samchain/econo-pairs-v1 huggingface dataset:
A new liquidity regulation is currently in the test and calibration phase. This regulation takes into account all balance-sheet and off-balance-sheet items that are of relevance in liquidity considerations, and is based – as far as possible – on internal bank liquidity management principles. It makes the big banks more resilient to disturbances in the interbank market or larger-scale withdrawals of deposits. It promotes longer-term financing as well as higher-rated securities that are capable of generating liquidity even in a stressed market environment. The new regulation is due to come into force in the second quarter of 2010. These advances and the broad consensus achieved at the international level can certainly be regarded as positive achievements. However, so far they only apply to preventative measures. As mentioned previously, these measures serve to reduce the probability of a crisis, but cannot always prevent its occurrence. Another crisis is inevitable and we must be prepared for it. 3. Resolution measures needed; “too big to fail” is biggest challenge  Consequently, we need tools that will substantially reduce the costs of a crisis. The legacy of the current crisis is a banking system with large international institutions that now enjoy a virtual state guarantee. The fact that systemically important banks enjoy such a guarantee is now openly recognised to be a problem by the banking sector, too. A guarantee of this kind contradicts the basic principle of the market economy and presents us with a situation that cannot be tolerated.

For these reasons alone,  BIS Review 21/2005  3  the use of petroleum revenues may in periods deviate from the 4 per cent rule. Spending was also increased in response to the economic downturn. We can therefore safely affirm that the fiscal rule has been normative for fiscal policy. At the time of the introduction of the fiscal rule in 2001 projections pointed to a continued increase in the use of petroleum revenues. We had to expect this growth in spending to lead to weaker competitiveness in Norwegian manufacturing, either through higher wages or an appreciation of the krone. With wage growth in Norway higher than abroad, the competitive position of Norway’s manufacturing industry has weakened by about 15 per cent since the mid-1990s. Competitiveness is about 4 per cent weaker than the average for the past 30 years. The krone has been influenced by high oil and gas prices and prices for other Norwegian export goods. Monetary policy has also influenced the path for Norway’s relative costs, but the nominal value of the krone is about the same as 10 years ago. Strong growth in public spending and expectations of moderately higher growth in the use of petroleum revenues now seem to have been factored into the cost level. Over the past 30 years manufacturing has been scaled back in waves. The last wave occurred around the turn of the millennium, but a substantial decline also occurred in the period 1977 to 1984 and from 1987 to 1992.
Fritz Zurbrügg: The Swiss National Bank’s investment policy – options and limitations Speech by Mr Fritz Zurbrügg, Member of the Governing Board of the Swiss National Bank, at the Money Market Event, Zurich, 27 March 2014. *  *  *  Accompanying charts can be found at the end of the speech or on the Swiss National Bank’s website The speaker would like to thank Dirk Faltin and Adriel Jost for their valuable support in preparing this speech. He is also indebted to Erich Gmür, Marco Huwiler and Sandro Streit for their insightful comments. Ladies and Gentlemen I would like to welcome you to our traditional Money Market Event in Zurich. I am delighted that so many of you have responded to our invitation. The focus of my comments today will be the investment policy of the Swiss National Bank (SNB), since it is now exactly ten years since the new National Bank Act (NBA) came into force, opening up new options for the SNB in the management of its foreign exchange reserves. Today I want to take the opportunity of presenting an assessment and acquainting you with the most important aspects of our investment policy. One of the most important and striking changes since 2004 has been our investments in equities and I will therefore focus particularly on our equity investments in my remarks. Following my presentation, my colleague Dewet Moser will take a closer look at developments on the foreign exchange and money markets.

