samchain/econo-pairs-v1 huggingface dataset:
Indeed, it has shown that in today's globalised and increasingly internationally integrated financial markets, seemingly isolated events in a small segment in one market can have far reaching and vastly magnified implications in other financial markets across the world. This recent episode of financial turmoil has shown that even the more sophisticated and informed investors are pre-disposed to over-react to uncertainties in financial institutions. It also needs to be recognised that the changes in the international environment has also increased the challenges to understanding and managing risks, even for financial institutions and the authorities. These developments have also brought issues of the effectiveness of financial safety nets as well as institutional arrangements for the regulation and supervision of banks, to the forefront. Elements of financial safety net It is in this context that the components of the financial safety net, the prudential regulation and supervision, deposit insurance, liquidity support arrangements, crisis management approaches and the consumer protection framework – have continued to evolve over the recent decade. My remarks this morning will consider some of the developments and challenges that are shaping the calibration of the financial safety net in the current environment. Prudential regulation and supervision Sound risk management by banking institutions, which is reinforced by prudential regulation and supervision, remains the first line of defence against financial crisis. This recent decade has seen important strides being achieved at both the international and national levels towards strengthening the prudential regulatory and supervisory frameworks in response to the changing nature and scope of banking activities.

This has evolved a high rate of participation in the financial system with deposits now accounting for 160% of GDP. This has allowed for the efficient functioning of the intermediation process to effectively mobilise and channel savings to productive activity thereby supporting the overall growth and development process. BIS Review 130/2007  5  Conclusion Ladies and gentlemen Essential to a progressive financial system is prudential safety and soundness, competition and consumer protection which needs to co-exist to effectively serve the interests of various stakeholders. As regulators we need to adopt the right balance between providing adequate protection for consumers while promoting competition and financial innovation in the financial system. But it is the combined efforts of regulators, the industry, and consumers that ultimately maintain market confidence and ensures the effective and efficient functioning of the financial system. The recognition of, and commitment to this shared responsibility will not only contribute to the evolution of the financial landscape and preserving financial stability, but will enhance its overall contribution to the overall functioning of the economy and securing its full potential. 6  BIS Review 130/2007
25.09.2020  How central banks can use digitalisation to better serve the public: the case of payments Navigating the Digitalisation Transformation - Virtual OMFIF-Banque de France Seminar Pablo Hernández de Cos Governor  Good morning, I would like to start off by expressing my gratitude to both the OMFIF and the Banque de France for organising this very interesting and, certainly, timely event. Like many of my esteemed colleagues, I have been vocal about the growing relevance of emerging technologies for the financial system before. In fact, at the Banco de España we are closely monitoring trends in order to fully understand their potential implications and be ready to act quickly, where necessary. Yet despite all its recent history and significance, it is now -in the light of the pandemic- that digitalisation has become even more critical and, possibly, also a catalyst for a tectonic shift across multiple dimensions. Products, services, business models, distribution channels and touch points all over the industry may, indeed, be closer today to an accelerated reshaping than was the case only a few months ago. If anything, these difficult times have, in my view, proven what a valuable ally digitalisation can be to strengthen banks’ resilience and secure the necessary flow of funds to society at large. This has been instrumental to mitigate some of the damage caused by the outbreak. More broadly, the virtualisation of our economic activity during the pandemic has further provided a necessary backstop for many businesses that used to rely solely on their physical presence.

