samchain/econo-pairs-v1 huggingface dataset:
BIS central bankers’ speeches  3  Returns important for preservation of real value That brings me to the third criterion for our investment activity – return. I would like to stress that the SNB is not concerned with maximising return for its own sake. Rather, return is inextricably linked to the criterion of security. Our goal is to ensure that the purchasing power of the currency reserves at least is maintained over time. That, in turn, presupposes that the long-term return we earn on our investments is equal to or greater than the average rate of inflation. Bear in mind that we are aiming to preserve real value in Swiss francs, not in local investment currencies. This means that a certain amount of positive return in local currencies is needed, if only to balance out the currency losses incurred in periods when the Swiss franc is appreciating. To improve the long-term relationship between risk and return, government bonds in our portfolio are supplemented by the additional investment categories I have already mentioned. Generally, the potential returns on equities are greater than those on government bonds issued by the major advanced economies. They can therefore make a contribution to preserving the real value of the currency reserves. To be more precise, equities increase the probability of preserving the real value of the currency reserves. This applies, in particular, in view of the current low (or negative) real returns on government bonds in core markets.

The issue is whether this world, however desirable, is realistic. There are some reasons for doubt. Financial system reinvention One of the likely consequences of the crisis, and the resulting regulatory response, is that the financial system will reinvent itself. Financial activity will migrate outside the banking system. And with that move, risk may itself change shape and form. What previously had been credit and maturity mismatch risk on the balance sheet of the banking system may metastasize into market and illiquidity risk on the balance sheets of non-banks. This could have important implications for the stability of the financial system and the broader economy. With more activity outside the banking system, and with the banking system itself better protected, the financial system and economy may become less prone to the low-frequency, high-cost banking crises seen in the past. But that is not the end of the story. Risk, like energy, tends to be conserved not dissipated, to change its composition but not its quantum. So it is possible the financial system may exhibit a new strain of systemic risk – a greater number of higher-frequency, higher-amplitude cyclical fluctuations in asset prices and financial activity, now originating on the balance sheets of mutual funds, insurance 4  BIS central bankers’ speeches  companies and pension funds. These cyclical fluctuations could in turn be transmitted to, and mirrored, in greater cyclical instabilities in the wider economy. In this world, it would be very difficult for monetary, regulatory and operational policy to beat an orderly retreat.
At the moment, both total, or headline, inflation and core inflation, which excludes the volatile food and energy prices, have increased but remain below levels consistent with our dual mandate objectives – which most members of the FOMC consider to be 2 percent or a bit less on the personal consumption expenditures measure. Moreover, the rise in commodity prices is likely to put further upward pressure on headline inflation in the coming months. Provided commodity prices level off around current levels, the effect on inflation should be transitory. But we will need to ensure that commodity price pressures do not cause inflation expectations to become unmoored. If that were to occur, it would be more difficult to keep inflation in check. To sum up, economic conditions have improved in the past year. Yet, the recovery is still tenuous. And, we are still far from the mark with regard to the Fed’s dual mandate. In particular, the unemployment rate is much too high. Economic conditions in Puerto Rico Now let me turn to economic conditions in Puerto Rico. In contrast to the situation during my last visit, I am pleased to see signs that the Commonwealth may finally be emerging from this painful recession. Nevertheless, conditions remain difficult for many families. The recession here has been deeper than the downturn on the mainland. By mid-2010, total employment in Puerto Rico had fallen by 13 percent or 138,000 jobs from its peak in 2005.

