samchain/econo-pairs-v1 huggingface dataset:
The evaluation has had greater scope to discuss these weaknesses in more detail than was possible in the Riksbank’s proposal, and it also highlights a number of important principles as to how one can conduct and organise the financial stability work. I believe that these arguments in particular can provide a valuable contribution to discussions in Sweden and to our own development work at the Riksbank, but perhaps most of all to the work of the financial crisis committee. 1  Proposal to the Riksdag 2009/10:RB4, “Proposal regarding certain areas that require investigation as a result of the financial crisis”. (http://www.riksbank.se/templates/Page.aspx?id=43390). BIS central bankers’ speeches  1  Something I consider to be quite crucial in this context is that we do not create institutions that lack the necessary power to make decisions. By this I mean that in all parts of the work on preventing and managing financial crises we should have some institution that is clearly responsible and this institution should also have the necessary mandate, tools and resources to handle this responsibility. When it comes to putting this into practice I believe that Goodhart’s and Rochet’s more theoretical reasoning regarding allocation of responsibility and institutional solutions could be very useful. But, as they are also careful to point out, the principles they discuss must be implemented in a way that suits each country’s individual characteristics. And each country must find its own way.

We at the Riksbank prefer to present our more detailed views on the evaluation during the consultation rounds, so today I intend to make a few more general comments. Regarding financial stability – we need clear legislation and efficient institutions I do not believe that anyone would still doubt that the risk of a financial crisis is a very real risk that we must learn to live with and to manage in the best possible way. It is probably also quite clear what is at stake here – a financial crisis could entail substantial costs for society. We must therefore learn from the experiences of the crisis and ensure that we are as wellequipped as possible to face any new crises in the future. This requires in an initial stage taking an overall approach to both crisis management and crisis prevention work, something that the government’s recently-appointed financial crisis commission has been tasked to deal with. Ultimately, the goal is to establish effective legislation and efficient institutions. The financial crisis that we have lived with over the past few years has tested institutions and legislation to breaking point, in Sweden and abroad. This has highlighted some old weaknesses in the legislative framework, and we have also discovered some new deficiencies. Even before the Committee on Finance’s evaluation was published, the Riksbank pointed out a number of weaknesses that require attention in a proposal to the Riksdag.1 It is therefore gratifying that Goodhart and Rochet clearly point out largely the same weaknesses.
Beyond these monetary policy actions, we have taken many additional measures to promote the stability of the financial system and to support the flow of credit. Today, I’m going to focus my remarks on these measures and detail their significance for supporting the economy. But before I continue, let me give the usual disclaimer that the views I express are mine alone and do not necessarily reflect those of the Federal Open Market Committee or anyone else in the Federal Reserve System. A Lesson from History Ensuring liquid and smoothly functioning financial markets are essential roles of central banks, like the Federal Reserve. Yet, it’s often poorly understood why these roles are so important for the health of the broader economy. It was the financial crisis that erupted in 1907 that led to the creation of the Federal Reserve System, and as we’ve planned and executed our response to the current crisis, it’s this history lesson I keep returning to. A number of shocks, beginning with the 1906 San Francisco earthquake, led to a run on the banks in 1907. The run on the banks was stemmed by emergency loans from a consortium of private banks, called the New York Clearing House. But a run on less regulated trusts, the “shadow banks” of that time, could not be similarly curtailed.1 J.P. Morgan brought together a group of young bankers, including Benjamin Strong, who would go on to become the first head of the New York Fed, to examine the books of the trusts.

