samchain/econo-pairs-v1 huggingface dataset:
On 2 May, agreement was reached between Greece, the IMF and the other euro area countries on a three-year loan package with a maximum limit of EUR 110 billion. The agreement included a comprehensive IMF adjustment program. Greece has borrowed approximately EUR 30 billion from the IMF and the euro area countries since May. Other European countries with weak public finances were also being scrutinised and there was a risk of contagion to the banking system in Europe, which was behind many of the loans. On 10 May the EU and the European Central Bank announced extensive support measures for EU countries, including the European Financial Stability Facility, which can provide loans to countries in difficulty up to a total limit of EUR 500 billion, with additional loans of up to EUR 250 billion made available by the IMF through its program facilities. Countries may draw on these loan facilities provided that taxes are increased and expenditure cut so as to enable the country to gradually become self-supporting. At the same time, the European Central Bank began to buy government bonds, which had become difficult to trade on the market, enabling markets and monetary policy to function more effectively. Economic history shows that periods of surging corporate and household debt and sharply rising property prices often precede banking crises. The fates of banks and states are inextricably linked. Banking crises usually lead to fiscal crises. Similarly, weak government finances will undermine banks’ financial position. 1 Crises are costly.

The financial markets are becoming increasingly integrated, banks are crossing more and more boundaries and so on. All this is affecting the Riksbank to a high degree. The same is true of the rapid technical innovations, with increasingly complex payment systems. Add to this the possibility of EMU and you can see the future does not lack challenges. Apropos of what I have been talking about today, a while ago one of my American colleagues, Bill McDonough, said something to this effect: we should be pleased if we are better today than we were yesterday at the same time as we are not yet as capable as we will be tomorrow. I think that's about right. 4  BIS Review 51/2001
So we may feel that at a certain point we need to do something more, or we do not. But we can expect the effect to be relatively limited. Second, I think the framework we have set, results in something very different from what we had before. Having decided that we refinance at fixed rates for unlimited quantities, and with a large corridor between the deposit facility and lending rate means, the lending rate has become the ceiling and the deposit facility rate is the floor and markets tend to move the money market rates in between, with overnight rates at a very low level and the three month rate at a level which can be below the refinancing rate. As a consequence, the rates effectively paid by borrowers are much closer to the situation in the US or the UK than most people would imagine. FT: What does that mean in practice? That the main policy rate need not go any lower, or can’t go any lower? CN: I didn’t say that. FT: Or that the deposit facility rate can’t go any lower? CN: I didn’t say that either. But it is clear that the room for manoeuvre on the deposit facility is limited. What I mean is that if we keep the present framework, we cannot move much. That’s obvious. If we want to move more, we have to change the framework, which could cause inconvenience.

Public opinion shifts rapidly from criticising banks for their mistakes – frequently, for the mistakes “inherited” from banks that disappeared some time back – to criticising them for not sufficiently easing the way for  4/13  credit to reach economic agents; indeed, for the risk of financial exclusion stemming from potential branch closures. Like the song, it would seem we can’t live with or without them. But the truth is, with or without criticism, the role of banks remains as essential today for our economy as it was 20 or 30 years ago. However, debate has arisen over the future role of banks, set against the emergence on the scene of the so-called Fintech. This can be seen as a threat or as an opportunity. I believe it entails both. But in any event, banks must evidently adapt their business model to technological change, as Gonzalo so rightly said. If instead of looking at the small, innovative and nimble Fintech, we assess the potential effect that the irruption of one of the so-called Big Tech may have on the system as a whole, the debate takes on a systemic dimension. In this connection, the recent announcement of the launch of the “Libra” project, the virtual currency sponsored by Facebook, has potentially systemic implications. These are so serious that supervisors, central banks and credit institutions must all evaluate the possible consequences. Evidently, we must be sure that the project will not compromise the integrity of payment systems and the stability of the system as a whole.
Even without this, economic activity could slacken in connection with decreased investment on account of falling demand and lower profits, as well as with a lower consumption propensity among households whose debt burden is already very high. In the euro area the available statistics indicate that the slackening of activity in the late autumn and winter was more marked than expected, mainly on account of weaker exports. Manufacturers and households differ in their assessments of the future; the former count on a turn for the worst, whereas consumer confidence has continued to improve. The direction in which confidence moves for these two groups will be crucial for prospects in the euro area. The optimistic trend among households has so far helped to mitigate the consequences of decreased external demand. The question is whether this will continue to be the case if industrial activity does not take a turn for the better. The Japanese economy has not shown any clear signs of recovering, though in some respects it does seem to have stabilised. The future path here is still highly uncertain. All in all, the statistics point to an international trend in the next two years that is weaker that in the Riksbank’s main scenario last autumn, though the differences should not be exaggerated. Together with lower commodity prices, the weaker international activity should result in lower external price pressure. The outlook in 2000 and beyond is, however, very difficult to foresee. One uncertainty is the endurance of U.S. economic growth.

