samchain/econo-pairs-v1 huggingface dataset:
The Project, titled Isuru Project, had as its objective, uplifting the economic and social conditions of the poorest of the poor with a  13  The yield ratio of paddy between the Western Province and more productive areas has been around 1:3. 14  In an earlier paper, the writer argued that Sri Lanka’s future depends on the services sector well integrated to the global economy. See, Professor Sirisena Thilakaratne Memorial Lecture, 2006. 15  Moral Hazard is not a new problem. According to the Buddha, the king in a kingdom found his citizens getting engaged in all types of thefts and robberies. On finding that they did so because they did not have any capital to start a livelihood, he gave funds to them from his treasury freely. People finding that, if they got into thefts more they could get more free funds from the king, committed more robberies and thefts. Chakkavatti Seehanada Sutra, Anguttara Nikaya. 16  Fernando, Nimal A, Understanding and Dealing with High Interest Rates on Microcredit, (2006), ADB, p 13. 17  Districts involved were Galle, Matara, Kandy and Puttalam where the incidence of poverty was considered the highest in the country. 4  BIS Review 22/2008  view to helping them to cross the poverty line within a given period and establishing the methods and techniques of sustainable poverty alleviation for emulation by other interested parties. The poorest of the poor were identified as those whose income was below Rs.

However, in view of the coincidence between this event and the ongoing saga, I will not do so today. Page | 5 Document Classification: Public
The Accord in full is meant for the internationally active banks but other banks are expected to follow suit. Although international institutions such as the IMF and the World Bank have announced that the adoption of Basel II will not be a yardstick for measuring compliance with the international best practice, sooner than later it will be the international norm and they will start monitoring the progress. So, there is no point in debating whether or not we should implement Basel II. The debate, if at all, should be how best to implement it and, where possible, be ahead of others. Overall, the benefits to the industry in terms of improvements in risk management and corporate governance and the supervisory action embedded in the Accord cannot be ignored. Basel II has three mutually reinforcing pillars, namely, the Minimum Capital Requirement under Pillar I, the Supervisory Review Process which is Pillar II and Market Discipline or Pillar III. The whole purpose of this exercise is to make capital the key shock absorber in banking operations. For that, simple risk mitigation measures in Basel I were not considered adequate. Therefore, a risk sensitive capital requirement and risk mitigation practices were combined in a more meaningful manner. Banking is a highly leveraged and risky operation and it is imperative to mitigate risks. With or without the Basel Capital Accord, banks and financial institutions must find ways and means to identify risks, assess them and put in processes and procedures to deal with such risks.

The Basel  BIS Review 3/2007  5  Committee has now decided to pay greater attention to give a standard definition for capital, hopefully before the implementation begins in 2008.  International Comparison Many countries have not tackled all these issues associated with Basel II, but there is notable progress; some slowly, some moderately and some at a faster phase. For example, the Development Bank of Singapore (DBS), the largest bank in Singapore and the 5th largest group in Hong Kong with universal banking, providing full range of products and services for consumer, small and medium enterprises, corporate banking, investment banking, fund management, trade finance, cash management, securities and treasuries has taken a keen interest over the last 2-3 years in meeting the Basel capital adequacy requirements and to implement the same in 2008. At present, it has a Tier I capital ratio of 10.1% and a total capital ratio of 14.1%. The main philosophy behind the DBS’s approach is a balanced and enlightened one based on the management of capital. The approach is led by the DBS’s board and senior management and it is embedded within business of a whole group. It is constantly reviewed by supervisors and communicated to the markets. The DBS group has implemented a large-scale Basel II governance structure at several levels which is a success factor.
Following the monetary policy meeting on 21 September, the Executive Board stated that developments in output, demand and underlying inflation had been consistent with the projections in the June Inflation Report. The Executive Board also stated that its monetary policy strategy and assessments indicate that the interest rate should be gradually increased in the period ahead. One option was to increase the interest rate at this meeting, but the Executive Board found it appropriate to leave the interest rate unchanged. Household credit growth Monetary policy easing through 2003 and into 2004 has resulted in low real interest rates. Short-term real interest rates may now be considerably lower than the level that implies long-term balance in the economy – the neutral real interest rate. A low real interest rate, and expectations of a continued low real interest rate, will contribute to stimulating activity even after the effects of the interest rate fall unwind. Although the projections are based on rising real interest rates, the real interest rate will be lower than the neutral rate during the entire period. The monetary policy stance is therefore expansionary. So far, the effects do not appear to be stronger than expected, but we have little experience of such low interest rates. How quickly prices and wages will react when growth in output and employment picks up is uncertain. There is also a risk that an interest rate that is kept low for a longer period may lead to expectations of a persistently low interest rate.

