samchain/econo-pairs-v1 huggingface dataset:
But that could not be a complete solution as it would leave the hosts of the group’s foreign subsidiaries with exposure to Topco being unwilling or unable to pay when it mattered. For that reason, the LAC of Topco needs to be passed down to the ‘systemic’ or otherwise key operating subsidiaries, forming LAC in the subsidiaries themselves. This should probably be in the form of subordinated debt issued to the Topco with write down triggers that would enable losses exceeding the subsidiary’s equity base to be pushed up to the Topco. By transmitting the losses to Topco, the operating company is recapitalised. If Topco itself is bankrupt as a result, it can be resolved in a top-down bailin by the group’s home resolution authority of its own debt. That is the model set out in the paper FDIC/Bank of England issued last December.13 For MPE resolutions, there needs to be sufficient LAC in each of the key subsidiaries that are manifestly relevant to global financial stability. Some of the gone-concern LAC should be issued externally, so that bailin can effect a transfer of ownership. Beyond that, the host authorities of other subsidiaries may want to require sufficient externally issued goneconcern LAC, in order to be confident of being able to execute a local resolution if the subsidiary they host is systemic locally, ie a domestic SIFI.

It is an original member of the IMF and the World Bank, and is represented on the Executive Boards of both institutions together with seven other countries in the Nordic-Baltic Constituency. In line with its long-held policy of supporting multilateral institutions, Norway entered into a bilateral loan agreement with the IMF in the first half of 2009, when the IMF urgently needed to strengthen its lending capacity. Later in 2009, Norway agreed to raise its commitment under the New Arrangements to Borrow (NAB) and expanded its voluntary transactions in SDRs following the large allocations. It also committed to support IMF lending facilities for low-income countries. Thus, Norway has actively backed the multilateral responses to the global crisis, in large part stemming from decisions of the G20 at the London Summit in April 2009. Norway has a strong external and fiscal position based on large petroleum revenues. The lion’s share of the revenues is invested abroad through our sovereign wealth fund. 1  The membership of the G20 comprises Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Korea, Japan, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States and the European Union. The G20 was formed as a new forum for cooperation and consultation on matters pertaining to the international financial system. It studies, reviews, and promotes discussion among key industrial and emerging market countries of policy issues pertaining to the promotion of international financial stability, and seeks to address issues that go beyond the responsibilities of any one organization.
The size of the gap, combined with the limited growth differentials, suggests that the process of real convergence will be a very slow one, likely to continue far beyond the tentative dates for EU accession and for the adoption of the euro. Hence, although differences in income levels are compatible with membership of EMU, it is important for accession countries to progress in the process of real convergence with the euro area. In particular, real convergence can help to create economic cohesion within EMU and promote integration between Members States. Further real convergence will also help to minimise the risks and the effects of asymmetric shocks. Against this background, it seems crucial that accession countries pursue structural policies that enhance the potential output growth of their economies. 2. Inflation developments  With regard to inflation developments, I should like to stress that, on the whole, the accession countries have made remarkable progress in bringing inflation down to single-digit rates. Inflation in the accession countries is expected to average around 6%-7% by the end of this year. However, reducing inflation from relatively low levels to even lower ones is clearly a difficult task. Evidence points to a number of micro and macroeconomic factors which affect current inflation rates in the accession countries. These include ongoing price liberalisation, privatisation processes, relatively expansionary fiscal policies and stubborn inflation expectations.

Indeed, the experience of countries such as Greece, Spain and Portugal confirms that a key element of their successful entry into the euro area was their success in controlling sources of inflation other than the Balassa-Samuelson effect. In particular, a balanced monetary and fiscal policy mix and the control of real wage increases have supported the disinflation process in these countries, and allowed them to advance in the process of nominal convergence without compromising the gradual catching-up in real incomes. 3. Monetary policy and exchange rate strategies  With regard to monetary policy and exchange rate strategies, most accession countries have already indicated their intention to join ERM II as early as possible after entry into the EU. The accession countries have also signalled their intention to adopt the euro as soon as possible, that is, after two years of ERM II membership. 2  BIS Review 92/2001  The whole issue of the timing of ERM II membership, both as to when to join and how long to remain in the system, is dependent on a somewhat more complex question, namely whether the discipline which ERM II imposes on its members is advantageous for the accession countries. The answer, in our view, is “yes”. Ladies and gentlemen, allow me to reflect on this question for a moment and explain why we hold this view. Being small open economies, most accession countries cannot disregard exchange rate developments when making their monetary policy decisions.
An adjustment in interest rates affects the price of households’ assets, such as housing and thereby wealth, and through this channel has an indirect effect on households’ consumption in the way I just have described. However, an adjustment in interest rates also has a direct effect on households’ purchasing power and willingness to incur debt via interest costs for borrowing. The speed and strength of the impact of an interest rate adjustment on households’ interest expenditure depends to a large extent, as I mentioned earlier, on the size of the debts, the percentage of the loans that are variable-rate loans and the average fixed-rate term for the loans at a fixed interest rate. The percentage of variable-rate loans increased during the 1990s and is currently around 35 per cent of the total debts. The larger the percentage of variable-rate loans a household has, the faster an  1  See pp 15-17, Financial Stability Report 2004:1  BIS Review 51/2004  3  interest rate adjustment will affect interest expenditure. The fact that indebtedness and house prices have increased should thereby have contributed to a more rapid and possibly also a stronger impact by monetary policy on household consumption demand than previously. Do the inflation forecasts contain all of the relevant information on house prices and indebtedness? As I mentioned earlier, the Riksbank’s monetary policy is normally based on forecasts of inflation one to two years ahead.

