samchain/econo-pairs-v1 huggingface dataset:
And it introduces a cooperative approach to CCP supervision, involving all relevant supervisors and central banks in “supervisory colleges” to ensure that CCPs are properly overseen across Member States. The global regulatory push towards central clearing has contributed to making CCPs extremely important parts of the global financial system. In 2009, just 40% of all interest rate derivatives contracts were cleared through CCPs, but by 2017 this had increased to 83%1. New developments and current challenges The rising importance of CCPs means that their supervisory framework needs to be reformed. Most clearing is now done across borders and is strongly concentrated in a limited number of EU CCPs, which have become systemically important for the EU as a whole. Two of these CCPs are based in the United Kingdom. Currently, they clear around 95% of eurodenominated interest rate derivatives and around 30% of euro-denominated repos. Thus, a significant disturbance involving a major UK CCP could affect financial stability and market functioning across the EU. On top of this, most of the liquidity provided by central banks tends to be channelled through the repo market. The United Kingdom’s withdrawal from the EU means the supervisory framework for non-EU countries must be adapted. EU authorities must continue to be able to not only closely monitor UK CCPs but ensure they comply with EU regulations.

Both exchange rates and interest rates then determine monetary conditions in Switzerland, and thus eventually output and inflation. Although short-term interest rates are the main monetary policy instrument, the SNB has, in recent years, been using exchange rate interventions as an additional tool. Due to the safehaven status of the Swiss franc, the SNB has been active on the foreign exchange market. We are also willing to intervene, as required, as part of our current monetary policy. Once again, banks have been at the heart of monetary policy transmission. They have acted as intermediaries of the SNB’s foreign exchange interventions. 4 With depressed international demand and a strong Swiss franc weighing on GDP, credit availability has been crucial for the domestic economy. Low interest rates and ample liquidity provision by the SNB have facilitated banks’ intermediation activities. In short, the SNB’s  4  2  For further details, cf. Lukas Altermatt and Romain Baeriswyl, The effect of the monetary base expansion on the balance sheet of domestic banks, SNB Quarterly Bulletin, 1/2015, and Raphael Auer, A safe haven: international demand for Swiss francs during the euro area debt crisis, SNB Quarterly Bulletin, 2/2015. BIS central bankers’ speeches  policy has supported the banks’ provision of credit to the real economy. The banking sector, which is traditionally procyclical, has in turn benefited from improved economic conditions. In order to fulfil our mandate we need a stable banking system. Financial stability is key, both for the SNB and the whole economy.
A legal framework for consumer protection as well as possible incentives have already been taken account of through adequate provisions in the revised Banking and Financial Services Act which is under Government consideration for possible legislation in 2014. Guest of Honour We all agree that one of the major barriers to growth of the SME sector in Zambia is the shortage of financing despite its high potential to catalyze growth and employment creation. It therefore makes business sense that the financial sector should start to look at the financing problems for SMEs in a holistic manner which takes into consideration other developmental constraints which may impede sustainable growth and render the financing ineffective. In line with Government’s desire to enhance local content through SMEs and use of locallymanufactured inputs in the Zambian mining industry, a study in the mining sector is being under taken by the Zambia Local Content Initiative (ZMLCI) facilitated by the World Bank and co-financed by DFID. The goal is to build sustainable collaboration between SMEs and the mining industry. It is our hope that the above initiative will be extended to non-mining related SMEs such as those in agribusiness, tourism and retail. Honourable Minister You may wish to note the following topics that will be discussed during this forum: i.  SME Financing and Business Linkages, IFC Experiences in Africa;  ii. SME Financing and Experiences and Lessons Learned – AfDB;  iii. Promoting Business Linkages in Zambia – DFID Zambia; and  iv.

