samchain/econo-pairs-v1 huggingface dataset:
At this late stage in the crisis, they thus played an important role in the package of measures. AT1 capital instruments actually contain specific features that are intended to absorb losses in the early stages of a crisis so that a bank can stabilise its situation through its own efforts. However, these features were not applied. In particular, Credit Suisse refrained from cancelling interest payments on these instruments despite incurring losses over a prolonged period of time. Such a measure would have provided immediate financial relief for the bank. At the same time, however, Credit Suisse would have exposed itself to the risk of negative market reactions – and thus also to the risk that refinancing would have become even more difficult and expensive. Third, customers withdrew deposits at an extremely rapid rate, especially last October, and then in particular in March of this year. Credit Suisse’s liquidity buffers were still able to cover the considerable outflows in October. In mid-March, however, its liquidity was no longer sufficient to cover the exceptionally rapid outflows. A contributory factor in this regard was that a significant portion of the liquidity held was needed for operational purposes. In addition, the collateral prepared by Credit Suisse was insufficient to cover the outflows using the SNB’s existing liquidity facilities. The liquidity assistance made available on the basis of emergency law, ELA+, thus created the necessary time window until a comprehensive solution to the crisis of confidence could be worked out.

In the event, the damage was contained, and world economic activity is now recovering far more quickly than anyone could have expected. But, encouraging though it is, the recovery is taking place in a context of large external imbalances within the world economy and large imbalances between strong domestic and weak external demand in a number of industrial countries most notably in the US and here in the UK. The challenge now for the major industrial countries - as we discussed at the G7 meeting last weekend in Tokyo - is to secure a more balanced pattern of growth among our economies in order to help sustain the global expansion. This chain of international events has also had a major impact on the pattern of exchange rates. Many emerging countries and some transition economies saw their exchange rates fall dramatically; but there were also important effects on the relationships between the currencies of the major industrial countries. The dollar and sterling have in fact remained reasonably stable against each other for most of the time since sterling withdrew from the ERM. The yen, which had been notably weak on the Japanese recession, has since picked up strongly as the prospect of recovery in Japan improved. But the most puzzling development in the exchange markets has been the disappointing weakening of the euro since its historic introduction at the beginning of last year.
The ability of our economies to absorb these shocks was however different. The natural instinct of macroeconomic policies facing such a contraction scenario is to engage in countercyclical measures in the form of expansionary monetary and fiscal policies. However, the very presence of financial stability concerns in the equation significantly changed the equation. We can safely argue that countries which experienced the least macroeconomic and financial imbalances were the ones better placed to pursue countercyclical policies and in fact the ones which emerged the fastest from the effects of the crisis. I believe Albania is such a country:   We had no bank failures or public injections of capital;    We did contain and reverse the confidence crisis in the financial system and its adverse effects. In fact, we did not experience financial disintermediation;    We did continue to grow, albeit at a slower pace;    We did manage to keep inflation expectations anchored. Therefore, I will share with you our thoughts and measures throughout this period. To conclude this topic I will briefly summarize my personal lessons from this crisis. Before the crisis, Bank of Albania was concerned for the possible financial threats that were being accumulated during the years of fast financial intermediation. To illustrate the point: most of the credit growth went in the non-tradable sector, with services and construction accounting for most of the expansion.

Ardian Fullani: Macrofinancial stability in EU candidate countries and potential candidate countries – lessons to be learned Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the High-level Policy Workshop on Macro-prudential Policy, Frankfurt am Main, 14 December 2010. *  *  *  Dear colleagues, It is a pleasure to discuss with you our experience with the crisis and share some thoughts on the relevant lessons for the future. My perspective on this issue will focus on the case of Albania; an emerging market economy which imported the crisis through financial market channels and interconnectedness. The challenges posed to eastern European economies and decision makers were mostly the same in nature, while their policy response differed according to economic structures, institutional differences and degrees of freedom enjoyed by them. Let me briefly preview the three main messages of my speech. The first one is that there is no conflict between price stability and financial system stability in the long run – instead, they do mutually re-enforce each other and the resilience of the economy to external and internal shocks. From a central bank’s point of view, a corollary to this is that any macro-prudential measure taken to enhance financial stability is an investment in medium and long term price stability. I believe this conclusion is amply borne from Albania’s recent experience. My second message is that global or even regional financial markets require global or at least regional supervision and crisis resolution mechanisms.
At the same time, concerns about the possible problems for the financial market apparently made the Bank of England decide to go no lower than 50 basis points and initially, in April 2009, prevented the Riksbank from going below 50 basis points, although the Riksbank later in July lowered the policy rate to 25 basis points. 5 How does the central bank know whether the constraint binds or not? I thought that it would know by continually monitoring the state of the financial sector. In some countries, the central bank publishes a regular Financial Stability Report of the type pioneered by the Bank of England and the Riksbank. These reports include an analysis of indicators of the state of the financial sector, in particular early-warning indicators of potential future problems. They serve to assure the general public and economic agents that everything is well in the financial sector when this is the case. They also serve as early warnings of the agents' concerns and for the financial-regulation authorities when problems show up on the horizon. Early action could then prevent any financial instability from materializing, thus limiting the probability of future threats to financial stability and future binding constraints on monetary policy.

