samchain/econo-pairs-v1 huggingface dataset:
Preconditions for Lender of Last Resort Support The basic precondition for lender of last resort support is the systemic risk that would, in the judgement of the HKMA, arise from the failure of a troubled institution if it were deprived of liquidity assistance. This is the basic precondition, but not the only precondition. The institution in question would also need to satisfy a number of further conditions designed to demonstrate that lender of last resort support is genuinely being sought as a last resort, and that such support would not amount to throwing good money after bad. To be specific, the additional preconditions are: •  First, the institution would need to have a sufficient margin of solvency. As a measure of sufficiency, we would generally require the institution to demonstrate that it maintains a capital adequacy ratio of at least 6% after making adjustment for any additional provisions that might be necessary. •  Secondly, the liquidity support extended to the institution would need to be adequately collateralised. •  Thirdly, the institution should have sought other reasonably available sources of funding before seeking lender of last resort assistance. •  Fourthly, the shareholder controllers of the institution should have made all reasonable efforts to provide liquidity or capital support as a demonstration of their own commitment to the institution. •  Fifthly, there must be no prima facie evidence that the management is not fit and proper, or that the liquidity problem is due to fraud.

None of these mechanisms would breach the Currency Board rules, since the Hong Kong dollar liquidity thus created, in the form of the addition to the Aggregate Balance of the banking system, would be BIS Review 77/1999  4  matched either by a decline in another component of the monetary base (the Exchange Fund paper) or an increase in US dollar assets. Beyond this, we have stated on several occasions in the past that, in exceptional circumstances, where there is a risk that large-scale Hong Kong dollar transactions might create extreme conditions in the LQWHUEDQN PDUNHW DQG DIIHFW WKH VWDELOLW\ RI WKH H[FKDQJH UDWH  WR DQ H[WHQW XQZDUUDQWHG E\ DQ\ economic fundamentals - the HKMA may temporarily lend or borrow Hong Kong dollars to or from the interbank market to dampen these extreme conditions. Should an imminent bank failure pose the threat of triggering extreme conditions in the money and foreign exchange markets, there may be justifications for the HKMA to inject liquidity directly into the interbank market, on a temporary basis, to ensure systemic stability. This would represent a departure from the strict rules of the Currency Board system. The availability of excess foreign currency reserves allows some scope for discretion, but the intention would anyway be that this injection should be only temporary.
How these decisions materialise, which in the literature is known as “risk culture”, is particular to each bank and the responsibility of each one. Supervisors observe and assess but, ultimately, this is one of the idiosyncratic aspects of banks’ DNA. In short, governance structures should be capable of measuring, heading off and analysing current risks and those that are arising. While there are no strong signs of any easing, for activity as a whole, in lending conditions and of aggressive pricing that might suggest that risk is not sufficiently reflected, banks must be careful to retain a suitable profitability/risk trade-off that is sustainable over the cycle in all business segments. An individualised reflection, adapted to the characteristics of each institution. I shall conclude with a brief but nevertheless important reference. In addition to being comprehensive and strategic, reflection on the business model should also be individualised, i.e. adapted to the idiosyncratic characteristics of each institution. Indeed, the findings of the SSM thematic review of profitability and business models show that there is no one single approach and that, even among those banks with better profitability results, there are differences in strategies. Some pursue strategies geared to obtaining high income, which counter relatively high costs. Others place an emphasis on low costs that are compatible with relatively low income. And others strike a balance between a medium income-generating capacity and medium or low-level costs.

09.10.18  Banking business model: challenges and opportunities IX Financial Meeting. “Transformation of the banking industry in a new setting of digital innovation” Margarita Delgado Deputy Governor  Good morning. It is a pleasure to participate in this ninth edition of the Financial Meeting, a classic in our calendar widely acknowledged for its prestige and which gathers together a large number of banking industry leaders. I thank the organisers for their kind invitation to me to speak at the start of the event. And it is a pleasure to follow on from Ramón Quintana, my “brotherin-arms” over the course of intense years of work, first at the Banco de España and then at the European Central Bank. Indeed, in connection with Ramón’s words, and in this my first address as Deputy Governor of the Banco de España, I wish to focus on the banking business model and the need to adapt it to a changing environment. Like all private companies, banks can only survive in a stable fashion over time if they are profitable. And, set against the current transformation of the banking industry, ensuring profitability over time calls for a comprehensive, strategic and individualised reflection on the business model. Allow me to develop this idea of “comprehensive, strategic and individualised”.
This requires that investments in people and processes are firmly supported by good information, confidence in a strong risk culture, and compelling risk managers who will ensure that organisations do not become complacent, and remain focused on doing their very best to prepare for any possibility. BIS central bankers’ speeches  5

