samchain/econo-pairs-v1 huggingface dataset:
This is so with regard to the diagnosis of institutions, to the risks they face in the medium and long run, and to the instruments they have to mitigate such risks. Traditionally, the Spanish supervisory model has been able to combine a demanding stance in respect of institutions’ risks with incentives for best-practices management. This has positioned Spanish institutions among the most efficient and profitable in the world, and the Spanish economy has benefited from a highly competitive financial system. In the coming years the challenge is successfully to transmit these values in the European context, but also to assimilate the best international – and specifically European – supervisory practices. We must allow our institutions to harness the benefits the single financial market can offer them. Accordingly, in overseeing our institutions, we should limit the inevitable cost all supervision entails, applying prudential policies that encourage appropriate risk management, through the tempered use of restrictive or coercive measures in relation to banks’ activities, and through the use of more effective instruments for obtaining prudential information. The second consideration on the European market is the need for all European supervisors to redouble their efforts as regards mutual collaboration. Indeed, we must move from collaboration to cooperation, and from there to joint action and mutual trust, if we wish to be capable of properly supervising a European financial market with increasingly blurred national boundaries.

There is a concern by the U.S. correspondents 2  BIS central bankers’ speeches  transferring funds for Middle Eastern customers that the correspondents might unwittingly be providing services to a terrorist organization, or be enabling a person or affected sovereign to evade economic sanctions. So, the correspondents close accounts for all banks in the Middle East. Similarly, there is a concern by the U.S. correspondents transferring funds for Latin American customers that they might unwittingly be providing financial services to drug traffickers, a money laundering risk. So, they close accounts for all banks located in Mexico, Venezuela and Colombia. The de-risking exercise succeeds in its risk-reducing objective, but it succeeds in an overly broad manner by cutting services indiscriminately to so many. The adverse and unintended consequences for certain regions of the world are clear and present. There are also implications for U.S. policy with respect to the role of the dollar as the international medium of exchange. These issues, while highly consequential, are not the object of my remarks today; rather, they are a symptom of what compliance can lead to – namely, a reason to restrict business activity. Given the size of penalties for violations, and the potential reputational damage associated with this business, it is very difficult to quarrel with the business judgment. The success of compliance over the last 20 years has conditioned business leaders to think about compliance as a pathway to terminate or constrain a risky business relationship.
Jarle Bergo: Oil - economic policy challenges Address by Mr Jarle Bergo, Deputy Governor of Norges Bank (Central Bank of Norway), at the 2003 Southern Norway Conference, Kristiansand, 11 March 2003. The address is based on the assessments presented at Norges Bank's press conference following the Executive Board's monetary policy meeting on 5 March and on previous speeches. Please note that the text below may differ slightly from the actual presentation. *  *  *  Oil is a major component of the Norwegian economy - with all the advantages and disadvantages this entails. Oil gives us an economic base that is not available to many other countries. But it also presents us with considerable challenges. How should we use our petroleum wealth wisely? This question poses a number of economic policy challenges. In my discussion today, I will focus on three points: First, we must manage our petroleum resources recognising that they are part of our national wealth. When oil is extracted and sold, natural assets are transformed into financial wealth. This is not income in the ordinary sense. Norway’s national wealth belongs not only to our generation, but also to future generations. This means that our petroleum wealth must be equitably distributed between generations. The authorities must therefore be disciplined and apply long-term considerations in their spending. Moreover, the size of the cash flow from petroleum activities varies considerably.