Guest of Honour Following on the success of the 2012 Forum, it was felt that the momentum gained from that forum should not be lost. This Forum is, therefore, a follow up event from the one held last year. The theme of this year’s event is “Encouraging Local Content and Business Linkages: Role of the Financial Sector” Arising from last year’s event, nine major recommendations were made as follows: i. Set up of a credit guarantee facility;  ii. Establish a credit line to be provided by a wholesale institution such as DBZ coupled with training for financial institutions;  iii. Training for MSMEs/financial education to be an integral part of on-going efforts to support access to finance;  iv. Establish a central collateral registry;  v.  Develop a national MSMEs financing policy;  vi. Initiate legal reforms for speedy settlement of commercial transactions and resolution of disputes;  vii. Develop incentives for financial institutions that service the needs of MSMEs;  BIS central bankers’ speeches  1  viii. Develop a legal framework for consumer protection and data protection; and  ix. Monitoring and regulation of Money lenders. I am happy to report that seven out of the nine proposals made have been progressed with the other two still under discussions. The Government and World Bank are already in negotiations for a financing arrangement that may incorporate a form of guarantee scheme and financial education elements while DBZ has been recapitalized and has disbursed some funding through other financial institutions.
First, I doubt that a higher inflation target would be viewed as consistent with the Federal Reserve’s Congressional mandate to pursue price stability. Our employment and inflation mandates have been established by Congress, not by the Federal Reserve. Second, the risks of being pinned at the effective lower bound for interest rates may be overstated. Only once in the postwar period have we reached the zero lower bound. Upending several decades of effort to anchor inflation expectations around 2 percent might be too high a price to pay to reduce the effective lower bound risk by what might prove to be a small amount. In this vein, it is important to recognize that the FOMC now has a more credible set of tools available to use at the effective lower bound than it did in 2008, when those tools were largely unproven. Forward guidance about the path of short-term interest rates and quantitative easing have been effective in providing monetary policy stimulus in the post-crisis period. Because this is now more broadly appreciated, households and businesses should be more confident that the Federal Reserve has sufficient tools available at the effective lower bound to generate a sustainable economic recovery. This greater confidence, in turn, should help keep inflation expectations from declining—which should also mitigate the risks associated with hitting the lower bound. Third, there are arguably better ways of reducing risks associated with the effective lower bound than a higher inflation objective.

For example, if we are in a period of “secular stagnation”— characterized by chronic excess global savings and aging populations—then one would expect r* to remain persistently low. 3 But, if we are in a world of abating headwinds as we recover from the financial crisis, then one would expect r* to rise over time. This lack of clarity about the environment increases the degree of uncertainty about the level of r*. Despite all these uncertainties, one still has to have a viewpoint. In the current circumstances, I would judge that r* over the medium term is likely to be somewhere around 1 percent. Although that is higher than the estimates from some models, I have nudged up my estimate because financial conditions are still easy and fiscal policy will likely be quite stimulative in 2018 and 2019.4 If the neutral real interest rate is around 1 percent, there is still some distance to go before monetary policy actually gets tight. At the FOMC’s 2 percent inflation objective, my estimate of r* implies that the federal funds rate would need to rise to around 3 percent for monetary policy to be considered neutral. Of course, as the factors that influence r* change, my estimate of r* will also move around over time. 2/7  BIS central bankers' speeches  Whether monetary policy will need to move to a restrictive setting depends crucially on how low the unemployment rate can go without inflation climbing meaningfully above 2 percent.
The cumulated loss at the end of the third quarter (since 1 October 2008) was USD 4.4 billion. Equity capital reported thus remains negative, though this loss was entirely covered at the time by the secondary loss protection – the warrant for the purchase of 100 million UBS shares at nominal value. By the end of the StabFund’s first financial year it will have largely completed the build-up of its operating activities. In the last few months, following the asset transfer phase between December 2008 and April 2009, the asset management process was set up, risk monitoring and financial reporting expanded, and an internal control system and operational risk management introduced. These processes will be further improved next year, with asset management taking on a key role. While the intrinsic values of the assets represent a key element in managing the portfolio, the process must not be merely mechanistic. Now that it has been possible to sell off some of the more liquid assets over the last few months, attention will focus more closely on two tasks: minimising the larger concentration risks, and ensuring that – as the portfolio is disposed of – the best possible equilibrium is maintained in various respects, including the degree of liquidity of its holdings. Broadening participation in the Swiss franc repo market The unsecured money market collapsed when the financial crisis broke out in August 2007 and it has not properly recovered to this day.

