samchain/econo-pairs-v1 huggingface dataset:
The Albanian banking sector remains sound, despite the challenges posed by the pandemic. The immediate operational measures taken by banks, as well as the macro and micro prudential measures taken by the Bank of Albania, ensured not only a continuation of the operation of the critical functions of the banks, but also satisfactory financial intermediation despite the great shock suffered by the economy. Credit to economy is growing (it grew by 6.3% in the third quarter 2020), capital is adequate and the banks’ balance sheets remain healthy, signalling their ability to withstand first-round shocks. We are optimistic that the economic activity is expected to revitalize over the next two years. However, the economic outlook for the future is accompanied by a high level of uncertainty and downside risks. In the short term, the risks are mostly related to 1/3  BIS central bankers' speeches  the uncertainty of the pandemic itself, its severity, duration, and potential return of restricting measures. In the long run, the risks relate to the long-term damage sustained by the productive capacities and domestic demand, as well as potential structural change sustained in the economy as a result of the altered behaviour of economic agents. We are sure that research based evidence, analysis and forecasts will provide accurate and timely information for policy orientation and coordination. Research in the area of monetary policy, financial stability and banking supervision has always dominated the topics of our workshop. This year COVID-19 has entered the agenda by brute force.

I am glad to see that almost all selected papers, including the ones by academia focus on the practical issues that are important for the policy formulation and decision making in the central bank. These works serve as the foundation for our understanding of economic and financial phenomena and the interaction of our monetary, macro and micro prudential policies with the economy. It is due to this understanding and knowledge that Bank of Albania crafts its policy response and chose its policy instruments to respond to significant negative shocks that have hit our economy. Recent data suggest that the pandemic has had severe impact on the Albanian economy, which experienced the strongest contraction of gross domestic product in the last two decades, at – 10.2% during the second quarter of 2020. Macro data on labour markets show that compared to the end of 2019, the Albanian economy lost about 50 thousand jobs, equal to an annual decline in employment of 3.6%. As a result of this the unemployment rate increased to 11.9%. Responding to such developments, inflation in the third quarter decreased to 1.4%, from 1.9% in the previous quarter. Despite these negative shocks, the measures taken by the Bank of Albania have provided the necessary monetary stimulus to support the normal functioning of the financial markets and to ensure the flow of credit in the economy. Interest rates for households and businesses are low and liquidity pressures are under control, while the exchange rate appears stable.
The volumes traded are small both in value and quantity, with agricultural products and consumer goods being the main traded goods. The traders’ mode of transport in conducting their business is on foot, using bicycles, taking a minibus or a taxi to and from the other side of the border. Ladies and Gentlemen, cross-border trade not only benefits traders’ lives through incomes but also strengthens local production, and fosters service provision. It also benefits the people involved in activities associated with trading. This entails that cross-border trade is a significant driver of employment and income generation for households that would otherwise have lived in poverty, especially in remote areas where employment is scarce. Furthermore, Ladies and Gentlemen, cross-border trade lowers import prices and widens the range of choice of goods available to consumers, as well as enables exporters to benefit from higher value-addition. Finally, cross border trade has a gender dimension with women being more actively involved. From the foregoing, Distinguished Ladies and Gentlemen, it is very clear that small-scale cross-border trade plays a very vital role in our economies, particularly in generating income, creating employment and alleviating poverty. However, Ladies and Gentlemen, the small-scale cross-border trade faces a lot of barriers and impediments, including lack of access to financial and payment services such as currency exchange and transmission facilities.

