samchain/econo-pairs-v1 huggingface dataset:
The standard for countries wishing to participate in the international capital market—the Special Data Dissemination Standard—is being revised to give a better account of the level of foreign reserves and the debt position in individual countries. At country level, moreover, a code for monetary policy transparency and measures for maintaining financial stability is being drawn up by the IMF together with the BIS, central banks, supervisors, the World Bank and the OECD. A fiscal policy code is already in place. 4. Managing future crises Even with these measures, we have probably not yet seen the last financial crisis. A readiness for the management of future crises therefore needs to be created. A central issue in international discussions is the distribution of risks among the parties concerned. While the IMF has been provided with additional financial resources, it neither can nor should be prepared to contribute the main part of what may be needed in a crisis. This is because expectations that any costs will always be carried by someone else can result in an overall increase in exposure to risks, the problem of moral hazard. Such expectations are liable to drive up credit supply and demand and can influence private agents as well as national policy-makers. One way of dealing with moral hazard among private investors is to arrange for them to carry a larger share of the burden in a crisis.

Leif Veggum, director of Norges Bank’s Cashier’s Department, is soon going to tell us about the security features that make the banknotes almost impossible to counterfeit. However, if these features are to work as intended, it is important that, as users, we should familiarise ourselves with them. If you feel that you need to brush up your knowledge, I would encourage you to visit Norge Bank’s webpage newnotes.no, Norge Bank’s Facebook page or order the banknote brochure from Norges Bank. You will still be able to use the old 50-krone and 500-krone banknotes for one year after the launch of the new banknotes, ie until 18 October 2019. So use your old banknotes when you are out shopping or take them to your bank well before the deadline to help make the withdrawal of the old banknotes as smooth and efficient as possible. Good luck with the new banknotes! 2/2  BIS central bankers' speeches
For instance, the Riksbank monitors and analyses the financial system, identifies potential risks and influences participants that are important to financial stability. We shall work to prevent financial crises from arising, but if they should nevertheless arise, it is our task to manage the situation. What does this mean? For instance, we must be prepared to act in situations where our assessment is that financial stability is threatened. Let us assume, for example, that a Swedish bank which is under the supervision of Finansinspektionen, the Swedish Financial Supervisory Authority, is solvent and has assets that are greater than its liabilities, but experiences serious problems with its liquidity and thereby difficulty in meeting its payments. If the Riksbank’s assessment in such a situation is that the stability of the financial system is at stake if the bank collapses, then we can intervene with measures to aid liquidity. The United States is currently in the midst of a financial crisis, the backwash of which is sweeping through the global financial system. Although financial turbulence has been included in our analyses ever since last summer, the way it has manifested itself and the intensity of the events has varied along the way. And in recent weeks the problems have escalated. The most recent wave of financial turbulence is the worst so far since the original US mortgage crisis broke out. So what has happened recently? For one thing, large agents in the US financial market have suffered acute problems.

In banking, one of the most important challenges for accounting standard setters is to achieve consistency with sound risk-management practices. Incentives built in to the accounting rules should be compatible with and encourage good risk management. In this connection, the areas of financial instrument accounting and transparency rules require special attention. This idea of market friendly incentive-oriented rules leads me to my last remark on the role of prudential regulation. Third: Efficient risk management One key question that we prudential regulators should ask ourselves is whether regulations provide the right incentives to assess and to manage risks properly. This question is directed at the very essence of financial regulation, whose basic aim is to ensure the stability of the financial system without being too intrusive or undermining its efficiency. Providing market friendly incentives for efficient risk management is probably the best contribution we can make to foster financial resilience. As you know this is one of the key objectives of the new Basel Capital Accord, the so-called Basel II. Let me just mention that in designing the new standards we have been and will continue to be sensitive to the possible implications for financial markets in terms of liquidity and potential development. This is especially so in areas such us securitisation and collateralised transactions. The implementation of Basel II will contribute to enhanced risk management by banking institutions.
The Treasury Markets Forum, as a broad-based and authoritative group, can help explore opportunities for closer co-operation with the Mainland on market development issues. Since the establishment of the Treasury Markets Forum, we have made visits to the Mainland financial regulatory bodies and the China Association of Banks to deepen our mutual understanding of the markets in two places. They were interested to learn about the work of the Forum, including those in raising the professionalism of our practitioners. The Forum also participated in the Hong Kong Financial Services Expo held in Shanghai in September to promote our treasury markets services to Mainland financial institutions and enterprises. We will also organise a seminar for the Mainland to promote their understanding in our financial markets, and responses from the Mainland have been very favourable. In addition, we will maintain close contacts with major overseas financial centres. In particular, we intend to invite major members from New York and London foreign exchange committees to meet with the Forum to facilitate the exchange of views on issues of mutual interest. In the past half year since its establishment, the Treasury Markets Forum has made good progress in its work. We will continue to work closely with industry associations with a view to enhancing the competitiveness of Hong Kong’s treasury markets and promoting Hong Kong’s status as the preferred hub for treasury markets services.

