samchain/econo-pairs-v1 huggingface dataset:
The banks’ Denar credits increased by Denar 7,463 million, or by 27.8%. The increase was primarily due to the abolishment of the credit limits of the banks’ Denar placements at the end of March 2000, which was a period of significant credit expansion. It should be underlined that according to the supervisory examinations of the NBRM, the newly extended credits are granted to good clients. In December 2000, compared to the same month of 1999, the banks’ foreign currency placements to the nongovernment sector decreased by Denar 1,421 million, or by 17.2%. The fall was primarily due to the higher attractiveness of the banks’ Denar credits due to the higher interest rates. At the end of March 2000, the NBRM continued with further reforms of the monetary policy instruments, where the abolishment of the credit ceilings being the most significant one. Hence, the transition to indirect market-oriented instruments for monetary regulation has entirely been completed. Moreover, the existing monetary instruments have been improved in order to be modern and closer to those used in developed market economies. Within the framework of continuous and intensive efforts to lower the banks’ interest rates, the NBRM, in April 2000, decreased the discount rate and the Lombard credit interest rate by one percentage points, thus reducing them to 7.9% and 17.5% p.a. respectively. 1  On December 30, 2000, according to the new methodology, the NBRM gross foreign exchange reserves equaled USD 478.1 million.

BIS Review 9/2001  3  Monetary Aggregates Taking into account the assumptions for the inflation rate, the real growth of the gross domestic product and the increase in the real demand for money in 2001, it is estimated that the nominal growth in the demand for money, expressed through the money supply M1 will equal 12.0%. In 2001, the money supply M2 – Denar component and the broadest money supply M4 should increase by 12.1% and 13.3%, respectively. The projected growth in the money supply will enable regular execution of financial transactions in the economy and adequate liquidity of the banking sector, and simultaneously, will not disturb the stability of the domestic currency. Reserve money and foreign currency net-purchase The stability of the monetary multiplier, in other words the existence of stable connection between the reserve money and the money supply has been taken as an initial presumption when projecting the reserve money. Accordingly, in 2001 the reserve money is planned to increase by 12.0% in order to meet the projected growth in the money supply. The reserve money issuance is planned to be carried out through the foreign exchange transactions of the NBRM. In 2001, the supply is planned to exceed the demand for foreign currency on the foreign exchange market.
However, the reactivation of credit activity remains a challenging goal, which would require encouragement of the final demand and generation of business plans valid for bank financing, reduction of real and perceived risk in the economy, review of development strategies and commercial banks’ lending policies, as well as reduction of cost and non-cost elements in lending. All these factors are envisaged to gradually improve throughout the year; however, they will remain far from the pre-crisis levels. Bank of Albania’s monetary policy will continue to be prudent, chiefly oriented towards achievement of inflation target. The recent upward inflation trend might have been motivated by temporary-action and limited-intensity supply factors. The Bank of Albania has envisaged  BIS Review 28/2010  1  that the exceeding of 4 percent inflation rate will be for a short period of time and will not be followed by steady inflationary pressures. Our projections show that consumer price inflation will fall gradually towards the 3 percent targeted rate during 2010. However, we remain committed to taking all appropriate steps to ensure this performance and meet our legal mandate for price stability in the economy. 2  BIS Review 28/2010

Luis M Linde: Presentation of the Bank of Spain’s Annual Report for 2014 Testimony by Mr Luis M Linde, Governor of the Bank of Spain, before the Parliamentary Committee on Economic Affairs and Competitiveness, Madrid, 24 June 2015. *  *  *  Ladies and gentlemen, I appear before this Committee on the occasion of the presentation of the Banco de España Annual Report for 2014. Let me begin by reviewing developments in the Spanish economy, the factors underpinning its recovery and the economic policy challenges of strengthening recovery. I shall then address aspects relating to the start-up of the Banking Union and the situation of, and outlook for, the Spanish banking system. Economic situation and outlook In mid-2013, the Spanish economy initiated a recovery phase that firmed last year and has continued to do so in 2015 to date. In 2014, GDP grew at a rate of 1.4% while employment did so at 1.2%, the first positive figure since the start of the crisis. In its Quarterly Report to be published tomorrow, the Banco de España will present a new set of macroeconomic projections. According to these, the Spanish economy will grow at a rate of 3.1% on average in 2015, an upward revision of 0.3 pp on the projections published in March. On the basis of this change, activity is performing better than projected three months back.
That was not the Committee’s expectation a year ago when it believed the most likely outcome was for inflation to stay around 2%. And at that point many commentators were predicting cuts in interest rates in 2006. So what happened? Part of the story has been a further sharp rise in energy prices during 2006. But it is only a part. It is impossible to be sure what explains the rest of this unexpected drift up in inflation. But three factors seem to be relevant. First, the historically low level of interest rates and rapid growth of money and credit have contributed to rising asset prices and buoyant nominal spending, not just in the UK but around the industrialised world. Spending and capacity pressures in the UK economy recovered from the slowdown in 2005 faster than many had expected. Second, and a direct consequence of the first, is that inflation expectations have risen. Firms have been able to raise prices a little faster than before with the expectation that now those increases would stick. As the Birmingham Chamber’s own recent quarterly survey showed – “over half of the City’s manufacturers were intending to increase prices in the next three months”. One of the reasons for the success of inflation targeting is the anchor which it gives to inflation expectations. But, when inflation moves away from target, we must prevent the anchor from dragging. Expectations need to be firmly fixed on the 2% target.

