samchain/econo-pairs-v1 huggingface dataset:
Under the proposals, essential payment services and insured deposits would be provided by a ring-fenced bank (RFB), capitalised separately and with no direct financial links to the group’s other businesses. If that succeeds in making the RFB super-resolvable, it should be easier for the UK authorities to retreat to maintaining at least the most basic payments services if a preferred strategy of top-down resolution of a whole group could not be executed. The introduction of ring-fenced domestic retail banks is, therefore, consistent with the broader international agenda on resolution. For each SIFI, the global authorities probably need not only a preferred resolution strategy for the group as a whole, but also a fall back. For example, are the clearing services provided by broker-dealers so important that they need to be maintained come what may? Recovery plans and preparing for resolution A final point. There is great emphasis on recovery and resolution plans, RRPs. As familiarly used, Recovery is a binary process – either it works, the firm survives and, thankfully, there is no resolution; or, alternatively, the best-laid and executed recovery plan fails, the firm fails, and it enters resolution. But this is too crude a way of thinking about Recovery. Of course Recovery is primarily about delivering recovery. That is what we all want. But it is not all. The period in which recovery is being attempted also provides a window for the firm and the resolution authorities to prepare in case recovery cannot in the event be achieved.

11  See Tucker, P. M. W. (2012), The role of deposit insurance in building a safer financial system. BIS central bankers’ speeches  7  Finally, whatever types of deposit end up being preferred, there should be no discrimination on grounds of location or nationality. The chosen creditor hierarchy should apply the same way to all branches of a bank throughout the world. The Financial Stability Board Key Attributes are clear about that.12 I do not need to remind this audience that depositor preference would not be a guarantee against the relevant uninsured deposits (or the DGS) ever taking losses. But they would be exposed to loss only after bonds, as well as equity, had been wiped out. The greater the gone-concern LAC requirement for bond issuance, the lower the probability of any preferred deposits incurring loss. Group structure: having LAC in the right place, and operational dependencies It will have been apparent from my earlier description of high-level resolution strategies that where and how a group maintains its LAC will vary somewhat according to whether the preferred resolution strategy is SPE or MPE. For SPE resolutions, sufficient loss-absorbing capacity must be at the topco. But more than that, there has to be a mechanism for transferring losses from operating subsidiaries, wherever they are in the world, to the topco. One way of doing that would be for Topco to guarantee the performance of the obligations of its systemically significant and other key operating subsidiaries.
First of all, the support of the private consumption demand for inflation in a downward direction, caused by the tight monetary policy stance, is expected to continue in forthcoming period. Although the developments in the crude oil prices which have strong repercussions on the course of inflation has indicated a positive outlook recently, oil and energy prices still constitute a major risk factor that can affect inflation targets. Unprocessed food prices, which have a remarkable weight within the inflation basket, is another factor of uncertainty for the future course of inflation due to the fluctuations in its course by showing sharp moves owing to the seasonal conditions. Elimination of price rigidities in the services sector also bears great importance in the fight against inflation. Practices to increase supply and competition in this sector are needed. On the other hand, we see that the unfavorable effects of the fluctuation period on inflation are eliminated thanks to the completion of the primary effects of the depreciation of the Turkish Lira on inflation as of the end of 2006. Nevertheless, rapid changes in the global risk perceptions, international liquidity conditions and the resulting fluctuations that can be experienced in domestic financial markets are other risk factors that may cause the inflation go beyond the figures that we temporarily foresee.

