samchain/econo-pairs-v1 huggingface dataset:
Over the past seven months, this fact has been confirmed by the increasingly strong correlation of bank CDS with those of the country where they are located. It is an area of concerns for banks especially in the case of a rapid and abrupt evolution. A surge in the cost of funding will be therefore damaging for banks profitability and their ability to grant credits. Short-term funding may also cause some concerns for banks as multiple sovereign downgrades can lower, either through a decrease in market prices or through an increase in haircuts, the value of government securities used to collateralize refinancing. On the asset side, banks are exposed to an abrupt drop in sovereign debt prices through mark-to-market losses on sometimes large trading portfolios of government bonds detained as a liquidity buffer. In addition, banks active on CDS as net protection sellers are also exposed to mark-to-market losses and real losses in case of a debt restructuration which constitutes a credit event triggering the CDS. These losses could erode the capital base of the banks at a time when the risk weighting of assets, based on credit rating levels, increases. The two factors push down capital ratios and reduce the potential for lending to the economy. It brings us to our third contagion channel. 2  BIS Review 84/2010  3)  Lastly, the economic channel is likely to play a significant role via the fiscal adjustments necessary to repair public finances and restore the credibility of the countries on financial markets.

But I draw upon my own experience in the corporate world and upon the insights offered by Goodhart to suggest that you simply take all this forward guidance and forecasting a year or more out with a big grain of salt, bearing in mind that the policy statements and forecasts issued by the FOMC are tactical judgments of the moment, made within a broader strategic context. 6  “Longer-term Central Bank Forecasts Are Step Backwards,” by Charles Goodhart, Financial Times, Feb. 2, 2012. BIS central bankers’ speeches  5  The most important announcement Which leads me to what I consider the third and most important announcement we made last week: the statement of our longer-range goals and strategy. For the first time, the entire 17-member committee stated that, given inflation over the longer term is primarily determined by monetary policy, we are able to specify that an inflation rate of 2 percent, as measured by the index for personal consumption expenditures, is most consistent with our mandate.
Changes seldom mean that all previous truths suddenly cease to be valid, and moreover changes do not happen overnight. Especially in the banking market, important changes are more likely to occur slowly and gradually over a long period. Nonetheless, these trends, even if the impact only proves to be half as big as the financial markets’ trend oracle predicts, entail interesting challenges and opportunities for Swedish banks. Together, disintermediation and commoditization should result in a more distinct division of production, distribution and risk-taking. As I am sure you know, this is what consultants call the breaking up of the value chain. Even though some banks undoubtedly will try to keep as much of the value chain as  3/4  possible, it is going to become more difficult. Each part of the value chain will be exposed to competition from specialised niche players. Allow me to give a few concrete examples. For several years now it has been noted that Swedish banks’ share of savings is slowly but surely decreasing. Not because Swedish banks have performed worse than any other pension or fund manager, but simply because there are a lot of players that are at least as good, and sometimes also cheaper. The four major banks have a strong grip on the Swedish mortgage market for households. But they seem to have defended their large market shares in some measure through price cuts. Also as regards the corporate market, the four major banks appear to have a continued strong position.

Working with SNB over the last ten months to set up this branch has been a real delight for MAS. You are clear in your objectives, methodical in your approach, and always gracious and understanding in your dealings. Thomas, you will always have the full support of my colleagues and I at the MAS, as SNB grows its presence here. Once again, please accept my congratulations on the opening of your branch. Have an enjoyable evening ahead! 2  BIS central bankers’ speeches
Last year, trading by international 2/5  BIS central bankers' speeches  investors through Stock Connect more than doubled compared to the year before; and trading through Bond Connect nearly tripled. 17. And the best is yet to come. Take Bond Connect as an example. Last Thursday, FTSE Russell decided to add Chinese government bonds to its World Government Bond Index from October 2021, on the back of increasing international demand for Chinese fixed income products. This latest move, together with similar steps taken by other major global bond indices earlier, will create huge headroom for Bond Connect to grow. Volume aside, the HKMA is continuously working with the industry and our Mainland counterparts to enhance the scheme through improving trading efficiency, and exploring new products, such as repo and related derivatives, that will help market participants better manage liquidity and risk in bond investment. 18. We also need the right infrastructure to support these rapid developments. The HKMA has already started a multi-year project to revamp the Central Moneymarkets Unit. This will include a number of new services related to Bond Connect to meet the existing dynamic market demand and to position ourselves for the potential Southbound Bond Connect in the future. 19. Closer to home in our own Greater Bay Area, we are looking forward to welcoming a new member to the Connect Family. In June this year, together with our counterparts in the Mainland and Macao, we announced plans for a third two-way cross-boundary scheme: the Wealth Management Connect.

