samchain/econo-pairs-v1 huggingface dataset:
Our approach is preventive, pre-emptive and prescriptive (where specific rules are needed). This morning, allow me to outline three key features, namely: a)  a strong legal and regulatory framework that is in line with international standards;  b)  an effective supervisory regime; as well as  c)  a collaborative partnership with the industry. A strong legal and regulatory framework 10 A strong legal and regulatory framework is the basis of any effective regime. Over the years, MAS has updated our AML/CFT Notices for financial institutions several times, to take into account the latest global developments, as well as to incorporate emerging best practices. Our efforts to stay ahead of the curve are recognised internationally. In the 2008 FATF evaluation exercise, Singapore is assessed to have a strict and rigorous AML/CFT regime. We have agreed to undergo another evaluation in 2015. 11 We should not be complacent, for the reasons that I mentioned earlier. MAS will continue to strengthen the AML/CFT regime for financial institutions, to maintain relevance and effectiveness. Later this month, we will be issuing a public consultation on proposed amendments to a range of MAS’ AML/CFT Notices for financial institutions. This round of amendments draws reference from the revised FATF recommendations as well as international best practices, and should not be a surprise for those of you who have been following these developments. While there are a few new requirements in response to FATF recommendations, many of the proposed changes formalise existing practices and supervisory expectations.

But I will say that the speech of the President, if one reads it completely, it’s totally in line with the statement we had in Tallinn in our monetary policy meeting there; the speech that he also made at the European Parliament; and here it was along the same lines. He recalled that domestic drivers of inflation, measured by the underlying inflation, are still subdued, and that we need to be sure that when we get to inflation close to 2% it’s a durable situation and a self-sustained situation that can go on without the high degree of accommodation that we have now: so all these conditions, he reaffirmed them, and then talked precisely about the need to persist and about the need to be prudent in talking about premature withdrawal of stimulus. So in other words we are not closer to an exit, not even a baby step closer, with the forum here in Sintra? Constâncio: Well, we are not predicting what the Governing Council will do. We are not trying to do that. This is the assessment that we have been producing also as a result of monetary policy meetings of the Governing Council itself, like the more recent one we had. So it’s going along the same lines. Personally, I don’t see anything in the speech that would be different from, say, the previous two main interventions about monetary policy done by the President. Let us talk about one area of optimism, and that’s the political tailwind.
For emerging markets, credit spreads have increased somewhat, but the impact of the turbulence on these markets seems so far to be moderate. Equity markets have also seen a turnaround and in a number of countries have now regained lost ground. 4  BIS Review 115/2007  The market for asset-backed commercial paper has been severely affected. The volume of paper outstanding has fallen markedly, and the share of short-maturity paper has increased. This is in part due to the withdrawal of a number of money market funds from this market. Substantial losses in this type of fund would have resulted in customer flight and funds are therefore having to dispose of their investments in markets that are now considered uncertain. The current turbulence differs from previous periods of turbulence. The impact on equity markets and emerging economies has been limited. This time, we are dealing with a credit and liquidity squeeze at the core of the financial system. This affects many participants, including large banks. Subprime mortgages account for more than 6 per cent of the total volume of mortgages in the US. However, the problems in this segment are spreading to other housing market segments. The housing supply increases because of the rise in the number of foreclosures, and housing demand declines as it becomes more difficult for new borrowers to obtain a mortgage. This may lead to a further decline in house prices. The resulting wealth effects may have a dampening impact on household consumption.

The greater use of RMB in international transactions will be closely related to China’s financial reforms and liberalisation, with new fund flow channels being opened up in RMB. For example, the RMB QFII scheme allows offshore institutions to use RMB funds to invest in Chinese capital markets, and it is a new channel in addition to the US dollar-based QFII scheme. And further to a recent relaxation, outflows under the QDII scheme can also be made in RMB. Such developments, in turn, will bolster the use of the RMB in trade, foreign direct investment and international transactions, thereby supporting the further development of the offshore RMB market. 13. While recent developments in RMB have been exciting, given the possible scope of future expansion, we are probably still only at the early stage of what could be more significant changes in the years to come. After all, RMB deposits and bonds outstanding in the offshore market only account for about one percent of onshore deposits and outstanding debt respectively. The possibility for expansion remains substantial. 14. One of the aims of the Hong Kong-London Forum is to assess what all this means to the financial institutions and to corporates — many of whose representatives are gathered here today. 15. For corporates, especially those already having business links with China, it is important to get prepared for the increasing use of RMB as a currency for transaction, financing and investments.
Even though domestic financial institutions might seem to profit, for the short term, by a depreciation in the króna and a rise in inflation, a trend in this direction would quickly take its toll on indebted households and businesses and would eventually result in loan losses. From the standpoint of financial stability, it is critical that inflation be reined in. It is also appropriate to emphasise the obvious fact that Icelandic banks’ access to foreign credit will not change if the Central Bank lowers the policy rate. It has been maintained that, because central banks in other countries have lowered their interest rates, the wider interest rate differential with abroad that resulted should have given the Central Bank of Iceland the margin to reduce its policy rate this February. This is not entirely correct. As is well known, the US Federal Reserve Bank reduced its interest rates in several stages, for a total reduction of 2.25%, over the course of the fall and winter. The Bank of England has lowered its base lending rate twice this winter, for a total reduction of 0.5%. Other central banks in our neighbouring countries have not lowered their rates. The European Central Bank has kept its interest rates unchanged for several months, and the central banks in Norway and Sweden raised their rates earlier this year. The Reserve Bank of Australia also raised its rates recently. Australia belongs to the group generally referred to as high-yield countries.