By way of introduction, I would just like to go back over the three collective hypotheses at the heart of today’s debate, before nonetheless going on to examine a few factors that are indeed specific to France. * * * 1. Does the problem lie in the measurement of growth? The first theory is that there is in fact no slowdown, as we are not measuring growth properly due to the rise of the digital economy. On 16 January this year, the Banque de France held a conference1 that notably discussed this issue in relation to the US economy. The main sources of measurement errors were: first, the estimation of quality-adjusted prices for new technology, as falls in prices tend to be underestimated in US national accounts; and second, product entry and exit, which makes it difficult to estimate changes in prices over time. This could lead to a significant upward revision to US productivity since 1983: by 1.1 percentage points per year at the top end of estimates, according to Philippe Aghion and his co-authors. Nevertheless, even allowing for these corrections, there has still been a slowdown since the mid-2000s. Indeed, the measurement errors were just as significant before this period. That said, this work does provide some grounds for optimism. First, growth in hi-tech sectors, and therefore technological progress, is stronger than we previously thought. Second, some of the gains in well-being linked to new technologies fall outside the scope of the market economy and, as a result, are not recognised in national accounts.
Financial markets are more likely to cry wolf, making Paul Samuelson’s observation fifty years ago that “the stock market has predicted nine of the past five recessions” as relevant today as it was then.3 For what it is worth, market-implied probabilities of a recession in the US are around 20%, nearly three times higher relative to this time a year ago (Chart 4). There are multiple definitions of what constitutes a global recession. Some have used a benchmark of global GDP growth falling below 2½% or 3%, whilst the IMF uses a definition of a fall in global GDP per capita.4 On the IMF’s definition, there have been four global recessions since WWII: in 1975, 1982, 1991 and 2009. 2  See: Baker, S, Bloom, N and Davis, S (2015) Measuring economic policy uncertainty, NBER Working Paper No.21633 From Samuelson’s 1966 column ‘Science and Stocks’ in Newsweek. 4 This is equivalent to global GDP growth falling below the current rate of population growth of 1%. 3  4  All speeches are available online at www.bankofengland.co.uk/speeches  4  Chart 4: Market-implied probabilities of a US recession have risen Per cent  100 90 80 70 60 50 40 30 20 10 0  1973  1978  1983  1988  1993  1998  NBER recessions  2003  2008  2013  2018  Fed recession indicator  Sources: Federal Reserve Board; NBER.

François Villeroy de Galhau: Technological innovations in payments and beyond Opening speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the Bank of France and CNPS (French Payments Committee) conference "Technological innovations in payments and beyond", Paris, 6 January 2017. * * * Ladies and gentlemen, I am very pleased to welcome you all to Paris, for this conference on technological innovations in payments and, more generally, in the financial system. Representatives from a wide range of stakeholders, from market to regulatory spheres, are here today and I have no doubt that this variety of backgrounds will make the discussions fruitful. Before leaving the floor to the speakers and panellists, I would like to share with you a few thoughts on three challenges raised by digitalisation, from the perspective of a central banker. 1. Technological innovations are opening up new opportunities for payments, which can provide benefits to the whole economy Payments are often viewed as a very technical and incidental activity, and sometimes even just as a matter of “plumbing”. And yet they are crucial for our economy and for central banks. For the Banque de France, payments are of the essence in all our three missions – what we call the “3 Ss”: monetary strategy, financial stability and economic services. First, monetary strategy: what is at stake with payments is the future of money.
We experienced a collapse in house prices, as well as a severe banking crisis, a foreign exchange crisis, fiscal deficits and high inflation. Hermod Skånland, the Norwegian central bank governor at that time, summarised the causes of the crisis as “bad banking, bad policy and bad luck.” Efforts were now focused on bringing public spending under control, while large parts of the banking system were nationalised. Unemployment soared. Monetary policy aimed at a stable krone exchange rate, resulting in high real interest rates. But with a binding commitment to a fixed exchange rate, inflation was brought under control. The banking crisis and the downturn in the early 1990s made clear how vulnerable our small open economy was to terms-of-trade shocks and that our banks needed to be properly regulated. Furthermore, it became evident to policymakers how hard it is to conduct countercyclical economic policy, or even to avoid being procyclical. In the following years, structural reforms were implemented in order to increase growth capacity, including a major general tax reform. The tax code had already been tailored to capture the economic rent in the petroleum sector – the petroleum company tax rate is about 80 percent. Confidence in monetary policy gradually gained a firmer footing, after a succession of devaluations had come to a halt. Inflation and the real interest rate declined, and cost competitiveness improved considerably. Norway has not experienced a really pronounced economic downturn since the crisis around 1990.