As a regulator, we are pleased to witness the progress made by the industry in using Regtech to combat longstanding issues – for instance, Natural Language Processing has been adopted to control conduct risk associated with the marketing of financial products, while Supervised Machine Learning can be deployed to more accurately help AML analysts flag suspicious transactions. 14. Understanding and facilitating the technology needs of the industry improves our own setting of supervisory priorities in a forward-looking manner. The HKMA’s three-year roadmap for Suptech adoption has identified, as key areas of focus, the need for a knowledge management system to handle structured and unstructured information, and the need for capabilities to analyse granular data. The aim is to make our supervisory work more effective without placing unnecessary burdens on banks. We have begun pilot projects to assess the suitability of various solutions. Cross-border banking 15. Technology has enhanced the use of our natural geographic advantage to participate in another major transformation: the growing interaction with the Mainland financial markets, particularly in relation to the Greater Bay Area. 16. As a leading international financial centre, Hong Kong has a long and successful history of serving as a gateway to the Mainland markets. We are the world’s largest offshore hub for renminbi business. Schemes launched in recent years, such as Stock Connect and Bond Connect, have expanded opportunities for investors.
Clearly, greater use of the local system for real-time settlement of Hong Kong dollar versus US dollar transactions would bring real benefits in terms of reduction and diversification of risk. Banks in Hong Kong will no doubt be looking seriously at their existing settlement arrangements for such transactions, and at the greater use they can make of local services to achieve finality of settlement for the currencies simultaneously in our time zone. For our own part, the HKMA will continue to develop and reinforce our local financial infrastructure and to link it more efficiently with global systems. We have, for example, started on the development of a two-way linkage with Euroclear, one of the world's largest central securities depositories. The two-way linkage, which will be highly automated for heavy usage, will enable investors in the Asian region to gain trading access to securities lodged with Euroclear. The infrastructure providing for payment and settlement form the essential roads and bridges that connect banks and other institutions with each other. What of the banks themselves? In Hong Kong, they have seen declining profits at a time of increasing competition. Yet the banking sector remains remarkably strong, with an average capital adequacy ratio of 18%. With good reason, the general public, and the international financial community, have a very high degree of confidence in Hong Kong's banks.

In making financial decisions, consumers require various information and details about the processes and documentation involved, the relevant fees and charges to be incurred and the risks and benefits of each type of financial product or service. This will allow consumers to be aware of the opportunities available, actively manage their financial position while at the same time, safeguard their financial future. The avenues to seek redress must also be easily accessible and available. Of importance is the need for all parties involved in the Islamic financial transactions to understand and appreciate the unique characteristics and features of Islamic banking and finance. Clear understanding on the conduct of the Islamic financial transactions would lead to the appropriate execution of Islamic financial contracts that truly reflect the Shariah tenet. Active consumerism will also prompt the desired efficiency in the Islamic financial industry. For the Islamic financial institutions, understanding the dynamics of customer segmentation, building customer relationships and addressing the requirements and preferences of specific segments are vital not only for strengthening the existing customer relationships but also to secure new businesses. This would  BIS Review 56/2004  1  contribute towards the expansion and sustainability of the market share of the Islamic financial activities. Fundamental to achieving greater customer-centricity is to ensure that the processes, and workforce orientations, are aligned towards meeting customers’ expectations and delivering superior services. This needs to be effectively communicated, shared and understood by all levels of the workforce, in particular, those at the front office.
BIS Review 47/2001  5  There is substantial uncertainty associated with developments in Japan. Industrial output and exports have declined. The financial sector is struggling in the face of large losses and poor performance, and the general price level is falling. In the euro area the picture is mixed. Growth is solid in countries like France, Finland and Ireland. Germany has a large internationally exposed industrial sector, which is feeling the effects of the 1 slowdown in growth in the US and Asia. In a survey , growth forecasts for Germany have been revised downwards this year from 3 per cent a few months ago to a good 2 per cent. Economic growth prospects for Sweden and the UK are also weaker than a few months ago. However, the easing of monetary and fiscal policy in many countries should contribute to a pick-up in growth and reduce the risk of a pronounced international downturn. The Norwegian economy will be particularly hard hit by an international downturn if this translates into a sharp fall in oil prices and other commodity prices that are important for Norwegian exports. This would lead to lower export revenues and slower growth. Employment would also be affected. An international downturn would also lead to lower prices for imported goods and services and thereby reduce domestic inflation. If other Nordic countries are negatively affected, this will have an impact on the supply of labour in Norway since the Nordic labour market has become increasingly integrated.