The use of unconventional measures has also changed the nature of part of the liquidity created. Liquidity resulting from repos and currency swaps is temporary: it flows back automatically when the transactions are not renewed. Liquidity created by acquiring foreign exchange and Swiss franc bonds, conversely, is permanent. We expect to keep the foreign exchange and bonds we have purchased on the SNB’s balance sheet for an extended period. As part of the impending normalisation of monetary policy, SNB Bills – introduced a year ago – will therefore play a central role. Liquidity absorption will mainly be conducted through the issuance of SNB Bills. Consequently, part of the balance sheet will in future be funded with interest-bearing debt capital. Moreover, the expansion of the balance sheet will substantially increase the SNB’s credit and currency risks. Strengthening the SNB’s provisions The financial crisis has highlighted how important it is for the SNB to have a solid equity capital buffer. Without it, the SNB would be unable to carry the risks on its currency reserves internally – nor would it be in a position to take the measures to stabilise the financial system that proved essential in the financial crisis. Equity capital, furthermore, is central to the independence and credibility of the SNB. In spite of the extensive crisis measures we have taken, the SNB’s balance sheet is as robust as ever – though its financial stress resistance is heavily dependent on the distribution reserve, which is high at present.
With such a regime, the central bank seemingly absorbs exchange risks, which gives private investors an incentive to utilise the interest rate differential with the rest of the world that characterises a situation where domestic inflation expectations are higher than in other countries. Loans were therefore obtained in foreign currency for investment in domestic assets. The maturities of the financing instruments often differed from those of the investments—the funds were borrowed short and invested long. When the exchange rate ceased to be perceived as sustainable and the risk of an adjustment grew, the earlier capital inflows turned into massive outflows. This accentuated the pressure on the exchange rate and created an acute currency crisis. If the capital inflow had been channelled through the banking system, the lack of confidence during the acute phase of the crisis often led to severe repercussions on the financial system. The course of events of this type is essentially dependent on the supply of credit. The problem has lain in widespread lending losses and it seems that the banks have repeatedly made much the same mistakes. This applies to their generosity in financing asset investment by private players as well as to the willingness of international banks to supply foreign currency to domestic counterparties. Situations of this type often involve a high concentration of credits and the credit risk assessments appear to have been rather superficial. What are the reasons for this? One is probably the difficulty, for banks as well as supervisors, in assessing the risks in loan portfolios.

A classic example is the tulipmania in the Netherlands, which ended in 1636 with the collapse of the market for tulip options. From the tulip crisis it is also clear that derivative instruments are not a recent innovation in financial markets. The world also saw numerous financial crises in the nineteenth century. As for the present century, what first comes to mind is the crisis in the wake of the stock-market crash in New York in 1929, with effects that left their mark on the global economy in the 1930s. There are various explanations for the Great Depression but it clearly involved widespread financial turbulence and the failure of many banks. In Sweden, too, there were serious bank crises in the early 1920s and ’30s; on both occasions they were accompanied by a deep economic depression and serious deflation. The drop in output and the price level reached two-digit figures before the problems could be overcome. In recent years the pace of financial market development has been rapid. As a result of innovations in communications and information technology, with the new instruments and methods they provide for risk management, the financial system is now more extensive and globalised than ever before. The system channels savings more effectively to those activities in the global economy that need them most. The rapid pace of financial developments and their internationalisation are a logical consequence of arrangements for the production and international exchange of goods and services in the world economy.
Malaysia has always been open, friendly and fair to foreign investors. Foreign investment in Malaysia dates back to more than a hundred years ago. In fact, foreign investors have been major partners of our economic growth. Foreign investment had contributed significantly towards the expansion of the country’s manufacturing sector, the creation of employment and the birth of economic hubs. Today, foreign investors remain key allies in our quest to become a high income nation. Periodic reviews and dismantling of burdensome regulations have been our ethos. In 2009, we reduced barriers for partnership with local companies and liberalised 27 service subsectors. Since then, at least 15 more subsectors have been liberalised. These measures have boosted investments in many corridors around Malaysia. Malaysia is a profit centre with no restriction in repatriation of profits even during difficult times. Foreign investments have indeed yielded significant returns for investors. Returns on FDI have grown by an average of 13% per annum, higher than Malaysia’s nominal GDP growth of 7.7% and one of the highest in Asia. Clearly, Malaysia is a regional profit centre where foreign investments are protected and is allowed to operate in a conducive environment. More importantly, profits by investors are freely movable. Malaysia does not impose any restriction on the repatriation of profits, even during difficult times. A fact sometimes missed by analysts. Even during the 1997 crisis, we did not restrict the movement of profits from Malaysia. Our compass in attracting investment has always been guided by seeking quality, rather than quantity, of investments.

