samchain/econo-pairs-v1 huggingface dataset:
The typical level of client initial margin for OTC derivatives held by a large clearing member is over $  34  If clients representing  half of the initial margin port, and the others are closed out and lose their entire initial margin, the loss to these clients collectively would exceed $ (Clearly we cannot know what the actual losses would be in any particular event, but we do know that the sums at risk are substantial). The financial stability benefits would have to be set against any possible costs. The risk-weighted capital ratio rather than the leverage ratio is the dominant constraint for many large clearing members. This means that for these firms a change in the leverage ratio to allow initial margin to offset exposure is unlikely to change their resilience at all. But even were a large clearing member to be constrained by the leverage ratio, the effect on capital – and hence on resilience – is small. For instance, for a typical large clearing member, the effect is to change the probability of default estimated by a model that has been used previously by Bank staff to inform discussions about the calibration of capital requirements  35  by between 0 and 8 bps. This takes the probability of default of  this typical clearing member from 1.2% to 1.28% at worst. This illustrates how different pieces of analysis and evidence could be brought together to assess objectively the case for making a dynamic adjustment to an aspect of banking regulation.

However, one interesting question is what effect the change in population structure will have on savings and on the securities markets in a few years time, when those of us born in the 1940s retire. We are a fairly large group from the baby boom years. The life cycle hypothesis assumes that we will sell large parts of our assets, which will lead to negative net savings. However, some studies indicate that pensioners may not consume their capital to the extent assumed. And of course, some people actually have something left to pass on to their descendants. One decisive factor for the future development of savings is how the pension system will function in practice and what responsibility the individual will have in the future for other parts of the traditional welfare system. Technological developments Another important driving force behind the securities markets is technological developments. These occur in several ways. Look, for example, at the current procedure for a securities transaction, from start to finish. The process from placing the order to buy or sell until the transaction is finally settled has become increasingly automated. I don’t just mean the actual trading, which has become increasingly electronic, but also the processes following on from this, namely clearing and settlement. Straight through processing, usually referred to as STP, is becoming more common. This involves the entire chain from placing the order to clearing and settlement being implemented without manual intervention. The increased automation has led to transaction costs falling.
The supportive packages, controls over prices, and the interventions of monetary policy have enabled and alleviated these shocks, and have kept the negative expectations of public under control. In the same spirit, Albania has remained neither affected not indifferent. The undertaken measures to control prices and the interventions of the Bank of Albania have calmed the energy and foreign exchange markets. Naturally, the above-stated events do affect both the present and future, by increasing uncertainty and the negative expectations. Education is the best response to fight against uncertainty. Today, more than yesterday we should properly understand the importance of financial literacy, which helps us in our everyday life, not only for well-informed decision making, also to properly comprehend and react to policy makers’ messages. Thus, the supportive polices undertaken will become more effective and support more strongly the mitigation of negative shocks. Being aware and making the right financial selections, everyone – banks, institutions, enterprises, households and individuals – may play an important role in dealing with the consequences of extraordinary situations that the world is suffering. This educational campaign of Global Money Week is an excellent event to recall certain messages that the Bank of Albania has addressed extensively, turning them into an important part of its efforts for meeting the objectives and preserving the economic and financial stability. I would like to point out three main messages, which nowadays, due to the geopolitical and financial situation become more meaningful.

Latest digital and printing technology has revolutionised the banknote production to the highest degree of speed, accuracy and consistency, using technologically enhanced high speed printing machines to print millions of banknotes every day. Despite the rapid innovation of technology, one fundamental and specific aspect of banknotes production has never changed. When it comes to banknotes design, no technology can replace the required dexterity and the innovative mind of a design artist. Banknotes design has always been made by hand and the work is inevitably involves a process that is time consuming and requires painstaking efforts. The artist has to meticulously draw in great detail every aspect of the banknotes. Indeed as you will see at the exhibition, all these micro lines of icons give a distinguishing character to the banknotes and contribute to their uniqueness. But all the details serve more BIS central bankers’ speeches  1  than an aesthetic purpose. They also serve as the first line of defence against counterfeiting. So far, no digital copier, despite having the best resolution of contemporary technology, is able to copy micro lines and lettering on the banknotes. So if any of you here have any doubt whether a banknote in your wallet is genuine or not, place the banknote under a magnifying glass and look for micro lines. You will be enthralled at how detailed the banknote design when you get to see the blown up version of banknotes on display here in this exhibition.
Domestic credit growth slowed to 6.8 percent in February while deposits grew by 6 percent. Contraction in economic activities further eased the pressure on prices, with headline inflation declined to a minus 0.2 percent in March. Given the sharp dislocation in economic activities in the last few months, market consensus now seems to agree on a small negative growth for Thailand this year, but with an improvement in growth next year. This means the market expects the Thai economy this year to go through a period of sharp adjustment on account of the global slowdown before growth is resumed next year. This view is consistent with the current mainstream view that, with the strengthening of the policy efforts at the global level, the world economy should look better next year compared to this year. As for the Bank of Thailand, our Monetary Policy Committee in its meeting next week, will also be going over this same question in assessing the near-term outlook for our deliberation of monetary policy. Whatever growth numbers we come up with, they will be conditional upon the prospects of the global economy going forward, especially after the G-20 announcement of the new global policy. Turning now to a more positive note, regardless of the adjustment we have to go through this year, or even next year, the Thai economy at this time is fundamentally stronger, and is in a better position to weather the crisis, compared with the situations we were in ten years ago during the Asian financial crisis.

