samchain/econo-pairs-v1 huggingface dataset:
The Monitor provides an overview of developments in the shadow banking sector, with focus on assessing potential risks to financial stability. It is intended to foster progress of the debate on related issues and hence targets a broad readership. The overall mission is to eliminate potential blind spots on the macroprudential map and to connect all the dots. To achieve that, we need both an analytical framework underpinned by sufficiently high quality data, and a policy framework which enables us to target risks in different parts of the financial system in a consistent manner. The resilience of a specific part of the financial system needs to be linked to its potential impact in terms of the systemic risk it could generate for the financial system as a whole. We may also need to develop a wider financial stability toolkit. This would, for instance, include  |6  top-down stress tests for asset managers and central counterparties, and recovery and resolution frameworks for the insurance sector and central counterparties. The ESRB is very well placed to play one of the leading roles here, due to its mandate, the broad expertise of its membership and its inclusive working methods with a wide range of the relevant stakeholders interacting. The long and winding road from global to national regulation I have been speaking about CRR/CRD on and off here for the past few minutes, but let me just elaborate a little bit more from another angle.

Today, almost seven years after the so called De Larosière Report, we have reached a stage where the European Commission is assessing the current macroprudential framework in the Union, including the role of the ESRB. There are a number of areas where the Commission wants to shed some light before drawing final conclusions about possible improvements. One such area is what would be the best composition of the ESRB’s decision making body, the General Board, and also most of its substructures. In this context suggestions to reduce the size of the General Board have been mentioned. This would in my view not only reduce the number of people around the meeting table, but also take away one of the ESRB’s main strengths. As somebody who has seen the ESRB at work from the inside pretty much since it saw the light of day, I wanted to take this opportunity to talk about the experiences so far and how we can use them as we move ahead. The ESRB brings together “all sorts” within its remit, and voting modalities pave the way for efficient decision making The ESRB is unique in that it brings together representatives from central banks and financial supervisory authorities from all 28 Member States, representatives from the three European Supervisory Authorities, the ECB, the European Commission and the Economic and Financial Committee as well as the “independent voice” of the ESRB Advisory Scientific Committee, the ASC.
4  See the BIS publication “Consultative Document -Reducing variation in credit risk-weighted assets – constraints on the use of internal model approaches”, http://www.bis.org/bcbs/publ/d362.pdf  9 [12]  Time to start a review of Sweden's special national requirements Some of the special Swedish requirements have arisen over the years following the financial crisis, as Finansinspektionen and other Swedish authorities have assessed that Swedish banks need more capital than the current minimum requirement supplies. These special Swedish requirements are thus not the result of international agreements. It is therefore reasonable that we should review our current special national requirements when Basel III will be introduced in full in Sweden, especially in the perspective that Basel III will imply higher minimum requirements of the major Swedish banks than before. Although no decision has yet been made on when Basel III shall be fully implemented in Sweden, my assessment is that we will have plenty of time to review our special national requirements and assess what level they should be at when Basel III is introduced in Sweden. One conclusion of this analysis may be that today’s CET 1 capital requirement of 18 per cent of risk-weighted assets for the major Swedish banks in total needs to be changed in future. Under these circumstances it is too early to make any precise analysis of how, for instance, Swedish GDP will develop or how borrowers’ interest rates will be affected by the coming changes in the regulations.

