samchain/econo-pairs-v1 huggingface dataset:
Along with the initiatives being developed to modernise and harmonise insolvency procedures and to tackle the vulnerability arising from the scale of the nonperforming loans still on bank balance sheets, the euro area economies must reinstate a reform agenda geared to enhancing productivity and to improving both the flexibility of product and factor markets and the business environment. Over recent years the monetary union and the European integration project have overcome the difficulties that called into question its existence. At present, there is some consensus on how to proceed in order to strengthen the project and to enable the ensuing benefits to be clearly perceived by all European citizens. European governments and institutions have a clear responsibility to heed the lessons learnt and to provide the appropriate economic policy responses. Thank you for your attention. 7/7

It takes very significant decisions, which made it an extremely attractive proposition. How do you explain the arrival of people like you or Christine Lagarde, who have a different profile to the one that ECB Executive Board members have traditionally had? I don’t think anything was predetermined or premeditated. Members of the Governing Council have different profiles and each of them contributes according to their experience. I contribute my knowledge of the European economy and the financial system, and my experience taking decisions when the Spanish economy was at its most delicate moment. What role does politics play in the ECB? The 25 members of the Governing Council don’t always agree, although many of the decisions we take are unanimous. There are those who think that the situation requires further measures, and others who think we have already gone too far. We look for a consensus. The decisions are very democratic – one Governor, one vote – but actually taking a vote is an exception, not the rule. In recent months there has been very strong, unprecedented public criticism. I’m not at all concerned by the fact that there are differing views, that’s healthy and it’s normal because there are 25 of us. But what has been happening in recent months has not been very helpful. It hasn’t undermined the effectiveness of the September package of measures, because it went ahead as planned, but it’s much better to be united. We are a collegial institution and once we have reached an agreement, everyone should defend it.
For evidence, we only need to look to the spread of infectious disease such as Covid-19 and severe floods that are occurring at shorter intervals and with greater intensity. But transition risks are also intensifying. With the announcement of the net zero national target, further changes in climate policies are inevitable to achieve the target. Technological changes will also have important economic and financial consequences for businesses and those that fund them. So will changing consumer preferences. And if that isn’t sufficiently persuasive, the reality of disorderly transitions, once thought to be a risk further into the future, has now been brought painfully home for many with the energy crisis that is confronting Europe. The financial sector has a critical role in helping the economy and society mitigate these risks. At Bank Negara Malaysia, we see this from two perspectives. First, as part of our mandate to manage risks to financial stability, we expect financial institutions to understand how climate-related risk drivers can impact their risk exposures - including credit, market and insurance risks from their lending, underwriting and investment activities. We expect financial institutions to be able to identify, measure and manage these risks well. Second, we believe that the financial sector can and should play a catalytic role in the transition towards a low carbon economy through its control of resources that fuel the economy. With this in view, let me highlight a few key developments that will shape the Malaysian financial sector’s climate response in the coming years.

The employment rate and labour force participation are both high in a European perspective, see Figure 7a, which shows the employment rate in Sweden compared with the euro area. A large part of the difference is due to the labour supply among women and older people being relatively high in Sweden. In other words, a lot of things work well in the Swedish labour market from a European perspective, but there are some challenges. Although unemployment is lower than the average for the EU countries, it is not among the lowest, see Figure 7b. Moreover, we have a marked division in the labour market between those born abroad and those born in Sweden. For those born abroad, unemployment is 16 per cent, but for those born in Sweden it is only 4 per cent, see Figure 8a. Unemployment among those born abroad is also high in relation to other European countries, see Figure 8b. An important challenge for the labour market going forward is thus the integration of those born abroad. 17 See, for instance, Lindé and Trabandt (2019) who show that when the economy is hit by major negative changes, companies and unions delay changing prices and wages, which leads to a flatter Phillips curve. Another possible explanation for the flatter Phillips curve could be that the central banks’ monetary policy has become more effective, see McLeay and Tenreyro (2018). 12 [24]  Figure 7.
Moreover, risk related to borrowers has diminished as the economic recovery has progressed and debt levels have fallen; indeed, at the end of 2015, total private sector debt was down to around the level last seen in 2000. Financial system risk is assessed four times a year by the Systemic Risk Committee and the Financial Stability Council, greatly increasing the monitoring that takes place. The Central Bank publishes its Financial Stability report twice a year, with the next issue forthcoming on 20 April. I will not expand further on this here. BIS central bankers’ speeches  5  However, I think it appropriate to mention four issues that, in the near future, could have a major impact on long-term developments in the financial system. The first is technology, which is advancing rapidly worldwide. In addition, we are engaged in renewing many of Iceland’s key financial market infrastructure elements and, in doing so, adopting new technology. This could create excellent opportunities to enhance security and reduce costs, including through joint utilisation of infrastructure elements, while increasing competition in areas where economies of scale are less in evidence. The Bank’s Financial Market Infrastructure report, to be published later this year, will discuss this in greater detail. The next is culture and ethics. In international discussion, it is widely emphasised that postcrisis reform will not achieve its goals in the long run unless it involves an improvement over the pre-crisis situation. It seems to me that considerable improvements have already been made here in Iceland.

