samchain/econo-pairs-v1 huggingface dataset:
By making firms safer, it is possible that the required risk premia in bank capital and funding instruments will be lower, and hence the effect on the overall cost of funding is uncertain. In addition CRDIV also makes changes to rules on corporate governance, including remuneration, and introduces standardised EU regulatory reporting. These reporting requirements will specify the information firms must report to supervisors in areas such as own funds, large exposures and financial information. CRDIV will take until 2019 to be fully implemented. In addition to CRDIV, there are a number of other reviews and developments affecting the banking capital framework. The PRA has been undertaking a review of its approach and application of Pillar 2A requirements to ensure consistency of application across firms. That will be complete in 2016H1. The BCBS is also continuing its work including reviews of the capital held against the trading book, sovereign risk, and securitisation, and more generally reviewing the use of models and Pillar III disclosures. Leverage The capital requirements for a bank are generally calculated by first weighting together the assets of a firm, reflecting the underlying risks of each type of asset. Hence the key metric is the capital held relative to “risk weighted assets” or RWAs. Whilst the general approach of being risk sensitive is widely accepted, it does raise issues around consistency.

These changes should have no impact on the reform agenda and so I won’t pursue them further in this lecture. The PRA Board is independently responsible for delivering the PRA’s statutory objectives. It does this by making policies and rules, supervising authorised firms, giving directions, issuing guidance and carrying out other legislative functions. In practice the Board is the senior supervisory committee in the PRA, but delegates some of its functions to the PRA Chief Executive who in turn delegates to the management and staff. In 2014/15 the Board met physically 32 times and had one additional teleconference. That’s enough scene-setting. Let’s get on to the reforms themselves. Capital: banks Arguably the single most important objective of a prudential regulator is to make sure that firms have an appropriate level of capital. The objective is two-fold. First, there must be sufficient capital to absorb the losses that a firm might make, even under relatively pronounced stress. Second, after the stress, there should be sufficient capital left such that the firm can either (a) carry on its critical economic functions, with customers and market counterparties believing it remains safe and sound, enabling market access to funding and capital or (b) be safely wound up. It was evident during the financial crisis that the point at which a financial firm is no longer trusted by customers or counterparties can come before it runs out of capital completely or even approaches that level.
If this has boosted loan demand, the successful policy of inflation targeting has been partly responsible. But so far this is just a hypothesis. It is important, however, for households to feel certain about how large their future payments will be. An international comparison suggests that household demand for home loans depends on how the market is structured and particularly on the availability of instruments for households to manage their interest rate risk. Demand mounts in line with the opportunity to manage risk. In the United States and Denmark, households can fix the interest rates on their mortgages for long periods and also refinance these fixed-rate loans at a reasonable cost should interest rates fall. In Denmark, households’ debt ratio is more than 180 per cent, compared with 120 per cent for Swedish households. This is despite the fact that the country has roughly the same proportion of homeowners as Sweden. The supply of mortgages has increased, too. According to the new capital adequacy rules, Basel II, mortgages will be given a lower risk-weighting than today, which means that banks’ capital requirements will be lower if they hold a large proportion of mortgages. The adjustment to this has started already, thus toughening the competition and depressing lending rates. Households have also become an increasingly important borrower group for the major Swedish banks. Lending to households now comprises a little more than 40 per cent of the banks’ total lending.