Markets for Treasury securities and agency mortgage-backed securities, which are normally highly liquid and form the bedrock of our financial system, nearly buckled under the strain of massive flows of funds in response to the pandemic.3 It’s easy to think of financial markets as somewhat divorced from the real economy—most people will never need to worry about a spike in the repo rate or liquidity in the Treasury market. But the reality is that like the events of 1907—and more recently 2008—turmoil in financial markets can have a devastating impact on the wider economy. If credit isn’t flowing, people can’t finance the purchase of a home, businesses can’t invest, and nonprofit organizations and municipalities can’t keep essential services going. This is why safeguarding the functioning of financial markets is essential for the health of the broader economy. In response to the extraordinary volatility caused by the pandemic, the Fed greatly expanded its repo operations and began purchasing sizable quantities of U.S. Treasury securities and agency mortgage-backed securities. These actions to provide massive liquidity have proven successful. They restored market functioning and averted what could have been a much more severe pullback from markets and the flow of credit to households and businesses.4  Deploying Our Tools In addition to the repo operations and asset purchases, we have established a number of programs to support the flow of credit to households, businesses, and state and local governments.5 I won’t go into detail about all of the facilities, but I will emphasize two important points.
At the same time, Norwegian importers have been able to shift demand to new markets in central Europe and Asia, which has led to a fall in prices for a number of consumer goods. The terms of trade have improved by about 40 per cent since 2002. A similar situation has not been seen since World War I when earnings in the shipping industry and other export industries were exceptionally high for a period. Second, an ample supply of labour has been an important factor behind output growth. In particular, the supply of foreign labour has increased sharply after EU enlargement in 2004. Over the past two years, these labour inflows have accounted for over 30 per cent of growth in the labour force in Norway. At the same time, this has enabled Norwegian companies to be bolder in accepting new assignments and make investments knowing that they can procure labour throughout Europe. In addition to increased labour inflows from Poland, Lithuania and other central European countries, we have long benefited from inflows of labour from Sweden. Many workers are on temporary assignment and their consumption is primarily concentrated in their home country. The Norwegian economy has seen a net capacity increase. High inward labour migration and the scope for relocating portions of production abroad have led to increased competition in the labour market and have probably curbed wage growth. Third, the Norwegian business sector has been quick to adopt new technology and to reap the benefits.

Over the past few years, the Norwegian real exchange rate, whether measured by relative labour costs or by relative consumer prices, has been stronger than the average since 1970, largely due to a stronger nominal exchange rate. The corollary to these developments is the pronounced improvement in Norway’s terms of trade. The strong rise in prices for oil and other Norwegian export products has contributed to the krone appreciation  6  BIS Review 97/2007  over the past few years. The strong real krone exchange rate is therefore a result of Norway’s position as one of the nations that has benefited most from freer global trade and increased cross-border flows of capital, technology and labour. In this respect, the strong krone is a sign that the Norwegian economy is faring well. Thank you for your attention. BIS Review 97/2007  7  8  BIS Review 97/2007  BIS Review 97/2007  9  10  BIS Review 97/2007  BIS Review 97/2007  11  12  BIS Review 97/2007  BIS Review 97/2007  13  14  BIS Review 97/2007  BIS Review 97/2007  15
Mergers and IPSs are thus two alternatives available to savings banks to concentrate their business and restructure. The two options differ in terms of their legal form, but they coincide fully in their objectives and should be equivalent in terms of their results. Let us turn to the second step of the evaluation process. The guiding principle of the design and legal construction of IPSs has been the search for a concentration mechanism analogous to mergers in terms of practical results. In this connection, the IPS has been structured on three basic pillars. The first entails the relinquishing by all participants to the central body of the IPS of the capacity to determine and implement business strategies and internal risk control and management tools, in such a way that this central body becomes the nerve centre of the IPS. The second pillar comprises the mutual liquidity and solvency pacts between the participating savings banks and the pooling of results, to extents that should exceed 40%. And the third pillar is a commitment to stability of the agreements, which must run for a minimum term of 10 years, and which cannot be broken without the Banco de España first analysing the viability of the various institutions resulting from the fragmentation process. It should be stressed that, in all cases, the agreements so far reached go further than these minimum legal requirements, in the extent of pooling of solvency, liquidity and results.

As the data to be collected and metrics that are relevant for each sector can differ greatly, there will be a need to take a sectoral approach to this. For example, an asset manager looking to invest in the agriculture sector will not find raw data such as temperature and rainfall levels, proximity of the farmland to conservation areas, or the education levels of the farm owners meaningful. These must be converted into an accurate assessment of the environmental and credit risks of the agricultural assets so that the asset manager can adjust its investment decisions accordingly. The financial sector has an important role to play in determining these frameworks, to ensure that capital is channelled effectively towards sustainable business practices. MAS is keen to work with the industry, academia and international organisations to develop these sector-specific frameworks, for example, for maritime, agriculture, logistics, and others. As an international financial centre, Singapore is committed to channelling financial flows towards sustainability and transition efforts in Asia and globally. We are developing green finance solutions and markets that can support a sustainable economy. We are strengthening the financial sector’s resilience to environmental risks through providing guidelines on environmental risk management and stepping up disclosure expectations. We are working closely with the private sector to develop a taxonomy prioritising transition activities. We are actively exploring how technology and innovation can be leveraged to drive the financial sector’s sustainability agenda. We must harness technology and data to drive effective climate action.
the postcrisis response of regulation coincided with the greater use of quantitative easing. But it is nonetheless helpful to separate them analytically. A decade ago there would have been reason to think that the monetary policy need for increased central bank balance sheets would be shorter term, while the financial stability See “The central bank balance sheet as a policy tool: past, present and future”, by Andrew Bailey, Jonathan Bridges, Richard Harrison, Josh Jones and Aakash Mankodi. Available here. 1  2  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  2  demand would be permanent. That distinction still stands, but the structural drivers of low equilibrium interest rates suggest the use of central bank balance sheets for monetary policy will be more long-lived than had been anticipated. Expansion of central bank balance sheets in response to Covid  Turning to the more recent period, the financial stability and monetary policy drivers of central bank balance sheet expansion were again deeply intertwined. Central banks faced an incipient financial stability shock together with a need for monetary policy to respond to an unprecedented – in scale and speed – economic downturn. But the financial stability emergency differed from previous such events. The problem originated not primarily in the banking system, but in the non-bank sector – among funds, traders and corporates themselves. Central banks activated their traditional tools to inject liquidity into the banks via repo operations, and these played an important part in stabilising conditions.

