samchain/econo-pairs-v1 huggingface dataset:
Since the risk weights given to such unsecured advances exceed even 100 percent, it is necessary for the Central Bank to plan for a higher level of reserves than the minimum 15 percent. The Central Bank management, having taken this prudential requirement into account, has decided, as a part of the Bank’s modernization program, to raise the reserve level up to 100 percent of the domestic assets of the Bank. This is being continued by the Bank since 2003 and the reserve level today stands closer to 100 percent. However, it would be prudential to revisit even this percentage today in terms of its adequacy in view of the level of ever rising unsecured provisional advances and Exter’s warning that the profits earned by inflating the economy should not be distributed. The build up of reserves by the Central Bank to be equal to its domestic assets has another monetary dimension. On the liability side of Bank’s Balance Sheet, it has liabilities on account of currency issue and demand deposits maintained by commercial banks. These liabilities are known as monetary liabilities, since they constitute the reserve money of the system. All other liabilities, including the capital and reserves, are, therefore, called nonmonetary liabilities. When reserves are built-up to be equal to the Bank’s domestic liabilities, its monetary liabilities would vary exactly in accordance with the movement of the Bank’s net foreign assets.

Even more difficult, the potential benefits – better differentiation and rank ordering of risk – were undermined by the problems of calibrating overall capital standards, and poor implementation in the rush to achieve compliance. Under Basel I and II, capital ratios were too low to sustain confidence in banks, and thus the system as a whole, through a severe stress, as the crisis sadly demonstrated. The minimum Tier I ratio was 4% of Risk Weighted  BIS central bankers’ speeches  3  Assets. And, crucially as the Tier I ratio included capital instruments with the flaws I described earlier, the core (equity) ratio could be as low as 2%. In the trading book, under the Market Risk Amendment, capital requirements could be less than 1% of trading book assets. To illustrate this last point, here is a quote from the FSA’s report into the failure of RBS. “The capital regime was most deficient, moreover, in respect of the trading books of the banks, when required capital for many instruments was estimated using value-at-risk (VaR) approaches. The acquisition of ABN AMRO meant that RBS’s trading book assets almost doubled between end-2006 and end-2007. The low risk weights assigned to trading assets suggested that only £ of core tier 1 capital was held to cover potential trading losses which might result from assets carried at around £ on the firm’s balance sheet. In fact, in 2008, losses of £ arose in the credit trading area alone (a subset of total trading book assets).
Tarisa Watanagase: Rethinking monetary policy in a globalized world – coping with current challenges and beyond Remarks by Dr Tarisa Watanagase, Governor of the Bank of Thailand, at the Central Bank of Malaysia High Level Conference 2009, Kuala Lumpur, 10 February 2009. * 1. *  *  Introduction  I would like to congratulate Bank Negara Malaysia on its 50th anniversary, and the magnificent job the Bank has done both in the domestic and international arenas. I wish the Bank continued success in the next 50 years and beyond. Thank you for the opportunity to address this distinguished audience on a topic that is a current concern for all central bankers during these turbulent times. I would like to raise a number of issues which have challenged the traditional thinking behind monetary policy as a consequence of globalization and the current turmoil. In some others I hope to propose solutions – some new, and some old. In many cases I will address the challenges and the blind spots which we face as monetary policy makers, and raise questions to which I myself do not yet know the answer. The developments that globalization has brought about has tested the limits of conventional monetary policy, both in terms of the current thinking about how monetary policy is conducted, as well as the effectiveness of the current approach to monetary policy. I will discuss these points in detail in a moment.

One last point before I end, I believe that most of us now agree that central banks need to maintain financial stability in addition to price stability. Therefore, we also need to improve our understanding of the implications of globalization on financial stability, as well as the tools to conduct monetary policy in addition to the interest rate tool for stability purposes. 4  BIS Review 33/2009
Lately, a trend has been the emergence of new suppliers of payment services outside of the bank domain, in Europe facilitated by legislation. Their heterogeneity is large, but so is the potential of some of them. Private and public sector do what they do best My third takeaway regards the role of the private and public sectors. While their roles may have changed over time, they have invariably explored their comparative advantages. Throughout history, the private sector has showcased that it is an  8 [15]  excellent innovator and understands consumer needs. Where there is a problem, it often provides a solution. The primary role of the public sector revolves around trust, universal services to all citizens, and security. One fundamental role of central banks today is to facilitate payments between banks. While the predecessor to our current clearing and settlement system may have started life in a London tavern, it later moved into the central banks. The main reason for this is to help banks settle payments using accounts at the central bank, i.e. in central bank money, thus abolishing the credit risks that could arise if they instead used commercial bank money. Central bank money is generally regarded as the safest settlement asset that could be used. While the private sector innovates, the public sector needs to be ready to ‘step in’ and correct market failure, provide coordination, guidance, and exercise its comparative advantages from time to time.

