samchain/econo-pairs-v1 huggingface dataset:
Companies have been unable or unwilling to invest as a result of earlier investment mistakes and poorer prospects for the future. The banks have suffered severe credit losses, which has further intensified the recession, as their capacity to provide new credit has been limited. The situation becomes particularly serious when losses have led to acute bank crises, which has often been due to the banks being greatly exposed to a particular sector. For instance, it was an overheated property market with banks strongly exposed to this sector that was one of the main reasons behind the bank crises afflicting several countries – including Sweden – at the beginning of the 1990s. Adaptations to large financial imbalances have also put a burden on central government finances and increased uncertainty. This has in itself prolonged and intensified the crisis. Japan is a well-known example of what can follow in the tracks of a serious financial crisis if confidence cannot be recreated in economic policy and future growth potential. The consequences of financial imbalances have proved particularly serious in countries with a fixed exchange rate, partly because interest rates need to be kept high when confidence in the fixed exchange rate policy declines, and partly because there has often been a large foreign currency debt. When the fixed exchange rate has to be abandoned and the country's own currency is weakened, the burden of debt increases. Should the central bank then concern itself with asset prices?

When confidence in the American economy returns and investment growth takes off, there is every indication that productivity will continue do develop favourably. However, this does not mean that the long-term growth path indicated earlier by developments in share prices and demand will be realised. Secondly, it seems that the over-investment has mainly taken place in the IT sector, where financing has been largely via the risk capital market. The depreciation period for IT investments is often short, which means that investment mistakes do not affect the willingness to invest in the long term. The bank system does not appear to be particularly strongly exposed to the IT sector and the risk spread among the banks' assets is assessed as good. There would thus appear to be little risk of problems in the banking sector reinforcing the slowdown to any great extent. Finally, there is scope to use fiscal and monetary policy to stimulate the economy, if necessary. The American central bank has utilised part of this scope and lowered interest rates by a total of 2 percentage points since the beginning of the year. The central government finances are in good condition. For several years now the public sector – unlike earlier periods of large American current account deficits – has shown a surplus in savings. All in all, there are thus many factors indicating that confidence in the American economy can quickly be recovered. If this is true, the economic decline will not last very long.
It has become fairly common to say that such groups should be resolved on a regional basis, ie broken up. Maybe. But, even if that is correct, it is obvious that “break it up” is an incomplete resolution plan. What happens to the broken-up parts? Under a “breakup” strategy, one needs a plan for each of the parts, both the distressed and the undistressed parts of the group. Under the FSB Standard (KA 11.8), it is clearly the responsibility of the home authorities of the group to ensure that a group wide resolution plan exists. There is no ducking that. It removes an ambiguity that has quietly haunted banking authorities for decades. Imagine that some of such a group’s regional/local commercial banks are smallish and simple, but that others are very large and complex. (Contrary to what is sometimes imagined, commercial banking can be complex!) To the extent that the group’s problems are in a bank(s) that is relatively small and simple, standard “Purchase & Assumption” techniques can be employed. Ie break up that bank into a good and bad bit; and effect a sale of the good and economically critical parts, aided by an injection of resources, in the usual way, by the Deposit Insurance Scheme, up to but not beyond what it would have had to pay out to insured depositors in a liquidation. The critical services are thereby maintained, and the DIS becomes a creditor in the administration and realisation of the rump.

Naturally, it will take time for these efforts to bear fruit. But developments in recent months have by no means wiped out the achievements of past decades. On the contrary, the region’s longer term fundamentals -- including its high domestic saving rates, strong fiscal positions, dynamic private sectors, and recent gains in competitiveness -- remain favorable. Moreover, all of these countries still have a long way to go to catch up with advanced economies. Thus, with sound policies, they should be able to sustain high rates of growth for another two decades or more. In the less distant future, growth can be expected to rebound strongly after a relatively short, but sharp, weakening of economic activity, especially in Thailand, and a rapid narrowing of external deficits. In fact, we are already seeing improvements in exports, even though recent exchange rate changes have not had much opportunity yet to generate their effects. And as these adjustments take place, each of these countries will have seized the opportunity to strengthen their economies in fundamental ways. This leads me to agree with those in the region who see this crisis not as a blight on the future, but as a blessing in disguise. Indeed, after this period of adjustment, these economies will emerge stronger than before. BIS Review 111/1997  -4-  In the meantime, I hope that some perspective about the benefits of global markets will be maintained.
It was probably similar considerations that motivated the measures taken in Germany to save IKB and Sachsen Landesbank. Now one has seen that it was not so easy for the British authorities to manage the problems in Northern Rock. The existing regulations and arrangements did not prove particularly effective. Despite the measures taken, they did not manage to avoid a bank run. This has led to the authorities in Great Britain drawing up, in an impressively short time, proposals for a number of improvements in the regulatory framework for managing institutions in distress. In February the British finance minister announced that they had decided to nationalise Northern Rock, as there was otherwise a risk that the cost to the taxpayers would be too high. 6  BIS Review 30/2008  The regulations for managing institutions in distress are inadequate As partially responsible for the stability of the financial system, I ask myself, how are things in Sweden? Do we have the regulatory framework required to manage possible future problems? Unfortunately, the answer to that question must probably be no, at least at present. During the Swedish bank crisis at the beginning of the 1990s a number of extraordinary measures were taken. These included issuing the bank deposit guarantee. This was a general declaration that the banks’ creditors would be protected. In addition, a special crisis management authority was established, the Swedish Bank Support Authority.