This Construction Sector Group has found that approximately one-third of unemployed construction workers lack occupational experience and around 6 per cent also lack formal training. In that the average age of construction workers is rising and young people do not find construction work attractive, the bottleneck  5  BIS Review 18/1999  problems may become even greater in the future. In order to prevent this from leading to sizeable problems, proposals have been put forward for increased mobility, improved competence and marketing of construction courses, for example. Construction costs are measured by the factor price index (FPI); the largest item is wage costs. The price of completed dwellings, on the other hand, is measured by the building price index (BPI), which also includes the construction companies’ productivity and profit margins. These indexes do show relatively large price increases but there are no actual signs of any direct risks of an inflationary development in Sweden in the coming years, provided that the bottleneck problems do not increase. The rising costs associated with earlier upswings in activity have been connected with the contemporary subsidy systems as well as the high degree of concentration in the construction market. The revised system for financing residential construction has appreciably reduced one of these problems: construction companies as well as consumers are exposed more directly to production costs. But the problem of concentration in the construction market still remains and may be a future cause for concern.
Spain, France and Italy have experienced the most rapid growth rates, but in Germany further declines or only moderate increases in prices have been reported. An evaluation of the risks to euro area financial stability stemming from the household sector depends on the balance sheet situation of households as this determines their resilience to adverse financial shocks. Both the households’ debt-to-financial assets ratio and the debt-to-liquid financial assets ratio have continued to grow, but more moderately compared with the rapid increase at the beginning of the current millennium. Although this implies a further deterioration of households’ financial position, the household sector’s liquid assets still exceed its debts. 5. Euro area financial system  5.1. Euro area financial markets  Let me now briefly turn to the euro area stock and corporate bond markets, both of which continued to develop dynamically until very recently. The Review points out that despite the favourable economic outlook, a risk of a slowdown in market dynamics cannot be excluded if risk-free interest rates continue to edge upwards and credit ratings and/or earnings growth surprise to the downside. On the positive side, structural developments in euro money markets, described in Box 6 of the Review, and the increased use of collateral in borrowing and lending transactions, discussed in Box 7, suggest an overall strengthening of the financial system’s resilience to a systemic shock.