One must go as far back as the herring boom of the 1960s to find a comparable debt position. The end-2015 external debt ratio was probably more noteworthy than it might otherwise have been because the net debt position as measured according to international standards was nearly three-anda-half times GDP only a quarter earlier. That figure was highly misleading, however, because it included, at full price, all of the debt of the failed banks’ estates, even though it had long since become clear that those debts would not be repaid except in part. For this reason, the Central Bank had adopted the practice of publishing what it called the underlying external position,  BIS central bankers’ speeches  1  which looked through the expected settlement of the estates. By this measure, Iceland’s net debt totalled just over one-third of GDP at the end of Q3/2015, down from nearly one GDP at the end of 2008. Nearly 40% of the reduction is due to the current account surplus and GDP growth during the period, and the rest is due to default, debt restructuring, and other factors. The reduction in the debt position in Q4/2015, from 35% of GDP to 14½%, is due for the most part to the settlement of the failed banks’ estates on the basis of stability conditions. As can be discerned from what I have just said, the state of the Icelandic economy is quite good. According to current forecasts, the outlook is relatively good as well.
Few people spontaneously want an increase in consumer prices, but most do want an increase in their nominal incomes. Furthermore, households, firms, financial institutions and governments enter nominal contracts (negotiate wages, take out mortgages, buy sovereign debt etc) based on expected inflation. If actual inflation is higher or lower than these expectations, then wealth and income are transferred from one group to the other. The best way to be neutral is to announce a target that can efficiently guide expectations. To a non-economist, price stability would imply targeting zero inflation. However, we need to explain why targeting zero inflation is not ideal. Real wage adjustments can be necessary to maintain competitiveness and sustain employment and this real adjustment is easier to achieve with a positive inflation rate. This is still more important in a monetary union in which real adjustments are necessary to maintain internal balance. The effective lower bound (ELB) on nominal interest rates would also be reached more frequently, putting a constraint on the use of monetary policy. But I do acknowledge that using the ELB argument at, say a family lunch on Sunday, is easier said than done. Last but not least, credibility. Here, households and firms have mixed feelings: they believe that actual inflation is much higher than central banks and statistics institutes claim; and they doubt we will deliver the “close to 2%”in the future. Distrust is too often the name of the game. Here, let us again listen and speak.

