samchain/econo-pairs-v1 huggingface dataset:
This is precisely the spirit of "Pillar 2" of the Basel framework. Supervision can and must be responsive, intrusive - including with on-site inspections -, exercised by highly qualified professionals, and applied forcefully. This is not wishful thinking: we have been practising it for decades at the ACPR, and for years now in the SSM. I would like to pay tribute to the ACPR's expertise and to the acclaimed work of its 1,050 women and men: it is indeed a certain "French-style supervision" model that inspired European-style supervision, under Danièle Nouy, the first Chair of the SSM, and which is still in place today under Andrea Enria. This active supervision is one of the greatest success stories of our European Banking Union. The SSM demonstrates the benefits of bringing all players under one main authority only, rather than under regional supervisors, with clearly defined responsibilities and coordination. This also allows for comparisons and for thematic on-site missions to be carried out. Page 6 of 9 Furthermore, our active supervision demonstrates the strong value of regular stress tests, including on interest rate risks, which are also applied to smaller institutions. The European Banking Authority (EBA) conducts an EU-wide bank stress test every two years, taking into account the latest macro-financial developments: in 2023, the stress test scenarios are typically based on a sharp rise in short and long-term interest rates.

In addition, under the EBA's Interest Rate Risk of the Banking Book (IRRBB) guidelines - as part of the rigorous application of the Pillar 2 provisions - published in 2018 and enhanced in 2022, European banks are required to conduct regular prudential stress tests to measure the impact of interest rate changes on their interest margins and the economic value of their capital; US regional banks such as SVB are not subject to this requirement. As regards the regulations of insurers, the general approach adopted in June 2022 by the European Council on amendments to the Solvency II Directive is in line with several of the ACPR's objectives: overall neutrality of quantitative requirements on the French market, support for long-term investment with more stringent requirements in terms of sustainable finance, better rules for crossborder transactions and better application of the principle of proportionality. It is now very important that the European Parliament adopt this directive as soon as possible, so that it can be implemented quickly and without being diluted. III. Areas to be enhanced in the short and medium term Resolution is another cornerstone of the Banking Union. However, the fact that the Swiss authorities opted for a merger in the case of Credit Suisse raised new questions about how to make resolution more operational and reliable. Let me share just two thoughts at this point. The first concerns the resolution of large or even systemically important banks.
In addition to be located on a very convenient naval route, conducive policies adopted by successive rulers have been a booster to international trade, and through it, to wealth creation. The pinnacle of country’s trade performance was recorded during the reign of the King Parakramabahu, the Great, in the late 12th century. The evidence suggests that it was a complete free market economy policy that was followed during this whole period. According to the Great Chronicle of Sri Lanka, Mahavansa, the king is recorded to have set-up the first ever export processing zone called Antharaanga Dhuura, bordering the present Kalu Ganga, Bentara Ganga and Sinharaja forest. In this zone, elephants, ivory, timber, gems, pearls and spices were processed for export to India, China and the Middle East 2 . In order to facilitate trading with many different nations, the King Parakramabahu made it mandatory for state officials to be fluent in foreign languages. During this period, Sri Lanka is reported to have functioned as a vibrant entrepot trade centre, the role played by Singapore in the modern world. According to some authors, Sri Lanka had simultaneously imported and exported the same commodity, such as textiles and fabrics 3 . This is considered as a very advanced form of trading known as intra-industry trade by modern economists. The same high profile of the country in foreign trade was continued unabated in the period afterwards.

