samchain/econo-pairs-v1 huggingface dataset:
They should, for example, consider whether it is desirable to grow in size or develop into niche players. Neither option is an easy one. The opportunities for organic growth in the local market are limited, while competition for niche operations is intense. 2  BIS Review 37/2004  China risk The second important process is the continuing and accelerating integration of the economies of Hong Kong and Mainland China, which will be hastened in the years to come by further financial liberalisation. I have already mentioned the arrangements under CEPA, in which more medium-sized Hong Kong banks will be able to access the Mainland market. Let us not overlook movement in the opposite direction, in which more Mainland banks will seek to enter the Hong Kong market. On the macro level, as the renminbi moves at a measured pace towards full convertibility, it seems inevitable that an increasing proportion of the balance sheet of banks in Hong Kong would be denominated in that currency. The opportunities arising from the developments are promising, but they carry risks as well. The growing banking relationship between the Mainland and Hong Kong will provide important business opportunities for banks in both places. The question for Hong Kong banks seeking to take advantage of this process is whether they have the requisite expertise to properly analyse the business and compliance risks.

2 Albert Gallatin’s efforts to solidify the Hamiltonian structure and to establish fiscal discipline in the early years of the United States are less well known. 3 As you will see, they clearly merit attention. The story of Albert Gallatin provides a wonderful example of how Swiss and American politics and economics have nourished each other for centuries through the exchange of ideas and people. Moreover, Albert Gallatin’s legacy arguably provides some valuable lessons which remain relevant in the present time. Today, I would like to focus on a crucial part of Gallatin’s legacy – his strong adherence to fiscal discipline. But first, let me take you on a brief tour of Gallatin’s fascinating life story. 2. The life and achievements of Albert Gallatin  For the sake of clarity, allow me to divide Albert Gallatin’s life into four distinct periods. 1761-1788: Youth The first period covers Gallatin’s life prior to becoming politically active in the United States. Gallatin was born into a wealthy merchant family in Calvinist Geneva in 1761. He became an  1  Gallatin served 13 years – longer than any other serving Secretary of the Treasury before or since. 2  Ron Chernov, Alexander Hamilton (The Penguin Press, New York NY, 2004), provides the most recent and complete Hamilton biography.
As supervisory authority, Norges Bank will follow up efforts in the area of cyber security, in collaboration with Finanstilsynet (Financial Supervisory Authority of Norway). Here, the interests of the authorities and the financial industry coincide. Let me once again encourage the industry to work out satisfactory solutions. A great deal has already been done and collaborative bodies have been established at a national level. However, initiatives in this area are still rather fragmented. There is a need for an even more coordinated and targeted effort to obtain overall control and reduce risks. The system owners must ensure that critical IT providers have established robust contingency solutions and that these are tested regularly. If this is not done, the system owners are obliged to assess alternative solutions, also if they are costly. The responsibility of the system owners is the same, irrespective of whether the entire technical operation or just parts of it are outsourced. Offshoring is increasing. More flexibility, lower costs and a larger pool of persons with requisite skills are good arguments. At the same time, offshoring entails other forms of risk. Norwegian control is reduced. We become dependent on infrastructure and authorities outside of Norway. It would help if, in a crisis, operations can be moved back to Norway at short notice. It is still possible that in the future, critical systems will be required to be permanently operated from Norway. Electronic central bank money Making payments electronically involves the use of deposit money (money deposited in banks).

