samchain/econo-pairs-v1 huggingface dataset:
In short, some hard work has been done in the euro area to unwind imbalances and to reinforce governance. But there is still a lot more hard work to do. Maintaining the current momentum of reform is essential for putting the euro area on the path back to stability. Fragmentation in monetary policy transmission Let me now turn to the measures being taken by the ECB. 2  BIS central bankers’ speeches  The confidence crisis and the process of adjustment across the euro area has weighed on short-term growth and dampened inflationary pressures. To maintain price stability, the ECB has lowered its interest rates to historically low levels. But before August this year, our low interest rates were not reaching companies and households evenly across the euro area. In some countries, interest rate reductions were being fully passed on. In others, lending rates barely declined. And in a few countries, they had actually risen. This divergence happened because banks in some countries had found it increasingly expensive to obtain funding from market sources. They therefore could not pass on the lower interest rates to their customers. This meant that monetary policy was unable to support the real economy in these countries. Smaller companies were affected the most, as was clear from our surveys of SMEs. And as companies in the euro area are very dependent on bank loans for financing, some economies were being forced into a damaging cycle. Economic activity was weakening. Public finances were deteriorating.

Overall, the composite weighted average Treasury bill yield rate stood at 16.2% in 2005, down from 17.8% recorded in 2004. In contrast, the composite yield rate on Government bonds stood at 23.0%, up from 20.9% registered in 2004. As at May 5, 2006, the composite weighted average Treasury bill yield rate came down sharply to 7.7% while the composite yield rate on Government bonds declined to 11.0%. The sharp reduction in yield rates on Government securities has been due to low inflation expectation coupled with high demand for these securities by the non-bank financial institutions and private sector. Mr Chairman, with respect to developments in the money market, commercial banks lending rates have also been coming down, though not as fast as the decline in inflation and Treasury bills rates. Commercial banks nominal weighted average lending base rate declined from 29.8% in 2004 to 27.6 % in 2005. As at May 5, 2006, the weighted average lending base rates stood at 23.7%. Clearly, there is a need for commercial banks to do more to reduce lending rates in order to influence a substantial expansion of private sector credit. Lower lending rates will contribute to the reduction in the cost of doing business in Zambia. Sustainable lowering of lending rates by commercial banks should occur in the current environment of low inflation. Distinguished Guests, Ladies and Gentlemen, the macroeconomic gains attained in 2005 will be consolidated in 2006. The real GDP growth is projected at 6.0% while inflation is projected at 10.0%.
Over time, investors have become nervous about the valuations of financial instruments. Banks took large write-downs on mortgage-related assets and other risky securities. Major financial institutions reported huge losses. Some of them even came to on the brink of default and some of the hedge funds liquidated their positions in order to match the increasing withdrawals of the investors. The sharp decline in risk appetite and concerns about the counter-party credit risk has led to a significant deterioration in shortterm credit and money markets leading to a major liquidity squeeze. Liquidity problems, coupled with solvency crisis, have tested the resilience of global financial markets, and we are still waiting for the light at the end of the tunnel. The big losses of financial institutions and deep plunge in consumer confidence due to sharp fall in house prices and declining personal income have increased the possibility of a recession in the US economy, which may have already started as we speak. Deterioration in risk perceptions has increased the risk premia of developing countries, including Turkey. So far, the rise in Turkey’s risk premium was in line with that of other developing countries, although more recently the current political uncertainty has started to put Turkish financial markets under considerable strain. I believe Turkey’s risk premium would be even higher in the absence of improvements in macroeconomic conditions and institutional reforms implemented in recent years. Dear Guests, One can label the last two decades as the era of globalization, deregulation, and privatization.

