samchain/econo-pairs-v1 huggingface dataset:
But insolvency had generally been avoided by the Bank of England twisting arms to ‘encourage’ other banks, to support a rescue ‘lifeboat’, as in the secondary banking crisis of 1973 or to take over the failing bank as with Barings in 1995. The failure of BCCI in 1991 did lead to a protracted and difficult insolvency. But the bank’s activities in the UK were not of a scale that posed risks to the UK financial system and economy The Bank of England’s approach to bank failure, an approach shared by many central banks, was one of ‘constructive ambiguity’. The aim was to guard against moral hazard by maintaining uncertainty about whether a bank in trouble would get liquidity support with the threat of insolvency in the background. In the event the threat of insolvency proved neither credible nor effective. When Northern Rock got into trouble with £ in customer deposits and a balance sheet of £ the UK financial authorities were left with no way of rapidly transferring parts of the failed bank’s business to another bank; or of recapitalising the bank by imposing losses on shareholders and creditors without serious risks to financial stability. 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  And so, on 17 September 2007, the Chancellor was compelled to guarantee all Northern Rock deposits. Subsequently the bank was nationalised to avoid insolvency and to allow the bank’s critical functions to continue while a buyer was found for its deposits.

Based on a joint assessment of financing conditions and the inflation outlook, the Governing Council judges that favourable financing conditions can be maintained with a moderately lower pace of net asset purchases under the pandemic emergency purchase programme (PEPP) than in the previous two quarters. We also confirmed our other measures, namely the level of the key ECB interest rates, our forward guidance on their likely future evolution, our purchases under the asset purchase programme (APP), our reinvestment policies and our longer-term refinancing operations, as detailed in the press release published at 13:45 today. We stand ready to adjust all of our instruments, as appropriate, to ensure that inflation stabilises at our two per cent target over the medium term. I will now outline in more detail how we see the economy and inflation developing, and then talk about our assessment of financial and monetary conditions. Economic activity The economy rebounded by 2.2 per cent in the second quarter of the year, which was more than expected. It is on track for strong growth in the third quarter. The recovery builds on the success of the vaccination campaigns in Europe, which have allowed a significant reopening of the economy. With the lifting of restrictions, the services sector is benefiting from people returning to shops and restaurants and from the rebound in travel and tourism. Manufacturing is performing strongly, even though production continues to be held back by shortages of materials and equipment.
By contrast, Romania pursues both a floating exchange rate and a direct inflation targeting strategy, the same as Hungary, Poland and the Czech Republic and, therefore, the approach is different, the changeover to the euro being more complex in this context. This is by no means to say that Romania is sceptical about euro adoption, but merely that it needs a comprehensive view, meant to ensure an adequate timing of this moment and a successful entry into the euro area. While we are on the subject, it cannot be overlooked either that the New Member States having adopted the euro – Latvia, Lithuania, Estonia, Slovakia, Slovenia – are relatively small countries, with a different level of real convergence. Referring to countries that are currently in the process of adopting the euro, I myself am among those who stress the need for sustainable convergence, being aware that, in order to reap the benefits of euro area accession, several essential prerequisites have to be cumulatively met. The fact that nominal convergence criteria need to be fulfilled in a lasting – not accidental, forced or temporary – manner is just one aspect. Actually, the durability of convergence has been set forth in the Maastricht Treaty itself (“high degree of sustainable convergence” is the exact wording), but this “detail” has been taken too lightly for a while. Moreover, now it is obvious for everybody that real convergence is also essential for the sustainability of the entire process of euro adoption.