After all we have heard today, I think it is safe to say that none of us disputes the idea that digital technologies are at the very heart of all serious present-day attempts to achieve any kind of sustainable, cutting-edge innovation. Moreover, in the aftermath of COVID-19, it is fair to expect that the financial services industry will have no choice but to continue to navigate the unchartered waters of digital transformation, on the lookout for a safe harbour that will provide shelter and, hopefully, a gateway to a booming market place. As central bankers with a clear public policy agenda and mandate, we cannot refrain from meeting our obligations in this context. Consequently, as the need for a major makeover becomes more pressing, I believe that financial authorities should take a proactive stance towards digital innovation. We should do so by striking the right balance between responsible parties, assignments and the necessary guardrails whilst ensuring optimal provision of what the BIS General Manager Agustín Carstens likes to call “central bank public goods”. For this reason, central banks must try to stay ahead of the curve and be ready to embrace experimentation and research on these topics as soon as possible, while building bridges with all the relevant stakeholders and closely scrutinising the progress that their initiatives achieve in related fields. Only this strategy will pay dividends in the long run and pave the way for a future that best serves the needs and maximises the welfare of our society.
In an attempt to maintain growth in the traditional industries, economic policy responded with a series of devaluations. Each devaluation was invariably said to be the final one but the cycle of rising wage  BIS Review 129/1999  2  costs and a devaluation was still repeated again and again. The aim of compensating for the lack of change in Sweden’s corporate sector, which stemmed from the 1960s, simply did not work. If anything, the devaluations meant that the problems persisted and were accentuated. With the lack of investment in new products and the dependence on an increasingly outmoded structure of production, the entire nation’s material standard had to be adjusted. For many years, growth in Sweden was weaker than in the world around us. This example shows how a “new economy” at that time posed problems for the Swedish economy rather than opportunities. The lack of change, because wage formation did not function properly, resulted in an economy that was weaker and more susceptible to inflation. The period clearly illustrates how globalisation, increased competition and new technology can lead to lower growth and higher inflation if changes are not made sufficiently quickly. If the economy is under pressure from strong competition as well as poorly functioning wage formation, economic renewal may lag behind. It is therefore gratifying that the labour market organisations seem to be increasingly in favour of the inflation target policy.

The financing of these companies accordingly imposes different requirements in markets for risk capital and loans. The US markets for risk capital appear to be more highly developed and more focused on the financing of high-risk projects than seems to be the case in Europe, where bank loans predominate and a larger proportion of financing goes to reliable, established firms. With the advent of the euro, the financial system in Europe may become more developed and, like its counterpart across the Atlantic, offer more alternative forms of financing. With a single currency in the euro area, the capital markets will gradually become more liquid and thereby more efficient. There will probably be more corporate financing with bonds and equity, forms of financing that are less common at present in Europe than in the United States. Signs of this are already evident. There is reason to make a deeper analysis of the financial system’s contribution to the changes that are needed in the Swedish economy. The introduction of a single currency may come to play a more important part in this transformation in that it influences the development of Europe’s financial system. This is an argument in the discussion about EMU that I have not encountered hitherto. Conclusion Sweden has already come a long way in utilising information technology. In order to reap the full benefit of this and go on enjoying the combination of high growth and low inflation, it is essential that the right driving forces and conditions are in place.
Tharman Shanmugaratnam: Credit Counselling Singapore – ten years of helping individuals recover from debt problems Address by Mr Tharman Shanmugaratnam, Chairman of the Monetary Authority of Singapore, at Credit Counselling Singapore 10th Anniversary, Singapore, 28 October 2014. *  *  *  Mr Kuo How Nam, President of Credit Counselling Singapore, Pioneers of CCS, Distinguished Guests, Ladies and Gentlemen, 1 Good afternoon. I am very happy to be part of CCS’ 10th anniversary celebrations today. I commend CCS and its pioneers for your contributions in helping distressed borrowers over the past 10 years. 2 CCS has come a long way from its modest beginnings in 2004. It has grown in strength, winning the confidence and trust of the people it has counselled as well as the banking industry. This is the result of the dedication of CCS’ leaders, staff and volunteers. 3 I would like especially to thank Mr Kuo How Nam, who as CCS President led and inspired the CCS team, and worked doggedly to establish partnerships with banks and other organisations. He has shaped the CCS of today – a credible source of inputs to Government on matters to do with individual credit, and a valuable partner for the financial and social services sectors.