As a matter of fact forward-looking decisions should be made on the basis of an ever larger and timely information; They should be constantly consulted with specialized economic and financial market agents. The Bank of Albania, likewise other central banks, endeavors to increase the qualitative and quantitative data base, in order to improve analyses and the decision-making process in making new steps. The finalization of the several-year project of the Bank of Albania, along which the Business and Consumer Confidence Indicator was consolidated, is an accomplishment of one of the medium-term development strategy objectives of our institution. The decision to publish these indicators passed through a prudent process and matured only after experts and decision-makers of the Bank of Albania were convinced that the confidence indicators, together with other indicators, revealed valuable additional  BIS Review 36/2009  1  information about the recent and future developments in the country’s real sector of the economy. Allow me to briefly summarize some of the basic concepts on confidence, tendency and the foregoing indicators. They have been widely used in many advanced countries of the world, particularly over the last two decades. These indicators are constructed on the basis of information collected from surveys, which are technically referred to as Business and Consumer Confidence/Tendency Surveys. The Bank of Albania conducts these surveys in cooperation with INSTAT.
At the same time, to ensure no disruption to the financing of the US deficits, there may be a need to consider broadening the scope of investing in US assets especially the physical assets. This is to ensure continued interest in US assets at a time when some segments of US financial assets may be less appealing than before on account of the ongoing stress in the credit market. But in the longer-term, we need to look at this process of adjustment from a global perspective and the key to the issue would be to rebuild a stronger domestic demand growth outside the US. Doing so would require stimulating public investment in infrastructure especially in Asia, as well as continuing with the financial reform to support private investment and credit expansion. And finally, greater flexibilities in prices will also go a long way in promoting an efficient resource allocation. All these points are not new, but they are a good reminder of what needs to be done. Since, our theme today is on the new trends in reserves management, let me end my remarks with a few points on reserves management and financial markets. Reserves management is essentially the flip side of reserves accumulation. In terms of the stock of reserves, notwithstanding a successful adjustment in the global imbalance, the relative importance of countries, as measured by their reserves positions, is unlikely to change significantly in a foreseeable future from the position we are in today.

By contrast, the risk premia for bonds of particularly burdened euro economies – namely those of Greece, Ireland and Portugal – continued to rise. Overall, the risk premia of certain European sovereign borrowers remain very high, and latent threats of contagion continue to exist. In the global equity and commodity markets, the mood during recent quarters was cautiously positive. In the equity markets, the gratifying corporate results had a strongly supportive effect. In the US, for example, around two-thirds of the most important corporations reported better results than were expected by the market. In the commodity markets, healthy economic conditions – especially in the emerging countries – assisted a continuation of the  BIS central bankers’ speeches  1  upward movement, although here, too, price volatility remained high. However, there were also factors weighing on the markets, like the political unrest in North Africa and the Middle East, the catastrophe in Japan and, finally, the indications of a global economic slowdown in the markets. To summarise, the situation in the international financial markets presents a mixed picture, despite the fact that economic developments are relatively favourable. This reflects the fact that the burden inherited from the economic and financial crisis continues to be very significant. Implementation of monetary policy The financial crisis was characterised not least by turbulence on the money market. While uncertainties in the international financial markets persist, the situation in the Swiss franc money market eased last year, and has been very relaxed since the beginning of 2011.
The reserves accumulation carried out by the Bank in the past few years, as well as management thereof – details are provided in an Appendix – should suffice to confront extreme episodes. Chile also has sovereign wealth funds that could help alleviate the financing needs in case of increased external tensions as well. The foreign funds of institutional investors can also act as stabilizing agents in this sense. On the other hand, we must always bear in mind that any intervention has associated costs. First, it can blur the objective of the Central Bank: inflation or exchange rate target. In our case, we have dealt with this problem by carrying out transparent, sterilized interventions, with a publicly known timetable that does not conflict with the formulation of monetary policy. In addition, our communication has been straightforward in stating that the objective of our monetary policy is price stability. Second, an intervention entails a significant financial cost for the Central Bank and the country. International reserves are invested in highly liquid assets abroad, whose yield is lower than the interest paid on the debt securities in pesos that are used to sterilize the purchase. In the current scenario, in which external-domestic interest rate differentials are significant and expected to remain so for some time, the financial cost of holding reserves is substantial and negatively affects the Bank’s balance sheet continually.