Keynote address by François Villeroy de Galhau, Gouverneur de la Banque de France, Official Monetary and Financial Institutions Forum webinar, 25 September 2020 « ROLE OF CENTRAL BANKS IN THE HEART OF THE ECOSYSTEM i »  Contact presse : Mark Deen (mark.deen@banque-france.fr), Déborah Guedj (deborah.guedj@banque-france.fr)  Page 2 sur 10  Good morning and welcome to this webinar, jointly organized by the Official Monetary and Financial Institutions Forum and the Banque de France. What better way to demonstrate the digital transformation than holding an event in cyberspace. It has been common in recent years to hear about disruptive technologies but over the past 6 months, information technology has instead been a crucial source of continuity in a highly disrupted world. Digitalization is one among many factors transforming central banking and this will be my broader theme this morning. The ECB Strategic Review rightly launched by Christine Lagarde, with an explicit list of challengesii, is the opportunity to reflect on how the Eurosystem should respond to them. The shocks that have hit the economy in the past decade have been unprecedented, but in hindsight, many long-term structural shifts were occurring that have caused the unstable and complex situation we face today. Global natural interest rates had already been falling since the early 1980s driven by the demographic transition and risk-aversion in key emerging markets. Digitalisation and globalisation, combined, have been pressing for “lowflation”. Financial vulnerabilities were also steadily, but invisibly, rising since the socalled Great Moderation.
Bandid Nijathaworn: “Implementation of Basel II and IAS” from a regulator’s perspective Keynote address by Dr Bandid Nijathaworn, Deputy Governor of the Bank of Thailand, at a meeting hosted by the Thai Bankers’ Association and organized by the Bankers Association of the Philippines and ASEAN Bankers Association, Bangkok, 4 October 2007. *  *  *  Distinguished Participants, Let me first thank the Thai Bankers’ Association for the invitation to give today’s keynote address, on the “Implementation of Basel II and IAS” from a regulator’s perspective. Looking at the agenda, the meeting in the next two days will dwell into a number of important regulatory issues. Therefore, to help set the stage for the discussion to follow, I would like to take this opportunity to speak on the Bank of Thailand’s perspective on the implementation of Basel II and the International Financial Reporting Standards (IFRS), looking in particular at the benefits from such adoption, the progress we have made on implementing the two standards, and the challenge and adjustments that need to be made for a successful implementation. Ladies and Gentlemen, Recognizing that today’s global financial system has become increasingly complex and interdependent, a number of organizations around the world have been working on improving international standards to ensure sound risk management and disclosure by financial institutions. Among these, Basel II and IFRS are undoubtedly the most important recent efforts. As an international framework for capital adequacy, Basel II is designed to ensure soundness and stability of the global banking system.

Switzerland’s only major drawback is the fact that it is a lightweight in the geopolitical arena, which makes it almost impossible for it to defend itself against protectionist tendencies and discriminatory measures taken by big countries. The Swiss government must therefore take a strong stand on behalf of free trade, while also ensuring that the private sector operates within the best possible framework for its further development. Ultimately, our future welfare depends on the vitality of the private sector, not on any state intervention. BIS Review 166/2009  1
This included measures to ensure adequate levels of capital and liquidity for the distressed foreign entities operating in their jurisdictions, or to ensure an orderly unwinding of their local operations in some cases, while maintaining confidence in the overall financial system. And third, while there were significant benefits associated with a closer exchange of information and policy discussion between regulators at the international level and the regional level, the conduct of policy actions that followed was more on a bilateral basis. A case in point was the US dollar swap lines which were available selectively. So, while financial systems in Asia were able to successfully weather the impact of the global crisis, recent experience points to an important gap in the coordination of supervisory policies and crisis resolution, both at the international and the regional levels. BIS Review 105/2010  1  Currently, as we know, efforts to strengthen financial regulation and supervision are being undertaken at all levels. The most important and also the most widely known is the BCBS’s reform, which aims to increase the quality, quantity and international consistency and transparency of bank capital, to strengthen liquidity standards, to discourage excessive risk taking, and to improve the overall risk coverage framework. The proposed new international standards, while important, are complex and will pose a critical adoption and implementation challenge. Another important point at issue is the proper treatment of macroprudential policies in the context of financial regulation and supervision.

This issue, as we know, is a complex one, and implementing the new reform or the new standards proposed, whether for crisis prevention or crisis resolution, will pose an important challenge for the region. Turning specifically to the issue of cross-border supervision, I think it is clear from the experience of the current crisis that a number of observations were important. First, Systemically Important Financial Institutions (SIFIs), which include internationally active banks, do have significant implications for global financial stability, not least for the AsiaPacific region. When in distress, their operations and the uncertainties that they propagate can significantly impact confidence, market liquidity, and the real economy through a credit crunch and the drying up of international trade financing as we have seen, while prolonged market anxiety about how the problem is going to be resolved can heighten volatility in global financial markets. Second, over such period, as was seen in the current crisis, host regulators in emerging markets in Asia had limited room and information to respond to the SIFI’s distress. The dominant role in managing the crisis was played by the home regulators. What followed was a lack of balance in addressing relationship and responsibility of home and host supervisors, particularly in information sharing. As a result, host regulator’s response became less timely and was bilateral in nature, limited largely to a mixture of ring fencing and coordinated moves that raised the potential for negative externality.
The MPC’s central forecast of the economy is for housing transactions to rise and for house prices to continue to grow faster than incomes in the near term, but then to fall back to grow in line with incomes. If that forecast came to pass, the upward pressure on household debt from the housing market would ease and the flow of new mortgages worth four-and-a-half times the borrower’s income would likely remain under the 15% limit. But an outcome in which house prices grow more rapidly relative to income and do so for longer is also quite plausible. It has certainly happened before in the UK. We know the pressure from demand for homes is great and that the supply of new homes is quite weak. If such an outcome came to pass, the proportion of mortgages at high multiples of the borrower’s income could rise substantially. Debt would grow and become more concentrated. Financial stability and the economy would be more exposed to a shock and one which, if it  BIS central bankers’ speeches  5  crystallised, could derail a sustained and durable expansion. The FPC’s recommendation should be seen as insurance against that risk crystallising. Consistent with its role as risk manager, the FPC has acted in advance to identify and to protect against a very major risk to the financial system and the economy. To return to where I started. The Bank of England is for stability. Monetary and financial stability. We do not achieve that, any more, by holding gold.

