samchain/econo-pairs-v1 huggingface dataset:
The direct role pertains to the further development of the banking market and products – in line with the best international experiences. Likewise, insistent work on further reducing the level of non-performing loans should not be neglected, and should be considered by all of us as a key factor for further strengthening financial stability in Albania and providing an impetus to the economy. On the other hand, the indirect role consists in the cooperation that you may offer to many structural reforms across all the sectors of the economy and in all the dimensions of the business setting. Your expertise is not insignificant. It must assume an authoritative place in the economic debate. Third, while acclaiming the cooperation between the Bank of Albania and the Albanian Association of Banks and commercial banks in educational activities, I would also like to iterate the importance of financial education and financial inclusion. As financial services and products develop and become more complicated, financial education helps users to understand and use them; it also helps preventing financial crisis and contributes to the financial stability and economic growth of a country. We need to continue to be key promoters in designing and implementing financial education programmes. Financial education is an investment in the future and it should be an integral part of our agendas, engaging more intensively in the implementation of alternative and innovative methods for enhancing financial education among the public.

Gent Sejko: Albanian economic progress in 2018 and banking industry challenges for 2019 Address by Mr Gent Sejko, Governor of the Bank of Albania, at the year-end function organised by the Albanian Association of Banks, Tirana, 13 December 2018. * * * Honourable AAB Chairman, Your Excellency, Minister of Finance and Economy, Dear senior representatives and colleagues from the banking system in Albania, Ladies and gentlemen, It is a special pleasure for me to participate and address this year-end function organised by the Albanian Association of Banks. In my brief address, I would like to bring to your attention some highlights of 2018, regarding the contribution of the banking sector and the financial system, as well as some milestones set for 2019. Let me first focus on the overall performance of the Albanian economy. The overall performance of the Albanian economy in 2018 was positive. Economic recovery is tangible across all of its dimensions. The pace of growth picked up, employment increased, internal and external balances were strengthened, while the main indicators of the banking sector’s soundness have been improving. It is encouraging to see that the sources of economic growth are both increasing and well diversified. From the aggregate demand perspective, growth in the exports of goods and services and in the domestic consumption and investments continued to underpin economic growth. In the meantime, from a sectorial perspective, economic activity expanded, reflecting a more notable contribution from output in the industry sector and the services sector.
That revolution has come in the area of external communications, openness and accountability. It came neither quickly nor easily. It was only a generation ago that, when asked by Mervyn King for a one-word piece of advice, Paul Volcker replied “mystique”. To that point, opacity rather than transparency coursed through central bankers’ veins. That bloodline ran from Montagu Norman a century ago (“never explain, never apologise”) through to Alan Greenspan a generation ago (“I’ve learned to mumble with great incoherence”). Historically, the case for central bank secrecy was deeply rooted. It rested in part on custom and practice, in part on theology. Central banks historically were rarely subject to external scrutiny, at least by the general public. And central bankers were generally perceived as the high priests of finance. It was said that central bankers, like faith, were better understood by their deeds than by their words. 2  That was just as well because central bankers rarely uttered any words at all. A century ago, public utterances by the Governor of the Bank of England amounted to one after-dinner speech each year to a well-watered set of City of London bankers. Heroically, attempts were made by some academics to rationalise this monetary mystique as a necessary means of central banks exerting influence over the economy. 3  Times have changed. The central bank secrecy doctrine has been over-turned, in part for conceptual reasons, in part for practical ones.

