samchain/econo-pairs-v1 huggingface dataset:
While the pandemic was raging, it was said again and again that these were unprecedented times. This is true, in that even though plagues have occurred repeatedly throughout human history, there has never before been an attempt to halt the spread of a pandemic with public health measures so wide-ranging that they extinguished the economic and social lives of entire countries. The war in Ukraine, on the other hand, has scores of historical precedents stretching back centuries. And yes, with this conflict, Europe has been set back in time. The economic sanctions that have been imposed on the Russians, like the disease-prevention measures during the pandemic, will leave a trail of aftershocks in their wake and will have broad economic repercussions for Iceland no less than for other countries. Honoured guests: In Adam Smith’s The Wealth of Nations, the magic of free enterprise is considered to lie in the fact that people can communicate through price formation in the markets. In this way, the markets will connect one coast to another, enabling people to work together without knowing one another – or indeed, without necessarily liking one another. It was the exalted invisible hand that harnessed self-interest in the service of the public interest. After two wars in Europe, Western politics was dominated by the conviction that the invisible hand could guarantee peace. (Note Icelanders’ optimism in referring to the former war and the latter war – as though no other world wars are even possible.)

This should not be surprising as the global FX market has become much bigger, with the average daily turnover in 2013 (USD 5.3 trillion 3) three times bigger than in 2004. Challenging times 15. As close partners, we have also faced significant challenges during difficult times in the past decade. 16. We all remembered vividly how a large part of the financial markets had almost come to a standstill after the collapse of Lehman Brothers in September 2008. Yet, the foreign exchange market continued to operate smoothly. Many market players had attributed the market stability to the support provided by CLS. 17. I also believe that our linkage with CLS has also provided the functional resilience and, importantly, confidence, that our market players needed in those critical moments. 18. This is certainly the case post Lehman’s collapse, as Hong Kong’s companies and individuals liquidated overseas assets and repatriated $ billion back into Hong Kong to tide themselves over the liquidity and credit squeeze. Looking forward 19. It is no exaggeration to say that CLS is now one of the most important pieces of infrastructure supporting the global financial market. The creation of the CLS Bank is also a shining example that demonstrates the power of private sector-public sector collaboration. The HKMA is proud to be part of that success story. 2  CLS reports both sides of an FX transaction.
One of the most relevant areas of work under way seeks to correct the excessive variability of risk-weighted assets (the denominator of the capital ratio) prompted by the use of insufficiently homogeneous internal models. Such heterogeneity leads to inadequate risk measurement and generates competitive distortions, harming those institutions subject to more demanding regimes of model supervision. The current challenge is to come up with a parameterisation of the new requirements that enables risk measurement to be enhanced without significantly increasing capital requirements for the system as a whole, as this is one of the commitments announced by  4  BIS central bankers’ speeches  global supervisory authorities, in order to hold prudential requirements at levels compatible with the pursuit of banking activity on a proper footing. Banks must also meet the requirements stemming from the new resolution regulations, which seek to minimise the need to use public funds to manage bank crises. In particular, under the Bank Recovery and Resolution Directive (BRRD), significant institutions shall, in addition to meeting the established capital requirements, have a minimum volume of liabilities enabling losses to be absorbed should it be necessary. That is to say, they shall have debt instruments at hand that may be converted into capital if they experience problems of viability. These requirements will likely prove a binding restriction for some financial institutions. The issuance of these instruments may pose a challenge, especially for unlisted banks with little experience in the issuance of convertible instruments or of subordinated debt.

