samchain/econo-pairs-v1 huggingface dataset:
V.  Maintaining price stability  In concluding my remarks today, I would like to reaffirm that maintaining price stability is the SNB’s utmost priority. We equate price stability with having average annual inflation below  4  BIS Review 59/2010  2% while avoiding deflation. The reason why I am emphasising this is because the financial crisis has also sparked a debate on the appropriate level for inflation. In particular, it has been suggested that central banks should target a higher inflation level in normal times. The argument goes like this: if central bank reference rates are low, there is also little freedom for reducing interest rates, as the nominal rate cannot fall below zero. In turn – so runs the argument – a central bank’s ability to react to a severe crisis is also limited. In contrast, higher inflation would lead to higher nominal interest rates. These could serve as a buffer in the event of a major shock. Monetary policy would then have scope for larger interest rate cuts, and a reduction in deflation risks. In other words: there would be more leeway for a relaxation of monetary policy in a crisis. This argument is severely flawed. First, it is very doubtful that further interest rate cuts alone would have been enough to deal with the crisis. Second, this line of argument implies that monetary policy is ineffective once the zero lower bound has been reached.

In the past year, the TMF also called on the financial regulatory bodies and financial institutions in Beijing and participated in a Financial Services Expo in Shanghai to promote the treasury markets in Hong Kong. In addition to the Mainland, the TMF maintains close contact with our overseas counterparts in the major financial centres, such as the foreign exchange committees in London and New York. The TMF will continue to arrange regular meetings and visits with our overseas counterparts to keep abreast of global developments and to exchange views on matters of mutual interest. Ladies and gentlemen, in less than a year since its establishment, the TMF, with the support from the industry and market practitioners, has made very impressive progress in its work. Looking ahead, with the numerous and valuable opportunities offered by the gradual opening up of the Mainland markets, it is up to all of us to try our best to seize such opportunities to ensure that Hong Kong will remain the hub for financial services and intermediation for Mainland China and the rest of the region. Thank you. 2  BIS Review 6/2005
This is buttressed by the way in which the Bank’s Court of nonexecutive directors approaches its statutory responsibility of reviewing the MPC’s processes, involving annual bilateral meetings with each MPC member. And, externally, it is similarly underpinned by the Treasury Select Committee holding us individually accountable for our monthly votes, which are published as part of the minutes of our meetings. This establishes very powerful incentives for each member to reach their own considered view. There is no free-riding in the MPC; and our policy debates are full and free. That lies at the very heart of the MPC’s operation, performance and communications. Indeed, it might be wondered whether the tone of some of the public scrutiny could set up incentives to cast minority votes with the aim of demonstrating independence of thought and action. 23 That, of course, would be perverse. Each member wants their individual decisions to matter – to the current Bank Rate, and to the expected path of policy and so the monetary conditions embodied in the money market yield curve. One votes in a minority when one disagrees with the immediate decision and the strategy it might convey. Occasionally, doing so, with the reasons disclosed in the minutes, can be an effective way of influencing monetary conditions. The make-up of the MPC’s majorities and minorities shifts around over time. There are no “blocs” on the Committee. And there is no distinction between “internals” and “externals” in that respect.

Having a look at all the statistical indicators, it results that the banking system at that time it was sound and growing continuously. But, all this was insufficient since the memories of year 1997 (the collapse of fraudulent schemes) were still present and households sensitivity to them was very high. Inspite of the recent significant achievements I would like to stress that still there is a high potential of fragility in our economy and the entire region as well. As a consequence, I think that we have to be much more prudent and much more diligent when speaking about the financial stability of the country. This episode suggests, inter alia, the necessity to associate the reforms with concrete preparatory steps and, certainly, combined with back-up plans in the case of failure. For this purpose the market needs to be intensively prepared and elaborated since in early stages of the implementation of reforms. It is imperative that the decisionmakers should themselves know in advance the market behavior and sentiments. Last spring, a joint assessment of the Albanian financial sector conducted from both the International Monetary Fund and World Bank (FSAP) concluded that: the financial sector consists mainly of a regulated and supervised banking system. The Stress-Test indicated that the level of different risk exposure to the banking system is rather low, an argument that supports this conclusion. The banking system has experienced remarkable developments over 2004.
As we have already discussed, the first component of the insurance aspect of the framework is the reserves averaging mechanism itself, which permits banks, within reason and without penalty, to vary their reserves account balances day-to-day in the face of small and/or short-lived liquidity shocks – provided they hit their reserves target on average over the maintenance period. The second component is the OSFs which allow banks to cope with larger, expected (frictional) payments shocks day-by-day. A third component comes through longer-term OMOs to which we now turn. Longer-term Open Market Operations The most routine method for ensuring there is the correct amount of sterling in the system, consistent with reserves targets, is via short-term OMOs. Prior to the start of QE, the Bank carried out weekly short-term reverse repo operations (STRs) against a pool of “narrow” collateral comprising highly liquid sovereign or near-sovereign bonds from a small selection of countries. At that frequency, the scale of the operations could be judged fairly precisely so as to offset any autonomous factors which affected the net supply of sterling to the market. But relying solely on short term OMOs could have meant carrying out very large repo operations every week. To avoid that degree of churn, some longer term reverse repos (LTRs) were also used precrisis – at maturities from 3 to 12 months.

