samchain/econo-pairs-v1 huggingface dataset:
Here we must accept that we still have not dealt with the fundamental problem that systemically important banks cannot currently be allowed to fail. The truth is that, if tomorrow morning a systemic institution were once again to find itself on the brink of failure, we would again face the terrible choice between either coming to its rescue at the expense of taxpayers or putting the stability of the financial system at risk. Moreover, as long as banks can expect public support, market discipline will always be undermined. Moral hazard has been exacerbated by the fact that there is no longer any ambiguity about the willingness of the public sector to bail out large banks. In other words, we must acknowledge that the wide-ranging public support measures have aggravated the moral hazard problem associated with large and complex financial institutions. Frankly speaking, we have no choice but to address the specific challenges of banks that are “too big” or “too interconnected” to fail. If we are committed to a market-based system, the financial system of the future must expose financial institutions of all sizes and structures to the ultimate test of the market place. The very definition of a market economy is that it must allow for failure as a sanction of excessive risk taking or managerial incompetence. In the event that large, systemically relevant financial firms face the threat of failure in a next crisis, the financial system of the future must allow for their orderly resolution.

For how can we justify the costs of these efforts, which will have to be borne for at least a generation, without fundamentally addressing the flaws that got us into this terrible crisis in the first place? Ladies and Gentlemen, there are many areas in financial regulation that can and should be improved. Given what is at stake, there is a need to prioritise. I have attempted to lay out to you today where the SNB puts those priorities and where it will focus its greatest efforts in the months and years to come. Together with FINMA, it is our duty to provide robust analysis and to issue sound recommendations that will help put our financial system on a more sustainable foundation. In certain areas, like capital requirements, regulators can issue – and have issued – decrees intended to strengthen the resilience of the financial system. With respect to the “too big to fail” problem, political decisions are required. The topic is crucial. The consequences of not addressing it adequately could be severe in the event of a future crisis. Politicians need to become acquainted with and get involved in this matter. The sooner, the better! 17  17  The Swiss government has recently mandated a group of experts to make proposals to limit the risk associated with large firms. 8  BIS Review 145/2009
The main role of private equity is to fill the gap between internally generated financing and conventional market sources, such as bank loans and public equity. Unlike most stock market investments, equity investment enables shareholders to adopt a long-term and hands-on approach in their investee companies, fostering sound corporate governance and transparency, making appropriate contributions to business strategy and optimizing management. Crucially, however, it also contributes to the transfer of skills and has positive demonstration effects in terms of the development of local capital markets and competitive market-oriented behavior10. These modalities such 10  EBRD Transition report 2015-2016. 12  as, venture capital, crowdfunding, business angels, are relatively modest in the CESEE, although the same holds for the EU as well, where private equity has a share of around 0.3% in GDP. Debt market in the region is larger compared to the equity, averaging around 50% of GDP, which is still much lower compared to the EU-28 average of close to 160%. Yet, dominant part of this market segment is related to government securities, while the corporate issuance remains modest. In fact, in most CESEE countries, corporate bond markets remain small, or even nonexistent. Chart 14: Stock and debt market capitalization  Source: ECB and central bank websites. To recap, the region needs to mobilize finance, which amidst burdened government financing and structurally difficult access to bank finance for new and innovative companies, requires further development of the capital markets and more diversified portfolio of financial instruments.

The solid growth in general, including the inflows of foreign capital and rising investments, was a combined effect of the reform processes in these countries, and the extremely conducive global environment. Low interest rates, liquidity glut, expansion of global trade and global value chains were global features that supported investment growth in the region. Hence, the share of investment in GDP was rising prior to crisis (close to 10 p.p. in 2008 compared to 2000), reaching around 30% of GDP in 2008, well above the rule of thumb benchmark of 25%. Yet, according to the IMF (2016), given the easy pre-crisis funding conditions and low initial capital-labor ratio, “CESEE would have been expected to have much higher rates of capital accumulation than what they actually had”. One reason for this might be that the financial flows fueled consumption as well, thus precluding stronger growth of saving and investment. Chart 1: Share of investments in GDP, in % in constant terms)  Chart 2.
François Villeroy de Galhau: Monetary policy in uncertain times Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the London School of Economics, London, 15 February 2022. * * *  Introduction I am very grateful to Iain Begg for the invitation to speak to you today, more than two years after my first intervention at the LSE. So many things have happened since then, and the Ukrainian crisis shows that uncertainty isn’t going away any time soon. The euro area, like many other economies in the world, is entering a crucial phase in the recovery from the covid-19 crisis. There is good news, there is bad news and the two are very much related to each other. Unemployment has fallen to its lowest level in the history of the euro area and real GDP surpassed its pre-crisis level in the final quarter of 2021. On the less positive side, shortages of materials, equipment and labour persist in some sectors whilst others still operate below capacity. This lopsided economy plus sharply higher energy and food prices caused headline inflation in the euro zone to accelerate to 5.1% in January. Core inflation is only at 2.3% but significantly higher than one year ago (1.4%).