Treasury markets comprise a wide range of products including foreign exchange, fixed income, derivatives and so on. The boundaries between various markets have become blurred alongside more innovative and sophisticated structuring of new products. Whether dealing, sales or back-office staff in treasury markets all require strong technical, up-to-date knowledge in order to cope with the rapid changes in treasury markets. In the discussions between the Treasury Markets Forum and ACI - The Financial Markets Association of Hong Kong on the design of the new membership scheme, we consider that there is a need to bring together qualifying practitioners from various treasury markets. This can facilitate the exchange of views among practitioners within the industry on the one hand and promote the professional standing of practitioners on the other hand. In addition, accredited educational programmes should be introduced to raise the professionalism of practitioners and provide training to those who are interested to join the industry. Following the active co-ordination among industry bodies, I am glad that the ACI - The Financial Markets Association of Hong Kong has successfully launched the new membership regime and made a major stride in raising professionalism of treasury market practitioners. While ACI - The Financial Markets Association traditionally is composed of professionals in foreign exchange market, today, it has expanded the membership to those engaged in other treasury markets (such as bonds and derivatives), encompassing dealing, sales, broker and back-office personnel.
The upgrade of CGO has been effected utilising CREST software -- deliberately, in order to align those two electronic settlement systems -- CGO for gilts, CREST for equities -- more closely. This was a considerable technical achievement, because the operating processes in the two markets are different -- equities settle on T+5, gilts on T+1 (and in some cases T+0); the equity market comprises a large number of relatively moderate-value deals, the gilt market a smaller number of much higher-value deals; hence delay in settlement in gilts is much more disruptive, and needs to be much less frequent, than in equities. Overcoming these differences has been a considerable challenge to the Bank team and I would like to pay tribute to their dedication and expertise and to their achievement in bringing the CGO upgrade to a successful and so far smooth launch just last week. I say this without immodesty because, though I was closely involved in overseeing the project, it was their technical proficiency that delivered the goods. 37. But this achievement has a wider significance. By utilising CREST software in CGO, we have now achieved for the market much of the benefit sought by those who favour a merger of the two systems. In particular, both utilise the same hardware, and the same software application; they operate on the same networks; and users can access both systems via a single terminal using a common gateway.

