samchain/econo-pairs-v1 huggingface dataset:
After the collapse of Lehman Brothers in October 2008, the turmoil mutated into a full-blown financial “crisis” and many market segments seized up. The “Great Moderation” gave way to the “Great Recession”, characterised by a massive fall in industrial output and trade. BIS central bankers’ speeches  1  Policy interventions were made by central banks and other public authorities to restore and secure the orderly functioning of markets and economies. I like to think of the interventions by public authorities as “lines of defence” against the crisis. They proved successful in guaranteeing those authorities’ ability to continue delivering macroeconomic and financial stability against the crisis. Let me recall briefly the three main lines of defence: central banks increased their provision of liquidity and financial intermediation services; monetary and fiscal authorities adjusted their policies in order to mitigate the macroeconomic impact of the crisis; and governments implemented a variety of measures in support of the financial sector. The government measures adopted in response to the economic crisis – both those related to fiscal policy and those in support of the banking sector – did not come cheap. This is true not only in the euro area, but – more generally – in all advanced economies. Together with the impact on government budgets of the massive economic contraction recorded during the crisis, they led to a significant deterioration in the public finances of a number of economies in the euro area.

The deterioration was particularly significant in countries in which: (1) pre-crisis growth had been of an unsustainable and unbalanced nature – typically as a result of an over-reliance on the expansion of private credit and the contributions of housing-related sectors (notably construction and housing finance) – and (2) in which governments had failed to take advantage of favourable developments in the years of booming growth in order to consolidate their public finances. Over time, concerns about the size of government deficits and soaring debt-to-GDP ratios – combined with uncertainty about the ability of governments to design and implement consolidation plans in the context of reduced potential growth and massive implicit liabilities towards the financial sector – developed into uncertainty about the sustainability of government debt. Although the initial problems primarily concerned the Greek government debt market, contagion and spillover effects meant that the crisis quickly spread to the sovereign debt of other so-called “peripheral” countries and other market segments. In particular, financial markets turned their attention to the solvency of some “peripheral” economies that were perceived to have been hit particularly hard by the crisis because of long-standing structural and institutional weaknesses. The deterioration of public finances in some euro area member States has impacted negatively on investors’ confidence in government bonds issued by these countries, and thus led to further turbulences in the financial markets. This is also reflected in the sharp increase in the yields on the government bonds issued by those countries.
Cybersecurity is the very foundation of modern banking and without it there is no point for us to boast Hong Kong as a world class international financial centre. While banks in Hong Kong have so far had very few incidents of serious cyber attacks, there is no place for complacency if we wish to maintain Hong Kong’s competitive edge as the preferred financial hub in Asia. In this connection, the HKMA has earlier this year set up a new Fintech Facilitation Office, which has taken cybersecurity as its top priority mission. Having worked very closely with the banking industry and other stakeholders, I am very pleased to announce today that the HKMA has decided to launch for the banking system a “Cybersecurity Fortification Initiative”, which is known as “CFI” in short. The CFI consists of three pillars: (a)  a Cyber Resilience Assessment Framework;  (b)  a Professional Development Programme; and  (c)  a Cyber Intelligence Sharing Platform. Let me elaborate on these three pillars. Cyber resilience assessment framework 5. We have about 200 banks in Hong Kong and they have a very diverse range of business models with understandably very different channels and modes of service delivery. Depending on the ways and technology platforms in which their businesses are conducted and delivered, the risk or vulnerability to potential cyber attacks varies from bank to bank. Needless to say, the volume and value of banking transactions conducted through the cyber world also matter a great deal.