Given this, there is a lot of international work on trying to alleviate the consequences for the economy when the banking system is subject to shocks. For instance, several countries have developed a framework within the Financial Stability Board (FSB) for how banks in distress can be wound up without too much impact on taxpayers. This framework has been introduced through an EU directive into Swedish legislation in the act on resolution. I welcome these standards. But in addition to these standards regarding resolution, it is important that we conduct global crisis prevention work that reduces the risks that banks will suffer problems. And as I mentioned, this work is largely done within the scope of the Basel Committee. Why are globally-harmonised capital requirements a good idea? Much of the Basel Committee's more than forty years of work has concerned capital levels in the banks, and for good reasons. Then as now, our assessment is that wellcapitalised banks benefit financial stability and contribute to a positive development in society. Banks that are well-capitalised are more resilient to losses and have greater capacity to obtain market funding during times of financial unease. In other words, the risk of a financial crisis declines if the banks are well-capitalised. Up until the end of the 1980s, the regulatory frameworks for banks’ capital levels were relatively different in different countries. In many areas, the existing capital requirements were considered outdated and in need of revision.
The question of when it would have been right to intervene – and how – is extremely difficult to answer, however. No one has perfect foresight. Many lessons will doubtless be learned from the experience of the past few years, including lessons about capital and liquidity requirements, concentration of financial company ownership, financial links between owners and financial companies, and financial companies’ ownership of other businesses, to name a few. But those lessons are outside the scope of my talk today. Conditions in the global financial system are at their worst since the Great Depression, particularly after the collapse of Lehman Brothers. It is virtually an unprecedented crisis. Perhaps it is possible to say after the fact that the fall of Lehman sealed the fate of Iceland’s banks. Once Lehman had failed, nothing could have saved them. Assets had become almost impossible to sell due to the crisis of confidence and the global credit squeeze the Icelandic banks faced a much harsher operating environment and could expect that strict limitations would be placed on their foreign deposit business – if it were not stopped entirely. Government authorities in other countries consulted with one another more and more frequently on these issues. Early in October, the Icelandic Parliament passed emergency legislation authorising the Financial Supervisory Authority to take over the banks’ operations. The authorities had no choice but to act on that authorisation immediately, take over the three large banks, and divide their operations into two parts, the old banks and the new.

When the agreement was officially signed at the Hofburg Palace here in Vienna this summer, with the Austrian president in attendance, I was reminded that it would perhaps have been impossible to achieve such an outcome on such a delicate and sensitive issue without this foremost mental closeness and some similarity of thought. However over the top it might seem to some, we are indeed very close mentally as well as geographically – perhaps more so than we would care to admit and more than we would like to admit, I should add. So, if you want to know a bit about the future of our economic, civic and other relationships and want to know how the other country is going to respond/react, all you need to do is look in the mirror. As really, you look at your neighbour in the Czech Republic or Austria, you will see something of yourself. Our relationships are sometimes like those within a broad family. Needless to say, we don’t always get along swimmingly. Besides many positive emotions, there is sometimes envy, spite, bickering, lack of understanding. Again, how typical are all these emotions for broader families. As a result, issues can arise between us. But that feeling of closeness in my eyes remains and should remain. It is a feeling I firmly believe we might share.
Benoît Cœuré: Interview with CNBC Interview with Mr Benoît Cœuré, Member of the Executive Board of the European Central Bank, and CNBC, conducted by Mr Steve Sedgwick on 6 April 2018. * * *  You've been talking about trade and that is the key topic here in Cernobbio and indeed globally at the moment as well. What's your contribution this morning on this topic? The point I was making this morning at the conference is that first we're not sure yet that we're in a trade war. As much as possible, if we could avoid the bellicose semantics and come back to a reasonable discussion, that would help for economic confidence. That also means that if this would morph into a full-fledged trade war, this has the potential to have quite damaging consequences for growth and jobs globally, including in the US. Is it already having ramifications in global financial markets? We've seen the volatility and equity markets. We've seen higher borrowing costs as well. It looks like it's already having the effects of a trade war without being a trade war yet. To some extent, yes, we've seen that. We've seen obviously stock prices going down, some risk premia are going up, so some tightening of financial conditions globally starting with the US. But it all depends on how the situation will evolve. Certainly what we don't want to see is a general tightening of financial conditions.

