samchain/econo-pairs-v1 huggingface dataset:
“The Great Leveraging,” NBER Working Papers, No. 18290. BIS central bankers’ speeches  1  this context, Turkey established the Financial Stability Committee in 2011. Along with the Central Bank, the Committee is composed of the Banking Regulation and Supervision Agency, the Capital Markets Board of Turkey, the Savings Deposit Insurance Fund and the Undersecretariat of Treasury. Distinguished Guests, Now I would like to briefly mention Turkey’s contributions to global financial stability. Turkey became a member of the Financial Stability Board (FSB) in 2009. In 2014, Turkey will participate in G20 Troika and assume Presidency of the G20 in 2015. During the period from 2014 to 2016, when Turkey will be taking part in G20 Troika, our representative from the Undersecretariat of Treasury will be assigned to the FSB Steering Committee. Turkey became a member of the Basel Committee on Banking Supervision (BCBS) and the Group of Governors and Heads of Supervision (GHOS) in 2009. The Central Bank of the Republic of Turkey will participate in the FSB Steering Committee during the period 2013–2015 when it will be chairing FSB Regional Consultative Group for the Middle East and North Africa (MENA). The New Constituency group, formed upon an agreement signed within the International Monetary Fund (IMF) governance reform framework, includes Austria, Hungary, the Czech Republic, Slovakia, Slovenia, Belarus and Kosovo along with Turkey. According to this agreement, during the periods of 2014–2016 and 2018–2020, Turkey will assume the Executive Director position on behalf of the group for two-year terms.

Pablo Hernández de Cos: How to preserve pandemic-struck viable firms for a stronger recovery Introductory remarks by Mr Pablo Hernández de Cos, Governor of the Bank of Spain and Chair of the Basel Committee on Banking Supervision, at the European Systemic Risk Board (ESRB) virtual seminar on “Corporate insolvencies and public support measures”, 29 April 2021. * * * Many thanks to the ESRB Secretariat for organising this seminar. And let me also thank and welcome all participants to this event. I will devote these brief opening remarks to outline why, at the ESRB, we consider the topic of the seminar “Corporate insolvencies and public support measures” a very relevant and timely one. The starting point is our perception that, in the context of the current crisis, even if the macrofinancial outlook has improved, uncertainty remains high. And one of the main elements of this uncertainty is precisely related to the extent of the damage inflicted by the crisis on the corporate sector, whose magnitude will be a key determinant of the persistence of the crisis and the strength of the economic recovery. Therefore, we need to measure this risk carefully and be ready to adapt our policies to mitigate it to the extent possible. And this is particularly relevant in the current phase of the crisis.
It goes without saying that it is not only a quantitative issue and that at the same time the efficiency of research and development in terms of industrialisation  12  See P. Hartmann, F. Heider, E. Papaioannou and M. Lo Duca (2007), “The role of financial markets and innovation for productivity and growth in Europe”, ECB Occasional Paper forthcoming. 13  Some authors have calculated that if the average size of capital markets in the EU was bigger - in the US for instance this size is around 450% of GDP instead of 220% in the EU (based on an overall indicator measuring total financing in the economy by aggregating bank credit to the private sector, stock market capitalisation and the outstanding amount of domestic debt securities issued by the private sector) - then annual GDP per capita growth in the EU could be positively influenced (see G. Favara (2006), “An empirical reassessment of the relationship between finance and growth”, mimeo). 14  See the European Commission’s Green Paper entitled “Entrepreneurship in Europe”, 21.01.2003. 6  BIS Review 82/2007  is crucial. In the longer term, GDP could be up by 4.2% in 2015 and 7.0% in 2020, equivalent to an additional growth rate of nearly 0.5% per year 15 . Finally, to make these measures most effective, they need to be accompanied by efforts to improve the labour force’s level of education and expertise.

