samchain/econo-pairs-v1 huggingface dataset:
Durmuş Yılmaz: Turkey’s monetary and exchange rate policy for 2009 Speech by Mr Durmuş Yilmaz, Governor of the Central Bank of the Republic of Turkey, at the Central Bank of the Republic of Turkey, Ankara, 16 December 2008. *  *  *  General framework of the monetary policy Overview Assessing the monetary policy decisions of CBT in relation to the developments in the last three years, it is of importance to fully comprehend the strategy to be implemented in the upcoming period. Therefore, before covering the operational framework of the monetary and exchange rate policy for 2009, it is better to provide a general evaluation of the inflationtargeting regime, which has been implemented for the last seven years since 2001. Between 2002-2005, the Central Bank implemented an implicit inflation-targeting regime under which short-term interest rates were used as the main policy tool. Following the achievements in the fight against inflation, decision-making processes gradually became more transparent and foreseeable, thus, finally in 2006, the transition to an explicit inflationtargeting regime was announced. The adoption of the explicit inflation-targeting regime coincided with a period when the global conjuncture was undergoing rapid changes, as a consequence of which; the Turkish economy faced a series of shocks. As a matter of fact, when we look at the 2006-2008 period, it is evident that factors hindering the decline in inflation mostly stem from the developments beyond the domain of monetary policy.

A deep understanding of risks provides the foundation for stability and growth. The research and educational activities of EDHEC-Risk Institute will help enhance our understanding of risks, and the development of talent. We welcome EDHEC-Risk Institute to our research and financial community in Asia. Your presence adds to another important strand in the deepening relationship between France and Singapore. I congratulate EDHEC-Risk Institute on the opening of its Asian centre, and wish Professor Amenc, Professor Ducoulombier and your colleagues every success. 19. 4  Thank you. BIS central bankers’ speeches
Strong employment growth in the 1990s resulted in a rise in labour costs, which in turn had a dampening impact on growth. Moderate wage growth in recent years is being accompanied by a strong cyclical upturn since summer 2003. The expansion has gradually broadened. Low interest rates have contributed to a relatively sharp rise in household demand throughout the upturn. At the same time, solid global growth has led to increased demand for many Norwegian export goods and high prices. Fixed investment in the petroleum sector has increased sharply, resulting in growing demand for goods and services supplied by mainland enterprises. Mainland fixed investment has also picked up. The Norwegian economy has continued to exhibit high growth this year. So far in the economic upturn, the mainland economy has grown by an average of about 3.5 per cent quarterly, measured as an annualised rate. Thus far, a substantial share of output growth has been attributable to strong growth in person-hours worked. It has taken time for employment to pick up, but this is occurring now. The labour supply and production equipment set a limit in the short term on the level of production in Norwegian enterprises. When production approaches this limit, wage and price inflation will pick up. Our assessment of total capacity utilisation in the economy is reflected in our estimate for the output gap. The output gap is defined as the percentage difference between actual output and potential output. Potential output indicates the level of output that is consistent with price and cost stability.

The size of global Islamic finance assets made a quantum leap from only $ billion in the mid-1990s to $ trillion at the end of 2011.1 Although the investment climate has been clouded by the US sub-prime crisis and the European sovereign debt problems in recent years, the global sukuk market is powering ahead. Indeed, last year was the best year for the global sukuk market on record, with sukuk issuances growing by more than 60% year-on-year, taking the outstanding sukuk amount to a new height of $ billion.2 According to some market estimates, the size of the global Islamic finance industry has the potential to increase five-fold from the current level to some $ trillion by 2020.3 4. The development of RMB-denominated investment products is equally impressive. In a short space of 6 years, the size of the RMB dim sum bond market in Hong Kong has grown from a modest amount of 10 billion yuan in 2007 to 237 billion yuan at the end of 2012. Offshore RMB financial products have also become more diversified, expanding from only RMB bonds to RMB equities, RMB investment funds, RMB A-share exchange-traded funds (ETFs) as well as RMB insurance products. The growth momentum of the offshore RMB financial markets is expected to pick up further, as more and more financing and investment activities can now be conducted in RMB, especially following the introduction by the Mainland authorities of the arrangements for inward and outward direct investments in RMB and the RMB Qualified Foreign Institutional Investors (i.e.
It is up to policy-makers to draft policy measures during such an episode in order to influence both the level where a U-turn occurs and the slopes following the end of an episode of sizeable capital inflows. I will show in the following section that the policies envisaged by the arrangement Romania signed with the EU and the IMF are aimed at smoothing out the slope of the trends of the abovementioned indicators so that the necessary adjustments unwind at a reasonable pace, without destabilising the economy. BIS Review 5/2010  5  3. Case study – Romania  3.1. The period of massive capital inflows  Foreign capital inflows in Romania have picked up since 2004. The current account deficit widened from 8.4 percent of GDP in 2004 to 13.5 percent of GDP in 2007 and to 12.3 percent of GDP in 2008. The medium- and long-term external debt of the private sector posted an almost twofold increase (Chart 1), from 12.9 percent of GDP in 2004 to 25.6 percent of GDP in 2008.