We still seem to be going through the same arguments, the same structural issues. In fact if anything a potential new government in Italy could scrap some of the reforms that the ECB so applauded. Certainly the advice we are giving to governments, insofar we can give advice to governments, because they are independent from us as much as we are independent from them. The only advice we can give is to use that environment of strong growth, of lower rates to build the buffers in the economy. That includes building fiscal buffers but that also includes doing structural reforms so that the economy can become stronger. Listening to some of the more recent speeches from Mr Draghi and hearing comments from yourself and others, I don't get the impression that the ECB feels that their opportunity has been taken. Am I wrong? There has been some disappointment on the fiscal side where we believe that governments generally could have made better use of the windfall of lower rates to reduce their deficits, to consolidate their finances in a more permanent way, in a more structural way. That's true. Now, when it comes to reforms in the real economy we've seen a lot going on. Look at how much Spain has reformed its labour market. That's now yielding very positive results in terms of job creation. Look at what France is doing, which really goes in the right direction, so reforms are being done. Are they being done in Italy?
The convergence of productivity and living standards gives rise to differentials in inflation rates via the rate of increase of non-traded goods prices. Countries with higher levels of economic development tend to have higher prices of non-traded goods. BIS Review 123/1999  2  Higher living standards mostly reflect high productivity in the traded goods sectors but, given integrated national labour markets, wages are generally higher in the economy as a whole and although the scope for productivity gains may be more limited in the non-traded sectors of the economy, a general rise in wages tends to lead to higher relative prices in the non-traded to traded goods sectors. The euro area countries undergoing this catch-up process will, therefore, in general have higher inflation. As an ultimately temporary but nevertheless protracted phenomenon, there is also an ongoing process of convergence of prices of individual goods. Price differences across countries will tend to be reduced for goods and services which are widely traded across national boundaries as a result of increasing integration of the single market. The introduction of the euro can, of course, be expected only to intensify this process through increased price transparency and the elimination of exchange rate risk. Are national differences a cause of concern? Are differences in growth and inflation among euro area countries a matter of concern? In terms of growth, there are no indications that the differences are particularly large or unusual.

I am pleased to see that the recent euro barometer showed a steady progression in the satisfaction of the Maltese with the adoption of the euro (from 40% in September 2005 to 64% in June 2007). Let me hand over the euro star to Governor Bonello to symbolically flag that the Central Bank of Malta will join the Eurosystem on 1 January 2008. We look forward to welcoming you wholeheartedly into the euro area. Thank you very much for your attention. BIS Review 110/2007  1
In the current more uncertain environment, in the aftermath of the recent global financial crisis, the role of the Islamic Development Bank will continue to be important, given that the goal of sustainable growth and development in the world economy has now become even more challenging. As the conventional financial system currently confronts what is perhaps its most defining period, several important lessons can be drawn for our collective efforts to build more resilient financial systems. Important considerations need to be accorded to the issues that have emerged, and on the policy directions affecting growth and stability. My address today will discuss several of these issues, and discuss how Islamic finance, given its nature and inherent features, can contribute to the process of enhancing the discipline that contributes to ensuring growth and financial stability. At the core, the financial system needs to serve the real economy. The purpose of the financial system is intermediation – that is, to match savings and investments for the purpose of generating economic growth. Yet, in recent decades, a number of factors have contributed to the weakening of the link between financial intermediation and productive economic activity. Deregulation opened up new opportunities for financial institutions to enhance performance and expand the scope of their activities. Greater competition, reinforced by significant advances in technology, intensified the pace of innovation. And, the extended period of low inflation and low interest rates incentivised greater risk-taking. Cumulatively, these developments contributed to a dangerous build-up of financial imbalances.

According to new figures, GDP growth amounted to 5.5 per cent in 2010 (see Slide 2). 3 This is the strongest growth seen since 1970. There have thus been very wide fluctuations in the economy in recent years. After developments in 2009, which entailed the sharpest fall in GDP since the Second World War, we have instead experienced, in 2010, the greatest increase of GDP in 40 years. Sweden is now among those economies with the highest GDP growth rates in the world. At the same time, the indicators are very strong, suggesting continued high levels of growth throughout early 2011. Exports, which decreased so drastically during the crisis, are showing very high growth figures (see Slide 4). One natural explanation is that world trade is now growing and Sweden has a high percentage of exports. This is the case even though the recovery in the United States and euro area is proceeding relatively sluggishly. From what I have just said, it is easy to conclude that the “emerging economies” have a high demand for Swedish exports and have heavily increased their proportion of these. This explanation is only partially correct. If we look at which countries Swedish exports go to, the United States and Europe remain completely dominant (see Slide 7). 4 However, over a longer period, the United States has decreased its share in favour of the BRIC countries (Brazil, Russia, India and China).
Thanks to this “coalition of the willing”, gathering today more than 90 central banks and supervisors across the world, high level scenarios were published in July last year, updated a couple of weeks ago by a set of 6 scenarios. This set of global reference scenarios  provide a good basis for financial authorities. Of course, the NGFS should continue to develop and refine those scenarios. However, there will remain the need to tailor those scenarios to the circumstances of each jurisdiction, for instance specifics of their climate policies, or more precise meteorological data at the national level. In addition, ST may legitimately differ along other methodological dimensions. A case in point is the use or not of a dynamic balance sheet assumption. Contrary to the BOE, the ACPR and the ECB have chosen to rely on such assumption, as it allows to take into account the concept of double materiality and to assess how financial institutions would implement their commitments or steer their alignment strategies. The second lesson we learned is that the implementation of scenario analysis can expose data gaps on firms’ exposures. Such data gaps are particularly acute in the case of scenarios, which go beyond the horizons typically considered by firms and their supervisors. This make disclosures of climate-related data and forward looking metrics all the more important to support effective scenario analysis. Progress in this area has already been made, following the COP21, with the creation of the Task Force on Climate-related Financial Disclosures (TCFD).