Nevertheless, there is a significant risk that the credit supply to Swedish companies and households could worsen considerably if the problems on the credit markets take hold and persist. Not only would the effects of such a credit squeeze be unfortunate for companies and households – they would harm the entire economy. It is in part against the background of this risk that we should view the Riksbank's liquidity support measures over the past few weeks. It is also one of the reasons for The Riksbank's most recent decision to cut the repo rate by 0.5 percentage points. Role of Swedish authorities One of the main duties of the Riksbank is to promote a safe and efficient payment system. More specifically, this means that the Riksbank continually analyses risks and threats to the stability of the Swedish financial system. The purpose of the analysis is to discover any changes and vulnerabilities that could lead to a serious crisis. In the event that a crisis should occur, certain tools are at our disposal to handle the situation. Over the past few weeks you  BIS Review 125/2008  3  have seen several examples of how we can assist the banking system in various ways with liquidity-supporting measures when the situation so requires. The Riksbank is not the only authority that is responsible for ensuring financial stability. Finansinspektionen also plays an important role as a regulatory authority.
The number of Shariah-based unit trust funds have also increased to 136 with a net asset value of over USD5.2 billion while 85% of the listed Malaysian stocks are Shariah-approved counters. The second strategy is to accord greater emphasis on the enabling environment for increased innovation in the Islamic financial industry. The product range in Islamic finance has now expanded into a broad spectrum of innovative instruments, including investment and equity linked products based on musyarakah, mudarabah and ijarah. These products are competitive both in terms of product structure and pricing. The enhanced depth of the Islamic financial markets, in particular, the sukuk market, has increased the attractiveness of the Islamic financial instruments as an asset class for investment. The drive for innovation has been supported by the investment in human capital development. A sufficient pool of the talent and expertise has been key to the development of the Islamic financial hub in Malaysia. The International Centre for Education in Islamic Finance (INCEIF) was established in 2006. INCEIF which has an international faculty and students from more than 40 countries is focused on programmes for Islamic finance professionals and specialists in Islamic finance. The first group of students for the Chartered Islamic Finance Professional qualification, CIFP, offered by INCEIF, is expected to graduate at the end of this year after completing a three year programme that includes an internship with an Islamic financial institution. INCEIF also offers a Masters and PhD Programme in Islamic finance.

In the coming years, the greater global participation in this developmental process, both directly and indirectly, would enhance the potential role that Islamic finance would have in contributing towards greater global financial stability in the international financial system. BIS Review 136/2008  5
One can express this as, if many imperfections impact at the same time, it could lead to substantial financial imbalances. Empirical research confirms that asset prices and loans can increase substantially over a long period of time and my impression is that the mechanisms I have indicated have contributed to this. While debt and asset price levels have built up slowly over a number of years, price corrections have occurred quickly. The entire cycle from start to finish, from asset price and credit expansion until the repercussions of price falls and debt reductions have waned can take up to a decade. The IMF, for instance, reports in a study that the repercussions alone from a share price crash take on average two years to wane, while it takes approximately four years for the effects of a house price crash to fade. Can and should monetary policy subdue the growth of bubbles? Even if we as monetary policy decision-makers assess that there is reason to feel concern that debts and asset prices have been pushed up by over-optimistic households and companies, it is not selfevident whether and how this will affect the decisions. There is always some uncertainty as to whether it really is a question of an imbalance. And, as I have said, it is not easy to quantify a risk scenario, both with regard to the probability that it will occur and the effects it can have for inflation and demand.

However, in my opinion and that of others, the risk of such an approach is in overdoing it and thereby delaying a necessary adjustment of balance sheets and debt levels. New imbalances in other markets could then arise and the process will begin again. When the situation turns next time in other asset markets, there is a greater risk of reaching the zero-interest rate level. Many central banks have acted in this way, which may be the reason why a house price bubble has been created some time after a share price bubble. In my opinion, the economic costs in the shape of sharp fluctuations in demand are likely on average to be higher if the central bank does not take account of the effects on growth and inflation of inflated asset prices and credit expansion in its decisions. One reason for this is the high costs connected with the risk of achieving the zero-interest rate level if one waits until asset prices and indebtedness are corrected and demand is severely subdued before taking interest rate measures. Monetary policy after the stock market bubble The share price bubble at the end of the 1990s is an example of a financial imbalance that was built up despite low and stable inflation.
Decisions about whether or not to make an adjustment will be made on the basis of a careful weighing up of evidence of benefits and costs. In doing this we need to bear in mind that regulatory costs will often be easier to quantify than the financial stability and safety and soundness benefits. And depending on the case we may need to look beyond the banking system to capture all of the costs and benefits. For instance, unintended consequences of bank regulation might be felt not in the banking sector but in financial markets, financial infrastructures, and other parts of the financial system. Principle 3: we should aim to match a dynamic adjustment to the problem that has been identified. If we identify an unintended consequence of a particular regulation we should first seek to adjust that regulation to deal with the consequence. Similarly with any new risks that emerge. For instance, if a new risk that is identified is threatening the stability of the system as a whole it would seem appropriate to look to use a macroprudential tool to reduce that risk. Adjustments we have made already  The Bank has already made several changes to the regulatory framework that can be thought of as dynamic adjustments. Two such changes have been made to the leverage ratio requirement. In response to a recommendation by the FPC, central bank reserves have been removed from the calculation of the denominator of the leverage ratio since summer 2016.