The world needs transition finance – to provide the funding support for businesses and sectors that are not so green, to adopt cleaner technologies, increase energy efficiency, and become greener over time. Inclusive transition is about decarbonising without compromising social and economic development. Hundreds of millions of people across Asia, Africa, and Latin America still do not have access to electricity, modern sanitation, and drinking water. Economic development will drive demand for fossil fuels, which is still the cheapest way to generate electricity and power mobility in many parts of the world. The switch to cleaner energy cannot be made in one leap. We need to shift the energy mix progressively, first to relatively less emissions-intensive fuels like natural gas, and then to renewables. Finance can be a powerful enabler for such a transition. Second, Asia – this is where the battle against climate change will be won or lost. Asia accounts for half of the world's greenhouse gas emissions and is home to about 60% of the global population. The issues of transition are most acute in Asia, with growing affluence and rapid urbanisation alongside the urgent needs of poverty alleviation. About 85% of the energy consumed in Asia comes from fossil fuels and Asia's demand for energy is projected to double in 2030. Asia is also most vulnerable to climate change, with large populations living close to locations prone to drought, floods, and rising sea levels.
At the same time, in a highly interlinked global economy consensus-building concerning the transmission of spillovers is crucial for dealing with shocks that affect substantial parts of the global economy. Moreover, the IMS should also provide incentives to foster appropriate preventive action that renders economies more resilient to shocks, and provide the necessary standards and infrastructures to make global markets work better as well as make coordination possible when warranted. This is already a robust policy agenda. 6  BIS central bankers’ speeches

It is sufficiently larger than the negative investment demand effect from higher interest rates, such that internal balance is attained and monetary policy is able to pursue domestic inflation and growth objectives.4  1  Linda Goldberg, Paolo Pesenti, Joseph Tracy and Matthew Higgins contributed to these remarks. 2  A global financial cycle refers to the global co-movement of credit by banks and capital markets, asset prices, term premia, and risk premia. 3  Fleming (1962) and Mundell (1963). 4  Krugman (1999). The balance sheet effects imparted from a large international debtor position may work against achievement of an improved external balance and attainment of internal balance. BIS central bankers’ speeches  1  Different policy options are available to a country with a high degree of capital mobility and a preference for currency stability. A country may prefer currency stability as an effective nominal anchor, or because of concerns about the broader uncertainties associated with currency volatility. Regardless of the reason and because the exchange rate is not available to absorb external shocks, this country will be in an unfavorable position to achieve domestic macroeconomic objectives by using monetary policy. Instead, monetary policy is aimed at external adjustment. Tighter foreign monetary policy and financial conditions need to be validated by tighter domestic monetary policy to maintain currency stability. With domestic monetary conditions effectively imported from abroad, they may sometimes conflict with domestic growth and inflation objectives. Simply put, currency stability is prioritized. These policy considerations are summarized in the well-known international policy trilemma.
Something one should always bear in mind, but which I do not intend to discuss further here, is that decisions we make regarding conditions in Sweden must also be incorporated into a broader, European context. There are also a number of questions, particularly with regard to the interplay between macroprudential policy and monetary policy, that sooner or later may need to be dealt with in practice and it would be wise to have thought them through. Coordination... Some of the research into macroprudential policy – which is in general still in its infancy – tries to analyse the importance of coordinating macroprudential policy and monetary policy. The idea is roughly as follows: Monetary policy and macroprudential policy act through largely the same channels. Both the policy rate and most macroprudential tools affect, for instance, credit growth in the economy and developments in various asset prices. This also means that the two policy areas affect one another’s objectives. Monetary policy affects the credit cycle – which was the whole point of “leaning against the wind”, and macroprudential policy has effects on the business cycle. It is therefore desirable to find the right policy mix – the combination of policy rate and macroprudential tools that give the best overall outcome for the economy. The conditions for finding the right mix are normally improved if the two types of policy are coordinated, rather than determined separately. 14 The importance of coordination is also pointed out in more practical economic policy contexts.

