samchain/econo-pairs-v1 huggingface dataset:
BIS central bankers’ speeches  1  from the depositing of money in their shops; and the Bank of England in the same manner, from the liberty it has to issue its notes in all payments 4.” Today, given my current role overseeing the Bank of England’s market functions, as well as my previous experience at the IMF dealing with the crisis in the Eurozone and in the wake of the Arab Spring, I would like to offer some thoughts on how lessons from reform to the domestic financial safety net for banks could be applied to sovereigns, to the IMF as international lender of last resort and to the global financial safety net more broadly. I will argue that we need a stronger and more resilient global financial safety net to reduce the systemic implications of sovereign crises and allow nations to cope with shocks in order to reap the economic rewards of an integrated system of trade and finance. I will also argue that the effectiveness of that safety net would be enhanced by implementing policies that strengthen surveillance and the stress testing of countries balance sheets, and better mechanisms for resolving sovereign debt crises when they occur. These are of course my personal thoughts rather than an official UK position, but I offer them in the spirit of encouraging debate. 2.

In this regard, we would like to note that:   If the external scenario should worsen significantly, many EMEs with flexible exchange rates and inflation-targeting regimes would have scope to adjust monetary policy, thanks to a timely process of raising interest rates to contain overheating risks. Going forward, these economies will be able to react flexibly to changing global circumstances in a context of anchored inflationary expectations.   Other EMEs have limited room for maneuver, as their economies have expanded beyond their potential output, with widening fiscal and external deficits, and thus today face the risk that external shocks might unhinge inflationary expectations and force pro-cyclical monetary and fiscal policy adjustments.   A third group of EMEs has maintained structurally high national saving rates throughout the expansion phase of the global cycle and might be subject to a natural deceleration as the global economy cools down. In these cases, undertaking reforms to boost domestic demand would help sustain both medium-term global rebalancing and short-term policy accommodation.   Economies that are being affected by high commodity prices, particularly LowIncome Countries (LICs), should strive to develop targeted policies to the most vulnerable groups through efficient cash transfers, instead of across-the-board subsidies. The international community should strive to support these efforts through similar measures, as demand subsidies or export constraints in non-LIC economies exacerbate commodity price pressures. Policy advice by the Fund should be tailored to these different groups of economies.
When there is a fixed exchange rate target, one might even have to expect an uncontrolled expansion of the balance sheet. This is attached to a number of imponderables. 6 In addition to major financial risks, it should be noted that, as the balance sheet grows, it will become increasingly difficult to reduce excess liquidity during a subsequent normalisation of monetary policy, and to fulfil the monetary policy mandate – of ensuring price stability – sustainably. Second, it is important to bear the following in mind: pegging the franc partially or fully to another currency would mean that the SNB would have to adopt the monetary policy of the  6  4  Cf. also Danthine, J.-P. (2015): Swiss monetary policy facts ... and fiction, speech at the Swiss Finance Institute Evening Seminar, Geneva, 19 May 2015. BIS central bankers’ speeches  currency area concerned. However, it could no longer be guaranteed that this monetary policy would always be optimally tailored to the needs of the Swiss economy. Thus, the benefits of an active exchange rate policy need to be properly weighed against the costs for the economy as a whole. But there is no one-size-fits-all method of determining the need to intervene in the foreign exchange market, or the best way to do so. The points to consider will differ depending on the situation. Current SNB monetary policy In that regard, I would like to briefly describe the SNB’s current thinking.

