samchain/econo-pairs-v1 huggingface dataset:
A bank failure affects not only shareholders and professional investors, but also all the ordinary people who have put their money in the bank in the belief that it will be safe there. It is not without reason that you often hear the reference to widows and orphans running the risk of losing their money in connection with bank problems. And even if the depositors may in the end recover much of their money in a subsequent insolvency procedure, they may lose access to the money in their bank account, and the possibility to make payments from it, for quite some time. As most of us have most of our money in a bank account, we may find it difficult to quickly find the means needed to pay our rent and food if this happens. And you may also be affected by the failure of other peoples’ banks. For instance, if your employer’s bank gets into problems, the pay-roll account might be frozen and you might not get your salary. And if your employer cannot quickly get credit from another bank, he may not be able to pay his subcontractors and his utility bills. He may also find it difficult to manage the risks in his business, for instance in relation to trades in a foreign currency. At worst, he may need to shut down entirely. A bank failure can thus have negative effects on the real economy.

But I think that we could go further in the direction of setting up minimum requirements for a crisis resolution framework for banks and other institutions covered by the financial safety net. Here one can draw some parallels to the work on fiscal policy frameworks, where the EU has come a long way in terms of coordination and codes of conduct in the event of macroeconomic crises. Where do we go from here? It is time to sum up. My message is that it is important for us to get in place an efficient regulatory framework for weak banks. A framework which combines the need to maintain stability and minimise costs to the public sector in the short term with the requirement for long-term market discipline. Returning to the health-care metaphor I started out with, we need to be able first of all to deal with the ordinary flus and broken bones of the financial system. But we also need to be prepared to deal with a more serious event. A possible outbreak of avian flu in the financial system. I have tried to outline the broad lines of such a framework.
That would allow the banking sector to remain part of the solution to the crisis, by lending to households and firms, and to contribute to the economic recovery once the pandemic is over. The sector should also focus on tackling the challenges it faced before the pandemic, such as low profitability, as well as new risks, notably those stemming from intensive technology use and climate change. Thank you. 11

The EU’s new Markets in Financial Instruments Directive (MiFID), for example, is expected to bring about important changes and intensify competition in the European financial market. This development will also influence the future of financial market infrastructures in Switzerland. Against this background, it is certainly crucial for the Swiss financial market infrastructures to persistently foster their competitiveness. They have pursued this strategy so far, and will need to continue doing so in the future. BIS Review 87/2006  1
Wide-ranging strategies have included consolidation, reengineering of business processes and reassessment of business models to fit the new financial landscape. Leveraging on advancements in information and communication technology is important to improve business automation and efficiency levels. To achieve a higher level of operational efficiency, rationalisation of business networks and outsourcing are gaining greater significance. The journey is however never-ending, to adapt to the changing needs of the market, and at the same time, taking into account all the potential risks. The need to enhance the capacity at the firm level is not limited to improving the way business is conducted and the level of efficiency in doing business. The financial institution, as a service provider, relies heavily on human intellectual capital which contributes to the innovativeness and competitiveness of the institution. Thus, human capital has been constantly sharpened through continuous development programmes and challenged to maximise its full potential. Towards this end, Bank Negara Malaysia has established the International Centre for Leadership in Finance to provide an avenue for the development of industry leaders especially in this region. In the wake of the growth in the volume and complexity of financial transactions, and worldwide integration of financial markets, risk management has increasingly become a key concern. Sound risk management practices will minimise adverse consequences faced by financial institutions during periods of uncertainty. Effective risk management systems facilitate the measurement and management of risk exposures, thus minimising potential future losses.