Of course, accommodating global monetary and financial conditions also contributed to highrisk appetites, high leverage and search for high yields. At this point we do not know the scale of economic fallout from the ongoing financial turbulence, nor its duration. It is, however, conceivable to expect some regulatory backlash by major industrialized countries. For example, just a few days ago the U.S. Treasury Department announced a new plan to overhaul existing financial regulatory structure to make it compatible with modern financial instruments. This is of course just a beginning and we should not be surprised to witness similar steps by other countries. Distinguished guests, Let me turn to the Turkish case and discuss recent developments in Turkey. As you may remember, throughout 1990s the Turkish economy was shaped by high and chronic fiscal deficits, high inflation rates and a weak institutional environment. The economic crisis in Turkey in 2001 was not only the lowest point of this period, but also a major turning point for our economy. Since then we have witnessed a very ambitious reform agenda taken towards reaching better economic governance. I classify these steps under four main categories: (1) Monetary policy, (2) Fiscal policy, (3) Financial stability and (4) Structural reforms. Taking into consideration the fact that I am a central banker, I think it will not be surprising if I start with the topic of monetary policy. Central Bank independence that was granted by Law in 2001 was the key step on the monetary policy side.
Rosanna Costa: Opening address - IV meeting of heads of financial risk management in central banks Opening address by Ms Rosanna Costa, Governor of the Central Bank of Chile, at the IV meeting of heads of financial risk management in central banks, Santiago de Chile, 26 April 2023. *** Good morning, I would like to extend a warm welcome to all participants at this Fourth Meeting of Heads of Financial Risk Management in Central Banks organized jointly by the Center for Latin American Monetary Studies, CEMLA and the Banco Central de Costa Rica, Banco de España, Banco de México and Banco Central de Chile. This initiative, whose first version was launched in 2020, has been consolidated as a forum for analysis and reflection to analyze current and emerging challenges of financial-risk management at central banks. Throughout these meetings, topics related to the governance of risk management and financial risks have been addressed from different perspectives, in a context strongly dominated by the challenges that the Covid19 pandemic has posed. Every organization is subject to numerous contingencies that may hinder or prevent the normal fulfillment of its functions. In particular, institutions such as central banks, whose mandate has important effects on the economy and social welfare, must also consider not only their own risks when making decisions, but also broader risks in the financial sector and the macroeconomy in general.

While it is admittedly difficult to forecast developments in the short term, there are some research results that can be used as a starting point for assessing developments further ahead. The Riksbank’s forecasts have primarily been based on these results. 20 Nominal and real exchange rates While the nominal exchange rate shows the number of Swedish kronor per unit of foreign currency, the real exchange rate shows the relationship between Swedish and foreign price levels. Put simply, one can say that the real exchange rate shows how much a given basket of goods costs in Sweden in relation to abroad when the price of the basket of goods is expressed in the same currency. The real exchange rate can change either through the nominal exchange rate changing or by inflation differing between countries. A stronger krona real exchange rate can thus be attained either through a stronger nominal exchange rate or through a faster increase in the price level in Sweden than in other countries. We can use the Economist’s Big Mac index as an example. This index shows how much a Big Mac costs in different countries in the same currency. In 2001 the krona exchange rate against the dollar was at its weakest level so far and oscillated between 10 and 11 kronor. In the United States a Big Mac then cost 2.60 dollars, which corresponded to 26.70 kronor. In Sweden a Big Mac cost 24 kronor.
Governments, perhaps governments everywhere, are probably behind the pace of integration that the market is driving in terms of further integration. This should provide a powerful incentive for greater speed and ambition in developing the institutional infrastructure that can accommodate the challenges that come with integration. Overall, however, the direction of change in the emerging world seems fundamentally reassuring. After a crisis that was in a sense the result of a failure to manage the early stage of financial integration, governments in emerging markets have established a record of credible fiscal and monetary policy management, built more substantial cushions of insurance against potential shocks in external reserves, restructured the currency denomination, maturity and composition of their debts to make them less vulnerable to volatility, and begun to build deeper and stronger domestic financial systems. These changes make it more likely that the progress now underway toward further financial integration - as they move to more open capital markets and more flexible exchange rate systems - will bring substantial benefits in terms of growth and fewer risks in terms of financial stress. The stronger foundation now in place will make the next wave of financial integration more successful. The policy achievements of the last decade are enormously consequential for the people who live in emerging markets. If the progress is sustained, the reduced vulnerability to financial crisis and the enhanced efficiency of resource allocation have the potential to dramatically increase long-run growth and living standards in these countries.