Rather, it was left on deposit or used to invest in other financial assets. The huge increase in borrowing by one part of the population was broadly matched by a big increase in saving by another part. The increase in house prices over the decade to 2007 – and the massive financial flows associated with that appreciation – represent a huge redistribution of wealth between different households within our society. Two important points should be drawn from this episode. First, any analysis of the increase in household debt over the past decade has to pay equal attention to the record accumulation of financial assets. They are two sides of the same coin. Second, changes in house prices do not result in significant changes in aggregate household wealth: for every winner gaining from higher house prices is a loser facing less affordable housing. But that does not mean that changes in house prices can not have significant implications for the macroeconomy. House price changes may directly affect aggregate spending both through their effect on the value of housing collateral, and hence on the ability of households’ to access credit, and through the different propensity of winners and losers to spend their “windfalls”. A debt hangover? Even though the accumulation of debt was not driven by excessive consumption spending, the sharp falls in asset prices associated with the financial crisis have led to a marked deterioration in households’ financial position – assets are worth less but the debts still need to be repaid.
Distinguished members of the Press and Esteemed Guests, Against this background, assuming that there is further easing in policy rates in the near term followed by no change until the end of 2010, medium-term forecasts suggest that, with 70 percent probability, inflation will be between 4.9 and 6.9 percent with a mid-point of 5.9 percent at the end of 2009, and between 3.7 and 6.9 percent with a mid-point of 5.3 percent at the end of 2010. Furthermore, inflation is expected to come down to 4.9 percent by the end of 2011 and to 4.8 percent by mid-2012 (Figure 26). Figure 26: Inflation and Output Gap Forecasts* (Percent)  Forecast Aralığı* Range * Tahmin  OutputAçığı Gap Çıktı  Band for 2009 2Uncertainty 009 için Belirsizlik Aralığı  Yıl SonuInflation Enflasyon Hedefleri Targets End-year  13 11  KontrolRange Ufku Control  9 7 Yüzde  5 %  3 1 -1 -3 -5 -7 -9 1  2  3 2009  4  1  2  3  4  2010  1  2 2011  3  4  1  2  2012  * Indicates a 70-percent confidence interval for the forecast. Revised forecasts indicate that even if policy rates are kept at low levels for an extended period, aggregate demand conditions will continue to underpin the disinflation process over the next two years. Forecasts also indicate that significant base effects may lead to some inflation volatility in the short term.

