samchain/econo-pairs-v1 huggingface dataset:
This policy may provide a direct support to aggregate demand, through fiscal transfers, and an immediate and targeted improvement of liquidity to enterprises, through the postponing of the payment of taxes and through the sovereign guarantees programs. The two introduced fiscal packages, so far, provide for a maximum potential stimulus at around 3% of GDP. Even without considering the negative effect on public income, this stimulus transfers to the balance sheet of public sector a considerable part of the financial costs of the crisis. On its side, the Bank of Albania has increased the dosage of the monetary stimulus. This stimulus has been taken the form of the reduction of policy rate, already in its historical minimum of 0.5%, aiming to boost lending and reduce the servicing cost of existing loans. Also, it has been in the form of removing the quantitative limits of liquidity injection into the system, aiming to a better supply of the banking market and the Albanian economy. The volume of liquidity that we inject every week in the system fluctuates around the level 2%. In addition, the Bank of Albania has undertaken operational measures for guaranteeing the supply of economy with cash, in response to its increased demands. In parallel, the Bank of Albania – in an agreement and good understanding with banking industry – has carried out regulatory amendments which ease the postponing with one quarter of the credit payment for firms and households which face temporary financial difficulties.

It accounts for around 25% of banks’ balance sheets and has a comparable share to GDP, while the bank – business relationships’ flow is present also in the field of other financial products and in the payment services. For this reason, your reaction against the shock should be decisive, courageous and visionary, as well as based on the spirit of collaboration and common long-term interests. Allow me to be more concrete in detailing the vision of the Bank of Albania on the challenges ahead. The first challenge is the facing of health emergency. The business and banking sector should 2/4  BIS central bankers' speeches  be clear that human capital is the most precious asset for every company. For this reason, any necessary measure to guarantee the health of the employees should not be considered as an expense, but as a strategic investment for the future of the firm. The second challenge is the revision of the business model and the increase of operational flexibility. One of the lessons of this crisis is that each of us can make more to adopt the information technology, to shift part of the business on line, and to increase the operational flexibility and efficiency. Putting into practice these lessons is particularly useful in case of the prolongation of the pandemic. The third challenge is maintaining liquidity and solvency of firms.
Determination is necessary in order to act in a timely way, because an untimely monetary policy will delay the convergence of inflation to the target or will do so at an unnecessary cost. 9 / 19  BIS central bankers' speeches  In practice, this means making robust monetary policy decisions in uncertain conditions. Thus, in our last monetary policy meeting we communicated that, in the most likely scenario, a bounded easing of the monetary impulse would be needed. The search for the right combination of prudence and determination is also necessary in the other fields where the Central Bank operates. To monitor the financial sector without restricting its ability to innovate; to develop instruments and facilities that are attractive to the market, and to improve risk management and transparency without compromising efficiency and timeliness. Identifying the new challenges facing the Central Bank and finding the answers that best balance prudence and determination requires organized and systematic efforts. As an expression of it, in the coming months we will develop a new institutional strategic planning exercise. We intend to consult with various players, both public and private, including, of course, this Committee. The purpose of this exercise, of the initiatives we undertake, and the conduct of our regular policy decisions must be particularly explicit. What we ultimately aspire is to continue to strengthen the Central Bank of Chile as an institution of excellence, that our fellow Chileans can trust. Thank you.

