samchain/econo-pairs-v1 huggingface dataset:
It is not to say that the banking sector response was all that we wanted because there were still some elements and gaps in the market response that we felt were inadequate. While overall credit grew well and continues to do so, some sectors, particularly SMEs, did not receive the credits we wanted them to get. The credit did not extend or reach out to the sectors hit particularly hard by Covid-19. Our response is to design policy measures to supplement the market response, for example, what we initially called a soft loan program. The program then started to have some obstacles because of the pricing of the loan structure. Therefore, we came up with another emergency degree on Financial Rehabilitation Measures, which in part established a loan facility for SMEs with a credit guarantee component from the government. The measures were to encourage the banks to lend to those sectors which had not received adequate credit by addressing the high credit risk that banks might experience from lending to SMEs. As a result of the package that we put together on the SME front, we managed to see loan growth in SME sectors. These measures are examples of the proactive response that policy authorities, both on the fiscal side at the Ministry of Finance and us on the monetary side at the Bank of Thailand, try to get the economy through this crisis, as well as it could be reasonably expected.

Therefore, inflation has not spread as broadly, and the likelihood of seeing second-round effects to date remains relatively low partly because of the softness of our labor market. That is the current state of the economy and the outlook, and so, what is the way forward a bit further? Page 4 of 8  Part 2: The Way Forward Immediate policy challenge is to keep the recovery intact. “No cliff” Looking a bit further, the immediate policy challenge is to ensure that the recovery is intact. We have to make sure that there are “no cliffs” or things that will interrupt our recovery path. What kinds of things would cause this? Firstly, we do not want financial conditions tightening too early because that would hurt the ongoing recovery path. In this case, we must do what is necessary to ensure that the banking sector still provides credit facilitation to the economy and help keep the recovery going. We also do not want to see an adverse impact on the Thai financial markets from the tightening in global financial markets due to the Fed or the ECB policy normalizations. However, we are well-placed to withstand the tightening, given our low external vulnerability. The other thing that would constitute a cliff is the deteriorating financial conditions. For example, a sudden and sharp uptick in non-performing loans could interrupt the banking sector and the credit intermediation channel.
As in late 2011, the main effects of these tensions in emerging economies, aside from lower commodity prices, have been the depreciation of their currencies, fallen stock prices and increased risk premiums on their external bonds. Chile has not been spared, although as of the statistical closing of these Reports the effects have been limited. Compared with March, the peso/dollar parity has depreciated somewhat below 5 percent; the stock market, as measured by the selected price index IPSA in pesos, has lost over 7 percent, and the sovereign premiums of Chilean CDS have risen nearly 40 basis points. Money markets, meanwhile, have operated normally. In contrast with the developed world, in Chile domestic output and demand are still strong. In the first quarter, y-o-y GDP growth exceeded March’s forecasts. However, in quarter-to-quarter terms it lost strength with respect to late 2011 and grew according to trend. Inflation has been lower than expected, which, combined with the drop in international fuel prices, has reduced the risks for its short-term evolution. In general, medium-term inflationary risks are still latent because domestic markets remain tight. In this context, the Board has kept the monetary policy interest rate (MPR) at 5 percent since January, and has conditioned its future movements to the implications of domestic and external conditions on the inflation outlook. Chile is on a healthy position to confront further deterioration of the global scenario.

In any case, and despite the impact of external volatility on the prices of some assets, financial markets have operated normally. In this context, I would like to highlight the need to continue advancing in initiatives to strengthen our regulatory and supervisory framework. One such case is the bill to reform insurance companies currently being debated in Congress. The banks’ solvency and liquidity indexes have been stable in the first half. In a context of good rents, core capital has hovered around 10 percent while regulatory capital – as measured through risk-weighted assets – around 14 percent. Meanwhile, since the last Financial Stability Report the banking industry has increased its long-term debt certificates, and some medium-sized banks have pursued strategies to attract retail deposits. Another favorable development is the greater diversification of banks into different types of credit from abroad. Also worth noting is the hoarding of liquid assets in foreign currency. The stress tests presented in our Financial Stability Report show that the banking industry’s current capitalization levels allow it to cushion an episode characterized by a GDP slowdown, higher financing costs in local currency and an exchange rate depreciation associated with the materialization of the external risk scenario. As for household debt, it should be noted that, on aggregate, borrowing has increased in tandem with disposable income. This has translated into fairly stable aggregate debt indicators, whether comparing the debt level or financial burden with disposable income or the wage mass.
The LIFI area is currently is responsible for roughly the top 23 foreign firms based here in New York with the largest U.S. presence (outside of the four firms that are covered in our Complex Financial Institutions portfolio); and, the RCFI unit is responsible for the remaining large group of smaller foreign firms. Our rationale for making this change was three-fold: First, we wanted to better tailor our supervisory approaches to the firms in each of these portfolios. •  In this regard, the LIFI portfolio approach will use a combination of on-site and offsite monitoring over the course of the year, as well as examinations – but the program will evolve over time as the rules are finalized for applying enhanced prudential standards for FBOs. •  The RCFI approach will largely be point-in-time examinations, using, where possible, a more streamlined process, more off-site analysis, and continued coordination with our colleagues at the other supervisory agencies. Second, we wanted to leverage the portfolio approach to ensure better dialogue with supervised firms, as well as to develop better cross-firm metrics and benchmarks that we can use to evaluate firms and to provide more robust feedback on key issues. 6  BIS central bankers’ speeches  And, third, it provides an opportunity to realize efficiencies across our supervisory activities, with similarly sized (and similar complexity) organizations examined by a common core of examiners; this also gives us more targeted training and development for our staff.