Construction activities over the next few years In line with other economic activity, construction activity declined slightly last year, although this was estimated to be a temporary phenomenon. Large resources have been allocated for infrastructure measures and for the development of the third generation of mobile telephony, which is estimated to lead to increased activity in future. There are numerous indications that residential construction will continue to increase, albeit from a low starting level. The continuing positive development of households’ disposable incomes should lead to an increase in new building and renovation of housing. Subsidies for building rental apartment blocks, support for student accommodation and ecological construction are also expected to stimulate investment in housing. Seen in a slightly longer term perspective, the low rate of new building is insufficient to meet the demand. A shift in the age structure will probably lead to an increase in housing investment as a percentage of GDP. However, even here prices and wages comprise a problem for the industry. The preliminary results show that construction workers received wage increases in excess of 5 per cent last year, while productivity only amounted to 1.4 per cent and unemployment among construction workers was almost 10 per cent. Unemployment in the construction industry varies geographically, however, with a rate of under 3 per cent in Stockholm and over 19 per cent in, for instance, the Gävleborg and Norrbotten regions. Relative productivity in the construction sector appears to be declining. The gap between the percentage employed and the percentage of GDP is increasing.
For example, asset fire sales dynamics that negatively impact market prices or a loss of confidence in the industry during periods of uncertainty or distress are examples of “externalities” with far-reaching effects on the financial system.7 Moreover, those costs and benefits will be realized in the future and thus need to be assessed ex ante from a probabilistic perspective. The official sector includes all of these costs and benefits to society in assessments of policy efficacy. This makes evaluating trade-offs and assessing effectiveness difficult, and suggests that simple assessments are likely to be incomplete. Policy assessment requires a rigorous evaluation of a broad range of outcomes, and an important part of the ongoing dialogue in conferences like this one is to continue to develop the conceptual frameworks and to study the data in order to make the most meaningful assessments of policy effectiveness. A Look at Bank Performance I will now discuss two perspectives on bank performance since the financial crisis that serve as rough proxies for the resilience of the industry and the provision of financial services. This is clearly not a rigorous test of whether specific regulations are optimal, but provides some indicative results about trends in resiliency and financial services. I will focus on accounting metrics from the balance sheet and income statement, but one could also turn to market data to assess resiliency.

Kevin Stiroh: A perspective on supervisory objectives and tradeoffs Keynote remarks by Mr Kevin Stiroh, Executive Vice President of the Financial Institution Supervision Group of the Federal Reserve Bank of New York, at the Columbia University’s School of International and Public Affairs and the Clearing House Association Conference on “Optimal Bank Capital Regulation,” Columbia University, New York City, 23 February 2017. * * * Accompanying charts  Introduction Good afternoon. Thank you very much for the kind introduction. Since the financial crisis, the topic of today’s conference—Optimal Bank Capital Regulation— has been of considerable interest to academics, the official sector, and market participants. Some have argued for dramatically higher capital requirements, while others have argued with equal conviction for substantially lower capital requirements. I am happy to be here today to offer some thoughts about potential trade-offs across supervisory tools and objectives, and how one might consider those trade-offs within the current supervisory framework. I conclude that the U.S. banking system has become considerably more resilient since the financial crisis, which is a necessary condition for the sustainable provision of financial services to households and businesses that supports the growth and stability of the U.S. economy. My comments today are my own and do not necessarily represent those of the Federal Reserve Bank of New York or the Federal Reserve System. Supervisory Objectives and Trade-Offs A well-functioning financial system intermediates between savers and borrowers, supports a robust payments system, and facilitates risk transfer and the efficient allocation of capital.
They have repaired their balance sheets, but not their compact with society. They have reformed their systems, but not their culture. Only with trust can the financial industry earn the “social license” it needs to thrive and grow. To strengthen this trust, we must: ensure that finance is not abused for illicit purposes; that it places its customers first and deals with them fairly; and that it fosters a culture of good conduct grounded in strong values and ethics. It is my pleasure now to invite Mary to share her views on fostering stronger culture and conduct at financial institutions. 5/5  BIS central bankers' speeches

Again I am happy to inform you that the central bank in partnership with the Bankers Association of Zambia are in the process of developing credit reference bureau guidelines and will in the near future issue licences to deserving companies. Lastly, but not the least, the issue of lack of an effective secondary financial market in Zambia is being addressed with Commencement of work on the Financial Sector Development Plan (FSDP). Let me join the Honourable Minister of Finance in wishing Barclays Bank Zambia PLC the very best of success with the launch of the Home Loan product. I thank you!! BIS Review 6/2006  1
Such inclusive, ongoing cooperation and information sharing builds trust and understanding. It will also enhance the effectiveness of resolution implementation by pre-empting host regulators from taking actions that may be incompatible with the home regulator’s resolution actions, due to a lack of clarity or awareness over the home regulator’s intended actions. Conclusion In conclusion, the issues confronting regulators today are wide ranging. This event is an excellent showcase of how regulators can come together to share our experiences and to keep each other apprised of developments in our respective regions. For instance, Europe’s Capital Markets Union project is an exciting development which we look forward to learning more about from our European colleagues. With various market integration initiatives also underway in Asia, there is room for us to exchange views and to learn from each other. Thank you for your attention. 1 France, Germany, Italy, Spain, UK. 2 Australia, China, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, and  Thailand. 3 Data source: IMF. 4 MAS’ Guidelines on the Regulation of Clearing Facilities, revised , set out the circumstances under which  overseas clearing houses are required to be regulated in Singapore, and how we approach the regulation of such entities. 5 In relation to financial risk management and recovery practices. 4/4  BIS central bankers' speeches