This “credit expansion externality” implies a market failure and may justify public intervention. As experience has shown that it is precisely the bursting of property bubbles that has played such a decisive role in several financial crises, there exists reason to believe that such credit expansion externality may be particularly great on the property market. According to one view, a central bank should try to counteract the increase of property prices and credit volumes by keeping the policy rate higher than would otherwise be necessary during the upturn. Central banks should lean against the wind, as this is usually described. The idea is that the increase in property prices and credit volumes will thus be smaller, but also that the decline, in return, will be significantly less dramatic (Figure 8). If the development of property prices and credit volumes becomes more balanced, it is also assumed that the real economy and inflation will be more stable. While growth will undoubtedly be somewhat lower in the upturn, it will, on the other hand, make it possible to avoid the deep recession that may be the consequence of a fall in property prices. BIS Review 68/2010  13  Figure 8 Leaning against the wind Property prices and lending Without ” leaning” With ” leaning”  time  One complication arising in this context is that it is not entirely easy to incorporate the risks that may be associated with the rapid increase of property prices and credit volumes into the normal work of forecasting and analysis.
This caused the average interest rate level in those countries of the future euro area to be lowered considerably before the beginning of Monetary Union. The close cooperation which had always existed between the European central banks was increasingly stepped up in the final months of 1998 between those countries participating in Stage Three of Monetary Union. The coordinated reduction of central bank rates in December 1998 to 3% made it perfectly clear that, de facto, Monetary Union had already begun before the start of Stage Three. Looking at economic developments, in the first few months of this year there have been an increasing number of indications that the negative effects of the crises in Asia and Russia on growth and employment in the euro area could be more serious than was first expected. With the apparent slowdown in economic growth in the euro area, the risks that the 2% threshold for the tolerable rate of inflation would be exceeded in the foreseeable future evaporated. This forecast was also reflected in the revisions to the inflation forecasts of international organisations. At the beginning of April 1999, the Governing Council of the ECB therefore decided to reduce the interest rates on the main refinancing operations by 50 basis points to 2.5%, as well as the rates on the standing facilities to 1.5% and 3.5% respectively. The M3 monetary aggregate did expand such that it was slightly above the reference value at the beginning of 1999.

Several potential reasons have been put forward for the reluctance of banks to use their buffers. Among them, the literature highlights: the stigma of the market, the uncertainty around possible future credit losses and the uncertainty around supervisory expectations regarding the restoration of any reserve provision (Hernandez de Cos, 2021b). In the case of Chile, this new macroprudential took was incorporated in the latest reform to the General Banking Law approved in 2018. Within the framework of the implementation of Basel III in Chile, the BCCh was empowered to determine the countercyclical capital requirement to banks. The General Banking Law gives the Central Bank of Chile the power to determine the activation or deactivation of the countercyclical capital requirement. Once the activation decision has been made, the Central Bank must set its level and deadline for compliance, after a favorable report from the Financial Market Commission. As recommended by the Basel Committee, this requirement can be established between 0 and 2.5% of risk-weighted assets and must be paid entirely with core capital (CET 1), above the minimum capital requirements established by the General Banking Law. In this context, in 2021 the Board of the Central Bank of Chile published a policy framework to implement this Capital Requirement as a macroprudential tool to preserve the stability of the financial system as a whole, rather than the solvency of a particular bank.
It is a question of choosing a repo-rate path so that the forecast for inflation and resource utilisation entails the best possible stabilisation of inflation and resource utilisation. As the forecasts play such a central role in the monetary policy decisions, it is of course important that the Riksbank employs good forecasting methods and uses all the relevant information available when the forecasts are produced so that they are as accurate as possible. An important step in the assessment of monetary policy is therefore to investigate whether the forecasts are reasonably accurate. One way to do this is to compare the Riksbank’s forecasts with those of other forecasters. The Riksbank makes such comparisons every year. Another component of the assessment of monetary policy is to analyse how predictable monetary policy is and what impact it has on market rates. Monetary policy mainly acts by influencing expectations regarding interest rates, inflation and the real economy in the future. Expectations regarding the repo rate in the years immediately ahead affect interest rates with  2  BIS Review 32/2010  longer maturities, and therefore inflation and the real economy, more than the repo rate in the period up to the next monetary policy decision. The predictability of monetary policy can be measured in terms of how well the market predicts the next repo-rate path. How effectively monetary policy steers market expectations and market rates can be measured in terms of how closely the market expectations regarding future repo rates correspond to the repo-rate path after it is published.

