samchain/econo-pairs-v1 huggingface dataset:
In slide 3, it is denoted by the light blue area.2 Our foreign currency purchases also lead to an increase in Swiss franc liquidity, i.e. a rise in the monetary base, which is reflected on the liabilities side of the balance sheet in the bank sight deposits item. In the chart this can be seen as a red area. Thus, the SNB’s foreign exchange reserves do not represent equity, or ‘true’ assets since they are offset by liabilities. They have come about through money creation as part of measures required for monetary policy purposes. Consequently, they should be at the disposal of monetary policy at all times. For instance, when capital flows normalise sustainably, we can assume that the SNB balance sheet total can be reduced again in the long term. However, the level of SNB foreign currency investments will remain high for as long as required by monetary policy. If necessary and reasonable from a monetary policy point of view and if the benefits exceed the costs, the SNB will further expand its balance sheet in future and accept the associated risks. Modern and professional asset management at the SNB This brings me to my second question: how does the SNB handle its foreign currency investments? The short answer is that the SNB manages its foreign currency investments professionally and cost effectively. The SNB began to set up its modern asset management structure relatively early.

It sets out the requirements with regard to the security and liquidity of the investments and also defines the eligible currencies, asset classes, instruments and borrowers. On this foundation, the investment policy establishes a long-term allocation for the foreign exchange reserves. Based on this long-term allocation, the Governing Board determines a specific investment strategy. This sets out the allocation of individual asset classes over the next year and defines the freedom of action at operational level. A valuation assessment of the individual asset classes is also taken into account in the investment strategy. Depending upon the assessment, this allows for certain deviations from the long-term allocation with regard to currency allocation, equity share or bond duration. In the third step, prior to the investment strategy implementation, the Risk Management unit sets out the necessary investment guidelines, limits and benchmarks. It also defines the permissible margin of deviation from the investment strategy at the tactical level. These parameters are very important for the fourth step, implementation of the investment strategy. Decisions on tactical allocation are made by an internal investment committee which makes periodic adjustments of given variables such as currency shares, maturity and shares of different asset classes to changes in market conditions, within the strategic range. The majority of investments are managed by internal portfolio managers, but external asset managers also play an important role. These external managers are used to obtain efficient access to certain asset classes or for benchmarking against internal portfolio management.
Yield Curve*  2-Year Real Interest Rates for Turkey*  (Percent)  (Percent)  *Calculated from the compounded returns on bonds quoted at the ISE Bonds and Bills Market by using ENS method. Source: CBRT, ISE. * Calculated as the 2-year discounted bond returns derived from the yield curve, minus the 24month ahead CPI nflation expectations from the CBRT’s Survey of Expectations. Source: ISE, CBRT. BIS central bankers’ speeches  3  Market interest rates plummeted in the last quarter due to improved risk appetite besides the liquidity policies pursued by the CBRT. Meanwhile, the decline in long term rates proved more notable. As a consequence, yields shifted down across all maturities while the yield curve flattened in the interreporting period as illustrated in the slide (Chart 8). Real interest rates also plunged since the fall in nominal interest rates was more significant than that in inflation expectations. Although having crept up recently, real rates still stand at ever-low levels (Chart 9). Bank lending rates also remained on a downward track in the last quarter amid eased external financing conditions alongside our liquidity policy. Consumer loan rates maintained a downward trend in line with the market interest rates. Moreover, the fall in corporate loan rates became more significant in the final quarter of the year owing to the cuts in the upper bound of the corridor (Chart 10). What is more, tightening in the credit supply conditions for corporate lending receded in this period (Chart 11). Chart 10. Chart 11.