These situations require robust governance at board level. 22  IDC: Wordlwide Semiannual AI Systems Spending Guide (March 2019). See: https://www.bis.org/review/r180727a.pdf and Finastra, FTI Consuting Survey 2019. 24 McKinsey & Company research for the Future of Finance review. 23  8  All speeches are available online at www.bankofengland.co.uk/news/speeches  8  To ensure that the benefits of cloud computing are realised and the associated risks are well managed, the PRA will issue a Supervisory Statement in the autumn that sets out its supervisory approach. The Bank, together with the FCA, will also establish a forum to discuss the results of a survey that it has conducted on AI use in finance and determine an appropriate supervisory approach. The Bank’s management and analysis of data is critical to our effectiveness as regulators and to the City’s competitiveness. The Bank now receives 65 billion data points each year of firm-related information. To put that into context, reviewing it all would be the equivalent of each supervisor reading the complete works of Shakespeare twice a week, every week of the year. For firms, while the Cloud and AI have reduced the costs of storage and analysis, producing regulatory submissions is still labour intensive and costs the industry an estimated £ billion per year.25 This is the new frontier of regulatory efficiency and effectiveness. The PRA is exploring how new technologies could streamline firms’ compliance and regulatory processes while improving our ability to analyse relevant data.
In return, we would be able to adopt similar supervisory policies, thus reducing damaging regulatory arbitrage possibilities and other risks associated with it. One implication of the supervision/regulation heterogeneity across counties in the region is the ineffectiveness of indirect measures to control for credit growth. Therefore finding ways and pushing homogeneity in this regard would at the same time be also important to compensate the lost effectiveness of monetary policy and the eventual demand pressures. There are also a few other ideas that stress the importance of pre-emptive regional cooperation, in bringing us as a region closer to fulfilling our target of European integration. By setting up and pursuing coordinated financial market development policies, we help to integrate our national financial markets into the international financial markets, and pave the way for other economic and social reforms to follow. The modalities of such cooperation vary. Ad-hoc periodical meetings of Governors in the region, supported by more frequent meetings in a technical level to support the discussion agenda, could be one way of approaching the objective for stronger cooperation. In addition, through a more consistent communication, we can try to identify particular issues which are relevant for our regional financial markets, and pose those issues to our counterparties, being common home country authorities, other supervisory authorities where we turn for assistance, or even professional organizations where our supervisory authorities participate. I am sure our concerns can be taken more seriously if raised as a region.

The number of additional people wanting to work overwhelmed the longer-term effects of population ageing, which, all else equal, would have been expected to have removed around half a million people from the labour force (Chart 10). This expansion of the workforce is being driven mainly by women and older workers. Before the Great Recession, between 46% and 83% of those in the 50- to 64-year-old age cohort were active. Now it is between 60% and 89% (Table 1). In part this reflects a continuation of past trends within age cohorts, but it goes much further. 8 The greater risks and financial burdens that many are now facing are likely to be important drivers of the recent increase in the labour force. Changes to pension arrangements have encouraged people to work longer. 9 State pension ages are rising, and the default retirement age has been abolished. 10  6  The average of European Commission, OECD and IMF estimates of structural unemployment have increased from 8.8% in 2008 to 10.3% in 2013, reported in Draghi, M (2014), “Unemployment in the euro area”, Speech at the annual central bank symposium in Jackson Hole, August. 7  There is evidence of there having been an increase in skills mismatch both in the rightward shift of the euroarea Beveridge curve and as indicated by skills mismatch indices. See Draghi (ibid.).
Consequently, longer-term inflation expectations became unmoored, and nominal wages and prices spiraled upward as workers sought compensation for past price increases and as firms responded to accelerating labor costs with further increases in prices. That wage-price spiral was eventually arrested by the Federal Reserve under Chairman Paul Volcker, but only at the cost of a severe recession in the early 1980s. Since then the Federal Reserve has remained determined to avoid these mistakes and to keep inflation low and stable.” [http://www.federalreserve.gov/newsevents/speech/yellen20110411a.htm]  BIS central bankers’ speeches  5  Figure 15 shows two measures of inflation expectations, plotted alongside oil price movements. The red line shows what professional forecasters expected inflation to average over the next 10 years, at various points in time. Their expectations have declined somewhat over the past 20 years, but what is striking is the relative stability of their inflation expectations. In addition, there was no significant reaction to the oil price shock that we experienced in 2008. The chart also shows a second measure of inflation expectations – the University of Michigan Survey (the green line), which asks respondents about their expectations for inflation over the next 5 to 10 years.6 Again these expectations are not very responsive to movements in oil prices, and have remained quite stable over the past two decades. It is worth noting that countries can be affected quite differently by supply shocks. As Figure 16 shows, the importance of food in the “basket” of goods purchased by consumers can vary greatly by country.