These reforms, it is said, may work very well, but they should be postponed until later because they are not useful for exiting the current crisis. Firstly, some of these reforms, such as those conducive to hiring, would clearly have immediate effects in resolving the main problem of the current crisis, namely unemployment. Yet while it is true that other structural reforms would not have immediate direct effects but would yield future results, the decisions economic agents take today depend greatly on how they see the future. What has brought decisions to consume and invest today to a grinding halt is mistrust of the future; accordingly, if confidence about the future is restored, that would have highly beneficial effects not only in the medium run but now, in the present. In sum, tomorrow we'll broach again the financial and real-sector crisis facing us. And how to exit it. We’ll be reflecting on how to break the vicious circles of the lack of confidence. We'll discuss how it is naive to believe these vicious circles can be broken only in one place, concluding that what we need is a recovery in the confidence of all economic agents. These measures cannot be taken only at the national level; the crisis is a global one and attempts should be made to coordinate action to the full worldwide. That makes very strong demands on all multilateral fora and institutions, governments, politicians, central bankers, supervisors and all those with responsibilities in the matter.
Norges Bank will actively pursue profitable solutions in the best interest of all the parties concerned. Payments should become faster Norway’s efficient payment system is a competitive advantage for the Norwegian business sector. This is positive, but there is no room for complacency. Other countries are catching up and may be ahead of us in some areas, in particular in terms of real time payments and the infrastructure for mobile payments. We have a job to do here. The Norwegian banking industry has collectively developed a payment solution where money is immediately received by the payee, so-called instant payments. A common system offers several advantages: The solution is cost-efficient and ensures fast payment services for customers. All banks and their customers can use the solution and it is not owned by an individual private market participant. Yet, to date, few banks offer instant payment services. This may be due to technical factors, or because mobile apps need to be more user-friendly. It may also be that the competition among participants to promote their own solutions is ultimately an obstacle to an overall efficient infrastructure. Competition is best pursued in the area of customer interface. In our neighbouring countries Sweden, Denmark and the United Kingdom, the situation is different. There has been broad cooperation in the area of instant payments in those countries. Banks have been engaged in developing common solutions – not only in the development phase, but also in the application phase. In all these countries, instant payments are widely used.

This is a price we have to pay to be able to exploit the benefits of the new technology. Existing payment solutions cannot be phased out until we are certain that they will be replaced by other solutions that satisfy customer needs and enjoy customer confidence. This is important in normal times, and not least in terms of crisis preparedness. That has a cost, but a situation where payments cannot be executed would entail a much greater cost to society. As such, there can be no compromise with regard to contingency requirements. Conclusion Norway has an efficient payment system. This is positive, but there is room for improvement. In some respects, other countries are now ahead of us, for example Denmark and Sweden, particularly in terms of instant payments. Payments should be faster than is the case today – both for end users and between banks. We must develop new infrastructure linked to instant payments and render payments faster through today’s infrastructure. Mobile payments can best be organised based on common underlying solutions. They should be cheaper and faster, and various apps must be able to communicate between banks and use the same shop payment terminal. Banks and the wider business sector do not have a choice in the long run. If the new solutions are to be viable over time, standards and common solutions for mobile payments must be developed. We may have started in this direction, but time is pressing. Common solutions and standards are not an obstacle to effective competition.
4  For example, see Chung et al (2011), “Have We Underestimated the Likelihood and Severity of Zero Lower Bound Events” and Vice Chairman Janet Yellen (2011), “The Federal Reserve’s Asset Purchase Program”, remarks at the Allied Social Science Associations Annual Meeting, Denver, Colorado, January 8. 5  TIPS are designed with a floor of zero on the cumulative inflation adjustment that they can realize over the life of the security. Thus, the prices of securities that are similar to each other in most ways but have different amounts of accrued inflation can be used to derive a measure of the value of this floor, which can then be translated into the probability of deflation. 2  BIS central bankers’ speeches  time, though, breakeven inflation rates have risen back to levels more consistent with the FOMC’s mandate, and the perceived risk of deflation has diminished notably. One criticism that has been directed at the LSAP2 program is that it was unable to restore vigorous growth to the economy. I think this is a reasonable observation but not a strong criticism. It is true that the support to growth provided by the asset purchases appears to have been countered by other factors that have continued to weigh on growth. However, the LSAP2 program was never described as such a potent policy tool that it could ensure a return to robust growth and rapid progress toward full employment in all circumstances.