The return on assets (RoA) of the system increased at 1.54%, in December 2017, from 0.7% a year earlier, whereas the return on equity (RoE) increased at 15.7%, from 7.2%. The capital adequacy ratio was 16.6% at the end of 2017, up by around 0.2 percentage point from a year earlier. The monitored indicators show a mitigation of risks to financial stability. In particular, credit risk fell considerably during 2017, as shown by the fall in non-performing loans. The liquidity risk continues to be low, while the banking system’s exposure to market risks remains significant. Notwithstanding the positive developments, the Bank of Albania has continued to work for improving its supervisory capacities and further strengthening the regulatory framework. The macro-prudential policy strategy was compiled and approved in 2017. The implementation of the macro-prudential policy was coordinated with a prudential and pro-active supervision. The supervisory practice improved regarding the methodology for banks control, the approximation of standards with Basel principles and the efforts to adopt the best international practices. Let me now focus on the preparation of the regulatory framework on the Internal Capital Adequacy Assessment Process. This framework was prepared in the light of Basel principles and EU directives. The Internal Capital Adequacy Assessment Process is particularly important, as its complements the supervisory perspective with the self-assessment dimension of banks. Significant changes have been made regarding the prevention process of money laundering, through the revision of the relevant regulatory framework.
However, the closing of the capacity gaps that widened in this period and the convergence of inflation to the target will only be completed by 2022. Moreover, this scenario is still surrounded by high levels of uncertainty and significant risks. Let me now turn to the details of the macroeconomic scenario. II.1. Macroeconomic scenario The behavior of the pandemic continues to be the driving factor in the evolution of the macroeconomic scenario. Several months after it first appeared, the Covid-19 has affected all the countries of the world over the course of this year, but its current dynamic is varied. While some countries have seen a more favorable evolution, others have had outbreaks or increases in infections that have yet to be brought under control. In some countries with good sanitary responses to the pandemic, it has been possible to avoid reinstating tougher restrictions in the face  1  of new epidemic outbreaks. The Latin American region overall currently accounts for the largest number of new infections, but they differ from one country to another in terms of their trajectories (Figure 1). In Chile, health indicators have improved, and the authorities have implemented a plan for gradual deconfinement nationwide. Thus, the percentage of the national population subject to quarantine has dropped from its peak of 54% in July to 40% this week. Particularly marked have been the changes in the Metropolitan Region, where the percentage of the population in quarantine has fallen from 98% in July to 46% today.

13  -20  -10  0  Figure 3  Activity indicators  (index, December 2019=100, deseasonalized series)  110  Manufacturing output (1)  Retail sales (2)  110 110  110  100  100 100  100  90  90  90  90  80  80  80  80  70 12.19 Dec.19  70  03.20 Mar.20 China  70 06.20 12.19 Dec.19 U.S. Eurozone Japan  (1) Real series. (2) Nominal series. 03.20 Mar.20 U.K.  06.20 Jun.20  70  Sources: Bloomberg and Eurostat. Figure 4  GDP - selected economies  (quarterly change of deseasonalized series, percent)  20  First quarter  Second quarter  20  Comulative first half  Source: Bloomberg.
In some cases they have lent money for fifty years at around 4%, and the interest rate on long-term UK government bonds is at its lowest level for over 50 years. Low and stable inflation clearly explains much of the fall in long-term interest rates which fell sharply when the Bank of England was made independent in 1997. But over the past three to four years long-term interest rates around the world have fallen further to remarkably low levels. In the UK, the annual interest rate on 20-year index-linked government bonds, after allowing for anticipated future inflation, is now around 1%. For most of the past 25 years, that so-called “real” rate of interest has varied between 2% and 4%. Long-term real interest rates of no more than 1% would normally be a signal to spend more, save less, and to invest in physical as well as financial assets. But it is not at all clear that rates will persist at such low levels. So is this particular signpost reliable? There are broadly two types of explanation for the fall in long-term real rates around the world. The first explains low interest rates as the outcome of an increased propensity to save and lower willingness to invest in the world as a whole. The second explains them as the result of rapid growth in money and credit which, in a “search for yield”, drives asset prices up and interest rates down.

