samchain/econo-pairs-v1 huggingface dataset:
However, this is for obvious reasons no simple task and there are no good examples of this from other central banks. Last spring, the Riksbank began work aimed at achieving this objective. One potential result of this work could be a development of the clarification from 1999. A clearer picture of which deviations are allowed would also make it easier to communicate our policy and to assess it in a purposeful manner. At present, policy is often assessed solely on the basis of historical averages for inflation. While this can act as a natural starting point, the discussion should be taken further and include how the outcome of the policy relates to the considerations taken to various  4/7  more transient price fluctuations. Real and financial developments should also be taken into account in contexts where they have affected the policy. I imagine that these are questions to which the Committee will wish to return in future, both as a result of the work conducted within the Riksbank and perhaps also as a result of the external assessment of monetary policy the Committee intends to make. The Riksbank is also holding discussions with external parties on a regular assessment, where a preliminary starting point would be comparisons between the assessments made by the Riksbank and other forecasters in order to provide a better basis for a correct discussion. The economic situation Let me now comment on our current assessment of inflation prospects and our interest rate decision yesterday.

Indirect data suggest that aggregate demand has carried forward positive growth rates, but growth remains significantly below the potential of the Albanian economy. Macroeconomic factors determining private consumption and investments, and a prudent fiscal policy sustain the assessment for contained growth of the domestic demand in the first quarter of the year. Moreover, in the absence of complete data and in real terms on developments in the external sector of the economy, assessments suggest that the contribution of foreign demand to economic growth will be lower than in the past year. Fiscal policy was subject to a consolidation nature over the first quarter of 2012, in line with its objectives to keep budget deficit and public debt in check. The contained fiscal approach has been reflected in minimum public expenditure in the first quarter of the year, with an annualised rate of 0.7%. Furthermore, low growth rates of fiscal revenues continued their trend, settling at 1.2% in this quarter. The budget deficit was ALL 11.5 billion, or about 2.5% down compared with the first quarter of a year earlier. Developments in foreign trade over the first two-month period of the year point to contracted trade exchange in annual terms. Value of exports in these two months dipped by 20.5% against the corresponding period of a year earlier, reflecting the moderation of foreign demand and price developments in global markets. On the imports side, their growth rates were significantly decelerated, reaching a nominal annual growth of 1.8% during this period.
Digitalisation in banks could be the solution to a number of issues, such as containment of costs and also keeping up with the new profile of consumers which are more technology-savvy and have less time to spend for making bank visits. Widely available digital innovations such as e-IDs, e-signatures and digital on-boarding solutions are available to facilitate the digitalisation of banks. To this I would like to note an initiative I undertook at the CBC to create a digital customer onboarding platform for banks in Cyprus. After a number of bilateral meetings with banks, a large number of them have confirmed they will join lt. The technology we will use will be scalable. The Central Bank of Cyprus is aiming to publish the tender for the technology provision in the very near future. EU-based banks should optimise their customer experience altogether, bearing in mind that the Single Market is borderless especially when it comes to digital services. For digitalisation to really deliver on efficiency, the digital strategy needs to be part of a wider reshaping of the business model and a streamlining of internal organisation. There aren't many examples of banks which have taken sufficient advantage of the Single Market opportunity, but, on the contrary, quite a few EMI's have done so and have acquired an important market share outside their home member-state, with the Cypriot market not being an exception.

Discussion questions were geared toward concerns about the feasibility of these new policies and regulations, and the need for global coordination and cooperation. In recent years, as you know, the global regulatory community has made significant progress on finalizing the post-crisis reforms and the conversation has naturally shifted to the impact of these regulatory reforms; for example, a desire for consistency across firms, business models and jurisdictions and an assessment of factors driving changes in market liquidity. In raising these three frequently discussed topics – systemic risk, governance, and regulatory reform—I also wonder what topics have emerged that we are not discussing, but perhaps should be. Since the financial crisis, I think we are all more aware of the importance of actively looking for our blind spots. Gillian Tett, writer for the Financial Times and author of The Silo Effect recently visited the NY Fed, and reminded us to look broadly. In her case, when trying to understand social dynamics, it is important to look not just in the middle of the dance floor, but also at the “non-dancers” outside of the spotlight. In our case, it is what other factors might create either idiosyncratic or systemic distress. So, with that perspective in mind, I noticed two surprising omissions from prior Global Risk Forum agendas. The first is cybersecurity. Over this time period, there has been an increasing awareness among risk professionals about the constant and present danger that cyber-threats pose to the financial sector.
The chart shows a subset of a larger model, which also includes equity volatility, house prices, bank capital and macroeconomic control variables. The second standout from the chart is that developments in debt prior to the 2008 financial crisis would have been sufficient to make an economic earthquake 2% more damaging. As it was, almost 4% of output was lost in the three years between 2008 and 2010. Why did output fall so much more than might have been expected? Was it bad luck? Was the economic earthquake off the Richter scale? Our research concludes that the 2008 recession was not the result of an unusually severe earthquake. The UK’s current account deficit and debt run-up prior to the crisis meant we were closer to the fault line. As important was the fact that the banking system did not have the strength to reflect that. As a result, it collapsed, tightening financial conditions for the economy and adding to the damage. Once we account for these factors, the depth of the 2008 recession is consistent with a 1-in-20 economic earthquake (Charts 14 and 15). It wasn’t that we were hit by a seismic event of unprecedented scale. The scale of the economic damage was avoidable.