These developments may also affect the rate of technological progress in the long run if, for example, they lessen the incentive to engage in innovative activities. And we cannot forget the risk of the observed increase in unemployment translating into a parallel increase in structural unemployment, an issue I will deal with later in my speech. Therefore, structural reforms appear to be the only available tool to avert the risk of the crisis exerting more permanent effects on both the level of output and the growth rate of the economy. Second, structural reforms cannot be seen in isolation from the other measures that are needed, in particular those stemming from the exit strategies, but rather as a necessary complement to them. As an example, the dramatic increase in fiscal deficits and government debt levels during the crisis, exacerbating fiscal sustainability concerns for a number of economies, would worsen if output losses were permanent and constrained government revenues and expenditures in the future. By the same token, growth-enhancing structural reforms may smooth acceptance of the fiscal adjustment or even reduce its magnitude if they prove to be effective. Past experience shows that structural reforms are often adopted in times of economic crisis or prolonged episodes of slow or negative growth. This contrasts with the generalised view that it is easier to cope with these reforms, since their costs are generally less painful, and distributional effects less visible, when the economy is strong and income is growing rapidly.
This workshop also demonstrates the stakeholders’ commitment to support the market development efforts as outlined in the Financial Sector Development Plan. Chairperson, over the recent past, the Zambian economy has performed well. This is reflected in a number of the key macroeconomic indicators. To mention but a few; the growth rate in real Gross Domestic Product (GDP) has remained positive and above 5%, we attained single-digit inflation, relative stability in the exchange rate of the Kwacha against major currencies, stable financial sector and improved banking services. These impressive economic trends suggest that the reform programmes that have been implemented are now bearing fruit. The reforms have focused on the restructuring of the economy, to let markets determine key decisions so as to allow the private sector lead, which has provided for increased investment in the economy. It is the contention of many financial analysts that there is no better market to determine prices than the secondary market. In that regard, this workshop is vital. Ladies and gentlemen, the importance of a secondary market cannot be overemphasized. By facilitating a ready mechanism through which financial claims can be transferred from one holder to another, a secondary market provides wide possibilities for issuers of long term securities to match their cash flows in a stable and cost effective manner. Investors with their diverse liquidity needs are assured that they can convert their investments into cash at any time and at a fair market price.

Let me quickly go over some of the most important changes to the primary market: •  Following the liberalization of interest rates in 1992 the auction system for Treasury bills was introduced to create a more transparent and market-based system of price determination that would encourage broader investor participation. •  Alongside the introduction of the auction system, the maturity structure was extended from the only existing term of 91 days to include 28 and 182 days in order to meet the various liquidity needs of investors. •  In 1995, Government bonds with a maturity term of 12 month and 18 months were added to the list of securities. •  Following the increased depth of the market, the structure of Government securities was streamlined with the termination of the 28 day Treasury bill issuance and the subsequent introduction of the 273 days maturity term. •  In 2005, reforms of the Government securities market continued with the cessation of the 12 months and 18 months Government bonds. In their place, a 364 day Treasury bill was introduced alongside the 3 and 5 years bonds. •  More recently, in August 2007, a portfolio of Government bond maturity terms was further increased to include the 7, 10, and 15 years. Since that period, the size of the outstanding issues has grown from 7% of GDP in 1994 to 17% by the end of 2007. With regard to secondary market, policy efforts have been initiated at different stages in the development of our market.
The value of the Fund and its investment returns will therefore swing in tandem with equity and bond prices. This may draw a veil over the progression of the Fund’s underlying earnings. In the long run, it is the Fund’s cash flow that makes a permanent contribution to our national income. Put in simple terms: The cash flow is cash in hand, while the prices we measure in market values vary with shifting market sentiments. The cash flow is more stable than the market values as expressed by exchange listed prices. The Fund’s cash flow is therefore a good cross-check for measured capital returns. Chart 12: Cash flow from the GPFG and petroleum revenue spending over the fiscal budget The cash flow is commensurate with the actual level of petroleum revenue spending over the fiscal budget of about 3 percent of the Fund’s capital. This is reassuring because it implies that the Fund’s capital is not being depleted. The fall in yields in recent years has provided one-off price gains in bond and equity markets. Looking ahead, low long-term interest rates will feed through into lower returns. It is doubtful that equity prices will continue to advance at the same pace as seen in the past couple of years. The most likely scenario is still one where the Fund’s real return will approach 3 percent in the longer term. Above all we should recognise that future returns on the Fund are uncertain.

