samchain/econo-pairs-v1 huggingface dataset:
Therefore, all policymakers should work harder to improve the business climate, develop a new economic growth model, based on producing and exporting activities, and solve legal issues still present in the area of collateral execution. Once the monetary policy easing reinforces, the external setting improves, and optimism in the economy increases, we expect a fuller transmission of the monetary stimuli to the real economy during the current year. However, as proven by world practice, boosting lending cannot and should not be an issue of concern and scope of work only of the central bank. I would like now to elaborate on issues pertaining to banking supervision and financial stability. BIS central bankers’ speeches  3  3. Banking supervision and financial stability  The Law on the Bank of Albania sets out a series of rights and obligations, which serve to sustain the country’s financial stability. The Bank of Albania is responsible for licencing, regulating and supervising the activity of the banking sector, which dominates the financial system in Albania. By implementing macro-prudential policies, regulating and supervising the banking sector prudentially, playing the role of the “lender of last resort”, and regulating and overseeing the payments infrastructure, it aims at sustaining an effective and stable banking system, by providing direct contribution to maintaining the country’s financial stability. The legal framework also establishes the responsibility of the Bank of Albania to communicate its assessment on the financial system’s stability.

The evolution of sophisticated Islamic financial products that have been structured based on multiple Islamic concepts have resulted in a new wave of innovation. These products have become competitive and efficient both in terms of product structure and pricing. The more recent innovations include the introduction of Islamic hedge funds and the creation of Islamic benchmark indices. There has also been increased listing of Islamic financial instruments in international exchanges. This has enhanced the depth of the Islamic financial markets has increased its attractiveness of an asset class for investment. This has contributed to increased sophistication of Islamic banking and takaful products evidenced by the recent surge of structured products and investment-linked products. The sukuk market is fast emerging as the most significant form of Islamic financing and continues to receive strong interest as an avenue for fund raising and investment. The sukuk market has been gaining growth momentum, increasing at an average annual rate of 40 percent. Significantly, 90 percent of the sukuk issuance are corporate issuances. In Malaysia, the issuance of sukuk has surpassed the issuance of conventional bonds for three consecutive years, with the annual turnover in sukuk trading in the secondary market at about RM135 billion. Strong demand for sukuks have also been spurred by the high levels of surplus savings and reserves in Asia and the Middle East. The sukuk is also an attractive instrument to assist Islamic financial institutions in managing their liquidity requirements.
They are thus peculiarly vulnerable to a loss of confidence, individually and as a group. The potential for contagion – the threat that trouble in one bank will result in a run on others that might endanger the system as a whole – makes monitoring banks’ solvency and liquidity a core activity for central banks. Whether responsible day-to-day for supervision or not, central banks still need to stand ready to act as lender of last resort. However, any such operation must be carefully considered. Any decision to support an institution, particularly in circumstances of underlying insolvency, creates a moral hazard that undermines market discipline. Designing effective arrangements for restructuring financial institutions is thus a particular challenge – there is a need to act quickly and finally; intermediate arrangements are much more difficult to sustain. The challenge is complicated by the degree to which financial markets are now global and financial groups operate in a number of different jurisdictions. The G30 report on international financial insolvencies, published in March 1998, raised several themes that are rather similar to those relating to cross-border corporate insolvencies. In particular, it emphasised that a close degree of international co-operation was necessary to prevent the disorderly failure of a bank or insurance company. Effective co-operation would help to bring about a reorganisation or if necessary an orderly disposal of assets, and avoid the delays, uncertainties and loss of value often associated with formal legal proceedings.

