samchain/econo-pairs-v1 huggingface dataset:
In any case, the need for a physical presence with a large branch network in the provision of financial services may soon become a thing of the past with the advancement of telecommunications and information technology. It is still early, I think, to come to a definitive view, but the prospects are that electronic money and the use of the internet for banking and other financial services are breaking down geographical boundaries. Barriers to entry and restrictive practices may lead to the diversion of business to offshore markets in locations with liberal practices. 7. The second area concerns financial intermediation in the international dimension, involving the flow of savings into investments across international boundaries. Hong Kong as a financial services centre has a business role of providing the markets, in banking, debt and equity, supported by other efficient financial services and the rule of law, to facilitate the international flow of funds in this region. Our markets have the freedom, the liquidity and the integrity to attract international investors managing institutional savings to come here and those in need of funds to raise them here. The opportunities in this region, in particular in China, are enormous, and international investors would have a preference to operate in markets in which the rules of the game are transparent and familiar to them, and are of internationally accepted standards. And that means coming to Hong Kong. 8.

In such market we indeed observe the emergence of monopolistic situations and systemic risk is associated to the possibility of the default of such market infrastructures. We should therefore make sure that we –all collectively- are shielded from a too strong market concentration in terms of clearing, which create risks that can’t be addressed by cooperation among their supervisors and overseers. Conflicting interests may indeed arise between (i) the authorities in charge of the oversight of the CCP, and its financial resilience, and (ii) the authorities in charge of the financial stability of the offshore markets served, especially in times of crisis, as we have seen in Europe during the sovereign debt crisis. To prevent such situation levers to be used include in my view a location policy of clearing activities and direct oversight by authorities in charge with the financial stability of the markets served. 3/3  BIS central bankers' speeches
Financial Stability Report No.14 (2)/2017 Liviu Voinea, Deputy Governor Press conference, Bucharest, 4 December 2017  Your Excellences, Dear colleagues, Dear guests,  Thank you for your presence at the launch of the December 2017 issue of the Financial Stability Report, No. 14(2)/2017. Right beside me are three NBR directors who are ready to answer your questions: Mr Eugen Rădulescu, director of the Financial Stability Department, which prepared the Report – I wish to thank all the colleagues involved; Mr Emil Vonvea, director of the Bank Resolution Department – an area having the role to strengthen confidence in the banking sector – the Report also includes a section dedicated to resolution strategies; and Mr Tudor Grosu, director of the Macroeconomic Modelling and Forecasting Department, as part of the analyses in the Report are based on scenarios and econometric models to the development of which his department also contributed. I would like to thank the other departments which cooperated in the preparation of the Report, particularly the Economic Studies Department for the translation. This is the 14th financial stability report launched by the National Bank of Romania. I would like to point out that the Report we are releasing today has been discussed in two meetings of the NBR Board and was unanimously approved by the NBR Board in its meeting of 27 November 2017. The Report presents the risks to financial stability, in close correlation with domestic and international economic developments.

The clarity of the objectives and the reporting system provided a stronger collective confidence that individual firms would be held to similar standards independent of their principal supervisor. And we have made a more systematic effort to share concerns with the SEC, the FSA and other supervisors and identify areas where we can work in parallel to highlight issues we see in the major markets and encourage change among the major institutions. We are in the process, for example, of consulting with these and other authorities on the use of stress testing and scenario analysis in the largest institutions. These efforts of course complement a substantial amount of cooperation in other contexts in the U.S. and internationally in the Financial Stability Forum, the Joint Forum and the Basel Committees on Banking Supervision and Payment and Settlement Systems. These initiatives help keep the supervisors closer to developments in markets, more informed of differences in approaches across the functional and geographic lines of supervision, somewhat more nimble in responding to potential problems and closer to creating a more integrated supervisory framework. The evidence to date suggests that dramatic growth in new instruments for risk transfer and the greater role of nonbank financial institutions have contributed to a more stable and more efficient financial system. But these changes present continuing challenges for the discipline of risk management.
It includes intensified efforts by financial regulators particularly – at the national level but also working collectively through the new Financial Stability Forum, the Basle Committee and IOSCO for example – to improve prudential standards of financial behaviour. And it includes the provision of official financial support to countries that are pursuing sound policies – in parallel with continuing private finance, on which the risks would have been reduced both through the parallel official finance itself and through official international endorsement of the borrowing country’ s policies. In this context I think we in  5  BIS Review 54/1999  the official sector may have placed too much emphasis in international discussions on “bailing in” the private sector – which can sound ominous, even threatening – where what we really need is recognition of our mutual interest in public-private sector partnership. It is a heavy and complex agenda which is being very actively pursued in many different international groupings, involving both the industrial and emerging countries, across a broad front. We are I believe steadily moving towards consensus or many of the issues and this is “leading the way towards sustainable economic growth” into the next millennium. In the meantime we are collectively having to manage the consequences of the recent global financial disturbances and their economic after-effects. Happily we have recently been making progress on that too, particularly in many of the emerging countries here in Asia. BIS Review 54/1999  6

