samchain/econo-pairs-v1 huggingface dataset:
This fragmentation limits the potential of the economy of scale, reduces the productivity of this sector, and turns it less attractive to the banking industry. In figures, referring to the data of the European Commission, a typical Albanian farm owns averagely 1.2 ha land, compared to the average of around 14 ha in Europe. At the same time, according to INSTAT data, around 99.6% of agricultural businesses hire one to four employees. This ratio is notably higher than the average of other economy sectors. In this context, detaching from the negative emotions that may stem from the memory of the inefficient cooperatives during the communism period, I think that there is a need for higher awareness of the Albanian farmer about building on partnerships and collective-risk sharing scheme, based on the free initiative and common interests. These partnerships improve access of farmers to funds and loans, and in turn their possibilities to succeed. The third reason for the low lending rate to agriculture is related to the lack of sound collateral. In many cases, the title of ownership is absent, or its value is low against the needs for funding. The sovereign guarantee schemes provide an adequate solution – in both short and medium term – to mitigating this problem. Nevertheless, local authorities should increase their attention on this issue in the long run. Dear banking system executives, The Bank of Albania deems that it is time for banking sector to pay a higher attention to agriculture sector.

In more concrete terms, the first reason on the back of low lending rate is related to the high risk – both real and perceived – that investment in agriculture bears. However, I think this risk is being reduced. On the one hand, the improved support to agricultural production, the improved roots network and the consolidated trade chain for the supply of the inputs in the market, drive to the improvement of this sector’s business. On the other hand, promoting agritourism and supporting agribusiness, grow the value added chain and profitability of investment in agriculture. In this context, I would like to greet the Albania Agribusiness and Tourism Support Facility 1/2  BIS central bankers' speeches  (AATSF), which includes the joint contribution of the Albanian Government and the European Bank for Reconstruction and Development (EBRD). This facility provides a significant contribution, around EUR 150 million, in both forms: direct loans and supportive guarantee for lending. To this end, by seeing the positive reaction that banking sector is displaying towards this scheme, with four banks already becoming part of it, I would like to encourage the other banks to adopt a more positive approach towards this sector. Also, I would like to emphasise that global experience suggests the promotion of private insurance schemes to address risk reduction in agricultural. In future these schemes should become an integral part of this equation. The second reason on the back of low lending rate in agriculture is related to the fragmentation of agricultural land.
People have taken those jobs of their own free will, even though the jobs may not measure up to the compensation levels everyone would like. And yet Texas, like all states, is subject to the same monetary policy as all the rest: We have the same interest rates and access to capital as the residents of any of the other 49 states, for the Federal Reserve conducts monetary policy and regulates financial institutions under its  2  The Code of the Woosters, by P.G. Wodehouse, New York: Doubleday, Doran, 1938. 3  See “Texas: What Makes Us Exceptional? Where Are We Vulnerable?,” speech by Richard W. Fisher before the 2010 Pre-Session Legislative Conference, Dec. 2, 2010. BIS central bankers’ speeches  7  purview for the nation at large. From this, I draw the conclusion that private sector capital and jobs will go to where taxes and spending and regulatory policy are most conducive to growth. Therein lies a lesson for our fiscal policy makers as they grapple with their monumental task of reconfiguring fiscal policy and eliminating the prevailing uncertainty about their remedy. We live in a world that, through steadfast sacrifice of the American treasure and with blood and capable diplomacy, won the Cold War, induced the Chinese to pull back the Bamboo Curtain and opened up the majority of the world to once unimaginable economic opportunity.