Howard Lee: Benchmark regulation and migration Closing keynote by Mr Howard Lee, Deputy Chief Executive of the Hong Kong Monetary Authority, at the Bloomberg-ISDA Benchmark Conference "Benchmark Regulation and Migration", Hong Kong, 30 May 2019. * * * Taran [Khera], ladies and gentlemen, 1. First of all, I would like to thank Bloomberg and ISDA for organising this Benchmark Conference and for gathering so many speakers and participants to exchange views on the important subject of benchmark reform. The subject of benchmark reform is always very close to my heart, as I have been involved in the review of interest rate benchmarks both in Hong Kong and in the context of the Financial Stability Board’s Official Sector Steering Group (FSB OSSG) deliberations for many years. LIBOR discontinuation: A turning point 2. If we look back to 2013 when the OSSG started to operate, there was a general agreement that given the changes in the interbank market, the interbank offer rates, or IBORs in short must be reformed. But given the long history of IBORs and the huge value of financial contracts referencing them, moving to new IBORs with fundamentally different determination methodologies, or switching to alternative reference rates is a very complex task, as we heard from many speakers just now. Understandably market participants generally took a ‘wait-and-see’ approach when dealing with benchmark transition issues. But now – with a growing recognition that LIBOR may discontinue after end-2021 – the situation is changing.
Financial Sector Assessment Program (FSAP) calls for further strengthening of the underlining of the supervisory framework, even though unified supervision under a single supervisory agency was considered premature. Capital and money markets are small or nonexistent. At this stage of development it is necessary that the policy of regulatory institutions should focus on enhancing infrastructure and governance. -  Banking system in the region is close 100 percent privately owned, with clear dominance of foreign capital. The banking system in the region amounts from 40 percent of total assets to GDP in Macedonia to 119 percent of total assets to GDP in Croatia and is dominated by private foreign owned/joint ventures banks. The privatization of large state owned banks has been completed in all countries, except Serbia and representing approximately only 38 percent of total capital in the banking system respectively. The system is dominated by a restricted number of big European banks that have set presence across all countries in the region. Lately there is evidence of increasing interest of other banking groups as well. -  Increased financial intermediation of the recent years has lead to a rapid credit expansion. This trend reflects increasingly deep financial integration with EU Member States and supports rising trade, investment flows, and institutional  6  BIS Review 119/2007  strengthening. The expansion of the financial sector and inflows of foreign savings can strongly support real convergence.

Thus, prudential tightening may not be able to be transmitted to a significant part of the banking sector but it may affect only smaller locally-owned banks. It follows from our discussion that the supervisory authorities may gain by the increasing transparency in financial markets which will allow consumers and other bank borrowers to be more aware of the risks inherent in foreign currency borrowing. Efforts to enhance this transparency could be encouraging or requiring banks to discuss exchange rate risks explicitly with borrowers before contracts are signed. On the other hand there is a need to discuss with banks means of assessing the risks arising from foreign currency denominated loans and adjust existing loan classification schemes or provisioning if warranted (FSAP recommendation for Albania). Monetary policy is constrained by the degree to which policy instruments are able to transmit into the economy. A tightening of policy interest rates’ effect may be constrained even in floating rate or adjustable peg regimes. A moderate tightening of policy may not be very effective in slowing the economy because of the high degree of euroization and the uncertainty associated with the final effect of exchange rate changes in balance sheets and the real economy. Many of the above issues require a significant degree of co-ordination between home and host authorities that can help fill supervisory gaps, given the very high levels of foreign bank ownership. In the process of improving the regulatory base, standards set by international institutions and especially the ECB are crucial in orienting regulators. 6.
It is key because it will permit the clean-up of the banks requiring State aid to be completed and will provide a suitable horizon for the management and sale of the mass of assets to be transferred. Conclusions The Budget for 2013 involves a considerable drive in respect of fiscal adjustment. It attempts to bring about a correction in the primary deficit, net of interest on public debt of almost 2.5 pp of GDP. In the depth of a recession, that is very difficult, but necessary in order to meet the targets to which Spain is committed within the framework of the European Union and the euro area. We have some data which, although not warranting excessive optimism, do indicate that an adjustment is being achieved. We are going to end 2012 with a current account almost in balance, and in 2013 it will probably run a surplus. The recession has a contributing factor, but not the only one. We also have a clear improvement in competitiveness based on changes in our labour costs and in productivity. The most pressing problem facing the Spanish economy is to restore market confidence. There is no other way to achieve this than meeting the fiscal consolidation targets, completing the clean-up and restructuring of our banking system, continuing with the process of private and public deleveraging and moving ahead with the reforms undertaken to improve our competitiveness.