Debt levels and developments in housing prices are taken into account in the Riksbank’s forecast of future inflation through their effects on household wealth and thereby on demand in the economy. It is difficult of course to predict how households will act, but we usually assume that they are rational and able to make sound judgements of how the economy will develop and how this will affect their borrowing costs. This is not necessarily a correct assumption. For example, it’s conceivable that households in certain situations would react stronger to a rate hike than to an equivalent rate cut. Should households not expect interest rates to rise in an economic upturn and a rate hike by the Riksbank came as something of a surprise, it could have effects on consumption beyond those predicted in our models. We discuss these effects and try to take account of them outside our models to the extent that we believe it is justified. Were households to react stronger than expected, it could mean that we don’t need to raise interest rates as quickly in an economic upswing as we otherwise would have done. BIS Review 67/2004  3  The question of the real economic effects beyond the forecast horizon is trickier. When a speculative bubble bursts, it can result in rapid price falls, but also in poorer economic growth and higher unemployment in the longer-term. Naturally, this is something we want to avoid if possible.
The Central Bank of Malta has been collaborating with the Ministry of Finance and the Ministry of Economic Services in the preparation of the necessary documentation. To date, like all other accession countries, Malta has submitted two PEPs. Conclusion The road to EMU is clearly not an easy one as the tasks involved are both numerous and difficult. For a small central bank with limited resources they represent a formidable challenge. On a policy level,  BIS Review 70/2002  5  there are reasons to believe that the current fixed exchange arrangement should ideally be maintained until Malta adopts the euro. It should also be clear, however, that the Government’s commitment to contain the fiscal deficit and to pursue structural reforms is a vital prerequisite for the sustainability of the fixed exchange rate regime. The importance of fiscal discipline and of product and factor market flexibility will indeed increase as Malta progresses towards EMU. 6  BIS Review 70/2002

Looking at the countries, which experienced a similar process that Turkey went through, it is clear that the falling inflation period differs from the environments where chronic inflation had previously existed or price stability is maintained afterwards. The falling inflation process is a transition period. Therefore, the features of the targeted price stability environment and the former high-inflation period can appear together. This can be explained by the fact that some sectors and economic agents can adapt themselves to the process relatively fast, while some sectors, failing to adapt to the new environment, take on different expectations and perception of risk factors shaped in the framework of their former habits. Let me elaborate this point as it is of great importance with regard to the achievement of price stability. In relatively fragile economic environments such as Turkish economy, where price stability has not yet been fully maintained and current policies have not gained credibility, some economic agents may take the exchange rate, monetary aggregates, interest rates and similar aggregates as reference while  BIS Review 63/2004  1  making their decisions. Therefore, as you will agree with me, expectations and risk perceptions in the economy will change according to the size of the referenced aggregate. In this period, some of the economic agents that I have mentioned are negatively affected by the referenced aggregates, which are adopted in accordance with the former habits that contradict with economic realities.
Moreover, the report also incorporates a study that examines recent developments in foreign exchange and derivatives markets by relating them to monetary policy decisions. Two boxes also clarify the new policy approach we are currently implementing. The former discusses the place of the reserve requirements in the monetary policy and its channels to influence economy, while the latter discusses the relationship between price stability and financial stability within the context of the inflationtargeting regime. Lastly, the sources of our revisions of inflation forecasts during 2010 are explained in a study that we designed within the context of our liability of accountability. Before moving on to the Central Bank’s assessments of inflation outlook and economic activity, which I will cover in detail shortly, I would like to summarize the current global conditions that continue to be determinant of the domestic economic outlook. The world economy continued to recover gradually in the final quarter of 2010, while downside risks remained a major concern for advanced economies. Financial institutions, firms and households in advanced economies are still undergoing the process of balancesheet repair, limiting the contribution of private consumption and investment to the economic recovery. On the other hand, the relatively less affected emerging economies are recovering steadily amid robust domestic demand (Figure 1). BIS central bankers’ speeches  1  This growth discrepancy between advanced and emerging economies and its implications for the Turkish economy became the key determinants for the Central Bank of Turkey’s (CBRT) monetary policy strategy in the fourth quarter.