Now, put yourself in the shoes of a business operator. On the revenue side, you have yet to see a robust recovery in demand; growing your top-line revenue is vexing. You have been driving profits or just maintaining your margins through cost reduction and achieving maximum operating efficiency. You have money in your pocket or a banker increasingly willing to give you credit if and when you decide to expand. But you have no idea where the government will be cutting back on spending, what measures will be taken on the taxation front and how all this will affect your cost structure or customer base. Your most likely reaction is to cross your arms, plant your feet and say: “Show me. I am not going to hire new workers or build a new plant until I have been shown what will come out of this agreement.”  6  BIS central bankers’ speeches  Moreover, you might now say to yourself, “I understand from the Federal Reserve that I don’t have to worry about the cost of borrowing for another two years. Given that I don’t know how I am going to be hit by whatever new initiatives the Congress will come up with, but I do know that credit will remain cheap through the next election, what incentive do I have to invest and expand now?
Since the inflation target was introduced, the Riksbank has tried in different ways to become ever more open and clear with regard to how monetary policy is conducted. More and more information on the bases for the decisions has been published, not least the forecasts for inflation and the economy as a whole. I think that the decision to publish our own forecast for the repo rate was a natural continuation of this process. One should also bear in mind that the Riksbank must in any case make an assumption about the interest rate as a basis for its forecasts regarding growth and inflation. To begin with, an unchanged policy rate was used in the forecasts. This method had the advantage of making it easy to explain that the interest rate needed to be raised or cut, but it also involved an unrealistic forecast. The interest rate does not normally remain unchanged during a forecast period of a couple of years. After this the Riksbank changed over to using implied forward rates as a base for its forecasts. One problem is that these interest rates do not unambiguously reflect expectations of the repo rate, as they also contain risk premiums that may vary over time. Although adjustments were made for this, there was another type of problem with using forward rates. If market agents’ expectations differ from the Riksbank’s view, it is problematic if forward rates are nevertheless used as a base for the forecasts. Using one’s own forecast is much more transparent and direct.

By the same token, let me stress the relevance of the Investment Survey conducted annually by the European Investment Bank since 2016, whose most recent results for Spain have been presented at this conference. This survey contributes to improving our knowledge of the dynamics of firms’ investment and investment finance. In particular, this source of information has proved very useful in identifying the main obstacles to investment. The high coverage of European firms in different countries allows for comparison of investment and investment finance developments across countries. In the context of the pandemic, the results of this survey are even more relevant since they allow us to better understand the implications of the COVID-19 shock for firms’ investment across Europe. To conclude, let me thank the European Investment Bank for partnering us in the organisation of this conference and, more in general, for their very good collaboration with us. I would also like to thank speakers and participants at the conference for such fruitful discussions. I’m convinced these debates are very useful for enriching our understanding of economic problems and for guiding policy makers as to the best possible design of economic policies to tackle them. Thank you. 2/2  BIS central bankers' speeches
It is known that banks and countries behave imprudently when they think that they will be bailed out, that others will bear the consequences of their conduct. There is broad consensus that both in the regulation of banking business and in that of sovereign debt, elements are needed to reduce moral  2  BIS central bankers’ speeches  hazard to a minimum, and sufficient deterrents must be in place so that banks and countries have an interest in acting correctly. Indeed, a large part of our work for the future, and in particular the change in resolution arrangements, is geared to preventing such irresponsible behaviour. However, as things currently stand, the strategy of punishing with bankruptcy those who have “done wrong” or “lent badly” may have undesirable and far-reaching side-effects both in the banking sector and as regards sovereign debt. The disorderly bankruptcy of an institution might have very adverse repercussions for the national or indeed European banking system as a whole. Default by a Monetary Union member country might cause a most considerable knock-on effect on other sovereign risks. It is not reasonable to ignore these externalities when calibrating the true scale of this “moral” consideration. The recent years of crisis have offered us two patent examples of the adverse consequences of applying a “moral” view to the solution of problems at an inappropriate time, i.e. not before they occur – which would have its logic – but during the crisis.

During this time, the Spanish economy has been radically modernised in many other areas, through the adoption of regulatory frameworks and measures comparable to those of the most advanced economies, such as the removal of barriers to trade, the liberalisation of certain sectors, privatisations, etc. However, our labour market, which is characterised by the very high levels of unemployment  4  BIS central bankers’ speeches  generated during crises and also by its inability to reduce unemployment rates during upturns, has retained the same institutional structure with no substantial changes for 30 years. The cost for workers of this resistance to reform has been insecurity both for the unemployed and for those who have jobs but fear losing them. The insensitivity of wage growth to the cyclical situation and to productivity generates numerous perverse effects. First and foremost, the adjustment to shocks is borne entirely by employment. But also wage growth in some sectors or firms may be lower than it would have been if more flexible labour institutions had allowed productivity gains at the firm level. This is what one observes when the situation of Spanish workers is compared with that of workers in those European countries that have the highest levels of flexicurity. For all these reasons, as I have so often said, Spain’s labour institutions must be reformed in order to lay the foundations for employment creation and for reducing unemployment from its very high current level to one similar to those of other European countries.
Malta also compares favourably on social cohesion, with income dispersions being comparable to those in other acceding countries and with the long-term unemployment rate being significantly lower. In summary, it appears that Malta has costs which do not reflect productivity levels and a highly expansionary fiscal stance. There is also a need for more spending on innovation activities and business investment. For while our economic system is successful in delivering social cohesion and stability, these factors cannot alone sustain the economy’s growth rate at sufficiently high levels. This suggests a need to question existing priorities and to re-direct policies to activities which can support higher income levels in future. Malta and EMU Malta’s participation in EMU will eventually lead to the adoption of the euro, a step which holds out the prospect of significant benefits. Perhaps the foremost of these is that Malta would share in the strength and credibility of a single, Europe-wide monetary policy. This would not only mean reduced exchange rate risks and less uncertainty for economic agents in Malta and for their foreign business partners, but also the elimination of the risk premium on the Maltese lira. The reduction in interest rates consequent upon the introduction of the euro would be of direct benefit in terms of price competitiveness, as would also be the reduction in currency conversion costs and the increased price transparency.