Caleb M Fundanga: Small-scale cross-border trade and payment services in southern Africa Official opening remarks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at a roundtable symposium on small-scale cross-border trade and payment services in southern Africa, Lusaka, 21 March 2011. *  *  *  Distinguished Invited Guests Let me begin by welcoming you to this Roundtable Symposium on Small-Scale CrossBorder Trade and Payment Services in Southern Africa. May I also warmly welcome our colleagues from neighbouring countries who have come to join us in this important event. It is my sincere hope that you shall enjoy your stay in Zambia and that you shall find this roundtable symposium fruitful. Distinguished Ladies and Gentlemen, cross-border trade plays an important role in supporting livelihoods, especially those of border communities, thereby buttressing prosperity in the region. Furthermore, by strengthening commercial ties, promoting cultural understanding, and deepening community relationships, cross-border trade helps to nurture harmonious relations amongst countries in the region. The unique feature of small-scale cross-border trade lies in geographical proximity which minimises transportation costs, thereby allowing traders to take advantage of differences in the supply, demand, and prices of various goods and services available on either side of the border. It is worth noting that most cross-border trade activities are not reported in foreign trade statistics. However, surveys conducted on the subject show that cross-border trade is carried out by individuals or small traders and their families.
Mervyn King: What fates impose - facing up to uncertainty Speech by Mr Mervyn King, Governor of the Bank of England, at the Eighth British Academy Annual Lecture 2004, London, 1 December 2004. The references can be found on the Bank of England’s website. I am indebted to David Aikman, Gertjan Vlieghe and Tony Yates who worked closely with me on the subject of this lecture over a long period. They should truly be regarded as co-authors. I am also very grateful to John Campbell, Gerd Gigerenzer, Robert May, Jim Poterba and many colleagues at the Bank for helpful comments and discussions. I would like to thank Tony Leandro (Actuarial Profession), the Met Office, Helen Bray and Adrian Gallup (both of the Government Actuary’s Department) for help in gathering and interpreting data used in this lecture. Kath Begley provided excellent research assistance. *  *  *  “What fates impose, that men must needs abide; It boots not to resist both wind and tide”. (William Shakespeare, Henry VI part 3, Act IV Scene 3)  1. Introduction  My subject tonight is risk: how we think about, how we talk about, and how we manage risk. So let me start by thanking all of you for coming and taking the risk of spending an hour with a central banker. Few writers have put central bankers in their place, but one of them was Nancy Mitford, whose centenary we celebrated last Sunday.

As in the case of foreign currency mortgage loans — and you remember how we had to deal with the crisis related to foreign currency mortgage lending — when people choose a product with a floating interest rate, especially where the initial interest rate is lower, they may be unable to comprehend that they are accepting serious interest rate risks associated with changes in market conditions and rate increases. In this regard, it would be better to prevent a situation we had to address in foreign currency mortgage lending. This also requires regulation, in our opinion. Currently, we are closely studying the international experience in floating interest rates regulation. These practices are quite diverse and comprise both prohibitions and certain limits on a floating range. We also need to introduce such regulation into our laws. Summing up this part of my statement, I would like to stress that we can certainly see no good in establishing new restrictions again and again. Actually, this is not our policy to continuously introduce new restrictions. However, we may not follow Wild West rules, given the maturity level of our financial market. We will need such direct restrictions on an ongoing basis until the banking sector implements efficient self-regulation. The worst thing is that we have to constantly play cat and mouse with you. Banks are inventing a new ‘relatively legal’ scheme — we are liquidating it. This is inevitably increasing the number of disappointed clients.
Moreover, they are characterized by low administrative and marketing costs, low employees’ salaries, easiness of procedures within their structure, high effective communications and quick access to information required for work, and the use of non-sophisticated production and operation means. They are also able to adapt to changes, especially in keeping up with consumers’ desires and preferences or change in the structure of labor force or policies of production, marketing and finance, enabling them to overcome economic changes and cycles. SMEs are also characterized by the freedom to enter and exit the market, thanks to their fixed and total assets and liabilities. Finally, they are flexible in geographic spread. Regardless of these advantages, growth and development of SME sector faces a number of challenges that might be greatly similar, not only at the level of a single country, but at the global one as well. The most important of these challenges are the high cost of capital due to high interest rates compared to large enterprises, difficulties in obtaining adequate finance due to lack of guarantees and their modest credit record, inability to compete and influence market forces and utilize economies of scale, inability of applying and facilitating government procedures to expand their activities, humble financial expenditure on development research, non-separation between ownership and management (80 percent of SMEs are run by their owners).