First, a growing share of new mortgage loans in this segment was used in 2018 to finance properties in regions with high vacancy rates. Second, the affordability risks of new mortgages financing residential investment property are high and have continued to rise. Since many of these loans also carry considerable loan-to-value (LTV) risk, they are  1  Cf. FINMA, Annual Report 2018, 4 April 2019. Page 2/3  Berne, 13 June 2019 Fritz Zurbrügg  News conference  particularly vulnerable in a scenario involving a correction in real estate prices and a sharp increase in interest rates. Given the risks I have just described, the SNB continues to take the view that targeted mortgage loan-related measures are necessary in the residential investment property segment. The SNB supports the Federal Council’s proposal to raise the capital requirements for highLTV loans in this segment. Specifically, this would involve increasing the risk weights for loan tranches exceeding two-thirds of the residential investment property’s value. The SNB welcomes the Swiss Bankers Association’s readiness to consider a revision to the selfregulation guidelines as an alternative to the Federal Council’s proposal. Such a revision would reduce the LTV ratio and shorten the amortisation period for new loans financing residential investment property. In the SNB’s assessment, the domestically focused banks hold sufficient capital to cover their risk exposure. Despite a fall in profitability in 2018 as a result of a further reduction in interest margins, they have been able to maintain their capital situation.
The “this-time-is-different-syndrome” is a powerful reminder of the dangers of complacency. One key observation is that financial crises are followed by unusually prolonged recessions in economic activity. Another valuable insight is that the fiscal and financial dimensions are closely interconnected. Fiscal imbalances can undermine the financial sector; financial sector imbalances can weigh down on the credibility of the sovereign; both can spillover into the real sector, and vice versa. The book foresaw that the massive implicit liabilities towards the financial sector accumulated by governments could result in unsustainable levels of sovereign debt. Despite the important theoretical and empirical advances to which Professor Rogoff has contributed substantially, there is still much to be learnt about the root causes, the triggers and the propagation mechanisms of crises. The major challenges for policymakers posed by the existing knowledge gaps are reflected in the very controversial debates about the optimal responses to mitigate and resolve the current crisis and to prevent future crises. In this context, since his time at the IMF, Professor Rogoff has featured prominently in global policy debates, producing analyses and making recommendations on how to contain the current crisis and restore overall macroeconomic stability in the euro area. On that very subject, as we all know, conditions in financial markets have taken a turn for the worse since the second half of July and early August.

First, it decided to continue to support ample liquidity conditions by conducting its refinancing operations as fixed-rate tender procedures with full allotment, at least until mid-January 2012. Let me point out that the outstanding Eurosystem credit in our refinancing operations currently amounts to about € billion and has come down since last year. The total value of marketable securities already presented and approved for Eurosystem credit operations amounts to € trillion and our counterparties have at their disposal almost € trillion out of the overall total of  2  BIS central bankers’ speeches  existing eligible securities of about € trillion. Therefore, this confirms that there is no liquidity or collateral shortage for the euro area banking system. Second, the ECB resumed its government bond market interventions under its Securities Markets Programme (SMP) in August. Via these interventions, the ECB Governing Council aims to help restore a more appropriate transmission of its monetary policy stance in an environment in which key market segments, such as those for government paper, are dysfunctional. The interventions do not influence our monetary policy stance. In order to sterilise the impact of these interventions on the liquidity conditions in the banking system, we re-absorb the liquidity injected. Let me underline that the secondary market purchases are not, and cannot be used to circumvent the principle of budgetary discipline as a pillar of Economic and Monetary Union.
However, these policy actions must remain focused on the specific groups hardest hit by the crisis and must be of limited duration. Against this backdrop, according to the ECB September projection exercise, the euro area economy is expected to grow by 3.1% in 2022, before slowing down markedly in 2023 to 0.9% - from the 2.1% forecast in June. Although a recession in the euro area is not currently envisaged as the baseline scenario, it is becoming increasingly likely. Indeed, uncertainty is high and both inflation and GDP developments will depend heavily on in the severity of any energy supply disruptions and the winter conditions, which could lead to higher energy prices and more severe production cuts. With this in mind, the ECB has also prepared a downside scenario relating to the war in Ukraine and energy supply cuts. Under this adverse scenario, GDP would contract by 0.9% in 2023. This downside scenario entails a complete cut-off of Russian gas and oil flows to Europe. In addition, it assumes fewer possibilities for energy supply substitution and unusually cold winter weather triggering higher energy demand. As a result, commodity prices and uncertainty would be higher, trade would be weaker and financing conditions would deteriorate further. In this very challenging situation, I would like to highlight one positive aspect of the euro area economy: the labour market remains robust. According to the latest statistics  3  published,5 the euro area seasonally-adjusted unemployment rate was 6.6% in August 2022, well below the 7.5% recorded in August 2021.