The reasons are large year-classes approaching retirement age, increased longevity and a lower birth rate. Conditions are quite different in Iceland, where age distribution is changing more slowly than in most countries with similar economies. Iceland’s retirement pension system is based on all working persons saving a proportion of their wages in a fund which is then used to pay their pension. Taxes therefore does not need to be raised even if there is a proportional rise in the number of pensioners. In addition to pension funds, some pensions are paid through the national insurance benefit system and there are also voluntary supplementary pension savings schemes. Iceland’s pension system thereby fulfils what has been considered international best practice in this field [the three-pillar system]. Total assets of Icelandic pension funds were equivalent to 120% of GDP at the end of 2005. No other pension system in the world is on such a strong footing. At the end of 2004, when total assets of Icelandic pension funds corresponded to more than 100% of GDP, the figure for the Netherlands was just over 100% and for the US 80-90%. In the overwhelming number of industrial countries, total assets of pension funds were equivalent to less than 20% of GDP, and the ratio was even lower than 10% in many countries, including Germany, Italy, Belgium, Austria, Sweden and Finland. By comparison, assets of Norway’s Government Pension Fund (Petroleum Fund) last year were equivalent to 60% of GDP.
Dear Guests, Today the transaction volume in derivatives markets is very much above the transaction volume in spot markets, where the trading and exchange of goods traded is realized on the same day. In 2004, the volume of daily derivatives transactions in the global foreign exchange market, excluding over-thecounter markets, was US dollar 1.2 trillion, which equals 65 percent of the total market turnover3. Dear Participants, Today we are about to bring in, and more importantly, institutionalize risk management principles and to initiate the development process of derivatives markets. This process is of great importance with respect to the overall economic activities. It should be borne in mind that this process will sometimes be arduous and time-consuming and it will also be a self-fulfilling process. Even if it takes a long time, sooner or later the derivatives markets will be established in our country. I am pleased to say that I am very happy to witness the efforts to develop derivatives markets and this achievement as well as its significance for the entire economy is a very important step for Turkish economy.

So, in short, in Sweden a situation has prevailed where subdued inflationary pressures have called for an expansionary monetary policy, while, at the same time, property prices have been surging in a fashion that in no way can be deemed as sustainable. How can, and should, a central bank in a small open economy with an inflation target deal with such a situation? The first thing a central bank can do is to engage in “open-mouth operations” and constantly remind everyone of the existence of the risks through speeches and documents. One publication that can prove particularly useful in this regard is the Financial Stability Reports, which are now published by an increasing number of central banks. By taking a systemic view of the financial system, the Financial Stability Reports investigate the collective impact stemming from the actions of individual financial institutions. By communicating these findings to market participants and the general public, the central bank can raise awareness of risks to financial stability, which might otherwise go unnoticed. BIS Review 101/2007  3  But, at times, all this may not be enough, and then the inevitable question begs to be answered – How, if at all, should a central bank let changes in asset prices influence its monetary policy? The Riksbank runs a flexible inflation target, which means that we also take the real economy into account when we set interest rates.
However, it should be noted that in all those cases no central bank was pressurised to take the full responsibility and to be scapegoated, unlike the continual public attacks here against the BNB. In other countries the responsible institutions and politicians have always held the understanding that the central bank’s authority is of paramount importance for the calm of depositors and the stability of the banking system as a whole. All across the world that authority, and the independence of the central bank, are considered to be a long-term asset of the country. Consequently, central banks’ actions have not been compromised under the pressure of temporary economic or political emotions. All said so far does not mean that the BNB has no intention to draw conclusions for improving the efficiency of the banking supervision. Quite the opposite, the BNB has already undertaken serious steps in this direction. Back in the summer we publicly announced a number of measures and actions for reviewing the supervisory framework and practices. I wish to remind you that as early as in July we sent an official letter to the EBA inviting them to carry out an independent review of the quality, capacity, practices and procedures of the BNB’s Banking Supervision Department. In August we sent another letter to the International Monetary Fund (IMF) requesting them to organise a mission of the IMF and World Bank in Bulgaria under the Financial Sector Assessment Program (FSAP).