It seems that one trend is towards disintermediation and a more important role of capital markets, gaining ground to banks, in a global financial system that will probably end up being smaller and more attuned to the size of the global economy. Another trend points to a reduction of financial linkages between national financial systems, as BIS banking statistics, for example, are starting to show. Here, the role of Central Banks’ policies and operations, as well as regulators is crucial, as they must walk a fine line in promoting domestic financial stability without falling into the nets of protectionism, something that would be indeed damaging for growth and prosperity. As we all know, the risk of fragmentation and re-nationalisation of the financial system has materialized at the European level, in the unique institutional context of European Monetary Union; and the solutions to overcome this situation are changing the foundations of the euro. Each of the three sessions which make up the programme will focus on a particular perspective on how the new trends are shaping the global financial system. The crisis and the policy response – in the areas of financial regulation and monetary policy – are generating new patterns of funding, new players and changes in capital flows across global markets. Those issues will be reviewed in the initial session. As I mentioned before, the euro area has to deal with a severe crisis which has led to the fragmentation of the European financial system.
Notes: Data for French government debt between 1934 and 1948 is not available in the IMF dataset. 41  All speeches are available online at www.bankofengland.co.uk/speeches  41  Chart 3: Compliance with EDTF disclosure 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Pre-EDTF Report  2012  2013  Aggregate implementation  2014  UK implementation  Sources: Progress reports of the Enhanced Disclosure Task Force from 2013, 2014, and 2015; Bank calculations  Chart 4: G-SIB and D-SIB Tier 1 capital ratios Per cent  16 14 12 10 8 6 4 2 0  2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total  GSIBs  DSIBs  Sources: S&P Capital IQ and Bank calculations Notes: Weighted average based on a sample of 189 banks which are systematically important as of 2016. Yearly is defined as the fiscal year of reporting of the individual banks. Tier 1 Capital Ratio = Tier 1 Capital/Risk Weighted Assets  42  All speeches are available online at www.bankofengland.co.uk/speeches  42  Chart 5: G-SIB and D-SIB leverage ratios Per cent  8 7 6 5 4 3 2 1 0  2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total  GSIBs  DSIBs  Notes: Weighted average based on a sample of 189 banks which are systematically important as of 2016. Yearly is defined as the fiscal year of reporting of the individual banks.

Sixth, with respect to our own crisis mitigation tools, a lesson that we can draw at this stage is that the operational framework of the Eurosystem has proved able to cope with stressed market conditions. So far, the Eurosystem has been able to manage the turmoil in an effective and flexible manner. Two ingredients of its operational framework have been particularly important: The first is the clear separation between on one hand the ECB’s management of the aggregate liquidity conditions and on the other hand the setting of its monetary policy stance, which is signalled by the minimum bid rate in main refinancing operations. This separation has been extremely valuable under present circumstances. Looking ahead, and in line with its previous communications and actions, the ECB will continue to steer very short term interbank rates close the minimum bid rate. The second ingredient is the Eurosystem’s collateral framework. The broad list of eligible assets has ensured that a broad range of counterparties could access the credit operations of the Eurosystem during the turmoil. This has helped counterparties to effectively mitigate funding liquidity risk when interbank markets stopped functioning properly. As a side effect, the acceptance of ABS in the sizeable refinancing operations has allowed to address also asset refinancing needs of counterparties effectively. This has certainly contributed to a better functioning of the money market since counterparties know that they can turn to the Eurosystem to refinance these assets.
It has helped entrench Hong Kong as a testing ground and pilot market for China’s continuing financial reform and liberalisation. There is clearly immense scope for us to leverage on our key strengths as a close business partner, a capital formation centre and a financial intermediary for the Mainland economy in the development of Islamic finance. There are opportunities for us to extend our reach to potential Islamic investors and financiers in the Middle East and Asia. The addition of Islamic finance as a new asset class in our financial system will add value to Hong Kong as a thriving financial centre and a leading financial services hub in Asia. As a major financial centre, Hong Kong – with its flexible and innovative market participants and its responsive government – has always stood ready to adapt to and embrace new ideas. Even if the current financial environment appears unfavourable to the development of Islamic finance in the short term, this is, at worst, a temporary setback as future prospects remain promising. We at least do not intend to be put off by temporary difficulties from our goal of making Hong Kong an Islamic financial hub. Indeed we believe that this is a good time to do the groundwork of installing the necessary legal, taxation and market infrastructure. 4  Source: World Federation of Exchanges.

