samchain/econo-pairs-v1 huggingface dataset:
However, with debt maturity profiles spread out over time and much of the borrowing at fixed rates, these vulnerabilities remain contained. A third necessary differentiation is that each country stands in a different place. If I may take the example of the French financial sector, both banks and insurers have proven quite resilient, with strong capital and liquidity positions, suffering no contagion from the financial turmoil caused by the political crisis in the UK. In terms of profitability, orderly rising interest rates should also have a progressive and positive effect on banks net interest margin. All of these factors explain that CDS premiums of French banks, for example, have remained lower so far on average than that of the US, the UK, and the rest of Europe, which underlines market confidence in the solidity of the French financial system. We happen not to have pensions funds – which in this regard at least is an advantage –, and French insurance companies don’t make significant use of the same kind of derivatives that would imply margin calls. Page 7 sur 11  These thoughts about financial stability bring me to a general remark about macroprudential policy in the present and new context of tightening monetary policy. When rates were low, macroprudential policy was essential to contain financial risks, allowing monetary policy to focus on the inflation and to remain loose as long as necessary. But now, how to revise our stance in a high interest rates environment with inflation above target?

Ultimately, leverage combined with inept asset management strategies will lead to hedge fund failures. These are likely to occur in the future as they have in the past. It is not inconceivable that expansionary monetary policy and the resulting global liquidity boost provide fertile grounds for the rise and fall of hedge funds. In the event of hedge fund failures, investors – for the most part wealthy individuals – will lose money. In some cases, these amounts could be vast. Nonetheless, such losses have no bearing on the stability of the financial system and should be of no concern to policy makers. What financial and economic policy makers must be concerned with are hedge fund failures or hedge fund activities that undermine the stability of the global financial system. Prudent and disciplined risk management methods, operations and processes in the global investment banks provide the most reliable defense against an erosion of lending standards and the potentially hazardous consequences of the use of excessive leverage in the hedge fund industry. BIS Review 8/2005  5  Graph 1  12000  1200  10000  1000  8000  800  6000  600  4000  400  2000  200  0  AuM in USD bn  Number of funds  Number of Hedge Funds and Assets under Management  0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 No.
As PM Mahathir has pointed out, Malaysia’s exchange controls have not harmed its economy. The Malaysian government has been working out bad loans in the banking sector, and getting banks to consolidate into core-banking groups. It is not clear how much corporate restructuring has taken place. But Malaysia’s external debt is relatively low and it can afford a certain amount of very long-term infrastructure projects which may not offer attractive financial returns. In Indonesia, Abdurrahman Wahid has just been elected as the fourth President, with Megawati as Vice-President, in Indonesia’s first truly democratic presidential election in over thirty years. It is a good outcome, after two traumatic years of upheaval and chaos. But the road ahead for Indonesia is not easy. The new government faces many urgent priorities. It must work out a new political balance, redefine the role of the military, lay the basis of a civil society, and strengthen the rule of law. Then confidence will return and the economy will revive. In this arduous task of national reconstruction and reconciliation, Indonesia has the good wishes and support of its neighbours, including Singapore. North East Asia In North East Asia, Japan is finally recovering from its prolonged recession. Public investment, private consumption and housing investments are all improving. We are also starting to see real financial and corporate restructuring in Japan. Sony, Nissan and NTT have recently announced sizeable cuts in their workforces2 – a significant departure from the lifetime employment system.

