samchain/econo-pairs-v1 huggingface dataset:
Ardian Fullani: Recent financial and economic developments in Albania Speech by Mr Ardian Fullani, Governor of the Bank of Albania, while presenting the 2004 Annual Report to the Albanian Parliament Audience, Tirana, 9 April 2005. *  *  *  Honored deputies, I am here with you presenting my first address as Governor of the Bank of Albania, to share with you the Bank of Albania estimations on the economic developments of year 2004, to present our viewpoints on the Albanian economy perspective for the years to come, and to present some other important aspects of the Bank of Albania activity during this period. Bank of Albania is an institution that plays a crucial role in the decision-making of economic and financial policies and for establishing and maintaining the financial stability of the country. For this purpose, on behalf of the institution I govern, I would welcome any opinion, comment or suggestion relating to the past, the present and the future of the institutional development, of monetary policy and banking supervision. Albanian economy during 2004 According to the Bank of Albania estimates, the development of the Albanian economy over 2004 was in line with the objectives of the strategy on the economic development of the country. Based on the latest estimates, it results that Albanian economy grew by 6.0 percent in real terms, keeping the average development rate of the last five years.

Low inflation rates made real interest rates rest close to historical levels, regardless of nominal interest rate cut. This has impacted on maintaining high annual growth rates for time deposits in Lek. The main features of money market over 2004 were the market activity intensification and interest rate cut. 2004 recorded rise of weekly and monthly interbank transactions. Under the impact of easing monetary policy, the interest rates in all markets continued the downward trend of the previous year, reaching the minimum historical levels at end of 2004. Besides the easing monetary policy of the Bank of Albania, these trends have also reflected the enhancement of competition in the banking system, due to the Savings Bank’s privatization. The banks’ supply to invest in government Treasury bills has been larger than the amount issued in the primary market, being reflected in pressures for constant yield cut. Therefore, the Treasury bills yield gradually dropped during 2004, reaching the lowest historical levels at end of the year. 2004 testified a strengthening of banking system interest in investing in longer-term securities, such as two-year bonds. The weight of two-year bonds in the securities portfolio of the banking system rose to 6.1 percent over 2004, from 2.4 percent at end of 2003; whereas that of quarterly Treasury bills dropped from 9.2 to 2.8 percent. Albanian authorities aim at capitalizing this positive development of financial market in terms of further increasing the maturity term and structure of domestic public debt.
Dimiter Kostov: The world of finance is becoming more IT Address by Mr Dimiter Kostov, Deputy Governor of the Bulgarian National Bank, Banking Department and Fiscal Services Department, before the participants in the 14th Financial IT Forum “The World of Finance is Becoming More IT”, Sofia, 19 April 2012. *  *  *  Ladies and Gentlemen, On behalf of the Bulgarian National Bank, I have the honour to congratulate you with the opening of the 14th Financial IT Forum. This Forum has established itself as an annual opportunity to share experience and ideas, and to view the prospects opened to the financial sector by the information and communication technologies. These results are undoubtedly owing to the organizers of the event, but what is of no less importance is your interest to it. From the point of view of the business, times are still hard for financial intermediation. In the conditions of volatile international financial markets and an unstable economy, the Bulgarian banking system is coping well with the challenges and remains stable. The levels of capital adequacy and liquidity remain high. Irrespective of the increased impairment costs the banking system continues generating positive results. It is of no little importance, too, that in these conditions the banking system managed to preserve and even to slightly increase its loan portfolio. In the recent three years the economic activity in the country has contracted by about 3 percent, while the loan portfolio not only did not contract, but grew by about 8 percent.