5 Richard H. Clarida, Vice Chair of the Board of Governors of the Federal Reserve System, The Federal Reserve’s  Review of Its Monetary Policy Strategy, Tools, and Communications Practices , speech delivered at the Federal Reserve Bank of Minneapolis, April 9, 2019. 3/3  BIS central bankers' speeches
When the krona appreciates it is thus a negative event to the extent that it leads to exchange losses that are booked in the Riksbank’s balance sheet. If these losses are too large, there is a risk that they must be covered by the capital the Riksbank has allocated for use in potential financial crises and to cover the Bank’s day-to-day operations. There is therefore reason to limit the impact of a krona appreciation on the Riksbank’s results. However, the possibility to do so is limited by the fact that we must have currency assets in order to intervene in the foreign exchange market. The need for intervention capacity in the form of foreign assets is determined by the prevailing exchange rate regime. Under a fixed exchange rate regime the central bank may need to intervene relatively often, which means that the need for intervention assets is considerable. This need is usually much lower with a floating exchange rate regime 7 . However, according to law, the Riksbank must be able to implement the exchange rate regime that the Government has stipulated for the krona, regardless of whether this is fixed or floating. This means that the currency holding is ultimately determined by the needs of a fixed exchange rate regime. At present, however, we have a floating exchange rate regime, which gives us scope to limit the currency risk. We do this by ensuring that our holdings of the important intervention currencies, i.e.

This definition is critical to clarifying the public interest-objective in a stable financial system, and that this public interest can diverge from the private interest of a firm in profit maximisation without reference to the public interest. One of the biggest lessons I take from the financial crisis is the need to ensure that the boards and management of firms appreciate and act consistent with the public interest. To achieve this end, we need a much better definition of the “public interest”, which will come from the legislation. The second important point regarding the meaning of the PRA’s objectives is that it will not be the PRA’s role to ensure that no firm fails. Rather, the PRA will seek to ensure that any firm it regulates that does fail should do so in a way that avoids significant disruption to the supply of critical financial services. Nevertheless, failure is not without cost and there is inherent uncertainty about whether a firm can fail without damaging the financial system and the supply of critical services. Consequently, the PRA will expect a given level of resilience to failure from all firms. Now, I recognise that we have a lot to do still on resolution planning to be comfortable about our objective of avoiding a “no failure” regime. For large banks, we are making progress on resolution planning, and this world is different to five years ago, but we are not there yet by any means.
Successful reforms, in my opinion, will need concentrated efforts on the following three areas: relieving labor market constraints, engineering a “transformative” upgrading of the supply side, and leveraging opportunities surrounding us. Let me elaborate on each of them. (1)  Relieving constraints in the labor market  Ladies and Gentlemen, Moving the country forward requires taking a step backward to examine closely what is holding us back at the moment. The first area that has been particularly binding is the labor market – an issue that has been nagging us all along, but often fails to get attention amid the clamor of short-term economic issues. Over the past decade, both the total workforce and labor productivity have been growing very sluggishly. Another related problem is that of skill mismatch, where workers with needed vocational training are in much shorter supply relative to university graduates. These pose serious limits to capacity expansion and innovation efforts of the private sector. To alleviate the problems in the near term requires that distorted incentives be corrected. Policy distortion such as the rice mortgage scheme and subsidy of other agricultural prices should be kept to a minimum, for these incentives drive workers away from high valueadded sectors to the agricultural sector. To solve the problems in the longer term requires educational reforms that tackle two major challenges: namely, raising the supply of workers with vocational training in demand and ensuring labor productivity upgrades.