Collateral should be required, but good collateral can never outweigh a borrower with a poor credit rating or an uncertain project. The bank must also make a realistic assessment of the value of collateral. For example, it is common to provide the borrower’s own premises as collateral. However, when a borrower goes bankrupt the value of the premises often declines substantially, as it is difficult and costly to adapt them to another user. The banks accepted high concentrations, not merely in lending to individual borrowers, but also credit granting to individual sectors and geographical areas. For example, the banks’ loans to the property sector, or with property as collateral, accounted for more than 60 per cent of all loan losses. This is a concentration risk that contravenes all sound risk management and is currently prohibited. However, it is easy to say all this with the benefit of hindsight. At the end of the 1980s, the banks had substantial profitability and low loan losses. Economic activity was strong. I believe that all of us active in the financial system then would have found it hard to believe that a crisis was impending. Nevertheless, the Swedish banks had one important piece of the puzzle already in place prior to the crisis. They were well capitalised and had built up capital reserves that corresponded to, or exceeded, the statutory level of 8 per cent. This created some resilience and to a great extent reduced society’s direct costs when the crisis occurred, as the bank owners’ money was lost first.
Speaking on behalf of the Thai people, I believe our history has played a big part in influencing our actions and our mindsets, allowing us to cope with new challenges. Specifically, Thailand’s long history as an open trading nation—having limited resources and military strength, and operating under the landscape of continued foreign threats—has implanted the mindsets of the Thai to be open-minded and receptive to new opportunities while flexible in our approach to adversities. It is with this mindset that has allowed our nation to adapt to changing environment and withstood various threats. Looking ahead, our resilience will certainly be tested by disruptive changes brought about by technological advancement. Thus far, the Thai people have shown that they are able to adapt and be receptive of new opportunities that have come with new technologies. This can be seen in the remarkable rate of adoption of the PromptPay faster-pay service since its launch just over two years ago, with now over 47 million subscribed accounts, a large number considering the total population of Thailand is just over 66 million. During that same period, usage of digital  7/9  payment almost doubled, reaffirming receptiveness of the Thai people to new payment channel. Moreover, the Thai population is digitally engaged, ranking among top countries with the highest number of social media users3. This has created opportunities for new platforms to emerge and innovations to prosper. Besides the people, increasing number of Thai businesses have incorporated new technologies into their work processes.

Recent history has shown that the Thai economy has the resilience to withstand adverse events and has  4/9  been quick to recover. Over the past ten years the economy has had to endure a number of shocks—externally, from the global financial crisis of 2009 to the beginning of quantitative tightening; and internally, from the domestic political turmoil throughout the decade, big flood of 2011, to the passing of His late Majesty King Bhumibol Adulyadej in 2016. And yet, over the past decade the Thai economy grew on annual average of 3.3 percent; it registered positive current account surplus in eight of the last ten years; and the Thai Baht has been one of the most stable currencies in the region. The economy has been able to overcome these challenges, because it possesses a unique set of qualities, qualities that contribute to our resilience. These key qualities are macroeconomic stability, diversified growth engines, and ability to adapt to new challenges. Ladies and gentlemen, Having sound macroeconomic stability is important for an economy to ensure confidence and provide environment conducive to growth. It also acts as a critical buffer, especially for small open economy, against episodes of external shocks and capital flow volatility. The Thai economy possesses macroeconomic stability in at least four key areas: (1) Our external stability remains strong, with ample foreign reserves, covering 3.4 times short-term external debt.
All this has aggravated fears of a sharper slowdown in trade, a deterioration in the confidence of companies and households globally and a loss of dynamism in global activity. And there is also a resurgence of the possibility of a no-deal Brexit. Scenarios where these risks intensify could lead to an abrupt deterioration of financial conditions. In view of this, the main central banks are likely to make their monetary policies more expansionary; however, this could be insufficient to contain the loss of appetite for risk and the decreases in the prices of assets and commodities. The high level that the prices of some riskier assets have reached—in some cases matched by increased borrowing—shapes a much more complex scenario. In addition, the materialization of any of these scenarios could have a negative impact on local investment decisions and expectations. At home, it is estimated that the balance of risks for activity is biased downward. The baseline scenario projects that, beyond the result of the first quarter, investment will see a significant recovery in the next two years, which includes both large-scale mining projects and investment from other sectors. However, there are risks derived, for example, from the greater uncertainty of the external scenario and the various costs associated with investment projects’ red tape. Also, worth mentioning are the risks coming from the mining sector. Although its poor performance of recent quarters has responded in part to specific factors, there are more permanent elements, such as the lower grade of mineral ore, that could prolong this weakness.