That means that the Bank has to supply excess reserves to the system in aggregate, such that no firm has any incentive to pay more than  7  4  And the OSF Deposit Facility rate was set to zero. BIS central bankers’ speeches  Bank Rate for the marginal unit of reserves. In that world, banks’ incentives to trade with one another in the overnight markets are largely diminished. A third model for implementing monetary policy is the “zero corridor” system. In this case there would be no reserves targets and banks could both lend to and borrow from the Bank in unlimited amounts at Bank Rate every day. Although short term market interest rates should always equal Bank Rate precisely, this system has several drawbacks. First, banks would never need to transact with each other; they simply transact with the central bank via the OSFs: there would be little or no commercial overnight interbank money market. That would be unwelcome. For example, the information the Bank deduces from movements in overnight market interest rates would be lost. It might also disrupt functioning of longer-term money markets, given implicit links to the overnight market. Second, if the Bank can always be relied upon to meet daily liquidity needs, then commercial banks have less incentive to actively manage their liquidity. And the Bank would be unable to distinguish between banks using the OSFs to manage their day-to-day liquidity buffers, and those facing more fundamental shocks.
Furthermore, in 2009, the Government approved the extension to the initial five-years of the FSDP in order to continue the national strategy of strengthening our financial sector and enhancing financial inclusion. The second phase of the FSDP will focus on three main pillars namely: (i) enhancing market infrastructure; (ii) increasing competition; and (iii) increasing access to finance. Overall, the vision is to have a dynamic and inclusive financial sector that supports all aspects of the economy. Therefore, the theme for this workshop and exhibition “Enhancing Financial Access for Women: A Tool for Poverty Reduction” is timely and appropriate. Our aim is to recognise and heighten awareness of women’s issues within this context. More specifically, the main objective of this forum is to showcase a variety of financial services and products available and sensitize the general public on: (i)  how financial institutions are contributing to increasing gender financing in Zambia;  (ii)  bringing awareness to the women on the opportunities that are available for them to access finance and mitigate related challenges;  (iii)  the role of the Bank of Zambia and other financial institutions in meeting the objective of financial inclusion;  (iv)  how the United Nations as the lead international organisation and other local agencies are supporting women in Zambia; and  (v)  sharing experiences in running businesses, and the opportunities and challenges in accessing finance in order to grow the income base.

Let me also take this opportunity to appreciate the efforts by our cooperating partners in the financing of activities promoting gender equality. This is evident by the number of agencies and non-governmental organizations looking at women’s issues, most of which are represented, here, today. Ladies and Gentlemen, International Women’s Day celebrates the collective power of women past, present and future. I believe the next few days will therefore be very informative and entertaining. I am certain that everyone will find this exhibition and forum beneficial and I wish you all a successful event. I thank you. BIS Review 26/2010  3
Given the Federal Reserve’s experience in the agency MBS market over the past eight years, it is important to consider what role—if any— agency MBS transactions may have in the policy implementation toolkit of the future. 1 SOMApurchased agency debt from 1971 to 1981, so participating in one of the agency markets was not entirely  new in 2008. In addition, in 2011–12 a maturity extension program extended the maturity of Treasury securities in the SOMA portfolio, although it did not expand the size of the SOMA portfolio. 2 The share is calculated as of October 12, 2016, see System Open Market Account Holdings. 3 Since the start of the year, these purchases have averaged approximately $ billion per month. In addition to 7 / 10  BIS central bankers' speeches  conducting these transactions, the Desk reinvests maturing proceeds from Treasury securities, though the Treasury reinvestment transactions take place at auction rather than in the primary market. 4 The accommodative monetary policy stance of the European Central Bank (ECB) rests upon three nonstandard  instruments: a series of targeted long-term refinancing operations, a negative deposit facility rate, and an asset purchase program that includes private and public sector securities. The Bank of England (BoE) currently sets the Bank Rate at 25 basis points and is currently purchasing £ billion in gilts over a 6-month period; the Asset Purchase Facility will have £ billion in gilts when the purchase round ends in February 2017.