These challenges lie less in the types of things that can be captured in a financial ratio or balance sheet, or in changes to the risk premiums attached to the financial claims on the country. They lie more in the realm of improving how markets work and how efficiently resources are allocated. These factors include the development of the types of institutions that are the subject of DeSoto's work or the reports. They involve the development of the legal system and World Bank's Doing Business its ability to ensure that property rights can be established and that the protections they engender can be enforced. They are about creating the conditions for more competitive domestic financial and product markets by reducing barriers to starting and building a business, and by building better transportation, power and telecommunications infrastructure. And they are about broadening access to and improving the quality of public education. Allowing competitive pressures to operate is undoubtedly the best way to foster the investment, innovation and risk-taking that is central to raising an economy's long-run sustainable growth rate. But markets can't solve all problems, and they don't always function perfectly. This means that the policy imperative isn't simply to reduce regulation; it is to improve the design of the regulations that are important to dealing with market failures. Finally, future growth outcomes will depend importantly on the success of governments in fostering the development of the domestic financial system.
Regulations typically require firms to set limits for recovery plan triggers at well above 100% LCR. [28] A 2019 survey of Basel Committee jurisdictions show that 13 of 23 members attributed their unwillingness to use HQLA to the potential regulatory response. Discussions with UK firms show that even after the regulatory communications issued during the Covid-19 stress, there is lack of clarity around how regulators will react to LCR levels below 100%. Suggestions were made to take inspiration from the capital side, for example to have clear regulatory minimums at times of stress. Second, there is the potential market reaction. Banks have to maintain a balance between utilising liquid assets in times of stress and maintaining market confidence. As such, market reaction or stigma can be an important factor behind the reluctance in using HQLA. The concern is two-fold. First, banks do not want to be seen as the first to draw on their liquidity reserves, for fear of being stigmatised as being in trouble. Second, this market stigma may then turn out to be self-fulfilling, triggering market reactions that lead to a loss of short-term funding, which may result in a bank’s failure even if it was otherwise solvent. [29] Third, there is the role of disclosures. Page 9  While disclosures increase transparency of banks’ liquidity positions and can enhance discipline and market pressure to maintain strong liquidity positions ahead of a shock, they can also lead to a range of knock-on impacts during periods of market stress.

Christian Noyer: It was vital to break the adverse feedback loop between bank and sovereign risk Interview with Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, in Les Échos, 17 September 2012. *  *  *  Do the ECB’s announcement to purchase sovereign debt and the German Constitutional Court’s approval of the European Stability Mechanism mark a turning point in the crisis? These announcements were welcomed by the markets and the outlook now appears much clearer. The European Stability Mechanism is a key factor for strengthening the cohesion of the euro area and demonstrates that the euro is here to stay and irreversible. It will help ailing economies return to competitiveness and growth. The Governing Council’s decision to purchase, subject to appropriate conditions, government debt is reassuring for at least three reasons: purchases are potentially unlimited, which should end speculation about the possible collapse of the euro area; the strict conditionality will oblige countries to pursue their fiscal consolidation efforts; lastly, these purchases fall squarely within the ECB’s mandate as they are conducted in the secondary market and aim to ensure the proper transmission of the policy stance to the real economy. The ECB has played its role. What must governments now do? Euro area Member States need to restore their credibility and they are already making efforts to do so.
The balance financial intermediaries are regulated by various authorities while some are not regulated at all. Banking companies in Sri Lanka come under several jurisdictions, but the Banking Act is the centrepiece for financial regulations. It sets out all necessary regulatory provisions for capital requirements, shareholder limits, credit operations, provisioning requirements, consolidation, acquisition and mergers, suspension, winding up of banking companies, etc. Sri Lanka’s banking sector is currently operating on Basel I, but getting ready to implement Basel II Capital Adequacy Ratios from early 2008. Basel II is basically risk mitigation in banking operations and, it allows supervisors and regulators to encourage or require banks to build up capital buffers in good times. Financial regulations have thus been set taking into consideration the cyclical situation which banking firms face in home and host countries. In addition to the provisions in the Banking Act, the Monetary Law Act which governs the operations of the Central Bank, also provide for regulation of banking companies. However, in recent times, through various amendments, most of the provisions of the Monetary Law Act have been incorporated in the Banking Act. Their stock market operations come under the purview of the SEC Act. In addition to the banks, the Central Bank regulates the finance companies under Finance Companies Act and the leasing companies under the Leasing Act. The primary dealers who deal in the government securities market irrespective of whether they are banks or not, are under the supervision of the Central Bank.

