samchain/econo-pairs-v1 huggingface dataset:
(The Monetary Policy Report contains a box with more details on the pass-through coefficient). For the same reason, monetary policy has moved to a more expansionary instance, and the monetary policy rate (MPR) has been lowered by 100 basis points over recent months to a level of 4 percent annually. Furthermore, as we said in our last press release, we will consider the possibility of making additional cuts to the policy rate, in line with the evolution of domestic and external macroeconomic conditions and its implications on the inflationary outlook. Some market players and observers have suggested that the current scenario of slower growth and higher inflation poses a dilemma to monetary policy makers. This, meaning that, in the current circumstances of some deceleration and a slight rise in inflation, one must prioritize one or other of these variables. We believe, for the aforesaid reasons that there is no such dilemma. Actually, our baseline scenario assumes that, as we will see in a while, inflation will rise temporarily to the upper zone of the tolerance range, but by the end of this year it will be close to the target. But if such a situation was to persist, there could be a dilemma. This is why we continually watch for the so-called “second-round effects”, that is, if a change in the parity puts more persistent pressure on the other prices. In that case, the Central Bank will take every measure necessary for inflation to quickly return to the target. That is our mandate.

The way our economy has reacted to the recent changes in the terms of trade and external financial conditions is precisely a reflection of our policy regime, which allows for timely adjustments in the real exchange rate and interest rates, letting the economy grow near its potential, smooth the capital account’s adjustments and maintain the credibility of the inflation target. This marks a difference with our economic history. 2  BIS central bankers’ speeches  Over the years, the Central Bank has given proof of its commitment with price stability and the inflation target. It has operated with consistency in order to build credibility and trust, which gives us the necessary flexibility for monetary policy and the real exchange rate to work as buffers of the business cycle whenever advisable. In the past, when our economy’s fundamentals were not as strong, and the exchange rate regime was rigid and poorly suited to confront external shocks, when faced by a drop in the terms of trade or stringent financial conditions, in order to stop a currency depreciation the Bank had to sell international reserves and raise the interest rate to reduce capital outflows. Monetary policy, far from cushioning the external cycles, made them worse, generating economic costs and financial risks. More often than not, these experiences ended badly. Overall, as usual, the present scenario has varied risks, most of them coming from emerging economies, because of both their importance in commodity prices and the behavior of world financial markets.
Looking back at the financial crisis and more recent scandals, there must have been people who recognized early that what was happening was wrong, but remained silent.16 As the first line of defense develops and convenes in gatherings like this, it is important to remember one other professional value: courage. Professional courage is key to the appropriate functioning of lawyers inside corporations.17 In what has been called the “partner/guardian” dilemma—a bit of a misnomer since the “dilemma” is really a good thing—lawyers are supposed to assist the firm in its mission and protect its longterm reputation, its good name as a store of value.18 That takes courage, especially when an action is technically legal but otherwise wrong or just plain stupid. Your roles in the first line of defense also require professional courage. You are partners in your business. You are also guardians of your firm, the investment of its shareholder owners, the trust of its customers, and the expectations of public authorities. That is not an easy task. You have my sympathy. And you have my thanks—not just for being an attentive audience, but also for all of your good work. 1 Pinchas Becker, Thomas Noone, and Angela Sun assisted in preparing these remarks. 2 See generally Gillian Tett, The Silo Effect (2015).

