samchain/econo-pairs-v1 huggingface dataset:
Philipp Hildebrand: Banking regulation – changing the rules of the game Speech by Mr Philipp Hildebrand, Vice-Chairman of the Governing Board of the Swiss National Bank, at the Twelfth Annual International Banking Conference, Federal Reserve Bank of Chicago, Chicago, 25 September 2009. I would like to thank Jürg Blum, Rita Kobel, and Signe Krogstrup for their valuable support in drafting this speech. I also want to thank Bertrand Rime for helpful comments and discussions. *  *  *  Introduction I want to thank the Federal Reserve Bank of Chicago for the kind invitation and the opportunity to speak to you this evening. It is a privilege to be here. A year ago, we were in the midst of a perfect financial storm. Following the bankruptcy of Lehman Brothers in midSeptember, the imminent collapse of the global financial system became a distinct possibility. To avert such an outcome, a bold and unprecedented international policy response was needed and promptly initiated. In the US as well as in Europe, several of the world’s largest financial institutions required public capital injections, and their nondeposit liabilities had to be guaranteed. A number of countries were forced to expand their deposit insurance programs. In some cases, governments or central banks purchased or guaranteed bank assets. 1 In spite of the rapid policy response aimed at stabilizing the global financial system, the broader economy was heavily hit. Trade and industrial production literally fell off a cliff.

2.4 Stress testing should also prove helpful in informing macroprudential policies While stress tests have become an important part of the microprudential toolkit, they have also taken a key role in macroprudential analysis in recent years for financial crisis prevention purposes, enabling central banks and macroprudential authorities to assess the vulnerabilities of the financial system as a whole. Informing macroprudential policy with a comprehensive overview of the financial sector’s resilience is and will remain an essential objective for the future of stress testing. In that regard, improving the accuracy and relevance of our top-down models is one of our priorities at Banque de France, but also at the European level, to better use them in the macroprudential field. 3/3  BIS central bankers' speeches
But probably the most striking unconventional feature of our monetary policy back then was the active recourse to reserve requirements, the rates of which were increased to levels exceeding by far those of any other central bank in the EU: 20 and 40 percent for lei- and forex-denominated liabilities respectively in 2006. However, taking into account that studies published even before 2006 considered the pure IT framework as not necessarily the most suitable for an emerging economy, one might think that the NBR’s departure from the mainstream was less significant. Specifically, the NBR opted for  2  BIS central bankers’ speeches  a “light” version of inflation targeting, which meant retaining the managed float feature of the exchange rate regime, which implied smoothing out excessive volatility, without defending a certain level of the exchange rate or preannouncing interventions. The actual form inflation targeting took in Romania thus matched the “managed-floating plus” concept introduced by Goldstein in 2002, considered the most suitable choice for an emergingmarket economy involved in the global capital market, as it combines the managed float part with an inflation targeting monetary policy strategy and an active pursuit of measures to limit the degree of currency mismatches in the economy. Subsequently, this “managed-floating plus” approach gained acceptance, especially during the global crisis, and now forex interventions are part of the arsenal of many central banks, including some of those using a free floating regime before the crisis. 3. Did markets and banks react to the departure from the paradigm?

Further, the value added tax on selected agricultural equipment and spares, was zero rated as incentive to increase agricultural production and productivity. (ii)  Tourism sector: – In order to diversify the economy and attain broad based economic growth, Government increased the allocation to the sector to improve access to the Northern Tourism Circuit (infrastructural development in Mbala and Kasaba Bay). Further, Government will embark on the development of a new world class tourism area in Livingstone, and step-up the development of road infrastructure in key national parks namely, Luangwa and Kafue. (iii)  Manufacturing: – In order to expand the manufacturing base, Government is promoting the establishment of Multi-Facility Economic Zones (MFEZ) on the Copperbelt (Chambishi), and Lusaka (Lusaka south and east) provinces by providing for fiscal incentives and quality infrastructure development in the budget. Operations at the Chambishi MFEZ have already commenced. Further, the budget reclassified and re-categorised certain manufacturing materials with the aim of lowering customs duty rates. (iv)  Mining sector: – In light of the adverse impact of the global economic crisis on the mining sector and with the view of easing these effects, the Zambian Government introduced tax concessions, which included removal of the windfall tax, increasing capital allowance to 100 percent as an investment incentive, and reduction of customs duty on Heavy Fuel Oils.
Now, in the recessionary phase of the cycle, we can see very clearly that it was Rojo and White who were right, and that other economists who underestimated the explosion in leverage and who did not worry about designing regulations forcing banks to strengthen themselves during the upswing were wrong. Today, with the benefit of hindsight, we know who was right. Next cycles will face us with fresh challenges but I hope that this experience will help us to meet them. Thank you very much and enjoy the wine – red or white (Rot oder Weiβ) – you have chosen. BIS Review 149/2008  5