Ardian Fullani: Improving the performance of Albania’s banking sector Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the year-end event with the Albanian Association of Banks, Tirana, 17 December 2013. *  *  *  Dear bank executives, Your Excellency Ambassador Sequi, Dear Mr. Ilahi, Dear Mr. Pencabligil, It is a pleasure for me to participate in this year-end meeting, as we reflect about the challenges we faced and the objectives we accomplished in this year, and endeavour to identify issues that may arise over the next year. Given the celebrations time and the spirit of this meeting, I would rather not dwell upon all the issues I would have liked to. However, I will share with you my opinion on two issues I consider as important for a good performance of the banking sector over 2014. Before moving on, we should acknowledge that the year we are leaving behind was a difficult one for the banking sector. In its development cycle for over more than one decade, this year, the banking sector’s growth slowed down sharply and annual lending levels contracted. Deteriorated asset quality, dictated by credit, has led to lower financial profit due to higher provisions needed. These developments have reflected the overall economic slowdown and domestic demand drop resulting from lower private consumption and investments. However, other developments highlighted the banking sector’s capacity to properly respond to and cope with these challenges.
(A side remark: output growth in the Nordic countries has also been robust in the past 10 to 15 years. Swedish GDP, for example, has doubled. Such pace of development is likely to have contributed to the growth in the Baltic countries.) Coming back to the Baltics, 1997 and 1998 were the years of the Asian and Russian crises. In the Baltic states, these crises led to the collapse of the stock markets, bankruptcies of many companies, including banks, and a surge in interest rates and unemployment. Thus it was a good time to make cheap acquisitions in many industries, including Baltic banks. That said, strategic entry of Nordic banks was at the time of critical importance to restore market confidence. SEB and Swedbank acquired minority shares in two largest Estonian banks, and started to increase their control. In the year 2000, Sampo Bank followed. BIS Review 81/2006  1  Indeed, the presence of foreign banks in emerging markets has generally been found to increase stability, efficiency, and governance. Combined with improved regulation, strong Nordic banks have brought a qualitative change in the Baltic financial sector. As a result, we can proudly say that the Estonian financial system stands out in the EU for integration, e-banking, and credit conditions, to name a few. Nordic investment in Estonian banking sector has proven profitable: ROE has been around 20 percent. Furthermore, local know-how helped the Nordic parent banks to enter the Latvian and Lithuanian as well as the Russian markets.

It is absolutely true that risks inherent in currency mismatch require vigilance from banks as well as from supervisors. But it becomes alarming when currency mismatch comes from skewed incentive structure as we have seen, for example, also in some EU member states where loans have been taken in foreign currencies because of lower nominal interest rates of foreign currency loans (e.g. Swiss francs). At the same time, most of the borrowing in the Baltic States is denominated in the anchor currency, the euro. It is quite natural in the context of the EU integration that new long-term contracts take into account the forthcoming euro adoption. Therefore, the issue at hand is not to "fight the liability dollarization". Such a fight would not only be a waste of scarce resources, but also completely futile in small open EU countries. Implications for risk management and supervision That brings me to the third topic I wanted to touch upon today, of risk management and financial supervision. I believe that the concerns I just mentioned should neither be overstated nor played down. These risks are a natural part of the immensely positive impact that financial integration has had on the development of the Baltic economies. In a rapid catch-up process, it is difficult to assess the level of optimal credit growth.
With that in mind, policymakers should follow the general principle of “same business, same risks, same rules”. That is important. As banking supervisors, we focus on risks related to banks. In that regard, we are working on a number of projects. Take bank licences, for example. We see a rising number of applications related to fintechs. In response to this, we have teamed up with the national supervisors to work on a joint policy approach. It will ensure that applications are treated in the same manner across the entire euro area. Risks that are specific to fintechs will be assessed appropriately and proportionately. We are also seeing more and more supervisors exploring and setting up mechanisms to facilitate the authorisation process for fintech banks. Innovation hubs and sandboxes are two of the key words here. And we too are seeking to implement a euro area-wide hub for fintechs. We are also assessing the risks that might arise when banks or fintechs outsource data or even entire IT systems. We already carried out some work in this regard; in 2015, we did a cybercrime survey, which was a unique project at the global level. As a follow-up we implemented a data base to track and analyse cyber incidents in large euro area banks. And last but not least, concerning the business models of banks, we will explore potential 2/3  BIS central bankers' speeches  risks that emanate from fintechs and other non-bank competitors. In that regard, fintechs are among our supervisory priorities.