Enhancing financial well-being of borrowers 14 We want to help everyone to manage their finances well. The Government, financial industry and CCS are working together on a three-pronged approach. Thrust one: tightening credit standards 15 First, we have to avoid excessive borrowing in the first place, which is why MAS has introduced tighter credit standards. (a)  1  2  In June this year, the data in the consumer credit bureaus was enhanced to include information on the total amount of debts that an individual has across financial institutions. This enables financial institutions to make a more realistic assessment of an individual’s repayment capacity, before they grant a new credit card or unsecured credit facility, and before they increase the credit limits on such facilities. MAS imposes minimum income requirements and also limits the amount of credit that each bank can extend to individuals. BIS central bankers’ speeches  (b)  From June next year, financial institutions will not grant further unsecured credit to a person if his total unsecured debt across all financial institutions exceeds his annual income, for three consecutive months. This cap on further credit is to help individuals avoid accumulating unsustainable debts. MAS had announced this last year and provided for a transition period of 18 months to allow time for borrowers to adjust. However, even when the rule takes effect, financial institutions are encouraged to give borrowers time to repay their existing debts gradually. 16 The Government is also strengthening other social safeguards to protect higher risk borrowers.
As the monopoly supplier of central bank money, which is the most liquid asset of all, the central bank is able to provide liquidity, either bilaterally (in the event of an idiosyncratic shock), or to the banking system as a whole (in the event of a market-wide shock). In doing so, there are some important constraints. Support from the central bank is not available to prop up a failing institution. The Bank of England will only lend to those commercial banks that are, in its judgment, solvent and viable. This is for two related public policy objectives. First, the central bank needs to guard against moral hazard – that is, our policies should not undermine the commercial banks’ responsibilities to manage their own liquidity prudently. If commercial banks know that we will always bail them out, then they may take too much risk: the bank’s shareholders and management might seek to profit from the extra gains arising from risky lending whilst relying on the authorities when the risks crystallise. Second, and in consequence, the central bank needs to protect its own balance sheet (and hence public money) against the risk of loss. As a result, central bank lending should be collateralised, and subject to haircuts which are prudently calibrated to be sufficient if the counterparty was to default. In a crisis, it can be difficult to judge whether a bank really does have just a temporary liquidity problem or an underlying solvency problem.

As I mentioned earlier, the problems in the US subprime market had widespread and profound effects on the international financial markets. These loans had been packaged together with other securities into structured products and sold to investors around the world. The uncertainty over where the potential losses were created a general distrust between the banks and a general increase in risk aversion. The former was expressed in a rise in the differences between interbank rates and risk-free government bonds, what are known as TED spreads. The latter was expressed in, for instance, rising credit spreads (see figures 7 and 8). For a few weeks now we have seen signs that the tensions in the credit market have eased. The credit spreads have declined and the cost of insuring against losses has fallen (see figure 9). Other signs are that the banks have been able to sell off loans from their balance sheets. They have also been able to strengthen their own capital, although a large part of this process still remains. The stock markets have also recovered. The uncertainty in the interbank market has prevailed longer; the TED spreads have remained high but have fallen over the past few days. In Sweden the TED spreads have also risen, but unlike other countries the markets have continued to function without any intervention from the Riksbank. Despite the fact that there are positive signs, it is still too early to assume the danger is past.
Slide 22  FinTech enablers in Chile ▪  Last year, a bill was passed allowing for the issuance of prepaid cards by non-bank institutions o o o  The Law establishes integrity requirements for these issuers Restrictions on how the funds can be used Requires the Central Bank to issue regulations with the prudential requirements  ▪ The Central Bank took the opportunity to undertake a full revision of its retail payments regulation ▪ The new regulations not only set the prudential requirements o o  ▪  Narrows down the scope of regulated entities dealing with the processing of transactions Changes their capital requirements  These features give some ground for optimism on the potential contribution of FinTech not only to the democratization of financial services but also to price and financial stability and development in Chile  [SLIDE 22] These same factors have provided the basis for the most important step in the development of electronic retail payment services. Last year, a bill was passed allowing for the issuance of prepaid cards by non-bank institutions. Its objective is to foster financial inclusion and competition. Given the sensitive nature of deposit-taking, the Law establishes integrity requirements for these issuers, restrictions on how the funds can be used, and requires the Central Bank to issue regulations with the prudential requirements for this industry. 17  Central Bank of Chile 29 June, 2017  The Central Bank used this opportunity to undertake a full revision of its retail payments regulation.

