samchain/econo-pairs-v1 huggingface dataset:
We – the central banks of the region – should represent an example in this direction. As pioneer institutions of progress, the central banks of the region should cooperate with each other in order to expand the road for a further political, social and economic integration. I believe that the chances for a rapid and secure process of European integration could be accelerated if we will have – among others – a healthy and safe financial and banking system, which should be able to advance the economic development of the country. Nevertheless, in order to materialise the objective for the approximation of their model with that of the EU member states, we hold the opinion that the central banks of the transition countries have more difficult “homeworks” than the classical responsibilities carried out by a central bank. Speaking in more concrete terms, this has to do mainly with the challenges related to the development of markets, with the unification of different norms and standards and with enhancing credibility in the country, thus aiming at the creation of an atmosphere that inspires confidence to foreign investors. Even though they have passed into the consolidation stage, our banking systems still remain fragile, and as such, they require greater commitment and care. Regardless statistical developments, the scale of financial intermediation is relatively low, whereas time after time the shadow of shocks on the economic equilibra shows up itself in different countries.

Ardian Fullani: Experiences of the Bulgarian National Bank in its road towards the ESCB Opening speech by Mr Ardian Fullani, Governor and Chairman of the Bank of Albania, at the workshop Experiences of the Bulgarian National Bank in its road towards the ESCB, organised in cooperation with the Bulgarian National Bank and the GTZ Office, Tirana, 5 September 2005. *  *  *  Dear participants, First of all, I would like to say good morning to all of you. Today’s meeting with our Bulgarian friends takes place in the context of several activities that we have recently organised with a clear focus on the future challenges related to the integration process. I am pleased that the fall season of this year starts with this activity and first of all, I avail myself of this opportunity to extend my gratitude to the representatives of the Bulgarian National Bank, the GTZ and to my friend, Professor Bolle. Since the very first days of my appointment to this position, I have publicly declared that Bank of Albania’s institutional preparation in its road towards the ESCB remains our main challenge. Meanwhile, in all the meetings that I have had with the representatives of the regional central banks, as well as with high officials from Brussels and the ECB, I have underlined the idea that the future of the EU will be both more prosperous and unproblematic if the countries on its periphery look not only towards Brussels, but also if they start looking to each other.
The development of a highly integrated euro area financial market and the ultimate establishment of a pan-European banking industry will raise the issue of the optimal organisation of supervision of the European financial sector. Today supervision is organised on a national level; financial markets are not yet fully integrated and we do not as yet have a genuinely pan-European banking industry. However, the situation is clearly dynamic. While it remains to be seen how quickly the situation will change, this example highlights the fact that the euro area is not yet an entity itself and not yet perceived as such in some respects. Looking back on the first few months of the existence of the euro, we have witnessed that singular and isolated news and data releases from individual economies within the euro area have sometimes inappropriately been interpreted as indicators for the entire currency zone. Such inadequate analysis can produce real difficulties, especially when the markets magnify and exaggerate the effects of these misconceptions. This phenomenon may possibly be explained by insufficient information about the new European framework. However, another reason might lie in the conduct and presentation of Member States’ economic policies. It appears that Member States are still learning to communicate adequately that, in economic terms, they also consider themselves constituent parts of a larger entity and thus also regard their domestic economic policy decisions “as a matter of common concern”.