The CMU action plan should cater for initiatives promoting private sector solutions, such as a broader use of existing rating tools. Investors need also to access clear, comparable and comprehensive accounting reporting which are currently lacking for most SMEs in Europe. Because accounting rules are the basis of financial information, a Capital Markets Union cannot be effective with 28 different accounting systems. This is all the more relevant in the Banking Union, where banks supervised by the Single Supervisory Mechanism (SSM) are still subject to different accounting systems. In this area, progress is highly desirable and as a first step, I would support an initiative aiming to assess the quality and degree of comparability of national accounting standards and to promote further convergence. (iii) Third, it remains necessary to ensure financial stability in the long run. The shift towards more market-based financing would entail several implications from a financial stability perspective. The development of alternative sources of funding, outside the banking system, brings a necessary diversification. Yet the risks associated with disintermediation are clear, notably a limited assessment 3 of risks by investors or less ability to address difficult situations and gaps in supervision. In parallel, re-intermediation by non-banks raises level-playing field questions linked with uneven regulation and supervision across sectors and countries. The objectives of the Capital Markets Union should serve as a backbone to the regulatory efforts made at the European level. Before adopting new pieces of legislation, it is of utmost importance to thoroughly examine their impact.
This morning, I would like to illustrate to you how our commitments to fintechs are being implemented in practice: (i) firstly by enhancing dialogue, (ii) secondly by facilitating their integration into the regulatory framework, (iii) and lastly by conducting experiments with them. I. Enhancing the dialogue with fintechs We communicate with fintechs primarily through the specific correspondents of the Banque de France and the ACPR. At the Banque de France, thestart-up correspondents, also French Tech correspondents, assist start-ups at all stages of their project (financing, ratings, etc.). At the ACPR, the Fintech Innovation Unit is a dedicated gateway for fintechs. Each year, about 250 discussions are conducted in this context, half of which being initial contacts with innovative project leaders. With the development of the fintech ecosystem, it became necessary to broaden dialogue to all stakeholders, which is what our ACPR-AMF Fintech Forumembodies today. In addition to the productive working groups it initiated – I will come back to this later – this annual Forum day was introduced last year. This year, it is also part of the “French Fintech Week” in association with France Fintech (the sector’s professional association) and Swave (the first French start-up accelerator dedicated to financial services). As a sign of our commitment, the Banque de France and the ACPR will attend several key events during the week and Dominique Laboureix, Secretary General of the ACPR, will conclude the week in Lyon. II.

Resistance is strong, particularly among those who gain most from squeezing through the loopholes. There is also an in-built professional inertia among regulators, lawyers and tax accountants with large  2  BIS central bankers’ speeches  amounts of human capital invested in complexity. In removing complexities, society’s gain would be their loss. Nonetheless, in the light of the financial crisis, we may be nearing an inflection point, where the societal pendulum begins to swing in the opposite direction. There are certainly signs of the red tape tide beginning to turn in the area of financial regulation. A growing chorus of concern has emerged recently about complexities and inconsistencies in banking regulation. Earlier this year, the G20 Finance Ministers and Central Bank Governors committed themselves to addressing this problem. So too has the Basel Committee on Banking Supervision. This is a good start. But, at this stage, it is no more than that. One risk is that the regulatory inclination may be to tackle this problem slowly and piecemeal, to unwrap the onion one layer at a time, to avoid throwing the baby out with the bathwater. As Axel Leijonhufvud once remarked to me in a different context, while the bathwater in this case may be worth reusing, the baby would never have come of anything. Thin-slicing reform, whether regulation or tax, condemns us to failure. Peeling the onion one layer at a time tends to end in tears.
From all the above it is clear that the Central Bank of Iceland has undertaken the major responsibility of ensuring price stability, which in the sense used in the joint declaration by the Government and Central Bank means a twelve-month rise in the CPI of 2½%. It is not the Central Bank’s role to ensure a specific rate of growth or level of employment, since its instruments are incapable of having any impact on them in the long run. However, it is acknowledged that ensuring price stability creates vital preconditions for economic growth and prosperity. Inflation increased substantially this year and in June it passed outside the tolerance limits as defined in the March declaration. According to the Central Bank’s inflation forecast published in early August, the outlook that inflation would rapidly decelerate towards the end of this year and the beginning of the next, then would move inside the tolerance limits in the middle of next year, and the 2½% target would be reached in mid-2003. The forecast was based on the main assumptions of an unchanged exchange rate from the forecast day, a cooling of the economy and no wage rises in excess of agreements that had already been negotiated. The Central Bank will publish its next inflation forecast on November 8. Tight monetary stance The Central Bank has applied a tight monetary stance for some time now, as reflected in its high policy interest rate.