The central banks draft, implement, monitor and assess their monetary, micro and macro-prudential policies against the backdrop of a highly integrated and interdependent global economy. On the one hand, integration bolsters economic growth, enabling a more efficient distribution of labour and capital, thus facilitating the transfer of knowledge and of technology, and promotes the adoption of best practices in economic and financial management. On the other hand, experience has shown that globalisation may spill over and amplify negative shocks among the countries, hence creating risks to financial stability, which interfere with central bank mandates. The experience of Albania during the transition period and onward perfectly illustrates these aspects. The Albanian economy has benefited from integration with the global economy; but, recently, we have also been under the pressure from consequences that some of our trading partners experienced due to the financial crisis. Therefore, our response functions have become increasingly complex, relating not only to the adjustment of the domestic product, labour and capital markets to external shocks, but also to the performance of international markets. This reality requires us to be heedful of international developments, and seek common solutions for the challenges we are facing. 1/3  BIS central bankers' speeches  The cooperation, coordination of policies and strengthening of effective dialogue between central banks is an indispensable requisite for drawing advantages from the opportunities arising from economic, financial and technological integration, and enhancing the immunity against the relevant challenges. 2.
Timothy F Geithner: Systemic risk and financial markets Testimony of Mr Timothy F Geithner, President and Chief Executive Officer of the Federal Reserve Bank of New York, before the Committee on Financial Services, US House of Representatives, Washington DC, 24 July 2008. *  *  *  Good morning, Chairman Frank, Ranking Member Bachus and other members of the Committee. Thank you for giving me the opportunity to testify today. I very much welcome the opportunity to appear before you with Chairman Cox of the Securities and Exchange Committee (SEC). The Federal Reserve and the SEC are working very closely together in navigating through the present challenges, and my colleagues at the Fed and I very much appreciate his, and his colleagues’, support and cooperation. The U.S. and global financial systems are going through a very challenging period of adjustment. The critical imperative today is to help facilitate that adjustment and to cushion its impact on the broader economy. The forces that made the system vulnerable to this crisis took a long time to build up, and the system will need some time to work through their aftermath. Looking forward, the United States will have to undertake substantial reforms to the framework of policy, regulation and oversight of the financial system. There was a case for reform before this crisis. The regulatory framework in the United States was designed in a different time for a very different type of financial system than the one we have today.

In this context, prudential supervisors, working with those responsible for setting accounting standards and capital market regulations, need to systematically examine the interaction among capital, accounting, tax and disclosure requirements to assess their effects on the overall levels of leverage and risk across the financial system. As we change the framework of regulation and oversight, we need to find ways to strengthen market discipline over financial institutions, and to limit the moral hazard that is present in a range of different forms in any regulated financial system. The liquidity tools of central banks and the emergency powers of other public authorities were created in recognition of the fact that individual institutions, including those central to payments and funding mechanisms, cannot protect themselves fully from an abrupt evaporation of access to liquidity or ability to liquidate assets. The existence of these tools and their use in crises, however appropriate, creates moral hazard by encouraging market participants to engage in riskier behavior than they would have in the absence of the central bank’s backstop. To mitigate this effect on risk-taking, strong supervisory authority is required over the consolidated financial entities that are critical to a well-functioning financial system. A more resilient financial system will also require a framework for dealing with the failure of financial institutions. For entities that take deposits, we have a formal resolution framework in place.