samchain/econo-pairs-v1 huggingface dataset:
We always have to take into account the costs and benefits of our measures. Assume that the supervisor, as an early intervention measure, asks the bank to draw up a capital plan. The bank might then be required to disclose this request to the markets as it shows that the supervisor is seriously concerned. This might erode trust in the bank and, in the worst case, trigger a bank run. This would bring about the very crisis that the supervisor wanted to prevent in the first place. If an early intervention measure does more harm to the bank than it does good, supervisors might be obliged not to apply the measures. Instead, they could ask for the same thing, but frame it as a standard tool. In that case, the bank would still have to draw up the capital plan, but would probably not need to disclose the request to the markets. Hence, the standard supervisory tools can be considered as less intrusive than the early intervention tools. So the overlap between the two tools should be removed. There should be a clearly defined set 3/9  BIS central bankers' speeches  of standard tools and early intervention measures and a clearly defined escalation process leading from one to the other. The second reason why it is challenging to use early intervention measures is because those measures are defined in the Bank Recovery and Resolution Directive, or BRRD. And as the BRRD is an EU directive, it has to be transposed into national law.

We are again at a similar junction. A wide array of economic indicators now suggest that growth in the U.S. has picked up and is widely expected to be around 3 percent during the second half of 2014 and in 2015. These forecasts seem quite reasonable to me and are consistent with views I have expressed in the past. Various “headwinds” have been impeding economic activity, but some of these forces have gradually subsided, allowing the substantially improved underlying fundamentals to exert themselves more forcefully. For example, fiscal restraint, which was a big factor last year, has subsided and is likely to disappear altogether next year. Credit availability has also improved, reflecting healthier bank balance sheets and improving job and income prospects for prospective borrowers. In addition, the excess supply of housing built up over the boom of the previous decade has been worked off, and both home prices and rents suggest that the supply of housing is not keeping pace with demand. This has allowed supportive financial market conditions, spurred, in part, by a very accommodative monetary policy, to shine through. As a result, aggregate household net worth has climbed relative to income and consumer balance sheets are healthier. On the business side, financial markets conditions suggest that risk aversion has subsided, leading to some firming in business investment spending. All of these developments help boost the confidence of consumers and businesses that this consensus forecast will in fact unfold.
This focusses on ensuring the robustness and solvency of banks individually without evaluating their potential interconnectedness with other banks and markets, and their exposure to common economic factors of risk. Something particularly worrying is the fact that banks fully complied with solvency rules during the build-up of our real estate bubble. Although the rules have changed so as to correct and avoid specific incentives, it cannot be ruled out that structural imbalances may accumulate again on bank balance sheets, just as they did during the pre-crisis phase. Nor can it be ruled out that assets located in segments or geographical areas may be overvalued. If we look, for example, at real estate credit, we can see that we are far from the pre-crisis situation, since new real estate credit shows much healthier loan-to-value and affordability ratios. Nor are house prices overvalued if we look at Spain as a whole. However, and I believe here that Madrid and Barcelona are similar markets, in some places prices are reaching pre-crisis levels. Consequently, and as a complement to the micro view, so-called macroprudential policy has emerged. Its aim is to boost financial stability by preventing and mitigating systemic 8/13  risks and vulnerabilities, while also assessing potential imbalances or overvaluations that may affect a specific sector in our country. In this respect, it is not only individual risks that are considered; these are assessed in an aggregate fashion. In sum, macroprudential policy complements microprudential supervision.