Firstly, in order to unlock the long-run potential growth, well-established infrastructure will be one of the crucial pillars that will sow a seed of a healthy investment climate conducive for growth. Such that, infrastructure upgrade requires time, yet necessary. Investment in logistic areas including increasing road density, better railway system, modernized airports and seaports will all lead to the enhancement of both production and distribution processes whereby strengthening connectivity among members. Preeminently, concrete long-term plans on infrastructure projects are vital in order to attract large pool of regional savings to meet investment needs. A set-up of Asian Infrastructure Investment Bank or AIIB comes at a right juncture to raise potential for infrastructure financing for the whole region. Also, governments’ clear focus on infrastructure upgrading will facilitate the growing cross-border trading activities. I am glad to see the continued cooperation between Thailand and other GMS members in linking our rail networks and roads in order to foster trade and investment interconnectedness among us. 12. Secondly, despite physical infrastructures in place, lack of innovative ideas to leverage on existing knowledge and technology could undermine the potential of the region. With this bottleneck, the economies may face limitation in sustaining their competitive advantage, which currently rely heavily on the exploitation of natural  2  BIS central bankers’ speeches  endowments and support from the government.
Some reporting requirements for insurance firms, especially smaller firms, have already been removed. The PRA will be consulting in the coming months on easing insurance reporting burdens further. The PRA has also started a review of banking reporting requirements. 20. On empirical research supporting this argument, see Ross Levine, ‘Finance, Growth, and Inequality’, IMF Working Paper WP/21/164 (2021). 21. PRA CP 4/23 – ‘The Strong and Simple Framework: Liquidity and Disclosure Requirements for Simpler-regime Firms’, February 2023. Proposals include replacing the NSFR with a simpler retail deposit ratio for firms with large retail deposit bases, simplifying liquidity reporting templates (including simplifying the ILAAP template), reducing Pillar 3 disclosure requirements, and removing Pillar 3 disclosure entirely when firms do not have listed financial instruments. 22. PRA CP 5/23 – ‘Remuneration: Enhancing proportionality for small firms’, February 2023. Proposals include removing requirements to apply rules on malus, clawback, and buyouts for eligible firms. 23. On earlier reforms to IRB modelling of mortgage risk, see PRA Policy Statement 13/17 – ‘Residential mortgage risk weights’, June 2017; PRA Policy Statement 7/19 – ‘Credit risk: The definition of default’, March 2019; and PRA Policy Statement 11/20 – ‘Credit risk: Probability of Default and Loss Given Default estimation’, May 2020. 24. For owner-occupier mortgages with LTV ratios below 50%, the gap between risk weights could narrow by between 50% and 70%. 25.

With respect to bond market development, we have taken a more active role both in the primary and the secondary market. This is because the bond market is where we operate monetary policy through liquidity injection and absorption in order to align short-term interest rate with the policy interest rate. Therefore, the more developed and efficient the bond market is, the more effective the monetary management would be. Besides, a vibrant domestic bond market is essential for a robust and efficient financial system, which is a solid foundation for long-term economic stability. In the primary bond market, while meeting with the sterilization needs, the issuance of BOT bonds and bills are also designed to promote the bond market. In particular, we coordinate closely with the MOF on issuance schedule to provide regular and predictable supply, reduce auction frequency and consolidate issuance to reduce the number of issues in order to  BIS Review 118/2008  5  facilitate secondary market trading. The BOT bonds have helped widen investor base and contributed to the growth of mutual fund industry, as retail investors are seeing this as an alternative to banks’ deposit. Other than the issuance of BOT bonds and bills, we also introduced floating rate notes to add diversity to the products in the market as well. With respect to secondary bond market development, developing the private repo market has been one avenue that the Bank has adopted to enhance a more liquid bond market.
In some senses the Bank is like a conventional trading company: we have our own capital and balance sheet, we trade, we make profits, and we pay both tax and a dividend to our shareholder, the Government. But there are also parts of our public policy functions - relating to monetary and financial stability - that, by their nature cannot be directly charged out to individual beneficiaries of our activities and which we need to finance in other ways. Like other central banks we, therefore, take unremunerated deposits from the banking system on which we earn income, for this purpose. Central banks generally levy this charge on the banking - or deposit-taking - sector specifically, because one of the essential services we undertake is the provision, through our money market operations, of sufficient cash day-by-day to the banking system to allow it to balance its books. Without that the banks collectively would need to hold more cash with the central bank in place of interest-bearing liquid assets than they do at present. These “cash ratio deposits” in this country have hitherto been voluntary. The new Bill puts them on a statutory footing, with the rate of deposit to be determined by the Government. The charge on the banks in this form has always been lower than in other major centres.