Times will become more demanding for the clusters of oil suppliers in Sørlandet, Nord-Jæren, Haugalandet and Stord and for manufacturing in Kongsberg, Grenland, Helgeland, Salten and Ofoten. 8  16  The historical figures are based on trend calculations. The figures for these years are therefore based on economic developments later in the 1990s. The degree of tightening may therefore also appear greater in retrospect. BIS Review 15/2010  Fortunately, manufacturing districts have shown the ability to adapt. Research shows that the degree of geographical and occupational mobility is high for the Norwegian labour force. Few people remain permanently outside the labour force after a period of restructuring. 9 But the communities are small and vulnerable and may disappear if the industry structure becomes too narrow. And as mentioned, the most important, perhaps the only, instrument available to the authorities in addressing this challenge is to restrain petroleum revenue spending in the Norwegian economy. The management of petroleum revenues It took a generation from the time the first oil field was discovered in the North Sea until the government began to set aside economic rent. The Government Petroleum Fund was established in 1990 and the first transfer to the wealth fund was made in 1996. Each year since that time, as a savings plan, the government has transferred a portion of current income from petroleum activities as deposits in the fund. Today, the value of the fund is around NOK 2.6 trillion, or slightly higher than annual GDP in Norway.
The definition of price stability is therefore an essential feature of our monetary framework. Originally, when the euro was created, price stability was defined as a “less than 2%” increase in the overall price index. That would theoretically allow for zero or even negative inflation. The definition was described as “asymmetric,” meaning that the Eurosystem would react to excess inflation but would be indifferent to low inflation or even deflation. But that was never the intention. In 2003 the definition was adjusted in order to eliminate any ambiguity. Price stability is now defined as “less than but close to 2%.” The current definition is therefore fully symmetric. It makes it clear that the central bank is equally concerned by inflation that is too low or too high. This is not only a question of semantics. Central banks’ perceived objectives determine expectations and the behavior of private agents. If a central bank is seen as equally  BIS central bankers’ speeches  1  intolerant of both high and low inflation, the economy will more easily stabilize within the acceptable inflation range. Stability of inflation expectations has improved the capacity of euro-area economies to absorb the post-Lehman shock: While inflation became negative for a few months in 2009, expectations did not change and deflation was never a threat. This episode illustrates the credibility achieved by the Eurosystem in approaching price stability in a symmetric fashion. Together with the definition of price stability, the “two pillars” approach is another important feature of the Eurosystem’s framework.

In parallel to assessing future economic prospects, the European Central Bank’s governing council looks independently at the dynamics of money and credit aggregates. This has proved very useful in the past to detect long-term risks to price stability, in both directions. The message today is clear: both money and credit are growing very slowly in the euro area as a whole. The M3 money-supply aggregate grew by 2.1% in September. These trends do not signal deflation, but warrant monitoring and vigilance when facing an uncertain future. Obviously, intentions may not always suffice and must be backed, when necessary, by appropriate and timely actions. Recent decisions by the governing council regarding both policy rates and liquidity provision show that we are ready to make the necessary decisions. Many instruments remain available should further risks materialize. There should be no doubt that the Eurosystem will ensure that price stability, as currently defined, will be maintained in the euro area. 2  BIS central bankers’ speeches
What we will diligently protect is the trust and credibility in our financial system. We will also be paying closer attention to financial institutions’ management of cyber-threats and to new forms of financial stability vulnerabilities as digitisation blurs the boundaries across geography and industries. Recently, we have created an enhanced role of a Chief Cybersecurity Officer as well as appointed a new Chief Data Officer. I believe there is much we can share and learn from other central banks, financial regulators and even law enforcement agencies, such as our European counterparts. Looking ahead Finally, there are other areas that should matter to all of us amidst the ongoing transformations in the banking industry. One is the important issue of financial inclusion. In the quest to innovate and as banks develop the sophistication to sharpen the profile of each customer, we should not overlook the need for financial inclusion – especially access to basic banking and financial services for under-served communities. Another area is in the responsible use of technology tools. Earlier this month, MAS announced the setting up of a regulator-industry grouping to co-create a guide to promote the responsible and ethical use of AI and data analytics by financial institutions. This Committee is known by its acronym FEAT – which stands for Fairness, Ethics, Accountability and Transparency. This gives you a good idea of its mandate. The key is as technology and data analytics usage become more prevalent, the responsible use of these is equally paramount.