Aggregate cumulative UK impairment charges over the five years of the (a) stress Impairments in the stress (left-hand scale) Impairment rates in the stress (right-hand scale) Per cent 25  £ billions 20  20  15  15 10 10 5  5  0  0 UK mortgages  Sources: PRA regulatory returns, published accounts and Bank calculations. (a) Major UK banks’ core Tier 1 capital as a percentage of their risk-weighted assets. Major UK banks are Banco Santander, Bank of Ireland, Barclays, Co-operative Banking Group, HSBC, Lloyds Banking Group, National Australia Bank, Nationwide, RBS and Virgin Money. Data exclude Northern Rock/Virgin Money from 2008. (b) Between 2008 and 2011, the chart shows core Tier 1 ratios as published by banks, excluding hybrid capital instruments and making deductions from capital based on FSA definitions. Prior to 2008 that measure was not typically disclosed; the chart shows Bank calculations approximating it as previously published in the Report. (c) Weighted by risk-weighted assets. (d) From 2012, the ‘Basel III common equity Tier 1 capital ratio’ is calculated as common equity Tier 1 capital over riskweighted assets, according to the CRD IV definition as implemented in the United Kingdom. The Basel III peer group includes Barclays, Co-operative Banking Group, HSBC, Lloyds Banking Group, Nationwide, RBS and Santander UK. (e) CET1 ratio less the aggregate percentage point fall projected under the Bank of England’s 2016 annual cyclical stress scenario for the six largest UK banks.
In times of trouble, sovereigns, like financial institutions can be either illiquid, or insolvent, or both. In many cases, the distinction is blurred. When uncertainty is high, sovereigns face liquidity shortages, and they can only issue new debt at constantly higher interest rates. This, in turn, creates doubts about their ultimate solvency, triggering a negative spiral. This process is clearly at work in peripheral Europe, especially Spain and Italy, since the beginning of August. 2  BIS central bankers’ speeches  In short, sovereign solvency is partly endogenous. Good fundamentals are an absolute necessity, but not always a sufficient condition. Liquidity spirals, when allowed to develop, can lock a country, just like a financial institution, into a bad equilibrium. What is therefore the appropriate policy reaction? We had a continuing debate on that question in 2009–2010 when dealing with financial institutions. We are faced with the same question now regarding sovereign risk. The standard answer is twofold. First, get the fundamentals right. For European countries, it means reverting to a sustainable fiscal position which, in most cases, necessitates a significant primary surplus. Necessary efforts are greater now since doubts have been created about sovereigns’ ability to meet their obligations. And second, when solvency is achieved, there is a need for a liquidity backstop to ensure that bad equilibria will not be allowed to develop. Where that backstop is coming from is a key question in the current debate.

As I have said from the start, public debt may not be able to play that role to the same extent as before. The ultimate safe asset, therefore, will be the currency itself. Markets and lenders will trust those currencies that, whatever the circumstances, are managed with one overriding priority: preserving price stability and the intrinsic value of the currency unit. On this fundamental basis, we can look at the future of the euro with strong and realistic optimism. I see the  BIS central bankers’ speeches  3  recent decision by the Swiss central bank to peg the CHF to the euro as a confirmation of this statement. A few words on the banking sector, and, of course, French banks. I would remark, first, that banks have been hit in all advanced economies by the downward revision of growth prospects. Since August, CDS premia on major banks and BOR-OIS spreads have risen in all regions, although to a larger extent in Europe, displaying everywhere a sharp rise of counterparty risk. By the same token, banks’ share prices fell in all major economies, with French banks being particularly hit. This overreaction of share prices can be explained by a simple amplification mechanism: slower growth means lower profits, thus lower projected dividends. At the same time, banks are required to build additional capital buffers, which further constrain their pay-out ratio. So dividend prospects are doubly affected and that explains why, in the current period, share prices are reacting so strongly to negative news on growth.
The other approach would have us starting with a blank page and identifying the minimum number of requirements needed to maintain small firms’ resilience. In this case, the result would be a completely different rulebook with different chapters. I will call this the ‘focused’ approach because it would be solely focused on the risks faced by eligible small firms. What are the implications of choosing one or other of these approaches? You may have noticed that I have spoken so far about the complexity of requirements, but not their calibration. That is because questions about the level at which requirements are set can only be properly addressed once an approach has been chosen. This is a natural consequence of our commitment to maintaining current levels of resilience. As I said earlier, this means that when we simplify some aspects of the regime we may need to tighten others. That tightening might take the form of increasing the calibration of remaining requirements. One might for example imagine, as an extreme example of a focused approach, a regime based on a single risk-insensitive capital requirement. That would be very simple, but the requirement would probably have to be set very high to satisfy us that it provided the same level of resilience as the current regime. A streamlined approach, on the other hand, might include simpler versions of current Pillar 1 and Pillar 2A risk weighted capital requirements with broadly the same calibrations as are applied today.