While these measures have merits in safeguarding financial stability, they could have complex and cross-border impact. Even on the monetary policy front, unconventional measures are becoming more conventional. Central banks in the major economies have increasingly used unconventional monetary easing. Though necessary to stabilize their economies at this juncture, these policies have side effects of large and volatile capital inflows into Asia. This  BIS central bankers’ speeches  1  further complicates safeguarding of financial stability in other countries including Asia, and could, in turn, trigger some countries to resort to macroprudential measures themselves. Thus, in terms of policy space, we are dealing with a new paradigm of expanded policy tools, with new transmission mechanism, and requiring their own policy framework and governance. So we need to recognize the need for cross-border coordination as well as flexibility in execution given emerging uncertainty. Turning to the more medium-term structural issues, major regulatory reforms especially Basel III, Financial Stability Board reforms, and Dodd-Frank Act are still a known-unknown. We do know that they are designed to redress weaknesses that caused the crisis by enhancing capital and liquidity, while addressing the problems of procyclicality, and too-big-to-fail of SIFIs. For this, their merits are well recognized. But these reforms will reshape the global financial landscape and raise cost of financial intermediation. They will also have implications for cross-border level playing field, regulatory arbitrage, and alter risk profile of banks.
We needed financial firms, and a financial system, that was better prepared to weather all storms. In 2011, we developed the Framework for Supervision – a framework designed to ensure we had firms and a system that were less complex, more resilient and better managed. Collectively, we have made a lot of progress since 2011 – and the industry is in much better condition relative to the pre-crisis period. But, as you all know, business does not stand still and this constant evolution results in new risks and new challenges. Before turning to one of the biggest risks or challenges I see, I want to pause and recognize two things: •  First, it’s clear that progress has been made across the industry in a number of areas – particularly in making firms and the system more resilient through improvements in capital and liquidity, as well as enhancements in risk management, including capital planning and stress testing across the range of risks firms face. But, in the remaining two areas of the Framework – less complex and better managed – I think it’s safe to say that despite the fact that firms are addressing a number of outstanding issues, these areas continue to present challenges in reaching the desired end state. •  Second, as I’m sure you would agree, we collectively still have quite a bit of work to do to fully implement all of the changes required under new rules and regulations.

Cybersecurity is not a topic or an issue just for the Information Technology staff or the CIO to address; it is a risk that isn’t exclusive in who, what or where it targets. •  It is a risk that is difficult to clearly define. •  It is a risk that is constantly evolving. •  It is a risk that is not limited to one source. •  It is a risk that is faced by every single financial firm, regardless of size or complexity. •  In fact, it is a risk that is faced by every business, organization, school, church or group that uses technology. In other words, no company is immune (unless, of course, you operate an all cash business from a brick and mortar store and keep your earnings under your mattress – not something we see a lot of in today’s world). The financial sector, in particular, is under unprecedented attack from a broad spectrum of intent and attack methods that are complex, widely distributed, and increasingly interconnected. These highly dynamic systems give rise to the “new normal” – system design and architecture that needs to support rapid and compartmentalized change. So, where do we begin when we look at a risk of this magnitude? And, how do we get our arms around the many associated risks that surround it? Let me begin with what it is not. Cybersecurity is not an “Information Technology” issue.
Adopting an integrated GRC framework is a challenge  4.1 Understanding the demands of the organization’s stakeholders is the key in terms of performance and conformance, and aligning the organization to deliver against these objectives. Considering the risk appetite and risk tolerance of the organization, the processes and technology should be designed and deployed so that the achievement of objectives is measured, risks are assessed and continuous improvement is realized in support of effective GRC. Integrating GRC has become a challenge for virtually every financial institution looking to establish an integrated and consistent approach to controlling exposures, managing risks and creating value. 4.2 The major challenge in adopting an integrated GRC approach is the aligning of the GRC framework and processes to standalone and isolated solutions that are already in place. The difficulty is to integrate these isolated solutions through a flexible and add-on basis to embrace new requirements. Changing core business solutions without overhauling business requirements is considered to be a nightmare by many financial institutions. If it is  4  BIS Review 15/2008  properly planned and designed, it would not be that bad and those who have taken the bold decision to do so will be the winners in the future. 4.3 Another important challenge would be to adopt a GRC framework, which is consistent with international standards. To enable this, new policies and procedures have to be written with links to automated systems.

Here, I would like to draw your attention to the large number of studies that stress the favorable effect of the presence of sufficiently developed, deepened and efficient derivatives markets on foreign direct investments. Dear Participants, In addition to all these benefits derivatives markets provide to the economy, they bear extra importance as a complementary element of financial markets in terms of their interaction with monetary policy and thus with the central bank. As it is known, establishing financial stability is one of the most important factors to be considered by all central banks that have set price stability as their primary objective. In this framework, derivatives markets, which help to sustain financial stability through their contribution by reducing volatility in the markets, support central banks in maintaining financial stability. The second contribution of derivatives markets to the monetary policies of central banks is that thanks to their functions in risk management and in providing information, they expedite and activate the transmission mechanism used by monetary policy in giving direction to the economy. 6  6  International Swaps and Derivatives Association, News Release on April 9, 2003. BIS Review 17/2005  Central banks adopt a long-term perspective in their target and try to affect the long-term movements of economic variables with the decisions they take. In this framework, it is crucial for a central bank to have as much information of a long-term nature about the economy and the future as possible.