This is an important area which will provide all those of us involved in financial sector oversight with major challenges for years to come. Increasingly active players are the hedge funds, employing alternative investment techniques and attracting a multitude of investors searching for higher yields. They often operate globally on the strength of the derivatised and securitised world. There has been a dramatic growth in hedge funds: data suggest that the past eight years alone have seen the value of assets rise by nearly 450%. Many of them are unregulated in a prudential sense, and are typically characterised by large proprietary positions, sometimes with an emphasis on unconventional assets and arbitrage positions. The complex and diverse operations of hedge funds can help to arbitrage away pricing mistakes, and to integrate financial markets. But they also raise new questions for financial stability oversight. The areas we need to look at are quite wide. There is of course the opacity aspect - what are the underlying concentrations hedge funds hold? But there are also other questions. How leveraged are they? Do lenders to them understand the risks that they are taking? And what is the potential impact of confidence and liquidity if they don’t? And what would happen if the new investors in hedge funds became disillusioned by their performance. Would it trigger an exodus and cause markets to go “one way”?
The second area of improvement is on other Pillar 2 risks including interest rate, liquidity, FX, strategic, technology and reputation. All banks have developed methodologies to identify, quantify, manage and allocate capital to such risks. These were risks for which no capital was required earlier. A third area is stress testing where Saudi banks have made good progress. This allows them to know their risk tolerance and resilience in times of stress. Finally, the introduction of Pillar 3 has strengthened the disclosure of Saudi banks to high international standards. This brings me to an important natural question. What does Basel III mean for Saudi banking system? Well let me assure you that our preliminary analysis is that the transition to Basel III in the Basel agreed time frames should be smooth. Saudi banks already maintain a high level of core common equity capital. The average following the introduction of Basel III has been about 17%, of which around 85% is core common equity. Similarly Saudi Banks maintain a high level of liquidity which has averaged over 30% over the past two decades. SAMA already requires banks to keep conservation buffers above the minimum and has  BIS central bankers’ speeches  3  introduced stringent stress testing requirements. Banks are making good progress in all areas. SAMA has already started the Basel III implementation process by publishing its plans, introducing relevant prudential returns and providing guidance to banks.

Monetary Policy From End To End: Define, Decide, Deliver Speech given by Dave Ramsden, Deputy Governor for Markets and Banking  The Strand Group Lecture Series King’s College London 20 November 2017  I’d like to thank Grellan McGrath for his assistance in preparing this speech, and colleagues around the Bank for their useful comments 1  All speeches are available online at www.bankofengland.co.uk/speeches  End to End Monetary Policy  This is my first speech in my new role as Deputy Governor for Markets and Banking, and as a member of the Monetary Policy Committee (MPC). It is a pleasure to be giving it in the newest part of King’s College London th  and in my position as a visiting professor here at King’s. And I’m delighted it’s the 25 Strand Group event, showing how this flagship series of policy relevant events has already become well established. One of the key differences between my old and my new role is the level of accountability. As Chief Economic Advisor to HM Treasury for the past 10 years, as would be expected under the civil service code, I was generally responsible for giving evidence-based advice to ministers who were ultimately accountable for their decisions to parliament and the public. That is very different in my new role in which I am directly accountable to parliament and public for decisions taken as a member of the MPC, Financial Policy Committee (FPC) and Prudential Regulation Committee (PRC).
First, a degree or diploma in STEM (Science, Technology, Engineering, Mathematics) provides a good head start. One does not need to have a tech qualification to take on a tech job. Financial institutions have been hiring engineering and science graduates as well. Financial institutions are also open to training mid-career Singaporeans with STEM backgrounds from other sectors too. Second, fundamental programming skills are essential. Demand is shi ing away from traditional roles like IT project manager and IT support, to product owners and so ware engineers. There are two kinds of so ware engineers: General app developers who focus on front-end and mobile app development; and Enterprise so ware developers who need deep technical skills that come from years of programming experience and knowledge of core banking so ware. Demand for enterprise so ware developers is much higher. Third, business domain knowledge is important. Gone are the days when technology professionals were at the back-end, building systems for business functions they had little interaction with. The demand today is for biz-tech or ops-tech integration. In financial services, tech professionals are expected to have business domain knowledge, to better support business needs. Fourth, overseas exposure is valued. As Singapore houses many global and regional tech hubs, tech professionals need to understand overseas markets to build better quality products and solutions. This means taking up overseas postings in countries like India and China, where there are large pools of tech talents to work with and learn from.