It is, of course, difficult to calculate these costs. Some surveys have indicated that an average production loss resulting from a bank crisis could be around 15-20 per cent of GDP. According to some calculations, the collapse of the Swedish bank market cost around 5 per cent of GDP in terms of a loss in output. Seen from society’s point of view, the individual agents’ incentives are not sufficient to take protective measures against crises that affect the financial system as a whole. The shareholders can never lose more capital than they have put in and individual depositors find it difficult to monitor a bank with widespread operations. There are, to use economic terminology, considerable negative externalities. In addition to the consumer protection aspects, this is a decisive motive for having a financial safety net in the form of special regulation, supervision and a deposit guarantee. It is also the reason why central banks have the possibility to provide liquidity support in the form of emergency liquidity assistance. Such emergency liquidity assistance shall in principle only be granted if the institution in question has temporary liquidity problems, but is essentially robust and if there are systemic contagion risks. It was exactly this risk of domino effects in the rest of the financial system that meant that Northern Rock, which can hardly be said to be of critical significance to the bank system, became the object of a number of measures taken by the British authorities.
Page 2/8  Monetary policy  With a view to ensuring appropriate monetary conditions, we are continuing to pursue our expansionary monetary policy. This is based on the negative interest rate that banks and other financial market participants are charged on their sight deposits at the SNB and on our continued willingness to intervene in the foreign exchange market as necessary. Both instruments remain essential as the situation is still fragile. While the foreign exchange market has largely shrugged off recent equity market turbulence, circumstances in the financial markets – and thus by extension monetary conditions for the economy – could rapidly deteriorate again. Such a development would be undesirable in the current environment. Inflation is now within the range that the SNB equates with price stability, and capacity utilisation in the economy has continued to improve. Nevertheless, inflation remains low and inflationary pressure is modest despite our expansionary monetary policy. Tightening monetary conditions would be premature at this juncture, and would risk unnecessarily jeopardising the positive economic momentum that has been established. The Swiss economy picked up markedly last year against a positive global economic backdrop. However, we should not let ourselves get carried away. Despite the easing on the foreign exchange market in the past twelve months, both short-term (cyclical) and longer-term (structural) challenges remain. Competition with other business locations around the world remains as intense now as it was prior to the crisis.

We are convinced that our banks are better able to withstand a crisis today than they were ten years ago. What is more, banks’ management bodies and the supervisory authorities alike now have a better understanding of how to assess risks. The comprehensive implementation of the agreed measures will further improve the stability of our financial system. We will still have systemically important banks in the future. However, these must no longer be too big to fail; that is to say, the state and taxpayers must no longer have to fear being held hostage. The new banking regulations therefore contribute to reducing risks, but they also take into account both the considerable economic importance of Switzerland’s banking sector and our interest in having a significant financial centre. I would like to cross over here, if I may, to the sovereign money initiative. The authors of this initiative hope that, if adopted, it would result in a more stable financial system. However, switching to an untested sovereign money regime would radically transform Switzerland’s tried-and-tested financial framework. Given the lack of empirical data and comparable systems worldwide, such a transformation risks plunging Switzerland into a period of great  11  From the end of 2019, both of Switzerland’s big banks must have a Leverage Ratio of at least 5.0% and an RWA Ratio of at least 14.3% on a going-concern basis, excluding the countercyclical capital buffer. Added to this are the gone-concern requirements in the same amounts (without taking any reductions into account).
It must be acknowledged that no regulation can prevent financial institutions from encountering difficulties. A new regulatory framework must therefore ensure that banks bear the ultimate responsibility for risk undertaken by them. Regulatory compliance will then be in their own interest. We can never fully insulate the financial system from shocks. But we can increase our resilience. One of the most important things we can do is to keep our own house in order – by preventing major imbalances from building up in the economy or in the financial system, and by ensuring that the financial system in general is robust. Thank you for your attention. BIS central bankers’ speeches  3