The relative passivity shown by all economic agents in the face of the build-up of imbalances is also due to excess confidence in the adjustment mechanisms that were assumed to be inherent in the functioning of the euro. For instance, it was assumed that relative price and wage rises and the changes in competitive positions, induced by the demand and spending excesses in those countries showing signs of overheating, would prompt the necessary adjustments to move demand back onto a more sustainable path and to redress the differences in competitiveness. We now have proof that the effectiveness of this adjustment channel depends on the flexibility of price- and wage-setting processes. Regrettably, virtually no progress was made during the expansion in eliminating the frictions and structural rigidities that distort the operation of labour and product markets in many countries. This lack of reforming ambition has inhibited the functioning of this adjustment channel, leading to the divergences in competitiveness not being promptly corrected. It was also assumed that financial market discipline would contribute to correcting the imbalances since, on the basis of a proper risk assessment, those public and private  2  BIS central bankers’ speeches  borrowers that were accumulating excessive debts should have been penalised.
For banks, this would erode the creditworthiness of debtors. In the area of mortgage lending, the adoption of stricter environmental standards could also diminish the collateral value of non-compliant real estate. 7 As you can see, climate risks may be of interest to central banks on a number of fronts. Each central bank tackles these challenges in its own way, depending on the profile of the economy in question and the institutional framework within which it operates. Countries are affected differently by climate risks due to their geographic location and economic structure. I am thinking in particular of countries that are partially below sea level (e.g. the Netherlands), those that are highly exposed to extreme weather events (e.g. droughts, storms, floods) and economies in which carbon-intensive industries (e.g. steel and cement) are strongly represented. Similarly, the institutional framework of each central bank will determine its room for manoeuvre in discussions on climate change. Some, for example, are responsible for microprudential supervision and also function as bank resolution authorities. They have to evaluate the soundness of each bank’s balance sheet, and this includes assessing banks’ exposure to climate risks. In Switzerland, this role is assigned to the Financial Market Supervisory Authority (FINMA). Other central banks advise the government and are expected to take a position on issues that go beyond pure monetary policy (e.g. fiscal or energy policy). This is not the case at the SNB. The SNB’s mandate is clearly defined.

The outcome of these developments is that a new focus is being placed on deposit insurance in the post crisis period. Deposit insurance is now considered as an essential crisis management tool and an important instrument for orderly liquidation of an unsound financial institution. A well-designed deposit guarantee scheme largely supports financial stability and financial crisis resolution by mitigating risks of and maintaining trust in the 1/3  BIS central bankers' speeches  financial system. However, recalling one of the most important lessons we learned from the global financial crisis, despite the mandate given to any institution, no player can alone deal with a systemic crisis and the consequences of strong spillover effects and contagion risks. It is essential that each element of the safety net develops robust mechanisms that aim to resolve financial institutions and stabilize the financial system as smoothly as possible, minimizing the cost to the economy. Moreover, financial stability can only be preserved by a well-coordinated financial safety net, which is supported by a resilient legal framework, proper tools and instruments and careful contingency planning for each of its elements. The Bank of Albania has dedicated much of the past 10 years to integrating the lessons learned from the recent financial crises into a new regulatory framework. Our financial safety net is further aligned with international best practices, as we coordinate our roles as supervisory authority, lender of last resort and, recently, resolution authority as well.
During the financial crisis, the Fund’s ownership share in global production doubled. Such a countercyclical investment strategy – also known as rebalancing – can be implemented more effectively if Norges Bank is given wider responsibility for balancing the Fund’s overall risk and return. A simplified, publicly available regulation for rebalancing the Fund would be an advantage. The value of the Fund – in krone terms – is continuously updated on our website and is now close to NOK 3.5 trillion. This is almost twice as high as mainland annual GDP. The size of the Fund allows us to take advantage of investment opportunities worldwide. The Fund has recently started investing in real assets. In the first round 5 percent will be allocated to real estate. (Chart 6: Growth in GDP) The world’s economic geography is changing. While growth in advanced economies has been weak and slowing, growth is robust in Latin America and Asia. Several countries in Africa are now catching up. (Chart 7: Growth in GDP and real return on Government Pension Fund Global) In line with the guidelines, the Fund has considerable ownership interests in Europe. Its holding in an average European company is around three times as high as in the Americas and Asia. The chosen regional distribution is related to Norway’s import pattern and can be viewed as a form of currency hedging. But the result has been that a large proportion of the Fund is invested in a region that has experienced weak growth over the past decade.