Conclusion I think I’ve covered a lot of ground in my remarks this morning. I look forward to continuing our dialogue in the coming year – and appreciate the opportunity to talk with you this morning. Thank you. BIS central bankers’ speeches  7
Technology is akin to Porthos, the fearless musketeer who is eager to try new ways for a better future. In a similar vein, Technology presents us opportunities to revitalise Finance: the opportunity to enhance customer experience; the opportunity to strengthen risk management; and the opportunity to improve cost efficiency. Let me elaborate on each of these opportunities. First, enhancing customer experience. This has become a critical success factor in many industries, including finance. Why? Basically, technology firms have reshaped the way businesses interact with customers. They have empowered customers and set higher bars for customer satisfaction. Whether they are established Big Tech firms or small FinTech start-ups, they pose a competitive challenge to financial institutions. If I have to name one thing these technology firms do very well, much better than financial institutions, it would be that they are obsessively customer-centric. Tech firms embed themselves in the customer journey and use data analytics to deeply understand customer needs. They then provide end-to-end solutions, often customised to individual circumstances. They have agile IT systems, efficient processes, and a culture that emphasises speed. Essentially, tech firms think of themselves not as being in a particular industry, but as platforms, upon which they provide access to the services their customers need. Traditional banks tend to be largely product-centric. The credit card division tries to sell you unsecured credit, the wealth management division tries to sell you mutual funds, the lending division tries to sell you a mortgage.

Last year, AFIN launched the API eXchange – the world’s first cross-border, open architecture platform to enhance financial inclusion. The API eXchange is a cloud-based platform that does two things: It is a marketplace, enabling financial institutions to discover and connect with FinTech partners through APIs on a globally curated platform. It also provides a sandbox environment for financial institutions and FinTech firms to design and test cross-border solutions. I have spoken so far of how the two musketeers – Finance and Technology – can and must come together to bring value and convenience to customers. But for consumers to be part of this ecosystem, there needs to be Trust – the third musketeer. Trust – the Musketeer who Binds Consumers to Finance Trust is similar to Aramis, the third musketeer who is faithful and values friendship. Trust is a key attribute for the success of a financial ecosystem. It is a shared responsibility among all the actors in the ecosystem. Banks in particular must be trustworthy so that customers have faith that their money and 7 / 10  BIS central bankers' speeches  data are safe with them. As Finance adopts more Technology, it must pay close attention to three risks, so as to maintain the Trust of consumers. First, cyber risk. As more financial services move online and collaboration among banks and technology companies becomes more pervasive, a growing risk that financial institutions are facing is in cyber space. The frequency, scale, and complexity of cyber-attacks are mounting.
Enhanced international coordination between monetary authorities is ensuring that their actions are part of a consistent overall strategy. These measures are highly exceptional with indeed unprecedented monetary easing leading key policy rates to historically low levels and the adoption, in certain cases, of unorthodox monetary policy actions. As such, they should greatly contribute to restoring confidence and a smooth functioning of money markets. Governments have moved aggressively to support banks' solvency and resilience. Since the Paris Declaration by euro area member-countries, Europe, under the leadership of France until year end, has been acting according to what I consider a sound and consistent action plan. I won’t enter into the details. Just bear in mind the three following elements. First, authorities are extending guarantees to banks’ refinancing so that they can, in turn, properly finance the economy. Second, significant reforms of accounting rules are now being implemented. Basically, these reforms allow banks to transfer instruments previously marked to market to portfolios where that will no longer be the case. They also provide for greater flexibility in methods used to value assets whose market has shut down. Third, and lastly, governments have confirmed their willingness, when warranted, to step in and support banks’ capital. What about France’s actions? Government and Parliament very quickly put meat on the bones of the European principles. A new bill has been passed, which provides for two things. First, it sets up a EUR 320 billion funding vehicle to guarantee banks’ medium-term refinancing (i.e. up to five years).

