samchain/econo-pairs-v1 huggingface dataset:
Actually, I would like to point out that the Albanian banking system left the crisis in healthy condition and that it guarantees growing stability. Our banking system, during this period, has carried out a considerable amount of work, which has served to consolidate each bank’s position prior, during and after the crisis. Hence, the banks are now able to use again their full lending potential. For the truth’s sake, it must be underlined that the latest figures speak of growth in the order of 10 per cent in annual terms, a figure which should not go unnoticed or be considered as inadequate. I would suggest the same philosophy to the business community. For objective reasons, the concept of free money belongs to the past. By that I mean that a bank loan should be earned, which means unconditional and honest cooperation within the legal and regulatory framework approved by the country’s authorities. Of course, banks are established to lend money, but first and foremost we need to bear in mind that the public deposits’ stability is more important than an individual business loan or bank portfolio. Moreover, the business community needs to recalibrate its position in relation to recent developments both in the national and global economy context. It must aim a higher productivity, primarily through identifying comparative advantages in the framework of global changes. In that regard, it is necessary to adopt new business administration philosophies on capacity building and investment in human resources, governance, internal control, financial and legal expertise, and risk management.

The global financial crisis that erupted in late 2008 had its influence on our economy by stiffening this cooperation. On the one hand, the system found itself in a difficult liquidity situation, while on the other hand businesses found it difficult to access markets. With some additional subjective reasons, the outcome of this was a deterioration of the system’s loan portfolio and companies’ liquidating capacity. Consequently, 2009–2010 marked a slowdown of lending growth to the economy, reflecting the increased prudence, fully justified by the system, and  BIS central bankers’ speeches  1  business inability to earn a meritable new loan. The period coincided with a review of balances and portfolio restructuring, when possible with provisions, directly affecting the system’s financial performance. The Bank of Albania has played a major role as a guardian of the country’s macroeconomic and financial stability. Macroprudence has been the prevalent word in our communication with the market, authorities and the public. We have translated macroprudence as a need for more capital and liquidity, and increased banking system payment capacity. Consequently, the Albanian banking sector did not experience contracting. The Bank of Albania has provided and continues to provide the necessary liquidity to the banking system, to stimulate not only to the market but also to the entire economy. Prudent policies and timely legal regulations guaranteed effective banking supervision and enabled satisfactory businesses’ access to bank loans.
Let me comment on some of these four aspects and touch on how we intend to fulfil our mandate to support the ESRB. Conceptual issues of systemic risk Systemic risk analysis is nothing new to the central banking community, including the ECB. One reflection of this fact is the series of triennial central bank conferences held under the G10 Committee on the Global Financial System between the mid-1990s and early 2000s. Even the European Monetary Institute, which was the forerunner of the ECB, contributed to systemic risk work in this context, alongside the US Federal Reserve, the Bank of England, the Bank of Japan and many other central banks. 4 For instance, from the outset, the ECB drew up a research agenda on financial stability and systemic risk. 5 In addition, in 2004 we started to publish a Financial Stability Report (FSR) twice a year. The main objective of this Report is to help identify, at an early stage, potential vulnerabilities and to raise awareness among market participants with a view to promoting preventive and remedial policies. Each issue also contains several special features offering a wealth of further insight into financial stability and systemic risk. This background suggests that the ECB is a logical choice as a provider of analytical support to the ESRB, but it should not obscure two major challenges we are facing. First, the phenomenon of systemic risk is extraordinarily complex.