We are therefore pleased that we have evidently been able to meet the expectations of the banknote users – the Swiss population: - The new designs have been almost universally well received and have also been lauded by banknote experts internationally. - The new notes are technologically state-of-the-art and are also easy to handle, robust and distinctive. - All the logistical processes, including the modification of ATMS to accommodate the new notes, also ran largely smoothly. The substantial media and public interest and the feedback on social media have also been gratifying. When it comes to rapidly informing the public about the security features and the design of the new banknotes, the media naturally play a pivotal role. Ladies and gentlemen, on behalf of the SNB, thank you for all the work you do. We broke new ground with respect to informing the public as well, introducing ‘Swiss Banknotes’ – an augmented reality app with which users can explore the new series. We are Page 3/4  Berne, 3 September 2019 Thomas Jordan  News conference on new banknotes  convinced that this innovation has helped to make the design and security features of the banknotes more accessible, especially to younger generations. So what happens to the eighth-series notes now? The old banknotes remain legal tender until further notice and can thus continue to be used for making payments. The SNB plans to announce the recall date for the eighth-series notes in the course of 2020.
But it would be an irony if an effort to get people to think more about how monetary policy might respond to events, by communicating something akin to a “reaction function”, had actually had the opposite effect. At any rate, having already gone through at some length the point I want to make, the rest just fills in some gaps. I’ll start with a more formal description of “Odyssean” guidance, explaining why, when the interest rate is up against the lower bound, there could be very significant  gains to credible commitments to keep rates low in future – but also why, in practice, such credibility is hard to secure. There’s then a brief discussion at various forms of guidance in the real world. As we’ll see, the distinction between “Odyssean” and “Delphic” guidance is less clear in practice than in theory. In the real world the dividing line between them is sometimes a bit fuzzy. This may have contributed to the conflation of the two – more exactly the (mis)interpretation of conditional as unconditional statements – in the outside world. But I think it’s clear enough that central banks have rarely if ever committed themselves unconditionally to future policy. It’s clear too that, on several occasions, the outside world has nonetheless viewed these statements as promises. I’ll give some examples before a short concluding section.

This was the first, and I daresay the last, time that MPC members were likened to an elite sportsman. )[2]  Chart 2: Forward interest rates and economic activity also co-moved closely before the financial crisis, less so afterwards  Six-month rolling averages. Combined IHS Markit/CIPS and CBI distributive trades lagged one month. Six-month change in one-year forward one-year LIBOR rate, spliced onto one-year, one-year OIS rate in 2022. Sources: ONS, IHS Markit/CIPS, CBI, Bloomberg Finance L.P. and Bank calculations. So if financial markets are able to react this way, without any explicit hints from the policy maker, why has there since been more communication from central banks about future policy – and more expectation of it in financial markets? What is the rationale for “forward guidance”? At least in theory there are two distinct types of guidance. The reasons for both, I think, are connected with changes in the economy in recent years. But they are quite distinct and it’s important to understand how. The first – sometimes described in the economics literature (somewhat grandiosely) as “Delphic” guidance – seeks in general to convey what is sometimes referred to as “private information” held by the central bank. This makes it sound more exciting than it really is. More often than not it means making clear to the outside world the policy maker’s view of how the economy might evolve over the future – its forecasts – and to clarify the so-called “reaction function” (how monetary policy might respond to possible future events).
Reforms to the “how” approach to the banking system oversight The Governor of the Bank said earlier this week that we face a choice between an overhaul of the regulatory regime and directly altering the structure of the banking system. As earlier policymakers would have put it, this is a choice between, on the one hand, regulating what banks and other financial firms can do and, on the other hand, leaving open the scope of what they may do but regulating and supervising how they do it. Since the thoughts on macroprudential instruments I shall go on to outline this evening are based on something like the existing structure of the banking system persisting, I shall briefly recap what I have said in a series of speeches earlier this year about the current reform agenda. 3 The three necessary planks are re-regulation and a return to supervision; for the first time, agreeing effective resolution plans with banks and any other key firms; and, I would hope, a clear Capital of Last Resort regime designed to avoid perverse incentives. 3  See “Remarks by Paul Tucker”, panel session at The FSA’s Turner Review Conference, 27 March 2009, “The Repertoire of Official Sector Interventions in the Financial System: Last Resort Lending, Market-Making, and Capital”, Tokyo, 28 May 2009, and “Regimes for Handling Bank Failures: Redrawing the Banking Social Contract”, at the British Bankers’ Association Annual International Banking Conference: Restoring Confidence – Moving Forward, 30 June 2009.

