samchain/econo-pairs-v1 huggingface dataset:
This, in my view, is a major challenge for all of us in the financial community. The second major challenge to the Thai economy is how to cope successfully with volatile global financial markets and an appreciating baht. This challenge is the more pressing of the two. Let me explain why. Thailand, like many emerging market economies with a small and shallow financial market, is particularly vulnerable to fast-moving international capital. Such rapid movements of capital flows, if vastly out of line with our ability to absorb it, can have negative impacts on the export or import sectors, depending on the direction of the exchange rate movement. In our case, the recent surge in speculative capital inflows caused a rapid one-way appreciation of the baht relative to regional currencies. The appreciation momentum hardly reflected our economic fundamentals. Left unchecked, it could have presented a clear threat to growth and stability – beginning with export, a current engine of growth, trickling down to the real sector, and eventually harming financial stability. In dealing with currency appreciation, the prevailing wisdom of "letting the market work" has been given a chance. Yet the baht kept rising against almost all major and regional currencies at an alarming speed. Letting such rapid appreciation work itself out could have entailed significant risks to our agriculture sector, which employs nearly 40% of the labor force, and small and medium-sized firms in the labor-intensive manufacturing sector. We recognize that the real sector needs to adjust.

Single Resolution Board Annual Conference – Brussels, 19 September 2022 Armed peace and risk proportionality: how to strike the right balance  Speech by François Villeroy de Galhau, Governor of the Banque de France  Page 1 sur 5 Ladies and Gentlemen, It is a great pleasure for me to be with you at the European Commission for the 2022 SRB annual conference, and I would like to warmly thank Dr Elke König for her invitation to give this keynote speech today. Above all, I would like to pay tribute to Elke for her hard work as first Chair of the SRB since its creation in 2015 – SRB staff can also be very proud. You have a strong ally in France, with whom I have great pleasure working each and every week: Dominique Laboureix. I won’t be betraying any great secrets by saying how much he enjoyed taking part in this creation, and how much he remains attached to the SRB. The title of this conference (“European banks: resolvable and ready for crisis?”) may cause some anxiety – yet a healthy type of anxiety. It reminds us of possible dangers ahead, and serves as a strong reminder of what happened to banks during and in the aftermath of the great financial crisis. The temptation to forget about these events would be a huge mistake: lessons of the past, especially of that kind, should remain vivid memories that motivate us, day after day, to build a safer system.
Traditional money market funds seek to maintain a constant NAV (CNAV funds) ie they invest with the explicit goal of maintaining a stable NAV of $ per share. Investors like this because it avoids any market price fluctuations in their investments. A CNAV money market fund is said to “break the buck” when its NAV falls below $ per share (or the equivalent in a fund’s respective currency). This is a rare event. Prior to the crisis, it had not happened to a US money market fund since the Community Bankers US Government Fund broke the buck in 199413. The conventional perception was that the principal should be “safe”. When money funds came under pressure during the crisis, more than 60 asset managers (among others, Wachovia and Legg Mason) unilaterally made up more than $ billion of losses14. On 16 September 2008, the Prime Reserve Fund, the oldest U.S. money market fund, wrote off 3 cents of losses on Lehman Brothers. Not being able to make up the losses, the fund was left with a NAV of $ triggering a “run” in the money markets. On 19 September 2008, the U.S. Treasury announced the establishment of a temporary one-year guarantee program to protect investors in money market funds. The funds that were eligible had to pay a fee to participate in the program, and any fund that had already “broke the buck” could not participate. This example raises several interesting issues.

But a more contentious debate has emerged over the potential use of our asset purchases to pursue climate-related goals. Our corporate sector purchase programme in particular has come in for criticism as it includes emission-intensive sectors, such as manufacturing and utilities.30 In this debate, it is important to recall that the ECB decides on and calibrates its monetary policy measures with a view to achieving its price stability objective under the Treaty. As a consequence, more than 80% of the € trillion of securities purchased under our Asset Purchase Programme were issued by governments or their agencies. The remaining share consists of purchases of covered bonds, corporate bonds and assetbacked securities. For these assets, the Governing Council concluded that the best way to achieve its monetary policy objective was to follow the principle of market neutrality.31 This principle does not preclude supporting environmental objectives, however. 32 The ECB has purchased “green bonds” both under its public sector and corporate sector purchase programmes. Under the former, we currently hold around 24% of the eligible “green” universe, estimated to amount to some € billion. Under the latter, we hold close to 20% of the eligible “green” corporate bond universe, which currently has an outstanding volume of € billion euros. Under both programmes, the share we hold in “green” eligible bonds mirrors, by and large, the share of our holdings of the entire eligible universe.
The objective to be achieved is the same, that is, to build the regional capacity to be better positioned to prevent, contain and resolve any potential crisis at minimum costs to our financial systems and to our economies. In conclusion, the cumulative effect of the changes since the Asian crisis has transformed ASEAN – opening up new opportunities and making the region resilient and a dynamic centre of growth. The ASEAN “tigers” are back, and poised to leap on to the next wave of economic advancement and prosperity. BIS Review 46/2007  3

