samchain/econo-pairs-v1 huggingface dataset:
Integrating across these businesses to develop a firm-wide, portfolio risk perspective is an important challenge, one that has many guises within a large, complex firm. For example, managing the complex pattern of risk exposures that derive from membership in multiple payment and security settlement systems, each of which has loss-sharing arrangements that generate contingent exposures among and between their members, is just one small facet of the broader challenge facing such firms today. The difficulty of managing the conflicts in dealings with customers is also significantly enhanced for these large, diversified institutions, given the multiple roles that they play. More generally, it is increasingly challenging for many large, diverse financial institutions to get an accurate picture of their aggregate exposure to individual creditors when their business contacts can come through so many different sources within the firm. This difficulty is compounded when different types of exposures that are functionally equivalent are managed in different ways in different parts of the firm. Different units within a single firm frequently trade with and transfer risk to one another, adding a further layer of difficulty in assessing the aggregate exposure to a given creditor or counterparty. The increased scale and scope of operations of the institutions that are the core of our system and the rapid growth in complex transactions place an extraordinary burden on the internal control, compliance, and risk management infrastructure. This is the “arms race” in finance.

However, much as New York City took time to recover, so too will it take time for Puerto Rico to recover from its crisis of the last decade. The future of Puerto Rico is yet to be determined. However, the experience of New York City suggests that a turnaround is possible even when underlying conditions appear dire. New York City is a compelling example of what is possible when you leverage your citizens’ ingenuity and capacity for reinvention. It shows what can be achieved with the appropriate discipline and effort. Thank you for your kind attention. 1 Jason Bram, Andrew Haughwout, Joseph Tracy and Luis Uranga assisted in preparing these remarks. 2 Raj Chetty, Nathaniel Hendren, Patrick Kline and Emmanuel Saez. “Where is the Land of Opportunity? The  Geography of Intergenerational Mobility in the United States.” Quarterly Journal of Economics, Vol. 129, No. 4, 2014. 5/5  BIS central bankers' speeches
For long periods, European banks have had problems obtaining funding on the market. This uncertainty is also reflected in the Riksbank’s calculations of the stress index for Europe. (Figure 1)  6  Credit Suisse (September 2011): “European Banks”. 7  IMF (September 2011): Global Financial Stability Report. 6  BIS central bankers’ speeches  Figure 1: European stress index  State support to the banking sector has been significant. In addition to EUR 90 billion in direct public expenditure, governments and central banks have paid out the equivalent of 13 per cent of GDP, EUR 1.6 trillion, in emergency liquidity assistance and support for the banks. The total commitments amount to triple this figure.8 The problems in the banking sector have still not been addressed The management of the present European banking problems can be contrasted with the way we handled the Swedish banking crisis twenty years ago. Of course, although we are often considered to have succeeded well in Sweden in 1992, this was due to a relatively beneficial political environment, rather than intellectual superiority. Even so, the differences illustrate an important insight from economics – more specifically, the significance of asymmetric information. Like other central banks, the ECB intervened in 2008 to support liquidity by various means, including offering loans at longer maturities. Unlike in Sweden, these extraordinary loan facilities continue to be available. Furthermore, the ECB has supported the markets for both covered bonds and government securities. In a crisis situation, it is necessary to maintain liquidity among the banks.

Before these problems are brought to light and dealt with, it will be hard to see any long-term solution for the European banking sector. A new framework – the way forward At the same time as the crisis has to be managed, those of us interested in financial markets must think ahead and build a more robust framework. The world doesn’t need a new 2008. Encouragingly enough, we have taken important steps towards creating structures that may prevent new problems. But there is still a lot of work to do. The crisis taught us lessons about risks in the financial sector Obviously, the experience of authorities around the world in the crisis will form the basis of a new and more secure financial framework. Academic research has also contributed valuable insights. It is obvious that risks in the financial sector were underestimated before the global financial crisis. One underestimation concerned the degree of correlation of risks in individual institutions. But it could also be argued that we, on the regulatory side, were a little naive regarding the risk of moral hazard in the governance of banks. To generalise slightly, it could be said that, before 2008, we felt quite safe when we saw that the risk in individual institutions looked manageable. Today, we know better. Even an individually well-diversified bank has assets that could be highly exposed to the same macroeconomic risk. In addition, as the banks largely act as each other’s counterparties, one bank’s problems can easily become another’s.
I should not wish to conclude this address without highlighting the need to further efforts in the financial education of consumers. In early 2007 the Banco de España released a new version of the Bank Customer Portal, but much remains to be done. The growing complexity and sophistication of the international financial system is, as I mentioned, creating a “knowledge gap” between financial institutions and final investors. And far from closing, the gap is widening. Supervisors, along with the other authorities involved in safeguarding consumer rights, must step up and, above all, combine their efforts in this field, since bank customers with a sound financial grounding are a vital pillar in a sound, competitive and stable financial system. It remains only for me to express my thanks, which it is a pleasure to do. During these first 11 months of my term of office I have had the good fortune to work closely with this Governing Council, the Executive Commission, the Deputy Governor and the Directors General, and to have received the firm support of the Bank’s staff. I thank you all and, after having celebrated the 150th anniversary of the adoption of the name Banco de España, I can bear witness to the fact this institution is performing increasingly better the tasks entrusted to it. BIS Review 67/2007  9