Slide 19  Chile’s financial market at a glance Chile’s financial market  Total debt of non-bank loans (*)  (percent of GPD; ratio; percent)  (percent of GPD) 140  2013  2014  2015  2016  120  Total Assets/GDP  112  119  123  122  100  NPL (%)  2.0  2.0  1.8  1.8  Loans/GDP  83  85  88  88  Loan/Total Deposits  1.3  1.3  1.3  1.3  ROE (%)  15.0  17.3  14.4  11.1  40  ROA (%)  1.2  1.4  1.1  1.0  20  CAR (%)  13.3  13.4  12.6  13.8  0  Local bonds Factoring, leasing and others External loans and trade credit  Local bank loans External bonds Debt related to FDI  80 60  09  10  11  12  13  14  15  16  (*) Based on firm-level data, expect for factoring, leasing, and other securitized bonds; and commercial paper. Source: Bank of International Settlements, Central Bank of Chile, and SBIF.
BIS Review 35/2009  3  to a great extent to our policy framework that ensures the solvency of our economy and to our sound financial system. As for the local bonds market, January stood out for its large corporate bond issuances. Meanwhile, the interest rate demanded from corporate bonds in the secondary market has been falling through all of this year, and is currently approaching its levels of last September. This drop owes exclusively to the decline in the interest rates on Central Bank documents, because the spread between public and corporate securities has increased significantly since September, reflecting the same global risk factors already mentioned (figure 5). Conclusions The global financial crisis has hit hard credit markets around the world. In some unfortunate cases, economies that faced this debacle from a fragile initial position, with high indebtedness or with fast credit growth, have faced drastic adjustments in local asset prices, output, and employment, with dire consequences on their living standards. Thanks to the fact that we prepared for years as a country to confront deteriorations of the external environment, our monetary policy has been able to adopt a clear countercyclical stance to lessen the effect on our economy of the global financial meltdown. We have seen that the aggressive reductions in the MPR implemented by the Board since January have begun to reflect on the borrowing conditions faced by households and firms. It is reasonable to expect this to continue in the coming weeks, especially after the MPR cut of last week.

In the current situation with considerable uncertainty in the world economy, it is important, as I said at the beginning, that we are flexible and prepared to act quickly and forcefully. One expression of this is that we are expecting to all in all cut the interest rate by a relatively large amount during a short period of time. Less impact than usual to begin with The effects of the lower repo rate will probably initially be weaker than usual. As I mentioned recently, the confidence crisis and the uncertainty in the financial system have led to high risk premiums. This means that some market rates are not affected by the development of the repo rate in the same way as usual. For instance, it is not certain that the loan costs faced by households and companies will fall as much as they usually do when the repo rate is cut. To correct the problems in the fixed-income and credit markets it is necessary to implement other measures beside monetary policy. But this is, as I mentioned earlier, something we and other authorities are working on, both in Sweden and abroad. Other effects of the international financial crisis One important reason for the interest rate cut is that the crisis in the financial markets has led to higher loan costs for companies and households than we had anticipated in our assessment at the beginning of September. Access to credit has also declined.
Such changes in the European financial scene have significantly improved the efficiency of capital allocation. The euro contributes to enabling European savers to easily select the most efficient investments. It also helps the productive sector and companies to achieve significant economies of scale, enhances the transparency of the market and boosts competition and innovation to the benefit of consumers. Moreover, the pace of internationalisation of the euro area economy has been further spurred by the euro. Allow me to give just one example, the level of French accumulated foreign direct investment abroad since 1999 has been of the order of magnitude of EUR 380 billion (a pace four times as rapidly as before the setting-up of the euro, and the same order of magnitude as the United States’ FDI abroad). The international role of the euro The euro has become a major currency in the world. As an official reserve currency, it is the second most widely used. As a bond issuance currency, according to the most recent statistics from the BIS, the euro has played a substantial role since the end of 1998 and accounted for around 35% of total issuance in 2001. The share of the euro in international bank assets has also increased significantly over the past two years. Furthermore, the euro constitutes a major reference currency for exchange rate regimes adopted by third countries. Over 50 countries in the world, mainly in Europe and Africa, are managing exchange rate arrangements that include a reference to the euro.

This is a unique and highly symbolic event for Europe. As regard France, the early changeover of non-cash payments in 2001, and the rapid introduction of banknotes and coins in euro in early 2002, proved to be a success and entirely in line with the scenarios devised in consultation with all the involved parties (the banking sector, cash-in-transit companies, the Police and the Army, retailers and the general public). In France, almost 70% of non-cash payments were in euro at the end of December 2001. Since 1 January, all transactions have been conducted in euro, and no major incidents came to light, thanks to the early use of non-cash payments by the general public throughout the second half of 2001. This was also a key factor in the rapid acceptance of the banknotes and coins by the public. Similar success has been witnessed in all European countries, thanks to national efforts and the co-ordination by the European Commission and the Eurosystem; a month and a half after the  introduction of euro banknotes and coins, more than 95% of cash transactions in the euro area are now being carried out in euro. Although the practical changeover to the euro might be considered as an outstanding achievement, we should nevertheless remain vigilant on the following issues: ·  First, price stability. Although some increases in prices of a certain number of consumer goods have been reported, it is likely that, overall, the effect on price stability will be marginal.