samchain/econo-pairs-v1 huggingface dataset:
Banks must integrate customer protection in the risk appetite framework and in the three lines of defence. Of course, as with all cultural change, to be successfully implemented, it must begin at senior management level. In order to be able to develop and implement this new culture, it is essential for the governing bodies to be committed and actively involved in aspects such as the design and governance of the products sold by banks, as well as in training and changes to incentive mechanisms for sales staff. Credit standards: ability to pay vs. value of collateral. Apart from the strengthening of transparency and protection of customers, I would like to mention an aspect of the law which seems to me especially significant from a supervisory viewpoint. Specifically, the law requires lenders to assess the solvency of potential borrowers, sureties and guarantors in depth before entering into loan agreements. This quires them to evaluate, among other matters, their employment situation, present and future income, assets, available savings, and any other fixed expenditure or commitment they may have already assumed. Of course, as a supervisor I fully agree with all these requirements, which are absolutely necessary and obvious. However it is somewhat disheartening to have to see them specifically mentioned in legislation. The text of this law shows that on many occasions institutions relaxed their standards and basic principles excessively, in order to carry on lending. That does not say much for us supervisors either, since we did not react sufficiently to the weakness of credit standards.

Finally, we must remember that the application of strict standards, as required by the law, will, at least in the short term, limit the access to owner-occupied housing of certain low income groups. I sincerely believe that in the medium and long-term the effect will be more positive, by fostering greater price stability over the business cycle. We should remember that runaway growth of prices is the main factor that ultimately restricts access to owneroccupied housing. In any event, it is up to public authorities to shape the social measures that aim to guarantee decent homes for the less well off. It should be noted that construction of subsidised housing is currently at low levels, despite the economic recovery. Certain initiatives in our neighbouring countries are of interest, such as the role played by the deposits and consignments fund in France or the state guarantee arrangements in the Netherlands for housing up to a certain value. It is true that banks must not forget to apply strict economic criteria in their business, but it is just as true that a fair and responsible society should not be guided by economic criteria alone. 11/15  Use of the new macroprudential tools. In the last part of my speech I would like to depart a little from the real estate credit law to discuss the new macroprudential tools recently introduced by Royal Decree-Law 22/2018. As I have already mentioned, the crisis highlighted the insufficiency of microprudential supervision to identify, prevent and mitigate the materialisation of systemic risk.
After the reforms were introduced, the Swedish economy quickly turned upwards and prosperity increased more than expected. At the same time, it is clear that not everything has developed for the better. Vulnerabilities have been built up that can make policy tightening painful; high private debt, a housing shortage, a divided labour market and lack of investment. 8 [16]  These are structural problems that make the Swedish economy vulnerable. I will talk about this in more detail soon. But when we think about our frameworks and their future, we also need to bear in mind, as I said earlier, that the Swedish and global economies have changed since the 1990s. The Swedish and global economies are different from thirty years ago The first thing I want to highlight is globalisation over the last few decades. The primary manifestation of globalisation is the entrance of China into the global economy. This has meant that the working population in the world has increased significantly, as have goods and services originating outside Europe and the United States. China's entrance has also meant an increase in the global supply, which has probably dampened consumer prices and kept inflation down.8 Diagram 5. China's share of the world economy from 1970 Percentage of global GDP  Source: World Bank. During this time, global real interest rates have fallen trend-wise, partly because of globalisation and China's entry into international markets. Real interest rates are now at historically low levels.