I have tried to give you a flavour of the synergies that I believe exist in debt workouts affecting, first, companies, then financial institutions and finally sovereign countries. But I hope I have also not underestimated the difficulties in realising those synergies, especially as the number and type of players involved in workouts has increased. Significant progress towards a global approach to corporate workouts has been made, however, thanks to the efforts of many of you. I am convinced that this has laid the foundations for further moves towards more effective frameworks governing bank and, especially, sovereign debt workouts. Thank you. BIS Review 67/2001  7
Our economy must be  2  BIS Review 25/2004  able to benefit from favourable domestic conditions that will allow it to develop and flourish. We have all witnessed its disappointing performance throughout the 1990s. This situation can only be corrected by the resolute implementation of structural reforms aimed at improving its long-term potential for growth. The issue is all the more pressing as we are witnessing the gradual ageing of the Swiss population. The problems caused by this trend have been identified by and large, and the measures needed have been repeatedly analysed. The goal is simple: everything must be done to increase our economy’s trend rate of growth in order to ensure better financing of its future needs. The solutions are complex because there is no magic potion. On the contrary, there are any number of different steps we can take to enhance our productivity: they range from promoting competition to repealing unnecessary regulations. Moreover, they have to be backed up by stringent control of public spending and deficits in order to ensure the efficient use of our resources and - above all - to avoid passing on a negative financial legacy to future generations. The Federal Council has adopted a legislative programme that gives priority to economic growth and a restructuring of the federal finances. We hope that Parliament will debate this programme in a spirit of intergenerational solidarity, keeping in mind the long-term interests of our country.

I am also confident that this will open up a new chapter in the history of credit bureaus and enable these entities to play an even greater role in the future development of the financial industry in Malaysia. 2  BIS Review 76/2007
We have taken the view that such fine-tuning is an unnecessary complication at this stage. If the MPC want to undertake further purchases, it would be straightforward to simply buy more gilts financed by issuing commercial bank reserves. 10  It was important that the gilts were not lent against cash, as that would have undone some of the intended impact of the initial asset purchases. 11  The 3 month commercial paper purchased had nearly all matured by the end of the programme, and had already been largely replaced by additional gilt purchases. 12  The cumulated dividends are not the profits on the portfolio, even before funding costs. Depending on such factors as the yield curves at the date of issue and purchase, and the maturity of the gilts; the dividends and market prices of the gilts are connected. See the DMO website for more information on changes in gilt prices: http://www.dmo.gov.uk/documentview.aspx?docname=publications/investorsguides/pig201204.pdf&page=in vestor_guide/Guide. 4  BIS Review 135/2010  Eventual exit strategy At this time, it is not clear whether the next step with the asset purchase programme is most likely to be to sell the assets back or to buy more. The Bank is prepared for either but it might be particularly helpful to set out in advance a few thoughts on the eventual exit strategy. After purchasing £ of assets in just under a year, the MPC paused its programme of asset purchases in February 2010.

10 The market responded rapidly to that development and, towards the end of the £ programme, some contacts were telling us that gilt market liquidity had actually improved relative to March 2009. One small point to clear up in relation to maintaining the programme is whether we should be re-investing the interest receipts earned on the gilts. In the United States, the Federal Open Market Committee recently decided that, to maintain the effectiveness of their asset purchases they needed to re-invest the proceeds from maturing assets and interest receipts. That reflects the fact that in large part they purchased (pass-through) mortgage-backed securities where, in addition to receiving coupon payments, a proportion of the underlying assets are constantly maturing or being pre-paid. Absent a re-investment programme, and making assumptions about pre-payment rates, the stock of assets in the US programme might have declined at a rate of around 17 ½ % pa. In the UK purchase programme we bought nearly all gilts 11 , with at least 3 years to maturity. The earliest gilt redemption won’t occur until the second half of 2012. We are receiving dividend payments and those have currently cumulated to a value around 5% of the total stock of purchases. 12 These receipts were anticipated, are currently held in the Fund and will contribute to repaying the original funding of the programme. A good argument can be made that, to keep the monetary stimulus of asset purchases constant, this cash should be reinvested in more gilts.
Because the majority are owned by institutions – banks, pension funds and insurance companies – it is hard to trace through the impact of any capital gain to its ultimate beneficiary. One thing worth saying is that, at least in terms of effective wealth, the gainers clearly include those entitled to future payouts from defined-benefit pensions. You can’t sell such an entitlement. But it does offer a guaranteed flow of future income, much like the coupons from an indexed gilt (that’s why DB pension funds are obliged to discount their liabilities using gilt yields and why, in response, they hold significant quantities of government debt). The present value of this income has therefore risen in similar fashion. To the extent they include equities, the value of defined-contribution (DC) pension funds will have performed less well. The third point is that none of this need have any bearing on the distribution of income, as opposed to that of wealth. This is an important distinction. To the extent that asset prices rise because the marginal investor is becoming more patient, lowering the discount rate (Chart 6(a)), this reflects a change in the present value of a given stream of income, not in the stream itself. Things are a little more complicated if interest rates have fallen in response to slower growth (6(b)). In that case, anyone who has locked in a future flow of income (coupons on government bonds, for example) will gain relative to others.

