samchain/econo-pairs-v1 huggingface dataset:
Different parts of the climb will be more relevant to different banks at different stages of their journey, and indeed to different business models and sectors. New subsidiaries of international firms may be able to take a path well-trodden by their Group, for example. (When I say ‘bank’ I am of course speaking loosely as we regulate banks – both UK based and the UK operations of those based overseas – building societies and credit unions.) Whatever the firm, an important part of the financial sector’s resilience is its ability to grow safely, and to respond to and to recover from stress. To support that, the regulator needs to be clear in setting out what is expected so that each bank can make business plans for when things go well and contingency plans for when things go wrong. And banks need to be able to do so safe in the knowledge that the regulatory path up the mountain is clearly mapped out, and that there is a way back onto the path – or indeed off the mountain – should they stumble. 5  The PRA has authorised 50 new entities in total since its creation in 2013, including subsidiaries and branches of overseas banks and entities established as part of ring-fencing.

Prudential Regulation Authority (2020), Supervisory Statement 2/16: The Prudential Regulation of Credit Unions – https://www.bankofengland.co.uk/prudential-regulation/publication/2016/the-prudential-regulation-of-credit-unions-ss 7  5  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  5  I mentioned earlier the scale of ring-fencing in the UK banking sector. As would be expected from such a significant change to the UK’s financial landscape, we have seen some wider impacts, in particular in the nature of competition for mortgages and the compression of lending margins in this market. Sam Woods mentioned in his speech to the Building Societies Association in May last year8 that mortgage risk-weights for large firms using internal models have been declining significantly over the last decade. And the average modelled mortgage risk-weight in the UK is lower than in many other jurisdictions. We have therefore been reviewing the implications of this, with an eye both to the safety and soundness of the larger firms using IRB models for mortgages, and to the competitive impact on other mortgage lenders using standardised risk weights. Our review includes the desirability of mortgage risk weight floors. And it is relevant to note in this context that others have already gone down this path – both Finland and Sweden have implemented portfolio floors at 15% and 25% respectively. Our hope is that in combination with other measures, including stress testing and the refined Pillar 2A approach I mentioned earlier, we might reduce unwarranted benefits from internal models.
In November 1999 we raised the repo rate and during early 2000 a similar assessment was made. During autumn 2000 we saw ahead of us a situation with a stable and strong upturn in economic activity that would gradually lead to a high level of resource utilisation and rising inflation. At the beginning of 2001 we received a number of statistics that indicated a slowdown, particularly in the USA. The Federal Reserve surprised everyone with an interest rate cut in January, in between two ordinary monetary policy meetings. The slowdown then spread. The Riksbank and most other forecasters began to revise down their growth forecasts for Sweden and internationally. The share and IT bubble burst and this together with rising oil prices and higher real interest rates during 1999 and 2000, led to a synchronous downturn in economic activity around the world. During the course of 2001, we made several major downward revisions to our forecasts for international growth. The economic downturn is assumed to have had a subduing effect on Swedish inflation via both direct and indirect channels. In mid-2001 the decline in the real economy had on the whole become more marked than expected. However, the development in prices deviated sharply from the forecasts made by the Riksbank and other analysts. When inflation surprisingly rose considerably during spring 2001, the assessment was made that this was largely due to factors of a transitory nature, partly caused by disturbances on the supply side.