The probable continuation of the current upswing on the mortgage and real estate markets means that risks to financial stability are likely to remain in the spotlight. Containing these risks will continue to require the participation and support of all market players: the authorities, the lenders, and the borrowers. Thank you for your attention.
We maintain, against all temptation of nilateralism or deregulation, our commitment to the multilateral rules of the game in place since 2009. And we are stabilising these rules once and for all: there will not be a Basel IV. In sum, 2017 positively marked a turning point for both the United States and France. The beginning of 2018 has thus been characterised by a welcome optimism, but one which must not act as a disincentive: confidence yes, complacency no. We must not lie back and enjoy the return of blue skies; we must take steps to ensure that this improvement is transformed into stronger and sustainable growth. To this end, I wish to make four collective wishes for the coming year. 2. Four wishes for 2018 My first wish concerns Europe. This does not so much concern our monetary policy, which has 1/3  BIS central bankers' speeches  entered a gradual normalisation phase, and which is a success; I will not discuss it further this evening during the "silent period". 2018 must above all be the year of Economic Union, which still largely remains to be built. We must now or never take advantage of the recovery to tackle the shortcomings of the euro area. Because France and Germany’s electoral calendars are aligned for the first time in 15 years, and since last Friday, there is a prospect of a pro-European coalition in Germany.

This is understandable considering the fact that the latest empirical research confirms the positive influence of the transfer from currency to electronic payment instruments on consumption, trade and economic growth, with the effects of card usage being the greatest, compared to other payment instruments1. Third, besides novelties in the field of payments, this conference traditionally includes the trends in securities settlement systems. Therefore, the discussions will be aimed towards the implementation of the “TARGET2 Securities” project, which is expected to facilitate realtime cross-border settlement of transactions in securities on the “delivery versus payment” principle, by integrating transaction accounts and securities accounts on a single platform. This project is aimed towards strengthening the integration of the financial market infrastructure, which is expected to contribute towards increasing competition, lower costs for settlement and greater financial stability. Discussions related to this topic will also include the latest trends in collateral and liquidity management taking into account the latest changes in the monetary policy setup in the euro area. Fourth, this conference will especially focus on the novelties in the proposed revision of the Payment Services Directive. The proposed amendments to the directive aim towards increasing the competition in the field of online payments related to e-commerce, by removing the barriers that the interested providers of these services face to enter the common market of the European Union, reducing the costs for the consumers when conducting card payments, as well as by raising the security level for online payments.
Loans: Commonplace since ancient times  Source: www.openthemagazine.com  A Mesopotamian clay tablet with debt details from around 3000 BCE  5  1 November 2017  Collegium generale | Fritz Zurbrügg | © Swiss National Bank  Loans fulfil two basic functions  Borrowers:  Loans enable borrowers to have future income at their disposal now Example: Start-up company Example: Buying a house Example: Government debt  Creditors:  Loans allow creditors to make optimal use of their available capital Example: Investments of an entrepreneur  6  1 November 2017  Collegium generale | Fritz Zurbrügg | © Swiss National Bank  Part 2: Under what circumstances is lending detrimental to an economy?