Starting with the first pillar of the monetary policy strategy of the ECB, monetary data for December 2000 confirmed the gradual moderation of the growth of monetary aggregates which has been observed since the spring of last year. According to the latest data, the three-month average of the annual growth rates of M3 in the months from October to December 2000 stood at 5.0%, which was slightly lower than the average of 5.1% recorded for the period from September to November 2000. Therefore, after the recent slowdown in monetary growth, the risks to price stability from the monetary side have become increasingly balanced. Caution still needs to be exercised, however, given the continued dynamics in credit growth to the private sector and the upward deviation of M3 from the reference value in the past. Turning to the examination under the second pillar, broadly similar indications are emerging, as inflationary impulses resulting from previous developments in oil prices and the external value of the euro are gradually diminishing. As regards economic activity, uncertainty concerning the external environment for the euro area has increased, mainly related to signals that the slowdown in growth in the United States may be more significant than earlier expected. This is likely to result, directly and via a spillover to other regions, in some deceleration of growth in the world economy. World real GDP growth, which in 2000 posted its strongest performance for many years, may therefore moderate in 2001 but will still remain at an acceptable level.
This relationship is not affected by whether or not there is an interest-bearing e-krona, as we would not introduce an e-krona to replace cash. A non-interest-bearing e-krona, on the other hand, would raise the lower bound for the policy rate to zero. This is because the e-krona would then function as cash with regard to alternative investment, but without the costs for storage, for instance, that large amounts of cash incur. Zero would therefore be a sharp boundary for the policy rate if there was unlimited access to a non-interest-bearing ekrona. But it is of course possible to implement other measures that counteract such a sharp boundary, such as limits as to how many e-krona one can hold or who is allowed to hold them. The potential impact of the e-krona on financial stability is a more complex question. A couple of years ago, it was fairly common to hear concern expressed over the risk that bank runs would increase when there was stress on the market and an attractive, risk-free alternative such as a digital central bank currency was available. However, there is research that shows why this need not be the case. 19 In general, I would say that within the central bank world this is no longer seen as a particularly large risk. On the other hand, there is still potential cause for concern if the e-krona were to become so large that in normal times it takes over large shares of the banks’ deposits from the general public.

On the other hand, a long period of very low interest rates may lead to imbalances in the domestic credit and real estate markets, which may pose serious risks for financial stability. We are well aware of these risks and are analyzing them very carefully. However, due to the exceptional monetary policy situation, interest rates cannot readily be increased to address such threats. In other words, at the current juncture, monetary policy cannot react to these imbalances with conventional monetary policy instruments. Therefore, the Swiss Government is due to decide soon upon the introduction of so-called macroprudential instruments that can be used – if necessary – to mitigate potential credit and housing market distortions. Conclusion The outlook for the global economy remains subdued. This, together with the persistently strong Swiss franc, is weighing on economic activity in Switzerland. Although some indicators have pointed to a slight stabilization recently, we project that the Swiss economy will grow only weakly over the next few quarters. The degree of uncertainty regarding the growth outlook remains unusually high, also by historical standards. Downside risks – in particular stemming from a further escalation of the European debt crisis – are substantial. If these were to materialize, economic activity in Switzerland would suffer a much more pronounced slowdown than just described. Despite this rather gloomy overall picture, we should not overlook the potential for a more optimistic development. For instance, if the European authorities were to credibly commit to a sustainable solution soon, existing uncertainties would be reduced substantially.