However, these numbers are estimates given that almost all of the repo transactions are conducted over the counter. See also IMF (2010), Global Financial Stability Report, October 2010. 2  BIS central bankers’ speeches  there is no new information but only the application of the existing and published criteria. Compared to many other central banks, the definition of eligible collateral is unusually open in the sense that the SNB is rare among central banks in accepting securities denominated in foreign currencies and not only in its home currency, the Swiss franc. The quid-pro-quo of this multi-currency policy is that securities eligible for SNB repo transactions must satisfy stringent quality requirements: these requirements concern their credit ratings and liquidity properties. This policy is coherent – open but strict! – and it has substantial advantages. First, no initial margin or haircut is applied during standardised repo transactions, making the system more capital efficient.8 Second, it allows a broad range of financial institutions to participate, including many international banks. Third, it creates incentives for banks to hold high-quality, liquid assets in their balance sheets. Finally, as already suggested, this highly credible collateral policy has resulted in SNB eligible collateral becoming the standard for the secured interbank money market in Swiss francs. This, in turn, has made an essential contribution to creating a robust secured interbank market and thereby keeping interbank credit lines open at all times during the crisis. II.
They will help us build the trust that is crucial to delivering our mission. And they will help us merit that trust by making us more effective. By reflecting diversity and choosing inclusion, we will ensure we are doing all that we can to promote the good of the people of the United Kingdom. 9  All speeches are available online at www.bankofengland.co.uk/speeches  9  ENDNOTES i  Putnam, R (1993), “What makes democracy work?” National Civic Review. Putnam finds that cities, regions and countries with more trusting people tend to have better working democratic institutions. See also OECD (2009), “Fostering diversity in the public service”, October. ii See e.g. Noland, M, Moran, T, and Kotschwar, B (2016), “Is Gender Diversity Profitable? Evidence from a Global Survey”, working paper 16-3 Peterson Institute for International Economics, February. iii Page, S E (2007), “The difference. How the power of diversity creates better groups, firms, schools, and societies”, Princeton University Press. Page describes four elements of cognitive diversity: perspectives, the way we see and present problems and solutions; interpretations, the way we explain our perspective; heuristics, the way we seek to rationalise and solve problems; and predictive models, the way we infer cause and effect. iv See e.g. Riordan C M (2015), “Diversity is useless without inclusivity”, Harvard Business Review, August.

Frankly, it’s too early to tell: we know the final rate of inflation, 2%; but we don’t know yet the « terminal interest rate », or the policy rates that will ensure a timely return of inflation to our target, while seeing no reasons for increased expectations on these. Let me rather give some light on the first part of the journey, the normalisation till neutral rate; for sure it’s unobservable, but this one can be estimated, in the euro area at below or close to 2% according to me. I sometimes use a simple metaphor: as long as it is about lifting off the accelerator, we have to act for sure, in a determined but orderly way, and we should be there by the end of the year. Afterwards, the question could come of pressing the brake, and tightening if needed: but this part of the journey remains today an open question, and will deserve further assessment and reflection, in due time. Let me only stress one last and obvious point of yesterday’s decision: it marks the return of interest rates in positive territory. This historical step brings with it multiple dimensions that need to be revisited: on our operational framework, on our TLTRO operations, on our remuneration mechanisms of bank’s reserves. This is a matter that, as Christine Lagarde said yesterday, we will take up without delay. May I add that with a long view, monetary policy cannot be the only game in town?
The very accommodative monetary policy that we implemented in response was aimed at helping to heal the labor market and promote price stability. Slowly, the economy began to respond and to recover. In October 2014, the FOMC announced the end of its latest asset purchase program citing that “there has been substantial improvement in the outlook for the labor market since the inception of its current asset purchase program.” In March 2015, the BIS central bankers’ speeches  3  FOMC set out conditions for the decision to begin to normalize monetary policy, stating “The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.” The FOMC judged at its December 2015 meeting that those conditions had been met. The improvement that we have seen in the labor market is very welcome. It took until May 2014 for the labor market to recover the jobs lost in the recession, but now there are 5.3 million jobs beyond the prior cyclical peak. The unemployment rate has declined to 5.0 percent. With this improvement, the number of long-term unemployed has been reduced to 2.2 million. Despite these gains, it is important to emphasize that more needs to be done to improve the labor market.

So, as long as New York City keeps adding jobs at such a brisk pace, Fairfield County will benefit. In addition, research indicates that a strong central city is critical for the well-being of its suburbs, meaning that a healthy and growing New York City economy is critically important to Fairfield County. What else can the region do to foster economic growth going forward? It certainly helps for cities like Bridgeport and Stamford to be attractive locations for businesses to locate and grow. It is also important to focus on quality of life issues that make people want to live here – like good schools and low crime, and also amenities ranging from nice parks to good restaurants. Bridgeport has clearly been making progress in this regard, both along the waterfront at Steelpointe Harbor and along Main Street. With New York City’s large and booming economy nearby, and Metro North providing a convenient mass transit link, anything that makes people more inclined to live here – and perhaps even set up shop here – is bound to boost the local economy. And finally, one of the most important ingredients for a healthy urban economy is a well-trained and motivated work force. It cannot be overstated how important it is to help provide residents with the skills and tools they need to be productive and successful, so that they can realize their full potential.
But none of this changes the fact that we must lift the controls as soon as it is safe to do so, both because of the economic cost of retaining them and because of Iceland’s international obligations. In my speech a year ago, I said that this was one of the most complex tasks facing the Icelandic authorities at the time. That has not changed. A prerequisite for success is that we base our efforts on the best possible analysis of the problem and the potential solutions to it. Until now, the controls have been viewed as providing shelter during the  BIS central bankers’ speeches  3  resolution of the balance of payments problems caused by the collapse of the financial system. If all non-residents’ potentially volatile claims on residents were paid in a short period of time, Iceland would pay down foreign debt much more rapidly than is desirable. If worse comes to worst, the deleveraging could amount to roughly half Iceland’s GDP in relatively few years. Under such circumstances, the króna would depreciate significantly, at least over a considerable period of time, the banks’ liquidity would be weakened, and public sector finances would do likewise. Domestic and foreign Treasury financing would be much more difficult and expensive to come by. But is this analysis correct? Is Iceland faced with a balance of payments and refinancing problem rather than a debt sustainability problem?