Radical action was necessary to ensure the survival of the banking system. And on the morning of 8 October that action was taken when the Prime Minister and Chancellor unveiled a UK plan for recapitalising the banking system on which the Bank, FSA and Treasury had been working for a while. Why was radical action necessary? When the financial turmoil began in August 2007, markets for a number of financial instruments, including mortgage-backed securities, dried up. Most observers expected this closure to be short-lived, and the predominant view was that the crisis was one of (a lack of) liquidity. But, as time passed and markets did not reopen, it became clear that the problem was deeper seated, and concerned the solvency of the banking system and the sustainability of its funding model. Attempts to deal with the problem by injections of liquidity from central banks led to temporary alleviations of the symptoms, but, after an initial improvement, conditions would deteriorate again. The scale of central bank liquidity support during the crisis has been unprecedented, and all central banks have increased the scale of their lending in broadly similar ways. The UK taxpayer now has a larger claim on the assets of banks (in the form of collateral held by the Bank of England) than the total equity value of UK banks. Massive injections of central bank  BIS Review 128/2008  1  liquidity have played a vital role in staving off an imminent collapse of the banking system.
During this period we were steadily reabsorbing the spare capacity created by the recession, and this was reflected in a gradual improvement in the labour market - in a net increase in employment of 1.7 mn people since the end of 1992, and in a persistent fall in unemployment to - as I say - the lowest rate for nearly 20 years. Meanwhile, underlying consumer price inflation has averaged 2.7% over the past 5 years, the lowest rate since the early 1960s - and it has been exactly on target - at 2½% - in each of the past 3 months. About 2 years ago it began to become evident that demand and output growth, in the economy as a whole, was picking up speed. And as we moved into and through 1997, it became increasingly obvious that unless we acted to tighten monetary policy, in order to moderate the rate of growth, we risked overheating, particularly in the labour market, where reports of shortages not just of skilled but even of unskilled workers, were becoming widespread. The situation was seriously complicated by an increasing imbalance between the domestic and the internationally exposed sectors of the economy. Domestic demand for goods, and particularly for services, was unsustainably strong, and large parts of the economy were doing very well on the back of that - though they didn’t make too much of a song and dance about it.

This standard describes advanced methods of evaluating interest rate risk in banking books in detail, such as sensitivity testing of the net present value (NPV) and of the economic value of equity (EVE) in terms of interest rate risk. Moreover, the BCBS standard devotes special attention to the assessment of non-standard instruments vulnerable to interest rate risk, that is, instruments without a defined maturity date (in particular, demand deposits), and instruments with built-in optionality (in particular, loans with an early repayment option). In order to evaluate to what extent the methods of interest rate risk assessment and management used in Russian banks are consistent with international best practice, the Bank of Russia conducted a survey of 27 of the largest banks about how their systems of interest rate risk management and assessment are currently organised. In general, there is pronounced variation in the methods used by surveyed banks to assess interest rate risk. Among the respondents we can find both banks applying advanced methods close to BCBS standards, as well as banks using the Bank of Russia’s regulatory methodology. This is a natural consequence of the differences in banks’ sizes, their business models and the structure of their assets and liabilities, and does not represent a disadvantage. At the same time, it can be expected that the BCBS standards of interest rate risk assessment will be reflected in Russian banks’ regulation practice in the near future.
That is the price society pays for maturity transformation and the other services provided by the financial sector – services that produce large public benefits. But I doubt that this should be the end of the story – we also have some control over the amplitude of booms and the severity of the busts. Although it is impossible to attribute the instability of financial markets to any one single driving force, recent experience suggests that in many cases innovation plays an important role. I explore this point further in the printed version of my remarks – but for the purposes of our discussion today let me summarize it by saying that innovations that initially create real value generate feedback mechanisms that often fuel the development of excessive expectations – a boom that eventually reverses when the basic belief system that sustained it is contradicted by events. Such innovations can occur in the real economy – consider the Internet – or in the financial sector – think of subprime lending and structured finance products. Although the role of innovation has differed across various booms and busts, some important common elements are evident in many of these episodes. Early on in the cycle, an innovation can lead to changes in fundamental valuations or the creation of new markets and financial products. Examples of this might include the technology boom that followed the creation of the Internet or the subprime lending and the associated structured finance innovations that supported the housing boom.