Ladies and gentlemen, The second challenge is in forging strong collaboration and cooperation among key stakeholders and overcoming the collective action problem. When it comes to costly and difficult action, we always prefer others to do it. Ministries, government agencies, policymakers and regulators must therefore set aside their differences and work for the greater good, consolidate their strength based on their shared values and work collaboratively to develop and bring creative ideas for sustainable development into fruition. Initiatives need to be driven beyond personal motivation and belief. Strategies need clear milestones with clear accountability by stakeholders. Sector-specific approaches need to converge to limit risks of a disorderly transition. The journey of sustainability is therefore one that is best navigated collectively. We have to come together to support joint and coordinated responses to mitigate unsustainable practices. For the Malaysian financial sector, the formation of the Joint Committee on Climate Change was an important milestone in pursuing collaborative actions for building climate resilience. A key mandate of the Joint Committee is to facilitate collaboration between key stakeholders in advancing coordinated solutions to address arising challenges and issues. This is in addition to building industry capacity, and identifying issues, challenges and priorities facing the financial sector in managing the transition towards a low carbon economy. The third challenge that we face as a developing nation is in balancing sustainability and competing socio-economic priorities, given our limited resources for transition to low-carbon economy.
It obviously underpins the rising populism, that reflects the dissatisfaction with the system that does not create equal opportunities for everyone, a system where reward is not merit based, i.e., system that gradually evolves into a crony capitalism. Against this background, I have no doubts that we have chosen the perfect spotlight for this Constituency meeting. Let me shortly use the historical lenses – what questioned the sustainability of capitalism and led to Marxism was the stagnation of wages and concentration of wealth in the early phases of industrial revolution. It gave ground for rising inequality, and as Thomas Pikketty, the so-called “Modern Marx” reveals in his book “Capital in the Twenty-First Century”, the only exception from this rising trend of global inequality is the period as of 1914 until 1970s, as a historical outlier. Indeed, actual data does indicate rising income inequality since the 1980s onwards almost across the board, although with different intensity. This turning point is very often associated with the end of the so-called “post-war egalitarian regime” around the globe. To bring the point closer, let me refer to the data retrieved from the 2018 World Inequality Report, which reveals that in 1980, the income share of the top 10% in the income distribution in Western Europe, North America, China and India was around 30–35%. By 2016, this percentage rose to around 35–40% in Western Europe, while the increase in the other regions was stronger, reaching 45%-50% of the total income.

Risk analysis and buffer-raising will also be a challenge for Eesti Pank in the forthcoming periods. The central bank just finished its first year as a member of the euro area, with one of the lowest equity to monetary policy assets ratios among euro area central banks. We must bear in mind that the revenues and expenditures of monetary policy operations are shared within the Eurosystem in proportion to the central bank’s participation in the total capital. The Supervisory Board of Eesti Pank thus resolved to raise the central bank’s capital adequacy ratio to the average level of euro area central banks in the long term. In order to bring the ratio into line with Eesti Pank’s participation in the Eurosystem, the capital adequacy ratio must be raised. This means that the central bank’s equity must be raised from 0.37 billion euros to approximately 1.3 billion euros. Eesti Pank’s equity currently stands at 0.07% of the Eurosystem’s total equity, while Eesti Pank’s participation in the Eurosystem stands at 0.26%. [QUO VADIS, EURO AREA?] 1. It is not only the central banks that can contribute to a successful exit from the crisis – the governments of member states must, as soon as possible, implement the measures taken and agreements made by the European Council and the euro area heads of state and government. Closer cooperation in the field of economic policy, along with clear-cut, functional rules, serve the interests of all members. 2.
This involved several key financial education initiatives for students and households in Malaysia, including the School Adoption Programme that was supported by the Ministry of Education and the financial industry. More recently, it has progressed to the integration of financial education into the school curriculum. This has been made possible through the successful collaboration between Bank Negara Malaysia and the Ministry of Education. Ladies and gentlemen The compilation of caricatures in Financial LATeracy is organised according to specific money management themes while the exhibition allows visitors to experience and appreciate the fine works of Datuk Lat while highlighting key money management messages. The timeless caricatures showcased in Financial LATeracy also embodies the true essence of a multicultural Malaysia, depicting the diversity of our people, cultures and traditions. Of significance is the  BIS central bankers’ speeches  1  influence that his works have had in promoting social harmony and benevolent values that bring the diverse people of Malaysia together. Most Malaysians have grown up with his drawings. His works have touched on so many aspects of the lives of Malaysians, providing us with powerful insights into the social and political scenes of this country. The power of story telling by Datuk Lat transcends beyond the drawing of cartoons. He is among the artists who have been observers that are the most honest and critical of developments in our society.