At this point, it is customary to wheel out the following, now rather over-used, Paul Krugman quote: “productivity isn’t everything, but in the long run it is almost everything.” Despite its over-use, this quote does have one important virtue, something not to be taken lightly in this post-fact, post-truth world: it is empirically verifiable and appears to be factually accurate. Let me illustrate that with a simple example. Since 1850 UK living standards, as measured by GDP per head, have risen roughly 20-fold, a huge gain. How much of that gain can be attributed to higher productivity? Well, if productivity had flat-lined over the period, UK living standards would only have only doubled. Or, put differently, in the absence of productivity growth, UK living standards would be an order of magnitude lower today, stuck at late-Victorian levels. A more refined way of reaching the same conclusion is to decompose growth into the contribution from inputs into the production process – labour and capital – and the contribution from improvements in the efficiency with which these inputs are used – so-called Total Factor Productivity (TFP). Chart 1 does that for the UK since the Industrial Revolution. This suggests movements in TFP have accounted for the lion’s share th  of both the growth and variation in living standards since at least the mid-18 century. Saying that productivity matters is not the same as saying we understand its determinants. The past few years have served to underscore just how partial economists’ understanding of productivity remains.
The text has also benefitted from helpful comments from Andrew Bailey, Ben Broadbent, Alan Castle, Jonathan Haskel, Andrew Hauser, Nick McLaren, Fergal Shortall, Dave Ramsden, Silvana Tenreyro, Daniel Walker and Chris Yeates, for which I am most grateful. Opinions (and all remaining errors and omissions) are my own. References Bailey, A., J. Bridges, R. Harrison, J. Jones and A. Mankodi (2020). ‘The central bank balance sheet as a policy tool: Past, present and future,’ Bank of England staff working paper no. 899. Bernanke, B.S. (2003). ‘"Constrained discretion" and monetary policy,’ Speech to the Money Marketeers of New York University, 3 February. Bernanke, B.S. (2004). ‘The great moderation,’ Remarks at the meetings of the Eastern Economic Association, Washington DC, 20 February 2004. Brunner, K. and A. Meltzer (1988). ‘Money and credit in the monetary transmission process,’ American Economic Review, Vol. 78, no. 2, pp. 446-51. Busetto, F., M. Chavaz, M. Froemel, M. Joyce, I. Kaminska and J. Worlidge (2022). ‘QE at the Bank of England: A perspective on its functioning and effectiveness,’ Bank of England Quarterly Bulletin Q1. Cagan, P. (1956). ‘The monetary dynamics of hyperinflation,’ in M. Friedman (ed.) Studies in the Quantity Theory of Money, University of Chicago Press, pp. 25-117. Cloyne, J., R. Thomas, A. Tuckett and S. Wills (2015). ‘An empirical sectoral model of unconventional monetary policy: The impact of QE,’ The Manchester School, Vol. 83, no. S1, pp. 51-82. Czech, R., B. Gual-Ricart, J. Lillis and J. Worlidge (2021).

Muhammad bin Ibrahim: Migration to electronic payments Keynote address by Mr Muhammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia, at the Payment System Forum 2013 “Migration to electronic payments”, Kuala Lumpur, 9 December 2013. *  *  *  It is my pleasure to welcome all of you to the Payment System Forum 2013 organized by Bank Negara Malaysia in collaboration with the Association of Banks in Malaysia (ABM) and the Association of Islamic Banking Institutions Malaysia (AIBIM). Overview of the payment system forum The objectives of the Payment System Forum are: •  Firstly, to build greater awareness amongst the business community on the wide range of electronic payment solutions available in the market; and  •  Secondly, to showcase experiences by businesses who have successfully migrated to, and are reaping the benefits of, electronic payments. Besides featuring presentations by banks and payment system professionals, and the sharing of experiences by businesses, I am pleased to announce that the Payment System Forum has also brought together 27 exhibitors. The exhibitors comprise representatives of banks, payment service providers and government agencies who will showcase their electronic payment solutions. Members of the business community are encouraged to visit the exhibition booths located outside of this Auditorium and sign-up to the latest offers. Enhancing Malaysia’s payment system infrastructure An efficient, reliable and secure payment system is critical to the stability of a country’s financial system, besides contributing to a country’s economic growth and competitive position.
Other things being equal, bank balance sheets – and so broad money – would expand, but it might be hard to judge the extent of any inflationary impulse coming through a “shock” to the supply of broad money over and above that stemming from a relaxation in credit constraints and higher asset prices. Also, although a “counterparts” approach to the monetary aggregates would incline one to think that shocks to the supply of credit would flow into broad money, changes in the “technology” of banking and financial intermediation might in some conditions make the connection tenuous. After all, the intermediation of credit occurs via capital markets and not just across bank balance sheets. That could matter, for example, if an increase in the supply of credit happened to occur at much the same time as an increase in incentives or the means for banks to securitise – ie sell – the loans they originate. In the limiting case, a big positive shock to the supply of credit could coincide with shrinking bank balance sheets and so negative broad money growth. That is, of course, not at all what we have 33 seen recently. But the thought experiment underlines two things. First, we need to attend carefully to the underlying drivers. As part of that effort, the Bank has recently launched a new Credit Conditions Survey, which should enrich our grasp of what is going on.