In this connection, I shall first briefly review the situation of the banking sector, focusing thereafter on the challenges banks will have to face in the short and medium term. I shall conclude with some brief thoughts on the ECB’s new supervisory framework. 1. Recent developments in the banking sector  In recent years, and in response to the financial crisis, banks have substantially improved their solvency levels, largely as a result of the new regulatory and supervisory requirements. At SSM-supervised banks, in the last year alone their highest-quality (i.e. CET1) capital increased on average by 70 bp, from 12.7% in 2014 to 13.4% in 20151. In the case of Spanish banks, whose starting levels were somewhat lower, the increase exceeded 80 bp, making for an average of 12.5% of CET1 at end-2015. The profitability of the banking business, however, remains at low levels and, in any event, far off the double-digit figures seen before the crisis. Among SSM banks as a whole, the return on equity (ROE) in 2015 was slightly below 5%, whereas in Spain, in consolidated terms, it was scarcely 5.6%. Admittedly, it is unusual for the return on capital to stand in most euro area countries at levels below the average cost of capital, on estimates made by the Banco de España. In the case of Spanish banks, estimates of the cost of capital stood at 6.8% in December 2015, drawing close to levels of 8% in early 2016, as a result of the period of instability observed in financial markets.
The Bank now has responsibility for end-to-end risk management for CHAPS including relationships with CHAPS direct participants, and clearer lines of responsibility and integrated governance, enhancing financial stability in the UK. The first glimpse of the new dawn: ISO 20022 – improving payment messaging June next year will be the first step in the UK’s migration to ISO 20022. Its implementation is a foundational step that will enable many of the future changes that are coming, both domestically in the renewal of RTGS and internationally including enhancing cross border payments. Payment messages are the vehicles for transactional data in the payments world. They provide a common data model and a set of rules for exchanging critical information for a transaction to take place for everything from consumer payments to corporate treasury operations. Increasingly used by payment systems across the world, many other key Payment System Operators are also on the journey to implement ISO 20022 including the ECB’s TARGET2 and the Federal Reserve’s Fedwire. In addition, starting in late 2022 SW IFT’s correspondent banking network will retire the use of the existing MT standard by November 2025 and mandate ISO 20022. ISO 20022 will bring enhanced data deliver significant long-term benefits for not only the UK’s payment systems but participants and their customers. It provides flexibility to adapt to changes in the economy, emerging technologies and innovation. It provides international harmonisation, supporting cross-border payments.

The northbound Stock Connect has presented a huge opportunity for Hong Kong to develop risk management capability for understanding of the risks and the pricing of such risks for offshore investors interested in the A share markets. Apart from helping to channel foreign investments into the Mainland market, the Stock Connect has also contributed to the inclusion of bigger weights of A shares in the global stock market indices such as the MSCI. Asian Equity Derivatives Hub 8. Another recent trend that is relevant is that several international financial firms have decided or are planning to relocate their Asian equities derivatives booking hubs from Europe to Asia. This is very logical as the underlying securities and clients are based in Asia. The HKMA welcomes these moves and stands ready to facilitate such moves, on the condition that the booking business must be accompanied by the necessary risk management functions. Again, this will enhance Hong Kong’s position as the risk management hub for Asian equities and derivatives, particularly Mainland related stocks. Bond Connect 9. By the same token, the launch of the northbound Bond Connect in 2017 has opened another window of opportunity for Hong Kong to enhance its risk management functions for offshore investors wishing to invest in the Mainland bond market. It is still early days yet, but I am confident that Bond Connect offers attraction to those investors who prefer using a nominee holding structure through the Central Moneymarkets Unit of the HKMA.
The optimal way to reduce the ratio of the deficit to GDP is through economic growth. In turn, faster growth calls for improvements in productivity. In this respect, there needs to be a greater degree of public awareness of the importance of productivity and competitiveness, and a consensus on steps that can be taken with minimal social disruption to enhance the country’s international competitiveness. 5  Thomas F. Huertas, Crisis Cause, Containment and Cure, 2e, Palgrave Macmillan, 2010. 6  Andrew W. Lo, “Reading about the financial crisis: A twenty-one-book review” Journal of Economic Literature 2012, 50:1, pp. 151–178. 7  6  Stefan Walter, “Basel III: Stronger Banks and a More Resilient Financial System”, Financial Stability Institute, 6 April 2011. BIS central bankers’ speeches  As you know, competitiveness depends on the relationship between changes in productivity and changes in costs, including wages. I have to note that unit labour costs (ULC), which are based on the relationship between compensation and productivity, have generally moved in line with those in the euro area. However, in recent quarters, Malta’s unit labour costs have pulled ahead of those in the euro area, as shown in Chart 6. In this respect, the wage setting process and efficient labour market practices are of critical importance. The fact that collective agreements in Malta are negotiated at the level of the individual firm helps to ensure that wage growth is compatible with the realities of the markets where the firm sells its products.