Up to now we have only seen isolated capital outflows but we need to keep an eye on that. In the 1/4  BIS central bankers' speeches  event of large outflows from investment funds, the main concern would be to prevent an excessive fall in prices caused by fire sales – that is, distressed sales of assets at large price discounts. On Sunday, the world’s central banks decided on extensive coordinated measures. The ECB announced a first major package on Thursday. What is the point of all that if the financial crisis has not yet set in? The situation in financial markets is already very tense. Last Thursday, we decided to provide abundant and very cheap liquidity to the banking system. That is the primary task of central banks at present. On Sunday, in a coordinated effort with other major international central banks, we took measures to provide banks with cheap US dollar liquidity. We did so because banks in some countries, especially Japan, had been finding it harder to access US dollars. The US Federal Reserve slashed interest rates. The ECB stepped up its asset purchases. But none of this seems to have had the desired effect. Equity prices continued to fall. What is going wrong? The ECB’s package was very comprehensive. But market volatility is partly masking the effects. Moreover, not all market participants seem to have immediately understood all of the components of the programme.
Without evidence about what works best, governments end up effectively running a mass experiment on everyone, but without the appropriate controls and therefore without learning as much as they could do to improve their policies. In this regard, the "causal revolution" of the past 30 years has also been characterised by the increasing attention that researchers have devoted to justifying causal interpretation of their research findings. In parallel, the appearance of new data, together with new concepts to be measured and new measurement techniques, have multiplied the opportunities to provide convincing descriptive analysis, even in the absence of experimental data. The influence of these approaches has been immense and has given rise to empirical results capable of shaking the most entrenched beliefs of economists. The truth is that there are still wide disparities in data availability across countries. At one extreme there is Denmark and other Scandinavian countries, with a culture that encourages the use of public data by the research community for the common good. But, in most cases, even if public administrations are repositories of enormous wealth in the form of individual data, the administration that holds the data is not capable of exploiting their full potential. Analysing this data is not their main priority and information is usually scattered among various administrations that do not readily communicate with each other or are very reluctant to share their data, even with external researchers.

This is precisely why, the role played by data labs, such as the BELab of the Banco de España, is of paramount importance. Our BELab has been created with the aim of providing the research community with greater access to high-quality microdata, in a controlled environment that ensures data confidentiality, through on-site or remote means, depending on the sensitivity level of the data. In any case, although there has been some progress, the truth is that Spain is still lagging behind this global trend that is a genuine “data revolution”. To change the situation in Spain it is crucial to make citizens and governments aware that there is a cost to restrictions on access to data by the research community, as they will eventually result in less effective public policies. I trust that discussions of the papers to be presented at the conference over the next two days will bring us up to speed with the most advanced practices across the globe. Thank you very much and enjoy the sessions! 2
26  See, for example, Blanchard, Dell’Ariccia and Mauro (2013), Carney (2013) and Stein (2013). 27  Stein (2013), p. 17. The Riksbank has also raised this argument in various contexts, see for instance, Nyberg (2011). 28  See, for example, the Bank of Canada (2012). Norges Bank writes in an article on the countercyclical capital buffer: ”The countercyclical buffer will strengthen the resilience of the banking sector during an upturn. It may also, to some extent, counteract the build-up of financial imbalances, but the effect is uncertain. Thus, Norges Bank cannot disregard taking financial imbalances into consideration when setting the key policy rate.” See Norges Bank (2013) p.23. 29  See, for example, the IMF conference ”Rethinking Macro Policy II: First Steps and Early Lessons”, Washington DC, 16-17 April 2013, http://www.imf.org/external/np/seminars/eng/2013/macro2/. 30  See also Jansson (2012). BIS central bankers’ speeches  11  is also likely that central banks' operational frameworks for monetary policy will be both slightly more flexible and slightly more complex than they were before. At the same time, it is important not to "throw the baby out with the bathwater". Above all, we must not jeopardise the anchoring of long-run inflation expectations – now that we have attained a credible nominal anchor. To a large degree, it is thus a question of making adjustments to the existing framework rather than starting all over again.

This part of the city survived the 1963 earthquake, when nearly all the city's beautiful neoclassical 18th and 19th century buildings were destroyed. After the earthquake, international financial aid poured into Skopje in order to rebuild the city. Today, Skopje is seeing a makeover in buildings, streets and shops, and many projects (Macedonian Struggle Museum, the Archeological Museum of Macedonia, National Archive, Constitutional Court, New Philharmonic Theatre) were finished in order to return some of the looks and spirit of the city. In economic aspect, being many times since 2006 on the list of 10 best reformers by the Doing Business rank of the World Bank, proves that Macedonia has undergone considerable economic reforms. It has developed as an open economy with the trade accounting more  BIS central bankers’ speeches  1  than country's GDP in recent years. Although the environment was highly difficult, first with the global financial crisis, afterward with euro area crisis and more recently, with Greece crisis, our GDP growth was on average above 3% for whole this period, which is one of the highest in Europe, and for 2015 it is expected to be around 3.5%. The unemployment from a very high level, throughout this period is on declining path, by implementing many structural reforms and ALMP. The government strategy to attract foreign investments and establishment of a good business environment for the development of small and mediumsized enterprises (SMEs) was paid off.
However, the overall impact of such events on economic activity is not obvious, as spending on reconstruction stimulates growth in the short term. Certain physical risks can also affect the functioning of the economy on a longer-term basis. In particular, measures taken to mitigate the effects of climate change mobilise resources that could otherwise be invested more productively. For instance, rising water levels may mean that dams have to be reinforced and maintained. In Switzerland, milder winters are reducing snow cover, which in turn is causing perennial problems for winter tourism, especially in lowlying areas. 6 Furthermore, uncertainty about the frequency and intensity of extreme weather events in the future may affect companies’ confidence levels and reduce their willingness to invest, thereby weighing on longer-term growth prospects. And finally, physical risks associated with climate change impact the financial system. Insurers are, of course, the first to be exposed to property damage in the wake of extreme and ever more frequent events such as floods, landslides and fires. These same events could also hamper the functioning of financial market infrastructures. In Switzerland, however, the practice of mandatory redundancy (e.g. multiple data centres with different risk profiles) should ensure business continuity even in the event of major natural disasters. With respect to commercial banks, these types of event increase credit risk as they can cause the value of assets pledged as collateral to decline and cause debtors’ earnings to fall (e.g. loss of rental income following damage to a residential property).