•  Principle 2: The board of directors should approve and oversee the bank’s strategic objectives and corporate values that are communicated throughout the banking organization. •  Principle 3: The board of directors should set and enforce clear lines of responsibility and accountability through the organization. •  Principle 4: The board should ensure that there is appropriate oversight by senior management consistent with board policy. •  Principle 5: The board and senior management should effectively utilize the work conducted by the internal audit function, external auditors, and internal control functions. •  Principle 6: The board should ensure that compensation policies and practices are consistent with the bank’s corporate culture, long-term objectives and strategy, and control environment. •  Principle 7: The bank should be governed in a transparent manner. 4  BIS Review 24/2007  •  Principle 8: The board and senior management should understand the bank’s operational structure, including where the bank operates in jurisdictions, those that may impede transparency (i.e. “know-your-structure”). It is very clear today, more than ever, that Regulators also have a key role to play in achieving good Corporate Governance. In general, all regulations, in the Banking System, are intended in one way or another, to enforce prudential requirements on key areas of affairs of institutions to mitigate identified risks. Regulations on ownership, related party transactions, fitness and propriety tests for directors are directly based on modern Corporate Governance principles.
For friendly societies seeking to merge their businesses, the PRA has sought to achieve proportionate outcomes within the parameters of the legislation. This has included waiving the requirement for an independent actuarial report where possible, in order to reduce the impact of the costs of transfer on member value. Conclusion The number of challenges we – and society – face present a full agenda for the Boards of mutuals and as they consider their long-term strategies. In order to continue to serve the wider economy effectively change is needed and as such, firms should be open to adapting their business models to ensure they remain sustainable, whether that be through upgrades in technology or – with due prudence – evolving their products. For some mutual business models, by design targeted at particular types of individuals, businesses or risks, the positives of specialisation can turn into negative concentrations of exposure, for example in Child Trust Fund business; applying sensitivity analysis and reverse stress testing to the business plan can help Boards assess, manage or at least mitigate those risks. We expect businesses with specialist offerings to be alert to concentration risk and, wherever possible, to develop mitigations that will enable those businesses to serve future generations as effectively they do their current members. I began these remarks noting the value of mutuals within the insurance sector and the adaptability that has been shown through the COVID 19 pandemic.

Specifically, industries manufacturing and selling consumer and investment goods have increased their financial flows above pre-pandemic levels. In contrast, sectors producing intermediate goods (that is, intended for further processing) and many consumer service industries are still to restore their financial flows and business activity. If we estimate the year 2020 in general, GDP will decline by about 4% owing to high performance in Q3. The economy bounced back significantly in response to the easing of restrictions and support measures. It is also worth noting that, amid limited opportunities to travel abroad this year, households kept over 1.5 trillion rubles earlier spent for outbound tourism. In 2020, these funds could partially be saved, but a portion of this amount was spent in Russia, propping up domestic demand. Fiscal measures provide significant support to the economy. This year, budget spending increased by over 14% against 2019. 2/4  BIS central bankers' speeches  Recovery growth is expected to resume steadily in spring 2021. Given the economic situation and price movements, the ratio of proinflationary and disinflationary factors and risks has altered considerably. Indeed, demand trends, especially amid the drastic aggravation of the epidemiological situation, continue to contain price growth. However, this impact is currently offset by the above-mentioned proinflationary factors. As I have already said, we will assess whether these factors become steady against the backdrop of increased inflation expectations.
6 However, the expansion in exports in China has been made possible by the fact that production per worker has increased, rather than by a dramatic increase in the amount of labour. 7 The "supply shock” is the result of modernisation and industrialisation, i.e. that workers who are not very productive move from an old-fashioned structure of collective agriculture and state-owned companies to modern companies that produce goods for export. The effects of this development on the labour market and on real wages in the west will depend on how the exchange of various types of traded goods develops and how this in turn affects relative prices. Globalisation could certainly entail downward pressure on Swedish real wages, but both data and historical experiences so far indicate that this is not the case. At least, there is nothing in the statistics to indicate that there has been any deterioration in industrial nations’ trade conditions towards either China or other Asian countries. In the long term, Swedish and Chinese wages will probably converge, but this does not necessarily mean falling real wages in Sweden. It is particularly those with no higher education who risk experiencing pressure from the new industrial nations, but a general reduction in real wages does not appear very likely. Sweden has been exposed to international competition for a long time without suffering any deterioration in our welfare, and over the past 10 years we have had rising real wages, despite the expansion in China.