In addition to encouraging trends in the global economy, the stabilisation of output growth in the euro area has contributed significantly to this. However, the most recent industry and consumer surveys also give positive indications with regard to economic activity in the euro area. Therefore, it is likely that economic activity will accelerate in the second half of 1999 and the year 2000. When assessing the risks for price stability, the ECB does also monitor the external value of the euro. The weakening of the effective exchange rate of the euro, which remained at around 8% between the start of the year and early September, lent itself to an increase in import prices denominated in euro. Taking into account all available information, the outlook for the preservation of price stability remains favourable. However, recently inflationary risks have increased slightly. In the coming months it will therefore be necessary to monitor developments in the monetary aggregates and credit aggregates. In addition, the short-term effects of the increase in oil prices and exchange rate developments on consumer prices need to be taken into account. The latter factors should not affect the outlook for price stability as long as wage increases remain moderate. The wage round for the year 2000 will, however, play an important role in future price developments. On the basis of this current assessment of the monetary, financial and economic situation, the Governing Council of the ECB left the central bank interest rates unchanged at yesterday’s meeting.
9  For sterling markets, see https://www.bankofengland.co.uk/markets/transition-to-sterling-risk-free-rates-from-libor https://www.isda.org/protocol/isda-2020-ibor-fallbacks-protocol/  10  4  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  4  3. Reducing the legacy of post-2021 LIBOR-linked contracts  Sadly it’s not only in derivatives where pre-existing fallback arrangements have been absent. Until recently, few contracts in other markets envisaged the potential for a world without LIBOR either, leaving borrowers and lenders alike exposed to serious uncertainty and the risk of a disorderly outcome. Where those contracts are expected to remain outstanding, the best chance of avoiding those risks lies in active conversion to another rate before the end of 2021. For sterling, the industry-led Working Group has strongly encouraged all market participants to complete, by the end of next March, a full assessment of their LIBOR contracts extending beyond the end of 2021. The aim is to identify those that can be actively converted, and to put plans in place to complete those conversions wherever viable by the end of next September. This advice is echoed more broadly by the FSB in its global transition roadmap. 11 If you haven’t done so already, you should be making a start on that assessment. To stand a chance of controlling your destiny, you need to know what your exposures are, and how you’re going to deal with them over the course of next year. Make and resource those plans now – we don’t want anyone to be caught out. And the regulators will be watching closely.

The conclusion of this process and the launch in October of ISDA’s protocol to insert these fallbacks into existing contracts provides the means for LIBOR users globally to plug a glaring risk in their derivative positions.10  And they are doing so, in large and ever-increasing numbers. As of this morning, nearly 1,700 legal entities around the world had adopted the protocol – from huge global banks and corporates, to local building societies and property firms. The list covers all twenty of the largest traders in sterling swap markets by volume. And both LCH and CME, the world’s largest swap clearing venues, have committed to adopting the same measures in their own rulebooks. But there’s much more left to do. Derivative exposures are not just the domain of large banks – they also hedge real economy risks. It’s therefore encouraging to see big household names like Unilever and Tesco, Vanguard and Aberdeen Standard, among the early adopters. But we need to see this coverage expanded to much more of the investment community and to the non-financial corporates who use these markets, as well as completing sign up by banks. If your firm has not yet assessed whether to sign up to the ISDA protocol, or discussed plans with your trading counterparties, this should now be a top priority. And if you determine the protocol is not the right approach for your particular circumstances, you will need to make clear alternative plans to mitigate the risks.
And the smooth operation of RTGS makes a vital contribution to the Bank’s overarching mission of maintaining monetary and financial stability. In April this year we celebrated the 25th anniversary of our current RTGS service. The service has been enhanced along the way with a number of technical and policy upgrades. We were the first major central bank to broaden access to RTGS to Non-Bank Payment Service Providers (NBPSPs), of which there are already around half a dozen that hold settlement accounts in RTGS. In April 2021, we introduced a new category of RTGS account for payment system operators – ‘omnibus accounts’6. These offer the benefit of settling in central bank money to a 2/6  BIS central bankers' speeches  wider range of payment system operating models. By doing so, we can support the industry in developing faster and more cost effective services, and the potential to enhance cross-border payments globally. But we want to do more. The time is right to drive yet further resilience and innovation through the RTGS Renewal Programme. Technology is changing, the payments landscape is changing here and abroad, and the demands of users and potential users are also changing. Industry engagement as a cornerstone to our joint success Just as the arrangement of Stonehenge takes the form of supportive structures, so too does the delivery and operation of the renewed RTGS.