And that, according to Eurosystem calculations, the output gap will return to close to zero by the end of the year ( 0.6%), even though France’s situation is less favourable due to its growth lag (output gap of around 1.4% according to our calculations). The non-standard monetary policy that we have been conducting since 2014 is contributing to this acceleration of growth in the euro area, by supporting domestic demand and by fostering very favourable financing conditions. In concrete terms, this acceleration results in more jobs – over 6 million jobs created in the euro area since the start of 2013 – and in a pick-up in investment. Corporate investment in particular, decisive for supply capacities, is clearly recovering: up 4.7% in 2015, 6% in 2016, and is expected to be up 4% in 2017 and 2018). [slide] This improvement in investment is underpinned notably by ongoing growth in lending to the private sector, at 2.5% year-on-year in August 2017 for firms and at 2.7% for households, with interest rates moreover remaining very low. This growth in lending is over twice as high in France, which incidentally leads us to be very vigilant at the High Council for Financial Stability. We are also observing favourable developments in inflation, which is gradually moving back towards our target of 2% over the medium term [slide]. After peaking at the start of 2017, the inflation rate stood at 1.5% year-on-year in August.
By that criterion, inflation as projected in the Bank’s forecast will be at target for the entire forecast horizon through end-2017, apart for the last quarter of 2015 and the first quarter of 2016. According to the forecast, inflation will average 2.6% during the period 2014–17 and will therefore be at the 2½% target. If this materialises, it is hard to call it anything other than an acceptable performance. It is naturally less of a concern if inflation deviates temporarily from target if inflation expectations do not deviate in the same direction. Early this year, inflation expectations were above target even though measured inflation was below it. But fortunately, inflation expectations have subsided towards the target in the recent term and, by some measures, are close to it, particularly short-term expectations. This is important for monetary policy, as I will explain shortly. I have briefly discussed the current situation and the economic outlook. But what about uncertainties and known risks? There are risks attached to the global economy, which seems to be on the downside, at least in the near term, as regards both output growth and inflation. And there is the risk that our economic policy and contractual wage negotiations will not be successful, as has so often been the case during upswings. GDP growth will then be somewhat stronger in the short run, but the current account balance will deteriorate and inflation will rise, and ultimately GDP growth will fall below what it would have been otherwise.

Iceland’s sovereign credit rating soared during the years before the crisis, and Icelandic banks’ credit ratings followed in its wake. In fact, perhaps they rose higher than was warranted and was good for us. In spite of the ensuing nosedive, we managed to keep the sovereign rating on the bottom rung of investment grade, apart from two years in Fitch Ratings’ speculative category after the first Icesave referendum. Keeping Iceland’s ratings in the investment-grade category cost an incredible amount of effort, and other countries that have gone on an IMF programme in recent years have seen their ratings from Moody’s and S&P fall to speculative grade. Some of them have managed to rise up faster than Iceland has, however. Studying the rating agencies’ reports shows which factors will be most important in order to improve Iceland’s sovereign rating and thereby pave the way for the banks to follow suit. Among them are continued reduction of public debt levels and sound, focused economic policy that provides stability throughout the ongoing upswing. The liberalisation of the capital controls is an extremely important factor, but it could work both ways. Successful moves towards liberalisation without jeopardising stability will have a positive effect, but disturbance of economic and financial stability will do the opposite. My assessment of this, and of conversations with the rating agencies, is that it is probably not realistic to expect an improvement in our sovereign rating in the very near term.
No matter how rapidly or how slowly the economy is growing, or how fast or slow the money is circulating, the aggregate amount of reserves will be exactly the same. So it should be clear that the quantity of central bank reserves held by the commercial banks is useless as an indicator of the effectiveness of Quantitative Easing. Now obviously we would prefer that the money circulates more rapidly and that this is done through increased bank lending and deposit taking. In other words, we would like to see a further expansion of credit and broad money. Since the banks collectively are now awash with reserves, they should not be prevented from making additional loans because of any liquidity concerns. Banks are, though, constrained by a lack of capital and are looking to reduce leverage rather than increase it. Fortunately, increased bank lending is not necessary for Quantitative Easing to work. Indeed, it was precisely because the Monetary Policy Committee expected the additional monetary injection not to stimulate bank lending directly at the current juncture, that the Asset Purchase Facility’s purchases were targeted at assets held primarily by the non-bank private sector 1 . So if the Asset Purchase Facility buys gilts from pension funds or asset managers, they will then have to look for another home for their money. As it is not very rewarding just to hold it on deposit, they are likely to look to put their money into other assets, including equities and corporate bonds.