Thus, CPI inflation will end the year at 2.4% and the CPIEFE at 1.9%, both below June's forecasts. Going forward, core inflation is expected to fluctuate around 2% until mid-2018, heavily influenced by the effects of the recent peso appreciation, to gradually return to 3% thereafter. Meanwhile, as fruits and vegetables prices resume a similar dynamic to that of their historical averages, the CPI will return to the target by the second half of 2018. As I mentioned, this trajectory is based on the RER depreciating slightly over the projection horizon (figure 10). 5  As usual, a number of internal and external elements represent risks to these projections. Abroad, an ongoing concern is how the financial markets will respond to the monetary policy strategies of the main central banks of the developed world. After several years of highly expansionary monetary conditions, the economies have closed—or are on their way to close—their gaps and it is natural for monetary policy to begin to normalize, both in its more (rates) and less (balance sheet) conventional aspects. This entails risks because of the unprecedented timing and gradual pace of the process and its differences with market expectations. In the United States, there's also the doubts about fiscal management and its effects on growth, interest rates, and asset prices in general. Add the concerns about whether the recent low inflation figures in several developed countries are one-time or rather systematic events, plus risks associated with recent geopolitical tensions.
BIS central bankers’ speeches  7  Exercising care and caution in uncharted macroprudential waters The authorities are sailing in uncharted waters when it comes to macroprudential measures. The complex interrelationships between monetary policy, traditional banking supervision and the macroprudential toolkit are difficult to assess. Consequently, we do not always know exactly how the different measures will work. The need for analysis and research in this field is correspondingly great. However, to be realistic, we will never have all the answers or be able to dispel all uncertainties, as – incidentally – is always the case in monetary policy. But this should not stop us using these instruments when we judge it to be necessary. In doing so, we endeavour to exercise the requisite care and caution. Consequently, we undertake comprehensive investigations, evaluate the results carefully and systematically, and carry out our measures based on criteria which have been specified in advance. As in the case of monetary policy, if decision-making is as free as possible from political influence and manipulation attempts, its quality will be improved. Following these thoughts, I would like to return to my initial question concerning the SNB’s role in financial stability, as a kind of interim conclusion. Central banks have always had an important role in financial stability. However, the crisis has shown that the traditional approach, which relies exclusively on the power of persuasion and the extinguishing of fires, can be very expensive.

It would be helpful if actual conversions happened reasonably frequently and not only in a rare crisis, demystifying the whole process. One  16  Admati, DeMarzo, Hellwig and Pfleiderer, 2010, “Fallacies, Irrelevant Facts, and Myths in the Discussion of Capital Regulation: Why Bank Equity is Not Expensive,” Stanford GSB research Paper 2065. 17  Duffie, 2010, “Contractual Methods for Out-of-Court Restructuring of Systemically Important Financial Institutions”, in Ending Government Bailouts as We Know Them, Scott and Taylor (eds). Hoover Press. 10  BIS central bankers’ speeches  would also need to make sure that the maturity profile was such that no dominant amount of contingent capital was rolled at any one point in time. There could be an on-going process of monitoring, rather than particular trigger dates that may cause a focus for a “run” during times of stress. Stress tests could also be one of the tools to force conversion of contingent capital securities by bank regulators. In addition to the accounting based capital trigger, capital requirements could be expressed in terms of what scenarios a bank has to be able to withstand, with capital securities triggered when the existing common equity is not sufficient. One argument that has been raised against contingent capital, has been the lack of a natural investor base, reflecting market segmentation between “credit”, “rates” and “equity” investors. We believe strongly that market segmentation is an inefficiency which should not be taken as a given; there are already regular convertible debt securities with an investor base.