samchain/econo-pairs-v1 huggingface dataset:
As for personal independence it should be also noted that the members of the Supervisory Board, apart from that of the Chair,[28] Vice Chair[29] and the ECB representatives[30] , are not protected under the SSM Regulation against arbitrary dismissal. There is also no legislatively protected minimum term of office for them. Second, the ECB’s accountability for its supervisory tasks is different from and more enhanced than that for its monetary policy task owing to the potential impact on taxpayers of the manner in which microprudential supervision is conducted. Throughout the financial crisis, taxpayers had to bail out banks supervised at national level. Even though, under the new EU resolution regime, the cost of bank failures is intended to be borne by bank shareholders and creditors, there is still a residual scope for public financial support, as we are currently witnessing. A further argument for a functional interpretation of the principle of independence is the principle of separation between monetary policy and banking supervision under the SSM Regulation. [31] Moreover, while the accountability obligations for monetary policy tasks are laid down in primary legislation,[32] the ECB’s accountability obligations for banking supervision tasks are subject to a specific regime set out in the SSM Regulation[33] and further detailed in an interinstitutional agreement between the European Parliament and the ECB[34] and a memorandum of understanding between the Council of the EU and the ECB.

In August, inflation, measured in terms of CPI and UND1X, was forecast from this perspective to rise slowly to around our 2-per-cent target. There is currently no reason to alter this forecast markedly. Some factors that are difficult to access Of course there are factors that could thwart the main scenario I've just presented. One such factor is a delay in the European economic recovery. Several countries in the euro area are contending with growth problems. Germany's GDP, which comprises one-third of that of the euro area, declined during the second quarter. Investment in Germany has fallen since 2000 while consumption has been weaker than the euro area average. There was also a contraction in second-quarter growth in France, whose GDP comprises roughly one-fifth of that of the euro area. This came after the country had enjoyed relatively robust growth in consumption in recent years, which had compensated  2  BIS Review 42/2003  for weak investment growth. There are also more fundamental problems in the euro area which could have a negative impact on economic activity. For instance, Germany is still suffering from the aftereffects of reunification. Moreover, the euro has appreciated sharply. In light of this, there is no doubt that the world economy is strongly dependent on a US revival. The outcome of the forthcoming wage bargaining round will also be of great importance, both for economic activity and inflation prospects.
As a result, French insurance companies remain fairly solid, and the own funds held largely cover regulatory solvency capital requirements for both life and non-life insurance companies, which is an important asset in the challenging environment in which they are operating. This is notably the case for the mutual insurance sector. Its solvency coverage ratio significantly exceeds 300%, which is higher than the average in France, thanks in particular to their prudent and long-term approach, with less pressure from the financial markets. However, adapting to a challenging environment does not come without new risks. For instance, it is necessary to closely monitor risks related to policyholder protection and advice, the excessive lengthening of bond maturities or the over aggressive search for yield. Now, I would like to focus on regulatory developments, which are numerous and may have an impact on the insurance business model going forward. The French insurance landscape has experienced major regulatory changes over recent years: a modification 3  of the taxation system of life/savings insurance contracts (Flat Tax), the possibility of changing credit insurance contracts annually (Loi Hamon/Amendement Bourquin), and the creation of a specific prudential status for French pension funds. The new Pacte Bill should bring about further changes that seek to promote long-term investment in equity, including a reform of the French life long-term insurance product (also known as Eurocroissance). In addition, at international and European level significant regulatory developments are also in the making.