Possible market-turning events Previous soft phases of the insurance cycle have ended, sometime quite dramatically, with a major loss. Examples include Hurricane Andrew in the early 90s, Asbestos, Pollution and Health losses in the mid-90s and “9/11” in 2001. Whilst it is understandable that some in the industry talk of the need to have naïve capital and capacity cleared out of the market, restricting supply and supporting premium above the technical price level, there is a sense that, this time, things may be different. Many believe that further capital is “waiting in the wings” to invest in the sector in the event that prices rise. Nonetheless, it is sensible to plan on the basis that a significant, market-turning event might occur at some point. Taking this as the starting point, we think there is an opportunity for firms to think through what issues might then arise and to consider what steps can be taken now to plan for these events, not least because we know some firms will be very keen to respond to any improvements in market conditions which might arise after a large loss event. We are publishing today a consultation paper setting out our expectations of firms in planning for these types of extreme insurance loss events; focussing on some of the governance, risk management, capital management and reporting capabilities that we think firms need to consider.
The second key question is whether Basel II is even appropriate for banking systems in emerging markets, which I would like to address now. In my view, the principles and vision of supervision in Basel II are valuable for supervisors and banks in all markets. I must acknowledge that its advanced approaches to risk measurement are mainly intended for those internationally active banks that have the greatest potential to increase systemic risk, and are very demanding in terms of the investments that they pre-suppose in the banks’ own systems, and the qualitative requirements that they set. The 1988 Accord itself was created initially to apply a more consistent set of rules to globally competitive banks, and the shortcomings of the existing rules today are especially evident in the context of these highly sophisticated organisations. However, many supervisors apply the 1988 Accord to less complex organisations that may be active mainly or even only in domestic markets. Is Basel II appropriate for those banks as well? I think that the great level of diversity in markets and in financial systems worldwide makes it difficult – and perhaps even counterproductive – to try to specify a single rule that could be applied to all banks in all countries. Fortunately, Basel II is moving away from a “one-size-fits-all” rule. In fact, Basel II’s menu approach provides supervisors and banks with a range of options that make its basic standards more readily available to many kinds of organisations in countries that face different economic circumstances.

If we want to preserve the present global expansion, if we want to encourage reforms and hence increase potential growth, we need to maintain an open international environment, a rule-based multilateral order. [slide 16] I stress it here in the United States, as a dedicated European speaking to close historical allies: we have many common challenges, politically and economically. To avoid disaster, we should resolutely build common solutions. Believe me: France is taking its part of the task, today more than ever. 4/4  BIS central bankers' speeches
As long as economic fundamentals do not support the krone exchange rate at the initial range, it is highly unlikely that this would persist. If monetary policy has contributed to a deflationary recession, it could not be characterised as successful even if the krone has been stable around the initial range for a period, because this would have created the basis for future fluctuations in the exchange rate. Similarly, a krone exchange rate around the initial range combined with high inflation will not be sustainable. Monetary policy could not be said to have been successful in relation to the guidelines because, also in this case, it must be assumed that it was partly responsible for creating the basis for an unstable krone exchange rate at a later stage. The Norwegian economy may be exposed to economic disturbances that contribute both to higher inflation and to a temporary appreciation of the krone exchange rate. In this situation, monetary policy should have attempted to counter a sustained higher level of inflation because higher inflation provides the basis for subsequent krone instability. However, Norges Bank should in advance have notified the government authorities, which should also have evaluated other measures for stabilising economic developments. The Norwegian economy may also be exposed to negative events that provide the prospect of a deflationary recession and a depreciation of the krone. For example, a fall in oil prices may influence the economy in this direction.

Trade unions base their wage negotiations on expectations regarding price inflation and developments in employment over the next few years. Expectations play an important part in financial markets. Equity prices and exchange rates may fluctuate widely as a result of changes in the expectations of market participants. Because expectations are of such importance to economic planning and decisions, it is essential that there is confidence in the nominal anchor. This makes it possible to achieve nominal stability with smaller disturbances in the real economy and lower unemployment. BIS Review 7/2001  1  Although nominal stability is a prerequisite for sound developments in the real economy over time, conflicts may develop in the short term. Such conflicts may occur if there are disturbances on the production or supply side of the economy which give rise to higher price and cost inflation that does not actually reflect increased pressures in the economy. Examples of such disturbances are cost-push shocks resulting from negotiations, or weaker productivity growth. When disturbances of this type occur on the supply side of the economy, there may be a trade-off between fluctuations in nominal prices and wages and fluctuations in production and employment. A trade-off of this kind is illustrated in Chart 2. The chart shows that using strong instruments to achieve an inflation target or exchange rate target in the short term results in more pronounced fluctuations in the real economy.
As a result, interest rates in emerging market economies are expected to be raised faster than the industrialized countries. These interest rate and growth differentials against the backdrop of ample global liquidity are breeding the carry-trade behaviour with the USD as the funding currency this time. This leads us to our third challenge, which is how to prevent the surge in capital inflows from creating unwarranted instabilities such as excessive volatility in the currency market and asset price bubbles. In response to this challenge, we are beginning to see some countries such as Hong Kong, Korea, Singapore and China tightening their prudential standards to cool down speculative pressure in the real estate sector. In addition, Brazil has recently imposed measure to slow down the inflows of fund into its stock market. In the case of Thailand, net capital flows have turned positive in July and continued to remain so, causing the Thai baht to strengthen as the current account is also in surplus. Nevertheless, the Thai baht has been moving in line with other regional currencies and the Bank of Thailand remains vigilant in ensuring this continues to be the case. In order to make capital flows more balanced, we are in the process of furthering the liberalization of capital outflows. This would also increase the flexibility of our businesses in financial management.