Let me again make some observations from my home country:  Norway had a severe banking crisis around 1990. Three of the four largest banks failed and the direct capital injections required were alone more than 3½ per cent of GDP. Just to put this figure into perspective, the 106 billion euros the European banks need for recapitalisation now is less than 1 per cent of GDP in the euro area. Ever since the Norwegian banking crisis in the early 1990s, our banking industry has been regulated more strictly than banks in comparable countries.   For instance, bank capital definitions have been tighter and the financial supervisor has been more actively restricting banking activities.   Another example is that packaging loans into complex financial instruments was in practice not permitted until 2007 when new regulations provided for the issuance of covered bonds. The complex instruments central in the creation of the subprime crisis were never introduced, and Norwegian banks did not invest in them. Our GDP growth rates have still been high during the years up to 2008, also outside the petroleum sector. And the downturn we experienced in 2009 was modest in relation to comparable countries. At the early stage of the banking crisis in the1990s, the Norwegian central bank provided a large liquidity loan to a savings bank. It soon became clear that the loan would not be paid  2  BIS central bankers’ speeches  back. A liquidity problem turned into a problem of solvency.
Responsive policymaking means that we respond swiftly and appropriately to issues, favouring flexibility over a ‘one size fits all’ approach. This will ensure our framework is appropriate in light of the risks, and it will benefit industry by being more tailored. Our policies will be implemented in a way that minimises frictions, recognising that the creation of new rules is only one option we can take. Setting expectations for firms and effecting change through our supervision are alternative tools in our toolkit, and new issues should start with an open conversation, for example through a Discussion Paper. Being responsive means that we are alive to new concerns as they arise – we need only look to the events of last year that highlight the importance of this. And our aim to be accessible reflects our goal of ensuring prudential regulation is as clear as possible through reform of the rulebook. We are well aware that the ‘patchwork’ of primary legislation, statutory instruments, on-shored binding technical standards, and PRA rules and guidance currently in force, is difficult to navigate – a rationalisation of this material will yield benefits for us as well as firms. The realisation of this vision will take years of coordinated work. Legislation will need to be passed that sets out the framework of our new responsibilities and our new powers. Thereafter, rules will need to be transferred in the correct way from the statute book to our rulebook.

In other words, perhaps uniquely in the constellation of the Federal Reserve System, my colleagues and I work for you. My standing before you represents a visceral reminder of our accountability to depository institutions, independent of size, which rely upon our services to send and receive time critical payments; to maintain and permit the transfer of Fedwire eligible securities; and to provide cash services to support the needs of consumers and commercial establishments. It is with this orientation that I offer these remarks today, which reflect my own views and do not necessarily represent those of the Federal Reserve Bank of New York or the Federal Reserve System. The theme of today’s conference, appropriately, has been “Navigating Future Risks for Community Banks”. Allow me to elaborate upon the single risk that dominates from my vantage, regrettably not a “future risk” but an all too present one, and to highlight some of the measures that we are taking in response. The risk to which I refer is not a function of regulatory pressure, or capital demands, or an evolving economy, or compliance challenges, or the proliferation of new technologies, or an unprecedented season of payments innovation, or the challenging competitive landscape. All of these may represent very real risks, and no doubt occupy your consciousness, to borrow the lyrics of a prior generation, “eight days a week”.
Necessary real exchange rate adjustments will have to occur via wage and price changes while the ability for fiscal policy to reduce the cost of higher unemployment is curtailed. At the same time, labor mobility that could absorb some of the costs remains limited in Europe. Arguably, therefore, far-reaching economic reforms become in fact more difficult to implement once a country loses its independent monetary and fiscal policy inside EMU. This is particularly true for countries with rigid labor markets. The recent electoral results in Germany and France illustrate this dilemma. It is of utmost importance for the Swiss political authorities not to fall into the trap of the kind of ‘help us from ourselves’ line of reasoning that I tried to outline. There may well be political reasons to have a long-term EMU accession strategy in place. But it is a mistake to link the question of domestic economic reform to EMU accession. As I pointed out earlier, in light of Switzerland’s legal, political and historical context, far-reaching reforms will be a formidable challenge, despite the extraordinary asset of a highly flexible labor market. Nonetheless, there is no alternative to tackling independently and directly the domestic economic restructuring process and its consequences if Switzerland is serious to boost its growth potential and thereby safeguard its tradition of broad social and welfare programs.