The experiences with the crisis and the decision to establish a macro-prudential stability function in Europe suggest that, even when building on existing structures, significant efforts are called for in order to extend and further improve models and tools. While it would be desirable for the risk assessment exercise to be increasingly quantitative, it should never become mechanistic or fully model-based. Expert judgement and qualitative assessments will always be crucial to understand the messages coming from various analytical tools, also taking into account overall intelligence efforts. Comprehensive information base Irrespective of their level of sophistication, models need to be fed with the appropriate data in order to produce results that, in addition to their analytical interest, can support policy messages. A comprehensive information base is also key in the risk surveillance phase that precedes the actual risk assessment. This is because the establishment of a wide radar screen supporting rigorous monitoring is only possible if the critical information is available. The current crisis has convincingly shown that a significant part of credit intermediation was channelled outside the banking sector and the regulated financial sector. The non-regulated or “shadow” banking system was almost totally off any surveillance radar screen. Not enough was known about special investment vehicles, conduits, securitisation markets and instruments, or about all the financial intermediation that takes place outside the traditional banking system. Moreover, little was known about the direct and indirect exposures between this shadow banking system and the regulated one, which turned out to be substantial.
Consideration is thus given to the sustained implications of monetary stability measures on the real economy. The law therefore requires the Bank to take a balanced view to avoid the adoption of rigid frameworks that may result in strong biases that would lead to a fundamental and sustained damage to the economy. This balance is also extended to the explicit role of the Bank in developing an inclusive financial system in its responsibility to develop a sound and progressive financial system. These considerations are particularly important for emerging market economies so as to ensure balanced economic progress and development. The new Central Bank of Malaysia Act 2009 also institutionalises the autonomy for the formulation of monetary policy, thus providing for the integrity and credibility of the decisions made. It also provides for greater flexibility in monetary policy implementation, allowing for a diversified range of instruments that can now be deployed for the implementation of monetary policy. As financial markets trend towards greater sophistication and demonstrate periods of extreme volatility, central banks must have commensurate capabilities to conduct monetary policy operations in order to maintain price stability. Equally important is the mandate to provide oversight over the money and foreign exchange market to ensure the orderly development and functioning of the markets. These necessary powers are however, combined with a system of checks and balances to enable the Bank to act decisively, but yet having in place safeguards so as to enhance transparency and accountability.

Zeti Akhtar Aziz: Current challenges confronting central banks Opening and keynote address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the SEACEN-BNM Banking and Financial Law School 2009 "Current Challenges in Central Banking – Legal Perspective", Lanai Kijang, 24 September 2009. *  *  *  It is my great pleasure to speak at the 5th Banking and Financial Law School 2009, jointly organized by the South East Asian Central Banks (SEACEN) Research and Training Centre, the Institute of Bankers Malaysia and Bank Negara Malaysia. The theme for this year's Banking and Financial Law School on "the legal perspective of the current challenges in Central Banking" has particular relevance in the present environment. Indeed, global attention is now focussed on an overhaul of the financial architecture in the efforts to address the fundamental weaknesses that have surfaced in this recent global financial crisis. The current policy debates cover a wide ranging set of issues that include far-reaching regulatory reforms to strengthen the foundations for financial stability, institutional arrangements to achieve more efficient functioning of financial markets, effective coordination of financial stability measures and greater clarity of central bank mandates in promoting monetary and financial stability. The theme of this conference also has special relevance to us at Bank Negara Malaysia, as our new Central Bank of Malaysia Act 2009 will come into force later this year.
Mr Lee comments on what Singapore and other Asian countries are doing in post-crisis Asia  Speech by Mr Lee Hsien Loong, Chairman of the Board of Directors of The Monetary Authority of Singapore and Deputy Prime Minister, at the Credit Suisse First Boston Investment seminar, held in Singapore on 26 October 1999. *  *  *  Pre-crisis Asia: a mirage? The Asian crisis swept through the regional economies like a huge tidal wave. The euphoria from more than a decade of boom in East Asian economies was abruptly punctured. Overnight, headlines switched from the “Asian century” to the “Asian disease”. Some analysts questioned if the earlier prosperity had been real, or just a bubble. Others attributed the crisis to fatal flaws in the Asian model, which was masked by a classic asset bubble. Asia would not recover, and investors would not return, until these deep flaws were corrected. This pessimism was exaggerated. The transformation of Asia in the last few decades was no mirage. It had sound fundamental underpinnings. Countries maintained high savings and investment rates. Education levels were rising. Economic policies generally became more liberal, outward oriented, and welcoming to foreign investments. Asia had all the ingredients for the takeoff that we witnessed. True, the crisis was a major setback but, compared to a decade ago, the regional economies are still way ahead in terms of development and already, most of them are beginning to bounce back. Undoubtedly, the economies did have serious problems that contributed to the crisis.