Malaysia is also the host to a number of the international institutions in the area of finance that include the Islamic Financial Services Board, and more recently, the Alliance for Financial Inclusion. We are very pleased that SWIFT, an important market infrastructure service provider to the global financial community, has selected Kuala Lumpur as its Corporate Services Centre. Malaysia’s financial sector has in this recent decade made significant strides in facilitating the country’s cross-border economic linkages with other economies. Malaysia is part of a vibrant region, comprising ASEAN and of the greater Asia. The region has prevailing strong foundations and significant growth prospects with strong inter regional connectivity. Malaysia’s volume of cross-border trade and foreign exchange settlements with ASEAN economies alone has grown at an average rate of 10% in the recent four years, reflecting Malaysia’s increasing integration with the regional markets. A vibrant foreign exchange market has supported this growth, where the overall Malaysian foreign exchange market volume has increased by more than five-fold in a period of 8 years to USD11.1 billion per day, at a ratio of about 6 times of total trade. Like most regional blocs, the integration process for ASEAN seeks to promote greater regional connectivity which will in turn expand and reinforce the region’s growth potential. The aim of reinforcing the regional linkages in the payment and settlement systems is to enable the establishment of risk mitigation mechanisms such as Payment versus Payment (PvP) and Delivery versus Payment (DvP) to reduce the foreign exchange and securities settlement risk.
The time may have come to evaluate the utility of the central credit registers that have long existed in some continental European and Asian countries. None of that, however, can alter banks’ core comparative advantage as monetary institutions: the provision of liquidity through overdrafts, lines of credit and other working capital facilities. That role might be aided by a revival of a market in trade credit.15 Banks will always be levered because their core monetary service revolves around transaction-account deposits, which are debt liabilities. And, on the other side of the balance sheet, they will always have somewhat risky asset portfolios because being a monetary institution makes them an efficient supplier of short-term finance to households, firms and the rest of the financial system. But they can do all that only if they are healthy and prosperous: only sound banks can make a credible promise to repay or lend money on demand. The fragility in banks’ balance sheets is why they are regulated. Today, I have sketched the outline of a Capital Accord for the future. An Accord that would go beyond reducing the probability of failure, by also addressing the need to cope with distressed banks, ensuring that resolution can be orderly. Taking the tax-deductibility of debt interest as a given, the banking authorities can make it beneficial to society as a whole, not just to private interests, by requiring that a minimum level of term bond finance be part of the capital structure.

The floating krone exchange rate has been able to act as a shock absorber for downturns in the Norwegian economy. In periods where oil prices have fallen and the economy has moved into recession, the krone exchange rate has depreciated and contributed to strengthening competitiveness and preventing inflation from moving too low. Nevertheless, interest rate setting is not decoupled from interest rate developments in other countries. A rise in foreign interest rates normally pulls in the direction of a weaker krone. A weaker krone pushes up prices for imported goods. When inflation is already high, as now, this increases the risk of inflation becoming entrenched, which we must take into consideration when setting the policy rate. If the FX market loses confidence in our commitment to tighten monetary policy when inflation rises, the krone may depreciate further. Confidence in the inflation target is a precondition for monetary policy's ability to dampen fluctuations in the economy and to support high employment. 3/5  BIS - Central bankers' speeches  In the long term, there is no conflict between the objective of price stability and high and stable employment. Ensuring that inflation remains low and stable is the most important contribution monetary policy can make to promoting high employment over time. We cannot keep employment permanently above potential by keeping the policy rate low. The level of employment over time is determined by structural conditions such as labour force composition, the tax and social welfare system and wage formation.
Over these decades, the economic environment has been characterized by freedom of capital flows, open investment climate, low inflation, stable financial system and availability of ample liquidity. This has encouraged the rise in both domestic and foreign investment in the country. Particularly in the past two decades, the growth has been rapid in the non-oil private sector which has almost doubled and now represents over 44% of the annual GDP, while the percentage contribution of the oil sector has declined to around 33%. As for SAMA’s other major objective of supervising and regulating the financial system, SAMA has followed prudent policies aimed at creating a sound, stable, solid and efficient financial system with a modern payments system. SAMA’s Charter and the Banking Control Law give it broad regulatory powers to ensure that banks are adequately capitalized, having efficient managements, run by fit and proper Directors and Managers who meet competence and integrity requirements, and that the banks have fit and appropriate operation and control systems. Over this long period, prudent supervisory policies and timely action have ensured that banks stayed strong and solid. This is a remarkable achievement in the face of global and regional economic uncertainties, political crisis, wars and volatilities of the oil market. Today, Saudi banks play a leading role in the financial system that also includes five large specialized government development financing institutions and leasing, investment and insurance companies and a few money changers.

