samchain/econo-pairs-v1 huggingface dataset:
Jean-Claude Trichet: The Euro after two years: present situation and prospects Speech by Mr Jean-Claude Trichet, Governor of the Banque de France, at a conference organised by “The Economist”, held in Madrid, on 7 February 2001. *  *  *  Ladies and gentlemen, it is a great pleasure and an honour for me to be invited to speak in this seminar organised by The Economist, today in Madrid. I also thank Arthur Andersen and the Banco Bilbao Viscaya for their contribution to this gathering. It is also a great pleasure to meet again with my colleague Jaime Caruana, between two meetings of the ECB Governing Council. I am particularly happy to express my views on the already successful existence of the euro and Monetary Union, and the conditions and prospects for its further success. st  As you all know, within ten months, on 1 January 2002, the euro will become a reality across Europe as euro banknotes and coins are introduced. This will be the largest monetary change over the world has ever seen. However, it should be recalled that for all economic, monetary and institutional st purposes, Monetary Union was created on 1 January 1999. Then, a decisive event in the history of Europe occurred. The euro was born and the irreversible nature of this change has convinced an increasing number of economic players that the success of the euro is necessary for Europe.

The significance of having as our own the world’s second most important currency is not lost upon a central banker. For, beyond its proven economic benefits, the euro signifies the virtual elimination of the potential risk of an exchange rate crisis to which the currencies of small, open economies are exposed on a daily basis in a world characterized by the free movement of capital. We have now traded in this vulnerability for the greater security and credibility afforded by a major international currency. The euro has indeed been a success story in many respects. The disciplines of Economic and Monetary Union (EMU) were intended to promote the creation of a macroeconomic environment in which countries could thrive in an increasingly competitive market place. The euro area’s track record in terms of price stability, trade expansion and employment creation suggest that these expectations have been largely fulfilled. The Central Bank of Malta is, therefore, proud to have become a member of the Eurosystem. From an institution charged with the preservation of price stability in Malta and with safeguarding the integrity of our national currency, the Bank now shares responsibility with the other members of the Eurosystem for shaping monetary policy in the best interest of 320 million people in fifteen countries. This is a task which my colleagues at the Bank and I approach with confidence and enthusiasm. From a national perspective, the challenge now is to maximize the benefits of participation in monetary union by making further progress on the path of reform.
Recent barriers include new measures to prevent foreign investment in national infrastructure. At the same time, the WTO’s position has weakened, making it more difficult both to resolve disagreements and carry out needed regulatory reforms. 4  Last year was marked by trade tensions between the United States and China. The United States raised tariffs on a range of imports, and China retaliated in kind. The immediate effects of increased tariffs are higher selling prices on goods liable to tariffs, adversely affecting consumers and producers who rely on imported input goods. We have also seen that growing uncertainty is dampening business’ investment appetite. The tariff increases have already had an impact on Chinese and US GDP. NORGES BANK ECONOMIC PERSPECTIVES 14 FEBRUARY 2019  The negative effects of the measures taken so far are fairly moderate (Chart 3). The danger is that trade tensions deepen, and that retaliatory measures lead to a negative spiral. More countries could be drawn into the conflict, with an even broader rise in tariff rates. In that case, not only the United States and China would be affected, but also Europe and the rest of the world. Chart 3 Trade tensions curb world GDP.

1970 – 2018 1) 250 250 Gas Oil  200  200  150  150  100  100  50  50  0 1970  1978  1986  1994  2002  2010  0 2018  1) Preliminary figures for 2018. Source: Norwegian Petroleum Directorate  9  There is still global demand for oil and gas. If we reduce production on the Norwegian shelf earlier than planned, other suppliers are ready to take over. The climate impact of an earlier reduction would therefore be marginal, while the costs to Norway would be substantial. NORGES BANK ECONOMIC PERSPECTIVES 14 FEBRUARY 2019  The oil industry has been an economic engine for Norway for close to 50 years. The revenues from this industry have improved the welfare of today’s citizens and the citizens of tomorrow. The spillover effects from the oil sector to the wider Norwegian economy are substantial. Throughout our country there are oil-related jobs to be found. More than 10 percent of all employed persons in Norway are either directly or indirectly working for the oil industry.3 Innovation and skills development in the industry have also benefitted other sectors. The oil industry has been through a demanding period of personnel cuts, cost savings and rationalisation. The restructuring in the industry that was already underway became even more pressing when oil prices collapsed in 2014. Today, oil companies are hiring again, and will likely continue to do so in the coming years.
6 See, for example, the boxes on pages 18-20 of the February 2017 Inflation Report and page 29 of the May 2014 Inflation Report. The solutions to these puzzles are also likely to involve some factors unrelated to globalisation. For example, one explanation put forward for missing dis-inflation is that companies facing liquidity constraints maintained prices at higher levels than they would otherwise have done in order to preserve cash flows and remain in operation (see Gilchrist, S, Schoenle, R, Sim, J and Zakrajšek, E (2017), ibid). Consistent with this, analysis by Bank staff found that UK businesses with weaker balance sheets increased their margins by more at the height of the crisis than those with healthier balance sheets). 4  All speeches are available online at www.bankofengland.co.uk/speeches  4  Chart 3b: Core inflation rates exhibited little co-movement post-crisis  See notes and sources to Chart 3a. Central banks have (thus far) been able to maintain their monetary sovereignty, achieving their mandates by offsetting the secular disinflationary forces from global integration. None of this, however, is to downplay current challenges of maintaining price stability in the face of global forces. The combination of the growing contestability of markets and prolonged synchronised weak demand may be restraining wage expectations. Moreover, technological changes, particularly those which could globalise markets for many services, may extend and deepen trend global disinflation. And, the global financial cycle could exacerbate the challenges of returning domestic inflation to target, particularly given the proximity of interest rates to the effective lower bound.