Monetary policy, by contrast, is strengthened by this. Acting through the expectations channel, it can have a lasting effect on the expected flows of financial revenue. Affecting the real rate of intertemporal discount, it can deeply affect decisions on savings and consumption. The definition of the objective is now wider. Price stability has become an essential parameter in defining and measuring prosperity. From taking a relaxed approach to inflation and considering it secondary, nowadays low and predictable inflation is a pre-eminent criterion of economic performance. Why? High inflation hits savings – and therefore investment and future consumption – with a tax on real returns that rewards the risk of uncertain inflation. Low inflation, however, frees up resources that individual choices can allocate to increasing the fixed capital. A policy that neglects inflation gradually destabilises the economy. The costs of uncertainty about the value of the money, initially unimportant, then overlooked, subsequently become evident, and then are judged intolerable. At that point, voters express a strong preference for policies that promise rapid disinflation. But such policies impose high costs in terms of job losses, which have to be included in the dynamic calculation of the costs of inflation. Also, it should not be forgotten that inflation affects the poor more than the rich, and is therefore a tax on the weaker members of society.
But it is important to underscore that the objective of these measures remains thoroughly conventional: to secure medium-term price stability. And in actual fact they fit together as a coherent package that reinforces our traditional monetary policy strategy of steering inflation developments largely through the bank lending channel. This package has three parts. The first part has been measures to increase the influence of our interest rate policy over the shape of the yield curve – especially the longer-term maturities that have the strongest link to loan pricing in the real economy. So, as the inflation outlook has deteriorated we have both reduced our main refinancing rate to the lower bound and introduced measures to augment the impact of those very low shortterm rates on longer-term rates. This has included steering downwards expectations about the expected path of short-term rates; and introducing a negative interest rate on our deposit facility, which has helped further flatten the yield curve. Overall this has measurably increased the traction of our interest rate policy on relevant market rates. Yet it is one thing for the central bank to reduce markets rate at maturities that are pertinent to loan pricing; it is another for financial intermediaries to reflect those lower rates in the price and availability of credit for firms and households. As late as the middle of last year, viable firms were still struggling to access finance in parts of the euro area.

Encik Abdul Rasheed Ghaffour: Revolutionising Microfinance Welcoming remarks by Mr Encik Abdul Rasheed Ghaffour, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Global Symposium on Microfinance, Kuala Lumpur, 22 May 2017. * * * In biology, the transformation of a species is said to happen in rapid bursts. Imagine an ecosystem of marine life along a shoreline. For millions of years, it can remain relatively unchanged. But an extraordinary event – such as a sudden move in sea levels – can alter everything quickly. Within decades, fishes, mollusks and plants alike can dramatically change in size and shape. Ultimately, those that adapt emerge as the stronger species in the ecosystem. We are gathered here today in the very different context of microfinance. Nonetheless, parallels can be drawn with the theme of this event, ”Revolutionising Microfinance”. Think of the incredible pace of technological change in recent years. In 2016 alone, machine prevailed over man in the world’s hardest board game. Reusable rockets became a reality. Twitter helped a nation elect their president. For microfinance, that rapid burst of change is already upon us. It is therefore a great honour for Bank Negara Malaysia to partner with the World Bank in hosting this Global Symposium on Microfinance. We are privileged to have so many learned speakers here with us to share their invaluable insights.
And alongside the Roadmap actions per se, there have been tangible changes that are already paying dividends. Nearly three quarters of payment system operators surveyed by CPMI have either implemented or have concrete plans to implement the latest financial message standard (ISO 20022) by 2025. [5] The Bank of England joined that club last week by moving CHAPS, our high value payment system, to ISO20022. Several jurisdictions have extended the operating hours of their high-value payment systems to near 24/7, including countries as far apart as India, Mexico, Switzerland and indeed South Africa. Over the last two years, several countries have expanded access to their payment systems to new types of financial institution: including Japan, Switzerland and Singapore. Others, such as United States, have developed new guidelines for more transparent and risk-based assessment of account requests. And recent figures[6] show that two-thirds of cross-border transactions that take place via the Swift network reach end beneficiaries within one hour. The private sector is also investing in better infrastructure: almost $ was invested in paytech start-ups last year. [7] Recent survey suggested that 94% of financial institutions are planning to invest in their payment technology in the next 3 years. [8] Africa has a place among the leaders in payments innovation, from new mobile payment technologies with M-Pesa to CBDC with eNaira in Nigeria. The Pan African Payment and Settlement System (PAPSS), launched last year, is expanding rapidly: it has nine central banks and 41 commercial banks live on the system.