And, as my colleague Sarah Breeden explained last July, the PRA attaches great importance to making sure that the way we regulate and supervise these firms isn’t an unnecessary barrier to them realising their ambitions.10 That is why the PRA consulted last year on how we should regulate new and growing banks and has this month published a Supervisory Statement outlining our approach.11 What we need to make sure of now is that growing banks don’t face unnecessary costs from having to move from a simpler regime to more complex requirements once they reach a certain size. If simpler requirements are very different from the requirements for larger banks and building societies, a growing firm would have to make a substantial investment to adjust to the more complex rules it was growing into. If this was prohibitively expensive, it would become difficult for small firms to grow. That would work against what the PRA is doing to support effective competition in the banking system. That is what we want to avoid. We don’t want to trap small firms within a walled garden. Now, to some extent this could be achieved by giving small firms the option to stick to the full set of requirements if they know they 9  See https://www.bis.org/publ/bcbs129.htm. ‘Climbing mountains safely’, speech by Sarah Breeden, Executive Director, UK Deposit Takers Supervisions, building on marks given at the PRA Annual Conference for Chairs of the Non-Systemic UK Banks and Building Societies on 6 July 2020.
Moreover, Thailand’s corporate sector has relatively low external debt financing. External corporate debt amounts to around 13 percent of total corporate debt, with a majority belonging to large corporations for financing overseas investment, and these firms tend to manage exchange rate risks well. On top of these external buffers is the fact that our growth engines in 2017 are firmer and more balanced than last year. Most importantly, both exports and to a lesser extent private investment have shown signs of a more broad-based and sustained pickup in recent 1  Including Bank of Thailand bonds 2  months. Given that the export recovery is now a regional phenomenon, we expect the trend to continue. On exports of services, the tourism sector, which was temporarily affected by the crackdown of illegal tour operators in the fourth quarter of last year, has recovered faster than expected. At the same time, fiscal stimulus remains an important growth driver with the additional mid-year budget and the implementation of the medium-term public infrastructure investment program. Apart from improved government disbursement, the government has proposed the supplementary budget for fiscal year 2017 amounting to 190 billion baht, which is over 1% of GDP on top of the originally planned budget deficit of 2.6% of GDP. In addition, fiscal policy will continue to be expansionary with a budget deficit of 2.9% of GDP proposed for the fiscal year 2018. Despite the continued sizable budget deficit, there are fiscal buffers to cushion against unexpected difficulties ahead.

4  BIS central bankers’ speeches  The tensions eased through various channels, among which the activity of CESCE, which bolstered the extension of guarantees and bonds to Spanish companies to participate in international tender procedures and projects. Regulation by the Banco de España The Banco de España, in the performance of its functions, lays down a series of accounting and prudential rules that determine the requirements made of banks in the pursuit of their activity. These rules comprise the regulatory implementation of Spanish legislation which, in turn, is determined by European regulations and by the agreements reached on the Basel Banking Supervision Committee. Let me begin with accounting regulations and, in particular, with the rules on country risk provisions, which are particularly significant in international trade transactions. In these financing operations there is, alongside the risk of commercial insolvency, so-called country risk, which includes, by way of sovereign risk, transfer risk (i.e. that it is not possible to meet debts abroad owing to a lack of currency or the legal impossibility of transferring currency) and other risks arising from international financial activity, such as expropriation and natural disasters. As what is involved is a risk other than habitual commercial risk, it requires a differentiated treatment under default provisioning rules.
Specific codes for professionals in markets will complement broader efforts to raise standards in banking by the new Banking Standards Review Council. For those in markets we need a simple approach that recognises a fundamental principle of the City: namely that true markets are the source of dynamism, prosperity and progress. Seeking to manipulate, game or profit from unfair access transgresses that principle. It weakens the effectiveness of markets for all. It holds back prosperity. It should thus have clear consequences, including professional ostracism. We must work together to ensure that everyone on every trading floor understands that dealing in a market means serving the needs of clients, investors and customers fairly and effectively. I am delighted that one of the City’s most experienced professionals and proven leaders, Elizabeth Corley, has agreed to chair a panel of market practitioners that will inform the Review. Now, recognising the centrality of markets doesn’t mean the Bank has a naïve faith that all markets always function smoothly. The City’s markets are not those of a textbook. We all know that real markets can seize up in crises of confidence, threatening financial stability and the wider economy. Just as there will be times when central banks must backstop the banking system, there are also times when they should backstop core markets in a way that supports their contribution to the real economy but doesn’t encourage excessive risk taking.