However, in some sense the Basel proposals will have failed in their purpose unless the pricing of bank credit better reflects the riskiness of borrowers. By removing perverse incentives for banks, we also wish to establish better incentives for borrowers. Greater risk sensitivity does, however, carry with it a possible danger, and that is the introduction of potential 'procyclicality' into the capital framework. I have touched on this concern more than once in the past, and make no apology for doing so again. To counteract this danger, regulators should not allow banks' internal ratings to reflect the optimistic prospects of borrowers during an economic upswing: rather, ratings need to be genuinely forward-looking, and to factor in borrowers' likely performance during economic stress. Long runs of performance records will be invaluable in establishing how robust borrowers are to different economic circumstances. In this way, economic downturns when they come should not prove too much of a shock to the ratings scales. Of course, I do not wish to sound complacent regarding the avoidance of 'procyclicality'. Capital is after all meant to be a cushion against volatility, also referred to as 'unexpected' loss, but measuring the unexpected is something of an oxymoron. Some of our researchers at the Bank of England recently reviewed the usefulness of various predictive models of banking problems, but unfortunately our conclusion at the moment is that banking crises are each unique in its own way.
Second, the “riskiness” of a bank’s activities and the liquidity of its funding can change suddenly and radically as market expectations shift. This means that what appeared to be an adequate capital or liquidity cushion one day appears wholly inadequate the next. Indeed, the Achilles heel of the Basel regime is the assumption that there is a constant capital ratio which delivers the desired degree of stability of the banking system. After the experience of the past two years, and a decade or more in which capital ratios fell and leverage ratios rose to historically unprecedented levels, banks need more capital to persuade investors to fund them. A larger buffer gives new creditors greater comfort that their claims will be met in future, without resort to the public purse. And rather than pay out dividends or generous remuneration, banks should use earnings to build larger capital buffers. But how much larger? We simply don’t know. A higher ratio is safer than a lower one, but any fixed ratio is bound to be arbitrary. One way of dealing with this problem is to require banks to take out insurance in the form of “contingent capital”, that is capital in a form that automatically converts to common equity upon the trigger of a threshold that kicks in before a bank becomes insolvent. If a bank’s regulatory core tier 1 capital – common equity – remained above the threshold, nothing would happen.

Roughly a tenth of banks’ current drawing capacity 10 is collateralised by assets referencing sterling LIBOR. Those assets include: securities paying a LIBOR-linked coupon, securitisations with embedded LIBOR-linked swaps; and LIBOR-linked loans, in either raw or securitised form. The Bank must be able to value and risk manage any collateral taken in its operations in case it has to take that collateral on to its own balance sheet in a default. As 2021 approaches, that will be increasingly difficult to do for some classes of collateral referencing LIBOR. In many cases, firms may choose to re-reference LIBOR-linked collateral to SONIA, either by amending its terms or by issuing new instruments. We can already accept SONIA-linked collateral, subject to meeting appropriate eligibility requirements. An alternative would be to ensure LIBOR-linked collateral includes adequate fallback language specifying an alternative rate in the event that LIBOR ceases to exist. The main 10  https://www.bankofengland.co.uk/-/media/boe/files/sterling-monetary-framework/annual-report-201819.pdf?la=en&hash=E4B7FDB6E9048DBD71F5C8CE4E00D3BE9F6A96A2 10  All speeches are available online at www.bankofengland.co.uk/news/speeches  10  challenge arises with any remaining LIBOR-linked collateral that matures after 2021 but lacks adequate fallback provisions – and we are today publishing a discussion paper seeking views on how best to respond in this situation, through some combination of rising haircuts and future eligibility restrictions. No immediate changes are planned. But we are seeking input on these questions from market participants, by 27 September, to help the Bank formulate clear and well-signposted guidance on its future approach.
It is steadily making progress in individual asset classes, among small groups of countries, sometimes bilaterally, where there is common interest and where markets and institutions are at similar stages of development. 12. We can see evidence of market integration among jurisdictions in several areas:  a. Banking. ASEAN is in discussions to complete a banking integration framework that will allow qualified ASEAN banks to progressively expand in each other’s’ jurisdictions. This initiative aims to create opportunities to strengthen regional banks in ASEAN and improve banking services offered to local markets. Even in other Asian countries where cross-border bank financing is restricted, we are seeing pockets opening up. For example, since China issued cross-border RMB rules for Suzhou Industrial Park (SIP) and Tianjin Eco City (TEC) in the middle of the year, about RMB 2 billion of loans have been approved from Singapore-based banks to companies in the two industrial parks. b. Equity Markets. In 2012, stock exchanges and regulators in Malaysia, Thailand and Singapore launched the ASEAN trading link to offer easy access to each other’s stock markets. Singapore and China have also established a Direct Listing Framework for Chinese companies last year. The framework will facilitate interested Chinese companies seeking direct listing opportunities in Singapore. c.  Debt Markets. ASEAN securities regulators have since April last year implemented common disclosure standards, which would allow issuers to issue debt securities across various ASEAN markets with a single prospectus.