If the private sector continues to grow – in line with the latest business survey evidence – and headline inflation remains high, it is hard to see why private sector pay settlements should not return to their pre-recession average of around 3.5% and possibly move higher.9 Issue 4: Inflation expectations and credibility That brings me to my final key issue – the role of expectations and credibility in the framework for monetary policy. Chart 12 shows a diagram which I have used in a number of speeches now and which I believe sums up well the challenge that the MPC faces in trying to stabilise UK inflation in a potentially volatile global economy. The global economy affects inflation in the UK through the cost of imports, the impact of world demand on the UK economy and through the way in which international businesses perceive the pricing climate changing on global markets – which will have an impact on their pricing strategies here in the UK. All these factors can affect UK inflation – but monetary policy has three powerful counter-influences: the influence of monetary conditions on the exchange rate and the level of domestic demand, and the ability of the monetary authorities to anchor price expectations through their commitment to the inflation target or some other monetary anchor.
All the prominent scholars who are presenting papers today will analyse some of the aspects of how and why market risk premiums vary. Financial regulations and financial frictions are  BIS central bankers’ speeches  1  important to our understanding of why risk premiums change over time. A thorough understanding of financial regulations and financial frictions might also be important in identifying unique investor characteristics. Axel Weber will shed light on the implications of financial sector regulation on the functioning of markets and the pricing of assets. Lasse Pedersen has provided valuable research on the micro structure of funding markets and how liquidity risks create systemic problems. In particular, he will cover frictions in financial markets. It is quite clear that the Government Pension Fund differs from the average investor in important respects. In addition, we need to understand how variation in risk premiums can be consistent with highly competitive financial markets. Why don’t all investors buy “value” or rebalance? Ken Froot will talk about rare events and disaster risks, how these events are priced in markets. He will also give insights on individual investor characteristics which give comparative advantages in holding these priced risk premiums. Ken French will speak about two ways for an investor to generate excess returns: informational advantages and systematically harvesting risk premiums which the investor has a comparative advantage in holding. Both Froot and French will mainly talk about average portfolio weights in highly competitive markets.

Mr Latter gives a tour d’horizon of the current situation on the world financial markets  Text of the opening address by Tony Latter, a Deputy Chief Executive of the Hong Kong Monetary Authority, to the Asia Pacific Issuers and Investors Forum, in Hong Kong on 7 December 1999. *  *  *  As we leave the twentieth century behind, the major regions of the world economy appear to be in quite good shape. North America is buoyant; Europe is positioned for more solid growth than of late, albeit only by its own rather modest standards; Japan may be moving forward, even if we have seen too many false dawns to be entirely confident; and the rest of Asia has recovered from the 1997 setback more strongly and quickly than most people expected. Meanwhile, major stock markets look set to end the millennium at or near all-time highs, with the notable exception of Japan, where the Nikkei is still at only about half its peak of more than ten years ago. It is also a confident end to the decade, century and millennium for “markets” in a broader sense. The 20th century has witnessed a considerable ebb and flow of fashions in economics, between allegiances to systems which afford primacy to market forces and those which yield varying degrees of control to the state. As it turns out, the former have held sway.
I should note that this is described in detail in the paper, "Measuring the Natural Rate of Interest After COVID-19," that was posted this morning on the New York Fed's r-star web page. First, we incorporated an additional persistent supply shock related to the effects of the pandemic that directly reduce the economy's potential. We measure this shock using the Oxford COVID-19 Government Response Stringency Index for each economy.12 This index aggregates measures of government containment and shutdown policies. Because the index is no longer being produced, we assume that in each case, it declines smoothly to zero over 2023-24. Second, we use a statistical procedure that accounts for outliers in the model's estimation. Specifically, from the second quarter of 2020 to the fourth quarter of 2022, we estimate a time-varying process for the variance of the shocks hitting the economy. This procedure places a lower weight on periods when there are very large outliers. Our results show that outliers are particularly large in 2020, as seen in Figure 2. By comparison, the estimated magnitude of outliers is relatively modest in 2021 and 2022. Starting in 2023, we assume that the distribution of shocks is no longer affected by the pandemic. Letting the Data Speak  Estimation of the modified model reveals three key findings. First, the modified estimation procedure yields results that are overall quite similar to those from the original model during the pre-pandemic period. Second, the current estimates of r-star are similar to those estimated directly before the pandemic.