----------  Referring to the significant decrease of currency outside banks to total money – from 31 per cent in 2002 to 24 per cent over the present year – as an important indicator of the cash economy, it can be said that the abovementioned measures have provided their effect. However, the reduction of the informal economy remains a decisive factor in order to reach to the levels of cash in more developed economies, which is below 10 per cent. In this context, the establishment of the Credit Information Bureau, initiated some time ago by the Bank of Albania and expected to finalize over the coming year, is believed to make an overwhelming contribution to reducing the business informality in the interbank level. 4  BIS Review 101/2006
The shared response to climate change: turning momentum into action Speech given by Sarah Breeden, Executive Director, International Banks Supervision, Bank of England  Based on remarks made on 19 March 2018 following the second formal meeting of the Green Finance Initiative and Green Finance Committee, London  Published 14 May 2018  1  All speeches are available online at www.bankofengland.co.uk/speeches  Introduction Thank you for the opportunity to explain what might otherwise not be obvious – why the Bank of England has an interest in climate change. In addition to outlining our interests, I shall stress how this is a shared challenge – where the private sector and the financial authorities need to work together, respecting our different mandates, if we are to rise to the challenge ahead. And in doing so I will pay tribute to the work you have done here in the China-UK Green Finance Taskforce. Turning momentum into action is imperative. The practical work you are doing in the Taskforce is key to making a real difference. Climate change, financial risk and the Bank of England’s objectives Climate change, and society’s response to it, presents financial risks which impact the Bank’s objectives. Those risks arise principally on two dimensions: the physical effects of climate change (for example from more frequent or intense storms); and the impact of changes as we transition to the lower-carbon economy that is consistent with the commitments made by governments in Paris two years ago.

This has produced a significant acceleration, by some Lm7 million or 10 per cent of the budget deficit, in the rate of increase in pension expenditures. Pension reform clearly cannot be delayed any longer. Population ageing also represents a broader threat to the sustainability of living standards and to social cohesion because the burden of supporting a growing number of dependent persons will, at some point, become unbearable for the productive sectors of the economy. This burden consists not only of pension and other welfare payments, but also of services provided in kind, most notably by the public health system. This is another reason why reducing government recurrent commitments should be a priority objective. A better understanding of the magnitude of these challenges can be obtained by synthesising their effects in terms of the growth rate necessary for the economy to deal with them effectively. For example, in order just to compensate for the increase in the dependency ratio associated with population ageing, the economy would have to grow by around 1 per cent per annum over the next twenty years. At this rate of growth, which is more or less what Malta averaged over the past five years, there would not be any improvement in per capita GDP, that is in living standards. As for hopes of raising the activity rate by ten percentage points to around 70 per cent over twenty years, the economy would have to grow by an average annual rate of at least 3 per cent.
Jessica Chew Cheng Lian: Evolving governance, risk and control in the digital age Welcoming remarks by Jessica Chew Cheng Lian, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Conference on “Governance, Risk and Control in the Era of Disruption”, Kuala Lumpur, 9 December 2019. * * * Dr. Firas Raad, World Bank’s Country Manager for Malaysia, Distinguished Guests, Ladies and Gentlemen. Good morning and welcome to Sasana Kijang. Bank Negara Malaysia is delighted to host this Conference on Governance, Risk and Controls in the Era of Disruption. Let me begin by sincerely thanking our joint host, the World Bank Group for working with us to put together a rich programme that speaks directly to issues that I am sure are keeping at least some of us awake at night. In the year 2000, the English author and academic, Sir Malcolm Bradbury wrote this: “We no longer live in the Age of Reason. We don’t have reason, we have computation. We don’t have a tree of knowledge, we have an information superhighway. We don’t have real intelligence, we have artificial intelligence. We no longer pursue truth, we seek data and signals. We no longer have philosophers, we have thinking pragmatists. We no longer have morals, we have lifestyles.” This rather grim view of the world was written almost two decades ago. Since then, the extent of technological change and disruption that has come to define our world gives these words a significance that few could have imagined.

At the same time, we recognise that our digital goals and aspirations can only be achieved through the values and behaviours of staff that promote inclusivity (between those that have technological skills and those that don’t); accountability (that is, the effective and responsible use of technology); effective collaboration that breaks away from working in silos; and an appropriate level of risk-taking that is compatible with a more agile and responsive organisation. And so we have taken pains to be specific and deliberate in our approach to building a digital culture within the Bank. This starts with being clear across the organisation on our tolerance for higher risks associated with disruptive innovations – through the development and communication of our digital risk appetite. We are shifting conversations on new digital initiatives away from the technical solutions themselves, to a greater focus on the business process transformations that they are intended to serve, and that is what we measure and track. We are also investing heavily in equipping our people with the knowledge, skills and confidence to make sound judgment calls in an environment where the pace of change is occurring at a dizzying speed, and our ability to anticipate risks is likely to be more constrained. At a practical level, this means being more precise about escalation, decision and communication protocols, while allowing more flexibility in internal policies to allow business lines to respond swiftly to emerging situations.
For instance, large fluctuations in asset prices may modify the behaviour of agents by decreasing the level of confidence. Such fluctuations can also expose bank portfolios to a higher risk of losses, inducing banks to compensate for these risks by restricting credit. Let me stress that, although a price stability oriented monetary policy is conducive to financial stability over the long term, episodes of financial instability have been known to take place during periods of low inflation. Price stability must be therefore regarded as a necessary but not sufficient condition. Other parameters influence financial stability, among which financial integration is of particular interest from the point of view of a central bank in the Euro area. 2.2  The relationship between financial integration and financial stability is twofold:  –  First, the liquidity redistribution function has taken on a new dimension as participants in the market are dealing with a wider range of counterparties, and actually trade larger unit amounts. Some bank treasurers in Paris mention that the average face value in euro of single transaction today is equivalent to the face value of a transaction in French franc in 1998, that is, more than six times higher. –  Second, financial market integration is related to the trend towards the greater share of markets in the allocation of assets. At the end of 2000 financial assets in the euro area were 10 split almost equally between intermediated and non-intermediated assets.