This would directly conflict with our monetary policy, since any hedging would be equivalent to a purchase of Swiss francs against foreign currencies, which would intensify the upward pressure on the Swiss franc. Therefore the broadest possible diversification of our foreign currency investments is our sole means of reducing exchange rate risk. At the end of September, 48% of foreign currency holdings were invested in euros, compared with 60% at mid-year, with 28% invested in US dollars, and 24% in other currencies. We are continuously evaluating new asset classes and currencies in both advanced and emerging economies; this year, the SNB began investing in the South Korean won. Our goal is to further diversify our foreign currency investments and thereby reduce risk concentration. To avoid undesirable third-market effects, our entire investment activity is invariably undertaken with a high degree of prudence and caution in respect of potentially adverse effects on markets. This applies equally to inflows and reallocations of investments, as well as to the establishment of new positions. If, for example, we see ourselves confronted with very high foreign currency inflows, we might place these in sight deposit accounts at other central banks, before investing them in securities. The SNB has absolutely no interest in causing market distortions or influencing currency movements in other countries. Issues surrounding the Libor and reference interest rates I would like to conclude by exploring some of the issues in connection with the Libor rate, and the global discussion on reference interest rates in money markets generally.
I don't suggest that that interest rate risk will go away altogether - though if I could make just one comment on the current macro-economic situation you'll be discussing in a moment, it would be to caution you against placing too much weight on the steepness of the short-term interbank interest rate futures curve as an indicator of the likely course of official short-term interest rates - at least in the UK: our impression is that it includes quite a significant term premium. But even if interest rates are some degree less volatile, in a context of overall monetary stability, we certainly won't avoid sectoral imbalances such as we have seen over the past year or so; nor can we exclude policy failures in individual countries, which can, as we saw in the Asia crisis but happily not in the present case of Argentina, have wider repercussions. So I suspect you will have your work cut out in pricing and managing credit risk in your necessarily more diversified bond portfolios. You have a difficult job. But the efficiency with which the market allocates financial resources depends upon your doing it well. It is a heavy responsibility. But the official community equally has a responsibility to help in so far as it can. And we can help, I think, in three main ways.

I welcome the proposal to strengthen the role of CBIs. It would reinforce coordinated supervision, while reflecting the responsibilities of the ECB – as a CBI – within the supervisory framework. The role of the central bank of issue Background and rationale for the ECB recommendation However, although EU legislators can incorporate a role for CBIs into the processes for supervising CCPs, the regulation cannot go so far as to confer on the ECB the sort of binding instruments this enhanced role requires, which the ECB thought it had until challenged in court by the United Kingdom. In 2015, the General Court held that the ECB does not have the competence to regulate the activity of securities clearing systems, including CCPs. Moreover, the Court stated that the ECB would need to request an amendment to Article 22 of the Statute of the ESCB and of the ECB, which already enables the ECB to make regulations for clearing and payment systems, if it considers this necessary for the proper performance of its tasks under the Treaties2. 2/5  BIS central bankers' speeches  The ECB’s Governing Council therefore unanimously adopted a recommendation to amend Article 223 to extend it to cover derivatives, give legal effect to the ECB’s role under EMIR, and give the ECB the flexibility and autonomy to act outside EMIR where clearing would pose a severe threat to the stability of the euro. Amending Article 22 of the Statute – procedure Let me briefly explain the procedure for amending the Statute.
The emerging economies, in general, and the Asian region in particular, have emerged with stronger growth. Several key factors have enabled this faster and stronger rebound. Firstly, is the policy flexibility to implement the monetary and fiscal stimulus. Strong fiscal positions and relatively low public debt levels have allowed many Asian governments to implement larger fiscal stimulus measures. Second, the financial sector in the region is in good shape, avoiding any disruption of credit flows to the private sector. The region has benefited from the decade long of financial reforms and development of the domestic financial infrastructure. The financial systems in Asia have remained resilient throughout this global financial turmoil. This will be an important factor in sustaining the economic recovery to support domestic private sector economic activity when the fiscal measures are gradually withdrawn. Third, households and the corporate sectors are not over-leveraged, and thus better positioned to sustain consumption and investment activity. Fourth, increased intra-regional trade in Asia  BIS Review 24/2010  1  has supported the recovery in regional trade activity. This has been reinforced by the strengthening of the domestic demand in the region. While domestic sources of growth have gained significance, trade will continue to be important but with a distinct change in the pattern of trade. Trade among the emerging economies has already increased, with this trend being most evident among the emerging economies in Asia. Intra-regional trade in Asia has already risen from 32% of total exports in 1995 to an average of 50% in 2008.