Last year, some of Puerto Rico’s banks were consolidated and many improved their balance sheets by selling underperforming assets. Both of these steps are likely to produce stronger, healthier institutions more able to make the sound lending decisions that support economic growth. 6  BIS central bankers’ speeches  All of these activities, ranging from effective monetary policy and prudent financial regulation to fostering economic literacy and measurement, complement and reinforce each other to help support a strong economy in Puerto Rico. Conclusion To sum up, the mainland economy experienced a pick-up in activity during the second half of 2010 that shows signs of continuing in 2011. The recovery in Puerto Rico has taken longer to get off the ground, but now shows signs of firming. On the mainland and in Puerto Rico, unemployment remains stubbornly high, but many indicators suggest that conditions are in place for stronger employment growth in the coming months. With government and business leaders like yourselves working together to build a better future for Puerto Rico, I am hopeful that we will soon be able to look back at 2010 and see not only the end of the island’s long recession but also the beginning of an era of growth and prosperity for Puerto Rico. Thank you for your kind attention. I would be happy to take a few questions. BIS central bankers’ speeches  7
The structure and condition of the financial system at any given time is determined by historical factors, economic and market conditions, the regulatory environment, technology, and culture and ethics. The Central Bank and the regulatory environment are also part of the financial system. The public sector can affect developments in the financial system through the regulatory framework, through transactions with the system – not least through the Central Bank – and by affecting culture and ethics. At present, the system is shaped by the financial crisis and the responses to it, including the capital controls. It is a relatively homogeneous system dominated by three domestic-oriented banks with similar business models and risk profiles. The capital controls, implementation of international regulations, and more stringent Icelandic regulations on foreign exchange risk all affect the banks. The capital controls will be lifted, but much of the regulatory environment will remain. Risk in the financial system has diminished markedly in recent years as resilience has grown, which can be seen in capital adequacy and funding; furthermore, liquidity relative to the scope of operations is much greater than before the crisis. The three largest commercial banks’ combined capital amounted to 669 b.kr. at the end of 2015. The banks’ equity ratios have risen by nearly a third since 2010, from 21% to 28%. In real terms, their equity has increased by 180 b.kr. over this period. Furthermore, the banks’ foreign exchange imbalances have been reduced, and the regulatory framework prevents excessive risk-taking in foreign currencies.

Jean-Claude Trichet: Lessons from the crisis and steps towards economic stability Keynote speech by Mr Jean-Claude Trichet, President of the European Central Bank (ECB), at the 9th Munich Economic Summit, Munich, 29 April 2010. *  *  *  Sehr geehrter Herr Bundespräsident, lieber Horst Köhler, Sehr geehrter Herr Chrobog, sehr geehrter Professor Sinn, Meine sehr verehrten Damen und Herren, ich danke den Veranstaltern dieser Konferenz recht herzlich für die Einladung. Besonders dankbar bin ich für die Gelegenheit, im Anschluss an meinen langjährigen Freund Horst Köhler sprechen zu dürfen. Wir sind uns über einen langen Zeitraum hinweg in verschiedenen Positionen immer wieder begegnet und haben oft sehr eng zusammengearbeitet. It has always been an enormous pleasure to talk with him and to work with him. Both of us were engaged in the negotiations of the Maastricht Treaty. That is where we met nearly twenty years ago. We were also heavily involved with the handling of the European Monetary System crisis in 1992/93. I remember that episode very well. It was a defining moment not only for the monetary integration of Europe. It remains in our memories as a vivid example of what close and friendly cooperation can do in very exceptional and demanding circumstances. In my remarks today I would first like to reflect on the lessons that I believe we can draw from today’s financial and economic crisis.
Political leadership has support from relatively broad economic and social groups, with more impersonal relationships and hence stronger competition and mobility. The authors argue that the transition between development stages to what they refer to as “the second social revolution”, a somewhat broader concept than the Industrial Revolution that gives weight to, inter alia, the Enlightenment and Modernity, started over 200 years ago, and that it is still underway. In many countries, society has benefited from technological progress but is still captive of the old stage of development of personal power relationships. They point to a clear concurrence between the open-access society and economic prosperity. North Douglass C., Wallis, John Joseph and Weingast, Barry R. (2009) “Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History”, Cambridge University Press. 8  Nation-building is a difficult task if there is no trust in as vital an institution as the police. Johs Andenæs spent the spring semester of 1971 as a visiting fellow at Oxford, taking along his son Ulf, who was my schoolmate. That year, Leszek Kołakowski, one of the past century’s most famous philosophers, was also a visiting fellow at Oxford, and Johs Andenæs and Kołakowski became friends. Although Kołakowski had been one of Marxism’s prominent post-war thinkers, by 1971 he had completely lost faith in the ideals of his youth. His relationship with the same Communist authorities that he had served as an ideologist earlier in his life was becoming increasingly difficult.