(2) How to ensure the necessary coherence of the efforts undertaken by stakeholders of different importance, submitted to different types of regulations, across the different financial centres that compose the financial system of the euro? 2. What roles for the Eurosystem  The Eurosystem has been quite active in the field of payment systems and is likely to develop further its involvement under its three roles of: (1) service provider, (2) facilitator of market and regulatory evolution, and (3) overseer. 2.1. Providing payment services  As a service provider, the Eurosystem has put priority on enhancing the efficiency and safety of its TARGET system, with the launch of the TARGET2 project. TARGET2 will provide harmonised services and prices, efficient liquidity management and settlement mechanisms, while setting a new benchmark in terms of business continuity. The Eurosystems objective is to promote the use of real-time settlement services in central bank money, given their expected social benefits in terms of risk reduction in the payment process. In the field of retail payments, the degree of the Eurosystem’s central banks’ operational involvement varies across countries. Most central banks provide payment services to public institutions. Some central banks also offer processing facilities to commercial banks by participating in private retail payment systems and/or operating an own retail payment system. The completion of the SEPA project calls for a specific effort of those central banks that are significantly involved in retail payment operations.
In spite of this, lessons should be learnt from the effects of the crisis in other regions and, going forward as a single monetary zone, policies are being designed and implemented to prepare us to cope better with any threats to our financial systems. We must also recognize that there are peculiar risks to our zonal financial sector which are being addressed through new initiatives. Since the signing of a joint memorandum on cross border supervision, as I informed you in my speech last year, Governors’ of the West African Monetary Zone have signed an additional memorandum for the establishment of a College of Banking Supervisors in July 2010. In 2010, Liberia attained full membership of the West African Monetary Zone (WAMZ), increasing the membership from five countries to six, and has now been integrated into a number of projects including the Payments System, Financial Sector Integration, and Trade Policies. Developments on the domestic front Economic developments in 2010 Your Excellency, distinguished guests, on the domestic economic front, projected real GDP growth in 2010 was higher at 4.5 percent, compared to 3.2 percent in 2009, a reflection of government’s effort to stimulate economic activities through investments in agriculture, energy and infrastructure. There was also an increased global demand for agricultural commodities and mineral exports which also improved the country’s balance of payments position. Furthermore, new mining lease agreements have been signed with foreign companies which would increase returns in this sector in the medium term.

Finally, an important aspect of responsible finance requires strong and effective governance. John Locke, one of the most prominent 17th century theorists, refers to the concept of a "social contract" in describing the origin of society and its inherent need for governance. The erosion of this social contract and of governance would drastically weaken the foundations of society, setting the stage for its eventual decline in the future. This was evident during the global financial crisis. The experience serves as a strong indication that the own version of the "social contract" in finance should not be overlooked. This extends not only to governance but also to trust, which has traditionally been the social bond between finance and humanity. Central to this is the realisation that financial markets cannot operate in the absence of trust, which in turn necessitates minimum standards for governance, ethics and integrity. This involves not only heightened expectations on the fiduciary duty of boards, but the alignment of compensation packages from short-term personal gains towards long-term value creation. In addition, corporate culture also have an important role in entrenching financial goals with ethical values, through the promotion of sound risk taking cultures and ethical codes of conduct. Conclusion Allow me to conclude my remarks. Often at its most defining moments in history, the rise of society has been intricately marked by the strength of its leadership and its people.
Several antecedents point to investment significantly outperforming our September estimate, including important upward revisions in the Corporation of Capital Goods’ (CBC) Project Survey, the behavior of capital goods imports, the evolution of more expansionary conditions of credit supply and demand (Bank Credit Survey) and qualitative information from our Business Perceptions Report (IPN). Thus, for 2019, our gross fixed capital formation (GFCF) growth forecast rises to 6% (4.5% in September), and for 2020 the near 4% figures are maintained. The case of mining investment is analyzed in detail in Box III.2 of the Report. According to the latest survey of the CBC—released in mid-October—for the period 2018-2021 investment expenditure of the mining projects it covers went from about 5.40 billion dollars to 10.60 billion. The greatest differences are concentrated in the years 2019 and 2020, when the surveyed investment is about 3.5 billion dollars higher than previously expected. This leap is the result of including a small number of projects that have advanced in their realization, but whose scope causes ripple effects in the baseline scenario. For 2018, where the incremental effect of the new survey is more limited, it is expected that Mining GFCF will increase 18% annually (just over 3 percentage points more than projected in September). For 2019, its annual expansion rate is revised from 7% in the September Report to 16% in our current estimate.

In fact, this is a central axis in the conceptual framework modern monetary policy is based on, from the different notions of the Phillips curve to the Neo Keynesian models of general equilibrium that today sustain our forecasting and analysis. With this in mind, we have attached to our December Monetary Policy Report a special study on the functioning of the labor market. It is based on the analysis of new databases that allow us to understand some of the clues to how this market operates, that were beyond our reach in the recent past. The analysis of the labor market, even if done with the intention of drawing macroeconomic implications, must pay attention to its structure and to the way in which the individual decisions of millions of workers and employers—that differ from each other in more ways than one—determine how the aggregates behave. However, studying this diversity empirically is no easy task, and is often absent from the macroeconomic debate. Most labor market indicators that are regularly reported and discussed in the public scene, including wage indexes, unemployment rates or job creation, are not only highly aggregated, but also represent net movements. This implies that much relevant information, such as differences in the behavior of different groups or changes in the composition of the flows, is not present in the analysis or public debate.