People may well question and in fact some already have the Bank’s grounds for its concerns and its strongly worded message, bearing in mind the short-term and long-term downturn in inflation, slower credit growth, lower oil prices and substantially less wage drift than was feared. The answers are obvious from the Bank’s core writings on these issues. They show that a tight monetary stance must be maintained for longer than would seem to be generally expected. Inflation has certainly slowed down but it is still running high and will continue to do so, and for quite a while will remain incompatible with the target and main tasks assigned to the Bank. Almost everywhere we look, strong pressures persist in the economy. The labour market is greatly overstretched and labour demand is enormous. This has been met with heavy imports of labour and it is questionable whether such a swift influx is necessarily beneficial or healthy for Iceland in the long run, despite making the battle with inflation easier for the moment. In the banking sector, credit growth remains robust even though it is now slower than at the peak, and is still unsustainable in the long term. Now that the banks have fortunately managed to secure medium-term funding, the risk is that they will become more complacent and ease their restraint. Such signs seem to be emerging. The housing market appears to be picking up again and household and business sentiment is still very upbeat.
This can be expressed as the central bank having responsibility for price stability, but, just as much, it is a matter of ensuring that there is an efficient payment system in the country. As I said, there is an international debate on the importance of being able to cut policy rates to far below zero, and it is being discussed how this could be achieved in practice with various technical solutions. 12  See, for example, Rogoff (2020). 13 See, for example, Brunnermeier and Koby (2018). 9 [13]  Something possibly missing from this discussion is how the general public’s confidence in their country’s own currency/means of payment would be affected. If one unit of saved currency suddenly gives less than one unit of currency back, what would happen to the public’s willingness to hold that currency? Negative real interest rates are certainly nothing new, and this phenomenon has not been linked to any undesired effects on behaviour. Consequently, according to economic theory, negative nominal interest rates should not be any different as it usually assumes that it is real interest rates that are important to our decisions to consume or invest. However, this assumption is not undisputed, and there are plenty of examples to indicate that people often think in nominal terms.

Thus the degree of monetary policy activism can be different; this, however, is not on account of a different decision-making strategy, but on account of the different nature of the shocks impacting on the two areas. Comparative analyses show that the macroeconomic shocks on both sides of the Atlantic, 2 while of similar magnitude, appear to be partially different in their nature. Over the past ten  2  See, for instance, Smets, F. and R. Wouters (2005), “Comparing Shocks and Frictions in US and Euro Area Business Cycles: a Bayesian DSGE Approach”, in Journal of Applied Econometrics, Vol. 20, No 2, pp. 161-  2  BIS Review 135/2008  years the euro area has been worse hit by “supply shocks” than the United States. A supply shock tends to have an effect on growth with the opposite sign to that of inflation. One example is the decline in total factor productivity (TFP) in the early part of this decade which brought upward pressure to bear on inflation at a time when economic activity was slowing down, as occurred following the bursting of the dot.com bubble. Indeed, available evidence seems to suggest that the exacerbation of negative supply shocks is a recurring feature of economic slowdown phases in the euro area. As a result of that phenomenon, inflation in the euro area tends to react to an economic slowdown less rapidly than it does in the United States.
But given the highly varied circumstances of UK banks, we concluded that it is more sensible in the first instance for FSA to work out the details in its supervision of individual firms. These will be meaningful discussions, and FSA will report back to FPC on progress. That measure is being taken in order to make the UK banking system more resilient, and so better able to maintain credit supply, in the face of threats that could crystallise any time over the next year or so. 4  BIS central bankers’ speeches  The FPC also looked at whether any developments in markets might pose a longer-term threat to stability. We were struck that a renewed Search for Yield is already evident in some markets, and that this is reflected in innovations that could add to the complexity and opacity of the system. The drift of Exchange-Traded Funds away from their original bearings is striking. The Bank team have briefed various international bodies, including the Financial Stability Board, on this over the past year. Compared with their vanilla forebears, there are now ETFs incorporating leverage, active management and synthetic structures. As FPC discussed, it is important for the European Securities Markets Authority to act to ensure that its regime for investment products does not fall further behind. HMT and FSA lead those negotiations for the UK.

Paul Tucker: Macro and microprudential supervision Speech by Mr Paul Tucker, Deputy Governor for Financial Stability at the Bank of England, at the British Bankers’ Association Annual International Banking Conference, London, 29 June 2011. *  *  *  Introduction: redrawing the Social Contract for banking. The past month has been pretty busy. It has seen the publication of the draft legislation for reforming the UK’s regulatory architecture; the launch of the high-level blueprint for banking supervision under the future Prudential Regulation Authority; the Chancellor’s comments on the Vickers Report; and the first meeting and decisions of the Financial Policy Committee, the UK’s new macroprudential body. That’s just in the UK! There is plenty going on internationally too. Next month the G20 Financial Stability Board will publish two consultative papers: one on the greater loss absorbing capacity needed by systemically important financial institutions, and the other on overhauling resolution regimes to cope with distress at SIFIs. It is understandably hard for the banking system and the market to make sense of how all this fits together. I therefore want today to organise it in terms of redrawing the Social Contract between banking and the rest of society. Traditionally, the Contract was as follows. As deposit takers, banks are permitted to issue money, enabling them to profit by providing liquidity-insurance services to the rest of the economy. They earn a spread between the rate paid on transactions deposits and the rate charged on loans that, on average, more than compensates for credit risk.
Banks can satisfy some of their demand for liquidity by participating in these auctions. As the participating banks are then no longer as dependent on the secured interbank market for obtaining the desired amount of liquidity, aggregate demand for overnight liquidity in the repo market falls, thereby reducing upward pressures on SARON. We also wish to note that, over time, liquidity can be redistributed between banks via other channels than just the repo market. For instance, liquidity redistribution may take place via the transfer of customer deposits and longer-term deposits between banks. Naturally, such adjustment processes take some time. Let me summarise the key points we have made so far. The steering of short-term money market rates continues to work – even in negative territory. Three interest rates play a key role  Page 10/13  here. The SNB policy rate is used to communicate the monetary policy decision and, in particular, the desired stance of monetary policy. The negative interest rate on sight deposits that commercial banks hold at the SNB is the main instrument with which the SNB implements monetary policy on the money market. The exemption thresholds allow the burden on the banking system to be reduced without jeopardising the SNB’s ability to keep secured short-term money market rates, in particular SARON, close to its policy rate. As you can see, the SNB has the instruments needed to steer money market interest rates, including during times when these interest rates are in negative territory.