Indeed, insurers have begun to redesign their products such that interest rate risks remain manageable; while offering guarantees that are valuable to policyholders at the same time. Financing Asia’s long-term growth 23. Next, financing Asia’s long-term growth. Insurers are one of the world’s largest institutional investors, managing almost $ trillion or a third of the world’s professionally managed assets9. Due to the nature of their liabilities, insurers are an ideal source of longterm funding to finance economic growth. They have the ability to invest in long-term and less liquid assets, such as infrastructure investments and clean energy. This role has never been more critical; at a time when banking regulatory reforms have crimped banks’ appetite and ability to play a long-term financing role. We are already seeing encouraging signs of insurers collaborating with banks to provide debt financing for infrastructure projects together. Allianz, Ageas and Swiss Re are just a few examples of insurance companies which have explored such moves. Zurich Insurance Group also recently made its single largest investment in green bonds, which fund projects that help mitigate climate change in local communities. Singapore – a key hub to capture Asian premiums and intermediate global-Asia investments 24. Singapore is now recognized as the leading insurance hub in Asia-Pacific. We are home to many top global insurance players, and an ecosystem comprising a strong brokers’ cluster, the largest captive community in Asia Pacific, a growing cluster of specialty players and the largest grouping of Lloyd’s syndicates outside of London.
It was felt that extending implementation to 2022 provided sufficient time for firms to reissue maturing debt as TLAC or complete any additional issuance in a way that minimises any impact on the cost of funding or the supply of credit to the real economy. Turning to the quality of TLAC, the principles covering the Term Sheet set out: the need for bail-in to be legally enforceable on TLAC; that bail-in should not give rise to systemic risk; that TLAC instruments should be stable, long-term claims; and that holders should have clarity on the order in which they would incur losses. Taken together, these principles underscore the importance of subordination of TLAC to operating liabilities. Subordination provides clarity to investors and avoids bail-in being complicated or inhibited by compensation claims that arise if creditors are treated less favourably than in insolvency. This need to ensure that the bail-in of TLAC instruments is credible as well as feasible was reflected too in the provisions in the final Term Sheet for a 5% limit on liabilities that could sit pari passu with TLAC and for exclusion of structured notes. Making TLAC consistent with bail-in also led to clarification in the Term Sheet that after 2022 all TLAC should be issued out of resolution entities: debt issued out of SPVs and, in groups subject to SPE strategies, Tier 2 subordinated debt issued to the market out of operating companies will no longer count as TLAC.

They put the emphasis on self-insurance, or firms having adequate liquid resources and the internal infrastructure to identify needs and mobilise collateral, to be able to see them through the resolution process. But they also describe a potential role for credible public backstops to instil confidence and manage the perception that the firm cannot self-insure. A backstop for funding in resolution is likely to be separate from ordinary central bank facilities. But that should not necessarily mean that the bank in resolution is cut off at the central bank. To some extent the same principle that we want to apply to other market participants in dealing with a bank in resolution should apply also to central banks – that is, if the bank remains authorised and continues to perform, it should have continuity. As long as a bank in resolution continues to meet the eligibility criteria applied to other banks, it should not, as a general rule, be excluded from central bank operations. The adequacy of a G-SIB’s liquid resources through resolution is part of the resolution planning discussion in CMGs. In a cross-border setting, coordination around resources and availability of backstops will depend on the resolution strategy – in an MPE strategy responsibilities will sit locally with the authorities of each resolution entity; in an SPE strategy the home authority will need to play a stronger coordinating role. But this discussion will stand on the firm foundation provided by TLAC.
The need for long-term investment Let’s now shift to a more critical gear. At present, financial institutions deposit with the Central Bank close to four times the average of the previous ten years. In essence, all the growth this year in deposits from Maltese residents has ended up being deposited with us  Page 6 of 10  at the Central Bank. Loans to the private sector have essentially remained flat. Taking a longer term perspective, bank lending to nonfinancial corporations has fallen from 62% of GDP in 2009 to 31% in the first half of this year. From a situation where credit to the nonfinancial sector amounted to more than half of all bank loans, the share has fallen to slightly more than a third. Now, the usual explanation is that banks welcome any feasible projects that comes forward, and that the decline is therefore demand and not supply driven. Moreover, stricter regulation on bank capital and liquidity has made life tougher for bankers, and this, it is argued, has warrants a higher level of caution regarding which projects are financed. Permit me, however, to submit some other facts for your consideration. The recent IMF mission concluded that the cost of bank borrowing for corporates in Malta is among the highest in the euro area, and the spread has been widening in recent years. In their forthcoming report in January 2018 they will furthermore show that credit supply constraints impact SMEs disproportionately.