Labourers might receive partial payment for their efforts in kind, or at large mills, in scrip that could only be used for purchases in the company store. The monetisation of the economy, based on secure monetary values, severed many of these ties of dependency. With money in their pockets, accepted as legal tender everywhere, the farmer or labourer was able to choose. This is also freedom. Nor did the party receiving payment, e.g. the town merchants to know more about the customer than that he had money in his pocket and could pay for the goods. Eitrheim, Ø. and L.F. Øksendal (forthcoming): On secure monetary values and freedom. 6  BIS central bankers’ speeches  In Norway, the aim of shielding the monetary system from the government was already embodied in the Constitution of Norway adopted on 17 May 1814. The drafters of the constitution formulated the following in Article 75(c): “It devolves upon the Storting ... to supervise the monetary affairs of the Realm”. This provision strongly censured the Danish King’s monetary policy during wartime. In future, representatives appointed by citizens, not the Crown, were to have final responsibility for the monetary system.27 The King’s scope for taxation by means of inflation was curtailed. The Storting, which was supposed to meet every third year, was not equipped to assume day-to-day responsibility for the monetary system. “Someone” had to do this on behalf of the Storting. That “someone” became Norges Bank, which was established in 1814.
While the pandemic was raging, it was said again and again that these were unprecedented times. This is true, in that even though plagues have occurred repeatedly throughout human history, there has never before been an attempt to halt the spread of a pandemic with public health measures so wide-ranging that they extinguished the economic and social lives of entire countries. The war in Ukraine, on the other hand, has scores of historical precedents stretching back centuries. And yes, with this conflict, Europe has been set back in time. The economic sanctions that have been imposed on the Russians, like the disease-prevention measures during the pandemic, will leave a trail of aftershocks in their wake and will have broad economic repercussions for Iceland no less than for other countries. Honoured guests: In Adam Smith’s The Wealth of Nations, the magic of free enterprise is considered to lie in the fact that people can communicate through price formation in the markets. In this way, the markets will connect one coast to another, enabling people to work together without knowing one another – or indeed, without necessarily liking one another. It was the exalted invisible hand that harnessed self-interest in the service of the public interest. After two wars in Europe, Western politics was dominated by the conviction that the invisible hand could guarantee peace. (Note Icelanders’ optimism in referring to the former war and the latter war – as though no other world wars are even possible.)

And even though they may have wanted to counteract inflation, they did not have the independence to do so. Furthermore, spiking oil prices were responded to with pay hikes, creating a vicious cycle of rising wages and prices – a typical wage-price spiral. This is why inflation was not brought under control until central banks had been granted independence and explicitly tasked with safeguarding price stability. In Europe, the German central bank led the battle against inflation, and it can be said that other countries tried to bask in the warmth of German credibility by pegging their exchange rates to the Deutschmark. In the Nordic countries, price stability was not ensured before a consensus was reached in the labour market with the so-called Nordic model. So is this where we are today? The lengths to which the world’s largest central banks have gone in quantitative easing over the past decade is cause for concern. They have truly taken on the task of financing government spending by printing money. It will require a Herculean effort to climb out of this slippery slope. The outlook is for many countries’ financing costs to rise significantly thereafter. By the same token, the labour shortages that have developed in the West could create wage pressures and push inflation higher. Honoured guests: It is vitally important that we Icelanders draw accurate conclusions from our own monetary history in the wake of the 1973 oil shock.
In order to have a more accurate picture of the delinquency rate, we calculate the “effective delinquency rate” by excluding this 46 percent of borrowers not in repayment; the result is shown in the right-hand panel of Chart 5. This effective delinquency rate is nearly double the measured delinquency rate, with almost onethird of borrowers in repayment being delinquent on their debt. It is important to note that because of the unique character of student debt, an increasing delinquency rate defined either way does not necessarily imply that a greater percentage of new borrowers are falling behind on repayment. Borrowers who became delinquent in the past and remain so are included in the delinquency rate. Some may also default, which is defined as being more than 270 days past due in the case of federal loans. Because student debt is not generally dischargeable, even in bankruptcy, the delinquency rate may continue to increase even when the percentage of borrowers becoming newly delinquent remains constant. We therefore also computed the proportion of borrowers in repayment who became newly delinquent on a quarterly basis. As shown in Chart 6 in 2005 about 6 percent of nondelinquent borrowers in repayment transitioned into delinquency each quarter, on average. By 2012, that rate had increased to almost 9 percent. This confirms that indeed there was an increasing trend of borrowers becoming newly delinquent over time. Our delinquency numbers may seem higher than those reported elsewhere.