There are essentially two objectives here. So there is a missing set of instruments. And the big question is whether a set can be devised that stack up not only in theory but in practice; instruments that can be used in the real world. Having first flagged 18 months or so ago that the Bank would work on this general area, earlier this year I set out four questions which the debate would need to address; 7 objectives,  6  See, Bean C. R “The Great Moderation, the Great Panic and the Great Contraction”, Schumpeter Lecture at the Annual Congress of the European Economic Association, Barcelona, August 2009 and “Some Lessons for Monetary Policy from the Recent Financial Turmoil”, remarks at Conference on Globalisation, Inflation and Monetary Policy, Istanbul, November 2008. Also Dale S, “Inflation Targeting: Learning the Lessons from the Financial Crisis”, remarks at the Society of Business Economists’ Annual Conference, London, June 2009. 7  My remarks at the Institutional Money Market Funds Association Annual Dinner in London on 2 April 2008 included the following on macroprudential policy: “Looking ahead further, the big question will be whether the authorities can tame the credit cycle without sacrificing the incentives to enterprise that are so important in a dynamic economy. The debate about the micro regulation of banks will need to take account of whether or not we can deliver that macroprudential objective. For too long, the debate has got sidetracked. Into whether we can rely on monetary policy “mopping up” after bubbles burst.
They would probably result in further reinforcement of fluctuations, as activity - and thus liquidity - on the markets would decline. As representative of a central bank, I would also like to point out that nor do I believe that monetary policy alone can counteract exaggerated movements on the financial markets. On the other hand, a clear monetary policy, aimed at price stability, is necessary in the work on maintaining financial stability. It facilitates economic decision-making in society. However, part of the solution must lie in breaking the pattern that causes players to behave in exactly the same way as one another. Increased transparency with regard to countries' and companies' economic status is an important step in the right direction here. Developments in technology have demolished many of the barriers that previously hampered the spread of this type of information. However, this requires that authorities and companies make use of the opportunity and actually release important information. We at the Riksbank, like many other Swedish authorities, have for quite some time now made use of the advantages of the Internet in this context. All important information is published on our website, which is easily accessible to most people. This applies regardless of whether one is an analyst at a major bank or whether one is a private person. Information technology has thus created a powerful instrument, which can be used to counteract the 'follow the leader' behaviour.

I shall not go into this work in any great depth here. Instead, I will discuss some factors that could contribute to strengthening movements on the financial markets in an unhealthy manner, and where we need to find other solutions to improve the functioning of the markets. These factors can also be more directly connected with mutual fund investment. Short-term evaluation and “follow the leader” behaviour The first thing that comes to mind here is the way many of the operations on the financial markets are evaluated. All too often the focus is on the short-term result. This applies in particular to the evaluation of various securities funds. Although many of you manage long-term savings that people intend to live on after retirement, you are nevertheless evaluated on the results you have achieved over the past year, the past few months or even the past few days. We have all seen the newspaper headlines declaring the winners and losers in mutual fund investment. Media coverage of developments on the financial markets certainly plays an important role for the transparency of these markets, but the focus on short-term results can create a vicious circle where investors and companies are constantly chasing the best possible result in the short term, despite the fact that this is not a good long-term strategy. Such behaviour can reinforce financial crises; for instance, through a fund manager not being given scope to wait until the crisis has abated, which could be rational in a long-term perspective.
We forecast that the rate of inflation will decline rapidly in 2009 and this will probably mean that people will continue to talk about deflation. If so, it is important to remember why inflation is falling. A large part of the explanation comprises falling energy prices and falling interest expenditure; that is factors that are favourable to growth. And it is also important to remember that a temporary fall in the rate of inflation towards zero, or even below zero, should not be confused with a prolonged process with falling prices that affects long-term inflation expectations. In the latter case, consumption and demand may come to a halt, which could further reduce inflation expectations and thus affect demand in an ongoing negative spiral. Our forecasts, and those of most other experts, indicate that growth will recover in 2010 and that inflation will then increase. Expectations of generally falling prices over a long period of time should not thrive in such an environment. We expect the financial crisis to peter out during the course of the year that has just begun. However, the analysis of what has happened and of what needs to be done in terms of regulation will continue. The discussion of the consequences for monetary policy and the monetary policy framework will also continue. One question that will probably arise again is whether, and if so how, central banks should take the development of credit and asset values  BIS Review 2/2008  7  such as property prices into account.