Through their sensitivity and expression, we are reminded of the things that we often take for granted, and sometimes highlighting how we fall short from attaining our fullest potential as a nation. Datuk Lat is one of such artists. A number of Datuk Lat’s artworks adorn Bank Negara Malaysia’s premises since the 1980s, reflecting the challenges we face as a central bank in ensuring a sound and robust financial system, in a light-hearted manner. This publication of the Financial LATeracybook aims to preserve these works for the benefit of our future generation. Financial LATeracy is also a way for the Bank to express its heartfelt gratitude and appreciation to Datuk Lat for his continuing support of our financial education initiatives. Today, Financial LATeracy pays a tribute to Datuk Lat’s enduring legacy in this important endeavour. Ladies and gentlemen The Financial LATeracy exhibition is taking place during a time when more than 200 global policy makers and practitioners in the area of financial education from all parts of the world are gathering here in Sasana Kijang to participate in the meetings of the International Network on Financial Education and in the High Level Global Symposium, a network under the OECD, to explore new paths and ideas in advancing financial literacy. I am certain that the works of Datuk Lat will continue to inspire not only Malaysians but many others from foreign shores in this important cause through his unique brand of humour and poignant reflections of our society. 2  BIS central bankers’ speeches
The capacity to withstand market turmoil was demonstrated during the financial crisis in 2008 and 2009. For a period of 18 months, Fund losses totalled roughly EUR 90 billion – more than 25 per cent of Norway’s GDP. The losses did not go unnoticed and led to a public  BIS central bankers’ speeches  3  debate on the investment strategy. The conclusion was that the strategy is robust and that Norway must accept such fluctuations in the Fund’s capital, given the high equity share. This point was made clear through 2009 and 2010, when those losses were reversed, and additional gains made. The government remained faithful to the strategy, reaffirming its commitment to the Fund’s long-term investment strategy. The large size of the Fund can also be exploited. Last year the Fund started investing in real estate as a new asset class. The first property investments were made in France, Germany and the UK. We are now preparing for property investments in the US. Direct real estate investments will provide a fairly stable, inflation-adjusted cash flow. Over time, in accordance with the mandate, we aim to invest up to 5 percent of the Fund in real estate. The investments will be allocated to more countries as we gain experience. Slide 11: Considerable overweight in Europe The large size and the long investment horizon also entail a need for diversification. From the start, the Fund has been invested with a considerable overweight in Europe.

It would operate with intra-day credit from its clearing bank, J.P. Morgan Chase, and overnight credit from the Federal Reserve. The Federal Reserve would provide credit that was fully secured by the collateral of the broker-dealer and this would continue for a period of time to enable the broker-dealer to wind down its trading book in an orderly manner – thereby mitigating to some degree the impact of the failure on financial markets and the economy. At the point in time when an orderly liquidation of the broker-dealer became practical, a petition would be filed for a receivership under the Securities Investor Protection Act. This became the contingency plan, although it was always subject to the Lehman board of directors deciding to file a Chapter 11 petition, a matter that was their responsibility and not ours. On September 15, Lehman’s board of directors elected to place the parent company in Chapter 11 while leaving Lehman’s brokerdealer open for business so it could wind down its operations. A look at the hypothetical alternative of lending to the Lehman holding company itself reveals that it was in fact not viable. By Monday, September 15, Lehman faced a total erosion of market confidence, and so the Federal Reserve would have been lending into a classic run. Had Lehman not filed for bankruptcy on September 15, but opened as if it were business as usual, creditors and counterparties would have rushed to protect their positions, using all legal remedies, causing the liquidity crisis to spread throughout Lehman’s organization.