For some years the volume of consumer spending rose much faster than its post-war average. From 1997 to 2001 it rose at an average annual rate of about 4%, and calendar year growth was last below 2% in 1995. We are not so much a nation of shopkeepers as a nation that keeps shopping. Behind this growth was a steady rise in real incomes, driven by increases in employment and falls in the prices of imported goods. Those price falls followed the rise in sterling in the second half of the 1990s, and the increase in cheap imports of manufactured goods, such as textiles, toys and electronic goods, from China and other emerging market economies. Over the past three years, however, consumer spending has decelerated and its growth has fallen to a more sustainable rate, close to its post-war average. The slower pace of consumption growth was the result of real income growth returning to a normal rate. It is striking, as the Monetary Policy Committee has said before, that for a number of years, and despite the volatility of house price inflation, the saving ratio of households has been rather stable. Some commentators are exercised by the possibility of a rise in household saving and hence a further slowing of consumer spending. Their concern is that since consumption is the largest component of total demand, the path of consumer spending is crucial to the outlook for output and inflation.
First, the authorities are supporting the refinancing of banks by providing them with guarantees so that they can, in turn, properly finance the economy. Second, very significant reforms of accounting rules are in the process of being finalised. The first reform aims to bring the current framework in line with what is best practice in the world today: it will allow banks to transfer instruments hitherto booked at market value to portfolios where that will no longer be the case. The second will introduce greater flexibility in markedto-market accounting rules, allowing assets, whose market is no longer active to be valued at amortised historical cost. This will ensure that the valuation of these products is better suited to the market conditions that have prevailed for the last few months. Lastly, governments have confirmed their support for the recapitalisation of banks. In the case of France, the Government and Parliament very quickly fleshed out these European principles as follows: New legislation provides for the creation of a funding vehicle, created to guarantee the refinancing of banks for medium-term maturities (up to five years). This vehicle, which is strictly supervised by the French Government and the Banque de France, has a credit capacity of EUR 320 billion. The guarantee is granted for a fee, so that the banks requesting it pay costs corresponding to normal market conditions. The law stipulates that a state-owned company has the possibility of subscribing to subordinated debt issues or preferred shares.

Mr. Yam discusses “Intervention true to guiding policy” Discussion by the Chief Executive of the Hong Kong Monetary Authority, Mr. Joseph Yam, published in South China Morning Post on 24/8/98. The current debate revolving around government intervention in the stock and futures markets to deter currency manipulation brought a feeling of nostalgia to me. It made me recall the many debates on government intervention there were within the administration when Sir Philip Haddon-Cave was financial secretary. I was then, in the late 1970s, a young economist in the Economic Services Branch of the Government Secretariat, with little responsibility and a lot to learn. Those debates were, somehow, rather more healthy and more intellectual. There was certainly less mud being thrown around. But the contrast is understandable. Today, this is a controversial issue. There are interested parties airing their grievances through punchy and articulate expressions of their views on this philosophical issue of interventionism. This is also an issue in which, in a more politicised environment and at a time when the community is enduring the pain of economic adjustment, the politically minded see great political mileage. A government with the whole of the legislature arguably in opposition makes a vulnerable target. It is so easy to wave the banner of free markets and condemn any government intervention, and be seen to be righteous and knowledgeable; notwithstanding that the government concerned has been so successfully running the freest economy in the world.
Dimitar Bogov: Activities and developments in EU payment systems Address by Mr Dimitar Bogov, Governor of the National Bank of the Republic of Macedonia, at the Seventh International Conference on Payment and Securities Settlement Systems, Ohrid, 6–9July 20414. *  *  *  Ladies and gentlemen, esteemed colleagues, It is a great honor and privilege to open the seventh conference on payment and securities settlement systems. This conference has had an international character for several years now, and this year, the list of participants and guests is even broader. Apart from the National Bank of the Republic of Macedonia, we must give due credit to the Central Bank of the Netherlands and the Central Bank of Portugal for making this conference a success. Without their support and active participation, the quality of the conference would not be at the same level. Therefore, I would like to acknowledge the traditional cooperation of the National Bank of the Republic of Macedonia with the Central Bank of the Netherlands and the Central Bank of Portugal, and at the same time to salute this year’s participation of the representatives of the central banks from Central, Eastern and Southeastern Europe, as well as representatives of the Committee on Payment and Settlement Systems at the Bank for International Settlements, Euroclear and Commerzbank. To us, the perennial active participation of the representatives from the domestic payment system is of great importance as well. Esteemed colleagues from the financial sector!