However, trade flows among the 13 countries, only amount to 10% of global trade, hence there’s much room for further growth especially as our countries are increasingly inter-connected. 13. We from the public sector have created financial highways to link up our vibrant economies and have found ways to finance physical roads and highways. To recapitulate my message: •  2  Financial integration within ASEAN is targeted to support the large markets of goods, services and financial products in the region. Financing economic activities of ASEAN needs not only strong but also interlinked banks and  BIS central bankers’ speeches  financial institutions. Financing opportunities grow significantly when expanding these linkages to the Plus Three countries. Firms can tap on to various modes of financing in equities and bond markets to expand their businesses to match the growing trade and investment flows. •  The other area is on infrastructure development: While the barriers of tariffs have fallen, trade among us cannot flourish if we are constantly facing infrastructural bottlenecks. The ADB has estimated that Asia has a demand for infrastructure to the tune of $ 8 trillion over ten years. This is where the Asian Infrastructure Fund and the Asian Infrastructure Investment Bank come into play to address these bottlenecks and open up vast potentials for development and trade beyond the AEC to Plus Three. Through this, a new regional logistics-based sector is about to take shape. 14.
The recent Basel standard, published at the end of 2022, which regulates banks' exposure to crypto-assets is also a very encouraging first step in shielding the banking sector from contagion risks. 2.3 Pursuing regulatory efforts and harmonising supervisory practices [Go to slide 6] Regulatory efforts must therefore be pursued and new initiatives have already been identified: regulations on Artificial Intelligence, open finance data sharing, and electronic identification. It is clear that we are walking a tightrope: we must not restrict financial innovation in order to benefit from the contributions of digital finance and big techs, while anticipating the possible bypasses that these players will no doubt exploit, to the detriment of financial stability. To this end, the community of regulators has a clear guideline: "same activity, same risk, same rules". With this objective and this guideline in mind, what regulatory changes concerning big techs can we hope to see to ensure financial stability and fair competition with other players? First, the strengthening or introduction of a prudential framework and requirements harmonised at the European level regarding payment services and non-bank loans, which are the areas where big techs are developing more specifically. Second, the introduction of a new framework for the non-financial conglomerates that are developing in the financial sector (also known as mixed activity groups).

In the United States, these rules were not applicable to SVB, as certain exemptions, introduced in 2019 under the proportionality principle, apply to banks that are considered to be less important, this concept being understood in a broad sense since it includes banks with a balance sheet total of up to USD 250 billion. - The post mortem analyses carried out and published by the FED suggest that, had SVB been subject to these rules, it would not have complied with the short-term liquidity ratio as defined by the Basel Committee. Moreover, SVB's heavy reliance on tech companies' deposits should have alerted its supervisor if the additional monitoring tools required by international standards had been put in place. The same FED analyses estimate that SVB's interest rate risk sensitivity was around 35% before the crisis, well above the 15% alert threshold set out in the international rules and supposed to trigger supervisory action. - Monitoring compliance with regulations calls for strict, intrusive and reactive supervision, which, according to the FED, was not the case. Let me reassure you on one point: the European situation is radically different. The Basel Committee's rules are applied in Europe in their entirety and to all banks. By the way, I would like to add that Europe is in the process of finalising the transposition into European law of the latest reinforcements of the Basel III agreements, ahead of the other major jurisdictions.
Without preempting the discussion, there are two opposing views regarding the debate on greening asset purchases. One view is that central banks would overstep their mandate if they were to discriminate among investors on the basis of considerations that fall into the realm of fiscal policy. According to this view, market neutrality is the benchmark central banks should use when purchasing bonds issued by corporates. The other view is that central banks have to respond to market failures and incorporate the far-reaching risks that climate change poses to price stability when designing their policy instruments. Importantly, this argument is not about weighing secondary objectives, which may provide additional justifications for monetary policy taking into account climate change. It is about protecting the primary objective. Of course, central banks would need to be mindful of their effects on market functioning. Overweighing green assets in monetary policy portfolios could crowd out other investors, thereby doing more harm than good. And while demand can create its own supply, success would ultimately hinge on green issuance growing substantially as the economy transitions towards its new equilibrium. Conclusion Let me conclude. The current crisis teaches us that decisive and early action is crucial to tackle global disruptions. It enables us to better imagine the much more dramatic consequences that society could face if we were to fail on our efforts to fight climate change. And while the pandemic can eventually and hopefully be cured, global warming is much harder to reverse, raising the costs of taking no action today.