It reflects the impact of the Job Support Scheme that shored up local employment; and the border control measures during the COVID-19 pandemic that made the employment of foreigners diﬀicult. Job growth in the financial sector has been consistently strong over the past 5 years A total of 21,000 net jobs were created during 2016-2020, with Singaporeans taking up about 16,000 or about 75% of these jobs. With more financial institutions setting up their regional and global hubs in Singapore today, 40% of financial sector jobs here are primarily international-facing. Half of these jobs are filled by Singaporeans. They include good jobs such as: application developers who develop digital products for overseas markets; private bankers who serve regional clients; and risk managers who monitor risk metrics for the regional or even global business. The employment outlook for the financial sector in 2021 remains positive. Late last year, MAS and the Institute of Banking and Finance (IBF) conducted a survey of financial institutions’ projected hiring from January to December 2021. Close to 800 financial institutions responded, representing about two-thirds of the financial services workforce. Financial institutions are oﬀering 6,500 newly created positions in 2021. These are new jobs created and do not take into account gross outflow of jobs. About 6,000 of the newly created positions are permanent jobs. Half of these jobs are in technology and consumer banking, with the remaining jobs spread across other business lines and functions.
How much discretion to give to the MPC and how much should remain with the Chancellor is an interesting question that was raised, but not fully resolved, in 1997 with the system of open letters which gives the Chancellor the opportunity to comment on the horizon over which the MPC plans to bring inflation back to target. So there are certainly aspects of the inflation targeting regime to consider. In assessing the current framework, however, there are two factors that should not be ignored. First, the primary responsibility of any central bank is to ensure stability of the price level in the long run. To drop the objective of low inflation would be to forget a lesson from our post-war history. In the 1960s, Britain stood out from much of the rest of the industrialised world in trying to target an unrealistic growth rate for the economy as a whole, while pretending that its pursuit was consistent with stable inflation. The painful experience of the 1970s showed that this illusion on the part of policy-makers came at a terrible price for working men and women in this country. The battle to bring inflation expectations down was long and hard, and involved persistently high levels of unemployment. Wishful thinking can be indulged if the costs fall on the dreamers; when the costs fall on others, it is unacceptable. So a long-run target of 2% inflation should be an essential part of our macroeconomic framework.

Reports from the regional network indicate that capacity utilisation is high in the construction industry and in manufacturing, particularly among suppliers to the petroleum industry. There were reports of shortages of engineers and project managers. Many of our contact enterprises in corporate services also reported increasing skills shortages. On the other hand, idle capacity is reported in retail trade and in household services. There are limitations to how much the supply of Norwegian labour can increase ahead. Labour participation rates are at a historically high level, particularly when taking into account demographic developments. Developments in the labour market are similar to the profile observed ahead of the period of accelerating wage and cost inflation that started in 1998. Several factors can explain why wage growth has been moderate so far during this cyclical utpurn. An increase in inward labour migration and the opportunities provided by an international labour market may have resulted in greater emphasis on the high wage level in Norway relative to our trading partners. Inward labour migration has also contributed to reducing bottlenecks in some industries. Developments in region North are fairly similar to the situation in the other regions of the country. Region North reported prospects of solid growth in most industries. Manufacturing, retail trade and the local government and hospital sectors expected moderate growth in investment. The service sector expected zero growth in investment. There were reports of moderate employment growth in all sectors, with the exception of the local government and hospital sectors where growth was unchanged.