This provision builds up a buffer during the benign part of the cycle, which starts to be released when recession comes knocking on banks’ doors. Counter-cyclicality is intrinsic to dynamic provisions and part of its usefulness can be seen in the resilience shown so far by Spanish banks in the current crisis. Furthermore, its direct impact on the profit and loss account (reflecting losses at a time when these losses are really being built up in balance sheets) constitutes a way to make banks more aware of how credit must be priced, reducing the underestimation of loans risk premia and, to some extent, compensating the relaxation of credit granting standards in good times. It also delivers the right information to investors about the financial position of the bank. In all, dynamic provisioning allows a proper recognition of credit risk. I must also admit that there are voices raised by some institutions that do not agree with this view, and particularly, accounting standard setters. In this respect, we should call for further dialogue between accounting rule setters and supervisors as well as a clarification regarding roles and objectives of each of them. I really think that our objectives are compatible and that delivering the relevant information to investors should not be an impediment for supervisors to ensure the stability of the banking sector by promoting the most adequate measures that experience and results have proved to be useful. Very much in line with dynamic provisions, the buildup of capital buffers also deserves room in our discussions.
The Rt Hon Sir Edward George: Turandot - an allegory about the state of the global economy Speech by The Rt Hon Sir Edward George, Governor of the Bank of England, at the Association of Corporate Treasurers Annual Dinner, London, 13 November 2002. *  *  *  This time of the year - between the end of summer holidays and Christmas - is always a particularly busy time for me: it's the season of annual dinners and international meetings. This year it's been even more hectic than usual. And it's been a particularly gloomy period - characterised by global economic uncertainty, financial market volatility and a pervasive sense of pessimism in business and financial circles, not to mention of course the media. That won't have escaped the notice of most of you here. So, in the middle of it all, I took time out a few weeks ago to go to Covent Garden to see one of my favourite operas - Turandot. And I thought it might be more agreeable for all of us if I talked about the opera this evening, rather than the prospect for interest rates. I'm sure you all know the story. The beautiful, but somewhat frigid, Princess Turandot decided to set her many suitors three tests. Turandot's tests were in the form of riddles - and she would only marry the man who could solve all three riddles correctly.

Disappointingly, Turandot's answer to the flickering flame was not "confidence" as I had thought it would be. Her rather chilling answer was BLOOD - which could no doubt flow if confidence were to fail. But you have to remember that I was watching the opera over a month ago. Perhaps today she would come up with a somewhat more positive answer. Turandot's third riddle was "What is the frost that burns…… and makes a king of the one it accepts as a slave?" Well for a time that stumped me completely! Not that it mattered much by then - I'd already failed the first two of Turandot's tests, so I knew I was for the chop anyway! But then I began to reflect on the implications of it all for our own economy here in the UK. And I even recalled that previous occasion on which I had dined with you here at the ACT dinner. At that time we'd had just 2½ years of growth with low inflation - after the 1990/91 recession. I told you that we were determined to maintain price stability as a necessary condition for sustainable growth of output and employment. You all hooted with laughter! Your President said it had been the best joke of the evening - even though you'd heard it many times before! Well we've now had 10 years of low inflation - with continuous, quarter-by-quarter, GDP growth, and the number of people in employment is at a near-all-time high.
This makes it possible to offer a set of interactive graphs for dynamic data queries. In a first stage, statistics on activity, employment, sectors, finance, demographics, and mobility, among others, will be included. I would like to take this opportunity to thank the different institutions behind these sources that produce these series and that will allow us to offer them as a whole unit via this platform. Finally, given the access to new information and the opportunities created by technology, we will soon begin to publish experimental statistics in several areas of interest. These series do not meet the same standards as traditional statistics, but they are timely and reliable enough to be considered in economic analysis. Like some statistical institutions in developed economies, we believe that, although they are a little less accurate and subject to more periodic revisions, they are sufficiently useful to outweigh their potential disadvantages. Thus, during the second half of this year we will publish a daily retail trade index, an indicator that provides a preview of activity in part of the trade sector. In the same vein, we expect to publish intermediate consumption statistics, i.e. we will have purchase and sales transactions between companies in different regions, which will allow us to measure trade within and between regions, among other new indicators. In conclusion, I would like to reflect briefly on the current state of our economy and the important challenges we face.

In addition, more countries have shown signs of further tightening in their labor markets, which will continue to put pressure on wages (figure 7). 3  Against this inflationary backdrop, most central banks have raised their benchmark rates and/or signaled a path of faster withdrawal of monetary stimulus. The Fed made its largest rate hike in two decades, anticipating additional raises at upcoming meetings and a reduction of its balance sheet from June onwards. Sweden, India, and Australia surprised the market by initiating monetary normalization in the face of increased inflationary pressures. The European Central Bank confirmed that it will end unconventional stimulus in the third quarter of this year, although it remains more cautious about raising rates. Central banks in Latin America have continued to raise policy rates in the face of growing inflation. (figure 8). In this context, and comparing with the closing of the March MP Report, global markets are increasing their risk aversion, reflected in higher long-term rates, falling stock prices, and an appreciated dollar. In any case, these trends have seen important changes in the period, with some recent reversal of these changes. The Chilean market has had a more favorable performance compared with its external peers. Compared to the end of the previous MP Report, long-term rates have remained unchanged, the depreciation of the peso is around the average of emerging economies and stock prices have risen, although specific factors have played a role in the latter (figure 9).
(Many economists remember the famous  9  All speeches are available online at www.bankofengland.co.uk/speeches  9  result of Brainard (1967) that uncertainty implies caution; few recall the more interesting result that 38  uncertainty motivates diversity – the use of all available policy tools in concert. ) A diversified policy is also more comprehensive. It guards against regulatory arbitrage; of lending moving to foreign banks or non-bank parts of the financial system. And by reducing the risk of debt overhangs and high levels of debt, it makes the economy more stable too. Why use the cure that creates just resilient banks when you can use the prevention that gives you a stronger economy too? 39  Consideration must now be given to how far to take these road safety standards. Is it optimal to address risks from the commercial real estate market and consumer credit solely with the cure of bank capital? Or might a preventative approach be more robust and comprehensive? Similar consideration must also to be given to the feedback loops in the financial system. Where should they be addressed directly? That is a topic for another day, but robustness and completeness will call for some to be addressed directly. Macroprudential policy – at home and internationally – is moving into this space. 40  So this is my third – and final – call to arms for academic research: where – in building resilience – is an ounce of macroprudential prevention worth a pound of cure?