I am confident that you experts have now a good opportunity for an in-depth analysis of the evolution of the international accounting system and the problems arising in the implementation of International Financial Reporting Standards, as well as for a useful projection of the major challenges to implementing the new accounting standards by the banking sector in Romania, given its importance in achieving a modern and efficient accounting system. Let me reiterate on this occasion our institution’s willingness to cooperate with stakeholders in the implementation of International Financial Reporting Standards by the banking sector. I trust that any problems relating to the introduction of the new accounting rules will be resolved in a timely manner so that the current transition ends successfully. Last but not least, my appreciation goes to the representatives of the Institute of Chartered Accountants in England and Wales for their effort to ensure that world-acclaimed IFRS experts and representatives of leading consulting and audit firms in Romania, with which the NBR maintains close cooperation ties, are participating in this event. I trust that today as many as possible issues related to the implementation of the International Financial Reporting Standards will be discussed and clarified. Finally, let me wish all of you every success. 2  BIS central bankers’ speeches
We are also taking steps to rationalise the requirements that branches are subject to, including consideration of the removal of branch capital requirements as part of the Solvency II review, with the aim of limiting regulatory requirements to those required to deliver our objectives. We are, however, also conscious of the need to ensure a level playing field among all insurers operating in the UK – there can be no question of insurance branches being held to lower standards than insurers that are based here, which would distort competition and potentially increase the risks to PRA objectives. All insurers will be supervised proportionately based on their possible impact on safety and soundness and policyholder protection. We will assess our ability to rely on home state supervisory authorities, considering both their supervisory equivalence and level of co-operation with us, on an ongoing basis, and will take action as needed if we judge that we are unable to supervise a branch effectively. 4  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  4  We have also been clear that some overseas insurers have UK liabilities that that represent too great a risk to PRA objectives, including the impact of branch failure on policyholders and Financial Services Compensation Scheme (FSCS) levy payers, to rely on branch supervision with its inherent limitations, even with strong co-operation from home state regulators.

Øystein Olsen: Monetary policy from the perspective of a commodityexporting country Dinner speech by Mr Øystein Olsen, Governor of Norges Bank (Central Bank of Norway), at the European Central Bank, Frankfurt am Main, 19 November 2012. *  *  *  Please note that the text below may differ from the actual presentation. I would like to thank the ECB for hosting this conference on a topic that is a core interest for us in Norges Bank. It is a pleasure to visit the ECB in Frankfurt. In my remarks tonight, I will give you a glimpse into the historical background for our economic framework and the conduct of monetary policy in Norway today. As you know, Norway is in the fortunate position of having ownership rights to large natural resources. Oil was discovered in the North Sea in 1969. Back then, it soon became clear that oil and gas would be a source of substantial wealth – and government expenditure and social programmes expanded rapidly. By 1977, a surplus on the current account had turned into a deficit of 12 percent of GDP. The deficit was three times larger than that of Italy and Spain last year. Predictably, we also experienced a contraction in the non-oil tradable sector. Fiscal policy had fuelled a boom-bust economy and had to be reversed and tightened. Many Norwegians experienced a decline in real income. When oil prices fell in 1986, the Norwegian economy was hit again.
Today we are defining the Strategic Plan 20232027, a process that reflects the Bank's viewpoint and the perceptions that the regions have about the Central Bank's work. I cannot be exhaustive in this time frame. However, I would like to stress that we are aware that our main role and obligation lies in inflation convergence and market stability. Our efforts are focused on this, aware of the importance they have on the welfare of so many households. These efforts are possible because this institution has teams of excellence committed to the country and a Board that seeks to contribute to this goal by setting its own example. I will now walk you through the pages of our recently published Monetary Policy Report. Macroeconomic scenario and projections Data for the last few months show that the Chilean economy continues its process of adjustment after the major imbalances it accumulated during 2021. As expected, annual inflation peaked in the third quarter. However, the high levels it has reached are a sign that the problem is far from over. This morning we learned that the CPI again posted a high month-over-month change of 1.0%, bringing inflation to 13.3% annually. Core inflation —excluding volatile items— also saw a significant increase of 0.9%, which placed it at 11%. Thus, by any standard, the level of inflation remains very high (figure 1). With regard to the factors that determine inflation behavior, it is worth noting that those linked to demand have begun to recede, in line with the macroeconomic and consumption adjustment.

Fiscal policy has also done its part, reducing spending from the high levels of last year. Clearly, the job is not finished and there are still difficult months ahead. Inflation remains very high, and its effects are being painfully felt by households. Lowering it is a task that we cannot afford to give up. Activity is already showing negative annual variation rates. Although this certainly keeps us alert, we should not lose sight of the fact that the figures we are seeing today are part of the adjustment process that the economy requires to resolve the imbalances generated by the overspending of 2021. It is not a drop in activity arising from an external shock, as we have experienced in the past. It is the adjustment we require for the economy to move towards sustainable levels, an indispensable prerequisite for lowering inflation. As I mentioned a few moments ago, today's high inflation is a problem whose origin lies in internal decisions, aggravated by a chain of external shocks. The economy's capacity to make an orderly adjustment at the lowest possible cost depends critically on the coherence of the decisions adopted by the different agents. It is essential not to abandon efforts. And certainly, it is even more important to contain additional impulses on demand that, far from contributing to the adjustment process, hinder it. This would add inflationary pressures, which, at this stage of the cycle, would impose even greater costs.