But in the past year there occurred subsequent developments leading to a substantial demand for banking services that included payment of salaries, payment of public utilities bills and fees through banks, more subscription to public offering of companies' shares, increase of demand on share trading, as well as enforcement of some security controls required as measures for protecting the banking system against money laundering operations. All this occurred in a very short period, leading to rising complaints of inefficient services provided by some bank branches. Banks managed and they are still working to overcome such shortcomings by employing and training more staff, opening new branches, and providing alternative channels to perform banking services, with employment rising during twelve months by 20%. 2. Banks have made significant strides in provision of asset management services such as investment portfolio accounts, mutual investment funds aimed at domestic, regional and  2  BIS Review 59/2006  international shares and bonds markets, money market instruments and real estate investment. Assets under management increased 8 times from Rls 17 billion to Rls 132 billion during the period 1996-2005. 3. Since 1998, consumer loans have increased dramatically. This can be largely attributed to the SARIE system which permits loans to be secured by salary assignments. These loans have provided access to banking system liquidity to a large segment of customers to meet their consumer and investment needs, thereby, supporting the pace of economic activity. 4.
Second, some EU bodies are obsessed with the “all EU countries must be same” approach. While there may be some point to this, why insist on it in the case of the single resolution system, for instance, if it has been negotiated that the SSM only applies to euro-area countries plus volunteers? One can hardly expect non-euro area countries not participating in the SSM to jump at the single resolution system if it means sharing the burden with those inside the banking union without the same treatment in the area of a fiscal back-stop. At the same time, would you join the SSM if you did not have a clue how the single resolution rules were going to work? The CNB’s position was: let’s discuss the whole thing (BU) in one shot as a one compact and coherent package where the balance between powers, duties, responsibilities and money always remains assured. And negotiate everything as a single animal, so that illogical inconsistencies are not being produced all along. Sure, that would take much more time, but the final outcome might look better and we would not build up the house from the roof down. We are debating the supervisory part first, while burden-sharing (money) is being left for the future. The sequence of steps should ideally be exactly the opposite one. Why? My observation is that the way the various bail-outs and the SSM have been negotiated so far shows that the readiness and willingness even among euro-area countries to share money is declining over time.

Jan F Qvigstad: Comments on Lars E O Svensson's lecture "Policy expectations and policy evaluations – the role of transparency and communication" Speech by Mr Jan F Qvigstad, Deputy Governor of Norges Bank (Central Bank of Norway), at the conference "Ten Years of Riksbank Independence", Stockholm, 11 September 2009. *  *  *  Introduction It was a great pleasure to accept the invitation to discuss professor and fellow central bank deputy governor Lars Svensson’s lecture in connection with the tenth anniversary of Riksbank independence. In his lecture, Lars Svensson discussed communication, credibility and monetary policy evaluation. He looks at general issues for central banks seeking to influence key rate expectations, using the Riksbank as an example. 1 I will not venture to remark on the Riksbank’s assessments but will offer my comments on the same issues in the light of Norges Bank’s experience of interest rate forecasts. There are a number of similarities between the communication strategies of the Riksbank and Norges Bank. And underlying these strategies is a model developed by, among others, Lars Svensson. In his lecture today, he described how to arrive at an interest rate path that “looks good”. He showed, as he has on many previous occasions, that this can be formalised by finding the interest rate path that minimises a given loss function. When does the interest rate “look good”? Svensson raises the issue of whether monetary policy is well balanced, not only ex-post but also ex-ante.