As a result, the overall GDP growth for the quarter came in at 1.3 percent on a quarter-on-quarter basis. Ladies and Gentlemen, In 2010, the Thai economy is expected to stay on the course of a gradual recovery due to two important factors. First, the continued world recovery, and second the fiscal stimulus. Let me go into each of these briefly. First, the IMF and market consensus expect the world economy to return to positive growth next year, owing primarily to monetary and fiscal policies of the industrialized economies that are expected to remain accommodative. Emerging market economies including Asia are expected to rebound faster and stronger than developed economies. This is because Asia’s financial sectors were not directly affected by the current crisis. Brighter prospect for the global economy next year means our export sector can continue to be our main growth engine going forward. Secondly, the government spending under SP2 or the Strong Thai scheme will also continue to support the nascent recovery. As we are all aware, we cannot indefinitely rely on fiscal stimulus to keep the economy going so it is our hope that public spending will eventually crowd in private demand so that the recovery will continue after the stimulus tapers off. Now let me turn to the risks associated with this outlook. Despite several good signals, the recovery of the world economy is still subject to a number of downside risks.
Suffice it to say, it is conceivable that the Federal Reserve’s net-interest margin could be pinched in certain environments – say if the economic recovery turned out to be very robust. But our analysis shows that it is extremely unlikely that the Fed’s net-interest margin will turn negative. In part, that is due to the fact that the balance-sheet risk associated with the interest-rate mismatch is offset to a large degree by the fact that the cost of much of the Fed’s liabilities – the amount of currency outstanding – is zero. So when short-term rates rise, the cost of a significant portion of the Fed’s liabilities is unaffected. Making policy during a crisis involves making tough choices. Perfect solutions are not always achievable or even legally feasible. I can assure you that our decisions have been made carefully, always with an eye toward finding the right balance between the risks and rewards of alternative options. Most critical is our commitment never to take actions that might compromise our ability to retain our control of monetary policy and that might undermine our ability to achieve our dual mandate of full employment and price stability. Thank you for your kind attention. I would be very happy to take a few questions. BIS Review 94/2009  7

Undertaking the net zero journey themselves will help central banks and supervisors gain a better understanding of the challenges that financial institutions face when considering climate-related and biodiversity risks in their activities. The NGFS will provide guidance on integrating sustainability considerations across the range of central bank functions. We will follow up on past work relating to sustainable and responsible investment (SRI) principles for central banks1. We will explore suitable metrics for central banks’ disclosure of climate-related and environmental risks, including climate-related governance structures and strategy. We will consider how disclosures for internal operations should be prepared, including a stocktake of how central banks are reducing their environmental and carbon footprint. Let me now move on to NATURE-RELATED RISKS. The NGFS will mainstream the consideration of nature-related financial risks across our work. Nature-related risks and biodiversity loss have garnered significant attention in recent years, and rightly so. Biodiversity supports all life on our planet. But we are eroding this biodiversity at a pace that is damaging the natural ecosystems that provide us food, water, and clean air. This in turn could pose significant risks to economic, financial, and social stability. Failure to address nature-related risks could adversely affect financial institutions and financial system stability. It is imperative that central banks and supervisors consider these risks in fulfilling their mandates. The financial sector should align itself with the transformations that are necessary to deliver a global economy that is positive for nature.