Inflation is expected to stabilize around 5 percent in the medium term (Figure 24). Hence, assuming that a limited monetary tightening will bring credit growth rate down to 20–25 percent in 2011, our revised forecasts indicate that inflation would be close to the target by the end of 2011. I would like to highlight that the envisaged monetary tightening in 2011 may be through various combinations of different policy tools. The monetary tightening could be implemented by either required reserve ratios or policy rates, or a combination of both. Moreover, during the tightening process, both instruments could move in either the same or the opposite direction. Yet, it should be emphasized that the baseline scenario envisages the net impact of the policy mix on credits and domestic demand to be on the tightening side. We believe that evaluating our forecasts in comparison with those presented in the previous Report would serve to provide a better understanding of the changes in forecasts. As I have mentioned earlier, the rapid decline in unprocessed Food Prices pulled short-term inflation forecasts down, while the upward revision of oil and other commodity price assumptions drove end-2011 inflation forecasts higher (Figure 25). The output gap has been revised slightly upward for the last quarter of 2010 (Figure 26). Moreover, taking into account the lagged effects of monetary tightening, the output gap is assumed to close slower than what was suggested in the previous report.
Caleb M Fundanga: Improving school infrastructure in Zambia Remarks by Mr Caleb M Fundanga, Governor of the Bank of Zambia, at the Handover Ceremony of computers to Mumbwa High School, Mumbwa, 4 February 2010. *  *  *  The Board Chairperson, Mr Gracious Hamatala Board Members Present The PTA Chairperson, Mr Mwila Kabange The Headmaster, Mr Kizito Kalonga Distinguished Teachers Students Members of the Press Ladies and Gentlemen It is an honour and privilege for me to be with you today as the Bank of Zambia makes this humble donation of 5 computers to Mumbwa High School. I am also glad because in some small way we are making a contribution towards ensuring a brighter future for the students. Chairpersons, I am informed about the numerous challenges and difficulties, the school continues to face in its quest to produce high quality education to students. For instance, I am aware that there is a critical low level of books compared to the population of students in the school. Further, having been established 40 years ago, the School’s infrastructure urgently needs to be rehabilitated. The refurbishment of infrastructure is not an easy task but in the able leadership of the Board Chairperson, I have no doubt that a solution will be found in good time. As we grapple with the ways and means of improving the school infrastructure, let me reiterate that the school need to maintain and protect the little infrastructure available.

This is important because in future while computer knowledge will perhaps not immediately get you a job, it will ensure that you are one step closer to being employed. Ladies and Gentlemen, I also recognize the efforts of the former Students Association who have been soliciting for donations from various organizations. As former students we all have the responsibility of helping the school that has played a key part to what you are today. Let us continue to support our beloved school. I thank you. BIS Review 14/2010  2
Moreover, I am firmly convinced that growth in an economy is what ultimately underpins a healthy society. It is simply not possible to have a strong society with a permanent underclass. No society - not our own nor any other - can hope to flourish if its youth are left unemployed and a large segment of its population remains poorly educated and inadequately housed. Nor can an economy grow without a basic infrastructure that enshrines the rule of law and the accountability of the government to its people. As I survey the world economy today, I am pleased that there seems to be broad-based recognition of these fundamental precepts. World economic conditions are considerably more benign than they have been in years as we begin the new millennium. How do things look outside the United States? Let’s start with Japan. When we look at Japan’s growth in the 1990s, we really see two patterns. One is the sluggish growth since 1992, the other is the steep recession in 1998. The 1998 recession stemmed from the financial crisis in a number of other countries in Asia, leading to a collapse in corporate profits and business fixed investment, and essentially a credit crunch as financial restructuring got under way. Japan today is in the difficult phase of restructuring, with high unemployment as balance sheets are being cleaned up in the corporate and banking sectors. Moreover, business investment was slow up to the fourth quarter of 1999 and consumers have been restrained in their spending.

(ii)  It was also difficult to decide the appropriate spread to charge for lending against wider relative to narrow collateral, to mitigate adverse selection and the moral hazard risk. A minimum 50 basis point spread was applied for wider collateral. (iii)  Those long-term repos exposed the Bank and the commercial banks to significant interest rate risk. That is because commercial banks’ reserves balances were being remunerated at Bank Rate but the minimum bid rate in the LTRs was the fixed  10  The narrow and wider collateral sets were redefined in February 2011. The changes will take effect from 1 July 2011. See http://www.bankofengland.co.uk/markets/marketnotice110211.pdf for more details. 11  For more information about changes in the Bank’s balance sheet in response to the crisis, see Cross and Fisher, “The Bank’s balance sheet during the crisis”, Bank of England Quarterly Bulletin, 2010 Q1. 6  BIS central bankers’ speeches  3-month market (OIS) rate at the time of the operation (plus the spread for wider collateral). So when Bank Rate was cut much more rapidly than was anticipated by the market during Autumn 2008, the Bank recorded a large, unintentional surplus (and the banks a corresponding loss).12 In order to try to resolve these issues, the Bank enlisted the help of Paul Klemperer from Nuffield College, Oxford, an expert in auction theory, to help re-design its long-term operations.
The reason why a strong wealth position does not necessarily provide a good protection is probably that a large part of the wealth mass is not very liquid and thus its use as a buffer in times of crisis is limited. This applies in particular if the crisis leads to a fall in housing prices. A high level of wealth is thus no guarantee for avoiding problems; the best strategy is of course to try to prevent a crisis from arising at all. It may of course be the case that we in Sweden really are different. But I am sceptical to this. I think it is very risky to rely on this being the case. Now that we have seen that the costs in many countries have been so high, I at least draw the conclusion that there is reason to try to reduce the risk that we may also find ourselves in this situation, even if it is not the most likely development. As I mentioned earlier, monetary policy is to a large extent about managing risk. I have not so far felt that the short-term gains of a slightly more expansionary policy are sufficient to compensate for the threat of losses further ahead in a really bad scenario.20 But, once again, it is a question of balance and things may change over time. The policy we have conducted has actually been expansionary and mainly concerned sending signals that developments give cause for concern.