[3] Moreover, studies have uncovered a significant lag in discerning the benefits of mitigation measures,[4] which makes it much harder to impose costs on society today if measurable results are available much later. By making the costs of a major, truly global crisis more tangible, the pandemic may help to remove the “tragedy” from Mark Carney’s horizon: after COVID-19, the dramatic consequences of a global climate crisis may be much easier to imagine. And given the need for fundamental structural change after this crisis, the willingness to use this chance to take precautions against the even bigger risk of a climate crisis may have increased. In order to achieve the European Union’s target of net-zero greenhouse gas emissions by 2050, our response to the growing risks of climate change has to start with the way we rebuild our economies after the pandemic. In my remarks this morning, I will argue that three complementary pillars are needed to accelerate the transition towards a low-carbon economy: an effective carbon price, a strong investment programme and a greener financial market. I will also argue that central banks have a role to play in mitigating climate-related risks, even within their traditional mandates, because global warming poses severe risks to price stability. Carbon pricing as the central tool So let me start with the first pillar, the introduction of global carbon pricing. Europe is already spearheading global efforts, which is essential at times when a global solution is not in sight.
The statement provides an account of the main aspects of economic developments that have had a bearing on the interest rate decision and the Board’s assessments. If you compare the Board’s policy statement with, for example, the minutes from the MPC meetings at the Bank of England, you will see that our statement is remarkably similar to the first part of the MPC’s minutes. In addition to the monetary policy statement, a press conference is held the same day. At the press conferences, which are webcast on Norges Bank's website, the governor or I explain in more detail the reasons behind the Board's decision. Together, the policy statement and the press conference provide quite thorough information about the assessments behind the interest rate decisions. Some might object that the policy statement can hardly give much information about the deliberations during the Board meeting, since it is published only a few hours after the meeting and thus has to be prepared in advance. However, when preparing the statement, the staff aims at following the bureaucratic principle that all relevant aspects should be considered. In the final statement, which is written after the meeting, the various aspects are weighed according to the importance attached to them by the Board members. Moreover, the Board has meetings with the staff in the period before the Monetary Policy Report is published. At these meetings, the main issues of relevance for the next rate decision are discussed, and these discussions are reflected in the statements.

Jean-Pierre Roth: Ten years’ experience in steering interest rates – taking stock of the Swiss National Bank’s monetary policy strategy Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the University of Fribourg, Fribourg, 20 November 2009. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  The Swiss National Bank’s monetary policy strategy has proved successful over the ten years since its introduction. Throughout this period, the SNB fulfilled its mandate of ensuring price stability while taking into account economic developments. The inflation forecasts, produced quarterly on the basis of various indicators, have proved especially useful. It has always been possible to successfully manage the Libor – the operational objective of the SNB’s monetary policy – despite an international environment which, at times, has been extremely turbulent. The Libor was maintained within a range intended to provide the bestpossible conditions for a favourable development of the Swiss economy.
Whatever the precise portfolio investment limits for the insurance funds, MAS will take the governance and deployment of these insurance funds into consideration, when assessing whether the banking group has de facto control of an investee company, and thus whether an investment meets the portfolio investment criteria for the banking group. Time frame and potential impact The separation of the financial and non-financial activities will be a major change for the banking groups. There will be significant corporate restructuring and divestment of assets. We must do this in an orderly manner, over a reasonable period. There is no reason to force a fire sale, which would weaken the banks and diminish confidence, and would be against the interests of shareholders and depositors. Local banks will be given three years to complete the restructuring and comply with the new requirements. The three years will commence from the passage of the relevant legislation, which should take place by the end of the year. MAS will work with the banks on a phasing and schedule, so that the restructuring and divestments can take place in an orderly manner and be completed within the three-year deadline. Tax treatment for divestment The divestment of non-permitted assets will have significant tax implications. In order to avoid uncertainty as to how IRAS will treat these transactions, and to minimise the tax impact on the banks of changes which have been mandated by MAS, the Government has decided on a set of one-off administrative concessions to facilitate this exercise.

I am not sure if this is a dimension covered in Professor Genberg's paper on Endogenous Dollarisation, but it is of particular relevance to Hong Kong. The third paper, to be presented by Professor Kumhof, deals with issues regarding price dynamics. Professor Kumhof's paper focuses on pricing policies and inflation inertia, at a time when we are experiencing deflation in Hong Kong: I am sure, however, that there are insights that we can derive from the paper and the discussion. Research on price formation is high on the agenda of the HKIMR and the HKMA, and possibly in academic and other organisations active in economic research in Hong Kong. We have had deflation for some five years now and we are still debating the relative importance of cyclical and structural factors behind that deflation. There is also debate on whether measures could and should be taken to limit the damaging effects of deflation, notwithstanding the fact that Hong Kong is a highly externally oriented economy. Views on price dynamics will contribute to these debates. As you know, the HKIMR was established by the HKMA. This reflects the importance we attach to thorough analysis of monetary and financial issues that Hong Kong is facing. Developments in the local, regional and global economies provide many opportunities for Hong Kong, but also serve as potential sources of risks. It is therefore critical that we actively seek to understand these developments.
As Figure 3 shows, in the current recovery, growth in consumption has been much slower than in the 1982 recovery and has, unfortunately, tracked the anemic initial recovery from the 2001 recession. While the 2001 recession damaged many a household’s finances, through an abrupt decline in stock-market wealth, the current recovery has been hampered by households trying to rebuild their finances given sharply diminished housing wealth in addition to declines in the value of their other investments. While there have been concerns about business fixed investment, Figure 4 shows that this component of GDP has grown quite well relative to the last two recoveries – although somewhat slower than the 1982 recovery. Despite the concern over economic uncertainty voiced by many businesses, investment has been growing. The real laggard in this recovery has been housing. While housing is a relatively small component of GDP, it can be quite volatile – and often grows rapidly during an economic recovery. In addition, purchases of appliances, home furnishings, and housing-related services are impacted by slowed housing activity. Given the problems that flow from the bursting of the housing bubble, Figure 5 shows that residential fixed investment is roughly where it was at the trough of the recession – and thus not providing its more usual contribution to growth in the early stages of a recovery. Just how moribund the housing market has been is shown in Figure 6. Both housing starts and building permits have leveled off, but are showing no signs of a significant recovery yet.