9  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  9  Figure 1B: Improvement in performance after adding Governance scores  Figure 1A naturally led us to ask whether there are other measures which can better anticipate problems at smaller banks and building societies. We know that the quality of governance is vitally important, so we repeated our experiment, adding PRA supervisors’ judgements about the quality of a firm’s governance. We found that adding judgements about governance reduced our false alarm rates more often – and by more – for small firms than for large. This of course doesn’t mean governance isn’t important at larger firms – the opposite is true in our view. But it does suggest that supervising governance can be even more important for small firms. Source: Bank of England and Bank calculations. Notes: Balance sheet data as of July 2007, taken from historical regulatory returns (see Sebastian J A de-Ramon, William B Francis and Kristoffer Milonas, ‘An overview of the UK banking sector since the Basel Accord: insights from a new regulatory database’, BoE Staff Working Paper No. 652 (2017)). Supervisors’ scores for Governance from historic FSA records (see Joel Suss and Henry Treitel, ‘Predicting bank distress in the UK with machine learning’, BoE Staff Working Paper No. 831 (2019)). To test the robustness of our findings to definitional choices, results are shown for two different definitions of “Large” and six different definitions of distress.
All in all, one may therefore expect a general increase in bid amounts and bid rates in tender operations, as well as adverse selection in the participation to these operations. Would this imply a changed risk profile of the Eurosystem’s balance sheet? In principle no, as the central bank is protected by its risk management framework, including a haircut schedule calibrated to the credit and liquidity risk of pledged securities. But higher average haircuts could imply a higher level of asset encumbrance on the balance sheets of banks, with potential feedback loops onto the perception of credit risk at counterparty or even at country level. Let me give a second example of how the interaction between liquidity regulation and monetary policy implementation might be expected to be complex, especially for the Eurosystem. On one side, the regulation aims at reducing banks’ undue reliance on central bank liquidity, which is an intended consequence of the regulation. On the other side, the regulation might lead to a situation in which some euro area banks, presumably the most fragile, would rely more on the Eurosystem than otherwise. The central bank then risks becoming a “lender of first resort”. Still, on this note, let me recall that the Eurosystem implements monetary policy in normal times in an environment of a large and structural liquidity deficit by using temporary liquidityproviding operations in the form of reverse repos. This implies that some reliance on central bank funding is not undesirable, but rather wanted.

This means that we are often forced to raise the rate, despite the fact that the inflation rate is below the target at the point in time when the decision is made. Conversely, interest rate reductions may be motivated even when the inflation rate is above the target level. As we all know, since the end of last year, the unexpectedly severe slowdown in the US economy has led to a downward revision in the assessment of Swedish production growth over the next two years. However, according to the assessment published by the Riksbank earlier, the most serious consequence of the slowdown will be that almost all of the resources within the Swedish economy will be occupied. If this is realised, one could say that the USA-led economic slowdown is, in a way, a welcome development in Sweden. The information on the Swedish and international economies that has been received in recent months does not give reason to change the assessment of the economic slowdown in Sweden. However, the signals are rather mixed and there is still considerable uncertainty. The downside risks with regard to international growth still remain. Despite the fact that growth has so far developed largely in line with our earlier assessments, price increases have been slightly greater than we had estimated. The krona has also continued to develop weakly. However, the wage agreements that have been signed so far appear to be in line with the earlier assessments.
Conclusion Let me now summarise what I have said and draw some conclusions. The global capital markets are here to stay. They have contributed to the good economic growth in many countries in recent decades by providing capital efficiently. At the same time it cannot be denied that the global capital markets can generate problems, as we have seen in recent years. There have been marked fluctuations and they have spread from country to  7  BIS Review 52/1999  country. Shortcomings in national economic policy have been the cause in many causes but not in all. Small countries with less liquid markets have been heavily hit when highly leveraged funds have shifted capital between markets. For some countries with a weak political and economic system, the capital movements have been sufficient to elicit political crises and considerable social costs. A part has also been played by problems in financial institutions in the industrialised countries, even in the very centre of the international financial system through the Manhattan-based fund LTCM. Last autumn the US Federal Reserve found it necessary to reduce the instrumental rate and take the initiative in solving the problem of credit. Against this background it is not surprising that an active discussion is now in progress about what is called the new international financial architecture. International meetings are being held in quick succession.