Nonetheless, all three of Iceland’s large commercial banks recorded a profit in the fourth quarter of 2007, and they concluded the year with an ample equity position. Banks all over the world have been forced to write off large amounts of money because of their investments in securitised assets related to the US mortgage market. Icelandic banks’ investments in obligations of this sort were small. That being the case, they have had relatively little need for such write-offs – and some had no need whatsoever because they had not invested in securitised assets. Furthermore, it is worth remembering that changes in the share price of Iceland’s banks have not differed markedly from that of banks in other areas of the world. Over the past few years, for example, the share price of Icelandic commercial banks dropped by 7-30%, while various large Nordic banks fell 15-40% and the shares of well-known international banking giants depreciated by margins ranging from 30% to over 50%. The decline is greater if measured against the peak of share prices. Financial companies carry unusual weight in the Icelandic stock exchange’s share price index (OMXI 15) – at present, some two-thirds. No matter where one looks, the price of financial company stock has declined all over the world – in most locations, it has fallen more than that of other companies that constitute equity indices.
Distinguished Guests, Another major risk to the inflation outlook is a sharper than expected slowdown in global economic activity, which, in turn, could lead to further volatility in financial markets. The eventual impact of financial turmoil on global economic activity triggered by mortgage loans in the US economy is yet to be seen. These uncertainties have been dampening the risk appetite and thus slowing capital flows to emerging economies. The CBT will not react to temporary fluctuations in financial markets. Yet, we will not hesitate to tighten monetary policy in case of a significant worsening in the overall pricing behavior. Under current liquidity conditions, I believe it is useful to note that the Central Bank has the resilience to implement a strong monetary tightening within a short time. The recent cuts in the amount of foreign exchange auctions, reduced FX borrowing of the Treasury and the increase in demand for money has led to a decline in the withdrawal of excess liquidity in the overnight market. The said tendency is expected to persist in the upcoming period, which will thus lead to relatively tighter monetary conditions. This framework not only allows the Central Bank to perform more resilient and efficient liquidity management but also to adopt tighter monetary policy without the need for a Monetary Policy Committee Meeting.

The annual growth rate of loans to non-financial corporations, by contrast, fell from its recent peak of almost 15% in April 2008 to 0.7% in August 2009 (see Chart 6). It should be noted that these figures cover all non-financial corporations, small, medium-sized and large, and do not provide a breakdown of the data by size of firm. In the case of non-financial corporations, the moderation in lending has thus continued, a fact which has raised some concerns among market observers that companies, and SMEs in particular, may be suffering from a true “credit crunch”. Against the background of these concerns, it is important to make a number of observations. First, looking ahead it is likely that loans to enterprises may moderate further before starting to recover. This would also be in line with past evidence, which indicates that the growth of loans to non-financial corporations tends to lag GDP growth by about three quarters. This may be related to the fact that non-financial corporations usually see their cash flows improve early in an economic upturn and thus tend to finance working capital and fixed investment with internal funds first, and only later with external financing. Given the current projections of a stabilisation in economic activity in the second half of this year, a turningpoint in loan growth may not be reached before early 2010. Second, recent credit developments appear to be fully in line with past historical regularities, once we take into account the severity and duration of the recession.
The increase in expenditures produced by this change then would lead to increased employment and income growth, higher assets values and a virtuous, reinforcing circle. However, with short-term interest rates close to zero already and problems in the housing market, this standard rebalancing channel is not working as well as we would like. This discussion, I hope, has underscored two important truths. First, while deleveraging had to take place following the excesses of the boom period, both the extent of deleveraging on the part of those with high debts, and the degree of precautionary savings by those with low  1  4  Defined here as credit market debt to net worth. BIS central bankers’ speeches  debts, depend on many factors, some of which can be influenced by the policy choices we make. Second, the amount of deleveraging and precautionary savings depends on the availability of credit and the health of the financial system and upon the degree to which income is sustained during this deleveraging process. Note that if income growth is sufficiently weak, households may struggle to achieve desired increases in savings and reductions in leverage, which appears to have been the situation of late. Policy responses in this environment So what should be done? What should economic policy do to secure the recovery and provide a sustainable environment for long-term growth? Clearly, monetary policy will continue to have an important role. But other, complementary, policy initiatives will also be important.