European Central Bank: Press briefing – transcript Transcript by Mr Jean-Claude Trichet, President of the European Central Bank, following the meeting of the Governing Council, Frankfurt am Main, 2 August 2007. *  *  *  Let me just say a few words and then I will be ready to respond to questions, as usual. Recent economic developments and survey indicators confirm that sustained economic growth continued in the euro area through the second quarter. Rising oil prices, emerging capacity constraints and the potential for stronger wage and cost dynamics, among other factors, imply upside risks to price stability over the medium term. The existence of upside risks to price stability at medium to longer-term horizons is confirmed by the strength of the underlying rate of monetary expansion: strong vigilance is therefore of the essence to ensure that risks to price stability over the medium term do not materialise. Both, our previous economic and monetary analysis as expressed in particular in the last press conference have been fully confirmed by the ongoing information we have received since the last meeting of the Governing Council. Let me also stress that we never precommit, we decide at the moment of the meeting of the Governing Council on the basis of the information that we have, facts and figures, and according to the judgement that we make at that moment. I re-emphasise that we never pre-commit.
The declines in the Central Bank Business Tendency Survey indicators and domestic sales of automobiles as well as the fall in the Consumer Confidence Index also support this anticipation. Thus, it seems likely that the rate of growth will decelerate to a certain extent in the second half of 2006 and the first half of 2007. At this stage, I would like to draw your attention to the following point: What Turkey needs is to sustain growth at levels close to its potential. The uninterrupted course of growth in recent years is just the beginning. This process is a dynamic one. Structural reforms are extremely important and should be reinforced with micro measures, and a strategic vision should be adopted in line with changing needs and new structures. The Ninth Development Plan provides significant ground in this regard and should be put into implementation immediately. I would also like to say a few words about employment, which is another important issue on the agenda of Turkey. The number of people employed is gradually increasing in line with the high growth performance in our country. In the last one-year period, nine hundred seventeen thousand (917,000) new employment opportunities were created in sectors excluding agriculture. Moreover, in accordance with the structural transformation process in the economy, the sectoral distribution of employment is changing and a rapid shift is observed from the agricultural sector to other sectors.

In addition, robust internal  BIS Review 40/2003  3  controls which are designed to provide qualitative standards are also necessary to complement the quantitative analysis of risk and provide a check and balance in the overall risk management practices. The Malaysian experience Let me now take the opportunity to share with you Malaysia’s experience in addressing some of these issues. The blue print for the development of the financial sector in Malaysia is outlined in Financial Sector Masterplan that was released about three years ago. The Masterplan is all about determining the future directions of the financial system and to define the financial structure that is most appropriate to our requirements as our economy moves to the next stage of development. It therefore provides the direction and common purpose for all the relevant parties in the financial sector, the industry, the market participants, the regulators, and the government. In emerging economies, the role of the government and the regulator is important in particular to prioritise policy goals, build the infrastructure, provide the legal and supervisory framework, and in addressing market failures. The key emphasis of the plan is to move toward a more diversified and balanced financial structure with a strengthened institutional framework, enhanced market infrastructure and practices, and an appropriate regulatory environment in line with the transformation that has taken place. The Asian crisis highlighted the vulnerability associated with fragmented financial systems and the risk of excessive reliance on the banking sector.
For example, as regards operational risk and the so-called hybrid approach which sets out how the capital requirement for operational risk calculated as an aggregate using advanced models (AMA) can be distributed or assigned within a banking group - we as supervisors find ourselves in a situation where it would be advisable for us to take steps to clarify some aspects of this approach, but where we need the industry to make clearer progress in developing concrete assignment models. There are other eminently practical topics that are being discussed by the AIG. Without wishing to provide an exhaustive list, I would just like to mention that it is examining the material effect, in terms of capital, of the differences that continue to exist in some jurisdictions on subjects such as the definition of default. The Group is also engaged in an exchange of views on how to interpret “user testing” and so-called “LGDs in stress situations”. The AIG is attempting to establish the circumstances in which all these differences may be acceptable, when they affect different entities within the same banking group, and under what circumstances it would be appropriate to standardise the treatment of some of them. Another practical aspect of implementation relates to the growing use by a number of institutions of external models and databases, known as “vendor products”.

The work has been, and continues to be, intensive and I believe that it is necessary to keep moving forward pragmatically. Many of the issues raised by the banks cannot be regarded as arising directly out of Basel II implementation; rather, they have always existed in connection with the supervision of internationally active groups, although obviously these are genuine problems. Cooperation between supervisors is a complex process which takes time and cannot be resolved by decree; I think that the way to move this process forward is by focusing on real topics and real cases, and that the time for discussing hypothetical or theoretically possible situations with no practical relevance has passed. However, we should recognise that Basel II implementation in international banking groups poses new challenges and requires a greater degree of coordination between the actions of home and host supervisors, especially as regards the adoption of advanced approaches. Having accepted the need to keep moving forward on coordination, I would like to voice some concern that these difficulties might be used to justify the tendency, on the part of international banking groups that are moving over to the advanced approaches, to use less sophisticated approaches in host countries, including in those that allow advanced approaches. Indeed, some observers are reporting, without justification in my opinion, that the low level of implementation of advanced approaches in subsidiaries may stem from the lack of coordination among supervisors.
Ardian Fullani: Needed – a new way of thinking, a new approach to economic policy Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the 6th South-Eastern European Economic Research Workshop, organized by the Bank of Albania, Tirana, 19 November 2012. *  *  *  Dear workshop participants, Dear central banks colleagues, I am very happy to be here today, in this 6th South-Eastern European Economic Research Workshop. This Workshop is an annual event that Bank of Albania organizes, aiming to successfully bring together researchers and their work from the region and beyond. We are very glad for your personal contribution and your institutions’ commitment to this activity. The participation map extends every year and we take this development as a sign of recognition. This activity takes place as Albania celebrates its 100 anniversary of independence, which happened on 28 November 1912; we are, therefore, very happy to welcome you on the occasion of this very important event. The South-Eastern European Economic Research Workshop provides a platform to discuss and, most importantly, improve our work. It also provides a platform that contributes to the extension of regional cooperation in the area of research, making an additional contribution to the cooperation in other important areas of Central Banking in the region. As I have previously mentioned, countries of the SEE region are similar in many aspects including the state of economic problems and economic research. We are focusing on finding the problems in the existing models.