Moreover, the opportunities for households and companies to borrow money have been restricted because access to credit has declined. The difficulties for banks and other lending institutions to find funding became acute when the financial crisis also hit Sweden with full force. They were forced to accept funding at shorter and shorter terms as these were the  BIS Review 2/2008  5  only markets that continued to function. In this situation the Riksbank intervened by, for instance, offering the banks loans at 3 to 6 months, that is, at much longer maturities than the daily and overnight loans normally offered. We took these measures to improve the functioning of the markets and to make it easier for the banks to continue to provide loans to households and companies. We will continue to offer this form of liquidity support as long as is necessary. The extraordinary measures taken by the Riksbank thus aim to ease the supply of credit and improve the functioning of the market. Although the measures primarily concern safeguarding financial stability, they will also improve the ability of monetary policy to stabilise inflation and the real economy. Substantial interest rate cut in December On 3 December we made the individually largest change in the repo rate since the inflation target officially began to apply in 1995.
BIS central bankers’ speeches  3

A recent innovative arrangement introduced this year is the risk-sharing arrangements between the government and banks to provide opportunities for the lower income and younger segments of the population to own homes and thus accumulate wealth at an earlier age. Another important form of wealth accumulation is the collective investment schemes such as unit trusts. The pooling of savings provides economies of scale, access to professional investment managers, as well as a diversified investment portfolio. In Malaysia, this was initially promoted through the establishment of government sponsored national savings scheme (Amanah Saham Nasional). Participation of the average household has now paved the way for the growth in the private unit trust industry. The formation of such national savings schemes has also contributed to the development of an institutional investor base in Malaysia that has been able to mobilize substantial volumes of savings. The mobilization of these funds provides the potential for funding of businesses and the corporate sector and for project financing including for infrastructure development. As SMEs and micro enterprises form the majority of business enterprises in most countries, and as they contribute significantly to GDP, employment and wealth creation, efficient access to finance is critical. The Malaysian experience to address this has been the establishment of the Credit Guarantee Corporation to assist viable SMEs with inadequate track record to access financing by providing guarantees and credit enhancements for SME financing. The credit evaluation is carried out by banks, and by the CGC.
As you know, Switzerland, like Israel, is a small open economy, and I emphasize both the words small and open. Indeed, we are widely open. Nearly half of our national income is generated abroad, and the European Union is by far our largest foreign partner. About two thirds of our exports head in that direction, and we are one of the best customers of the EU. We are also very small, meaning that although we have no significant impact on the rest of Europe, we are very exposed to foreign shocks, whether they are real or monetary in nature. Our activity is highly correlated with that of the eurozone. Under these conditions, would the SNB still be in a position to conduct an independent monetary policy? Would it be realistic to expect the SNB to follow a course that deviated from the one set by the European Central Bank, or would the SNB be forced to shadow the actions of the ECB? The question of an independent monetary policy is not just a matter of safeguarding the appeal and the prestige of our jobs as Swiss central bankers. The stakes are much higher. For one thing, even if Swiss activity and economic conditions more generally are highly correlated with events in Europe, the correlation is less than perfect. Our economy, although offering many similarities with those of Germany, France, and Italy, also has its specific features. Thus, Switzerland is very well endowed with physical and human capital.

One of the main parameters of the National Strategy to promote financial literacy and financial education in Cyprus relates to the need of the establishment of a permanent Committee, which will be responsible for the national strategy implementation. The ad hoc Committee continues to operate for a transitional period until this permanent Committee is convened. For the time being, significant preparatory work has been undertaken by the CBC, particularly as regards the designing of the detailed governance structure of the new permanent Committee. Another piece of preparatory work undertaken since the adoption of the National Strategy last June, is the launching of an OECD technical assistance project, in the context of a 250,000 euro grant from the European Commission, in relation to the implementation of specific actions for the promotion of financial literacy in Cyprus. The work on the agreed pillars of the project is progressing according to plan, with close collaboration between CBC staff and OECD technocrats. These pillars are, first, the conduct of an updated national survey on financial literacy in Cyprus, second, the development of a website and application for smart devices that would provide useful information and financial calculators and tools to the public, and third, the development of a "train the trainers" program for adults, which would focus on strengthening financial education. The abovementioned preparatory work undertaken at the CBC, will be utilised as input by the permanent Committee for the implementation of the National Strategy in Cyprus.