sought out and contagious scare stories may be allowed to proliferate. Each of these has societal costs which may be significant. Financial exclusion (people excluded from access to core financial services and advice) remains pervasive in the UK. There are almost 2 million people in the UK without a bank account. 26  In the most deprived parts  (including parts of London, Manchester, Middlesbrough, Liverpool, Bradford, Birmingham and Glasgow), over a third of people do not have access to a bank account. 27  While not all of these problems can be  blamed on a misunderstanding and mistrust of finance, these are still depressing statistics. Many more people suffer the consequences, not of financial exclusion, but financial illiteracy. Studies have identified a range of ways in which this can adversely affect people’s financial health. Financial illiteracy is a key contributor to excessive indebtedness. in the run-up to the sub-prime crisis. 29  28  It is associated with an increased incidence of default, including  And illiteracy causes people to seek out high-cost, non-standard  sources of credit, the financial equivalent of alternative medicine.
While these trends tell us something about relative patterns of global interconnection, they leave unanswered the question of whether global finance is a truly integrated network. To gauge that, consider an alternative measure of global capital market integration – the correlation between national saving and investment rates. From Feldstein and Horioka (1980), we know that this correlation provides a proxy for capital market integration. For example, a savings/investment correlation of one indicates a closed capital account: all domestic investment needs to be fully financed from domestic saving. At a global level, this  2  BIS central bankers’ speeches  would signify something close to global financial autarky. By contrast, a correlation of zero implies that domestic investment can be fully financed on global capital markets. This would signal something close to perfect capital market integration. So saving/investment correlations of zero and one define the outer limits of global capital market integration. Chart 3 plots this correlation coefficient over the same 140-year period shown in Chart 1. Broadly-speaking, the two series track one another fairly closely. But Chart 3 now allows us to say things about the absolute degree of capital market integration. And what a rollercoaster ride it has been. During the first period, from around 1880 up until the Great Depression, global financial integration sat roughly mid-way between its outer limits. Integration was high-ish, but far from perfect. For around a fifty year period, from the 1930s through to the 1980s, global finance then went into hibernation.

The literature has typically assumed (i) that a monetary policy tightening is effected by the central bank withdrawing reserves from the system (or slowing the pace of reserves injection); (ii) that banks are required to hold a proportion of transactions deposits in reserves, so that reduced reserves provision entails slower deposit growth; and (iii) that they do not have unrestricted access to liabilities that are not subject to reserves requirements, and so cannot fill the gap left by slower deposit growth and must, instead, slow loan growth, which they do by tightening credit conditions. 9 The first two steps seem archaic. We effect monetary policy changes by controlling the price not the quantity of central bank money in the system; and, in the UK, banks choose their own reserves targets rather than having them determined by a balance sheet ratio of some kind. But the third plank in these models – restricted access to non-deposit liabilities, whether capital-like or not – plainly is still relevant today. In a world of asymmetric information, banks do not have unrestricted access to resources, and we do not believe that a bank’s lending  7  Adrian, Tobias, and H. S. Shin (2007), “Liquidity, Monetary Policy and Financial Cycles”, paper prepared for Current Issues in Economics and Finance. Adrian, Tobias and H S Shin, (2007), “Liquidity and Financial Cycles”, paper presented at the 6th BIS annual conference on “Financial System and Macroeconomic Resilience”.