It takes many forms, and should extend across all areas of central banking. Few of the materials that will be discussed today and tomorrow illustrate this initiative very well. I hope there will be more similar examples in future workshops. The presentations and discussions today and tomorrow address a wide range of issues, reflecting the nature of problems that our economies are facing. I understand from the programme that our guests’ focus of research is similar to the one at the Bank of Albania. During the past year, we have focused on financial stability and monetary policy, trade integration and trade relations, and the modelling of stochastic economic process. But above all, the crisis, its implications, the channels of transmission, and policy response have become the focus of empiric and theoretic research in the central banks and academia during the last 4 years. The results of this research and analysis have taken central banks and their monetary and regulatory policies beyond what was considered sacred limits of monetary policy. However, this has not proven very helpful for the economy. It is now five years since the crisis began and the more authorities deal with short-term problems of growth and unemployment, the more they reveal long-term imbalances and structural problems of national and global scale. In the meantime, we still cannot fully define, understand and model the economy in its true stochastic form.
One of the many official reports on the lessons took a mandate about capital flows and turned it into a series of prescriptions on national balance sheets, including being attentive to vulnerabilities and to perverse incentives.1 The emphasis of the Draghi Report was hardly surprising. Brazil, Mexico, and Russia had suffered from mismatches in the maturity and interest-rate structure of their public debt. For Korea, it had been mismatches in the external funding of the banking sector. In Indonesia, the non-financial corporate sector had been overly reliant on short term, foreign-currency-denominated external debt. In each case, the country’s economy was eventually brought to heel by a run. It might have been easy for “developed” economies to ignore the Draghi Report. But efforts were made to draw wider lessons amongst advanced economies. Thus, in late 2000, the Bank of England ran the first of a short series of annual articles that tried to draw out the implications of the UK’s balance sheet for financial stability. It is worth quoting fairly extensively from that first article:2 “It is advisable for authorities to monitor a range of balance sheet indicators, focusing on variables and relationships that have in the past indicated financial fragility.....the size and structure of the economy’s foreign currency debt are particularly relevant, especially for countries on a fixed exchange rate regime. Sound risk management by the public sector warrants particularly high priority. National authorities need to adopt prudent strategies and practices in managing their own debt liabilities and financial and other assets.

A report submitted by an Ad-hoc Group chaired by Jean-Pierre Landau. BIS central bankers’ speeches  5  increase in risk appetite. It is not far fetched to ask whether excess Global Liquidity can result.16 We thus have two broad stories of what kicked off a period of pronounced credit growth and asset price appreciation. First, a fall in the world safe real rate, due to excess savings in the East. Second, increasing Global Liquidity, transmitted through expansive cross-border lending, kicked off by prolonged accommodative monetary policy. These stories are not at all mutually exclusive.17 And, most probably, both contributed to exuberance. But it is not my purpose this evening to revisit how asset-price appreciations that are initially fundamentally warranted can get out of control through the “Minsky” mechanisms of extrapolation of past returns into future targets, herding and myopia18 – the last no doubt aided by exaggerated market beliefs of what monetary policy can achieve following years of uninterrupted growth. Rather, it is important to my purpose this evening that both stories involve shifts in risk premia driven by changes in the supply and demand for financial assets. Shifts in risk premia, gross capital flows, and balance sheet strains That story would hardly have interested most macroeconomists a few years ago. Financial asset prices were regarded as providing useful information because they are forward-looking and available at high frequencies, but no more; they were not seen as actors.