With banks having substantially reduced their exposures in the past decade, largely by reducing their lending to commercial property companies, the resulting losses amounted ‘only’ to £ And following the shrinking of banks’ trading books in the past decade, their losses on trading assets totalled ‘only’ £ The losses resulting from this, and other parts of the stress scenario, would have wiped out the entire banking system in 2007. However, major UK banks have tripled their capital strength. Even after a stress like this, they have more than twice the capital they had going in to the crisis. They can now absorb losses like this and continue to supply credit to the real economy. 5. Are bond markets resilient or might they amplify adjustments? This is the final channel through which stretched markets could affect the wider economy. It would magnify any effect on corporate and bank balance sheets. And it could affect the cost of finance directly, as market interest rates are driven up and credit availability tightened. We have a duty to spot new market developments that could drive this and to simulate, rather than wait for the empirical proof, because by that point it can be too late. And as your mission statement acknowledges, we must move beyond the causes of market fragility in the last crisis. The resilience of markets is not guaranteed by the safety of the banking system and other core intermediaries. To do that, we’re going to have to delve into some of the detail.
OECD (2013) documents an increase in market income inequality over the period 2007–2010 across developed countries, and reports with respect to the top and bottom 10% of the income distribution that “lower income households either lost more from income falls or benefitted less from the often sluggish recovery.” In general it is likely that adverse income and employment shocks hurt the poor the most, for example because they lack the ability to hedge against these shocks and may lack access to credit markets to smooth them. Even if crises have a neutral effect on income inequality, the poor are much less able to absorb a cut in income (Honohan 2005). 15  For an assessment of the distributional effects of the Bank of England’s asset purchases, see http://www.bankofengland.co.uk/publications/Documents/news/2012/nr073.pdf. 16  See Oreopoulos, von Wachter and Heisz (2012). 17  See Abel, Deitz and Su (2014). 18  Yellen (2012). 4  BIS central bankers’ speeches  the system as a whole. That is now reflected in the Bank of England’s responsibility to bring a macroprudential perspective to financial stability policy. Financial reform and rebuilding social capital Central banks’ greatest contribution to inclusive capitalism may be driving financial reforms that are helping to re-build the necessary social capital. In doing so, we need to recognise the tension between pure free market capitalism, which reinforces the primacy of the individual at the expense of the system, and social capital which requires from individuals a broader sense of responsibility for the system.

Tourist arrivals declined by 8.4% in 2009 while the manufacturing industry’s gross value added fell by more than 18%. On the upside, several service activities that have expanded thanks to access to the Single Market have proved quite resilient to the global recession and their performance helped the external balance on goods and services to move into surplus for the first time since 2002. As a result, the domestic recession was less severe and shorter than elsewhere. Malta’s GDP fell by 1.9% in 2009, compared to 4.1% in the euro area, while the peak-to-trough drop in GDP is estimated to have been similarly less pronounced, 3% against 4.7%. A sharp decline in investment acted as a major drag on demand in 2009, but private consumption held up. The reduction in exports was less marked than might have been expected given the severe contraction in world trade such that, together with a steeper drop in imports, net exports contributed positively to GDP. This limited slowdown in economic activity was in turn reflected in labour market trends. The unemployment rate rose moderately in the first half of the year from 6% at the end of 2008 and has stabilized at around 7% since then. On the inflation front, consumer price trends in 2009 again did not fully mirror those in the euro area, converging only during the second half of the year when energy and food prices, which had risen sharply in the early part of the year, decelerated substantially.
At the other end of product spectrum, equal, if not more, emphasis needs to be given by the industry in extending coverage to low-income individuals via microtakaful. There is little doubt that the ability and commitment of takaful industry to deliver such value proposition that allows for the benefits of growth and development to be experienced across all communities will resonate strongly with the values espoused by takaful. This in turn could go a long way towards elevating the importance of takaful in the eyes of the public and further widening the industry’s growth prospect. With this aim in mind, it is critical for industry players to leverage on the readily available channels to reach to the masses and employ agents and bancatakaful to the fullest to maximise its potential. The third dimension of growth which is integral to the nation’s high income agenda relates to the opportunities to be harnessed under the initiative to consolidate Malaysia’s position as an international Islamic financial centre (MIFC). As industry is well aware, the MIFC initiative seeks to enhance the international dimension of Malaysia’s Islamic finance. The prospect is most compelling for the takaful industry. Malaysia is already at the forefront in the development of takaful, particularly family takaful, compared to other market.