BIS central bankers’ speeches  1
And they can be sure that their business partners are as well supervised as they themselves are. So, the playing field has become more even, which is essential if we are to achieve a truly European banking market. And that is our vision: a banking market that seamlessly covers the entire banking union; a market in which banks can offer their services to customers from all over Europe; a market in which they can compete on even ground. The benefits of such an integrated market are well known: it is more efficient, it is more innovative, and it is better able to support growth. This is true for the entire union as well as each country. Are we there yet? As I said, this is the vision. But are we there yet? No, not quite, but we are getting closer. The banking union has brought its members closer together; it has lowered some of the barriers that were standing in the way of a potentially seamless market. But it has not entirely removed them. While supervision has been harmonised, the regulatory framework in Europe remains somewhat fragmented. And this applies not just to minor details but also to big things. It runs counter to the idea of a single market and fosters regulatory arbitrage; and it violates the principle of same business, same risks, same rules.

Banks were ailing, some governments were struggling to obtain the funding they needed, markets were in turmoil, and there were fears that the euro area might eventually break apart. Well, it didn’t break apart. In fact, the crisis triggered a chain of reforms, and these reforms have made the euro area more stable. One of the boldest steps was taken at the peak of the crisis. On 28 June 2012, EU leaders decided to move towards a European banking union. And move they did. Two years, four months and six days later, they had turned their political pledge into reality. On a rainy day in November 2014, banking supervision was taken to the European level. Another year later, the same was done for bank resolution. And there is an ongoing debate about whether and how all this should be supplemented with a European deposit insurance scheme. In my view, it should be, and I am certain that, at some point, it will be. From the start, the banking union has covered the entire euro area. But its boundaries are not set in stone. The banking union is not an exclusive club; it is not limited to those countries that share the euro as their common currency. In fact, any EU country can join the banking union through an arrangement known as “close cooperation”. I know that many in Denmark are very much aware of this. But, as I said, I’m not here to talk about Denmark. I am here to talk about the banking union.
Such a scheme would be justified as one which reallocates resources from current to future consumption, and the reallocation would occur only during a time of relative prosperity. 5  See F. Holme-Hadulla, S. Hauptmeier and P. Rother, “The impact of numerical expenditure rules on budgetary discipline over the cycle”, ECB Working Paper Series No 1169, April 2010; see S. Hauptmeier, J. S. Fuentes and L. Schuknecht, “Towards expenditure rules and fiscal sanity in the euro area”, ECB Working Paper Series No 1266, November 2010. BIS central bankers’ speeches  7  While this on its own would not ensure the sustainability of the pension system, it would be an important component in the process of pension reform, and, as I have already mentioned, I would suggest that it would be appropriate for deliberation at the MCESD. The phenomenon of population ageing raises sustainability challenges also for the public provision of healthcare, which represents a significant share of government expenditure. It must be recognised that the extent of provision of free healthcare and other services by the State must ultimately be financed by the taxpayer. The earmarking of certain revenue measures or particular revenue streams for this purpose may also be an appropriate topic for consideration by the social partners. The sustainability of funding the government’s capital expenditure programme, particularly in relation to the infrastructure and the public utilities through fiscal resources may also have to be reviewed.

We expect that this will help boost the demand for fixed income securities although we do not know exactly how much such investment outflows will be approved by the Mainland authorities in the initial years. 2  BIS Review 56/2006  Given our experience and achievements in financial services and the fact that we are the only international financial centre of China, I am sure that Hong Kong is well positioned to grasp the opportunity. Apart from the initiatives and developments I just mentioned, I believe that it would be useful to highlight a few fundamental factors which make Hong Kong an ideal place for the bond market. The first is our free capital mobility. The absence of capital controls means that there are no restrictions on foreign enterprises using our capital markets to raise funds. Foreign investors can also freely invest in our markets and easily remit the proceeds back home. Secondly, our well-developed financial markets, including derivative markets, would allow issuers and investors to manage any interest rate risk or exchange rate risk effectively. Thirdly, Hong Kong has a critical mass of financial institutions which stand ready to support issuers to tap the capital markets. Hong Kong is also an asset management centre thus providing a large investor base for debt instruments. Last but not least, the absence of capital gains tax and interest withholding tax would also favour bond market development.