In addition to these forecasts, alternative scenarios on the inflation outlook and the global economy are discussed in the Risks section of the Inflation Report. You can examine the Report for details. While concluding my remarks, I would like to thank all my colleagues, who contributed to the Report, primarily those at the Research and Monetary Policy Department as well as the members of the Monetary Policy Committee, and thank every one of you for your participation. 10  BIS central bankers’ speeches
In June the evaluation exercise was completed, enabling an estimate of the capital needs for the whole system to be made, and confirming that they were clearly below € billion; at the end of August the Royal Decree-Law on credit institution restructuring and resolution was approved, constituting a new code in this area; at the end of September the exercise was completed, enabling the capital needs for each of the banks participating in the exercise, which accounted for 90% of the Spanish banking system, to be determined; and, last Thursday, the Decree which will regulate the activity of the Asset Management Company for Assets Arising from Bank Restructuring (SAREB) was approved, another key step in the implementation of the programme agreed with the European Commission. The analysis concluded in September enabled the classification of banks for restructuring purposes to be confirmed. Previously, the banks without additional capital needs had already been determined (Group 0) as had the banks controlled by the FROB (Group 1), to use the terminology of the Memorandum of Understanding; this classification was completed, dividing the other banks with capital needs into: a) those with plans to achieve the capital levels required using their own means; and b) those which will require State aid to do so. The latter were requested to provide restructuring plans which are currently being studied.

There can certainly be no doubt about the attitude of the European Central Bank. Those who had doubts in the past must have now changed their minds. The second line of action concerns financial markets. On this matter there is now a precise action plan, agreed at international level within the framework of the Financial Stability Forum. Within 100 days a number of regulatory, and self-regulatory, measures need to be approved, aimed at improving transparency and risk management. Among these measures some are particularly relevant: the introduction of standards for disclosing the exposure to off-balance sheet items; asset valuation methods where the underlying asset is illiquid; more generally, a higher degree of transparency for banks’ exposure to structured financial products. Rating agencies are called upon to improve their evaluation and to reduce possible conflicts of interest. As far as regulators are concerned, more international cooperation is required, for example through the creation of a “college of supervisors” for large and global financial groups. The third priority is to tackle the problems related to global imbalances, together with other main players of globalisation in the relevant bilateral and multilateral fora. Globalisation cannot be stopped. Governments must act, within the framework of existing rules. In this regard, Europe has a major responsibility. Concerning international trade, Europe can only gain from the completion of the Doha round, so that WTO rules are respected, particularly regarding intellectual property rights.
The Riksbank is monitoring developments closely, but our assessment is that at the moment there are no funding problems for the Swedish banks on the international capital markets. To sum up we can say that the turbulence around the world will have a dampening effect on Swedish growth in the period immediately ahead. The clearest signs of this so far are the weak stock market in Sweden and the dramatic decline in the confidence of the households and companies, which is reducing demand. How can we ourselves facilitate developments in Sweden? We have laid stable foundations – which we must build on Although we are dependent on what happens abroad, we must do what we can to keep the economy on an even keel in Sweden. We can compare the situation to our own personal finances. Various external circumstances that we have no control over can undermine our financial situation. However, if we have had a firm grip on our personal finances before this happens, we will be better prepared and have a better chance of managing the situation. But how can we relate this to the Swedish economy as a whole? If we return to Figure 7 we can see that labour costs over the last 10 years or so have increased more slowly in Sweden than in the euro area. We can also go back to Figure 9.

The macroeconomic effects of a transfer of resources from debtor to creditor 1/5  BIS central bankers' speeches  countries is an old issue, going back to the debate between Keynes and Ohlin about Germany’s international obligations after World War I. In recent decades, Maury Obstfeld and Ken Rogoff 4 have pointed out in a series of papers that the basic mechanism of the adjustment results in a transfer of real resources from debtor countries to surplus countries, regardless of the drivers of global rebalancing. In the debtor country, there is a clear macroeconomic cost related to a drop in domestic spending and welfare, leading to large negative output gaps and high unemployment rates, and in turn putting strong downward pressures on wages. This is typically what we saw in the euro area, where the adjustment contributed to the very different dynamics of unit labour costs across countries [Slide 5], and therefore led to relative price adjustments. In cumulative terms since 2007, Germany has seen real exchange rate appreciation of about 8% relative to France, and 20% relative to Spain, although we should take into account in these dynamics the large gains in German competitiveness before the crisis. The adjustment relied mainly on nominal adjustment in deficit countries. The link between the current account and the real exchange rate is still subject to considerable debate among academics.
6  The counter-cyclical capital buffer may consist of Core Tier 1 capital or other capital than can completely absorb losses. The Basel Committee will specify what types of capital the banks can include at a later date. 7  Issuing bond is a less costly alternative for acquiring capital than issuing shares for tax reasons. Interest rate payments for bonds are made pre-tax while share dividends are paid from post-tax profits. 6  BIS central bankers’ speeches  The sum of the new capital regulations There are many new regulations and levels and it may be difficult to estimate what the banks’ total capital requirement will ultimately amount to. It we limit ourselves to looking at Core Tier 1 capital we can see that the new regulations mean that all banks will need to hold share capital and retained earnings amounting to at least 4.5 per cent of their risk-weighted assets. In addition there is the capital conservation buffer of 2.5 per cent and the counter-cyclical capital buffer of a maximum of 2.5 per cent. This means that in a situation where the countercyclical capital buffer is fully activated the banks will need Core Tier 1 capital amounting to at least 9.5 per cent, and this applies to all banks. There are also discussions about whether additional capital requirements should be placed on those banks that are considered to be systemically important. At present, no decision has been made on which banks this would be, nor on the levels that could apply.