But with growth slowing, I anticipate the unemployment rate to increase from its current level of 3-1/2 percent to around 4-1/2 percent over the next year. Turning to inflation, I expect cooling global demand and supply improvements to result in declining inflation for goods. These factors should contribute to inflation slowing further from its current rate to around 3 percent this year. While services inflation is still a sticking point, I expect overall inflation to come back down to 2 percent in the next few years as further tightening of monetary policy realigns the balance between demand and supply. Conclusion I'll close by saying that the monetary policy gear is turning. But it will take time for supply and demand to come back into proper alignment and balance, so we must keep moving. While the route ahead is still uncertain, I am fully confident we will return to a sustained period of price stability. 1 John C. Williams, Peeling the Inflation Onion , remarks at the Economic Club of New  York, delivered via videoconference (November 28, 2022); John C. Williams, A Bedrock Commitment to Price Stability , remarks at the 2022 U.S. Hispanic Chamber of Commerce National Conference, Phoenix, Arizona (October 3, 2022). 2 John C. Williams, A Steady Anchor in a Stormy Sea , remarks at SNB-FRB-BIS High-  Level Conference on Global Risk, Uncertainty, and Volatility, Zurich, Switzerland (November 9, 2022).
China and India's emergence as economic powerhouses have driven cross-border trade and fuelled economic growth in Asia. Japan has rediscovered its vigour. Many Southeast Asian economies are enjoying vibrant economic growth. The resultant wealth creation will increase demand for insurance. To increase our competitiveness as a regional insurance and reinsurance centre, and retain a greater share of the Asian business that traditionally flows outside Asia, it is important for Singapore to deepen its pool of underwriting and broking expertise, especially in the more specialised risks, and to increase the capacity to underwrite such niche risks. We also want to encourage greater specialisation and new techniques in the industry, for example by having specialised service providers to support the industry, and by facilitating access to a wider variety of risk and capital management tools for insurers. Let me share with you some ideas and initiatives we have to help catalyse such developments. Insurance expertise and capacity Firstly, regarding insurance expertise. The industry needs to accelerate its efforts to provide more regional and international exposure, and advance training across a broad range of business lines, to raise the level of technical competency and experience of its staff. The industry should take advantage of MAS' Financial Training Scheme (FTS) which provides co-funding for training. Such efforts should not be focused only on developing the existing talent stock, but also cultivating the talent pipeline. The insurance industry faces strong competition for intellectual capital from other economic sectors.

BIS Review 103/2006  3
Paul Tucker: Competition, the pressure for returns, and stability1 Speech by Mr Paul Tucker, Deputy Governor for Financial Stability at the Bank of England, at the British Bankers’ Association Annual Banking Conference, London, 17 October 2012. *  *  *  Introduction Propelled by a deep crisis in the financial system, the international authorities are overhauling the “rules of the game” for global finance. The changes are profound. But it is worth stressing that the goal is not to abolish risk or risk-taking. We need to find broadly the right balance between, on the one hand, safety and, on the other hand, the contribution that sound and honest finance can make to economic prosperity. In striking that balance, international policymakers have maintained three beliefs: •  risk is an intrinsic and unavoidable part of the (monetary) services that banks provide to the economy, just as risk is intrinsic to the businesses that borrow from banks;  •  competition in finance is good, although the authorities need to be mindful that the drive for superior headline returns can contribute to excessive risk in the system as a whole;  •  a global financial system must be maintained, but the authorities need to contain the way that financial problems can be transmitted easily from one part of the globe to others. In short, the things society wants from finance come with risks attached. History contains repeated episodes of herd-like chasing of high headline returns during exuberant phases of the credit cycle.

I shall confine myself to a tour of some of the international and domestic reforms of banking itself, highlighting a few questions for debate along the way. Expose debt holders to losses: resolution regimes First and foremost, we need holders of bank debt to be exposed to losses when banks fail. This is not some macho thing. If banks’ cost of debt finance does not vary with the risks they are taking, what should be an important check on the tendency to excess is badly diluted. For the financial system to be safe, we need to be able to sort out distressed commercial banking and investment banking operations without massive disturbances to the provision of services and without taxpayer solvency support. That, in a nutshell, is what is meant by making a firm “resolvable”. The economy’s payments system obviously needs commercial banks that can be resolved in an orderly way. But, in addition, the capital markets need sound intermediaries which, if they become distressed, can expire safely or whose viable parts can be resurrected. I stress that because we need to do more than ensure that the most critical services are preserved come what may. We need also to avoid the massive destruction of value that occurs when, under standard bankruptcy proceedings, a trading portfolio is liquidated in stressed market conditions and without sensitivity to spillovers to the rest of the system. We need resilient capital markets.