In addition, higher education is an important export industry in which the US holds a significant comparative advantage. This produces a better understanding among foreigners of the US and vice versa. All of these social benefits mean that there is an appropriate role for the public sector in helping to finance higher education. The best policy would align the social and private benefits of attending college, and would find a way to relieve the liquidity and credit constraints that families face. Finally, the best policy would direct scarce educational resources toward those matches between student and institution that are likely to yield the best educational outcomes. The best matches avoid regrettable dropouts or degrees granted with little to show in the way of educational attainment or career prospects, or similar bad outcomes. In considering what the proper public role should be, it’s useful to think about an extreme case. In Europe, higher education has traditionally been essentially 100 percent publicly funded. This result is big subsidies for people – mostly wealthy people – who would have gladly paid for college if they had to. Making college free also means that there will likely be excess demand for the fixed number of seats at high quality institutions. Either this demand has to be rationed, or quality will have to fall. Neither choice is particularly attractive.
Ladies and gentlemen, Non-bank financial institutions are a significant component of the financial sector as their assets constitute a significant proportion of the total financial sector assets in most countries in the region. Similarly, microfinance institutions play a critical role in poverty alleviation and economic empowerment of marginalized communities in our region. As such these institutions are systemically important as they can exacerbate the fragility of the financial system particularly where there is lack of effective regulation. Over the past few years, we have seen a trend where these institutions have increased in numbers in our region; some have been established as part of financial conglomerates while others are on a standalone basis. Sadly, our supervisory and regulatory structures for this sector in the MEFMI region have remained rather incoherent and somewhat underdeveloped to handle the challenges that have been identified with this sector. The trend makes it more important than ever for supervisors in the region to get together and talk about matters of common interest. I am pleased to note that over the past few years, the region has taken a proactive stance towards promoting harmonisation of regulatory and supervisory frameworks and the integration of financial systems. Through MEFMI, SADC, COMESA, the East African Community (EAC) and the West African bloc, member central banks are working together to promote effective supervisory standards geared towards achieving long term goals of financial inclusion and financial stability.

BIS central bankers’ speeches  1  Ladies and gentlemen, I note with gratitude that this workshop is designed to address supervisory standards in the non-bank and microfinance sector through three main themes, namely; i)  regulatory structures,  ii)  international trends and standards, and  iii)  integration of non-banks into the formal sector. These are all very important and topical issues and allow me to talk a little bit more about one of these themes – the development of regulatory structures. First, while there is a definite role for international standards for regulation of this sector, it is very important that they are implemented in a way that takes into account the individual circumstances of each country. Secondly, the standards we adopt should in the end not impede financial sector inclusion. We need to balance this in order to achieve our overall objective which is a sound and efficient financial system. Ladies and gentlemen, It is important not to assume that supervisory arrangements should be, or can be, the same in every country. They must be tailored to the individual circumstances of each country. As an example, what is appropriate for Namibia may be totally inappropriate for another country like Uganda, and vice versa. However, there are likely to be common characteristics that cut across and can enable us all to learn from each other.
That is enough to offset a reduction in GDP of some 1.5%10 – three times the Bank’s estimate of the hit from the direct effects of the tariffs implemented so far (Table 1). Indeed, the scale of market moves suggests a shock to US and Chinese business confidence and investment analogous to what has happened in the UK (Table 3). Table 3: A significant confidence shock could lower US GDP by more than 1½ % Change in level of GDP (%) US  China  Euro area  UK  World (PPP-weighted)  Severe shock to business confidence in the US and China  -1.8  -1.8  -0.7  -0.7  -0.9  Direct trade effects if all measures are implemented  -2.1  -1.2  -0.6  -0.4  -0.8  Total  -3.9  -3.0  -1.3  -1.1  -1.7  See sources and notes to Table 1. 8  Currently a sample of over 7,000 companies. More details on the Panel are available at https://www.bankofengland.co.uk/statistics/research-datasets. 9 Similarly, in the Deloitte Survey of CFOs, 54% of respondents rated the level of uncertainty as high or very high in 2019 Q1, up from 25% in 2018 Q2. 10 This assumes a multiplier of 1 – that is, a 1 percentage point fall in the federal funds rate boosts US GDP by 1%.

The Bank of Albania judges that in the period ahead, inflationary pressures along the time horizon of monetary policy stance will remain relatively high, but their intensity will decrease during the year. In the following, I will analyse in detail the factors determining inflation developments and related risks. During the first months of 2011, global economic activity continued to grow, although the signals coming from confidence indicators suggest that risks associated with these positive developments are in place. Global inflationary pressures have increased as a consequence of a higher demand and persistent supply-side shocks. In advanced economies, fiscal consolidation and public debt reduction remain the major concerns, whereas inflation pickup has decreased the space for monetary stimulus. In advanced economies, the positive global demand momentum has led to increased aggregate demand, while the upward inflationary pressures have made the central banks respond by tightening the monetary policy. In financial markets, the public balance health has determined the yield performance in several countries, while the political tensions have elevated the demand for safer instruments. The outlook remains highly uncertain, as a consequence of higher global prices, fiscal consolidation in some euro-area countries and less space for fiscal and monetary stimulus. Returning to Albanian economy, the latest data on 2011 Q1, obtained from business confidence surveys, the performance of external trade activity, and monetary and fiscal indicators, support the continued recovery of the domestic economic activity, primarily due to positive contribution of production sector. External demand and fiscal stimulus are factors of major influence on this growth.