A second informative feature is the similar evolution of the dollar in both episodes. It is natural to expect that a hiking cycle in the United States would strengthen the US Dollar relative to other currencies. This is indeed what happened in the 1994 cycle, with the US Dollar Broad appreciating about 7% in 2 years and almost 30% in 4 years. In contrast, the dollar weakened about 5% in the  4 It was not until the Asian crisis in 1998 when the consequences of balance of payment pressures where directly felt across the developing world. 5 Hereafter, all panels in figure 2 are centered around the month in which the hiking cycle started, labeled month 0. These correspond to February 1994, June 2004 and December 2015. 6 In this case, after a very sharp increase during 1994, the yield on the 10‐year US government bond fell significantly during 1995 to levels similar to those observed before the hiking cycle. 2          first 12 months in the 2004‐2006 cycle, at the very same time that the Federal Reserve had increased short term rates by 200 basis points. Because periods of dollar strength have tended to coincide with periods of weaker commodities, it is not surprising to see that commodities had a flat/declining trend in the second half of the 1990s. Indeed, high world interest rates, high credit spreads and low commodity prices all contributed to a weakening of emerging market economies.
As a part of implementation plans, SAMA has conducted quantitative impact studies on selected banks, started capacity building within SAMA as well as the banking industry, and formed technical groups comprising of supervisors and bankers to deliberate on technical issues and seek industry feedback to facilitate smooth implementation. Our multi-pronged strategy to implement Basel III is focused on the following areas: i. Setting the regulatory requirements for banks essentially based on the Basel Committee’s rules and international best practices on implementation of Basel III;  ii. Conducting impact studies and collecting data from banks to assess the impact of new capital and liquidity rules on Saudi banks;  iii. Providing guidance to banks on regulatory and technical issues to facilitate the implementation;  iv. Reviewing the plans of banks for implementation and holding bilateral and industrywide meetings at various levels to track progress on implementation;  v.  Arranging and/or coordinating training programs and other capacity building initiatives for supervisors as well as bankers to enhance their understanding of technical issues. We are also actively participating in various international meetings, conferences and forums to keep ourselves updated on international developments;  vi. Implementation of various other standards of BCBS and FSB, besides Basel III. These includes, inter alia, the FSB Principles and Standards on Compensation, BCBS Principles on Stress testing, plans to introduce rules for D-SIFIs, etc. In many areas, the new rules are equally applicable to the branches of foreign banks operating in Saudi Arabia;  vii.

The second area of improvement is on other Pillar 2 risks including interest rate, liquidity, FX, strategic, technology and reputation. All banks have developed methodologies to identify, quantify, manage and allocate capital to such risks. These were risks for which no capital was required earlier. A third area is stress testing where Saudi banks have made good progress. This allows them to know their risk tolerance and resilience in times of stress. Finally, the introduction of Pillar 3 has strengthened the disclosure of Saudi banks to high international standards. This brings me to an important natural question. What does Basel III mean for Saudi banking system? Well let me assure you that our preliminary analysis is that the transition to Basel III in the Basel agreed time frames should be smooth. Saudi banks already maintain a high level of core common equity capital. The average following the introduction of Basel III has been about 17%, of which around 85% is core common equity. Similarly Saudi Banks maintain a high level of liquidity which has averaged over 30% over the past two decades. SAMA already requires banks to keep conservation buffers above the minimum and has  BIS central bankers’ speeches  3  introduced stringent stress testing requirements. Banks are making good progress in all areas. SAMA has already started the Basel III implementation process by publishing its plans, introducing relevant prudential returns and providing guidance to banks.
But if they are not adequately addressed - whether within the system as a whole or at the level of the individual market or individual firm - they could - like purely financial failures - weaken public confidence or attract public responses, which would have a damaging effect on overall activity. Mr Chairman, I can’t imagine that anyone working in the City will become bored as we move into the new millennium in the face of these challenges. How successful we are in confronting them will depend, as in the past, upon the interaction of the technical and professional skills and self-discipline of the market and the structure, substance and application of the rules of the game as they are reflected in public policy. We have unique experience within the City on which to build. The market has repeatedly demonstrated its capacity to respond successfully to new challenges and currently attracts representatives of the strongest participants from all parts of the world. It is supported by very highly qualified professionals and professional bodies which play an important role in setting and maintaining standards. It is supported, too, by an extraordinary range of specialist professional and technical organisations, which help to ensure that the rules of the game are sensibly formulated and clearly understood.

While regulation must not front-run innovation, regulators must run alongside innovation •  We must know what’s going on and be ready: either to promote or to restrain. There are three ways in which MAS does this. One, we actively engage FinTech firms to better understand emerging innovations and help them design their solutions for financial services. Take for example cloud computing. •  •  Our traditional approach was to deal only with regulated FIs, not their service providers –  But with cloud solutions proliferating, we changed tack  –  Many of these solutions offered strong efficiencies and cost savings but not all models met our regulatory requirements for data integrity and protection. So we engaged in dialogue directly with cloud service providers to explain our concerns and at the same time understand the technology –  The service providers then came up with solutions that met our concerns  –  And we modified our requirements to take account of new business models and technological capabilities. Two, we allow our FIs to experiment with new technologies in a safe environment. FIs do not have to seek MAS’ permission to try new things. •  Responsibility lies with boards and management to assess the risks and put in place adequate safeguards  •  But with many innovations, it is not always possible to anticipate every vulnerability or whether there is a risk of breaching regulation. •  Sometimes, as Nike puts it, you have to “just do it”.
After lift-off looks sustainable and the federal funds rate is somewhat above the zero lower bound, the Committee will cease to reinvest those funds generated by maturing Treasury securities and prepayments of agency MBS securities. The Committee  3  See Primary Dealer Surveys and Pilot Survey of Market Participants. 4  See Policy Normalization Principles and Plans. 4  BIS central bankers’ speeches  anticipates that the balance sheet will gradually normalize passively as these assets run off, not actively via asset sales. The effective federal funds rate will be pushed into a higher target range by raising the interest rate paid on excess reserves (IOER). The overnight reverse repo repurchase (ON RRP) facility will play a secondary role, in the sense that it will be used “only to the extent necessary” to help put a floor under the federal funds rate, and it will be phased out when it is no longer needed. With respect to “how fast” the normalization process will proceed, that depends on two factors – how the economy evolves, and how financial market conditions respond to movements in the federal funds rate target. Financial market conditions mainly include, but are not necessarily limited to, the level of short- and long-term interest rates, credit spreads and availability, equity prices and the foreign exchange value of the dollar. When the FOMC adjusts its short-term federal funds rate target, this does not directly influence the economy since little economic activity is linked to the federal funds rate.