Speech  Embargo 27 April 2018, 10.00 am  Comments on monetary policy and banking regulation 110th Ordinary General Meeting of Shareholders of the Swiss National Bank  Thomas J. Jordan Chairman of the Governing Board Swiss National Bank Berne, 27 April 2018 © Swiss National Bank (speech given in German)  Page 1/8  Mr President of the Bank Council Dear Shareholders Dear Guests It gives me great pleasure to welcome you to our Annual General Meeting. As is customary, the first part of my speech will be devoted to comments on the current economic situation and monetary policy. Ten years after the start of the global financial crisis, we can now look back on a year in which economic momentum has been much more positive – both in Switzerland and worldwide. The question is: has the global economy now finally completed its unusually sluggish recovery process? As I will show, there are indeed grounds for optimism, but it is still too early for this to give way to euphoria. In the second part of my speech, I would like to look at the state of play in banking regulation. A decade on from the global financial crisis, we should not just be asking whether we have recovered from the consequences of this event; we should also take stock of what we have done to improve the ability of our banking system to withstand future crises.
Young Members of Parliament whom I met were upbeat about India's future. Of course, India's growth trajectory will not be a straight line. Development across states will be uneven. Unlike China, power does not rest with one political party. The intricacies of coalition politics mean that time, patience, skill and political bargaining will be needed to balance different interests, and forge a national consensus on reforms. Investors have cited inadequate infrastructure, rigid regulations and bureaucracy as some of the impediments to India's rapid growth. In addition, India cannot grow into a major economy on services alone. It will have to find ways to expand its manufacturing sector to create jobs for the large numbers of young people entering the labour market each year. India has decided to use Special Economic Zones (SEZs) to spearhead the growth of its manufacturing and export sectors. SEZs will create pockets of growth and prosperity. They will have a powerful demonstration effect on the rest of the economy. Foreign investors will find it easier and more attractive to locate their factories in an SEZ. Singapore and India have agreed to set up an SEZ in India and both sides are now working to implement it. China on the rise Let me now turn to China. I first visited China in 1971 to do business with them. It was during the height of the Cultural Revolution. I saw young Red Guards holding their study sessions in the open.

For example, in India they lead to an increase in saving of around 10 percentage points of GDP, raising the saving ratio to 50% by 2050, as demographics push a larger fraction of the population into the high savings cohort. Among developed countries, meanwhile, these trends are reversed with further demographyinduced falls in savings rates. 5  12  See also the evidence in Wilson and Ahmed (2010). BIS Review 174/2010  Given the rising income share of the BRIC countries, these patterns are even more dramatic when we consider country shares of future global savings. China rises to represent around 40% of global savings by 2050. Over the same period, the US share of global savings continues its descent, stabilising at around 5%. On the face of it, these partial equilibrium projections of future savings rates suggest that medium-term pressures on global imbalances could intensify, with saving rates rising among surplus countries and falling in deficit countries. To bring this intuition to life, assume for simplicity’s sake that investment rates as a fraction of GDP remain fixed at 2010 levels across countries, but that saving rates evolve as in Chart 23. The result would be a trebling of global imbalances from current elevated levels over the next twenty years. Of course, these projections only look at the marginal impact on imbalances of medium-term demographic and GDP trends.