So it is no surprise that a risk factor which adversely affects one institution would simultaneously hurt another. With fair value accounting, everyone has to mark their positions to the same volatile market. A number of institutional investors also abide not to hold any assets below a certain credit rating, hence a hard cut-off. So when borderline assets get downgrade, all these institutional players have to liquidate their positions, all at the same time. Meanwhile, as VaR methodologies and risk management tools employed by different banks become increasingly converge, the results of the analysis also tend to converge. The main point is that when a risk factor moves adversely, these similarly exposed institutions incur the same direction of losses, whence their largely identical response actions further distress the market, thereby completing the feedback circuit. The second propagation channel in the form of network linkages between institutions presupposes that there exists prior bilateral relationships between financial institutions. A good example is in the clearing, payment, and settlement activities where the bilateral link is simply the amount that must be cleared, paid, or settled. But with real-time gross settlement,  4  BIS Review 130/2009  the vulnerability in this area featured very little in this crisis. Instead, in this crisis, the direct interbank liquidity/funding lines proved to be the most critical network of bilateral relationships. When one bank becomes illiquid, this triggers cascading illiquidity to all other banks that are direct counterparties, or counterparties to the counterparties.
Central banks' response to the crisis History taught us that banking crises degenerate into deep and lasting depressions unless they are dealt with quickly and forcefully. Those lessons were not lost on both fiscal and monetary authorities and the policy response worldwide has, indeed, been exceptional by any historical standard. I would like to focus here on three characteristics of central banks interventions •  First, they have been fast and decisive. Indeed, the start of the crisis can be dated back to August 9 2007, when the Eurosystem provided up to 95 billion euros in exceptional liquidity support to the interbank market. As the crisis developed, those interventions multiplied and evolved, a point to which I will return shortly. The deterioration of the real economy and subsequent easing of inflationary pressures opened room for a substantial relaxation of the monetary policy stance. In the euro area, seven reductions in policy rates brought the interest rate on our main refinancing operations from 4.25% in October 2008 to 1% today. •  Second, those interventions have been flexible and highly innovative. Central banks saw as their mission to avoid the paralysis of financial intermediation and keep the monetary transmission mechanisms working efficiently. To achieve those objectives, they considerably expanded and diversified their tools and instruments. In countries where markets play an important role in the allocation of credit, they created numerous new facilities to provide financing and to lower spreads through the purchase of private and public debt securities.

Ong Chong Tee: Review of post-crisis regulatory reforms and initiatives Opening address by Mr Ong Chong Tee, Deputy Managing Director (Financial Supervision) of the Monetary Authority of Singapore, at the ISDA Regulators and Industry Forum, Singapore, 13 November 2017. * * * Mr Christopher Giancarlo, Chairman CFTC, Mr Scott O’Malia, CEO ISDA, Distinguished guests, ladies and gentlemen 1. Allow me to first thank ISDA for inviting my colleagues and I to join you today in this Regulators and Industry Forum, and for me to deliver the opening remarks. LOOKING BACK 2. Let me start with an analogy from the popular children story of The Three Little Pigs and the Big Bad Wolf. I am sure you are all familiar with that – how the Big Bad Wolf ‘huffed and puffed’ and blew down the houses of straw and sticks; except for the one made of bricks. 3. Almost a decade ago, we had a Big Bad Wolf that blew down the house of global finance, triggering the worst financial crisis since the Great Depression. In the post-crisis commentaries and debates that followed, a lot of attention had focused on who was the Big Bad Wolf at that time – was it Lehman together with other investment banks, insurance companies and hedge funds, or was it this product called subprime mortgages? But the more important lesson was that the global financial system was not as robust nor sturdy as previously thought.
A natural way to gauge the cost of higher capital requirements on banks is to estimate how much lower economic activity – GDP – might be as a result. I want to illustrate the cost of higher capital for banks using a very similar method to that used in the studies mentioned above. The calculation proceeds in steps. First, estimate how much the average interest rate charged by banks would have to increase to recoup any cost of an increase in their equity financing relative to use of debt. Then estimate how much a rise in the cost of borrowing from banks might change the required rate of return (or cost of capital) of investors. Finally use a production function to estimate the impact of such an increase in the cost of capital on desired capital and output. We can then express the cost of having banks hold more equity capital in terms of the present value of all future falls in output. This is the methodology used in the calculations reported in the Bank of England’s 2010 Financial Stability Review (FSR). Those calculations were based on conservative assumptions – understandably so, for fear of under-estimating the cost to the wider economy of imposing substantially higher capital requirements on banks. I will start from that FSR baseline estimate of the present value of output lost as a result of a 1pp increase in the capital ratio, which is 4.25% of current annual GDP.