The fall in prices for imported consumer goods was unexpectedly sharp. It is uncertain whether this price fall was due to abnormal seasonal patterns or a decline in underlying inflation. The fall in prices may be related to an unusually warm winter, which has made it more difficult to sell winter clothing and sports equipment at ordinary prices. On the other hand, there are indications that prices for imported consumer goods in foreign currency may have fallen somewhat more than previously assumed. The wide variations in prices for some imported consumer goods, especially clothing and footwear, may lead to wide monthly variations in consumer price figures. Excluding changes in prices for clothing and footwear, the year-on-year rise in the CPI-ATE in March was 1.2 per cent, down from 1.3 per cent in February. Changes in indirect taxes, and particularly in VAT rates, have made it more difficult to interpret the price figures for the beginning of the year. The low level of inflation may be partly due to a lag in price adjustments following the indirect tax changes. Among the companies in our regional network, the share expecting a sharper rise in selling prices in the coming year is larger than the share expecting a slower rise in prices. TNS Gallup’s business sentiment survey conveys a more neutral impression. Nevertheless, both surveys indicate expectations of a sharper rise in prices in the service sector. The other Nordic countries have also experienced falling inflation.
Minister, this Loan Scheme being launched today provides a real opportunity for human capital development, which is necessary for national development. It enables children who would otherwise be excluded from the educational system have decent opportunities to receive education, as their parents can now access loans specifically targeted at meeting their educational expenses. Ladies and Gentlemen, a nation’s development depends on the levels of skills among its people and it is our expectation that the launch of this Scheme will contribute towards this noble cause. To this end, I would like to encourage parents and guardians to use the Student Loan Scheme in order to realise the vision of educating their children. Chairperson, what we are witnessing today represents an initiative by banks to respond to the needs of the community. As the Central Bank, we commend your bank for this initiative, which was borne out of the identified need to develop financial products that address problems in our society. Chairperson, Ladies and Gentlemen, let me end by reminding players in the banking sector that as new products and services emerge, different or heightened levels of risk also emerge. The challenges that financial innovation poses for public policy and the regulatory framework in ensuring financial stability are enormous and cannot be over looked. In this regard, let me call upon the management of Indo-Zambia Bank to not only look at the benefits, but more also on the risks that accompany financial innovation.