Thus far, this disinflationary effect has mostly affected the 9  prices of goods (Chart 5), as trade in goods has been liberalised to a much greater extent than services. 10  Monetary policy makers in advanced economies have responded by accommodating relatively higher services price inflation in order to meet their inflation objectives. For example, in the UK core goods prices fell an average of 0.3% over the past two decades, services prices rose by an average of 3.4% and total CPI inflation was on average at target. 11  7  The slowing of trade growth since the financial crisis largely reflects the rotation of global growth to countries with less import intensive demand, notably the US and EMEs, as well as the declining import intensity of final domestic demand in China as the composition of growth there rotates towards consumption and services. 8 This positive supply shock comes about because the availability of cheap imports improves advanced economies’ terms of trade – the price of exports relative to that of imports. For more detail on this channel, see ‘Globalisation and Inflation’, speech given by Charles Bean at the LSE, 24 October 2006. 9 Abdih, Y, Balakrishnan, R and Shang, B (2016) ‘What is keeping US core inflation low?’, IMF Working Paper No. 16/124. 10 For example, barriers to services trade are estimated currently to be up to three times higher than those for goods trade. See ‘A fine balance’, speech by Mark Carney at the Mansion House, 20 June 2017.
In the area of equity-release mortgages (ERMs) we have consulted on measures to ensure that investments1 in that asset class, which is growing by more than 10% a year, are appropriately and consistently reflected in the regulatory balance sheet. We want to do this both for prudential reasons and to facilitate competition by establishing a level playing field. Our proposition is a simple one: house price growth above the risk-free rate is a risk to which ERM providers are exposed; it should not therefore be assumed and banked up-front as capital in the form of the Matching Adjustment, even if a reasonable person could expect house prices to increase in that way – instead, that benefit should be earned if and when the house price growth actually materialises. We have received many strong views in response to this suggestion, and are considering them now before reaching a final view. Good cop I will turn now to the other part of our work – areas where, as I see it, there is generally no inherent conflict and we and firms are engaged in a shared endeavour to deal with the challenges we face. You may be relieved to hear that, in my determination to be the Mansion House good cop this year, I will only touch on two examples of this – though each of them is a huge topic. Operational Resilience First, what we call ‘operational resilience’ – the ability of firms to keep going operationally as well as financially.