On the assumption that the three-month Libor rate will remain stable at 0.75% during the next three years, inflation should average 0.7% in 2003, move up to 0.9% in 2004 and reach 1.6% in 2005. Forecast inflation will remain below 1% until the end of 2004 except in the fourth quarter of 2002. In the course of 2005, however, a marked acceleration will set in, with forecast inflation reaching the 2% mark in the fourth quarter of 2005. The new forecast is consistently below that of June 2002. It reflects the delay in the economic upswing. In the new forecast, inflation will rise more markedly at the end of the forecasting horizon due to an even more expansionary monetary policy since June. Expansionary monetary policy to be continued At our last media conference, I pointed out that the National Bank must be prepared to react quickly to changes in the economic situation. When the delay in economic recovery became discernible in summer, we acted immediately by again lowering interest rates. Since then, nothing of basic significance has changed in our assessment of the situation. We shall adhere to our expansionary monetary policy in the foreseeable future. We will thus contribute to the economic rebound and continue to keep Swiss franc investments unattractive. The low interest rate level and the relatively strong growth of monetary aggregates currently do not represent a threat to price stability. Once a sustained economic recovery becomes discernible, we shall have to review our monetary policy and adjust it to the new circumstances.
The central bank monitors not only the absolute value of forex reserves, but also the derived indicators: foreign currency reserves expressed in months of imports of goods and services and the ratio of forex reserves to short-term debt remained unchanged or improved (Chart 8). Chart 8  Foreign exchange reserves with the NBR: derived indicators months  10 8  times official foreign exchange reserves - months of goodsand-services imports official foreign exchange reserves/ST external debt (right-side scale)  10 8  6  6  4  4  2  2  0 0 Jan.05 Jul.05 Jan.06 Jul.06 Jan.07 Jul.07 Jan.08 Jul.08 Jan.09 Jul.09 Source: National Bank of Romania, National Institute of Statistics  Thirdly, the magnitude and the timing of forex market interventions were also related to money market liquidity management, given that public deficit was financed, over certain periods, by resorting chiefly to the funds released under the arrangement signed with the EU, the IMF and other international financial institutions. The NBR provided banks with liquidity  12  BIS Review 5/2010  by way of open-market operations (Chart 9), while in the prior years, amid excess liquidity due to massive capital inflows, the central bank held the position of a net debtor position visà-vis the banking system. The rationale behind the forex market intervention in the abovementioned context was the attempt to fend off temporary reversals in the NBR’s creditor position vis-à-vis the banking system, which could have jeopardised the monetary policy transmission mechanism.