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Under these circumstances, there was a likelihood that a number of credit and interest rate markets would experience extreme price moves and possibly cease to function for a period of one or more days and maybe longer. This would have caused a vicious cycle: a loss of investor confidence, leading to a rush out of private credits, leading to a further widening of credit spreads, leading to further liquidations of positions, and so on. Most importantly, this would have led to further increases in the cost of capital to American businesses. Let me be clear: had we not just experienced in August precisely this type of shock to our credit markets, had we not just seen a sudden, world-wide straining of investor confidence, had there not already been underway a flight of capital away from private credit and into Treasury securities, were much of the world not experiencing financial strain, then our judgements about the risks to the American economy of an abrupt and disorderly close-out of Long-Term Capital may well have been different. But, in the circumstances that did in fact exist, it was my judgment that the American people, whom we are pledged to serve, could have been seriously hurt if credit dried up in a general effort by banks and other intermediaries to avoid greater risk.

Svein Gjedrem: The outlook for the Norwegian economy Address by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), for Norges Bank’s regional network, Region East, Oslo, 25 September 2009. *  *  *  Please note that the text below may differ slightly from the actual presentation. The speech is based on the assessments presented at Norges Bank’s press conference following the Executive Board’s monetary policy meeting on 23 September and Monetary Policy Report 2/09. It has been a year since financial turbulence developed into a full-blown crisis. The result was the most severe downturn in the global economy since the Second World War. Key rates were set at historically low levels both in Norway and abroad. Government spending has increased considerably to support demand for goods and services. Global economic activity is now picking up, albeit from a very low level, and unemployment is high. Financial market conditions have improved, although liquidity remains tight in many markets. The financial crisis eroded confidence in banks, counterparties and contractual partners. Access to export credit came to a halt, international trade slowed sharply and manufacturing sales stalled. With financial markets improving over the past six months and an increase in the credit supply, global trade is now picking up slightly. Manufacturing output has recently increased in the US, the UK, Japan and many emerging economies, while it continues to fall – albeit at a slower pace – in Sweden and the euro area.
Taken to extremes, the  3  BIS Review 98/1999  system as a whole could be brought into disrepute. This is why we promoted the Code of Banking Practice issued jointly in 1997 by the two industry associations. The Code is intended to be observed by authorised institutions in dealing with their personal customers, and it provides an extremely useful mechanism for the promotion of fair and transparent banking services in Hong Kong. What tools can banks use to manage ethics in their own organisations? No doubt you will have been discussing this during the course of the seminar and I will not go into a lot of detail in this speech. Clearly, the first essential is for the bank itself to be clear about the key ethical values to which it subscribes. It then needs to ensure that the organisation and the employees act in accordance with these values. This can be done through the adoption of codes of conduct. The former Commissioner of Banking issued a guideline in 1986 which requires all authorised institutions in Hong Kong to prepare a code of conduct for their staff setting out the standards to which they are expected to adhere. It is also necessary to have policies and procedures designed to ensure compliance with the standards specified in the code of conduct. For example, many companies now employ “ethics officers” and give their staff specific training and advice on ethical issues.