And, by removing derivatives and certain structural features embedded in RMBS, it will improve the Bank’s ability to manage the risk associated with this collateral. Moreover, this initiative will also allow smaller counterparties, who do not have access to securitisation platforms, or for whom the cost of securitisation is prohibitively high, to access liquidity insurance in times of need.9 The Bank started processing applications for the pre-positioning of loans in the DWF in January 2011. At the same time as announcing that it would accept portfolios of loans as collateral, the Bank formalised the next steps in its ABS transparency initiative. Following on from its consultation in March 2010, the Bank announced that it would be phasing out the eligibility of residential MBS and covered bonds that did not conform to certain transparency criteria. During a year-long implementation period, running to November 2011, those securities that do not confirm to the new standards will remain eligible for use in the Bank’s operations. But over that period, counterparties should be working to ensure that they meet the new transparency requirements. Subsequently, in the year from November 2011 to November 2012, there will be a 12 month transition, during which the Bank will begin to apply increasingly large haircuts to those securities that do not conform to its requirements. By the end of November 2012, assets that do not comply will become ineligible. The transparency initiative will help the Bank risk-manage collateral more accurately and effectively.
So the risk of central banks having “too little” scope to carry out LOLR is real. At the same time, the public has a legitimate interest in avoiding “too much” LOLR. We cannot afford for financial institutions to view liquidity support as a substitute for prudent financial management: central banks must not be “lenders of first resort”. And lending to institutions that are in need of capital rather than liquidity is the wrong solution. Given the uncertainties involved, neither outcome can be avoided with certainty. But it is right to seek robust safeguards against them. BIS central bankers’ speeches  1  A well-designed LOLR framework must therefore get the balance right between lending “too little” and “too much”: –  To help avoid “too little” LOLR, central banks must be given clear responsibilities and the tools and powers needed to carry them out, including the ability to lend to individual institutions, covertly if necessary to maintain financial stability. –  To help avoid “too much” LOLR, central banks must have strong risk management, be ring-fenced from special interests (in public or private sectors), have a clear public mandate specifying their scope for action, and be subject to strong transparency and accountability requirements. There are powerful parallels between these design challenges, and those for monetary policy. Like monetary policy, LOLR is vitally important to an economy’s health, but involves intrinsically complex, technical judgments – including the solvency or otherwise of potential borrowers, the pricing, scale and maturity of loans, and the appropriate collateral.

This is the central role assigned to the Euro Retail Payments Board. Later on this morning, Yves Mersch will give us further insights into the work of the ERPB. Allow me now to conclude briefly by expressing again my gratitude to all the speakers, panellists and participants who are present today to share their thoughts on a wide variety of subjects of topical interest. I wish you extremely fruitful discussions throughout the whole day. Thank you for your attention. 3/3  BIS central bankers' speeches
For large banks, we are making progress on resolution planning, and this world is different to five years ago, but we are not there yet by any means. I have a background in resolving banks, and I regard having the capacity to resolve failed large banks – including the largest – as the holy grail of resolution. Unlike the legendary Holy Grail, I think there is a good reason to believe that the objective of being able to resolve large banks that fail can be within our grasp. I am very clear that when firms mess up, they should be allowed to fail, and by doing so they are putting at risk the money of their shareholders and if necessary after that those who provide debt funding according to levels of seniority. But I am also very clear that really achieving the objective of avoiding a no failure regime requires a fundamental change of mindset both inside firms, the authorities and in society more broadly. Fear of failure is an important conditioner of behaviour in a financial regulator, and achieving a change on this front depends on establishing a wide acceptance of our approach that orderly failure which does not compromise our public policy objectives is an acceptable outcome. BIS central bankers’ speeches  3  To be clear, we should be criticised where failure compromises those objectives and we could have taken steps to avoid it.