Hamad Al-Sayari: Financial planning and wealth management in Saudi Arabia Speech by His Excellency Hamad Al-Sayari, Governor of the Saudi Arabian Monetary Agency, on the occasion of the graduation of the 7th and 8th Batches of the Financial Planning Program and the 2nd and 3rd Batches of the Wealth Management Program, Riyadh, 17 January 2007. *  *  *  Dear Audience, I am really glad on this blessed day to be with you in this happy occasion to celebrate the graduation of the 7th and 8th Batches of the Personal Financial Planning Program, and the 2nd and 3rd batches of the Wealth Management Program. In pursuance of its key role in developing the banking and financial sector, SAMA has been very keen to develop human resources in all financial and banking specializations. To this end, SAMA has made many initiatives. It has instructed the IOB to conduct a comprehensive study on the investment sector to determine the professional and educational criteria that must be satisfied by personnel involved in the various areas of investment. The findings of the study have showed that all staff working in investment and financial intermediation should have certain basic knowledge and skills in these fields. To meet these needs, the IOB designed scientific subjects and standardized tests on the basics of investment and stock trading. Moreover, the findings have indicated that banks’ customers are in need of persons specialized in offering financial advisory services.
However, an important point that should not be forgotten is that the financial sector encompasses a wider scope than just banks. In fact, policymakers in ASEAN have been successful in enlarging the borders of our financial markets by developing more diverse sources of funding for the economy. This is best reflected in the building of deeper and more liquid bond markets arising from the experience of the 1997 Asian Financial Crisis. We are also seeing a shift in the financial landscape through the usage of technology, something that I will elaborate more on later. Thus, the term bankers without borders, should perhaps, be expanded to be finance without borders. Yet, despite the positive outcomes from these and the continued strong need for openness, the conviction for globalisation and international banking seems to be waning. For one, post the global financial crisis, we have seen the rationalisation of operations by many international banks. 1/3  BIS central bankers' speeches  We read regularly on the prospects of trade protectionism, how globalisation has created widening inequality and how globalisation is like a train running out of control. No doubt, a key driver of the 2007/2008 financial crisis was indeed financial liberalisation going too far. Interestingly, some, including economists at the Bank of England have also begin to consider the theory of “peak finance” – that global finance has peaked and financial de-globalisation has begun, while others at the BIS have argued otherwise.

International banking and finance – a new model for a new era While this debate will surely continue to unfold over the coming years, perhaps the more pertinent question is how we can evolve the model of international banking such that it becomes more desirable and beneficial for the needs of the future. It is worth considering a new model – one that is inherently more sustainable and inclusive. If I may postulate, the starting point is perhaps an honest appraisal that international banking ought to be much more than just a commercial decision. Beyond considerations of revenue, margins and returns, international banking should fundamentally be more attuned to and invested in the developmental journey of the host country. Existing and traditional considerations on profitability, while important, should not become a border that limits the potential of transforming international banking for the benefit of the future. Here, the mindset is not one of a “winner takes all”, but rather one where the benefits of development are equitably “shared by all”. This, again, resonates with the ‘ASEAN Way’ of greater shared prosperity and is perhaps a useful reference. There are at least three ways in which international banking can further this new model. Firstly, by actively identifying the economic needs of the host country and working to serve these needs. These include, for example, national infrastructure development needs, financing gaps for certain segments of society as well as adoption of productivity-enhancing technology by firms.
2  Even though systemic risks are not an issue in the card market, other risks may be highly relevant. Operational risks in particular are important since operational disturbances may give rise to substantial costs for society as a whole. The market for card payments is characterised by the presence of strong network effects in combination with economies of scale. To exploit these effects players that otherwise compete with each other have to cooperate. This cooperation is manifested in common standards and a common infrastructure. It is an important cooperation, which has the potential of providing inexpensive and convenient payments services to the public in a way that would otherwise be impossible. There is, however, another side of the coin. High market concentration may reduce the competitive pressure and thus the functioning of the market. Market power may be abused. The effect from concentration on incentives to invest in research and development is ambiguous. High concentration may also make it difficult to establish new payment instruments and systems. It is not obvious that the market by itself can strike the right balance between cooperation and competition. Turning to the pricing of card products, the Riksbank, in dialogue with the banks, has launched a research project related to retail payments. The aim is to investigate how well the price structure for retail payment services reflects the underlying production costs for these services.