Miles, D. (2013), “Monetary Policy and Forward Guidance in the UK”, speech given at Northumbria University, Newcastle, 24 September. BIS central bankers’ speeches  7
-3.5 92  94  96  98  00  02  04  06  08  10  Sources: Bank of England, Bloomberg, Chicago Board Options Exchange, Debt Management Office, London Stock Exchange, Bank of America Merrill Lynch, Thomson Reuters Datastream and Bank calculations. (a) 90-day moving average of index. Index represents number of standard deviations from the mean of a range of market liquidity measures, incorporating prices and volumes, normalised on the period 1999–2004. The indicator is more reliable after 1997 as it is based on a greater number of underlying measures. See also Box 1 of the April 2007 Bank of England Financial Stability Report. 10  BIS central bankers’ speeches  Chart 9:  Chart 10:  Major UK banks’ and LCFIs’ leverage ratios(a)(b)  Major UK banks’ and LCFIs’ price to book ratios(a)  Maximum-minimum range Weighted average US LCFIs  European LCFIs  European LCFIs US LCFIs Major UK banks (b)  Ratio 120  Major UK banks (c)  Ratio 4.5 4.0 3.5  100  3.0  80  2.5  60  2.0 40  1.5  Adj. (d)  1.0 0.5  10  09  0 08  10  2007  09  08  11  Q1  2007  Adj.

In the more recent period, with the enhanced international dimension of Islamic finance, it has become an increasing form of intermediation that has facilitated economic linkages between emerging economies. In addition, it has also drawn the participation by the more established financial centers to forge stronger financial linkages with the dynamic growth regions of Asia and the Middle East. Indeed, this would contribute towards more efficient mobilisation of funds across regions, reinforcing the significance of Islamic finance as an increasingly important channel for a globally more inclusive economic development. In the aftermath of the crisis, Islamic finance will continue to spur new connectivity among nations as its role and relevance gains more significance, thereby contributing to a more balanced global growth. Conclusion In conclusion, it is the very premise on which Islamic finance performs its intermediation function that strengthens its potential role and relevance in advancing the growth and development agenda towards preserving financial stability and towards strengthening economic and financial linkages between nations. By operating in accordance with the rules of Shariah, Islamic finance draws its strengths from its direct link to economic activity and its inherent requirement for prudent risk management and explicit disclosure and transparency thereby ensuring the viability of the activities in generating sufficient wealth to compensate  BIS Review 70/2010  3  for the risks involved. These inherent strengths will continue to be the catalysts driving its transition into a new era of growth and development in this post-crisis world.
In both of these segments, we hope to achieve the greatest impact on the market as a whole. In principle, we buy only marketable bonds and pay market prices. Apart from the mortgage bonds, we did not buy any bonds issued by financial institutes. As of mid-June, our total purchases amounted to around CHF 2.5 billion in mortgage bonds and roughly CHF 300 million in corporate bonds. For the time being, we plan to continue purchasing selectively. As regards volume, we have set no restrictions. The bond purchases also seem to have fulfilled their purpose. Risk premia have come down significantly (cf. chart 3). That said, we were able to benefit from the favourable mood in the financial markets. The fact that, in the past few weeks, several issuers found their way back to the issues market for the first time in a long time is further proof of the effectiveness of our strategy. SNB StabFund Developments in the market since the UBS package of measures was announced show that the transfer of illiquid assets from UBS to the SNB StabFund was both appropriate and absolutely necessary. Had these assets remained on UBS’s books and been valued at  2  BIS Review 77/2009  market price, the bank’s existence would have been seriously threatened these last few months. The transfer of assets was concluded at the beginning of April.