Bandid Nijathaworn: Thailand’s banking and economic outlook Keynote address by Dr Bandid Nijathaworn, Deputy Governor of the Bank of Thailand, at the Australian-Thai Chamber Luncheon, Bangkok, 3 April 2009. *  *  *  Let me first thank AustCham Thailand, especially President Andrew Durieux, for the invitation to speak at today’s luncheon. It has been almost four years since I last spoke at an AustCham event, so, it is a pleasure to be back. Today I will speak on Thailand’s banking and economic outlook, a subject which I am sure will be of interest to all of you. In keeping with what a good luncheon speaker should do, I will keep my remarks short and to the point, so that we will have plenty of time for desserts and for questions and answers. This week is undoubtedly an important week for the global economy, as leaders and finance ministers of the world’s twenty most important economies gather in London to map out a strategy that aims to comprehensively address the current global financial crisis. Up to now, policies to tackle the crisis have been left largely to the individual economies in response to the problems that arise. But as the crisis has mutated into a major global problem, a coordinated policy response at a global level is clearly needed to ensure a synchronized recovery in all the key parts of the global economy. Without coordinated and comprehensive policy response, a synchronized recovery will not take place.
This obstacle has to be removed. Let’s return to our bank and assume that nothing helps and that the situation goes from bad to worse. At some point, the bank will have to be declared “failing or likely to fail”, to use a bit of jargon. This is mostly done by the supervisors, and it is the most intrusive thing we can do. Declaring a bank “failing or likely to fail” has far-reaching consequences. It is a difficult decision which requires a delicate balancing act. As long as there is a reasonable chance of the bank recovering, a “failing or likely to fail” decision would put an undue financial burden on the shareholders. But if the decision is put off for too long, the costs of an imminent failure start to mount up. This would hurt creditors and depositors. In extreme cases, it might even become a threat to financial stability. So, the “failing or likely to fail” decision must neither be taken too early, nor too late. And in any case, it must be taken with great care. There are four general cases which call for a “failing or likely to fail” decision. Some of these cases are quite clear-cut and can be objectively assessed. Others are a bit less clear-cut – particularly when they refer to things that are likely to or might happen in the near future. Thus, there is some room for discretion when determining whether a bank is failing or likely to fail.