News conference  22 September 2022, 10.00 am  Introductory remarks by Thomas Jordan Ladies and gentlemen It is my pleasure to welcome you to the news conference of the Swiss National Bank. Our news conferences will now be held after every monetary policy assessment. The introductory remarks will be shorter overall. This will give us more time to take your questions afterwards. Monetary policy decision  I will begin with our monetary policy decision. We have decided to tighten our monetary policy further and to raise the SNB policy rate by 0.75 percentage points to 0.5%. In doing so, we are countering the renewed rise in inflationary pressure and the spread of inflation to goods and services that have so far been less affected. It cannot be ruled out that further increases in the SNB policy rate will be necessary to ensure price stability over the medium term. To provide appropriate monetary conditions, we are also willing to be active in the foreign exchange market as necessary. The SNB policy rate change applies from tomorrow, 23 September 2022. Moreover, we are adjusting the implementation of our monetary policy to the positive interest rate environment. This ensures that the secured short-term Swiss franc money market rates remain close to the SNB policy rate. Banks’ sight deposits held at the SNB are remunerated at the SNB policy rate up to a certain threshold. Sight deposits above this threshold are remunerated at an interest rate of zero percent. We will also use liquidity-absorbing measures.
The economic situation in Norway was more favourable compared with the international trend for a long period, and wage growth was surprisingly high in 2002. As a result, the interest rate differential against other countries was high. This had an impact on exchange rate developments. In addition, special factors in the global economy led to a stronger krone than might have been expected from the higher interest rate differential alone. Themes in foreign exchange markets shift. In periods, investor focus on stock returns feeds through to exchange rate movements. During periods of political and economic unrest, investors may choose individual currencies as a safe haven. In autumn 2002, the Norwegian krone was probably also perceived as a safe haven. Over the past 18 months, developments in the interest rate differential between Norway and other countries appear to have had a particularly marked impact on our currency. Norwegian interest rates have been pushed down towards the level prevailing abroad. Through 2003, the interest rate differential has narrowed as a result of monetary policy easing. The interest rate has been reduced by 5¼ percentage points and is now approximately the same as among our trading partners. Through 2003 and up to March 2004, the krone depreciated by about 15 per cent, measured by the import-weighted index I-44. Since the monetary policy meeting on March, the krone has appreciated again by about 3½ per cent. Inflation has edged up, but is still low. In March, inflation stood at 0.3 per cent.

Increase in consumption and private investments, owing to the improved financing terms, confidence and private sector balance sheets, was, and is expected to continue to be, the main driver of the economy’s performance. On the other hand, the public sector has been and remains committed in the path to fiscal consolidation, whereas the external environment continues to face problems and pose challenges to the increase of Albanian exports. In the short run, the increase in consumption and private investments is sufficient to generate initial triggers for economic growth, but the long-term growth of the Albanian economy should rely more on the improvement of its competitive profile and growth of exports. Therefore, we deem that the acceleration of structural reforms has a unique role in supporting economic growth. Inflation continued to stand below our target. Internal inflationary pressures have been upward, but the fall in prices in global markets decelerated the return of inflation to target at home. The monetary policy stance of the Bank of Albania has become strongly accommodative. This policy stance aims at reducing the financing costs of the private sector, in order to sustain the return of the economy to equilibrium and of inflation to target, in the medium-term horizon. In our view, the indicators of economic activity and inflation are performing in the right direction; however, the sustainable accomplishment of targets will need time and will imply keeping low interest rates for some quarters ahead. Overall, the main indicators in banking system activity improved.