In the years leading up to the start of the crisis there was a dearth of prudential supervision, but I am quite prepared to acknowledge that there have been periods where the opposite has been true. My point here is that I don’t think the system of integrated regulation demonstrated the ability to deliver a stable equilibrium of conduct and prudential supervision. Third, there was something of an inbuilt tendency within integrated regulation to play down the active debate of issues where conduct and prudential regulators found themselves with potentially conflicting objectives. There are several important reasons why reform of financial regulation will in my view be an important step forward. It starts with establishing very clear public policy objectives for financial regulation to which we, as the regulators, are fully committed. For both banks and insurance companies, the PRA will have the objective of promoting the safety and soundness of firms. Consistent with this objective, it will focus on the potential harm that firms can cause to the stability of the financial system in the UK. We define a stable financial system as one that is resilient in providing the critical financial services that the economy needs. And this supply of services is a necessary condition for a healthy and  2  BIS central bankers’ speeches  successful economy, as demonstrated by the costs imposed by the financial crisis on the public and society at large.
This might involve higher rather than lower interest rates because of a risk premium, plus greater uncertainty. Before moving on from the subject of competitiveness, let me leave you with a couple of thoughts. If Hong Kong has, in some underlying sense, been suffering from severe uncompetitiveness, how does one explain the continuing strength of the trade and current account performance...  … and the fact that the pace of recession in Hong Kong over the last two years has not been significantly different from that in a number of other economies in the region? 6  BIS Review 17/2002  I am drawn to conclude that the criticisms of the peg on competitiveness grounds do not stand up too well under scrutiny. Even if the foregoing analysis and discussion does not prove unequivocally that fixing is superior to floating, it does challenge the contention that perceived problems of competitiveness would dissipate if only we had a floating exchange rate. Living with deflation Let me turn now to the other focus of criticism of the monetary regime that I mentioned earlier, namely deflation. There are four main factors which have been contributing to falling prices in Hong Kong. First, there is the state of the global economy. A combination of recession and remarkable success in taming inflation in recent years have left policy makers in several countries facing the unusual situation of deflation. Hong Kong has not been alone, although the process has perhaps been more prolonged here than in many other places.

But it is clear that they are exploitation of smaller countries by bigger nations with more economic clout and technological advancement. These practices still continue to the detriment of the public in smaller nations. Such resentment comes not from the physical harm or destruction of personal properties, but from the feeling that they are living in an unjust world, where the rules favour big nations at the cost of smaller nations. I do not have any solution to this problem, and I do not foresee any elected leader, whose rise to office have been supported by influential business sectors, to make a move on this issue. I only hope that an internationally neutral body such as the United Nations which is the hope and voice of all nations, big and small, would look at the issue of economic exploitation of bigger nation on smaller nations and set appropriate rules of the game to protect the interests of smaller nations. This would help people feel that they are living in a just and fair world. Thank you for your attention. 2  BIS Review 29/2005
In line with new framework, banks establish maximum indebtedness levels by category of customers based on internal lending norms, by observing the risk profile and strategy assumed by banks in relation to borrowers’ financial capacity. These caps are subject to prior validation by the central bank. •  In February 2008, stricter requirements were applied for the provisioning of foreign currency-denominated loans granted to borrowers earning incomes in currencies other than the loan currency. •  In August 2008, the regulation on lending to households was amended so that banks were required to determine borrowers’ indebtedness levels in such a way that the debt service might accommodate the materialisation of currency and interest rate risks, as well as higher fees and commissions, over the entire life of the loan. On the same date, the legal provisions were supplemented by imposing the use of the borrower’s annual tax record instead of the monthly income certificate throughout the income validation process. •  In October 2011, the NBR introduced additional restrictions on foreign currencydenominated loans to households, consisting in stricter requirements on establishing the maximum indebtedness level allowed for consumer loans, loan collateralisation, etc. C.  Prudential supervision  Prudential supervision of credit institutions is one of the NBR’s main tasks, according to the law. To this end, the NBR is empowered to check, based on reports and on-site inspections, the compliance with legal provisions and with the NBR regulations in order to limit and prevent risks specific to the banking activity.

Mention should be made that banks showed caution in managing CHF-denominated assets and liabilities. III. The current economic environment  The analysis of the current economic environment reveals two significant characteristics. First, Romania has maintained sustainable macroeconomic balances over the last years, also as a result of the counter-cyclical monetary and prudential policies implemented by the National Bank of Romania. Romania further enjoys robust economic growth and solid growth prospects, of 2.7% in 2015 and 2.9% in 2016. The annual inflation rate has remained on a  4  BIS central bankers’ speeches  downward path, while the general government balance and the current account balance stand at sustainable levels. These arguments show that the movements in the CHF/RON exchange rate should not be seen as a depreciation of the domestic currency (which is supported by strong economic fundamentals), but as CHF appreciation following the Swiss National Bank’s decision. Second, the downtrend in interest rates on leu-denominated loans, also as a result of the NBR’s decisions to gradually cut the monetary policy rate and to pursue adequate liquidity management, is supportive of the solution of converting foreign currency-denominated loans into the domestic currency in the case of currently unhedged borrowers.