It is also necessary to ensure that the behaviour of the organisation is in practice aligned with these values and that employees buy into them, so that the organisation actually practises what it preaches. Let me try to put some flesh on these arguments with some practical examples of ethical dilemmas involving banks that have been in the news recently. I have said that banking business is becoming more complex. One aspect of this is the globalisation of business activities which may be summed up as the tendency of the world to become one market place. As banks reach out beyond their home market, they become exposed to unfamiliar business environments and customers whose ethical standards may be very different from their own. This puts extra strain on the “know your customer” policy upon which regulators are so insistent. Business dealings with Russia are a case in point. Here you have the situation of a country that is making the transition from a communist to a capitalist economy. This naturally creates profit opportunities for Western banks. It could indeed almost be argued that these banks have a moral responsibility to assist in transforming the Russian economy. Unfortunately, somewhere along the line, this transformation has gone wrong, and the borderline between what is legitimate and illegitimate business in Russia has become blurred, to say the least. In this situation, what should a bank do? The decision can obviously be viewed in strictly commercial terms. But there is an ethical dimension as well.
That of course is true of all FPC policies but clear, regular public communication of the costs and benefits of macroprudential policies is particularly important in this area given the more direct focus on households as opposed to banks. The evolving evidence base for the tools  First, the evidence base. Since the FPC introduced the borrower-based tools, there has been further work by central banks and academics on this link between debt and reduction of consumption in stress. Some of this work adds to the evidence we already had. There is now more evidence that higher household debt is associated with bigger consumption cuts in a shock. 12  As set out in Section 9C of the Bank of England Act 1998, as amended by the Financial Services Act 2012: The responsibility of the Committee in relation to the achievement by the Bank of the Financial Stability Objective relates primarily to the identification of, monitoring of, and taking of action to remove or reduce, systemic risks with a view to protecting and enhancing the resilience of the UK financial system. Those systemic risks include, in particular— (a) systemic risks attributable to structural features of financial markets, such as connections between financial institutions, (b) systemic risks attributable to the distribution of risk within the financial sector, and (c) unsustainable levels of leverage, debt or credit growth. The FPC was subsequently – in 2015-16 – given explicit powers of direction over LTV and DTI limits.

This is likely to be particularly true when there is increased uncertainty about unemployment.15  The literature suggests that both channels can be important. For example, Danish research finds evidence in favour of over-consumption in Denmark over 2003 to 2009.16 This captures consumption financed by mortgage equity withdrawal or second mortgages, although the results may in part be driven by consumer credit, as the study does not distinguish between mortgage debt and consumer credit. The authors of the study think of the subsequent cuts in consumption as ‘spending normalisation’. In the UK, however, research shows that a credit availability channel is best able to explain the historical movement between leverage and consumption.17 And studies in the US point to a range of channels, including credit availability and liquid assets.18  This variation in findings is not surprising. One would expect the channels to vary over time and across countries. But what does it mean for policy? 13  For example Andersen et al (2016), Kovacs et al (2018), Dynan and Edelberg (2013) and Fagereng and Halvorsen (2016). For example Bridges et al (2017) and Jorda et al (2016). For example, in Japan, Nakajima (2018) finds that precautionary saving – in particular due to concerns about potential unemployment and old age – played a significant role in explaining consumption cuts by highly indebted households. 16 Andersen et al (2016). 17 Kovacs et al (2018). 18 Dynan and Edelberger (2013) and Baker (2018).
As Mr Duisenberg stressed, this event was more than a mere technical presentation, but took on an historical and symbolic dimension. On 1 January 2002, we will have the honour of witnessing the largest currency changeover that the world has ever experienced. This will be the crowning achievement of a long economic and political process which led to the creation of Monetary Union on 1 January 1999. This unique event in European history will help to ensure lasting prosperity, which is not only in Europe’s interest but that of the rest of the world as well. Lastly, speaking in front of bankers, financial institutions, business executives and journalists, I would like to make the following remarks as regards the present situation: -first, the main message in the present exceptional circumstances, is that the first quality of all Institutions, all economic leaders, all enterprises as well as households is to keep one’s nerves. The best gift we could give the terrorists would be to change our plans, to cancel endeavours, to delay decisions, to reduce investment or consumption. We, Institutions, enterprises, individuals had and have projects : let us realize them, in time, and unchanged. -second, let us beware of fashion. It was still fashionable, a year ago, to embark on vibrant eloge of the new economy, to predict the end of the business cycle and to forecast for ever very high level of productivity progress and buoyant economic growth.