A monetary policy that is guided by an inflation target is basically concerned with adapting the development of demand to the economy’s long-term growth. That is not easy, I can assure you, and our chances should not be exaggerated. Towards the end of last year, however, activity in the Swedish economy did begin to slow to a growth rate that can result in a stable long term development. The last time we met, early in October, we discussed the situation in these terms and I concluded that if the strong economic upswing were to continue, it would be necessary to raise the repo rate. Other central banks around the world had been facing a similar situation for some time. The U.S. Federal Reserve, for example, had raised its instrumental rate successively during 1999 and 2000 to 6.5 per cent. Last year the European Central Bank raised its rate to 4.75 per cent and the Bank of England’s rate was increased to 6.0 per cent. I recall that last year many observers counted on relatively large interest rate hikes in Sweden as well. They thought they saw signs that the Swedish economy was on the way to becoming overheated and argued rather vigorously that the Riksbank therefore ought to act quickly — starting in the autumn of 1999 and continuing with further steps up to last summer — in order to avert the threat they saw looming on the horizon.
But I think that we could go further in the direction of setting up minimum requirements for a crisis resolution framework for banks and other institutions covered by the financial safety net. Here one can draw some parallels to the work on fiscal policy frameworks, where the EU has come a long way in terms of coordination and codes of conduct in the event of macroeconomic crises. Where do we go from here? It is time to sum up. My message is that it is important for us to get in place an efficient regulatory framework for weak banks. A framework which combines the need to maintain stability and minimise costs to the public sector in the short term with the requirement for long-term market discipline. Returning to the health-care metaphor I started out with, we need to be able first of all to deal with the ordinary flus and broken bones of the financial system. But we also need to be prepared to deal with a more serious event. A possible outbreak of avian flu in the financial system. I have tried to outline the broad lines of such a framework.

To this purpose, alongside the banking system, we are considering the required measures that may lead to the growth of lending in line with the cyclical and structural needs of the economy. Economic and monetary developments elaborated above yielded an environment of contained inflationary pressures. Average annual inflation marked 3.4% in the third quarter. Against a background of below-potential economic growth, and given the absence of monetary-related inflationary pressures, inflation was largely affected by the rise in administered prices. The contribution of the latter’s rise to headline inflation is 1 p.p. In the absence of second-round effects, the effect of the rise in administered prices is expected to be transitory, while the inflationary pressures arising from domestic demand remain well contained. On the other hand, the depreciation of the national currency has been declining, hence offsetting the rise of primary commodity prices in the world markets and the increase of inflation in Albania’s main trading partners. The absence of inflationary pressures in the medium run and the contained fiscal policy provided room for pursuing a stimulating monetary policy that sustains economic activity. In July, the Supervisory Council of the Bank of Albania cut the key interest rate by 0.25 p.p. bringing it to the historical low of 5.00%. In addition, the Bank of Albania continued to supply the banking system with the required liquidity in order to ensure the smooth operation of the money markets and to enhance financial intermediation in economy.
This very bold construction, which has no worldwide equivalent in the world, will simultaneously permit through the decision-making process that has been decided in Dublin: - to ensure that we have a sound consolidated fiscal policy at the level of the euro area even without a federal budget, - and to ensure that each particular economy reloads the fiscal cannon in order to be able to cope with domestic or external shocks even without the automatic stabilizers of the transfers built into a federal budget. Ensuring a sound consolidated fiscal policy at the level of the Union and reloading the fiscal cannon at the level of national economies are the two major goals of the stability and growth pact monitored by the Stability Council and decided, in accordance with the Treaty, by the Council itself. As regards the costs associated with the transition towards the euro, which were the fourth major criticism, I will confine myself to two main remarks relating to the fiscal side as well as to the monetary side. From a European perspective, the strategies of fiscal retrenchment that have been decided within the European Union are to be implemented in any event, whether the Maastricht Treaty existed or not.