Per Jansson: Perspectives on the Riksbank’s monetary policy Speech by Mr Per Jansson, Deputy Governor of the Sveriges Riksbank, at the Centre for Business and Policy Studies, Stockholm, 7 June 2013. * * * Nowadays one can hardly open a newspaper without seeing headlines about the Riksbank. Many have opinions about the monetary policy we have conducted in recent years, and the one we are conducting now. The opinions differ in nature. The Riksbank has conducted the monetary policy we consider best balanced to attain the inflation target and create conditions for long-run sustainable growth. However, some analysts have not shared the Riksbank's view of economic prospects and have therefore reached slightly different conclusions as to how monetary policy should have been designed. Of course, this type of difference of opinion is not particularly remarkable in a field such as monetary policy, where decisions necessarily have to be based on assessments. But there are also other objections that are more a matter of principle and aimed at the very way the Riksbank conducts its policy. Although it is not always stated explicitly, the message is that the Riksbank is conducting a policy other than the one it is intended to conduct – that, to put it drastically, the Riksbank has misunderstood its task and is "playing by its own rules". It has been claimed, for instance, that the Riksbank has a tendency to be over-zealous in combating inflation and to care too little about unemployment.
In fact, the demand for micro-prudential datasets for macro-prudential analysis also results from the fact that the form in which existing aggregated data can be disseminated is often of poor quality, is not sufficiently granular and is not suited for analytical purposes. Ahead of reaping the benefits from the various initiatives that are under way at the global, EU and euro area level to limit data gaps, there is a need for close cross institutional cooperation between supervisory authorities and macro-prudential bodies, at the national and supra-national level. This calls for more interaction and data-sharing between the ECB (also when acting on behalf of the ESRB) and the ESAs that have access to supervisory reporting data and can collect ad hoc data more easily upon request. Procedures for the secure transfer of information and appropriate legal provisions need to be in place to safeguard confidentiality. More broadly, it is important that the pace at which efforts are being made to address current information needs – at the macro- and micro-levels – does not slow down. At the same time, improvements in datasets already in use for macro-prudential analysis should continue to be given priority. This needs to be done in an innovative way, reusing existing information where possible, so as to minimise the reporting burden, whilst serving the increased demands of users.

Finally, I will highlight what is missing and mention a number of important ongoing initiatives that could help to overcoming the key challenges in terms data that we still need to deal with. 2. The macro-prudential oversight function and the role of the ECB  Let me start by reflecting on the macro-prudential oversight function. There are three main components in the macro-prudential oversight process. The first concerns the surveillance needed to identify plausible and (systemically) important sources of risks and vulnerabilities on the basis of an analysis of the individual and collective strength and robustness of the constituent parts of the financial system – institutions, markets and infrastructures. The second involves the assessment of the potential costs and the ability of the financial system to cope with these costs should some combination of the identified risks and vulnerabilities materialise. This requires the ability to measure (and model) the potential costs and to calibrate the plausibility and importance of the various risks. The third component is the possible policy response that needs to be clearly justified and interlinked with systemic risk assessments. In particular, it should inform policy decisions on the appropriate timing of interventions and the selection of tools. The role that the ECB and the national central banks of the EU Member States play in contributing to financial stability is set out in the Treaty on European Union.