Yves Mersch: Digital transformation - Europe's integrated market of tomorrow Speech by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the Joint ECB and European Commission Conference "Into the future: Europe's digital integrated market", Frankfurt am Main, 31 January 2017. * * *  Introduction For over a decade the European Commission, the Eurosystem and the market have been working towards transforming what has up to now been a very fragmented financial market infrastructure in Europe into a more integrated one. This work is still ongoing and requires more effort. However, we are at a point now when progress has become tangible. In the first part of my speech, I will briefly take stock of where we stand, particularly with regard to the post-trade area. I will then address two areas where I still see gaps that are in the way of our achieving a truly integrated European financial market. The first area is securities issuance, the second instant payment settlement. In both these areas, digitalisation is opening up new opportunities, which requires action. We at the ECB stand ready to take action accordingly. Integration in the post-trade area Following the launch of T2S in summer 2015 and two further migration waves in 2016, the German market is due to migrate to T2S in less than a week’s time. This latest development is expected to bring a big increase in the volume of securities transactions being settled on the platform.
I understand that the EU Code on remuneration would already be consistent with this. What I am describing is not a scary prospect. It should, in fact, be liberating to establish a financial system based more firmly on the principles of the market. But it is a prospective world in which our capital markets will be at least as important as they were over recent decades. That underlines the necessity of the work on, for example, standards for central counterparties, on shadow banking, and on transparent and resiliently liquid markets. This is a world in which securities regulators will play a vital role in underpinning stability. In the UK, the new Financial Conduct Authority under Martin Wheatley will be a member of the new macroprudential body, the Financial Policy Committee, for just that reason. Thank you again to AFME for providing a forum through its book for this public policy debate to continue. 2  BIS central bankers’ speeches

We must look at the institutions active in the financial markets; monitor how borrowers and other operators who could affect the banks behave and how the infrastructure supporting the financial system functions. It is difficult to determine which problems could constitute a threat to the system. Let me take the IT bubble in 1999 and 2000 as an example. If the banks had financed the many newly-started IT companies, they would have been hard hit when the air went out of this market. This would in turn have had repercussions for the real economy. However, it was not the banks who acted as venture capitalists here. This meant that the risk of shocks in the economy as a whole was less. Another example is what happened at Barings Bank a few years ago, when one of their foreign exchange traders speculated and lost around SEK 10 billion. The Bank of England refrained from intervention and did not provide the bank with any support, although a major bank was suffering serious problems that eventually caused its failure. This is because Barings’ problems were not expected to have any serious repercussions for the system as a whole and thus were not a stability issue. As in other sectors, bankruptcies do occur. This is normal and also important for market discipline.
In this connection, I will attempt to raise pertinent initiatives that will accord the opportunity for us to discuss and develop coherent and converging solutions which are both effective and timely. Firstly, the design of a suitable policy framework to provide incentives for more stable long term savings that could negate the effects of reducing living standards after retirement and fiscal strains in the government budget. In this regard, there is a strong need to pursue measures to incentivise and marshal long term savings without making it compulsory, a worthwhile effort in the wake of managing retirement risk implications. The measures involve  BIS Review 137/2007  3  raising financial literacy and public awareness of the perils of the aging, describing the uncertainties of health care and the limited capacity of government funded schemes; Secondly, with the increasing demand for suitable financial instruments to hedge long-term liabilities and with increased emphasis to strengthen asset-liability management practices to meet projected obligations, further development of the financial instruments that facilitate risk management is therefore critical. In this regard, the Government could play a crucial role in the development of financial instruments and the associated market infrastructure. For example, the issuance of large amounts of very-long dated bonds and index-linked bonds in some industrialised nations have helped mitigate risks associated with the duration gaps of asset against liability, inflation and longevity risks; Thirdly is the careful design and implementation of an appropriate tax mechanism for pension system that will encourage greater retirement savings.