And yet, we have just emerged from a successful experience: let us recall that it was collectively considered that we Europeans were in a very bad position in March 2020 at the onset of the Covid crisis. But together we have managed to weather this crisis very well, thanks for instance to the joint purchase of vaccines and the SURE1 and Next Generation EU programmes, backed primarily by Germany and France. I will therefore venture to outline here, in the field of economics, where we will succeed together, what we differ on today, and - lastly and perhaps most importantly, what both our countries are in danger of forgetting. I. Where we will succeed together: monetary policy This shock further increased inflation, which had already reappeared during the strong post-Covid recovery. Thus, after a decade of too low inflation, and even a risk of deflation during the Covid crisis, inflation now stands at 10.7% in the euro area as a whole (7.1% in France, and 11.6% in Germany). Exogenous factors, especially energy prices (up 42%) and certain food prices, still account for half of total European inflation. Nevertheless, inflation has become more "domestic" and broad-based: core inflation excluding energy and food - has gradually increased and reached 5.0% in October, and this is precisely where monetary policy has a more direct impact. The ECB Governing Council therefore decided at the end of October to raise its key rates by a further 75 basis points, bringing the deposit facility rate to 1.5%.
A series of environmental changes over the past decade or so have affected the quantity and price of credit generally. Greater macroeconomic stability, and perceptions that it will persist more or less uninterrupted, probably increased the supply of credit; and by reducing risk premia, may have increased demand too (Diagram A). Other developments are more likely to have worked purely through credit supply. The most obvious is the growth of instruments such as credit derivatives and securitisation, associated with an increased role for rating agencies in monitoring credit risk. This was in effect a shock to technology, making portfolios transferable. By offering the prospect of better meeting desired risk profiles and by separating origination from investment, it has brought more nonbank financial institutions, and so more capital resources, into the credit markets, increasing the supply of credit (Diagram B). This seems to have been borne out in the significant shift in actual credit quantities and prices up to the middle of this year. In the United Kingdom, non-bank lenders have accounted for a greater share of credit extension to both the household and corporate sectors (Charts 2-4). 2  Stiglitz, J. E. and A. Weiss (1981), “Credit rationing in markets with imperfect information”, The American Economic Review, Vol. 71, No. 3, pp 393-410. 3  Bernanke, B. and M. Gertler (1989), “Agency cost, net worth, and business fluctuations”, The American Economic Review, March 1989, pp 14-31. 2  BIS Review 149/2007  A lot of that has been securitised (Chart 5).

First, in contrast to the textbook account of shocks to the Money supply via the proverbial helicopter drop of base money (pound notes), firms and households are not caught in a bind where, in aggregate, they are forced to hold the increased supply of broad money, even if it exceeds demand. Following a shock to the supply of credit, in which some people or companies become less credit constrained, it will be open to others to reduce their existing borrowing as the extra money circulates around the economy via the purchase of goods, services and financial assets. Second, and more important, the shocks to credit supply are, in themselves, real not nominal shocks. And like other real shocks, causing changes in the balance of Aggregate Demand and Aggregate Supply, there is a nominal effect only if monetary policy does not respond via alterations to the path of short-term interest rates to keep the economy on a stable path and in line with the inflation target. Absent an appropriate policy response, the easing in monetary conditions would in time feed into inflation through an expansion of nominal spending. In the first instance, the expansion of “liquidity” represented by faster money growth may sometimes work through asset prices. That is because with imperfect substitution between different kinds of financial assets, relative risk premia may be altered, which in turn may affect borrowing conditions in capital markets.
For example, if we are in a period of “secular stagnation”— characterized by chronic excess global savings and aging populations—then one would expect r* to remain persistently low. 3 But, if we are in a world of abating headwinds as we recover from the financial crisis, then one would expect r* to rise over time. This lack of clarity about the environment increases the degree of uncertainty about the level of r*. Despite all these uncertainties, one still has to have a viewpoint. In the current circumstances, I would judge that r* over the medium term is likely to be somewhere around 1 percent. Although that is higher than the estimates from some models, I have nudged up my estimate because financial conditions are still easy and fiscal policy will likely be quite stimulative in 2018 and 2019.4 If the neutral real interest rate is around 1 percent, there is still some distance to go before monetary policy actually gets tight. At the FOMC’s 2 percent inflation objective, my estimate of r* implies that the federal funds rate would need to rise to around 3 percent for monetary policy to be considered neutral. Of course, as the factors that influence r* change, my estimate of r* will also move around over time. 2/7  BIS central bankers' speeches  Whether monetary policy will need to move to a restrictive setting depends crucially on how low the unemployment rate can go without inflation climbing meaningfully above 2 percent.