However, despite this method of stating assets in the balance sheet at amortised cost, the StabFund had already used up its equity capital by the end of March. Up until that point, it had been necessary to make value adjustments amounting to roughly USD 5 billion. Nonetheless, it still looks as though the StabFund will ultimately be able to pay back the loan. This is because, on the one hand, markets can recover; the positive turn of events in April and May corroborates this. On the other hand, the assets have been generating relatively robust cash flows until now. Owing to interest payments and loan repayments, the SNB loan has already been reduced considerably. By mid-May, it came to only USD 23.7 billion. In addition, the original size of the StabFund has declined by around USD 6.7 billion as a result of sales, maturities and the closing out of derivatives positions. In mid-May, the size of the StabFund, as valued at amortised cost, was just roughly USD 32 billion, of which around USD 4 billion comprised contingent liabilities from derivatives. The performance of the stabilisation fund’s assets is due to be reassessed at the end of the second quarter. Approximately 80% of the SNB’s loan to the StabFund is denominated in US dollars. Originally, the SNB fully refinanced the dollar loan via the existing swap facility with the Federal Reserve. Now, less than 20% is refinanced thus, accounting at this stage for only about USD 3 billion.
In the banking system, credit activity is growing moderately, except for mortgage loans. Corporate and consumer loans continue to grow slowly. On one hand, the slowdown of the commercial portfolio is consistent with the economy’s cycle, which coincides with the reduction BIS central bankers’ speeches  5  in demand revealed by the Bank Credit Surveys of the past few months. On the other hand, the consumer portfolio shows zero growth in the lower amount segments, usually associated with lower-income debtors. In the mortgage category, the greater expansion of debt comes from loans of more than five thousand UF, partly explained by the housing price dynamics. Bank financial indicators show the sector losing strength. At the third quarter of 2015, ROE dropped to 15 percent, largely because of reduced interest rate spreads. This reflects the shift in portfolio composition from higher-yield segments (consumer and commercial) to mortgage. The capital adequacy ratio (CAR) continued to decline, to slightly below 13 percent as of August 2015, consolidating a fall of just over one percentage point in the last four years (figure 14). This has occurred in a context where international banks have tended to increase their capitalization levels to strengthen their capacity to respond to episodes of financial stress, in line with the new international regulations (Basel III), or as a voluntary way of building resilience. Although Chile, with capitalization levels of around 14.3 percent in 2009, was around the median of OECD economies, its place today is in the lower part of the distribution (figure 15).

8  BIS central bankers’ speeches  Figure 3 GDP, domestic demand and components (annual change, percent)  9  21  Domestic demand  6  14  Consumption GDP  3  7  0  0 Gross fixed capital formation (right axis)  -3  -7  -6  -14 12  13  14  15  Source: Central Bank of Chile.
Since the currencies of many countries, including Switzerland, were tied to the US dollar, this had resulted in high rates of inflation. Not until flexible exchange rates were introduced could central banks manage monetary policy conditions in their own countries and thereby effectively combat inflation. The SNB belonged to a group of pioneering central banks in this respect, managing to greatly reduce inflation within a very few years. And if we return to our loaf of bread, it is still possible to pay for it with Swiss coins and banknotes, although nowadays cashless payment forms – debit and credit cards – are further options. Two invariables of a sound monetary order By taking you on this short journey in time, my idea was to illustrate the following points for you: The monetary order did and does not arise from natural causes; neither is or was it godgiven. It is, rather, a – more or less – useful human invention. Some of the fundamental turning points were the result of an organic learning process. For instance, the centralisation of the right of coinage in the hands of the Confederation was a reaction to futile attempts to overcome the currency confusion through cantonal agreements, and was a response to the novel requirements of an economy that was developing rapidly. At other times, however, it was necessary to react to upheavals in the international arena with determination, and under time pressure. On example of this was the departure from fixed exchange rates at the beginning of the 1970s.

Nowadays, the SNB and the commercial banks together provide the economy with money. Through credit creation, the banks are in a position to create book money, only a small part of which they are required to cover with SNB sight deposits. In everyday life, this book money – for instance deposits in salary accounts – is generally accepted in the same way that cash is accepted. A plain money system would mean that banks had to cover 100% of their book money with SNB sight deposits. The people behind the initiative believe that this would simplify monetary policy because a plain money system would allow the SNB to manage the money supply with utmost precision. Moreover, plain money is thought to increase the stability of the financial system because deposits are secured by SNB sight deposits. In addition, profits from money creation would accrue fully to the SNB and no longer, in part, to the banks. Although the idea of plain money may be interesting in certain respects, I am sceptical as to whether acceptance of the initiative would result in better money. My reticence is born not only of considerable doubts as to the anticipated benefits of plain money, but far more because the introduction of plain money would constitute an enormous experiment for which we lack any experience or comparative figures from the past. Never in monetary history has a country introduced plain money based on central bank money. Assumptions which appear plausible could therefore prove to be incorrect.