It would not opt out of the region. Other investors may not have such a long history in Asia, but for you too, taking a long and informed view will be worth your while. 5  BIS Review 117/1999
We run the risk of ending up with international banking groups in which the advanced approaches tend to be used almost exclusively by the parent company. I think that this outcome is neither optimal nor desirable, and falls short of the goals of improving the stability and efficiency of the international financial system, to which Basel II can make a much more effective contribution if it is applied appropriately. Problems also arise over how to consolidate the capital of these subsidiaries. Take, for example, a bank applying an advanced approach at group level with subsidiaries outside the home country that use a standard approach. This bank will have to perform a double calculation: first, using the method applicable under the approaches adopted by its subsidiaries; then, it must recalculate those same subsidiaries’ requirements using the approach for the group as a whole, ie that of the parent company in the home country, for consolidation purposes in order to calculate the overall capital requirement. This double calculation can impose a heavy burden - although a necessary one in some instances and will in any case require close collaboration between home and host supervisors to ensure that the entity’s overall system adequately takes account of the characteristics and sensitivity of the local market. The AIG is attempting to pinpoint which criteria would be acceptable at the consolidated level, assuming the - fairly frequent - scenario of a bank with subsidiaries governed by local requirements that differ from those of Basel II.

Neither is there an urgent need to update the assessments; in this respect, one should stress the validity of the self-assessments carried out by the countries themselves, as a complement to the assessments performed by the Fund and the World Bank during their FSAP missions. The second general direction followed by the Core Principles revision was to keep their character of a single universal standard for assessing the quality of banking supervision, independently of the complexity of each country’s financial system. To maintain this universality, on the one hand, it was decided to place greater emphasis, throughout the text, on the idea that the Principles should be applied proportionally, always taking into account the material impact of the risks or the complexity of activities, which allowed application to be adapted to less sophisticated financial systems. On the other hand, the new Principles, by taking into account the most advanced practices, have gained in validity as regards the assessment of complex financial systems which were previously outside the scope of many of the established criteria. I would like to express my view that this universal character is one of the most positive aspects of the Principles. To achieve this, the Committee worked closely with a very large number of supervisors. Thus the initial drafts were prepared using groups made up of equal numbers of representatives from Committee members and non-members, involving both the IMF and the World Bank as interested parties.
4  BIS Review 29/2009  balance between stabilising inflation and stabilising the real economy. An ex ante evaluation should then aim to assess whether the central bank has succeeded in doing this. Before making such an assessment of the central bank's forecasts it is natural to first examine the general quality of the forecasts. Any assessment of the quality of the forecasts obviously entails an ex post analysis with the help of historical forecast errors. If the assessment is that the forecasts are of a reasonable quality it then becomes a question of assessing the monetary policy deliberations held on the basis of the forecasts the central bank makes. This primarily entails an ex ante analysis. Were the forecasts good enough? The first question we should ask is thus whether the central bank's forecasts are normally good enough. It would of course be going too far to demand that the central bank's forecasts should be perfect. As I have said, the economy is constantly subject to unexpected shocks, which means that the forecasts are always likely to be incorrect to some extent. Analysing the accuracy of a forecast in an individual year thus provides limited information. A significant forecasting error may indicate that the forecast was poor, but it may also be due to the fact that a shock occurred that could not have been predicted. 3 Do the forecasts systematically over- or underestimate the actual outcomes?

This means that it is not quite as easy to determine the position of the modified Taylor curve. It is still possible, however, to enter the position of various forecast alternatives on the graph and at least assess whether the forecast is extreme in any respect with regard to the deviation of inflation from the target and the deviation of resource utilisation from the normal level. As yet, it is in practice mainly a question of whether the choice of interest rate path was extreme in either direction in the sense that the central bank gave considerable or very little relative weight to the stability of the real economy. Another interesting aspect to investigate is whether the weight attached to the stability of the real economy actually has been constant over time. If it has not been constant then the central bank's loss function has not been consistent over time, or it is more complicated than the quadratic loss function that I have discussed here and that is regarded as normal and reasonable in the literature on monetary policy. Figures 4 and 6 can be studied more closely in the light of this discussion. In Figure 4 we can see that the main scenario for February 2008 leads to resource utilisation being stabilised rather well, but that the CPI forecast is a little high in relation to the target of 2 per cent.
Second, periods of higher productivity growth may lay the basis for high corporate earnings, heightened optimism and reduced risk awareness. At the same time, with strong productivity growth, inflation remains low. Banks that record low losses and solid results can increase lending without eroding their capital. Debt-financed investments may then lead to a faster rise in property prices. Third, strong international competition may contribute to curbing inflation during a period of strong economic expansion. Given that a conflict between the two goals may arise; how are financial stability considerations incorporated into monetary policy decisions? There seems to be widespread agreement among central banks, that extreme events which could threaten financial stability should be met by resolute use of monetary policy. For example, leading central banks made an effort to ensure continued liquidity in the markets in the aftermath of the terrorist attack on the World Trade Centre on September 11, 2001. As a consequence, the risks confronting the financial system were limited. However, risks to financial stability due to evolving financial imbalances are likely to develop over a long period of time. From this perspective, the question of whether financial stability considerations should be explicitly included in monetary policy is heavily debated, both in academia and within central banks. The answers diverge and international consensus has not yet been reached. One view is that an explicit and proactive monetary policy response to financial imbalances is neither desirable nor feasible. A number of concerns have been raised to explain this view.