Philipp M Hildebrand: Switzerland - the challenges of being and remaining a leading financial centre Speech by Dr Philipp M Hildebrand, Member of the Governing Board of the Swiss National Bank, at the Financial Management Association (FMA), European Conference Zurich, University of Zurich, Zurich, 3 June 2004. *  *  *  I am pleased to be here this evening to reflect on Switzerland: the challenges of being and remaining a leading financial center. Moreover, I am honored to share this platform with Peter Wuffli, Walter Kielholz and Bruno Gehrig. The Financial Management Association should be commended; you have assembled three outstanding leaders and representatives of the Swiss financial industry. I very much look forward to their comments. When I think about the Swiss financial industry, two closely linked thoughts come to mind: first, Switzerland’s status as one of the world’s leading financial centers and second, the important contribution of the financial sector to the overall vigor and resilience of the Swiss economy. Going forward, the key challenge for the Swiss financial industry will be to maintain its leading global status in a world of fierce competition. Because of the financial sector’s critical contribution to the overall economic well-being of the Swiss people, meeting this challenge is important not only to the financial sector but to all Swiss citizens who are concerned about the long-term vitality of their economy. Many of you are familiar with the relevant figures: roughly 10 percent of Switzerland’s real GDP derives from the financial sector.
Evidence from Eleven Countries over Twenty-Five Years”, Review of Economics and Statistics, 96(1), pp. 60-77 2  2/6  costs for certain groups of workers. Third, cybersecurity threats pose another challenge, given the vast amount of valuable information created and stored in the digital economy. Digitalisation may potentially lead to significant changes in the structure of most sectors of the economy. Among them, the possible impact on the financial sector is especially relevant for the Banco de España given our role as banking prudential and conduct supervisor and central bank. In particular, new technologies may imply efficiency gains and may also facilitate the entry of new companies offering financial services. For customers this may entail benefits in terms of cost savings and financial inclusion. For the incumbent banks technological change involves both challenges and opportunities. On the one hand, the entry of new competitors such as Fintech or Bigtech companies may threaten the market shares of incumbents. But on the other hand, innovation may lead in the long run to efficiency gains in the provision of financial services for incumbent banks, although in the short term it probably implies an increase in costs necessary to adapt to the new technologies. Given our limited understanding of the impact of digitalisation on the economy, the use of surveys to firms can be a useful tool to enhance our knowledge of specific aspects of digitalisation such as adoption rates, barriers and impact on firm performance.

In this regard, I would like to summarise the main findings of two recent surveys undertaken, respectively, by the EIB and the ECB. The EIB Investment Survey, which is run annually, included in 2018 some questions on firms’ demand for skills and digitalisation activities in the EU and the US. More specifically, 888 firms in the EU and 800 firms in the US were surveyed4. This survey shows that EU firms lag their US peers in terms of adoption rates in the services sector whereas adoption rates in the manufacturing sector are similar on both sides of the Atlantic. It also shows that larger firms are more likely to adopt digital technologies than smaller ones. The ECB Digitalisation Survey is an ad-hoc survey which interviewed 74 very large nonfinancial companies from the euro area5. This survey shows that among large companies the take-up of digital technologies is very high, with big data and cloud computing being the most widely adopted. When it comes to the impact of digitalisation on firm performance, the results of both surveys are highly consistent. They find that digitalisation has a positive impact on firm productivity, driven by the possibility of sharing knowledge more easily and more efficient production processes. It also has a positive effect on sales mainly due to better access to customers. Digital firms invest more, especially in intangible assets, and innovate more than non-digital firms. As regards perceived obstacles, digital firms report difficulties at recruiting and retaining highly skilled ICT staff.
I am not going to comment on the merits of the precise measures that the banks are taking, except to say that they are in line with what we anticipated at the time the decision to proceed with deregulation was taken. They should be seen not as something that is peculiar to Hong Kong, but as part of a global trend. This global trend is being driven partly by an increased focus by banks on the bottom line and on the creation of shareholder value. This seems the right thing to do in the interests of long-term survival. There are plenty of examples of companies around the world that lost track of what they were actually in business for and as a result are no longer in business. Banks, like other companies in a free market economy, have a responsibility to make profits for their shareholders. It is in the interests of society as a whole that they do so, otherwise we could end up with the banking sector in a mess. But any company maximises shareholder value subject to constraints. These may be imposed by laws and regulations, such as those relating to environmental protection, or by the expectations of society. This means that if banks wish to preserve their reputation and the confidence of their customers, on which ultimately the strength of their franchise depends, they should act in a way that is seen to be fair and reasonable.