With this now more developed Islamic financial services industry in Malaysia that includes the advanced development of Islamic financial institutions and markets, more aggressive liberalisation initiatives have been made in this sector to strengthen our interlinkages with financial markets in other parts of the world. This has also been reinforced by the further liberalisation of the capital account of the balance of payments and the implementation of tax neutrality measures. These initiatives are aimed at supporting the strengthening of trade and cross border investment activities through Islamic finance. Concluding remarks Let me conclude my remarks on these three major trends occurring in the world economy and the international financial system. Asia’s role in the global economy, the international  BIS Review 24/2010  5  regulatory reform agenda and the development and expansion of Islamic finance is likely to have a growing influence on the global economy and financial system going forward. As we participate in this rapidly evolving environment, these new trends need to be taken into account in creating a global economic and financial order that is profoundly better than the one we have today. Thank you.
It is crucial to ensure that the models that drive CCPs margin requirements are robust, conservative and do not act pro-cyclically. This is an area that, as a supervisor, we look at closely. The second is to develop further the arrangements for the recovery and, if necessary, resolution of CCPs. I will cover this in the next section. 17  EMIR RTS Article 45.2 requires CCPs to secure not less than 95% of cash collateral with highly liquid financial instruments, thereby limiting the amount of cash CCPs can hold unsecured. 11  All speeches are available online at www.bankofengland.co.uk/speeches  11  And the third, and perhaps most important, is to develop within CCPs the culture of the ‘systemic risk manager’ - responsible not just for managing the risks to the firm but also managing the risks to the system more broadly. CCP management, with encouragement from supervisors and regulators, have made significant progress in strengthening their governance and risk culture. But as the reforms are implemented, as greater use is made of CCPs, as they become more important as a systemic shock absorber, CCP’s management and boards will need to continue to up their game. And we will continue to hold them to account in doing so. Regulators and Supervisors  Regulators and supervisors will need to up their game also as the importance of this infrastructure grows. As I noted at the outset, the international standards – the CPMI-IOSCO Principles for Financial Market Infrastructure - were developed by central banks and regulators in 2012.

[8] Since climate change is partially irreversible, such delays could prove detrimental. [9] In fact, the preliminary results of the ECB’s ongoing economy-wide climate stress test illustrate that the magnitude of long-term physical climate change risks by far exceeds the short-term transition costs associated with more stringent mitigation policies, as described by Vice President de Guindos in a recent blog post. [10] Other research corroborates the finding that an early and orderly transition is likely to reduce the extent of economic disruption associated with climate change. [11] Central banks can act as a catalyst to facilitate an orderly transition towards a greener economy. [12] Although central banks’ leeway to address climate risks within the remit of their mandate is still subject to debate[13], there are an increasing number of commentators who argue that central banks should take the implications of climate change into account. [14] First, central banks should ensure that climate risks are adequately incorporated both in their own risk management and in that of the financial institutions they supervise. Second, central banks can have an important role in fostering climate-related information disclosure by firms and financial institutions. [15] Finally, central banks have an array of potential instruments at their disposal to incentivise the issuance of green financial products. [16] However, we need to proceed with caution: as a European institution with statutory independence, the ECB is strictly bound by the provisions of the Union’s legal framework.
Before I comment on the significance of board charters in augmenting good corporate governance in the financial sector, I think it is appropriate that I acknowledge the commendable work that has gone into implementing the FSDP through collaborative effort involving government and other institutions. The Government, working with the three financial sector regulatory bodies, namely, the Bank of Zambia, the Pensions & Insurance Authority and the Securities & Exchange Commission has continued to take the lead in implementing various reforms. This effort has been supported by private sector experts and representatives responsible for the technical aspects of implementing the FSDP recommendations.

Krone liquidity was provided through currency swap agreements, both in euros and US dollars. We also proposed the covered bond swap arrangement and a capital injection of core capital from the government to banks. 2  Walter Bagehot (1873), “Lombard Street: A description of the Money Market”. 3  Norges Bank’s automatic borrowing facility for banks is referred to as D-loans. The interest rate on overnight D-loans is one percentage point higher than the key policy rate and forms a ceiling for short-term money market rates. 2  BIS Review 119/2009  The Norwegian monetary policy measures have been effective Before the crisis the daily surplus liquidity in the Norwegian market of about NOK 20 billion was sufficient to keep short-term money market rates near the key policy rate. From autumn 2008, Norges Bank has supplied ample liquidity, bringing bank deposits in Norges Bank to well above NOK 100 billion in periods. The substantial supply was necessary to prevent short-term money market rates from rising too high above the key policy rate or from fluctuating widely. Risk premiums at shortest end of the money market fell. Through the currency swap agreements, under which Norwegian kroner were offered in exchange for US dollars or euros, we reached participants who were active in Norwegian kroner but who did not have access to loans from Norges Bank. The currency swap agreements helped to limit the risk premiums in Norwegian interest rates. Norwegian banks are dependent on US dollar liquidity, which was on occasion difficult to procure in the market.
International economic activity may result in inflation being even lower than in our main scenario, at the same time as a lastingly weak exchange rate that has no counterpart in poorer economic fundamentals could lead to upward pressure on prices. Increased financial unrest Financial unrest has grown since the September Report was published. It is difficult to foresee to what extent the crisis that began in Thailand almost a year and a half ago will affect the real industrialised economies in the West. The direct real economic effects via foreign trade will probably be relatively small. For economic activity and inflation in Sweden, the effects that could arise from decreased general confidence are more important. Share prices in Sweden have gone on falling since the September Report was published, wiping out not just the gains during 1998 but also a part of last year’s increase. Since the high in July, the Stockholm Exchange1 has dropped nearly 30 per cent, giving a fall of about 8 per cent from the level at the beginning of the year. Since the Inflation Report was published, share prices have fallen nearly 6 per cent. 1  Affärsvärlden’s general index. BIS Review 81/1998  -6Continued unrest and falling asset values would affect the behaviour of firms and consumers. If households and firms postpone investment and consumption decisions, economic activity will be lower.