Given the evidence of substantial excess capacity and a quite low core inflation rate, it is absolutely appropriate that monetary policy – and indeed fiscal policy – have been deployed in a way that encourages a more robust recovery. Going forward, it is my view that monetary policy must continue to focus on addressing both elements of the Fed’s mandate – price stability, and growth supporting a return to full employment in the medium term. Today I am going to focus on two questions that seem to be at the forefront of most discussions of the recovery. The first question is, what role will housing play in the recovery? As the most interestsensitive component of gross domestic product (GDP), housing has traditionally been an important sector of the economy for generating recovery. I will be highlighting the fact that, despite some improvement in factors fundamental to a housing recovery, I expect housing will not provide as much support to this recovery as it has in previous ones. My sense is that residential investment, consumer durables, and services related to housing will be less robust than is usual in many recoveries, thus playing a role in what I think will be only a gradual improvement in the economy and employment. To put it plainly, these housing-related headwinds are part of why I do not expect growth greater than 4 percent this year. And while 4 percent is not terrible, at that rate it will still take a very long time to get back to full employment.
BIS Review 28/2010  By acting in this way, marking to market has the potential to serve as an amplifier of stress in the financial system. 19 Other things equal, it could result in sharper and more severe asset price falls than in the past, accompanied by greater institutional stress. It could exaggerate excess volatility and misalignment. Marking to market may not just be a casualty of the failure of EMH; it may also be a cause. Hyun Shin has likened the destabilising dynamics of mark to market to the unstable oscillations of London’s Millennium Bridge at the time it opened. In finance, these adverse dynamics have a much longer historical pedigree. In their classic monetary history of the United States, Friedman and Schwartz assigned mark to market a key role in propagating banking failure during the Great Depression. 20 The evidence of such dynamics during this crisis is more mixed. Some studies have claimed this effect was limited to banks with large trading portfolios; 21 others that it has been significant and wide-ranging across the financial sector. 22 Perhaps the truth lies somewhere in between, with some market and institutions affected and others immune. Chart 8 plots commercial property values in the UK since 1920. There are five discernible boom and bust cycles in commercial property, signified by the dotted lines. Chart 9 looks at the cumulative falls in value during the bust. In four of the cases, the bust was similarly timed and sized.

During this crisis, the precipitate rise in liquidity premia and fall in asset prices may have called into question the viability of many banks had their assets been fair-valued. Consider again the banking book of UK banks on a mark to market basis. Chart 7 shows the loss of value on this book, which would have peaked at over £ billion during the early months of 2009. The total capital resources of UK banks at that time were around £ billion. In other words, the UK banking system in aggregate would have been technically insolvent on a mark to market basis. The recent recovery in asset prices has been almost as remarkable as the preceding fall. It has meant UK banks were back in the black within a matter of months.   “Liquidity and fire-sales”  The act of marking to market may itself have a bearing on asset price dynamics. This arises because of its potential effects on banks’ behaviour. If swings in perceived solvency cause banks to sell assets, these fire-sales may themselves add to downward pressures on asset prices. Under mark to market, these pressures are felt by all institutions, not just the seller. In effect, fire-sales by one firm have negative externalities for all others. And as other banks adjust their own balance sheets in response, there is a risk the downward dynamic is perpetuated. 18  8  Khan (2009).