Starting from 1994, the Treasury’s annual use of short-term advances is to be reduced gradually over five years from 15 to 3 percent of each year’s incremental budget appropriations. By 1998, the Treasury will be entitled to short-term advances totalling not more than 3 percent of that year’s incremental budget appropriations over the previous year. In addition to that, the Treasury and the Central Bank have signed a seven-point protocol to cooperate in fighting inflation. The official aim of this accord is also to give the Central Bank more independence. So, an important development towards the full independence of the Central Bank has been initiated, as required in the Maastricht Treaty. However, we have been in the process of preparing a new Central Bank law in parallel with the same institutions in the EU. The work has already been done and we are ready to submit it to the government if and when the political environment is appropriate. On the other hand, in addition to the already installed electronic payments clearing system, the CB has signed a contract to develop and install a modern national securities settlement system. The new system will allow the Bank to increase the efficiency with which government securities can be traded on the capital markets and ensure that the payments system will match the standards of those in the EU and other western nations. The new system will also be capable of being connected to the BIS Review 105/1997  -3TARGET network.
Well-known problems and deficiencies With regard to measures involving correcting well-known problems and deficiencies, I see three main priorities. One priority is to gain a better overview of the mortgage market. Although we have information on aggregate changes and mean values with regard to household indebtedness,  2  For a review of how different studies evaluated the housing market in the United States prior to the crash, see Gerardi, K.S., C. L. Foote and P.S. Willen, (2010), “Reasonable People Did Disagree: Optimism and Pessimism About the U.S. Housing Market Before the Crash”, Public Policy Discussion Papers No 10–5, Federal Reserve Bank of Boston. 4  BIS central bankers’ speeches  how much of their income goes on paying interest, etc., this type of data can disguise a substantial underlying variation. If we view it uncritically, there is a risk we will be lulled into a false sense of security. It may be enough for some households to be so much in debt that a fairly modest increase in the mortgage rate forces them to sell their homes. If a sufficiently large number are in this situation, it may start up a spiral of falling prices forcing further sales and leading to further price falls. But as I said, we do not know how many households are in this situation. We also need to gain a better idea of the extent to which households amortise their loans. We hope to achieve this now.

Money laundering has a wide range of adverse effects on any country’s economic, political and social structures. Since laundered money passes through the financial system, money laundering also has several effects on the financial systems as a whole and banks in particular. Some of the effects include: •  First, undermining legitimate private sector efforts. Money launderers use front companies, to disguise the proceeds of illicit activities and in the process hide the ill-gotten gains. These companies have access to substantial illicit funds, therefore allowing them to subsidize the front company and offer it’s products and services at levels below market rates. At times they quote prices, which are below production cost. This explains why front companies have competitive advantage over companies that source their funding from the financial markets. This makes it difficult, if not impossible, for legitimate business to compete against such companies. This situation may lead to the crowding out of legitimate private sector businesses by criminal entities. Clearly, such criminal enterprises would not adhere to good corporate governance practices as legitimate businesses would. •  Second, loss of control of economic policy. As already alluded to, the magnitude of money laundering is between 2% to 5% of world output. In most developing economies, like ours, these proceeds may dwarf government budgets, resulting in loss of control over economic policy by such governments.
Housing market activity has begun to recover, and a widely followed national home price index is up 12 percent over the 12 months ending in September.1 Anecdotal reports suggest that this higher-than-expected increase in home prices is due to a relatively low number of homes for sale. Due to this shortness of supply, there is reason to expect increases in starts going forward. Yet another bright spot on the horizon is the fact that growth prospects among our major trading partners have improved following a few years of lackluster performance which induced a sharp slowing of growth of U.S. exports. In particular, the euro area appears to have emerged from a protracted recession and is experiencing modest but positive growth. To summarize, while growth in 2013 has been disappointing, I believe a good case can be made that the pace of growth will pick up some in 2014 and then somewhat more in 2015. The private sector of the economy should continue to heal, while the amount of fiscal drag should subside. Despite near-term concerns, growth prospects among our major trading partners will improve further next year. This combination of events is likely to create an environment in which business investment spending will strengthen. As growth picks up, I expect to see more substantial improvement in labor market conditions and a gradual updrift in inflation back towards the FOMC’s target rate. However, the notion that the economy will grow more swiftly remains a forecast rather than a reality at this point.

Shortly afterwards, we decided to create the Securities Markets Programme (SMP) to start purchasing government bonds of several countries. That was an important moment. And, of course, at the same time, there was then the big loan to Greece, the creation of the European Financial Stability Fund, so those months of May, June 2010 were crucial. We were very active and it was the first big manifestation of the crisis. The peak of concern was more in the second half of 2011, first half of 2012, because that was when the markets, without any change in economic fundamentals, started to attack heavily the government debt of Spain and Italy. There was contagion and, at the end of 2011, I spoke about the ECB’s analysis of this, which showed it was already influencing, for instance, the price of French debt. So indeed, it was a development that was quite dangerous. We decided on a second round of the SMP, ended up with the OMT decision and injecting a big supply of liquidity, € trillion. It wasn’t particularly the French contagion that forced it, more the continuation of the pressure in the bond markets throughout the first months of 2012. We had to do something more significant than just a second round of the SMP. It clearly seemed that was not enough. These decisions, plus the decisions of the European summit of June 2012, ended the acute phase of the euro area’s existential crisis.
According to these advocates, it should not be more difficult to use existing knowledge to assess when a financial imbalance is being built up than it is, for example, to calculate the output gap. And many central banks today calculate the output gap to make assessments of inflation. The argument that it is difficult to determine how large interest rate changes are necessary is usually met by saying that a higher interest rate in any case subdues credit growth and thereby also indirectly asset prices. By conducting tighter monetary policy than is required to keep inflation on target in the short term when asset prices and debts begin to accelerate, we can certainly have slightly lower inflation and weaker demand than is desirable, but one also reduces the risk of negative effects on production and inflation from a collapse in asset prices later on. For example, the Bank of Japan has  BIS Review 62/2006  5  been criticised in recent years for not having conducted a sufficiently tight monetary policy 15-20 years ago when the bubbles in Japan were building up. Those who maintain that there is too much uncertainty to dampen a price rise via interest rate adjustments are thus of the opinion that it is better to wait until a correction of abnormally high asset prices is a fact and take action then. Many believe that it is important in such a case to act forcefully so as to prevent a deep recession.