The euro is based on a credible, stability-oriented monetary policy  a)  I would like to point out that, from a technical point of view, the launch of the euro on financial markets, on 1 January 1999, has been an indisputable success, and that the Eurosystem, made up of the ECB and the National Central Banks of the euro area, has fully achieved the objectives assigned to it in the following areas:  b)  –  operational efficiency, highlighted by the precise adjustment of banking liquidity and effective steering of short-term interest rates;  –  the security provided by the procedures and systems implemented, both for the execution of interbank transactions, and vis-à-vis large-value payments. The interbank market became integrated in early January 1999, right from the start of Monetary Union, thanks to the setting up of the Target system for the real-time transfer of largevalue payments throughout the euro area and in other EU countries. –  and, finally, the smooth functioning of the Eurosystem, which is an integrated organisation in which the decision-making centre works in constant contact with the national central banks on the implementation of operations. Together with many other factors, this technical and operational success has contributed to the high level of credibility of the single monetary policy which is based, in particular, on the independence of the European Central Bank and national central banks, and on the store of confidence inherited from the latter. Moreover, contrary to popular belief, European Monetary Union did not start from scratch.
(Article 112) "The Exchange Fund of the Hong Kong Special Administrative Region shall be managed and controlled by the government of the Region, primarily for regulating the value of the Hong Kong dollar." (Article 113) "The Hong Kong Special Administrative Region shall follow the principle of keeping the expenditure within the limits of revenues in drawing up its budget, and strive to achieve a fiscal balance, avoid deficits and keep the budget commensurate with the growth rate of its gross domestic product." (Article 107) These stipulations confirm the continuance of the Hong Kong dollar as an independent currency; they confirm that the Exchange Fund is available to regulate the exchange rate; they rule out the use of exchange controls; and they provide some comfort that deficit fiscal financing should not attain a scale that would pose a serious threat to monetary stability. Choice of regime But within these parameters the exact monetary arrangements are not prescribed. We have chosen to operate a currency board with a fixed rate against the US dollar. I have recently written and spoken at  2  BIS Review 31/2002  2  some length on the rationale behind this choice and do not intend to repeat all of that today. But let me just reiterate one of my principal contentions – namely that monetary policy, which includes exchange rate policy, cannot determine an economy's competitiveness outside the relatively short term.

Tony Latter: Who or what determines monetary policy in Hong Kong? Speech by Mr Tony Latter, Deputy Chief Executive of the Hong Kong Monetary Authority, to the Hong Kong seminar on Financial Services in Asia, organised by Lovells and the Pacific Rim Advisory Council, 13 May 2002. *  *  *  You may think this a rather naive question, to which the answer is obvious, but my experience is otherwise. Who is responsible? Let's start with the "who" question. I have encountered people who variously believe the answer to be the Beijing government; the People's Bank of China; the US Federal Reserve Board; some combination of HSBC, Standard Chartered Bank and the Bank of China (which are the note-issuing banks in Hong Kong); the Hong Kong Legislative Council; the Hong Kong Government; or the Hong Kong Monetary Authority. Article 110 of the Basic Law – often referred to as Hong Kong's constitution – includes the statement that "The Government of Hong Kong shall, on its own, formulate monetary and fiscal policies". This makes it clear that neither the Mainland government nor the PBoC has any powers in relation to our monetary policy, and that the policy responsibility lies firmly with Hong Kong's own government. Since China resumed sovereignty over Hong Kong some five years ago, there has been absolutely no 1 erosion of this principle.
There were prospects that the interest rate would rise further at about the same pace. The key rate was raised by a further 0.25 percentage point at the meeting of the Executive Board on 16 August. At its meeting on 27 September, Norges Bank’s Executive Board decided to leave the key rate unchanged at 3.00 per cent. The background for the decision was described as follows: "There is little slack in the Norwegian economy. A steadily rising share of enterprises lacks the capacity to accommodate increased demand, largely because of labour shortages. The labour market has grown considerably tighter, and there are several signs that wage growth is picking up. Developments in aggregate demand, output and employment suggest a higher interest rate. At the same time, the rise in consumer prices is slowing, and the rise in prices excluding energy products is unexpectedly low. This suggests a continued low interest rate." The Executive Board’s overall assessment was that the strategy published in the Inflation Report, coupled with new information, warranted that the interest rate should be left unchanged at this meeting. Projections are uncertain. The uncertainty surrounding the interest rate forecasts is illustrated in the fan chart and indicates that monetary policy reacts to disturbances to the economy. This contributes to increasing the uncertainty surrounding future interest rates, but at the same time contributes to stabilising economic developments. Monetary policy cannot fine-tune economic developments, but it can prevent the largest effects from occurring when the economy is exposed to disturbances.

It is, therefore, important that in the examination that follows a country’s request for a convergence report due consideration be given to the policy consistency and credibility of the applicant country. A comprehensive economic analysis that is not only quantitative but also qualitative, and which recognizes the difficultly of simultaneously satisfying all the Maastricht criteria in the current world environment would encourage EMU candidate countries to persist in their efforts to achieve even closer nominal and real convergence. It would also provide further evidence that the euro project is credible, that it is both feasible and realizable in a near-term perspective. Let me conclude by thanking you again for being here to contribute to a deeper understanding of the challenges ahead. I also wish you a pleasant stay in our country. BIS Review 53/2006  5