But this was by no means the only factor. Contributions to the low outcome seem to have been made by this wage round having been conducted both centrally, with efforts to hold wage formation together, if not throughout the labour market then at least in large segments, and decentralised to individual firms. Whether this model can be repeated is another matter. Transitory effects, import prices and rents account for 2 percentage points of the substantial downward revision of inflation in 1998 by a total of 2.2 percentage points between the Inflation Reports in December 1997 and this September. The same factors are responsible for about half of the downward adjustments for 1999 and 2000 between the forecasts in March and June. Monetary policy increasingly understood, but problems last spring BIS Review 81/1998  -4For some years now the Riksbank has been working hard to communicate the line of thought behind its decisions both to the general public and to market players. This is intended to heighten the general understanding of how monetary policy functions and what it can do and also prevent, as far as possible, market disturbances on account of uncertainty. The more clearly the market understands our way of thinking, the smoother should short interest rates adjust to new information about inflation prospects. A comparison of market expectations (as expressed in implied forward interest rates) with the actual repo rate can serve as a indicator of the market’s error in foreseeing the repo rate. This predictive error has, on the whole, decreased.
The majority of the key measures relating to securities market in the Action Plan are expected to be adopted before the end of this year or the spring 2004. Discussions and consultations continued in several crucial areas such as the overhaul of the Investment Services Directive - a cornerstone of the FSAP and a key area in terms of European financial integration and investors protection, post trading activities (clearing and settlement), the review of the capital requirements that apply to financial institutions and a framework for the supervision of the reinsurance sector. 2. Financial integration is an ongoing process with renewed challenges in a constantly changing environment  We can easily measure the significant progress that have already been made in terms of financial integration. However, and this is the second topic I wanted to touch upon, in a constantly changing environment, and as the integration process deepens, new challenges arise that need to be addressed and taken duly into account in our reflection on the integration of European financial markets. Preserving financial stability is obviously among those challenges. In that regard, there are two specific and crucial issues on which we need to concentrate our efforts: the deepening of co-ordination among financial supervisors and the restoration of public confidence in financial markets. 2.1 Central banks, as well as public authorities and market participants, have a collective responsibility to find the ways to ensure that market globalisation goes along with financial stability. Financial stability is a complex concept.

Early outreach to customers whose finances are most vulnerable in the current circumstances whilst bearing in mind relevant FCA guidance12. Ensuring that customer support and collections arrangements are appropriately scaled so they can expand rapidly if need be. This is, of course, not an exhaustive or comprehensive list but simply highlights some of the good practices we are seeing amongst the firms we supervise. However, the message is clear: the outlook is highly uncertain; and we expect firms to be proactive in enhancing the way you manage the risks in your credit portfolios – rather than simply  11 UK Deposit Takers Supervision: 2023 priorities (bankofengland.co.uk) 12 FG23/2: Guidance for firms supporting existing mortgage borrowers impacted by rising living  costs | FCA  Bank of England  Page 5  relying on historic approaches. Doing so will enable you to continue to support your members in a sustainable way. As your supervisor, we have been increasing our own focus on credit risks. You will probably have seen this in your firm’s engagement with our supervisory teams; through the questions we are asking, the data we are collecting and the reviews we are conducting both with individual firms and thematically. And, of course, our Annual Cyclical Scenario stress test will enable us to assess the resilience of the largest UK deposit takers. The results of this will be published in July. We expect all other firms to use the PRA published scenario as a benchmark in their own stress testing processes.