At its core, the Framework places significant emphasis on product suitability assessments in the delivery of insurance products. These developments that we observe in the offering of investment-linked products have at times been at odds with this emphasis. With more than twothirds of new premiums generated from such products in 2017, and an environment of heightened financial market volatility, a key concern for the Bank has been with the complexity of products offered, and the level of understanding of the investment risk, which is borne entirely by consumers. From our observations, the safeguards in place within insurers over product design, disclosure levels and suitability assessments continue to reveal gaps. 3/4  BIS central bankers' speeches  In this regard, the Bank has consulted the industry on potential enhancements to be made to our requirements on investment-linked insurance businesses to address some of these gaps. We expect to finalise the requirements to the Minimum Allocation Rate (MAR) shortly to protect the account value of consumers; more robust suitability tests to improve policy persistency; and enhancements to sales illustrations. The other key reform has been the Phased Liberalisation of Motor and Fire Tariffs which started in 2016. The Bank is currently assessing the outcomes of the second phase as we prepare to launch into the next phase of liberalisation. We are encouraged to see the positive response from the industry and the positive impact on the diversity of products available to consumers.
And the greater, therefore, is the “buffer” monetary policy can use to stimulate the economy if necessary – the risk is smaller that the policy rate will reach its lower bound and, if average inflation expectations are higher, it will be easier to bring the real interest rate down. One practical objection towards attempting this in the near future is that there would hardly be any point in announcing a new, higher target when inflation has long been below the old target and this target already seems difficult to reach. In theory, it could certainly be the case that a raised inflation target in itself would create expectations of higher future inflation and that this, in turn, would lower the real interest rate and stimulate demand and inflation. But, in practice, it would probably be at least as likely that raising the inflation target in such a situation would not be perceived as a particularly credible measure. In addition, if the target is raised, a more expansionary monetary policy will initially have to be conducted to get inflation to rise. This will be difficult if the policy rate level is already very low. Assuming that it is decided to raise the inflation target, one probable precondition for this will thus be that it is carried out in a situation that is relatively normal and where inflation is not too far from the earlier target.

In other words, it does not seem as though we can expect monetary policy scope to increase that way very soon. It is primarily for this reason that I believe we need to think about how we will be able to conduct monetary policy over the next ten to fifteen years or so. I would like to stress that my discussion is general and looks forward over a relatively long perspective. It should not be interpreted as dealing with contemporary policies. As regards such policies, my conviction is that we will succeed in bringing Swedish inflation up to target and in anchoring the long-term expectations – as I’m sure you know, we are almost there. Preparedness for a different monetary policy playing field But at the same time, we must be prepared for it perhaps not being possible, in the future, to conduct monetary policy in the way and with the impact we have previously been accustomed to. For example, we should include in the calculation that the policy rate will probably be unusually low when the next recession occurs. A recession is certainly not on the cards at the moment, but we know that, sooner or later, one will inevitably arrive. When the financial crisis broke out, we were able to cut the repo rate from a level of almost 5 per cent. The Riksbank’s latest forecast indicates that, in the middle of 2019, the repo rate will be 0.7 per cent.
In fact, more than 75% of Malaysians find it difficult to raise even RM1,000 of immediate cash for emergencies. The ability to plan for the future and exercise self-control is a crucial life skill that needs to be cultivated and nurtured. In fact, a key predictor of success in life, is to be able to take the longer term perspective. Let’s move on to the issue of debt. Not all debt is bad as any economist would tell you, for borrowing to invest in productive assets or purposes will make one better off in the future. However, when the level of one’s borrowings is too high, it is a cause of concern. Let me illustrate, a significant proportion of youth today are surviving on high borrowings. The statistics are telling, 38% of youths take up personal loans, 47% have expensive credit card borrowings 1/3  BIS central bankers' speeches  and more than 3,400 borrowers between the ages of 20–30 years have sought out AKPK’s financial assistance in 2017, which would likely mean that the actual numbers facing financial difficulties are higher. To those of you today who are making early forays in the working world, it is our collective hope that you will take all active measures to not be part of those statistics. The future ahead of you is bright and the burden of being weighed down by excessive debt is a hindrance to your development and success.