BIS Review 146/2008  3  To name just a few developments in the past 12 months: a new Dow Jones Islamic Market Index was launched to track China-related equities listed on the Hong Kong Stock Exchange; Islamic mutual funds were introduced by a local bank and an asset management company featuring China-related equity investments through the stock market platform in Hong Kong; and an exchangeable sukuk linked to the shares of a Mainland company listed in Hong Kong was issued in March, enabling investors to gain exposure to China’s growth story. The response so far has been highly encouraging: for example, the sukuk was 10 times oversubscribed. Likewise, positive progress is achieved in the development of Islamic banking in Hong Kong. Following the first Islamic banking window introduced three months ago, I’m glad to witness yet another market player who is set to launch its Islamic banking window in Hong Kong at this auspicious occasion today. The increasing number of banks taking part in Islamic banking activities will add further momentum to the development of an Islamic capital market in Hong Kong by providing an important tool for funding and liquidity management. The Hong Kong Monetary Authority will continue to give full support to the HKSAR government in its initiative to develop Islamic finance in Hong Kong by acting as a market enabler and infrastructure provider. The HKMA has taken important steps and devoted considerable resources to promote the industry in Hong Kong.
Since the June technical adjustment, rates on federal funds transactions have continued to edge higher in the range, and most recently the EFFR has risen to the IOR rate, or five basis points below the top of the target range. 27 It is possible that the EFFR could fluctuate around the IOR rate or exceed the IOR rate. However, I don’t believe that this upward pressure on the EFFR signals that we’ve reached balance sheet normalization or that we are at the “steep” portion of the reserve demand curve, where reserves are scarce. This is supported by the lack of evidence across a range of indicators signaling aggregate reserve scarcity. Let me be clear: Observing the EFFR and other rates above the IOR rate is not a sufficient condition for reserve scarcity. 28 In the last few days, even amid upward pressure in overnight funding rates, we still have not seen the range of signs I described earlier that would indicate reserve scarcity, such as significant 25  See Minutes of the Federal Open Market Committee, March 17 – 18, 2015. Recall that before liftoff, the main concern was that rates would fall below the bottom of the target range. Thus, policymakers thought term draining operations might be helpful.

Finally, regarding fiscal policy, it is assumed that the consistent framework outlined in the Medium Term Program (MTP) will be implemented and further enhanced by institutional and structural measures. In other words, it is assumed that no public price/tax adjustments would  14  BIS Review 31/2010  be made to lead to unpredictable volatilities in inflation and administered prices would be set in line with inflation targets over the next three years. Moreover, it is assumed that the fiscal stance will remain expansionary – but less so than in 2009 – throughout 2010, and subsequently fiscal tightening would be gradually adopted starting from 2011. In this respect, it is envisaged that the rising debt-to-GDP ratios would reverse their course steadily starting from 2011, and hence the risk premium would not display any significant changes throughout the forecast horizon. Distinguished Guests and Members of the Press, Against this background, assuming policy rates are kept constant for a long period followed by limited rises thereafter, with policy rates staying at single digits throughout the three-year forecast horizon, the medium-term forecasts suggest that, with 70 percent probability, inflation will be between 5.5 and 8.3 percent with a mid-point of 6.9 percent at end-2010; and between 3.4 and 7.0 percent with a mid-point of 5.2 percent by the end of 2011. Furthermore, inflation is expected to decline to 4.9 percent by the end of 2012 (Figure 34).
Second, it is difficult because the evaluation must extend to entities and activities that operate outside of the more tightly regulated core – including, of course, the so-called “shadow banking system.” In the U.S., some of this responsibility undoubtedly falls to the Financial Stability Oversight Council,  BIS central bankers’ speeches  7  which was created by the Dodd-Frank Act. But this is a relatively new institutional arrangement and how well it will be able to perform its mission in practice remains to be determined. Similarly, on an international basis, the Financial Stability Board has undertaken an initiative to evaluate risks within the shadow banking system, but this effort is also still in a fledging stage. Finally, turning to the last issue about how to deal with institutions that run into difficulty, there has been progress. In the United States, the Dodd-Frank Act (DFA) gave the FDIC the authority to resolve certain large systemically important financial firms, on the recommendation of the Federal Reserve and the FDIC, and after the Treasury Secretary makes certain determinations in consultation with the President. Among other things, DFA enables the FDIC to establish a bridge institution in which critical activities could be moved so that the failure of a major institution will not unduly disrupt the provision of key financial services. DFA also authorizes the Federal Reserve to require that such institutions develop recovery and resolution plans – plans that must be acceptable to the Federal Reserve and the FDIC.