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During the crisis, around 500 banks were resolved in the US without triggering financial instability. In contrast, one estimate puts the total number of banks resolved in the euro area in that period at around 50.25  5/9  BIS central bankers' speeches  An orderly resolution of this magnitude was possible in the US because of confidence in a wellfunctioning resolution framework. And the presence of the Treasury backstop was fundamental in creating this confidence. Indeed, the FDIC ultimately did not have to draw on its credit line, but it was clearly reassuring to markets and to depositors that it had that option as a last resort. In fact, the FDIC has only borrowed from the Treasury once, during the savings and loans crisis in the early 1990s, and it repaid in full a few years later.26 This example underlines that the dichotomy between risk-reduction and risk-sharing that characterises the debate today is, in many ways, artificial. With the right policy framework, these two goals are mutually reinforcing. Public risk-sharing through backstops helps reduce risks across the system by containing market panics when a crisis hits. And a strong resolution framework ensures that, when bank failures do happen, very little public risk-sharing is actually needed as the costs are fully borne by the private sector.27 So we need to put first things first and complete the resolution framework in all its dimensions. And creating a properly designed European deposit insurance scheme would be an additional element that could further reduce the risk of bank runs.

It is estimated that 49% of an unemployment shock is absorbed by the automatic stabilisers in the euro area, whereas the figure for the US is 32%.9 And studies have found a gradual convergence in labour mobility between Europe and the US, reflecting both a fall in interstate migration in the US and a rise in the role of migration in Europe.10 Where the euro area and the US differ more is in terms of ex ante risk-sharing – that is, insuring against shocks through financial markets. This was a concept that only appeared later in the literature on Optimal Currency Areas. 11 But it plays a key role in stabilising local economies in a monetary union, in two ways.12 The first is by de-linking consumption and income at the local level, which happens through integrated capital markets. If labour income falls during a recession, but the private sector holds a diversified financial 3/9  BIS central bankers' speeches  portfolio, people can smooth their consumption with the financial returns they receive on assets in better performing parts of the union. The second way is by de-linking the capital of local banks from the volume of local credit supply, which happens through retail banking integration. Because local banks are typically heavily exposed to the local economy, a downturn in their home region will lead to large losses and prompt them to cut lending to all sectors.
The authorities in many countries are working to enhance financial market resilience. Three changes are particularly relevant for the Norwegian banking sector: First, for a given risk assessment, capital requirements must be higher. Second, banks must not be allowed to reduce capital below a minimum level even if they extend loans that, according to models, seemingly involve low risk. Third, banks must build up strong capital buffers over and above the minimum requirement in normal times. Then banks would not have to increase capital when the turnaround occurred. On the contrary, they would be able to absorb losses, thereby avoiding the need to ration credit in bad times. Norwegian banks do not have sufficient buffers today to safeguard their own, their shareholders’ or the economy’s best interests. That is why the government is now supplying risk capital. There should be no doubt that banks have the capital they need. In addition, banks’ funding methods make them vulnerable. Earlier, Norwegian banks primarily obtained funds through deposits by households and enterprises. In recent years, banks have borrowed heavily in both domestic and foreign markets. During the crisis, this proved to involve high liquidity risk for banks. Long-term credit markets have now dried up. The government and Norges Bank have therefore taken on the role of lender. In the future, in regulations and in practice, deposits must again take precedence as the largest source of funding for banks. Bonds collateralised by high quality mortgages, so-called cover bonds, will probably also be important.