The government and the Central Bank introduced several short-term measures to address the pressure in the external sector, although the external sector developments once again highlighted the need for structural reforms to boost the tradable sector, particularly by enhancing merchandise and services exports in the medium to long run. The external sector was also affected by political instability during the latter part of 2018. Political developments, compounded by concerns regarding fiscal slippage in the lead up to the elections, were significant causal factors in the decisions of all three major rating agencies to downgrade Sri Lanka’s sovereign ratings. This, in turn, negatively affected investor confidence. 6  However, such downgrading only on the premise of heightened political uncertainty and anticipated rather than actual fiscal slippage cannot be justified as there was no solid evidence of a deterioration in macroeconomic policies or fundamentals. This was evidenced by the good progress made in completing the fifth review of the Extended Fund Facility (EFF) of the International Monetary Fund (IMF) until 26 October 2018. Sri Lanka continued to receive the assistance under the EFF and we received the fifth tranche of the programme in June 2018. We look forward to the successful completion of the IMF EFF programme in 2019. We are optimistic that the staff level agreement reached in principle with the IMF on the fifth review will proceed to the next level. Although the government continued its efforts towards fiscal consolidation, the performance on the fiscal front was rather mixed in 2018.
13  All speeches are available online at www.bankofengland.co.uk/speeches  13  (ii)  Impact on IS curve  The second way in which a shift in market power could potentially influence macro-economic outcomes is through the IS curve. One structural parameter in that relationship is r*, the neutral rate of interest. In the baseline model, the path of r* is determined by the path of shocks to households’ marginal utility of consumption (𝑧) and firms’ TFP (𝑎):  𝑟𝑡∗ = (1 − 𝜌𝑧 )𝑧𝑡 −  1 − 𝜌𝑎 1+𝜑 𝑎 −1 (1 𝜎 𝜎 − 𝛼) + 𝜑 + 𝛼 𝑡  (8)  In steady-state, the equilibrium real rate is determined by household discount rates (determining saving) and firms’ trend productivity growth (determining investment). 𝑟 ∗ = − log 𝛽 + ∆𝑎  (9)  This suggests that, if there is any impact of market power and mark-ups on productivity, this could in turn have an impact on r*. 24  Consistent with that, and taken at face value, there is a positive correlation between  estimates of the US natural rate of interest and (the inverse) of global mark-ups since 1980 (Chart 17). But whether higher mark-ups might in practice have contributed significantly to the global slowdown in investment and productivity, and hence r*, is far from clear.

Perhaps the most important factor that has for several decades sustained the economic success of the emerging Asian economies is its economic flexibility to adjust to the changing conditions in the global environment. This economic flexibility is supported by the high degree of labour and capital mobility within the national economies and the significant investment accorded to education and to infrastructure development. The region has also adopted a pragmatic approach to policy that is not constrained by rigid ideology. In this more recent decade, institutional development, extensive financial reforms, and the adoption of new business models have been an important part of this transformation process. Several of the economies in emerging Asia’s have transformed their production capacity in the manufacturing and services sector to meet the changing demands of the global economy  BIS Review 131/2010  1  and the growing consumer market in Asia. Given the different stages of development and endowment of natural resources in the region, the emerging economies in Asia have also leveraged on their respective distinct comparative advantages. This has resulted in intraregional division of labour and specialisation, and the capacity to undertake the entire spectrum of the supply chain for a wide range of products and services. Part of the economic restructuring has also involved the greater emphasis on domestic demand as an important source of growth. This has involved significant increases in domestic private consumption and investment activities.
Thomas Jordan: Monetary policy in the financial crisis – measures, effects, risks Speech by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the Swiss Banking Global Symposium, Zurich, 16 November 2012. *  *  *  The speaker thanks Mathias Zurlinden for his support in preparing this speech. He would also like to thank Katrin Assenmacher, Rita Kobel and Peter Kuster for their helpful comments, and also extends his thanks to the English Language Services. When the Swiss Bankers Association was founded 100 years ago as Vertreter des schweizerischen Bankgewerbes, or Representatives of the Swiss Banking Trade, this step was warmly welcomed by the Swiss National Bank (SNB). Surprisingly, perhaps, the senior representatives of the SNB were even members of the Association between 1916 and 1937. Since that time, of course, the role and the tasks of central banks have changed significantly. It would be unthinkable for the SNB nowadays to belong to a private sector interest group. Nevertheless, I am happy to observe today that the relationship between the SNB and the Swiss Bankers Association has remained good and reliable over the years. The Swiss Bankers Association has been a key dialogue partner for the Governing Board on all matters relating to the financial centre, and continues to be so. My topic today is the monetary policy which central banks have pursued during the past few years to manage the financial and economic crisis.

To receive an LOLR credit, a bank must on the one hand be systemically relevant and, on the other hand, be solvent and able to furnish sufficient collateral. Without collateral, the National Bank cannot grant any credit. This fundamental principle is enshrined in the National Bank Act. By disclosing our terms to the banks in advance, we are eliminating any possible misinterpretation of the liquidity risks and helping to ensure that preparations are in place for a liquidity crisis which can never be ruled out altogether. This is what we refer to as “constructive clarity”. Conclusion To sum up, I would like to reiterate that the situation of the Swiss financial system is stable. However, this gratifying conclusion should not allow us to rest on our laurels. Maintaining a stable financial system in the long term calls for constant efforts to prevent and cope with crises. While this challenge must primarily be met by the private sector, the authorities can, should and must support its efforts. Financial Stability Report 2004 (424 kb)  BIS Review 39/2004  3