In order to achieve a harmonized application of legislation at European level and to support payment initiation and account information service providers, the European Banking Authority (EBA) adopted an opinion on obstacles in early June 2020. within the meaning of Art. 32 (3) of the regulatory technical standards for in-depth identification of the customer and common and secure standards of communication1. The opinion highlights a number of technical or organizational obstacles that payment service providers, which maintain accounts, pose to the new services and which should be removed. Examples of such obstacles include the unavailability of all procedures for performing in-depth identification of the customer when using the new services, requiring manual entry of the IBAN on the payment account from which payment is initiated or requesting account information, repeated in-depth establishing the identity when initiating payment, the need to provide prior consent to the client to use the new services, etc. 1/2  BIS central bankers' speeches  Improving the security of electronic payments is the second major aspect of PSD2. In September 2019, the requirements for payment service providers to apply a procedure for indepth identification of the customer when the payer accesses his payment account online, initiates an electronic payment transaction or performs another remote action that could occur risk of payment fraud. These requirements have started to apply to credit transfers made through the Internet and mobile banking platforms.
We cannot afford to have banking, so central to the allocation of capital in market economies, semi socialised. Moreover, we need to harness the energies of bond holders to monitoring and helping to contain the tendency to excess characteristic of bankers, over the generations, in the upswing of the credit cycle. That is not  1  See INSOL International (2000), Statement of Principles for a Global Approach to multi-creditor workouts. 2  That strategy was initially set out by the Financial Stability Board in 2010, Reducing the moral hazard posed by systemically important financial institutions, available at http://www.financialstabilityboard.org/publications/r_101111a.pdf  BIS central bankers’ speeches  1  in and of itself a guarantee of stability, but I would rather give asset managers incentives to help the objectives of prudential supervisors than incentives to rely on a fiscal backstop. Second, effective resolution regimes, capable of operating across national borders, are necessary for a healthy international monetary and financial system (IMFS). As Mervyn King has said, the large financial groups have been ‘international in life, but national in death’. Without effective cross-border resolution arrangements, domestic authorities are left with a clear incentive to take steps to cap the contingent exposure of local taxpayers, who are local voters. That is surely part of the backdrop to the series of measures taken by national and regional authorities to restrict the range of activities or structure of banking. Those measures need to be taken without the world slipping into a hard-to-reverse balkanisation of the international financial system.

We can note that economic activity in the rest of the world, not least in the United States, weakened appreciably in the first half of this year. The Swedish economy has been affected by this, as is evident from Statistics Sweden’s latest quarterly GDP data. The most recent figures for the national accounts are admittedly preliminary but the tendency behind them is clear: GDP growth fell back from an annual rate of 3-4 per cent in recent years to just under 2 per cent in the first half of this year. Thus, the world economic slowdown has helped to bring about a downward adjustment of demand growth in Sweden towards the long-term path without the Riksbank needing to lift the repo rate up to between 6 and 7 per cent, as the central banks in a number of other countries have been obliged to do. How does the krona come into it? But it is not only the interest rate that influences the development of demand and ultimately the rate of inflation. The exchange rate also plays an important part. Among other things, a weak exchange rate tends to stimulate exports and other segments of Swedish production that are exposed to international competition. That could limit the impact of an international economic slowdown. Conversely, an appreciation of the krona can act as a brake and modify the pull from an economic improvement in the rest of the world.