Most of the time, the best projection of asset prices at that horizon is for them to be broadly flat. Consequently, I suspect that our policy choices would not have been radically different had we been tasked with targeting an inflation measure that included a measure of owneroccupied housing costs. Finally, there is something of a logical error in moving from the indubitably correct observation that successful inflation targeting is insufficient to guarantee either macroeconomic stability or financial stability to the conclusion that monetary policy should in addition, or instead, be focussed on some other objective. There is a real danger in overburdening monetary policy if it is expected to achieve both price stability and financial stability simultaneously. With two objectives, one needs two independent means of achieving them. The assignment of instruments to targets then revolves around which instrument is most effective at achieving which objective. Though loose monetary policy, particularly in the United States during 2001–5, arguably contributed to the build-up of the financial imbalances, it was but one of many causes, including a plethora of failings within financial institutions. These include: inadequate care in the extension of loans to risky individuals, when those loans are then sold on; the inappropriate use of off-balance-sheet vehicles to circumvent capital requirements; reward packages that encouraged an undue focus on short-term returns; excessive complexity and opacity in some asset-backed securities; and distorted incentives facing ratings agencies.
A transition to a so-called “Y-copying” - also in the Norwegian SWIFT system - should be a long-term objective.10 Foreign exchange settlement We must assume that the Norwegian payment system is also vulnerable to a fairly substantial amount of foreign exchange settlement risk. This risk arises because the parties to a trade must usually send the currency sold long before they know whether the currency they have purchased has been received. We know that the krone portion of foreign exchange turnover makes up a very large part of the turnover in the gross settlement system, and that such trades can amount to NOK 90bn kroner daily. The transition to gross settlement has thus reduced settlement risk in the Norwegian system, but at the same time this transition may not have addressed what may represent the largest risk. Norges Bank intends to identify foreign exchange settlement risk among Norwegian banks in the same way as has been done for G10 countries. Norges Bank also supports the inclusion of Norwegian kroner in the  10  Y-copying: the payer bank sends a payment order to the data centre, which first sends a settlement order to the settlement bank and then, when the settlement bank has confirmed that settlement has occurred, sends the payment order on to the payee bank. 9  BIS Review 7/2000  foreign exchange settlement system CLS.11 Ties to the CLS will be in line with international recommendations and will greatly reduce the foreign exchange settlement risk of trading in NOK. 3.2.3.

As a result, CGC is now able to undertake some new business activities such as securitisation, portfolio guarantees and collateralised loan obligations (CLOs). These are aimed at raising alternative sources of funds as well as attracting medium-term funding from the capital markets for SMEs. CGC firmly believes that these exercises are also key drivers in the Corporation's efforts towards achieving financial sustainability. The Corporation has also identified a number of strategies to help it to achieve financial independence. Of importance is the expansion in the product range that include capital  BIS Review 75/2008  1  market activities. In view of our commitment towards making CGC a financially sustainable institution, we have even gone a step further by working closely with our financial partners to ensure higher business quality. To encourage active participation, CGC introduced for the first time in 2008, a new award called the Best Financial Partner Award. The award acknowledges and recognizes the financial partner that contributed the most towards quality assets for CGC. It also recognises the financial institutions' conscientious efforts in ensuring that scarce funds are channelled to SME borrowers identified to have the capability and capacity to maintain good credit standing. The Best Financial Partner Award will be a regular feature in the years to come and we look forward to the active participation of all the financial institutions. In addition to the Best Financial Partner Award, another two awards were also introduced.
With the elimination of impromptu, spontaneous interactions over coffee, in elevators, and unplanned encounters, organizations need to understand the impact on communication, collaboration, innovation, and comradery. Will networks and relationships depreciate? Is there a heightened risk of silos? Are there missed opportunities for creativity in problem solving? Are there insights and knowledge being overlooked? And how do all these influence dialogue, debate and ultimately outcomes in the organization? Uncertainty. The third dynamic is uncertainty. As many industries and organizations face unprecedented businesses challenges, we know that employees are also facing unique personal challenges related to their health, well-being and job security, both for themselves and their families. While we understand that this level of uncertainty can be paralyzing for individuals,10 we should also be asking how this level of persistent and profound uncertainty may impact a firm’s culture. One potential risk is the potential for “action bias.” When feeling out of control due to the uncertainty of the environment, people are more likely to act quickly. They do this to feel as though they “did something about” an issue when in fact, more thought and analysis would result in a better business outcome.11 Even for organizations that are not as directly impacted by the pandemic, thought should be given to how uncertainty about personal and professional circumstances impacts decision making, relationships, and behaviors in the workplace. Decreased monitoring/oversight. The final dynamic is monitoring and oversight.