In this context, the parallel commitments of the major political parties to the continued provision of free health services for all and to prudent fiscal policies are not easy to reconcile. Much the same can be said of higher education, which is characterized by a student subsidy system that is probably unique. The University of Malta and MCAST have together been allocated Lm15.5 million for 2007, compared with no less than Lm8 million budgeted for students’ maintenance grants. Funds that would permit these institutions to offer better quality programmes, and in the process hopefully raise the number of science and technology graduates from its current inadequate level, are instead paid to students regardless of their financial means. Changes needed in the pattern of resource allocation This generous approach to the management of public finances has meant that recurrent revenue, although higher year after year, has often not been able to keep up with recurrent expenditure. For example, in 2005 expenditure amounted to 41% of GDP, roughly matching revenue at 42%. As a  1  A recent paper on public sector efficiency in the new EU Member States gives Malta a relatively high score in terms of public sector performance that measures outcomes. However, when performance is related to the inputs used to gauge the efficiency of the State, Malta ranks 21st in a pool of 24 countries including all 10 new Member States, Greece, Portugal, Ireland and a number of emerging market economies.
7  https://www.oecd.org/g20/summits/pittsburgh/G20-Pittsburgh-Leaders-Declaration.pdf 7  All speeches are available online at www.bankofengland.co.uk/news/speeches  7  The aim of the reforms was to ensure that derivatives trades were prudently, transparently and efficiently collateralised.8 The reforms also aimed to ensure that collateral could adjust as smoothly and predictably as possible if asset prices changed sharply in times of stress. Clearing through central counterparties provided a degree of mutualisation of counterparty credit risk. It also provided greater efficiency through the ability of central counterparties to ‘net off’ opposing flows of margin payments to market participants, reducing the gross liquidity flows around the system that would result from a network of bilateral trades. Derivatives markets went into the COVID crisis with much greater underlying collateral in the system to protect against counterparty credit failure - with at least $ in additional collateral against OTC derivative exposures.9  As financial market asset prices adjusted very sharply in March, margin call, the increasing collateral required to protect against counterparty credit failure, went up sharply also.10 These margin calls were met in the UK and there were no defaults. With one or two small exceptions, the same picture was true internationally. It is clear however that the need to post additional margin generated sharp liquidity pressure on those on the ‘wrong’ side of derivatives exposures, adding to demand for liquidity in the system. There are two types of margin. CCPs collect variation margin (usually in cash) as a core part of reducing participants’ counter party credit risk as prices move.

Ida Wolden Bache: The conduct of monetary policy Introductory statement by Ms Ida Wolden Bache, Governor of Norges Bank (Central Bank of Norway), at the hearing of the Standing Committee on Finance and Economic Affairs of the Storting (Norwegian parliament) in connection with the Storting's deliberations on the Financial Market Report, 9 May 2023. ***  Accompanying charts of the speech Thank you for this opportunity to report on the conduct of monetary policy. When I was here in April last year, Norges Bank had started a gradual normalisation of the policy rate following the coronavirus pandemic. Chart 1: In March 2022, a gradual rise in the policy rate was envisaged The Norwegian economy had recovered after the sharp downturn during the pandemic. High energy prices and a sharp rise in international goods prices had driven up consumer price inflation to a level markedly above the inflation target. Economic activity was strong, and job vacancies were high. Norges Bank expected rising wage growth and higher imported goods inflation to push up inflation through the year, and overall price inflation was projected to be 3.4 percent in 2022. The policy rate was projected to rise towards 2 percent over spring 2023. Chart 2: The policy rate has been raised more than projected a year ago These forecasts were less than accurate. The policy rate has been raised faster and more than projected in March 2022.
The development of High Frequency Trading for instance – whose economic utility is by the way also questionable – could hamper the resilience of financial markets in times of stress. New services such as smart contracts embedded on a blockchain could create new shock transmission mechanisms or result in new forms of interconnectedness or pro-cyclicality that could be the sources of financial instability. Third, it could threaten market integration, especially in Europe after a decade of tremendous efforts to foster harmonization between financial markets. Such efforts are evidenced in the securities markets area, by the recent launch of the Target2 Securities platform in 2015, in the payments area, by the completion in 2016 of the second round of the SEPA project which now allows for fully harmonized credit transfers and direct debits denominated in euros, throughout the European Union. By contrast, the current profusion of new technologies, standards and protocols that are not fully interoperable, at least at this stage, constitutes a potential risk of market fragmentation. Additionally, they could lead to some kind of social fragmentation, if the new payment means are less accessible to the less welloff. 3. Against this background, public authorities play a key role in helping to reap the full benefits of innovation while preventing the threats it brings This implies first rethinking the regulation so as to strike the right balance between innovation and security.