In turn, job creation and growth are essential ingredients for progress on fiscal consolidation. Accordingly, economic policy-making should continue to be structured around two main goals: promoting competitiveness and growth, and restoring the sustainability of public finances. I shall briefly refer to these two major issues before analysing the Budget for 2013. Competitiveness and employment First, let us look at developments in employment and competitiveness, two closely interconnected problems. In terms of economy-wide unit labour costs, the cumulative loss to 2008 in respect of the 1998 level stood at 18%. In industry, and measuring competitiveness always in terms of unit labour costs, it was almost 30%. Naturally, labour costs are not the only explanation for the increase in unemployment, but they have undoubtedly been a major factor. That there were serious failings in the regulation of our labour market is something that practically all international economic organisations have been pointing out for years. The reform of our labour legislation was unavoidable. The changes made are essentially geared to increasing the flexibility of our labour market: the priority of firm-level agreements, limits on the so-called “ultra-activity” of agreements, new regulations governing dismissal for objective reasons and greater facilities for maintaining wage restraint at companies in difficulty are all elements of change aimed at preventing dismissals and higher unemployment from being the only option for many companies to stay in business.
The prices of goods we import are also affected at the consumer stage by conditions in Sweden, for instance, via transport costs, price mark-ups by wholesalers and retailers and also by the value of the krona. When the Riksbank raises the repo rate, total demand in the economy is dampened. This reduces the scope for price increases in all areas. And it is important that monetary policy focuses on keeping down the general price increases and that the inflation target is not redefined merely because some prices are rising more than others. Swedish households’ total purchasing power declines even when prices of imported products rise. So the risk of such price increases spreading to other prices and to wages will scarcely decline just because the inflation target is defined in terms of domestic prices. It is also important to distinguish between the measure of inflation to which our target applies and measures that are useful from time to time to analyse the driving forces behind inflation. The Riksbank often highlights the development of other measures to describe developments in inflation and explain the monetary policy strategy in a better way. For example, last autumn one measure that was useful was CPIX excluding energy. This could illustrate that we were assuming that energy prices would push up inflation temporarily but that the inflation trend would not be affected. But then is the CPI really the best measure for our inflation target?

And businesses are unlikely to want to expand while capacity is lying idle and there is still much uncertainty about the outlook for demand. But the substantial depreciation of sterling – down nearly 25% since the start of the crisis – should, over time, help to boost the contribution of net exports to UK growth. We have seen some of the fruits of that in the robust performance of manufacturing over the past year. As I already noted, the economy began to grow again more than a year ago, in the fourth quarter of 2009. And over the first year of the recovery, growth was around the UK’s historical average rate. In part, that was on the back of the boost to growth from a slowing in the rate of inventory de-stocking. Given the prospective fiscal consolidation, the maintenance of such growth rates requires a pickup in the contribution of private domestic final demand and in net exports. In our November Inflation Report, our central view 3 , predicated on market interest rates, was for the recovery to be maintained, with the boost from a stimulatory monetary stance and from the past depreciation of sterling offsetting the continuing headwinds from de-leveraging and fiscal consolidation. Since the November Report, we have, of course, had the first estimates from the ONS of growth in the final quarter of last year. They suggest that the economy contracted by 0.6%. In part, that was down to the disruption caused by the snow.
Moreover, domestic uncertainties, the weak course of the confidence indices, and volatility in financial markets driven by global monetary policies may limit the contribution of final private demand to growth. Despite the existence of these factors keeping the downside risks alive, the robust employment performance following the global crisis along with low oil prices generate room for domestic demand and economic policies by improving the current account balance and the inflation outlook. In addition, the expected correction in the agricultural value added emerges as a factor that may support growth on the production side. Against this background, we project the second half of 2015 to witness a sustained moderate growth and demand conditions that support disinflation. In line with the favorable developments in the terms of trade coupled with the slowdown in consumer loans, the recovery trend in the current account balance is anticipated to continue in the upcoming period; yet the weak course of external demand may limit this recovery to some extent (Chart 19). As you all know, food, energy and import prices also play a great role in inflation forecasts. Therefore, before moving on to forecasts, I will briefly talk about our assumptions regarding these variables. In the second quarter of 2015, oil prices stood slightly above the path projected in the previous report, while USD-denominated import prices remained below projections (Chart 20). On an annual basis, we lowered average oil price assumption by 2 percent for 2015, and by around 6 percent for 2016.