I know many of you have come here today to hear more about how to tap into this rapidly developing market to finance your business in the future. Now of course, as a global hub, it does not mean that all offshore RMB businesses are to be conducted only in Hong Kong. Quite the contrary. As RMB becomes more widely used and accepted by trading companies and investors worldwide, it is natural to see financial institutions providing RMB services to meet the demand of their customers. That said, even as its role evolves over time in line with market changes, we do see Hong Kong continuing to be an ideal place for companies to conduct their RMB banking and financing activities. In addition, Hong Kong will develop its ability as a RMB hub to serve a growing network of financial institutions around the world. And in this last respect we are seeing real signs of development. More foreign banks are either choosing to have a base in Hong Kong or are using RMB correspondent banking services provided by banks in Hong Kong. As of the end of March 2012, there were close to 200 banks participating in Hong Kong’s RMB clearing platform. Of these, 170 are foreign-owned or located overseas. At the same time, over 1,100 RMB correspondent accounts were maintained by overseas banks with banks in Hong Kong.
Durmuş Yılmaz: Recent economic and financial developments in Turkey Speech by Mr Durmuş Yılmaz, Governor of the Central Bank of the Republic of Turkey, at the press conference for the presentation of the Inflation Report, Ankara, 27 October 2009. *  *  *  Distinguished Guests and Members of the Press, Welcome to the press conference held to convey the main messages of the October 2009 Inflation Report, one of the most important communication tools of the inflation-targeting regime of the Central Bank. The report typically summarizes the economic framework addressed in monetary policy decisions, elaborates global and domestic macroeconomic developments and presents the medium-term inflation forecasts, which have been revised in view of previous quarter developments, along with the monetary policy stance. I would like to start my speech by underlining once more that the Central Bank’s assessments on inflation outlook and economic activity, which I will share with you in detail shortly, should be considered in the light of existing global conditions. The global crisis, which erupted in developed markets and spread across the world during the last quarter of 2008, has continued to affect the economic outlook, albeit less forcefully, during the third quarter of 2009. In this period, data releases on activity indicated that the recovery continues to gain traction with growth forecasts being revised upwards after sustained downward revisions (Figure 1).

However, improvements in many leading indicators are still tentative, problems across credit markets linger, and employment remains in a precarious state, all suggesting that recovery is likely to be anemic and protracted. Figure 1: Revisions to GDP Forecasts in Advanced Economies in the Last Three Months (Seasonally Adjusted, 2008Q2=100) 104 102 100 98 96 94 92  USA (Sep09)  USA (June09)  Euro Zone (June09)  Euro Zone (Sep09)  90 2  3  4  1  2008  2  3  4  1  2009  2  3 2010  4  1  2 2011  Source: Consensus Forecasts, June and September. 1. Inflation developments  Distinguished Members of the Press, Inflation developments observed in the first three quarters of 2009 were shaped around the framework that I have already mentioned. The crisis was characterized by a steep drop in economic activity, which was mainly driven by shrinking external demand, tighter financial conditions, and rising precautionary saving. The sharp contraction in economic activity and the collapse of commodity prices have brought down inflation rates across the world,  BIS Review 143/2009  1  including Turkey. In this respect, after displaying a sharp decline in the first half of 2009, annual inflation maintained a downward trend in the third quarter to become 5.27 percent breaching the lower limit of the uncertainty band set (Figure 2).
The inflation performance over the last twelve years, except for the year 2012, is an anchor to monetary stability in Algeria, despite structural excess liquidity in the money market. After a surge in 2012, the disinflation process started in February 2013 and continued through 2014, with inflation declining to an annual average of 1.49% in July. The contribution of monetary policy to preserving financial stability in Algeria remains crucial, given the predominance of the banking sector in the Algerian financial system and banks’ potentially important role in the development of financial intermediation. At the same time, the financial capacity built during the period 2000–2008 enabled the Budget to mitigate the impact of the 2009 external shock, while avoiding any crowding out effect. This financing capacity remains significant and accounts for 34% of GDP at the end of 2013, in a situation of very low domestic public debt (8% of GDP in 2013) and implementation of fiscal consolidation. In contrast with the case of several emerging and developing countries, credit expansion in Algeria continued at the pre-global financial crisis pace, and even at a higher rate since 2010, in particular as regards credit to the private sector. The strong growth of credit to the economy in 2013 (20.3% against 15.1% in 2012 and 14% in 2011), driven by medium and long term credit dynamics (27.6%), was a key determinant of monetary expansion in 2013. As regards the private sector, the credit growth rate over the last thirteen years averaged 19.4%.