The focus of strengthening the system since the crisis has been on building the resilience of the core banking system. The results have been transformative. A system that could absorb losses of only 4% of (risk weighted) assets before the crisis now has equity of 13.5% and is on track to have overall loss absorbing capacity of around 28%. 32  Our stress tests show that it could absorb a synchronised recession as deep as the financial  crisis. And if signals emerge that what could happen to the economy is getting worse, or the feedback loops in the system that would be set in motion are strengthening, we will go further. 8  All speeches are available online at www.bankofengland.co.uk/speeches  8  But bank capital is not always the best tool to use to strengthen the system and is almost certainly not best used in isolation. It is a classic ‘cure’ – a largely fatalistic approach, taking what could happen in the economy and the feedback loops in the financial system as given, and ensuring they can be withstood. 33  Sometimes we must be fatalistic. We don’t have the means to prevent foreign credit booms, for example. But building resilience into the financial system solely using bank capital is equivalent to addressing road safety only with tougher car safety standards – more airbags – while ignoring standards of driving behaviour. Such an approach is not robust: no airbags will deal with all types of crash.
I would like to also point out that a couple of mitigating factors are currently at play, which can help alleviate the adverse impact of capital flow surge. First, the new investment cycle in Thailand may have taken off, led by both the private sector and large public infrastructure  2  BIS central bankers’ speeches  projects. Many of these projects have high imported contents, and stand to gain from an exchange rate appreciation. Spells of baht appreciation thus provide an incentive for many firms to implement a long-overdue technological upgrading and import more capital goods in an environment where labor is scarce and no longer cheap. In turn, these imports can help slow down the pace of appreciation and mitigate the adverse effects on export industry. Furthermore, corporations that have expanded their operations overseas or plan to do so will also benefit from stronger baht which can help, to some extent, reduce the overall impact of baht appreciation on their businesses. With cooperation from all sides, including policymakers and private sector alike, Thailand could seize this opportunity to strengthen the fundamentals of the economy further, and reap long-term benefits that are likely to be greater than short-term costs of adjustment. Second, it is often overlooked that under flexible exchange rate, adjustments in the currency’s value themselves can be an effective buffer for capital flow volatility. In a wellfunctioning market, a currency that is overvalued relative to its fundamentals would be subject to market discipline that helps slow down further appreciation.