The extraordinarily poor economic outcomes we see today underscore the importance of building a financial system that is resilient in its ability to provide credit to households and business throughout the business cycle. It also underscores the importance of limiting the types of financial and real imbalances that develop during times of prosperity. When such balances unwind, they can cause significant damage to the financial system and the economy. A range of reforms are in train as the Dodd-Frank Act and other initiatives are implemented in the United States and abroad. Within the Federal Reserve System, we are building a more robust framework for financial stability. And, through the Financial Stability Oversight Council (FSOC), interagency coordination in identifying and mitigating risks to financial stability is being strengthened. As we move to implement financial reform, we should not be dissuaded by those who argue that the costs of reform are too high or that the job is simply too difficult. I grant that not everyone is, or will be, happy with all the reform measures. Reasonable people can disagree about the best way to achieve certain public policy objectives or the appropriate speed of the transition. But I think that the fundamental point that the financial system needs to be changed in profound ways should be broadly accepted at this point.   Policymakers and market participants must acknowledge that the financial system is inherently unstable – that it is prone to booms and busts, and that these episodes can destabilize the real economy.
20 This compares to the 40% of US mortgages that were issued without full documentation of borrowers’ income in 2006. 11  All speeches are available online at www.bankofengland.co.uk/speeches  11  incentives between originators and holders. It is regrettable that this requirement has been rolled back in the US, where 85% of Collateralised Loan Obligations (CLOs) are originated.21 Most fundamentally, the main holders of leveraged loans can generally bear the risks. There is no analogue to the thinly capitalised Structured Investment Vehicles (SIVs) who issued short-term commercial paper to hold long-term illiquid sub-prime debt in the run up to the crisis. For CLOs, the riskiest tranches are concentrated in hedge funds, open-ended funds, structured credit funds and CLO managers (Chart 9). US banks and insurers own around one third of CLOs (usually the less risky tranches) compared to only 6% for European firms and 2% for UK firms. Chart 9: Estimated holdings of CLOs by global investors  Sources: BarclayHedge, Bloomberg Finance L.P., FCA Alternative Investment Fund Managers Directive (AIFMD), Firm public disclosures, LCD, an offering of S&P Global Market Intelligence, Morningstar, National Association of Insurance Commissioners, Securities Industry and Financial Markets Association, Solvency II submissions, and Bank calculations. Notes: Indicative estimated holdings of CLOs by global investors. 1 square = 1% of $ billion global CLO market. For further detail, see footnotes to Chart F. 8 in the November 2018 Financial Stability Report.

According to various estimates, about 5% people at working age have already left Poland. For Estonia, this figure stands at as much as 10%. In the global economy of the 21st century, technological progress and lower transportation costs have allowed for the business processes or their parts to be easily moved between countries (a phenomenon frequently described as business process offshoring). The relative role of crucial factors behind long-term development prospects is thus changing. In the 21st century, the key factor conducive to economic growth will be knowledge – broadly understood as a country’s intellectual capital – and this country’s ability to drive innovation. If businesses in a given country fail to change their product and service profiles to achieve greater value added, they will find themselves pushed out of the market by companies from countries with low manufacturing costs. This applies to a number of markets, products and services only recently considered as subject to the international competition, one glaring example being the off-shoring of services offered by radiologists from the US to India 6 . China has already become the world’s leading exporter of computers and their components or telecommunications equipment 7 . I believe that it is just a matter of less than twenty years for China to achieve a similar position in the automotive industry, mainly because Chinese companies have mastered network-based cooperation.