Denis Beau: Building an appropriate climate stress testing framework for capital markets Opening remarks by Mr Denis Beau, First Deputy Governor of the Bank of France, at the Future Europe Sustainable Europe Global Virtual Conference "Europe’s global response - promoting global financial coordination towards our common sustainable future", 6 July 2021. * * * I would like to thank you very much for your kind invitation to present the work the Banque de France and the ACPR, its supervisory arm, conducted on climate stress-testing and to share some of the lessons we have drawn from it. I will focus my remarks on 1/ the objectives to be set to such exercice 2/ the tools to be used. ***** 1- I think it is not a matter of debate between financial institutions and their supervisors that climate change affect financial institutions through the traditional risks categories they face. Sizing the exposure to and impact of climate-related drivers on those traditional risk categories is however difficult, given the specificities of those climate-related risk drivers, which are not necessarily economic in nature, and the multiple layers of uncertainty which affect them. In particular, data on past changes in climate and their financial impact may be a particularly poor guide to future magnitude and dynamic of climate related risks. In addition, financial institutions decision-making horizons are usually too short-term oriented to fully account for the long time horizon of risks associated with climate change, the so-called “tragedy of the horizon".
Maechler and Moser (2022) discuss the transition from Libor to SARON. We also remunerated reserves from January 2015 to September 2022. During this period, we paid negative interest on banks’ reserve holdings at the SNB. To reduce the burden for banks, we exempted reserves up to a bank-specific threshold from negative interest. Maechler and Moser (2020) discuss the SNB’s monetary policy implementation in the negative rate environment. Page 4/10  reserve requirement, so that the threshold generally does not match its reserve holdings. 9 As a result, there are two types of banks: those whose reserves exceed their thresholds, shown in the upper half, and those whose reserves are below their thresholds, shown in the lower half. The SNB now remunerates reserves up to the threshold, shown in dark blue, at the SNB policy rate, which is currently 0.5%. In contrast, the SNB remunerates reserve holdings that exceed the threshold, shown in light blue, at the SNB policy rate minus a discount. Currently, the interest rate on reserves above the threshold is 0%. For the remainder of this speech, we will refer to reserves above the threshold as ‘excess reserves’. Let us examine the banks with excess reserves more closely. As we just noted, part of their total reserves would be remunerated at 0%. These banks therefore have a strong incentive to lend some of their excess reserves to other banks, at an interest rate above 0%.

11 This outcome would be undesirable for us, as we aim to steer secured short-term Swiss franc money market rates so that they remain close to the SNB policy rate. By reducing the stock of excess reserves, we also reduce the supply of reserves in the interbank money market. This lets us steer money market rates closer to our policy rate of 0.5%. That is precisely what the second element of our implementation approach accomplishes. To absorb excess reserves, we use open market operations. Specifically, we use term repos and SNB Bills, the latter being marketable debt claims on the SNB. 12 Term repos have a term of one week and are auctioned daily. SNB Bills, on the other hand, are auctioned on a weekly basis and with different terms from week to week. As Slide 8 shows, the effect of these operations is to replace the light-blue shaded rectangle with a light-green one. Our reserve-absorbing operations are offered with interest rates that are close to 0.5% on an overnight-equivalent basis. 13 This makes them particularly attractive to banks that hold excess reserves. By purchasing the instruments we offer, these banks can reduce the stock of excess reserves, which would otherwise be remunerated at 0%. It is important to emphasise that both interbank trading and the SNB’s reserve-absorbing operations are mechanisms for reducing the stock of excess reserves, possibly to the point where all excess reserves have been ‘soaked up’. How does the SNB’s approach determine money market rates?