Ranee Jayamaha: Glimpse of current financial regulations Inaugural speech by Dr Ranee Jayamaha, Deputy Governor of the Central Bank of Sri Lanka, at the Client Seminar on International Trade, organized by HNB (Hatton National Bank), Colombo, 13 November 2006. *  *  *  Mr Theagarajah, officials of HNB, Mr Richard Lightbound from Wachovia Bank, distinguished participants, ladies and gentlemen. Thank you for the invitation extended to me to be present at the client seminar on Trends in International Trade. Let me congratulate HNB for taking the corporate social responsibility seriously and arranging a forum to exchange stakeholder views on an important subject. Generally, regulations are not liked by anybody. Same goes with the financial community in Sri Lanka. However, the common factor is that even regulators do not like to rule by regulation. For a better appreciation of the past and present financial regulatory environment, let me first set out the key elements underlying financial regulations. In summary: (a) regulations are mainly a reaction to an action by the financial community, although there may be instances in which regulations are brought in on hindsight with a forward-looking approach, but they are a few; (b) there is a clear difference between the objectives of regulators and market participants; (c) regulations are not necessarily a oneway street. They are not there only to tighten markets.
2018 (e) 2019 (f) 2020 (f) 2021 (f) March June March June March June 00 - 07 10 - 17 Report Report Report Report Report Report Terms of trade Trading partners' GDP World GDP at PPP World GDP at market exchange rates Developed economies GDP at PPP Emerging economies' GDP at PPP External prices (in $  8.2 3.6 4.5 3.2 2.4 6.5 4.6  2.0 3.9 3.9 3.1 1.8 5.3 0.8  LME copper price $ Oil price, WTI-Brent average $  154 43  312 79  -2,1 3.6 3.6 3.0 2.2 4.8 2.4  (annual change, percent) 2.2 0.9 -0.3 3.3 3.2 3.2 3.3 3.2 3.2 2.6 2.5 2.6 1.6 1.6 1.5 4.6 4.5 4.5 -1.3 -1.8 3.7  0.1 3.2 3.2 2.5 1.5 4.5 3.4  -0.9 3.3 3.3 2.7 1.6 4.7 3.7  -0.3 3.3 3.3 2.7 1.6 4.7 3.4  (levels) 280 64  280 62  290 60  280 59  296 68  290 62  290 62  (e) Estimate, except for commodity prices. (f) Forecast. Source: Central Bank of Chile.

After considering these elements and the prospects for the economic scenario, the right move was to reduce the MPR. I believe it is important to stress that this decision is based on an important analytical effort of the Bank, backed by the search for more evidence and capacity to identify structural phenomena that affect the Chilean economy. This is the conclusion of an announced and documented process, which required a rigorous development before materializing in a change of the MPR, because monetary policy cannot be conducted on the basis of intuitions or perceptions. We have characterized this exercise as a monetary policy recalibration because it is largely derived from an update of the structural parameters that serve to characterize the macroeconomic situation and inform the policy rate decision. This translates into a one-time adjustment of the rate, whose exceptionality is reinforced by the unusual combination of changes in the parameters, including the new measurement of inflation. However, we must make it clear that this does not mean ignoring the recent performance of the economy. On the contrary, the effective growth rate of recent months is weaker when compared with a higher trend growth. Page 1 of 18  Similarly, recalibrating the MPR does not mean that it cannot be adjusted in the future in the face of changes in the macroeconomic environment: rather it will allow for an adequate response to said changes to be evaluated on their own merits, without mistaking them for the factors that justified this adjustment.