But before the minutes are published it is the majority line that applies when we Executive Board members make speeches outside of the Riksbank. After that we members are each free to describe our personal differences of opinion regarding the interest rate decision. Constant assessment means that we are always prepared for change Let me round off. Today I have talked about the major changes in recent years in the way we produce material used as a base for our interest rate decisions. Some of these have come about because the methods of making forecasts in general have developed, something that also affects other central banks. Other changes have been shaped by the specific conditions that apply in Sweden. The Riksbank’s independent position makes demands on us to be open and clear, what economists usually term transparency. The Riksbank’s decision to begin publishing its own forecasts for the repo rate is a step in the work on increasing transparency and further improving our analysis. 10 The new assumption for the repo rate has led to the Executive Board becoming more involved in the forecasting process. We are constantly evaluating our forecasts to see how successful they are at capturing developments. This also means we are constantly striving to improve our ways of working. If we make any major changes that have significance for our forecasts we will of course let you know.
Between 2010 and 2013 Greece, Ireland, Portugal and Cyprus requested financial assistance from the EU and the IMF. These programmes involved far-reaching economic and financial policy adjustments. Other countries that had been hit by a confidence crisis, such as Spain and Italy, chose to undertake similar corrections. Spain also requested ESM programme for its financial sector. As a result, structural fiscal balances (i.e. fiscal balances excluding the impact of the cycle and one-off costs) improved significantly in all these countries. From 2010 to 2013 this improvement was equal to about 15 percentage points in Greece, 6.5 percentage points in Portugal, 6.0 percentage points in Spain, 5.5 percentage points in Ireland and 4.0 percentage points in Italy. Some of these adjustments are unparalleled in scale from a historical perspective. These fiscal corrections took place at a time when confidence had reached its lowest level, private sector saving ratios were sharply increasing, banks had to deleverage and access to finance by firms and households was impaired. The short-term costs in economic and social terms were therefore high. Yet, those costs were also elevated by the fact that most of the stressed countries had entered the crisis with rigid institutions and economic structures. As a consequence, the necessary adjustment of prices and costs to restore competitiveness was slow, which exacerbated the negative impact on activity. Nominal rigidities increased the real cost of the adjustment and the burden has often been borne by the more vulnerable members of society. A key complement to fiscal adjustment has therefore been structural reform.

One of the most important is determined by what we know about the functioning of the economy and the effects of monetary policy. Not everyone agrees, however, that transparency is a good thing for attaining financial stability. Many people argue that so-called constructive ambiguity is the best way to avoid problems of moral hazard in the banking industry. I believe, however, that transparency is important in this area as well. Banks that are "too big to fail" from a systemic point of view will in any case count on support from the government. Especially when it comes to countries like Sweden, which experienced a severe banking crisis not so long ago, it is likely that support to banks that encounter financial problems will be expected if nothing else is being communicated. Another risk associated with constructive ambiguity is that it could limit the motivation of central banks to seriously consider what to do in a crisis. In other words, it could provide an excuse for not thinking the issues through. However, if you are not prepared, you could easily become the bank's prisoner in a time of crisis. Through deeper analysis of the "too big to fail" problem and open communication of crisis strategies, it should be possible if anything to mitigate the moral hazard problem. If you can show that the banks do not need to be systemically important, it should make banks even more uncertain about the possibility of receiving support than any policy of constructive ambiguity.
Diversity is not only about our physiological identity – our gender, ethnicity. It is also about our sociological identity – our background, experience – and our neurological identity – our personalities, how our brains are wired. When I joined the Bank of England 26 years ago, I was physiologically similar to others at the Bank, but quite different along these broader sociological and neurological dimensions. In fact, I was the beneficiary of one of the Bank’s first waves of diversity initiatives. And I am delighted to say that, following a sequence of initiatives over the years, the Bank today is a significantly more diverse place along all these dimensions. So too, I am sure, are all of your organisations. The numbers here speak for themselves with a steadily rising trend, over several decades now, of female and ethnic minority representation in the workplace and, admittedly more limited, evidence of a rising trend at senior executive and board level. That is good 3  progress, spurred on by initiatives such as Helena’s 30% Club , Jayne-Anne’s review of gender diversity 4  5  earlier this year and John Parker’s review of ethnic diversity just last week. But can we rest on our laurels? My answer to that – and I imagine Helena’s, Jayne-Anne’s and John’s too - is a resounding no. Many of our organisations have diversity policies, champions and initiatives. Yet this is still a subject owned by the HR department rather than the Boardroom or Executive Suite in many firms.

The diversity project Speech given by Andrew G Haldane, Chief Economist, Bank of England  Opening remarks given at the Investment Association Launch of the Diversity Project Tuesday 8 November 2016  1  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  1  Let me start by congratulating Helena for launching the Diversity Project. It is a great initiative. The UK’s financial services industry is a world-leader in a great many respects – and long may that remain the case. Yet when it comes to issues of diversity it is often a laggard. For example, recent work by PWC has shown that the gender balance in Financial Services diminishes sharply with seniority. Despite women making up 60% of all employees, only 25% make it to middle-management and only 19% to more senior roles. 2  This is deeply disappointing. But it also presents the industry with a real opportunity to make some great strides forward. I hope the Diversity Project under Helena’s leadership, and the announcement of Jayne-Anne as the Government’s new Women in Finance Champion can help seize that opportunity and propel financial services into a leadership role on diversity too. When I asked a colleague what I should talk about today, she said I needed to have a personal story. That was an immediate challenge. As a white, middle aged, middle class, man working for an Establishment institution, I am not exactly part of a disadvantaged minority. Or am I? Diversity, like beauty, is much more than skin deep.