Credit lines were closed, margin calls were made, and all but the safest assets sold off at fire sale prices. Emerging market assets experienced a sell-off as a part of this process, and funds were repatriated back to the US in order to meet margin calls and repay debt. In normal times, managing liquidity across currencies from countries with free movement of capital and relatively developed capital markets is not much of an issue. In these conditions, FX swap markets can speedily be used to convert liquidity from one currency to another at spreads that closely reflect the differences in domestic money market rates in the two countries concerned. In other words, the covered interest parity condition broadly holds. Visà-vis the US dollar, this relationship showed periodic strain for most currencies after the  BIS Review 9/2010  3  financial turmoil erupted in late summer 2007, but it broke down almost completely after Lehman. There are probably several reasons for this, some of which were analysed in BIS publications such as the Quarterly Review during the period when I was still there. 2 Thus, for instance, we know that before the crisis, European banks had a structural imbalance where they had invested in longer-maturity USD assets and financed them partly in USD interbank markets at shorter maturities. When these dried up, there was probably a scramble to get USD liquidity through FX swap markets, with the result that those markets became dysfunctional as well.
John Gieve: London, money & the UK economy Speech by Sir John Gieve, Deputy Governor of the Bank of England, at The University of Surrey, Guildford, 26 June 2007. *  *  *  Introduction The past year has been one of rapid growth and record profits for much of the financial sector worldwide. The strength of the world economy has provided a favourable wind but the spectacular growth of derivative markets and the spate of leveraged buy outs have also fuelled the growth. And, of course, London has been at the centre of the story. In a speech in March I discussed the renewed ascent of London as a centre of international finance and concluded that it was based on powerful economic forces which were likely to persist. 1 I showed how the leading position London built up in the days when Britannia ruled the waves gave it a strong comparative advantage based on language, law, time zone and, above all, by a concentration of expert labour. This allowed London to maintain an important role in international finance even while Britain’s overall economic and political position was eroded. In the last twenty years we have seen a resurgence in the City which has established a strong position not just in traditional markets like foreign exchange, where its share is around 30% of trading, but in new products, with a share in OTC derivatives markets over 40%.

Over the last 10 years, for example there has been a striking swing in employment with rapid growth during the dotcom boom followed by a sharp fall and subsequent recovery (Chart 5). 3  The UK is a net exporter of financial services, running a surplus in 2006 of £ billion (or 2% of GDP) on financial services and insurance. North Sea oil production peaked in 1999, and in 2006 was nearly 40% below this peak. 2  BIS Review 73/2007  That reflects a strong cycle in financial sector profits (Chart 6) which is an international phenomenon – indeed, in the last 10 years major European financial firms and US securities dealers saw an even bigger cycle in their profitability than major UK financial firms (Chart 7). The same is true for earnings (Chart 8). This reflects the importance of bonuses which account for around 20% of remuneration in the financial sector compared with around 5% across the economy as a whole. The figures in the City itself can be considerably higher. A figure of 50% is common in investment banking, in which a rough rule of thumb is that firms distribute about half their pre bonus profits to staff. It is estimated that 4200 workers in the City received bonuses worth more than £ in 2006/07. Of course the growth in those bonuses is contributing to the widening inequality of incomes at the top of the earnings distribution.
On the other hand, neither can we rule out a strengthening of copper supply and demand factors that would allow prices to remain high for longer, according to some market analysts. Regarding domestic activity, we expect GDP to gradually regain faster growth. Several local factors pose risks to this projection. For now, the lack of synchrony between different expenditure components persists, with sectors (especially investment-related) that still lag behind in the recovery process. Lower than expected short-term dynamism could threaten the robustness and sustainability of the recovery of growth in the medium term. In particular, because the improvement in the consumer and business confidence indicators owes more to expectations of better conditions going forward than to the present situation, and because the financial market, within a generally favorable scenario, contains segments of greater vulnerability in consumer and commercial credit. In contrast, borrowing costs remain at record lows and international conditions have been better than we anticipated, which could add momentum to investment and speed up its recovery. In this context, the Board estimates that the risk balance for both activity and inflation is unbiased. However, it reiterates its intention to monitor any possible downward deviations of inflation in the short term that could jeopardize its convergence to the target within the forecast horizon. Accordingly, the Board reaffirms its commitment to conduct monetary policy with flexibility, so that projected inflation stands at 3% over the two-year horizon.

The Financial Stability Report In our FSR, we communicate every June and December the recent macroeconomic and financial developments that may influence the financial stability of the Chilean economy. As opposed to the MP Report, the FSR is not articulated around a baseline scenario, but rather focuses on the most significant risks threatening the financial system. In this FSR, we note that in the second half of this year the Chilean financial system has suffered no major disruptive events and the data at hand indicates that the sector continues in a strong enough position to withstand the impact of stressful scenarios. We also observe that the internal and external payment systems have worked normally, while the traditional credit risk indicators have remained low up to this moment. However, some alternative risk measures show increases in certain sectors. As we warned in the MP Report, if the local economy's slowdown of recent years is further prolonged, this situation could deepen. In the external scenario, as usual, the risks identified in the MP Report's baseline scenario that I just 7  presented are very similar to those considered in the FSR, particularly those relating to a sharp increase in external interest rates and their impact on our local financial conditions. The FSR notes that the good financial conditions abroad have been mirrored locally. Likewise, we emphasize that the cost of short-term bank financing has remained coherent with the MPR and that the cost of issuing long-term debt for companies and banks has been compressed lately.