Accordingly, we revised assumptions for annual percentage changes in average import prices downwards by 1.7 points for 2015 and 1.4 points for 2016. Developments in food prices show that unprocessed food prices exhibited a notable correction in the second quarter of 2015 and the contribution of food prices to inflation witnessed a significant decline. Due to the projections that this correction will continue and the effects of measures taken by related institutions will materialize, we revised the food inflation assumption for end-2015 downwards from 9 percent to 8 percent. Our medium-term projections are based on the assumption that tax adjustments and administered prices will not exceed inflation targets and be consistent with automatic pricing mechanisms. The medium-term fiscal policy stance is based on the Medium Term Program projections covering the 2015-2017 period. Accordingly, we assume that a cautious fiscal  4  BIS central bankers’ speeches  stance will be implemented and the primary expenditures to the GDP ratio will decrease gradually. 3. Inflation and the monetary policy outlook  Now, I would like to present our inflation and output gap forecasts based on the outlook I have described so far. Our medium-term forecasts are based on a framework that a cautious monetary policy stance will be maintained by keeping the yield curve flat until there is a significant improvement in the inflation outlook. Moreover, we envisage that the annual loan growth rate will continue to hover around the recent reasonable levels in 2015, also thanks to the macroprudential measures.
5  Eg, public interest pre-conditions for the use of resolution tools; compensation if creditors bear losses beyond what it is estimated they would incur in insolvency; an independent process for valuing potential compensation, etc. BIS central bankers’ speeches  3  The critical difference from a standard corporate reconstruction is that for banks and dealers there is not time for a negotiation lasting a month or so under the control of a judge. In the wider public interest, swifter action is needed to stabilise banks, executing a resolution strategy designed to contain the impact on stability in the financial system as a whole. Bailin seeks to deliver that. Such bailins do, of course, impose losses on creditors. But all – I repeat, all – resolution tools involve creditors and the Deposit Guarantee Scheme, as well as equity holders, taking losses. As this audience certainly knows, that is not an exotic proposition. The losses simply have to go somewhere. There is, however, a difference between ‘bailin’ and other resolution tools. Under most traditional bank-resolution techniques – L&P or P&A – losses for uninsured creditors , including the DGS, are revealed only at the end of the administration of the rump, when all assets have been sold or run off. ‘Bailin’ works by making an ex ante, up-front judgment of the scale of expected losses, and by reconstructing the capital structure accordingly, without the destruction of value entailed by winding down all portfolios associated with non-critical services.

those which the Bank’s analysis identified as being systemically important to the CHAPS system in terms of the total value of payments they send and receive. 5  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  5  the first non-bank PSP to join CHAPS directly. Direct access allows non-bank PSPs to reduce their operational dependence on the banks they are trying to compete with. Over the longer term, this should also create a more diverse payments sector with fewer single points of failure. Reducing the cost of access. We continue to seek to avoid the costs of direct access being prohibitive to prospective and existing participants. We have enabled third-party aggregators to provide technical connectivity to RTGS for smaller CHAPS direct participants, reducing the upfront costs of direct access without reducing overall resilience. The RTGS Renewal Programme will further reduce the barriers to direct access. Its technical architecture will be designed to support several hundred Direct Participants in CHAPS; allowing for a significant increase from the current 33. We also intend to introduce automated testing to streamline the joining process. We will build simulators to help new joiners better familiarise themselves with CHAPS and provide broader RTGS functionality before going live. The renewed RTGS will also feature enhanced functionality (e.g. enhanced liquidity management and the capability to extend opening hours), facilitating innovation by both established participants and new joiners.
It’s also been aided by domestic polices, including the Funding for Lending scheme, a series of regulatory actions to improve the strength and resilience of our banking system and, more recently, the Government’s Help-to-Buy policies. I fully recognise that the ability of many SMEs – perhaps many of you here today – to access credit at reasonable rates still remains impaired. But even here my sense is that some progress has been made. That’s the message from surveys of small businesses, from reports by the Bank’s Agents, and indeed that I get from my own conversations with many businesses around the country. We’re not there yet – and the Funding for Lending scheme remains in place to encourage banks to lend more to companies, particularly SMEs – but we have taken a step in the right direction. For households, the improvement has been more marked. Interest rates of new mortgages, especially those for fixed-rate mortgages and those with higher loan-to-value ratios, have fallen by well over a percentage point since the summer of 2012. Unsecured personal loan rates have fallen by even more. The greater ease with which many families can access credit has fed through to the housing market, which until recently had been in a state of deep freeze. Housing transactions fell very sharply in the wake of the financial crisis and subsequently flat lined. Nominal house prices moved sideways for several years. But over the past six months or so, there’s been some thawing.

Indeed, this attitude has, in many respects, proved highly advantageous for the country. Nonetheless, it doesn’t change the fact that international competition has increased and that the Swiss are making the most of the growing number of possibilities to avail themselves of goods and services from abroad. BIS Review 69/2004  1  Of course, we can’t talk about Switzerland without also talking about the Swiss franc. The Swiss franc forms the basis for the Swiss National Bank’s monetary policy autonomy and for price stability. It also underpins the efficient Swiss capital market, which is characterised by a low interest rate level, when compared internationally, and which represents an important locational advantage for the country. The European political and economic environment - of which Switzerland is an integral part - has, however, gone through a great deal of change. It is therefore not surprising that our relationship with Europe is a topic of much discussion in my country. 2. Switzerland and the European scene  For almost six years now, Switzerland has been surrounded by the single European currency. And for six years we have been trying to make it clear to our friends abroad that Switzerland is nevertheless not an island, but is in fact deeply integrated into Europe. Approximately 20 percent of our workforce comes from EU member states. A total 60 percent of our exports go to the EU and 80 percent of our imports come from there.