Their expertise will surely benefit our audience today. I would also like to thank HSBC, Standard Chartered Bank, Citibank, BOC and BNP Paribas for sharing their experiences with everyone later today. 15. Ladies and gentlemen, I wish you all a fruitful workshop and I look forward to working closely together with the industry to develop green and sustainable banking in Hong Kong. Thank you very much. 2/2  BIS central bankers' speeches
Access to interbank money markets for short-term borrowings gives considerable flexibility to banks to adjust their short-term cash flows. Existence of secondary markets for financial instruments is also an important source of liquidity. However, this conventional mechanism of liquidity management including interbank market, secondary market financial instruments  BIS central bankers’ speeches  1  and facilities from the central bank as the lender of last resort are all based on interest and therefore, not acceptable for Islamic financial institutions. In addition to the challenges regarding the liquidity management, there are also supervisory and regulatory issues to be considered. In order to resolve the differences in country level regulations regarding appropriate Shari’ah-compliant instruments, working on globally accepted liquidity management regulations and infrastructure could be a viable option. Establishment of a carefully designed and structured Global Shariah Supervisory Board could be a step in the right direction. In this context, we also appreciate the excellent and productive work of Bank Negara Malaysia, the Gulf central banks and other parties. As a major effort, the International Islamic Liquidity Management Corporation (IILM) has been established to assist institutions offering Islamic financial services in addressing their liquidity management issues in an efficient and effective manner. This institution addresses one of the fundamental problems of Islamic financial institutions: the provision of adequate liquidity in times of stress. Once there is an international lender-of-last-resort facility (to complement and not to replace existing national facilities), the provision of Islamic financial services will be carried out with an increased confidence.

Caballero, Ricardo J. and Arvind Krishnamurthy, 2009. “Global Imbalances and Financial Fragility,” American Economic Review, May. Lewis, W. Arthur (1954). “Economic Development with Unlimited Supplies of Labor,” Manchester School of Economic and Social Studies, Vol. 22, pp. 139–91. Obstfeld, Maurice, Jay C. Shambaugh et Alan M. Taylor (2010), “Financial Stability, the Trilemma, and International Reserves,” American Economic Journal: Macroeconomics, American Economic Association, vol. 2(2), pp 57–94. Rajan, Raghuram G. (2010), Fault Lines: How Hidden Fractures Still Threaten the World Economy, Princeton University Press. Wei, Shang-Jin and Jiandong Ju (2010) “Domestic Institutions and the Bypass Effect of Financial Globalization” American Economic Journal: Economic Policy, forthcoming. BIS Review 170/2010  5
Villy Bergström: Monetary policy and wage formation in Sweden Speech by Mr Villy Bergström, Deputy Governor of Sveriges Riksbank, at the HSB Bank’s Finansdag, Stockholm, 13 November 2002. *  *  *  Let me begin by thanking you for the invitation to come to HSB and for giving me the opportunity to discuss wage formation. As you know, the Riksbank's objective is an inflation rate - measured against the annual change in the consumer price index (CPI) - limited to 2 per cent, with a tolerance interval of +/- 1 percentage point. As interest rate decisions affect price pressure, partly through resource utilisation, with a certain time lag, monetary policy needs to be based on the total assessment of the rate of price increase one to two years ahead. Payroll expense accounts for approximately 70 per cent of the total value added in the economy and is thus crucial to the development of costs and prices. Wage formation has also gained increased topicality since the Swedish Municipal Workers' Union decided to terminate its collective wage agreement before the third year. The Riksbank's assessment in the October Inflation Report also pointed to high wage increases as a potential risk factor for domestic inflation. New conditions for wage formation in the 1990s New conditions for wage formation were created at the beginning of the 1990s. Monetary policy became more clearly focussed on maintaining low inflation and tighter fiscal policy was necessary to consolidate public finances.

Almost 900 businesses responded to our last poll, some of which were from this area. If you, as a representative of a small business, would like to participate in our current poll, please pass your card to my colleagues, who are in the audience, or see me after the speech and we will be glad to add you as a respondent. Results from our prior polls stressed the problem of access to capital. In response we held two workshops at the Bank in December. In the first workshop, senior officers from the Export-Import Bank, the Small Business Administration and the Department of Commerce described the various loan programs available to small businesses from their agencies, as well as programs to help identify markets. The second workshop reviewed the business plans of 40 small businesses and matched them with potential lenders. We plan to hold a similar workshop in Upstate New York this year. As you know, even states that are wealthier, such as New York, have large pockets of poverty. So, we target some of our work specifically to low- and moderate-income groups. We have worked hard to help neighborhoods that face high foreclosure rates, although much remains to be done. We have provided housing advocates with the latest information on mortgage conditions, via mortgage briefs, roundtables, presentations and newsletters. We have developed an interactive online tool that shows monthly delinquency and foreclosure conditions, which we believe will aid the work of housing counselors and other parties seeking to help these communities.