To achieve this, policymakers will need to acknowledge the risk and come up with the appropriate safeguards. First and foremost for emerging markets is the continued strengthening of the domestic financial sector as I have noted, which is the key pre-requisite for raising the ability of the financial system and the economy to manage risk. Next, regional financial mechanism will also need to be strengthened to provide additional safeguards in the context of market surveillance and coordination of crisis prevention and resolution efforts. One lesson we have learnt dearly from the current crisis, as well as from the Asian financial crisis, is that globalized finance can be a source of serious risk to global economic and financial stability. Policymakers at the global level must accept this fact and be prepared to respond to it in a forward-looking way. I probably have used up the allocated time. Again, I want to thank the Central Bank of Peru and Reinventing Bretton Woods Committee for the invitation. It has been a pleasure, and thank you for your attention. 4  BIS Review 92/2009
Across the market, reserve releases continue to run at high levels by historical standards.   Insurers may be underestimating risks, particularly on new business. For example, they may be too sanguine about catastrophe risks, such as significant weather events.   Terms and conditions are loosening.   Insurers may be tempted to expand into new lines of business with apparently more attractive returns. But these may fall outside their knowledge and expertise. Over the course of 2017, we will carry out a number of supervisory initiatives to deepen our understanding of how individual insurers are being affected by these conditions. Our overall expectation remains that firms (and their Boards) are the first line of defence and accountable for the risks written on their balance sheets, regardless of distribution channel used. Where insurers participate in delegated underwriting arrangements, we will expect them to retain the ability to understand the impact of business written through these channels on their overall risk profile. Our specific work this year includes:   Reviews of underwriting and exposure management for selected lines of business at a number of large London Market insurers. In the course of these, we will seek to understand how changes in terms and conditions are carried through to planning, reserving and capital assessment. Where these insurers delegate aspects of underwriting through broker facilities, managing general agents or other arrangements, we will also assess whether they have sufficient information and control to manage their risks effectively.

As a result, in the long term, two different uses of the CBDC could exist side by side: one for payments between financial sector players (a socalled “wholesale” currency) that uses blockchain technology and all its possibilities, notably smart contracts; and another for the general public (a so-called “retail” currency) that is simpler and better suited to retail transactions. In this respect, financial institutions are much more digitally mature than private individuals as they already access central bank currency digitally via the bank accounts they hold with the central bank. In addition, following on from the questions raised by the Governor of the Bank of England, Mark Carney, on the idea of creating an international digital currency in response to the dominance of the US dollar, I think there would be some advantage in moving rapidly to issue at least a wholesale CBDC, as we would be the first such issuer in the world and would thus reap the benefits of having a benchmark CBDC. 2/ The issuance of a CBDC can generate significantpositive externalities by increasing the productivity of the financial sector and by extension the economy, and by shoring up confidence in the currency and in the financial system. But, in parallel, it is vital that we examine the potentially negative externalities that a CBDC could generate for liquidity, profitability and bank intermediation. In particular, we need to look very closely at the risks linked to large-scale and/or sudden conversions of bank deposits into central bank money.
The highly fragmented banking system and relatively weak risk management systems within the domestic financial institutions which prevailed in Malaysia prior to the financial restructuring and reforms that were undertaken from 2001 would have rendered the implementation of Basel II extremely difficult, if not impossible to achieve without risking disruptions to the intermediation process. The financial reforms that were undertaken to strengthen the underpinnings of our banking system are therefore instrumental in facilitating the smooth transition to the adoption of Basel II in Malaysia without adverse market outcomes. In the more recent period, the Asian region as a whole has made significant strides towards strengthening market structures and institutional arrangements for financial stability. Two developments deserve mention, in view of their important contributions towards mitigating some of the concerns surrounding Basel II for emerging economies. First, in the decade following the Asian crisis, the emerging economies in Asia have extensively developed their bond and equity markets. Measured in terms of market capitalisation, East Asia's equity markets have more than trebled since 1997. The bond markets in the East Asian region have also seen significant growth during this period with significantly improved liquidity conditions in these markets. There is therefore now a more diversified structure in the financial system. Second, within Asia, the regional cooperative framework has been substantially strengthened to support financial sector development, surveillance, crisis management and capacity building.

Benefits and likely risks brought by this major transition in global finance will be discussed in length over the next two days by academicians and policymakers in six different sessions. I  BIS central bankers’ speeches  1  believe that this conference will produce fruitful and beneficial outcomes for global financial stability. I would like to thank our participants and distinguished guests for their contributions and for being here with us. 2  BIS central bankers’ speeches