Mark Carney: Speech at the Mansion House Bankers and Merchants Dinner Speech by Mr Mark Carney, Governor of the Bank of England and Chairman of the Financial Stability Board, at the Lord Mayor’s Banquet for Bankers and Merchants of the City of London at the Mansion House, London, 12 June 2014. *  *  *  Introduction My Lord Mayor, Ladies and Gentlemen. A year ago when my predecessor Lord King delivered his final Mansion House speech, he noted “clear signs that a recovery in the UK, albeit modest, [was] underway.” That recovery was due in no small part to measures he and his colleagues had initiated including extraordinary monetary stimulus, recapitalisation of the banking system and innovative support for lending. The task a year ago was to secure that recovery in the face of continued domestic frailties and ongoing international weaknesses. At home, unemployment and underemployment remained elevated, productivity growth was anaemic, and debt levels were high. Abroad, the European crisis had moved only from its acute to its chronic phase and financial markets were demonstrating their fragility during the “taper tantrum”. With this backdrop and with real wages around 10% below their pre-crisis levels, it was not surprising that consumer confidence, though improved, remained low. Business confidence was similarly shaken by past shocks and current scepticism about the ongoing strength of demand. The Bank responded to these challenges.
•  A state tender for services – the state can use a joint tender run by the central government, a state company or local government for provision of banking services in rural areas. The Swedish post and telecoms operator PTS used this approach by running a state tender in 2008 at the request of the government to supply 15 local authorities and 73 districts around the country with cash. •  Requirements, or best practice guidelines that are generally adhered to, for the closure of bank branches, especially in rural areas – Canada has requirements for closing local bank branches and the banking association in Australia has set out the best practice for closing branches there. •  Joint work by local governments and banks to train people – this is where banks offer regular training in the use of internet banks in the style of the Vaata Maailma project that ran earlier. Local authorities help in deciding who needs  BIS central bankers’ speeches  3  training and bring together everyone interested, and the banks provide the people, computers and knowledge for the courses. •  Joint work by local governments and banks to provide cash – the commercial banks help local authorities provide cash and payment services to people who have impaired mobility or difficulty using a computer. This could be particularly useful in helping elderly people or people with impaired mobility or vision.

Swedbank has released detailed data to explain why they are closing branches, and they show that the branches being closed were used by only 13% of the clients registered there prior to closure, and that the number of cash transactions in those branches has halved in five years. The larger commercial banks in Estonia now provide services more efficiently, and one consequence has been the closure of branches and cash machines in rural areas. A comparison with Sweden can be useful here, as that is where the parent banks of our largest banks are based. At the end of 2013 there were 1655 bank branches in Sweden, and a little over half of them were cash-free, which is more than twice the proportion in Estonia, where only 23% are cash-free. 2  BIS central bankers’ speeches  At the start of June I wrote to the leaders of the local government in Läänemaa that Eesti Pank finds that having a single network of cash machines for all the banks would not improve access to banking services in rural areas. This is because it would not be possible for any commercial bank to differentiate its services from those of other banks by offering higher quality if there were a single network. Furthermore, a single network dilutes the responsibility of each individual bank, making it harder for clients or the public to affect the decisions taken by the banks.
So, after growing at an average of near 3% (at market prices) during this decade, global GDP will shrink, something that didn’t happened even during the 1970s’ oil shock or in the crisis of the early 1980s. Moreover, global growth as measured at purchasing power parity (which gives more weight to developing countries, such as China, which grows faster) will be negative this year. This had never happened in the postwar period. As is obvious, and as we have insistently stressed since the beginning of this period, our economy does not stand aside in this global crisis. Although our financial system has proved to be healthy and sound, the crisis has let itself show on the real sector since the final quarter of last year. This is a major challenge for macroeconomic policies, since they are the ones meant to mitigate the impact of the crisis and, in turn, to open the way to an earlier recovery than the rest of the world. Our economy is healthy. It has a solid financial system and a strong fiscal and foreign reserve position, enabling our country to cope with much harsher financing scenarios than the current one and to generate a large scale countercyclical fiscal drive. We have a floating exchange rate system, which allows for an easy adjustment to reduced external demand, and we have no exchange rate straitjacket, so adjustments have no restrictions, thereby avoiding harmful consequences for output and employment. Finally, prospects for inflation have brought about a substantial increase in the monetary policy stimulus.

This is mainly because it is necessary to give time to the transmission mechanisms of the monetary policy to work, so that the consequences of decisions already made can be seen in practice. Final remarks I would like to end with some lessons about monetary policy conduct which have stemmed from the great inflation rise that has taken place since mid-2007, into our current international situation. In the first place, many times it had been noted that Chile was one of the countries where the highest increase in inflation – more than tripling the target – was observed, with the interest rate rising less than in other economies with lower inflationary pressures. As I have already argued, our policy response was completely consistent with a flexible monetary policy framework. As the price shock became stronger and more persistent, monetary policy became more restrictive. This same flexibility in managing monetary policy enables us to react quickly to the strong deterioration of the external conditions today. Fortunately, our economy is solid enough to absorb significant changes in the course of monetary policy, without this being a threat to stability. In the second place, inflationary dynamics are highly complex and cannot be linearly mechanized based on historical evidence. Early this decade, when inflation was consolidating at low levels, we saw that persistence of inflation had dropped substantially, thereby reducing the impact of propagation via indexation and other phenomena that were characteristic of our high-inflation past (García and Valdés, 2005).