The UK government’s plans for insulating retail banking are, therefore, a central element of the plans to make the UK’s large and complex banks resolvable. The proposals in the recent Liikanen Report on the structure of EU banks are welcome in seeking to achieve the same goal. Both Vickers and Liikanen can be viewed as working with the grain of the broader international agenda on resolution regimes. But bail-in can be attractive when a distressed group does have viable parts and sufficient uninsured debts covered by the bail-in power. As the UK’s resolution authority, the Bank is working closely with the FDIC on how to operationalise this type of resolution strategy. Meanwhile, the FSB will, over the next month or so, be publishing a consultative paper on resolution-strategy planning. The prospect of taking losses via resolution gives debt holders a strong incentive to monitor banks’ risk taking. That will be a first order change for the financial system. Expose management to tail risk: payment in subordinated debt Once debt holders are unambiguously exposed to loss, the authorities need to consider whether to require management to be paid to a significant extent in subordinated debt: an idea recently endorsed by the Liikanen Committee. 6 Having managers exposed to instruments whose value depends on the survival of their firm would give them a healthy incentive to maintain a safe and sound bank. There should also be a review of the structure of remuneration for desk-level bankers – tying pay to the medium-term success of the firm.
At high levels of reserves, the responsiveness of rates to changes in reserve levels is fairly low, and the demand curve is said to be “flat.” As excess reserve levels decline, the responsiveness of rates increases. At low levels of excess reserves, the overnight rate responds sharply to small adjustments in the level of reserves, and the demand curve is considered “steep.” 20 Despite some of the recent upward moves in overnight rates, I don’t believe we’ve reached the “steep” portion of the demand curve, where aggregate reserves are scarce. Let’s run through some places where evidence of aggregate reserve scarcity might be found. To begin with, if we were closing in on the “steep” part, I might expect to see substantial above-IOR lending in the unsecured overnight markets, as at least some banks each day found themselves short of reserves and had to borrow them from other banks. In fact, the current amount of such 18  Assuming that all banks place an equal value on the next dollar of reserves, aggregate reserve scarcity is when that value is above the rate at which reserves are remunerated, and aggregate excess reserves is when that value is at or below the remuneration rate. 19 The classic paper on this topic is Poole (1968). A number of recent efforts have been undertaken to modernize the Poole model by adding interest on reserves and other features of modern money markets. Two notable examples of this are Schulhofer-Wohl and Clouse (2018) and Afonso, Armenter, Lester (2018).

We will also provide a detailed picture of access to digital banking services in Spain and recent developments in this area. Lastly, we will conduct a review of the action taken to combat financial exclusion nationally and internationally, which may prove a good platform for future actions in our country. To conclude, I would simply like to thank again the Deputy Prime Minister and the Ministry for their efforts to address this problem. And the banking associations for their agile and swift response in drafting and signing this protocol. And, of course, I would like to thank the individuals who have made us more aware of the problem and whose actions have prompted this rapid response. I believe that we should all aim to ensure that Spain continues to take the lead on financial inclusion in the digital era, as it has always done. And I would like to add that the Banco de España is firmly committed to this goal and that we will do everything within our power to attain it. Thank you very much. 2/2  BIS central bankers' speeches