This also provides the foundation for a long-term trust-based relationship, and a clear interest for the financial institutions to undertake the appropriate due diligence to ensure that the returns are commensurate with the risks being assumed. Aspects of governance and risk management thus strongly underpin these contracts. In particular, such contracts demand higher standards of disclosure and transparency to be observed, which in turn act to strengthen market discipline. The legal, regulatory and supervisory framework will need to be adjusted to accord greater clarity to the appropriate legal and regulatory treatment in order to foster the sound and orderly growth of risk-sharing structures and activities, both in terms of the funding and the assets-side of Islamic banks. In Malaysia, steps are currently being taken to provide a conducive enabling environment for this next phase of development that will spur more risksharing transactions though the formulation of new legislation for Islamic banking and takaful. This legislation is now at the final stages of the process of its enactment. This new law for the industry is aimed at promoting certainty to the legal and regulatory treatment of Islamic financial transactions by providing legal recognition to the contractual requirements in accordance with the Shariah.
The same goes with mBridge, the cross-border payment project that recently completed a number of pilots. For the platform to be sustainable, it is important for as many banks and their clients as possible to use it. The more the better. It is similarly important to include as many currencies and jurisdictions as possible. There is a virtuous cycle: the larger the network, the more the users, which in turn will further expand the network. So again, “more is more”. Beyond Tech 26. My third reflection is that the key to success is “beyond tech”. (Not “BioNTech” the vaccine!) Here I am referring to the need to go well beyond technology to create network effects. 27. Projects that fill a glaring gap in available services, as was the case with FPS for example, may achieve quick adoption more easily. But for other projects that seek to replace current products or practices, adoption could be an issue even if the new product or experience is far superior to what we have currently. 28. Let me illustrate this using our CDI initiative. The technology to construct this infrastructure and connect all parties is relatively simple. Creating a conducive environment to attract all stakeholders to join is far more challenging. 29. The project team spent most time not on technology, but in creating a commerciallyviable arrangement to ensure that there’s something for everyone: banks can use data to manage credit risks; data providers can earn fees; and data owners can borrow more easily and cheaply.

Two weeks ago, the HKMA issued a circular to banks providing guidance on the importance of sound governance and good corporate culture and what they should do to promote them. I won’t go into the details now as the main themes of these new guidance circulars will be covered in the Conference later today. 8. Today is going to be a long day for you because the Conference won’t end until 5:45 pm. However, I sincerely hope that by the end of the Conference there will be some takeaways that you will find helpful in your capacity as INEDs of banks. 9. Fellow INEDs, I have talked long enough and now is the time for me to introduce to you our keynote speaker for this Conference. We are honoured and highly privileged to have Mr Andrew Bailey, Chief Executive Officer of the UK Financial Conduct Authority, to fly all the way from London to join us today. Andrew needs no introduction. Before he joined the FCA last year, he was the Deputy Governor in the Bank of England and Chief Executive Officer of the Prudential Regulation Authority from April 2013 until June last year. So Andrew is truly exceptional in the sense that he has been in charge of both the prudential and conduct sides of banking supervision, and is very well-respected internationally. He is therefore uniquely well placed to share with us his experience and insights. Mr Bailey, please. 2/2  BIS central bankers' speeches
Concluding, I would like to highlight the suggestions found in the report that it is now the time for the financial sector to focus on firms, as the basis for employment, innovation, productivity and economic growth. Thus, the development policies should focus on the firms and their future, as a source of convergence growth. The economic development policies and priorities, at micro and macro level, should focus on: the improvement of the institutional and financial infrastructure; the development of the capital market; the investments in infrastructure; and, the regional integration. * * * Dear participants, The EBRD Transition Report 2017–18 is an important document to all of us. Irrespective of our status as decision-makers, policy-makers, researchers, academics or journalists, the Report provides ample information to further corroborate our analyses and conclusions. I invite you to further read the Report and materialise its conclusions rationally and responsibly in your analyses for the present and the outlook of our economy, and beyond. Thank You! 3/3  BIS central bankers' speeches

The combination of big data analytics, cloud computing, artificial intelligence and blockchain is transforming the way financial products are designed and distributed. For its proponents, this transformation is promising better consumer experiences, a better financing of the economy and a better efficiency of the financial system. Beyond those promises, cutting-edge technologies also lower the barriers to entry into the financial sector for Tech firms and make it possible to unbundle financial services into an array of distinct core functions such as channeling payments and money, providing financing, sharing risk and allocating capital. This new competition also implies that incumbents’ business model should be prepared to adapt: the unbundling of services will challenge business models built around the logic of an exclusive and comprehensive customer relationship possibly involving elements of cross subsidization; more mobile customers could limit the ability to cross-sell products; and higher deposit volatility may unbalance the funding of maturity transformation. That said, FinTechs are the talk of the town but BigTechs are the real deal. On the one hand, frankly, FinTechs already had a huge and positive impact on the financial sector by developing new solutions and proving that these solutions bring value. However, overall, with a market capitalization of $ bn worldwide, Fintech start-ups have been 1/4  BIS central bankers' speeches  so far more a complement to existing financial actors, through integration or partnership, than irresistible rivals to incumbents.