Bank of England reserves) and, crucially, by requiring all private money to be exchangeable for Bank of England money, cash, on demand by the holder and without loss of value. Alongside regulation, the provision of Bank of England money to the public and reserve money to commercial banks institutions anchors the confidence, uniformity and interchangeability of money in the UK. Our assessment is that future developments in payments and money will make it likely that, alongside regulation, we will in future need a digital pound, issued by the Bank of England to perform this anchor function. The experience of digitalisation is that new products and services, enabled by new technology, can be adopted rapidly at scale. The Government has identified several characteristics of digital markets that may lead to concentration. Such characteristics include network effects, economies of scale and scope and data advantages, which can act as barriers to entry. This suggests that the future development of private money issuance could tend towards a small number of firms taking a significant market share. While concentration and market power are not inherently harmful and may reflect innovative products and services, they can damage consumer choice, competition and innovation. Dominant issuers of new forms of private digital money may create ‘walled gardens’ - payment systems that are not fully interoperable or restrict the development by smaller firms of payment services using the money they issue.
These arrangements must be in place before we conclude our assessment, in line with the declaration of the European Council of June 2013. It is also noteworthy that strong efforts to repair bank balance sheets and enhance transparency have already been undertaken in all euro area countries, especially in those that have experienced severe stress. As regards fiscal policies, substantial fiscal adjustment has been undertaken by the euro area countries over the last few years. The average fiscal position of the euro area countries is much stronger than that of global peers. The authorities should not unravel their multi-year efforts to cut deficits but should reduce the debt ratios without delay, in line with the EU’s fiscal framework, which has been considerably reinforced over the past few years. As part of this enhanced framework, the draft budgetary plans that countries will now deliver for the first time under the “two-pack” regulations need to provide for sufficiently far-reaching measures to achieve the fiscal targets in 2014. Euro area governments must also decisively strengthen their efforts to implement the needed structural reforms in product and labour markets. These reforms are required not only to help the respective countries to regain competitiveness and to rebalance within the euro area, but also to create more flexible and dynamic economies that will generate sustainable growth and employment. As regards intra-euro area imbalances, there has been a major external adjustment in euro area countries with previously high current account deficits.

Further decisive steps towards establishing a genuine banking union are needed so as to further reduce financial fragmentation, enhance the resilience of the banking sector and strengthen the institutional framework of the euro area. The ECB welcomes the approval of the legal framework of the single supervisory mechanism (SSM) by the European Parliament on 12 September and we look forward to its urgent adoption by the EU Council in the course of October. The entry into force of the SSM legal framework will allow us to further speed up the preparation process, which is well under way. We are committed to delivering on our new supervisory responsibilities by November 2014. We also strongly support the envisaged timeline for the establishment by the end of 2014 of the single resolution mechanism (SRM), which is a necessary complement to the SSM. The Commission’s proposal for the SRM contains three essential elements for the effective resolution of banks, namely: a single system, a single authority and a single fund. The ECB’s forthcoming comprehensive assessment of banks’ balance sheets, which will take place before the ECB assumes its supervisory responsibilities, will be an important confidence-building tool, and we are committed to ensuring its consistency and transparency. The effectiveness of this exercise will also depend on the availability of necessary arrangements for recapitalising banks, if and when needed, including through the provision of a public backstop, if private funds cannot be acquired.
BIS Review 15/2003  5  Next Steps in finalizing the New Accord Most of my remarks today have been centered on implementation of the new framework. I’d like to conclude by spending a few moments discussing where we are in the process to finalize the New Accord. As I mentioned, the Committee has just finished gathering data from the industry through its third impact study. The aim of the study was to collect and to analyze information from banks worldwide regarding the capital impact of the new proposals on their existing portfolios. The results are under review and will help us to determine whether any adjustments will be needed prior to release of the final consultative package. That final consultative paper will be issued by early May. Our goal continues to be to have a final Accord agreed to by the fourth quarter of this year. In closing, I want to emphasize that effective supervision of modern banking organizations will necessarily entail a closer and more cooperative partnership between industry participants and official supervisors. The industry’s participation in the formulation of a more risk-sensitive capital adequacy framework is a good example of this kind of constructive interaction. Indeed, the three pillars of the proposed framework reflect the understanding that regulatory requirements alone are no longer sufficient to address the growing complexity of banks’ activities and the associated risks. Consistent with this notion is the need for effective corporate governance, which plays an increasingly important role in a rapidly evolving banking environment.