Now the point of all that was not just to help me decide how I should vote in the MPC next month! It was to distinguish two distinct issues relating to monetary policy that I want to discuss over the next few minutes. The first is the objective of monetary policy - what it is that we, in the MPC should actually be trying to do. And that objective couldn’t be clearer. It is to achieve - on average and over time - a target rate of retail price inflation, of 2½% on the RPIX measure (i.e. excluding MIPS), as set by the Chancellor of the Exchequer. 1  BIS Review 18/2000  I suppose it might just be coincidence, but since we adopted inflation targetting as the objective of monetary policy, towards the end of 1992, our economy has performed remarkably well. In fact over the past 7 years we have enjoyed the longest period of sustained low inflation we’ve known for a generation. Retail price inflation - on the Government’s target measure - has averaged 2.7% over that time. That’s just about 2% on the European standardised HICP measure of inflation and on that measure our inflation rate is currently the lowest in Europe at 0.8%. Alongside low inflation we’ve also had the lowest nominal interest rates that most of us can remember. Short-term rates have averaged some 6¼%, (fluctuating between 5 and 7½% over the period) compared with some 11¼%, (fluctuating between 7 and 15%) over the previous decade.
There remains an urgent need for the international financial community to raise its game in both preventing and resolving such crises. On prevention, much has been achieved, built around the overriding principle of transparency. In itself, transparency will not prevent financial crises. But it can help reduce the frequency of crises - by alerting both markets and policy makers to problems on the horizon - and their severity - by minimising the surprises about the scale of any liquidity problems. On the resolution of crises, the past year has seen a significant change in practice with more weight given to the involvement of private sector creditors. The key to progress is the recognition that official finance from the IMF is strictly limited. Large bailouts from the IMF are undesirable - partly because they reduce the incentive for private sector investors to appraise carefully the risks they take, and partly because the funds available to the IMF are wholly inadequate for it to play the role of an international lender of last resort. Once it is recognised that official finance is limited, then it is clear that countries need to work closely with their own private sector creditors. Debt obligations must be honoured, although in some circumstances it may be necessary to restructure those obligations. The relationship between debtor countries and their private sector creditors is one that must be nurtured at all stages.

Mervyn King: No country is an island Speech by Mervyn King, Deputy Governor of the Bank of England, at the Institute of Petroleum Annual Dinner, London, 21 February 2001. *  *  *  No country is an island - in terms of economics, if not geography. Trade and capital flows link all the economies of the world. Since 1970 the volume of world trade has increased more than five-fold. Globalisation is not a slogan; it is a fact. The economic winds can rapidly alter direction bringing significant changes in the economic weather. What happens in the world economy is of great importance to your industry. But no business in a country, such as the United Kingdom, which exports and imports almost a third of its national output each year, can ignore global economic developments. Recent events have reminded us of just how volatile that economic weather can be. Only a few short months ago, the United States was experiencing rapid economic growth at a rate which surprised us all. The new frontier had become the new economy, and some had forgotten that economic downturns are a regular feature of a market economy. Share prices had reached levels four times that of a decade earlier, and the price earnings ratio of America's top 500 companies was over forty, an unprecedented level. Now, after a swift and sharp fall of business and consumer confidence, the business cycle appears to be alive and well, and living in the United States.
Through another field experiment embedded in our American Life Panel survey modules, we have examined how respondents update their expectations after receiving information about either past food price inflation or future inflation forecasts by professional forecasters. Before the information treatment, and again after the provision of information, respondents were asked for their inflation expectations. We also asked for respondents’ priors about the information that was provided, to see whether those who have larger perception gaps are more likely to update their expectations, and if they would do so by a larger amount. We found that respondents revise their expectations in the direction predicted by theory after receiving new information. Further, the extent of revisions is correlated with the size of their perception gaps. Finally, respondents are more receptive to the new information when the uncertainty expressed in their baseline expectations is greater. All three findings are consistent with rational, Bayesian updating of expectations. Moving beyond average effects, we also found that our information treatment leads to a significant decline in the cross-sectional dispersion of inflation expectations, and causes the 4  BIS central bankers’ speeches  distribution of inflation expectations to converge toward its center – particularly for those who had high baseline expectations and were less informed ex ante. In fact, average revised expectations were nearer to actual realized CPI inflation as a result of our intervention.

The question is then how we can maintain the benefits of financial integration at the same time as we avoid ending up in another crisis such as this one. It is especially important to answer this question in our respective countries, that is, in Sweden as well as in Greece. Both you and I represent countries with domestic banks that are heavily engaged in cross-border banking activities. In Sweden, the domestic banks conduct roughly half of their lending in international markets, mainly in the other Nordic countries and in Germany. However, over the last five years we have also seen three of our largest banks (SEB, Swedbank and Nordea) capturing substantial market shares in the Baltic States. In some of these countries the Swedish banks account for up to 80 per cent of the domestic banking system. 1 Greek banks are also extensively involved in cross-border banking. National Bank of Greece, for instance, operates subsidiaries in over 20 countries in South-eastern Europe and the Eastern Mediterranean. 2 I will devote most of this speech to a discussion about the main implications and challenges arising from this new banking structure. Before turning to that, however, I will say a few words about how cross-border banking has developed and describe briefly why we may have seen such a rapid globalisation of the banking sector to begin with. Then I will focus on the need to enhance cross-border cooperation between national authorities.