Without further delay, I now would like to officially open the Fitch Ratings Annual Conference and wish everyone a fruitful discussion and exchange today. Thank you Fitch Ratings (Thailand) again for organizing the conference, and thank you for your attention. BIS central bankers’ speeches  5
Rodrigo Vergara: The Monetary Policy Report and the Financial Stability Report Presentation by Mr Rodrigo Vergara, Governor of the Central Bank of Chile, before the Finance Commission of the Honorable Senate of the Republic, Santiago de Chile, 21 December 2015. *  *  *  Both Reports can be found at http://www.bcentral.cl/en. Accompanying figures and tables can be found at the end of the speech. Introduction Mr. President of the Finance Commission of the Senate, senator Andrés Zaldívar, senators members of the Commission, ladies and gentlemen, I appreciate your invitation to present the vision of the Board of the Central Bank of Chile on recent macroeconomic and financial developments, the respective outlook and its implications for monetary and financial policy. This view is contained in detail in our Monetary Policy Report of December 2015 and in our Financial Stability Report for the second half of 2015. In the past few months, annual CPI inflation evolved in line with September’s estimates, although its core component – the CPIEFE – posted a slightly larger increase, reflecting the further depreciation of the peso in the period, with still bounded output gaps and within the historical indexing patterns. GDP growth for the third quarter matched the projections, while domestic demand was somewhat higher. Thus, the economy continued to grow in the range of 2 to 2.5 percent. The external scenario has worsened, due to the drop in the terms of trade, particularly the price of copper, sluggish growth of our trading partners, and notso favorable financial conditions.

10  BIS central bankers’ speeches  Table 2 International baseline scenario assumptions 2014 2015 (f) Jun.15 MP Report  Sep.15 MP Report  Dec.15 MP Report  Growth  2016 (f) Jun.15 MP Report  Sep.15 MP Report  Dec.15 MP Report  2017 (f) Sep.15 MP Report  Dec.15 MP Report  (annual change, percent)  Trading partners' GDP  3.4  3.3  3.1  3.0  3.7  3.4  3.2  3.4  3.3  World GDP at PPP  3.4  3.4  3.2  3.1  3.7  3.5  3.4  3.5  3.5  United States Eurozone Japan China India Rest of Asia (Excl. Japan, China and India) Latin America (excl.
6 The projected reduction in the workingage population will translate into slower economic growth and will, therefore, negatively impact tax revenues, at the same time as the fiscal burden of a larger population of elderly people increases. The Commission calculates that by 2015 the share of age-related spending in GDP is expected to reach 20.1 per cent, two percentage points up from 2007, mainly due to the increased cost of pensions and healthcare, and will continue to rise thereafter. The fiscal correction required to bridge the implied sustainability gap clearly cannot be achieved without a culture change regarding the welfare state. Put simply, it needs to be understood that you cannot give away what you do not have. We must, therefore, adopt a more cost-efficient approach to the provision of public goods and services, whereby only those demonstrably in need would benefit. Access to social benefits, healthcare and subsidies should be streamlined through a combination of means testing and market-based mechanisms. In addition, the benefits structure could be further refined beyond the recent Budget measures with a view to making work pay and reducing the disincentives to enter the labour market. Conclusion The Maltese economy is experiencing its first major test since it adopted the euro. While membership of the euro area has provided a degree of protection during the crisis, in particular exchange rate stability, the road ahead is still fraught with challenges.

A medium-term analysis of the relationship between productivity, wages and unit labour costs suggests that this is indeed the case. Between 2000 and 2008, productivity grew by 3.6 per cent but nominal wages increased seven times faster, by almost 28 per cent. As a result, unit labour costs rose by more than 23 per cent during this period, compared with 15 per cent in the euro area. Thus, despite the more moderate pace of relative cost growth during the last few years, Malta must still recover the ground lost in the early years of this decade. In the absence of relevant data, a sectoral diagnosis is not possible, but given that the export sector is a price taker and continues to attract investment, it is likely that the greatest effort must be made by other, mainly non-traded, sectors, including the public sector. To a large extent, Malta’s weak productivity record explains why per capita GDP in relation to the euro area average has stagnated at around 70 per cent since 2003. It is true that this subdued productivity performance was partly offset by higher labour utilisation in the past two years, but the latter is still some 88 per cent of the euro area level. This analysis suggests that the economy’s growth potential can indeed be raised. This should be a key objective. As things stand, for example, should the Commission’s growth projections prove accurate, in 2011 Malta’s real GDP would only have recovered to its 2008 level.