Scenarios however, are not projections, predictions or preferences but rather it provides a way of making sense of uncertainties and in addition it challenges our assumptions about what the future holds. Scenario building today is synonymous with thinking broadly and more freely about a problem, enlarging the frames of reference and involving different worldviews, rather than seeing a situation from a single perspective. Essentially scenario planning interventions have been most useful in supporting the construction of multiple frames of future states of possibilities. The process of scenario planning enhances the evaluation and integration of information and promotes contingency planning. Scenarios are also important for risk management. As risk is inherent in any business activity the framework becomes a useful tool in risk assessment and management. Most of all a major risk in the current environment is the lack of preparedness for how the environment might change and for the new challenges that may emerge. To attempt to predict these changes in any specific manner in this environment would be highly speculative. The risk management process therefore involves preparing for, rather than attempting to predict the change. This would promote an increased level of preparedness to cope with the inevitable changes. Scenarios also help to connect strategies and action plans to our visions. Using scenarios will essentially widen our perspectives, increase our understanding of the issues and developments. It also allows us to see opportunities that we may otherwise miss. New developments emerging would be seen from different angles and perspectives.
Experience has shown that enhanced financial integration has, on the whole, resulted in higher growth and greater convergence among economies. Admittedly, not all sectors have gained in this process; there have also been losers in practically all countries involved. Nevertheless, the benefits of liberalisation have exceeded its costs. The call for a return raised by some voices therefore seems inappropriate. On looking ahead, the path and success of the liberalisation process will depend on how the effects of inequality gaps within and between countries, and the effects of increasing volatility on financial markets, are dealt with. Securities: demand and supply Integrated capital markets operate primarily on the basis of supply of, and demand for, securities. This has not always been the case. Bank deposits and loans used to play a much more significant role. Yet with deregulation and the rise of institutional investors, securities have become the central tool of capital allocation. The United States’ strong net import of capital illustrates this fact. Let’s have a look at some figures 3 taken from an IMF report . The net foreign purchase of US long-term securities almost doubled between 1995 and 2000, rising from USD 232 billion to USD 456 billion. Taking a closer look reveals some interesting facts. During the same period, the net foreign purchase of corporate bonds and stocks increased by 3 and 15 times, reaching USD 182 and 175 billion respectively. The net foreign purchase of corporate securities amounted to 30% of the entire net purchase of US long-term securities in 1995.