From a general point of view, volatility is a kind of genetic signature of the price setting mechanism in a competitive market. Prices hover around the equilibrium through successive adjustments. When market participants express widely different views on this equilibrium price, or when the volume of transaction shrinks, volatility usually increases. In this respect, there is a close correlation between the occurrence of crises - such as the revealed insolvency of an emerging country, supply shocks on commodity prices, bursting of equity bubbles - and excessive volatility. Volatility is not an indicator of market inefficiency. However, excessively high volatility has adverse effects on the behaviour of market participants and the real economy. From a corporate management point of view, volatility on capital markets lowers the predictability of the cost of capital. When reviewing investment opportunities, managers may want to avoid relying too heavily on external finance because of the uncertainties surrounding the cost, or even the sheer availability, of financing. This may lead companies to postpone or downsize investment projects. From a financial management point of view,  11  Estimation in “Central banks and financial stability - exploring an intermediate land” - Second ECB central banking conference - 2002. 12  BRI - Economic aspects of regional currency areas and the use of foreign currencies - 2002 - document non publié. BIS Review 2/2003  5  large investors may give priority to companies with a low risk profile, in order to bring back their own asset portfolios to levels of volatility matching their requirements.
And the global population scarcely budged, held in check by unchanged food supplies, as th  7  predicted by Thomas Malthus in the late 18 century. Not for nothing was this called the Malthusian era. Another example of this secular stagnation, a favourite of mine, is provided by plotting heights from excavated skeletons records. These are a diagnostic on levels of health and nutrition. Male skeleton heights were essentially unchanged, at 160-170cm, for at least 2,000 years prior to 1750. Humans grew neither physiologically nor financially. And neither, then, did the societies in which they lived. That makes the contrast with developments in the last quarter of the millennium all the more striking. From around 1750, GDP per head suddenly took off and has kept on rising ever since, growing by around 1.5% per year. The magic of compound interest means these growth rates have transformed people’s living standards. The time it takes for living standards to double has shrunk to less than 50 years. The impact on people’s well-being, financial and psychological, has been transformational. It has meant each generation has been around 50% better off than its predecessor. After 1750, generational progress suddenly became visible, children to parents to grandparents. Growth in living standards became a social norm, in a way never previously true in human history. Life’s travellator turned into an escalator. And not just for GDP. Broader metrics of well-being tell a similar tale.

On this front, a study conducted by the Hong Kong Government in conjunction with TMA earlier concluded that there are no major legal or regulatory obstacles to transactions involving wholesale Islamic financial instruments in Hong Kong. 13. However, there is a need to refine the tax regime in Hong Kong in order to provide a level playing field between sukuk and conventional bonds. Owing to Shariah requirements, structuring sukuk often involves the originator setting up a special purpose vehicle for the purposes of issuing sukuk to sukuk holders, and multiple transfers of underlying assets between the originator and the sukuk issuer in order to generate profits. These complex structures, which are not required for conventional bonds, may incur additional tax and stamp duty expenses for the sukuk issuers. 14. I am pleased to see that an amendment bill to address this issue has been introduced into Hong Kong’s Legislative Council and is now in the final stages of enactment. 3  2  Source: Institute for International Finance. BIS central bankers’ speeches  The bill, once passed, will enable sukuk to enjoy tax treatments similar to those currently afforded to conventional bonds. This would be a significant milestone in the development of a sukuk market in Hong Kong. 15. Apart from providing a level playing field, equally important is the active participation of market players, including non-Islamic arrangers, issuers and investors in the Islamic capital markets, as they will be the ones who lead market development in the future.