The rapid, unconventional and coordinated response by central banks at the peak of the crisis undoubtedly averted a collapse of the system, and the vigorous measures to maintain the functioning of financial systems have been largely effective – so far. Nevertheless, the crisis itself, and the very scale of the response, have brought central banks more into the foreground than ever before. As the full implications of what has happened unfold there will undoubtedly be questions about their role and the policies they pursue. The appropriate response to this is for central banks, international organisations, and government authorities to seize the initiative for reform so that financial crisis does not become a crisis of confidence in the system itself. Since, as recent events have resoundingly demonstrated, the financial system is a global system, the reforms must be organised along international lines. The limited achievements in international co-operation following the Asian financial crisis might make us sceptical. But, in fact, the signs are positive. Co-ordination among central banks in crisis management has been effective. Technical blueprints for regulatory reform on an international scale have already been drawn up. And the political will has been demonstrated in the commitment by the world’s largest economies to implement far-reaching reform. One area of progress is the movement towards greater participation by developing economies in international forums and in the process of reform.
Labour costs1) in manufacturing: Norway and trading partners Percentage change in hourly costs  8  8 7  7  Norway 6  6  5  5  Trading partners  4  4  3  3  2  2  1  1)  1  Labour costs per hour  0  0 1991 1993 1995 1997 Sources: Statistics Norway, TRCIS/IMF and Norges Bank  1999  2001  SG Gausdal 31.01.03  Since 1998, wage growth in Norway has been markedly higher than that of our trading partners. Until spring 2001, the monetary policy objective implied that, over time, wage growth had to be reduced to the level in Europe. The inflation target of 2½ per cent implies that wage growth over time can hover around 4½ per cent. This takes into account that productivity growth in Norway has been around 2 per cent over the past twenty years. If wage growth is higher than 4½ per cent, monetary policy generally has to be tight in order to counter inflation. This will normally lead to deteriorating competitiveness in the business sector. If wage growth is lower than 4½ per cent, monetary policy normally has to be eased to counter inflation that is too low. This can result in a weaker krone and an improvement in competitiveness in the business sector. The difference between current wage growth and the long-term equilibrium level of 4½ per cent can be 2 referred to as the wage gap for the Norwegian economy.

When we look at future prospects, a good estimate for the output gap can therefore provide a better indication of the outlook for wage and price inflation. Both these simple measures are based on stylised assumptions concerning productivity growth and must therefore be used with caution. Wage gap1) and output gap Per cent 4  4  3  3  Output gap  2  2  1  1  Wage gap  0  0  -1  -1 -2  -2 1) Up to 2000: difference between rise in hourly labour costs in manufacturing in Norway and among trading partners. Thereafter growth in excess of 4.5 per cent. -3 -4 1991  1992  1993  1994  1995  1996  1997  1998  1999  2000  2001  -3 -4  2002  Sources: Statistics Norway, TRCIS/IMF and Norges Bank SG Gausdal 31.01.03  The high level of wage growth in 2002 implied a tight monetary policy. The interest rate differential against trading partners widened. The krone appreciated further. Relationships in the foreign exchange market are unstable, but there are a number of fundamental forces that influence the krone. High oil prices and the phasing in of petroleum revenues into the Norwegian economy are part of the explanation, but the predominant factor is probably the cyclical divergence between Norway and abroad. Krone exchange rate1) and 12-month interest rate differential against trading partners.