The high level of investment has been almost entirely financed through domestic savings. The saving ratio in China amounts to around 45 per cent of GDP, which is a much higher level than in most other countries. According to estimates, Chinese households save one third of their incomes. One reason for the high level of saving is the lack of a social safety net and a general pension system. As a consequence of the high level of saving, private consumption is relatively low. China has had relatively strong growth in exports; in the past five years alone exports have trebled. 4 The country is currently a nation as open as, for instance, France and Italy, measured in the percentage of foreign trade in GDP and considerably more "open" than the United States. China has come to be called “the factory of the world” as an increasing number of foreign companies have chosen to purchase goods and locate parts of their production there. For instance, China manufactures more than two thirds of all photocopiers, microwave ovens and DVD players, and 40 per cent of all of the world’s computers. 5 However, a large part of the input goods for these products are imported from neighbouring countries, but the prevalent picture that China can only compete with lowcost products is slowly changing. In recent years China has gone from specialisation in simple, labourintensive low-cost products to also producing more technically-advanced and internationallycompetitive products.
Having a deep and solid financial system is an asset and a source of strength for Chile and that is why it is so important to safeguard the capital market as a central pillar to achieve the sustainable and inclusive growth that our country needs. 2. Moderating macroeconomic cycles and providing financial stability Let me now talk briefly about the actions taken by the Central Bank to contribute to the process of resolving macroeconomic imbalances after the pandemic as well as to mitigate the impacts of external shocks in the past moderate macroeconomic cycle. The year 2022 has been a very challenging time from a macroeconomic perspective. The end of many long-lasting quarantines and the return of economic activity as we knew it before Covid erupted in 2020 provided an auspicious start. Yet inflation was increasing both domestically and abroad. The most urgent and important, macroeconomic challenge that Central Bank of Chile had to address is inflation. Given that maintaining low and stable inflation is the main mandate of the central bank, this current situation undoubtedly represents the biggest test for the central bank at least since inflation targeting was adopted in the late 1990s. We have had a 4  difficult year in terms of inflation. In August, it reached a peaked to 14.1% yoy, and currently stands at 13.3% according to the figure released last Wednesday. This latest monthly inflation print showed an elevated number (1% for headline, 0.9% for core) highlighting that the deceleration of inflation is still not completely consolidated.

During this year some things have certainly changed. Internally, uncertainty has decreased after experiencing peaks at certain periods. Key asset prices, such as interest rates and the exchange rate, have shown high volatility and, in spite of a reduction, have not returned to previous levels. Externally, persistent higher levels of inflation have prompted a strong reaction by most central banks and uncertainty remains elevated. This driven by factors such as the war in Ukraine and the likelihood of recession in US and Eurozone. These elements add complexity to an already challenging scenario. Yet, despite these difficulties and a weakened capital market, the financial system has proved to be very resilient. 1  I will start this presentation with a macro-outlook, in particular at our continuing efforts to resume balanced growth on the back of a sound macroeconomy, by applying the appropriate monetary and exchange rate policy in times of high uncertainty and external shocks. Then, I would like to share with you the factors that explain the remarkable resiliency of our financial system, and the policies we are developing from the Central Bank to contribute to strengthening and developing the financial markets, in accordance with our mandate of financial stability. 1. Building resilience over the years as a source of strength 50 years ago, Chile was an economy mostly closed to international trade and capital flows, with severe credit constraints and a fairly basic financial system, with banks as the only source of financing for businesses and individuals.