And, the odds are that the cause of the next one will not be the same. I have been involved in mopping up problems in banks long enough to have been involved in Barings, which was an idiosyncratic fraud, not a sector-wide problem. This is the resolution element. In short, we need better fire prevention and better fire-fighting. In the UK we took a major step earlier this year by creating a Special Resolution Regime. But that is not the end of the response to the crisis. Rather, it is where “living wills” or what we now prefer to call Recovery and Resolution Plans, or RRPs, come in. I want to spend the rest of my time setting out what I think should be the role and form of these plans, and why they should be critical tools both for banks themselves, banking supervisors and resolution authorities. I have been struck by the strength of support for RRPs. In April, the G20 leaders endorsed a set of principles from the Financial Stability Board that include strong encouragement for firms to maintain contingency plans and procedures for use in a wind down, with regular reviews to ensure that they remain accurate and adequate. The Financial Stability Board cross-border Crisis Management Working Group, chaired by my colleague, Paul Tucker, has  BIS Review 156/2009  1  published principles aimed at strengthening the ability of authorities to deal with a crisis in certain cross-border financial groups.
This was prepared by a Task Force consisting of persons from the banking and financial sector. But, we now believe that the time has come for us to move towards more stringent application of Corporate Governance Codes and therefore we are now in the process of drafting and issuing a new code of best practices on Corporate Governance to be made mandatory for banks. What are the challenges that face regulators in dealing with the Banks? Over the past few decades, the activities in the field of banking have been increasing rapidly and today a large number of new areas have been added to the traditional list of services provided by Banks. An examination of such lists would clearly indicate that Banks of today are performing many  BIS Review 24/2007  3  services that were hitherto provided by other service providers. We now see that the conventional difference between banking and other financial businesses, i.e., insurance and securities trading, has almost disappeared. In the meantime, the rapid development of debt securities markets too, has been posing new challenges to the traditional intermediation business of banks. All this has blurred the customary boundaries and there are many overlaps that have been created. Naturally these trends lead to new challenges to the Regulators of banks who now have to deal with these new multi-faceted conglomerates, instead of the traditional deposit taking/money lending institutions that were onceupon-a-time called “bank”.

There are therefore compelling arguments in favor of a generally positive assessment of the consequences of innovation. Does experience provide support for these arguments, or are these changes too new for us to know? The recent changes in credit markets have been dramatic. We have seen rapid growth of structured credit products, credit default swaps and new types of collateralized debt and loan obligations. Although these instruments are very new, they are the natural extension of earlier innovations in credit markets. Over a long period we have seen innovations ranging from the syndication of bank loans and the direct provision of credit through the capital markets, to the spread of asset-backed securities and products that separate different parts of the payments stream and different dimensions of the risk in a credit obligation into different instruments. These changes have contributed to a substantial reduction in the share of total credit held by banks. They have produced a greater separation or distance between the entity that first arranges a loan and those who end up holding the risk, and more intermediaries in that chain. And they have contributed to a dramatic increase in the number and diversity of creditors to any individual borrower, and a greater capacity to actively trade credit risk. BIS Review 29/2007  1  We are now well into the third decade of experience with the consequences of these earlier innovations, and this history offers some useful lessons for evaluating the probable impact of the latest changes in credit markets.
2  BIS central bankers’ speeches  Finally, growth is only resuming at a slow pace.3 Investment has been too low in Europe over the last 15 years, and the crisis has exacerbated this trend. At the same time, total factor productivity, which forms the basis of long-term growth, has also been disappointing.4 If this trend continues over the long term, the euro area will not generate enough wealth to sustain the standard of living of its citizens and to ensure the sustainability of its social model, which is a defining feature of its identity. We sometimes ask ourselves how to keep the reform momentum going without the pressure of the financial crisis.5 We would like to believe that what has been achieved since 2010 to strengthen EMU is enough to make it strong and sustainable and we can therefore claim “mission accomplished”. But the challenges I have just outlined provide enough of an answer. What has been achieved so far is not enough. The euro area is not in a financial crisis anymore, but it must still contend with high debt, low growth and unacceptably high unemployment. These are reason enough to remain alert and continue acting. Stability – a precondition for growth For companies to invest, for firms to hire, for households to consume, a stable economic environment is tantamount. If uncertainty reigns, economic activity suffers. In my view, there are three relevant dimensions of economic stability: price stability, financial stability and macroeconomic stability, including the health of public finances.

The need for further fiscal adjustment is clearly emphasized in the latest available IMF country reports. The screening shows that with exception of two countries (Romania and Lithuania) all the countries should adjust further. According to the IMF, most of the countries are in the so-called group of "strong adjustors"7. This means that the governments should have a very "ambitious" agenda, or have to significantly shrink the primary deficit in order to ensure fiscal sustainability. Expectedly, the most indebted countries are amongst the ones where the strongest downward adjustment is envisaged, such as Slovenia, Croatia, Serbia and Albania. However, even if they pursue their consolidation plans, some of them will still have vulnerable position as the debt level will be higher then what the Maastricht criteria prescribes (60% of GDP) - chart 13 lower right and left quadrant. Further fiscal consolidation against the background of still "anemic" economic activity and rising interest rates may be very challenging. 7  Authors’ definition, presented on chart 13. Chart 13: Size of fiscal adjustment -2021-2015*  Debt change and distance from the Maastricht Criteria 60% of GDP** -40  Cumulative change of primary deficit (in p.p.)