•  International reserves have increased substantially, providing a larger cushion against adversity. Among the largest borrowers, half now hold reserves greater than 150 percent of maturing short- and long-term debt; less than one-sixth had such coverage heading into 1997. •  There have been improvements in fiscal performance, with some notable cases of governments achieving and sustaining large primary surpluses. BIS Review 37/2004  1  •  External balances have improved, with current accounts in most of the emerging world in surplus or modest deficit. Only 2 of the 20 largest borrowers now are running deficits in excess of 3 percent. •  Exchange rate regimes are more resilient and less fragile, as a substantial majority of the largest borrowing countries have moved to flexible regimes, and away from the fixed-butadjustable pegs that proved so dangerous in the crises of the last decade. •  Important progress has been made in building credibility for new monetary policy regimes, and inflation is generally moderate. •  Governments have made major investments in recapitalizing and restructuring their troubled financial systems. For example, in Asia, where some of the most severe problems were encountered, governments have spent over $ billion carving out problem loans and bolstering capital. •  Growth rates have improved with the restoration of domestic stability and recovery in external demand. Indeed, aggregate growth currently is running at its highest rate since the onset of the crisis in 1997.
The Single Resolution Mechanism Let me now turn to the establishment of a Single Resolution Mechanism (SRM), which constitutes the second pillar of the banking union and is a necessary complement to the SSM. It is crucial that the SRM is in place once the SSM is operational. There would otherwise be a danger of creating potential conflicts between supervisory and central bank perspectives. It would be a misunderstanding to believe that there will be no more troubles at banks as soon as responsibility for banking supervision is conferred to the ECB. On the contrary, non-viable banks will have to be closed down and resolved in order to prevent the “zombification” of the European banking sector. The viable parts of certain banks may nevertheless require transitional funding – which should not be mistaken for a bail-out. A single resolution mechanism is hence an essential condition. It will ensure timely and impartial decision-making focused on the European dimension and that resolution costs are borne by the private sector, thus putting an end to the expectation that taxpayers will foot the bill. The era in which the privatisation of profits and socialisation of losses was possible should belong to the past. The SRM should be equipped with a comprehensive set of enforceable tools and powers to resolve all banks participating in the SSM. This mechanism should under no circumstances be placed with the ECB, in order to nip any potential conflicts of objectives in the bud. However, the flow of information to the SSM must be safeguarded.

ways to delink reserves creation from monetary policies and exchange rate management appear promising and, although very complicated, should be encouraged. These are extremely difficult issues. But I want to pay tribute to the leadership taken by Korea on this question during its G20 Presidency. Conclusion To conclude, I would like to outline what I see as the main lessons central banks should draw from the crisis. First, financial crises are a pervasive feature of modern capitalism. While the exact timing of a crisis is hard to predict, situations of financial fragility, when some sectors have increased their debt and leverage in parallel to asset prices, reduce the resilience of financial systems to asset price reversals. Second, timely and determined interventions of central banks can quench the thirst of financial markets for liquidity and limit the spill over of liquidity squeezes to the real economy. Central banks have demonstrated that their international cooperation could be relied upon even under extreme stress in financial markets that have become integrated at the global level. Third, central banks should both prepare to manage future financial crises and design their policies in order to minimise the risks of future financial crises. For the least, central banks should avoid that their policies stimulate potential excessive risk taking, which although benign in good times, increase the scale of insolvency in the event of an asset price reversal. This is the best way to limit the risks to price stability over the longer run. Thank you for your attention.