The full-time employment model does not adequately address the profound changes in employment patterns, which economies are now experiencing, such as the increasing number of women in the workforce. Then again, most pension schemes are also designed for workers with full and uninterrupted careers. This does not reflect the experience of women, as we see more and more today, who may leave their jobs to become full time housewives or homemaker. Breakdown of marriage institutions, which is now not uncommon, and the fact that women typically outlive their husbands, place women at greater risk of being in poverty in old age unless pension schemes are adapted to meet their needs. Pension schemes must also take into account the changing work patterns in economies, which in the recent decade had seen an increase in part-time workers, the self-employed and temporary workers. 2  BIS Review 137/2007  The third challenge is in instilling public awareness on planning for retirement, particularly on having an appropriate level of retirement income to support retirees' healthcare and longterm care. A recent survey conducted in Malaysia revealed that more than 80% of Malaysians are either indifferent or not worried whether or not they have enough money for retirement. Only 34% are consciously saving regularly for retirement and an alarming 60% do not know exactly how much they need during retirement.
The correction with respect to March responds to the negative developments in the external scenario in recent weeks, particularly as the escalation of the trade conflict has led to greater risk aversion, causing, among other effects, a global appreciation of the dollar and a reduction in most commodity prices, including copper. The latter is especially relevant due to its effect on the terms of trade (ToT). Thus, for the period 2019-2021 we assume that the ToT will accumulate an increase of 0.6%, which compares with the increase of 1% expected in March (Figure 10). This projection considers a copper price whose annual averages will be closer to 280 cents per pound between 2019 and 2021, and not around 290 cents per pound, as we estimated in March. As for global growth, the baseline scenario adjusts slightly the expected expansion of our trading partners during this year, to 3.2% (3.3% in March). In this correction, a much lower performance of Latin America becomes important. We still estimate that China will grow around 6% and the US somewhat above 2% (table 4). Although our trading partners’ growth is adjusted only slightly, there has been a marked deterioration in world trade growth, which is captured in the less favorable evolution that is expected for Chilean exports (Figure 11). In the baseline scenario, we project that these will lose dynamism, particularly in 2019, due to the difficulties encountered by some exporting sectors. Also because of the lower copper output, which will impact metal shipments.

Although each case is, in some sense, unique, and international experiences are not easily transferable, its analysis provides some useful background to understand the Chilean case. The first is to confirm the exceptional nature of the Chilean experience, due to its size and speed. In addition, given the factors that motivate migration— particularly from Venezuela—one can think that it will not be reversed any time soon. Secondly, recent immigration is characterized by an average population that is more qualified, younger and with a greater labor participation than the Chilean population. Third, relative to other countries, Chile poses fewer legal impediments to enter the labor market, and unlike other migratory cases, shares the language and other cultural aspects with a majority fraction of the immigrant population. To update our trend growth estimate, we use the population projections for the period 1992-2050, published by the National Statistics Institute (INE) at the end of 2018. These reflect the significant immigration flow observed since 2015, which is expected to continue to be important in the coming years (Figure 5). This affects the projection of the labor factor and, through it, the growth capacity of the economy. The other forecasting assumptions do not undergo major changes with respect to the fiscal year of 2017, except for the updating of the Quarterly National Accounts figures and an explicit modeling of the way in which capital and total factor productivity respond to the immigration-related increase in the labor factor.