The discussions on this topic are especially important for the Republic of Macedonia at this point, having in mind that the IPA project was initiated through the funds of the European Union, aimed towards implementation of the directives in the field of payment systems and financial markets. Therefore, tomorrow we will hold a panel discussion in order to encourage active participation of the Macedonian financial sector in the domain of card payments, e-commerce and innovations, in general, as well as of the National Bank from the aspect of its role in the payment system of the Republic of Macedonia. Fifth, the social welfare is greater in countries with higher level of financial inclusion, which implies access to financial services to as many people, especially those with lower income. In that context, this conference will also induce discussions about the effects of the greater financial inclusion on the economic growth and income inequality. Furthermore, financial inclusion will be considered from the aspect of integration of the payment trends outside the formal financial sector. One of these channels is the flow of remittances, which are of great significance for the countries in the region. In that regard, the discussions will particularly focus on determinants of the choice of the payment channel through which emigrants transfer remittances. Sixth, from the aspect of institutional changes, we will cover the new Euro Retail Payments Board, as a successor to the SEPA Council.
My address today will focus on three issues. The first is the lessons learned from past crises. The second is the post-crisis environment and their implications for emerging markets. And, the third is the challenge for central banks going forward. First, the lessons learned. Those of you who have been at central banks fifteen years or more will by now have witnessed at least two major financial crises that put the task of central banks in managing the economy under the spotlight. The first is the Asian financial crisis of 1997–98, and the second is the current global financial crisis. Although the two crises share many similarities as well as exhibit important differences, they both have a common origin in globalization and in the inability of the global financial system to deal effectively with the consequences of globalization. In the Asian crisis, the origin was in external imbalance of individual economies, private sector indebtedness, currency mismatch, and a sudden reversal of capital flows. In the current crisis, the origin lay in a large global imbalance, excessive-risk taking by financial institutions, and the accumulation of large systemic risk. In the context of policy, the two crises have produced many useful lessons on what needs to be done to prevent the recurrence of crises. While there is no shortage of lessons learned, having been at the Bank of Thailand through the two crises, my own list of lessons learned comes down to four important lessons. The first is that nobody is above crises.

1.3  The euro project  At the core of this report is a discussion of the euro project. It examines what euro area membership entails and what its strengths and weaknesses have proven to be so far. Chapters 2 and 16 focus on economic developments in the euro area since its  1  See Central Bank of Iceland (2010), Monetary policy after capital controls, Special Publication no. 4, and Central Bank of Iceland (2012), Prudential rules following capital controls, Special Publication no. 6. 2  BIS central bankers’ speeches  establishment, with particular emphasis on the post-crisis period, and Chapter 17 compares the effects of the financial crisis on countries inside and outside the eurozone, with emphasis on a comparison of Iceland and Ireland. The objective is to inform the reader and report on research findings, with the aim of promoting informed discussion and policy-making on this major issue. Chapter 24 explores the changes that would be needed in Icelandic laws and regulations with respect to the currency and the Central Bank should Iceland join the EU and adopt the euro. Chapters 21-25 describe the Eurosystem and the EMU accession process. According to EU regulations, member countries are to adopt the euro once they have fulfilled the Maastricht criteria for economic convergence.