•  Use of microprudential tools for macroprudential purposes: The Committee will oversee preparations for the countercyclical buffer, as well as exchange information on the wider range of microprudential tools that have been used for macroprudential purposes (eg sectoral adjustments to risk weights, stress testing requirements, loanto-value limits or varying margin requirements). Concluding remarks Since the financial crisis, the Basel Committee has accomplished a great deal. But we still have work to do to complete the overhaul of the regulatory framework and fully factor in all of the lessons learned. We also need to see whether we have the balance right when it comes to simplicity and risk sensitivity. That work is going to keep the Committee busy for at least the next two years. But that is far from the end of it, because, as I have noted a number of times today, our policy work will not generate its full benefits if not implemented in a full, timely and consistent manner. So our implementation monitoring work is equally important. And then even when  6  BIS central bankers’ speeches  the new standards are implemented, we will need effective supervisors to ensure that they are adhered to. This is an area where the Committee has the potential to do much more, particularly once the policy pipeline begins to slow. In other words, the Basel Committee will continue to provide you with much to talk about – at this meeting and those in the future! BIS central bankers’ speeches  7
This expectation is linked in particular to the significant concentration risk to which banks in Malta are exposed stemming from both a direct exposure, and indirectly through collateral, to the construction, property development and mortgage sectors. Taken together, property-related loans account for almost 60% of loans by the banking system to the private sector. Profitability levels are also likely to be affected by slower growth in business volumes and squeezed interest margins due to increased competition for customer deposits. And as the repricing of risk is expected to continue in the near term, further downside pressure on earnings growth will come from write-downs in investment portfolios resulting from fair value adjustments. While a prudent credit risk assessment process has long been a characteristic of banking practice in Malta, the importance of ensuring that the risk potential of assets is adequately understood and controlled bears emphasising at this time of uncertainty. The results of such monitoring need to be translated into appropriate internal ratings, classifications and loss recognition to develop an accurate picture of credit quality. The concentration risk referred to earlier, combined with the prospect of a prolonged period of slow growth, also suggests that banks would do well to strengthen capital buffers further beyond statutory ratios. … and in the likely post-crisis scenario While the immediate priority of the authorities during the ongoing crisis has been to restore calm to the financial markets, considerable attention has also been devoted to drawing lessons and devising remedies.

The optimal mix depends on the level of development of the financial market, but a more active role has to be played by the authorities to achieve the public policy objectives of retail payment reforms. 4.3  Policy elements  4.3.1 Central banks to play a catalytic role: Central banks should be at the centre, take the leadership and coordinate the development process as other stakeholders tend to have vested interests. While it is important to enhance oversight and supervisory functions by the central banks and ensure that governance arrangements for infrastructure and service providers are in place, it is also necessary to ensure that such arrangements do not lead to unnecessary restrictions on competition and innovation. 4.3.2 Stakeholder participation: It is essential that central banks engage in effective participation and secure cooperation from all stakeholders in the payment systems, through establishing National Payment Councils (NPC) or National Payment Committees/Advisory Councils etc. India, Sri Lanka, Pakistan and some others have already established NPCs and they are the highest level policy making authorities for development of national payment systems. Banks have a good opportunity to give their inputs at these meetings, especially on operational matters. 4.3.3 Declare public policy objectives of retail payment system development: The undeclared and unsaid public policy objectives have been a contributory factor for ad hoc retail payment system developments in the past.
Thanks to the low exposure of Polish financial institutions to the main infected markets and good economic conditions in Poland, the Polish financial system remained practically unaffected by the turbulences which unwound on the global financial markets. Nevertheless, some negative effects of those turbulences may yet materialize. In addition, two areas in Poland require a special watch of supervisory institutions: the property market and the equity market in view of the risk of an asset bubble developing on those markets. The development of asset bubbles on asset markets constitutes a potentially very dangerous phenomenon. As shown by experience of many countries, shrinking credit supply (credit crunch) materialized at commercial banks in the wake of a bubble burst was a strong shock for the whole economy. 1 In some cases it may lead to a long-term economic recession, like the one which Japan experienced in the 90s. Bearing in mind the severe macro- and microeconomic consequences of bubble burst, we should determine the appropriate reaction of public authorities, including the institutions responsible for the economic policies of a country and the supervisory authorities. However, the key questions are whether there should be a reaction, who should react and when. A number of arguments may be quoted for and against undertaking action by central banks during a boom phase of a bubble 2 . I enumerated them in my book on globalization 3 .