And, anyway, repapering contracts helps to convey to counterparties that there will be continuity in resolution and so reduce incentives to break for the exit. FSB has published guidance in this space for operational continuity in resolution and continuity of access to FMIs. 5  Perhaps the most notable effort has been FSB’s work with industry to agree a protocol to International Swaps and Derivatives Association (ISDA) and other master netting agreements that addresses close-out 6  risk in over-the-counter (OTC), derivative and repo transactions. Agreement in 2014 of the universal protocol amongst G-SIBs, and subsequently of jurisdictional modular protocols for individual jurisdictions to bring in buy-side and non-G-SIB counterparties, is another major landmark in ensuring big international firms 7  are resolvable. The protocol is built around the premise that entry into resolution should not be classed as an event of default as long as a firm continues to perform. This underscores the importance of funding to making resolution credible. FSB set out principles on funding in resolution in 2016 and just last week published for consultation guidance for use in CMGs on the liquid resources and liquidity management capabilities firms require to be adequately resolvable and how liquidity 8  in firms might be bolstered in adverse cases by public backstops. CMGs will use the guidance to draw up resolution funding plans setting out how, in order to achieve resolvability, liquidity and collateral should be held in a group across legal entities, currencies and locations.
If a deregulation stems from political decisions that could not be predicted, or its effects on inflation are calculated to disappear in less than one to two years, it will not elicit a reaction from the Riksbank as long as the rule of action is adhered to. The situation is different, however, if the economy goes through a series of deregulations or the price effects of a single deregulation continue for several years. This may lead to inflation being below the target more permanently, which in turn ought to lead, according to the rule of action, to a downward adjustment of the instrumental rate. The stimulus from monetary policy acts through the usual channels. So all else equal, one can expect a fall in market interest rates, rising share prices, a stronger expansion of credit and so on. General demand rises, employment moves up, unemployment falls and the inflation target is fulfilled. When the price effects have waned, there is a risk, if nothing else intervenes, of inflation rising above the target. To counter this, monetary policy responds by gradually increasing the instrumental rate again. Market interest rates move up, share prices fall and the growth of credit slackens. In other words, the customary transmission mechanism now works in the opposite direction, leading to some fall in production and employment as well as in resource utilisation. Another component of the process is the higher inflation’s limiting effect on household real income, just as the lower inflation benefited household income.