It is expensive to use, however, and in one way or another we all as bank customers pay for the use of it. For reasons of security and efficiency in retail payments, a more widespread use of cards would be desirable. Forces driving the development of the card payment market The forces of supply and demand shape the evolution of the card payment market in much the same manner as they influence the evolution of any other market. Demand is influenced by factors such as acceptance, convenience and relative prices. It has sometimes been argued that demand for payment instruments is not price elastic - that relative prices 1 do not greatly influence users' preferences for different payment instruments. The Nordic experience does not support this view. The rapid expansion of card payments and other electronically initiated instruments in Norway clearly point in a different direction. Norwegian consumers' shift of preferences followed immediately after banks' change of pricing strategy, where (among other changes) a price was put on the use of cash (as a small fee on ATM withdrawals). In Sweden, as previously noted, the use of checks fell sharply when banks started to charge for their use, although the charge was fairly small. Of course, good substitutes must be readily available. But if alternative ways of payment are present, fees seem to matter and matter a lot.
Peter Pang: Promoting and maintaining financial stability in Asia through cross-border co-operation Remarks by Mr Peter Pang, Deputy Chief Executive of the Hong Kong Monetary Authority, at the Hong Kong Monetary Authority – Bank of Thailand Joint Press Conference on the launch of US dollar – Thai Baht PvP link, Hong Kong, 15 July 2013. *  *  *  Deputy Governor, ladies and gentlemen, I would like to thank the Bank of Thailand for co-hosting this press conference with the Hong Kong Monetary Authority (HKMA). It is my great pleasure to join Deputy Governor Mr. Krirk Vanikkul to announce the implementation of the payment-versus-payment (PvP) link between the Thai Baht Real Time Gross Settlement (RTGS) system in Thailand and the US dollar RTGS system in Hong Kong. This PvP link sets another excellent example of central bank cooperation to provide solutions to enhance regional financial stability and to meet market needs. In particular, it will make a significant contribution to addressing the current principal risk in the USD-Thai Baht foreign exchange (FX) transactions that arises from buyers of USD paying Thai Baht in Asian time ahead of receiving US dollar in US time the next day. For technical people in the payment field, this is often referred to as the “Herstatt” risk which brought down the Herstatt Bank in Germany in 1974.

The implementation of this PvP link comes at an opportune time in view of the need to better manage the increased settlement risk due to the rapid growth in FX transactions and to assist financial institutions, in particular banks, to comply with the standards recommended by the international standard setting bodies. Driving the rapid growth in FX activities of the regional currencies has been Asia’s expanding share in global trade and investment flows. In the past decade, trade between Asia and the rest of the world had grown tremendously. Asian economies’ export of goods and services, as a percentage of the world total, increased significantly from 29% in 2002 to 38% in 2012, amounting to $ trillion. Asian economies’ total imports also increased significantly in the same period from 32% to 47%. Meanwhile, the investment flows between Asia and other regions have also intensified. Supported by the robust trade performance and increasing capital flows, activities in the regional FX market have increased significantly. According to the latest triennial survey on global FX market activity of the Bank for International Settlements (BIS), the average daily turnover in FX transactions involving Asian currencies increased by 172% from $ billion equivalent in 2001 to $ billion equivalent in 2010. BIS central bankers’ speeches  1  Against this backdrop of rapid growth in global FX activities, the Basel Committee on Banking Supervision issued an updated guidance on management of FX risk in February 2013.