Given their balance-sheet structure, funding liquidity is a key risk for banks: the transformation of short-term liabilities into long-term assets leaves them structurally vulnerable to liquidity pressures. Banks therefore need to position themselves so as to be able to withstand extraordinary demands on their liquidity. If capital markets work efficiently, a solvent bank in need of liquidity should, in principle, always be able to rely on the market to obtain funds. However, in practice, the interbank market may not always work perfectly; asymmetric information and coordination failures are among the most severe potential frictions. Banks may, therefore, find themselves unable to access normal sources of funding liquidity. The measures to which a bank in this situation would have to resort, such as large scale asset sales, could have major adverse spill over effects through the system, as could the most extreme case of an outright failure to meet obligations as they fall due. Liquidity buffers may help in this regard: a bank holding a buffer of assets that is reliably liquid under conditions of stress, perhaps with a core component that is eligible as collateral at the central bank, should always be able to access liquidity in a way that avoids precipitating severe market disruption. The trends described at the outset are also important here. First, a shift to greater reliance on wholesale funding and greater involvement in capital market activity more broadly perhaps makes banks more exposed to funding liquidity pressures than in the past: they are at the mercy of nimble wholesale lenders.
Dimitar Bogov: Improving education and access for children and youth to financial services Address by Mr Dimitar Bogov, Governor of the National Bank of the Republic of Macedonia, at the 3rd Annual Regional Meeting for Europe and Central Asia (ECA), Skopje, 2–3 October 2014. *  *  *  Dear Ministers, Esteemed guests, Dear ladies and gentlemen, It is my honor and privilege to welcome you all here in Skopje, Macedonia to this important event for the region of Europe and Central Asia. The aim of this meeting is to gather together in one place the regional leading policy-makers, financial institutions and experts that are engaged in the issues of children and youth access to financial services, financial inclusion and financial education, employability and entrepreneurship opportunities, to share success stories and challenges. There has been some progress made in these fields because of the existence of international movements such as Child and Youth Finance International that are keen to develop a generation that will be better prepared to prevent future financial crisis by increasing the financial education, access to finance, employability and entrepreneurship skills of children and youth. On a global level, significant progress has been achieved in advancing the mentioned priorities. Important steps have already been made in the area of improving access to financial services in the previous years. Access needs to be complemented by the quality of the financial services. The quality of financial services and the participation in the financial system is equally important for all participants in the system.

We are trying to build financial capabilities among the population lunching the project that has a goal to raise the awareness for the importance of savings. At the national level, by improving the cooperation between the regulatory authorities, it is vital to ensure that the respective strategies are aligned to achieving the common goals of financial education and financial inclusion. Since last year, there have been some efforts for institutional arrangements to bring authorities together in the Coordinating Body of the Regulatory Authorities for Financial Education in Macedonia to secure a joint commitment towards clearly defined and measurable financial education and financial inclusion goals. With joint strength, we will establish national co-ordination frameworks, and our main goal is to define the national financial education and financial inclusion strategies. While we focus on financial education initiatives at the national level, equally important is that adequate attention be accorded at the global level. We begin this two-day regional conference with our vision firmly focused on our long-term goal of universal access for children and youth to financial services. This event provides an opportunity that brings together knowledge, expertise and best practices from all across the Europe and Central Asia that I am sure will prove useful for all of you here and will provide fruitful meetings, interesting sessions and most importantly – will make an impact. Thank you very much! 2  BIS central bankers’ speeches