Although the crises can be explained in terms of shortcomings in the workings of the financial system, the instability has almost invariably stemmed from macroeconomic and structural problems. A reasonable economic policy is, of course, not just a requirement in emerging markets but also a standing order in the industrialised countries. Yet it is barely five years ago that Sweden regained a fairly firm economic foundation after the profound crisis in the early 1990s. There are many parallels between the Swedish crisis and the crisis in Thailand, for instance. An important factor here is, as I mentioned, the exchange rate regime. Experience has shown that exchange rates that are fixed but adjustable may often contribute to problems and currency crises. They presuppose that fiscal policy is capable of countering economic shocks at the same time as they invite speculation. In the debate it is therefore sometimes proposed that the emerging markets ought to set up currency boards (a system whereby all outstanding currency can be converted into some hard currency) or participate in some well-established regional monetary cooperation. These systems do demand just as much of policy but their stronger links are intended to confer greater credibility. There is a risk, however, of financial players being lured into a false sense of security, giving imbalances more time in which to grow. Another feature that fixed exchange rates and currency boards have in  5  BIS Review 52/1999  common is the negative effects they may exert on other countries if they have to be abandoned.
It also has an established capacity to judge whether a systemic crisis may occur as a result of an institution’s financial problems. The Riksbank is able to make this judgement by virtue of its role as provider of the central payment system and the responsibilities attached to this, its presence in financial markets and its general knowledge of the state of the economic and financial system. Other authorities typically have greater obstacles to reacting fast, as they do not in most cases have instruments or resources readily available for these sorts of operations. There may also be difficult political considerations that have to be taken. For example, a minority government may need to seek support from other parties to use budgetary resources, a support that may be hard to get or at least take some time. However, this is not to be taken as an argument for governments to use the central bank as a provider of support because it does not want to use budgetary resources. The central bank should be independent and control its own resources. The conclusion of this is that ELA operations should have the role in the general crisis management infrastructure of dealing with quickly emerging problems. Where problems arise gradually, other measures available to supervisory authorities and governments are more likely to be used. ELA should be seen as a means for handling acute problems, so that the authorities gain time to decide whether other crisis management measures are needed, such as restructuring of troubled institutions.

While accommodative monetary policies over an extended horizon may have unintended consequences for certain sectors in the form of excessive risk-taking and misaligned asset prices, we do not currently see any broad based evidence of excesses in the behaviour of banks and other financial institutions and valuations of euro area asset prices. Moreover, euro area countries are in a position to use macroprudential policies to address imbalances should they arise. The stability of the euro area banking sector has improved significantly over the past few years. Bank capital and provisions have been substantially reinforced and bank profitability has started to rise again. However, against the background of a moderate economic recovery, this profitability remains low. Structural factors may also be at play. In addition, in some jurisdictions, a high stock of non-performing loans (NPLs) continues to linger as a legacy of the earlier crisis. As this may constrain banks’ lending capacity and their ability to build up further capital buffers, determined action is needed. Cooperation among all major stakeholders, including governments, banks, regulators and investors, at national and European level, is necessary in order to make substantial progress in this field. Tailored approaches, based on a thorough understanding of country-specific aspects and in the context of a comprehensive strategy that is led as much as possible by the private sector, are needed. The banking supervision arm of the ECB is working from the supervisory perspective, on identifying best practices that can be adopted by individual banks.
The inflation target may be formulated as an interval, for example 1-3 per cent, as in New Zealand or, as in Norway, as inflation of close to 2.5 per cent over time. Partly owing to various disturbances to the economy, inflation cannot be expected to remain at target constantly. Central banks have somewhat varying formulations as to how rapidly inflation should be brought back to the target. Some central banks state that inflation should be brought back to target within a “reasonable time horizon” or “over the medium term”. Others have quantified that the inflation target should normally be attained within two years, as in Sweden, or as in Norway, where the interest rate is set with a view to stabilising inflation at the target within a reasonable time horizon, normally 1 – 3 years. In practice, the monetary policy conducted by most central banks is nonetheless similar. They orient monetary policy towards maintaining low and stable inflation. All central banks will reduce their policy rate when there are prospects of low inflation in the medium to long run and raise it when there are prospects of high inflation. What distinguishes Norges Bank from other central banks? Monetary policy in Norway is in line with the monetary policy conducted by a number of central banks in the OECD area. One difference, however, is that Norges Bank is conducting monetary policy in an oil economy.

In return, the p2p lenders will refer borrowers who have completed two successful rounds of fund raising to DBS for larger commercial loans and other financial solutions such as cash management. The road to financial inclusion is neither short nor easy. But it is an important one. Broadening access to financial services will offer Asian banks – and FinTechs – the opportunity to grow their business while serving a social purpose. Financial inclusion will be a key priority in the economic co-operation agenda when Singapore assumes the chairmanship of ASEAN next year. Conclusion You will be discussing many of these issues in the days ahead. I look forward to hearing your insights. It leaves me now to hand over to John Williams for his keynote address. He will speak on US monetary policy – a subject of evergreen interest to the financial industry and central banks around the world. I look out for John’s speeches not so much for clues to what the Fed might do next – though that is of course of great interest too – but for the original insights John provides on some of the deep, conceptual issues in monetary policy. John has made thought-provoking contributions in areas such as the natural rate of interest, or r*, and nominal GDP or price level targeting for monetary policy. It is my pleasure now to invite John to share with us his insights on how we should view monetary policy in a changing world.