Amendments introduced the legal provisions with the aim to extend investment possibilities of open pension funds, to provide better diversification and to decrease investment risk would fall within the trend currently observed in many countries. All over the world, pension funds may invest abroad, taking even recourse to hedging funds to this end 13 . In most OECD Member States, pension funds may hedge the value of investment portfolio on derivatives 14 . Those changes depend on thorough restructuring of supervision over the open pension funds sector, i.e. the development of a supervision system based on the assessment of risk of open pension funds’ portfolio (risk-based supervision). The supervisory institutions should not concentrate on analyzing formal restrictions imposed onto open pension funds by law, but they should examine the risk of the entire portfolio instead. This development has been widely observed also in other supervisory areas (banks, insurance companies). By way of recapitulation, let me outline the infrastructure of the European clearing system in about 10 years’ time, as prepared by the NBP. At first, let me define the main elements of this infrastructure, which include: 1.  trade platform where transactions on the capital market are performed,  2.  central counterparties (CCP) performing the clearing functions on the capital market,  3.  securities settlement systems (central depositories) performing the depository and settlement functions  10  Black F. (1989), “Universal Hedging: Optimizing Currency Risk and Reward in International Equity Portfolios”, Financial Analyst Journal, July-August 1989.
I perceive them mainly as a policy statement of how the Fed intends to act in future, and a signal of its determination to achieve its objectives.18 As I see it, Fed has thus explicitly adapted its strategy to  16 The Fed’s communication so far has focused on target deviations downwards, which are compensated for by  overshooting the target. 17 For a more detailed description of “average inflation targeting”, see Nessén and Vestin (2005). 18 Powell (2020) puts it like this: “Overall, our new Statement on Longer-Run Goals and Monetary Policy Strategy conveys our continued strong commitment to achieving our goals, given the difficult challenges presented by the proximity of interest rates to the effective lower bound.”  9 [15]  tackle the challenges most central banks are currently facing. As the monetary policy situation in the United States has a lot in common with that in many other countries, these changes will be analysed in detail by central banks around the world. The changes can certainly be regarded as more of an “evolution” than a “revolution” of the Fed’s monetary policy.19 But they are nevertheless sufficiently large for other central banks having to examine them in detail and discuss whether they should do something similar. This also applies to the Riksbank, of course. My most important messages Let me conclude by repeating my most important messages. The pandemic has brought the international discussion on the central banks’ monetary policy framework and strategy to a head.

Mr Lopes’ speech before the Economic Affairs Commission of the Federal Senate Summary of a speech by the new President of the Central Bank of Brazil, Mr Francisco Lopes, before the Economic Affairs Commission of the Federal Senate in Brasilia on 26/1/99. Translated from Jornal do Brasil of 27/1/99. Inflation I am sure inflation will not come back. Of course, there will be some adjustment in relative prices but there is no possibility of resuming the old inflationary process. We will have to put in place tight monetary policy and prevent any forms of indexation, opportunism or speculation. As the Brazilian economy is relatively closed - imports correspond to 8% of GDP - a devaluation of 50%, (i.e. the exchange rate stabilising at the very depreciated level of $ 1.80), would add about 4 to 5% to the rate of inflation. Overvaluation of the real The use of the exchange rate anchor made an exchange rate overvaluation inevitable. Nevertheless we had imagined it would be possible to shift from the mini-band regime to the free floating regime in a rather gradual way, while the economy was still attracting foreign capital. But reality sometimes frustrates the best intentions. With the benefit of hindsight (after the Asian and Russian crises), the widening of the exchange rate band in April last year, which widened the amplitude of the exchange rate fluctuation by 1% per year, was a rather timid movement. But it is easy to be wise after the event.
In Harvard Yard sits a statue of John Harvard, seated on a bronze throne, commemorating 1638, the year of the university’s founding. Tour-guides relish in pointing out that, in fact: No-one knows what John Harvard looked like, so it is unlikely to be a great resemblance of him; The college wasn’t founded in 1638, but two years earlier; And it wasn’t founded by John Harvard, but by the Court of the Massachusetts Bay Colony, which first voted to set up the university. The “Statue of the Three Lies” is part of Harvard legend. The Three Lies in question are harmless fun. But they should remind us how deeper untruths can persist, embodied in monuments or sustained by conventional wisdom and mores. We gather this evening almost seven years to the day that the failure of Lehman Brothers shattered conventional wisdom and laid bare three lies about finance. Unlike the statue’s three lies, those falsehoods have had lasting consequences. 1  So wrote F A Mackenzie, a Quebec-born writer and journalist who was the Daily Mail’s travelling correspondent in the Far East in the early 1900s. See Mackenzie, F A, “American shrines in Britain”, Chapter XLV in Hammerton, J A (ed.) (1926), Wonderful Britain: its highways, byways and historic places, Vol. 2.

Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as a result of animal spirits – of a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities.” Keynes, J M (1936), The General Theory of Interest, Employment and Money, Palgrave Macmillan. BIS central bankers’ speeches  5  Not markets that collapse when there is a shock from abroad. Not markets where transactions occur in chat rooms. Not markets where no one appears accountable for anything. Real markets are professional and open, not informal and clubby. Their participants compete on merit rather than collude online. Real markets are resilient, fair and effective. They maintain their social licence. But real markets don’t just happen; they depend on the quality of market infrastructure. Robust market infrastructure is a public good in constant danger of under-provision because the best markets innovate continually. This inherent risk can only be managed if all market actors, public and private, recognise their responsibilities for the system as a whole. True lies So this time is the same. Markets don’t always clear. And we can suffer from their amorality. So what to do with such knowledge? And how to retain it? The longer you are a central banker, the more careful you become in your forecasts.