It also prompts incumbents to adapt, pushing them to develop new business models and new activities that ultimately benefit the customers. In this regard, let me highlight the initiatives to develop instant payments in the SEPA area, to facilitate market-based funding and equity financing in the European Union. I would like also to mention that the Banque de France is conducting its own experiments, with the recent creation of a Lab and the appointment a Chief Digital Officer, Thierry Bedoin, who will moderate the first panel of this afternoon’s session. 2. Technological innovation is to be welcomed but the risks should not be underestimated Innovation brings new threats for the financial system that have to be carefully dealt with: First, it raises challenges in terms of fraud and security, given the multiplication of actors involved in payment and financial processes, the higher circulation of personal data as well as the multiplication of potential “points of failure”. These new “cyber” risks are an acute concern for the whole industry, including for a mature technology such as internet card payments which accounts for more than two thirds of all fraud losses on card payments in France. Thus “younger” technologies that may not have been tested yet, such as the blockchain, and might generate new security risks, deserve early and extended scrutiny. Second, it could endanger financial stability over the longer term, as a result of the process of increased automation that we have seen during the last few years.
The challenges of managing liquidity in Islamic finance banks As well as supporting the safe development of new types of Islamic finance, we also recognise some of the challenges facing more established parts of the sector. Islamic banks, for instance, have long faced profound challenges in efficiently managing their liquidity, and it’s here that the Bank of England’s new non-interest based central bank deposit facility is designed to help level the playing field. All banks need to manage expected and unexpected outflows, eg as depositors make payments and withdrawals. Conventional banks hold a range of high-quality liquid assets to meet those obligations, including cash and central bank reserves; government and corporate debt; and asset backed securities and commercial paper. They can also borrow in secured and unsecured money markets and, as a backstop, from central banks. 17  http://documents1.worldbank.org/mwg-internal/de5fs23hu73ds/progress?id=wYC7RO1Zn_OMlVWKvBTqqxD6WoVnUClPU3g5WCRi6Y,&dl. 7  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  7  But Islamic banks’ prohibition on the payment or receipt of interest means they can’t access many of these tools. To avoid being caught short, they have historically had to structure their business in inherently narrow or inefficient ways, for example by holding large stocks of non-interest bearing cash, or limiting their offerings of short-term deposits. Ironically this left them relatively well placed to weather the Global Financial Crisis of 2008-09: in aggregate UK Islamic banks remained liquid, in a market where liquidity was otherwise very scarce.

9  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  9  Chart 4 How the ALF will work19  We’ve come a long way since Eddie George’s speech almost 20 years ago. But one thing that remains more important to us than ever is working with you. The liquidity facility I’ve described here today is in no small part a product of close and committed co-operation between the Bank, industry bodies and the private sector. It’s a real step forward, but it’s only one step. Through continued engagement and focused effort, together we can build a more innovative, diverse and inclusive marketplace: one which really can meet the needs of every part of our society. Thank you  19  In the first instance, (1) the Bank prefunds the ALF with an interest-free loan, which is used (2) to purchase eligible sukuk and (3) any hedges required to insulate the fund from FX risk. Islamic banks then (4) place deposits in the ALF, the principal value of which is (5) guaranteed by the Bank to ensure the facility is HQLA-compliant. In the event the aggregate value of participating bank deposits do not reach the aggregate value of the fund, the Bank will step in as co-depositor for the residual amount.
Over time, this has become a reality almost everywhere. In Europe, countries and their inhabitants have converged on one currency – with the euro area as a special case, of course. In the United States, developments have been similar. The ‘free banking era’ showcased the impossibility of keeping track of the values of notes by different issuers. In the end, they were replaced by Federal Reserve banknotes, and a common currency was established. During our lifetime and in our part of the world, it has been like that – one country, one monetary unit. However, a few years ago, technology started to challenge this, at least conceptually. We are now seeing the emergence of cryptoassets in various forms, without a public issuer, claiming to be money. Yet, most of them vary significantly in value, which means that their purchasing power also fluctuate. Consequently, cryptoassets mainly function as investment assets and not as a means of payment in the way we use, for example, kronor, euros and dollars. One innovation in the crypto world is so-called stablecoins, which are cryptocurrencies where the issuer promises that the value follows the value of another asset, such as dollars. In this way, the stablecoin issuer uses the trust in already established currencies. So far, stablecoins have mainly been used by those active in the cryptoasset market, but there is the ambition to broaden their acceptance as a means of payment.

The public bank was tasked with estimating the value of the 500 or so different coins that were around and exchanging them with its own currency, the rijksdaalder. By having a single currency, the highly chaotic system was improved, and the bank quickly became a hub for settling international payments.2  The modern banknote In Sweden, problems with the coin system were of a different kind. At that time, Swedish coins were made of copper, not gold or silver. As a consequence, they had to be quite sizeable, as their value still depended on the metal used. Obviously, this made daily purchases a fairly heavy exercise. But again, great ideas seemed to come to our rescue when Latvian-born Dutchman Johan Palmstruch, with the blessing of Charles X Gustav, set up Stockholms Banco to issue the first ‘modern’ European banknotes. This was in 1661. However, Mr Palmstruch hadn’t thought it through properly. Or at least, he had underestimated the collateral needed to operate a business like that. When people started to queue up outside the bank to have their notes redeemed, he quickly ran out of metal. The bank was liquidated in 1667, and poor Mr Palmstruch was imprisoned, though reprieved from his initial death sentence. The year  2 See, for example, Gerarda Westerhuis , and Jan Luiten van Zanden, ‘’Four Hundred Years of Central Banking in  the Netherlands, 1609–2016’’, in Sveriges Riksbank and the History of Central Banking (2018): 242–264, for more about Amsterdamsche Wisselbank.