The public banks restructuring cost, in terms of non-performing loans repurchased by the Treasury (excluding interests owed by the Treasury, materialized in bonds), accounted for 2.38% of GDP for the decade 1991–2000. For the same period, when including the amount of foreign exchange losses and interest rate spreads paid by the Treasury on account of public banks earlier external borrowing to support the balance of payments, the overall cost reached 3.26% of GDP. BIS central bankers’ speeches  1  Improvement in public finances during the 2000s enabled further restructuring of public banks’ balance sheets, with part of the NPLs consisting this time of bad loans to the private sector. For the period 2001–2010, repurchases by the Treasury through issuance of securities, essentially with regard NPLs to public enterprises, reached about 1.30% of the decade’s GDP. Finally, in 2011–2012, repurchase by the Treasury of loans to public and private enterprises accounted for 235.7 billion dinars, representing 0.77% of GDP. Along with NPLs repurchase operations, public banks received financial support from the Treasury to increase their equity capital. The overall amount in this regard reached 238.8 billion dinars, of which 107.7 billion dinars in cash and 131.1 billion dinars in equity securities. Part of these securities was subsequently repurchased by the Treasury, bringing their outstanding amount to 56.2 billion dinars by end 2010. It is worth noting that, during the 2000s, public banks provisioned significantly and benefitted from additional financial support from the Treasury to further increase their equity capital.
Machine would, in effect, replace man (and the odd woman). Other things equal, this greater transparency would tend to increase the degree of accountability of, and trust in, the central bank among the general public. But other things are rarely equal. The downsides of slavish adherence to a fixed rule are also wellunderstood. 77  They include the fact that rules can sometimes be fragile and fallible, particularly at times of  structural change. If blind adherence to an algorithm sent policy and the economy into a tailspin, that is unlikely to enhance trust in central banks among the wider public. That does not mean, of course, that rules cannot play a useful informational role in setting policy, as is the case in a number of central banks. 76 77 78  78  Meltzer (2009), Taylor (2011, 2012). Williams (2015, 2016b), Haldane and Radia (2016), Yellen (2017). Williams (2014), Yellen (2017). 25  All speeches are available online at www.bankofengland.co.uk/speeches  25  An alternative way of making monetary policy more accountable would be to canvass the views of the general public directly. 79  Digital technology means this option is feasible. But would it be desirable? Public  referenda are hardly infallible. You may have heard there was an important referendum in the UK last year. The result came as a surprise to many. For some, it was a shameful example of the perils of populism.

However, one can argue that there is something wrong in the level of profits shown if the latent credit risk in the loan portfolio is not properly taken into account. Intrinsically every loan has an expected (or potential) loss that should be recognised as a cost by means of an early provision. Otherwise, the picture of the true profitability and solvency of the bank over time could be distorted. More dangerously, the overvaluation of profits might lead to an increase in dividends that could undermine the solvency of the bank. Therefore, the acknowledgement of latent losses is a prudent valuation principle (similar to the mathematical reserves set aside by insurance companies) that contributes to correcting the cyclical bias that currently exists in the profit and loss account. The management of credit risk in the banking sector has perhaps something to learn from insurance practices. Theoretical papers on bank credit risk management also go in the same direction, stressing the importance of proper pricing (i.e. the interest rate charged should cover expected losses as well as the cost of holding capital for unexpected losses). Estimating expected losses when the bank assesses the borrower is the first step for sound risk management. Proper risk management is obviously a primary task of bank managers and shareholders. But we, as bank supervisors, should evaluate the effectiveness of a bank’s policies and practices for assessment of loan quality and provisioning practices.
In general, credit terms should be calibrated to the quality of the information provided by the hedge fund counterparty. To the extent this is done generally across those funds that are less transparent, have weak risk management disciplines and/or inadequate operational infrastructure, they will be able to take on less leverage, which would limit the potential risk they may pose in a disruptive event. As these points suggest, it is not enough to simply manage the firm’s direct potential future credit exposure to hedge funds within prudently low limits. This has to be complimented with a more exacting approach to the evaluation of a firm’s overall vulnerability to market risk that includes full consideration of the potential impact of a large shock, including one that involves hedge funds. Alongside these enhancements to risk management practices, we believe that market participants should also intensify their efforts to improve the underlying infrastructure of the markets in which hedge funds are important. Weaknesses in close-out procedures for OTC derivatives were among the areas singled out by the CRMPG for collective action in the wake of LTCM, and important progress has been made in this area since. In addition, there are potentially valuable efforts underway to standardize documentation and improve the confirmation and execution process in these markets.

Ardian Fullani: Effects of the exchange rate regime Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the lecture of the Governor of the Central Bank of the Republic of Turkey, Mr Durmus Yilmaz, entitled "Current Global Financial Crisis and Recent Developments in the Turkish Economy and Monetary Policy", Istanbul, 24 September 2009. *  *  *  Ladies and Gentlemen, It is my great pleasure to give the greeting speech in this joint meeting, in which our dear and honourable friend, the Governor of the Central Bank of the Republic of Turkey, Mr. Durmus Yilmaz, will address very important theoretical and practical issues related to the most recent global developments, sharing at the same time his experience in Turkey. The global financial crisis hit all the advanced economies severely. It certainly affected the emerging economies of South-East Europe, our two countries are part of. The contraction of global economic growth, the decline in foreign trade, the higher risk premiums, the interrupted functioning of the credit system and the rush to get liquidity affected our economies as well. These economies remain closely related to the Euro area economy through a number of trade and financial channels. The response of fiscal and monetary policies to this crisis is of prime importance; this aspect will be thoroughly elaborated by our dear friend.