The government’s update of the stability programme published this week rightly provides for such a control of public expenditure once the recovery is firmly established (0.7% growth per year from 2023 on average), although this is somewhat higher than 0.5% per year, and incorporates a more  optimistic view on potential growth than our own forecast (1.35% vs. 1.1%). What is more important in this regard however is not the exact number but that the established targets are effectively met. The level to be fixed – and then respected –, is a matter for democratic debate, not for central banks. This is a demanding but attainable goal: many of our European neighbours have achieved it. ** In conclusion, the Covid crisis has completely warranted a very supportive fiscal policy. But the gradual exit from this crisis should be a crucial opportunity for us Europeans to respond to one core question: how to maintain the right use of the fiscal tool while ensuring the sustainability of our debt, in order to be able to finance our common social model for coming generations. Accommodative monetary policy obviously helps, but it cannot be taken for granted eternally. To draw an analogy from the sphere of climate change, we should avoid a « tragedy on the horizon ». Thomas Paine, an English-born political philosopher and citizen of the world, once said: “If there must be trouble, let it be in my day that my child may have peace.iii” This is exactly what we should aim at in the next decade.
Indeed, those were among the reasons a number of countries, including the US and Canada, had a leverage ratio regime ahead of the crisis.4 The Basel III leverage ratio, set at a minimum level of 3% Tier 1, is due to be implemented internationally by 2018. A second new element of the Basel III package was to augment solvency with liquidity-based standards. Banks’ liquidity has long been a pre-occupation of the Basel Committee (Goodhart (2011)). But it took wholesale liquidity runs on the world’s largest banks during the crisis to provide the impetus for internationally-agreed liquidity standards. Under Basel III, these take the form of a liquidity coverage ratio (LCR), designed to ensure banks have sufficient high-quality liquid assets to meet their 30-day liquidity needs; and a net stable funding ratio (NSFR), designed to ensure banks’ funding profiles are sustainable. The LCR has been implemented in full in most countries; the NFSR is due for implementation by 2018.5  During the crisis, a crucial missing ingredient from the financial regulatory architecture was found to be the ability to wind up financial institutions in an orderly fashion – that is, while minimising disruption to financial markets and the economy and without exposing tax-payers to risk (FSB (2014)). A number of measures have been taken or are in progress to fill this gap, including the introduction of more effective national resolution regimes for financial firms and greater cross-border co-operation and co-ordination when dealing with international banks in situations of stress (FSB (2017c)).

Of course, such a judgment depends on how much other policies succeed in reducing the negative externalities their failure would generate. Critics of our approach believe it would be better to just break up firms deemed TBTF now – perhaps through legislation requiring the separation of retail banking and capital markets activities or by imposing size restrictions that require firms to shrink dramatically from their current scale. My own view is that while this could yet prove necessary, it is premature to give up on the current approach: changing the incentives facing large and complex firms, forcing them to become more resilient, and making the financial system more robust to their failure. In my opinion, there are shortcomings to reimposing Glass-Steagall-type activity restrictions or strict size limits. With respect to Glass-Steagall, it is not obvious to me that the pairing of securities and banking businesses was an important causal element behind the crisis. In fact, independent investment banks were much more vulnerable during 2008 than the universal banking firms which conducted both banking and securities activities. More important is to address the well-known sources of instability in wholesale funding markets and give careful consideration to whether there should be a more robust lender of last resort regime for securities activities. With respect to size limitations, it is important to recognize that a new and much reduced size threshold could sacrifice socially useful economies of scale and scope benefits.
To begin with, the economic data looked brighter at this point in 2010 and again in 2011, only to fade as we got into the second and third quarters of those years.1 Moreover, the United States has experienced unusually mild weather over the past few months, with the number of heating degree days in January and February about 17 percent below the average of the preceding five years. While this reduces the amount that households and businesses must spend for heating, I suspect that it temporarily boosts economic activity overall. For example, the mild weather is certainly conducive to higher than normal levels of construction activity, and we did see a surge in hours worked in that sector over the past few months. More importantly, real economic activity has yet to be strong enough on a sustained basis to make a big dent in the overall amount of slack in the U.S. economy. While it is true that growth was stronger in the fourth quarter, most of that growth was due to inventory accumulation. Growth of final sales was actually quite weak. Historically, a quarter in which inventory investment makes a significant growth contribution is typically followed by a quarter in which that growth contribution is modest or even negative. That appears to be what is shaping up for the first quarter of this year. Based on available data, current expectations are that real GDP will expand at around a 2 percent annual rate during the first quarter of 2012.

William C Dudley: The national and regional economic outlook Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Long Island Association, Melville, New York, 19 March 2012. *  *  *  Good morning. I am pleased to be here on Long Island. It is always a pleasure to speak with the business community because of the leadership role you play in your communities and in shaping the economic landscape in the region. So, I thank you all for coming today. Over the past few years, I have been engaged in a series of outreach meetings all across my Federal Reserve District. For example, in 2010 I visited several upstate cities. Early last year I made visits to various parts of the city – Brooklyn, the Bronx, Queens – and to Puerto Rico. In August, I met with community and business leaders and elected officials in Newark, Patterson and Jersey City. In November, I went to West Point and the Capital region. I consider these visits just as important as my trips to Washington, D.C., to help formulate monetary policy or to Switzerland to help shape international bank regulation. Each visit within the region helps me to deepen the relationships with the people I represent. I believe that the understanding of issues and concerns that I gain today will help ensure that the Fed’s policy decisions reflect the public interest in the broadest sense.