The review shows that the Riksbank’s rule of action works well as long as the structural changes concern price effects in connection with deregulations. In a period of accelerating productivity growth, on the other hand, the choices for monetary policy can be more complicated. While higher productivity growth is positive as such because it implies higher real incomes and a long-term improvement in living standards, during the adjustment process it can entail a number of risks. What looks like a good circle initially can lead later on to unduly strong and self-generating euphoria. It is, of course, difficult to tell under which circumstances the good circle will turn into a less favourable development. In practice it is presumably a matter of very difficult assessments. But the risk is probably greater if monetary policy aims too strongly and for too long at stimulating demand in order to  BIS Review 30/2001  5  keep inflation close to the target, instead of accepting a temporarily lower rate and doing its best to bring the development of demand into line with potential growth. In a way it could be said that such a reaction pattern implies that the central bank pays more attention to asset prices than in the normal case. It is important to note, however, that this is done in a situation where unduly rising asset prices are one of several signs that imbalances are building up in the 3 economy .
3  https://www.bankofengland.co.uk/research/future-finance Transforming data collection from the UK financial sector - Discussion Paper (bankofengland.co.uk) 5 Transforming data collection from the UK financial sector: a plan for 2021 and beyond | Bank of England 4  4  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  4  These common standards can improve all aspects of the data collection process: how firms first find the data we are asking for; how they merge and consolidate data sets from different internal sources; how they submit and we receive data; and how they and we can compare data points that have been provided to us. But, just as in the middle ages commonly adopted measurement standards had benefits far beyond cathedral building, so common data standards are about much more than just improved reporting. Standards are a key part of the soft infrastructure of the digital age. They make it easier to source, move and compare data. They can make a whole range of activities easier: better financial reporting, cheaper payments, and more accurate credit scoring so customers get the financial products that suit their needs. They can boost transparency and help customers choose between competing products in a more informed way. They can support newer innovations like artificial intelligence and machine learning methods. In short, they bring benefits throughout the financial sector. The example of the Legal Entity Identifier  Of course the development of common standards and identifiers, and a role for authorities in helping develop those standards, is far from new.

And this was not just an English peculiarity: across the channel, a foot length in Strasbourg was 295 mm, a foot in Paris was 325 mm, but a foot in Bordeaux was a relative whopper at 344 mm1. Of course people came to understand the great benefits of enforcing universal, common standards. In part for maintaining the cathedrals themselves, so that new, replacement stones could be sourced that would fit snugly between their neighbours. But the benefits of universal measurement standards could be applied a long way beyond the niche discipline of cathedral building. Now some of you may think that today’s financial system is not perfectly comparable to the glorious gothic cathedrals of the Middle Ages. But like those cathedrals, many of the data systems underpinning today’s financial firms and markets were built with narrow reference to their own needs, by their own master masons – their CIOs and systems architects. They too were closed systems. Each needed to be able to record, track and manipulate its data. Its data points needed to fit snugly alongside each other. But the design of each system often paid little attention – understandably – to any broader public good. In this speech, I want to talk about whether there are wider public benefits that might flow from standardising these data labels, and set out a way forward to reap those benefits collectively. So let me turn from mediaeval architecture to data. At a central bank like the Bank of England, data is our life blood.
But financial institutions and policymakers could – and should – have been more alert to the vulnerabilities that were building during the years leading up to the crisis and therefore to the possibility of a major shock to the financial sector and to the economy more generally. It is somewhat analogous to seismologists trying to predict earthquakes along a fault line. It is impossible to predict the day and magnitude of a shock with any precision, but it may be possible to say something about the likelihood of an earthquake occurring within a given period from seismic measurements and indicators of latent stress. Now it might seem natural to measure the severity of a recession by the magnitude of the fall in output. Indeed, a recession is sometimes characterised in the media as being two or more consecutive quarters of falling output, with the end of the recession being marked by a return to expansion. But that is not a very useful definition, as the mere resumption of growth will still leave some plants idle and some workers unemployed. From an economic perspective, it should be the margin of unused resources in the economy – the difference between actual and potential output – that we care about. And it is also the margin of unused resources that determines how much the economy can grow during the recovery before it puts significant 3 upward pressure on inflation , the control of which is the MPC’s primary objective.

The problem is that the level of potential output is inherently difficult to measure. For an individual firm, the notion of capacity is slippery. A car manufacturer might be able to say how many units can be produced if all production lines are operating 24/7, but he knows that to do so would prevent essential maintenance and impair the firm’s ability to produce output later. And in the service sector, the notion of capacity is even more complex. What is the capacity of a law firm, for instance? One might be able to say how many hours the existing partners could work, but that is not the same as how much output they could produce. Moreover, it is impossible to match unemployed workers to unfilled vacancies instantaneously, so it is not appropriate to ask what level of output could be achieved if all  3  Of course the margin of spare capacity is only one determinant of inflation. Other factors include commodity prices, the exchange rate and inflation expectations. And the rate at which the margin of spare capacity is closed may also matter – so-called “speed limit” effects. BIS Review 142/2010  3  those who wanted a job were actually in one. The frictions and the institutional characteristics of labour and product markets need to be taken into account too. Economists studying business cycles have used a variety of approaches to construct proxies for potential output.