In addition, French national regulators are recognised for their credible action, and for being at the cutting edge of technological developments, as Geoffroy Goffinet from the ACPR will develop in more detail. Let me just briefly highlight one last course of action at the Banque de France. We have been a pioneer in central bank digital currency (CBDC): in addition to taking an active part in the work on a potential euro retail CBDC, as early as 2020 we launched a series of twelve experiments on a wholesale CBDC, both for payments and securities settlement. The first nine experiments have been very valuable, and the three experiments underway focus on cross-border payments and tokenised asset settlement. 4 We are keen to pursue our long-standing partnership with commercial banks, to reconcile innovation and security. To conclude, this stay in New York is also the opportunity for me to point out that the Statue of Liberty, which so forcefully embodies our common values, is the fruit of a tight cooperation between France and America. Let this fruitful cooperation carry on throughout the 21st century; we will be happy to welcome you in Paris. I thank you for your attention, and will now leave the floor to Olivier Vigna, deputy CEO of Paris Europlace. 1 ECB, Macroeconomic Projections, 16 March 2023 2 Eurostat flash estimate, 31 March 2023 3 Bloomberg, 22 March 2023 4 An updated report will be published by the Banque de France within next months.
In business abroad, ordinary earnings improved notably, driven by the strength of business in Latin America. Thus, the Spanish banks with the most international activity obtained ordinary profit in excess of pre-pandemic levels. 10  Between December 2021 and April 2023, the pass-through was 42% in the case of lending for house purchase and to NFCs, and 27% in other lending to households. 11 The year-on-year improvement in this ratio was driven by loans to firms (-1.8 pp, to 9.7%), while the ratio increased in loans to households (by 0.9 pp, to 5.7%). 12  The cumulative decline from the December 2012 peak is 79.6%. 13  ROA excluding the windfall tax on banking sector profits and other extraordinaries rose to 0.83% in Q1. 14  By comparison, net interest income rose by 17.2% between March 2014 and March 2019 and fell by 1.8% between March 2019 and March 2022. 5  Dividend payments amounted to more than € billion in 2022, with a payout ratio of 40%, similar to the pre-pandemic level. Also noteworthy were the rise in earnings per share and the sharp increase in share buy-backs made by some banks, the aim being to subsequently cancel the repurchased shares and reduce share capital, thus providing additional remuneration for shareholders. Solvency After falling by 25 bp in 2022, in 2023 Q1 the CET1 ratio was virtually unchanged on the same period of 2022.

Agreements signed in 2023 – affecting around 1.5 million workers – provide for an average wage rise of 4.3%. 2  See the results of the Banco de España Business Activity Survey. 3  Indeed, while Eurosystem financing amounted to 10% of Spanish banks’ consolidated liabilities in 2020-2021 (3% in 2007), that figure fell by nearly 5 pp in 2022. 3  an increase in deposits.4 However, these fell in 2023 Q1 by nearly 2.5%, especially among firms.5 In 2022, the average interest expense on bank liabilities increased by nearly 60 bp compared with the 2020-2021 average, to stand at 1.1%, still slightly below pre-pandemic levels. This change highlights the fact that the rise in the 12-month EURIBOR has only partially passed through to deposit costs, far less than in previous monetary tightening cycles.6 Banks’ comfortable liquidity position helps to explain this. Similarly, the fall in the cost of equity – by 2 pp between December 2021 and May 2023, when it reached 6.6% – has cushioned the rise in the cost of borrowing from banks.7 The cost of equity rose during February and March 2023, mainly owing to the higher equity market risk premium, although the increases have been moderate. The liquidity coverage ratio stood at 173% at March 2023, much higher than the required minimum threshold and likewise above pre-pandemic levels8. Meanwhile, the net stable funding ratio stood at 130% at December 2022, again above the minimum requirement of 100%.