A subset of those digital assets, known as stablecoins, could over time be used by consumers and businesses as money, if they serve as a safe means of payment, a store of value, and a unit of account.2 Some jurisdictions are considering bringing these kinds of instruments into the regulatory framework by requiring their issuers to become banks or other licensed entities.3 This could enhance the ability to safely integrate them into the payments system. It could also expand access to central bank accounts and services to new entrants, allowing the stablecoins to be backed by the most liquid and stable of assets: central bank reserves. Traditional commercial banks are also forming consortiums and partnering with digital innovation firms to increase their offerings of liabilities associated with digital activities, which might entail offering deposits to stablecoin issuers or even direct issuance of stablecoins. Many are also investing in distributed ledger activities that could transform their businesses. Preliminary analysis of the May 2022 Senior Financial Officer Survey suggests that most U.S. Global Systemically Important Banks (GSIBs) expect growth and development in these areas to be a medium or high priority over the next couple of years, and banks continue to explore these areas to see how they fit into their business strategies.4 Central banks are also innovating. Many are implementing new forms of payments or experimenting with central bank digital currencies (CBDCs) to prepare for the future.
Accordingly, in the past several months we have seen main stock indexes falling substantially, interbank spreads rising again and commodities prices falling, with only a few exceptions, including gold (figure 2). Increased appetite for safe financial assets has triggered a worldwide reduction in interest rates on this type of instruments, while the dollar has strengthened and the euro has depreciated. The significant capital flows to emerging economies have stabilized or reversed partially, in particular stock-portfolio flows. Nevertheless the preoccupation remains in many emerging economies – especially in Asia – about the creation of bubbles in their asset prices. As shown in the IEF, the domestic financial market, like those in other emerging economies, has been fairly resilient to the instability in external markets, which is visible in several dimensions. The bulk of the price adjustment has taken place in the foreign exchange and stock markets, but even these movements have been comparatively small (figure 3). Unlike recent episodes of financial volatility, local monetary markets have operated normally, and credit spreads have no risen significant. Chilean sovereign risk premiums have not changed much, and local banks have managed to obtain external loans in similar conditions to those at the end of 2009. Recently, pension funds have reduced their assets abroad, a phenomenon that also occurred during the worst external turbulences at the end of 2008. The baseline scenario assumes that this relative resilience will continue over the projection horizon.

Today, however, the economy is still operating below full capacity, which limits inflationary pressures and is consistent with monetary policy remaining significantly expansionary. Nonetheless, as output gaps close, inflationary pressures will be incubated which must be contained in time in order to ensure that annual inflation will stand at 3% over the two-year policy horizon. Hence, the Board estimates that achieving the inflation target in the projection horizon requires, as has been said in recent months, a progressive normalization of the current significant monetary stimulus. As a working assumption, the baseline scenario estimates that the level of the MPR one year ahead will be similar to the one inferred from private expectations. In the long term, it will converge to its neutral level (figure 8). As usual, the outlined scenario is subject to several risks. Internally, the greatest risks come from domestic expenditure. The baseline scenario considers that a significant part of its current strong expansion is temporary. However, there is a risk that said strength is largely the response to stimulative macroeconomic conditions, which would mean that the downturn foreseen in the second half of this year may not occur, speeding the closing of output gaps. The medium-term impact on aggregate demand of reconstruction works and the funding thereof will have to be assessed continually. In the immediate term, April data and the reaction of economic sectors to the earthquake and tsunami reduces the possibility of a generalized delay in the economic recovery.
In addition to these new facilities, the Fed made the judgment, after very careful consideration, that it was necessary to use its emergency powers to protect the financial system and the economy from a systemic crisis by committing to facilitate the merger between JPMorgan Chase and Bear Stearns. We did this with great reluctance, and only because it was the only feasible option available to avert default, and because we did not believe we had the ability to contain the damage that would have been caused by default. 6  BIS Review 74/2008  Our actions were guided by the same general principles that have governed Fed action in crises over the years. There was an acute risk to the stability of the system; we were not confident that the damage could be contained through other means; we acted only to help facilitate an orderly resolution, not to preserve the institution itself; and the management of the firm and the equity holders of the institution involved suffered very substantial consequences. Although we assumed some risk in this transaction, that risk is modest in comparison to the risk of very substantial damage to the financial system and the economy as a whole that would have accompanied default. Conclusion One of the central objectives in reforming our regulatory framework should be to mitigate the fragility of the system and to reduce the need for official intervention in the future.

Birgir Ísleifur Gunnarsson: Monetary issues in the European Union and Iceland Speech by Mr Birgir Ísleifur Gunnarsson, Chairman of the Board of Governors of the Central Bank of Iceland, at a seminar organised by the Iceland Trade Council, Euro Info office in Iceland and the EU Commission on the theme: Does the Euro affect Iceland?, Reykjavik, 31 October 2001. *  *  *  Ladies and Gentlemen: The evolution of European integration during the second half of the last century is remarkable in many ways. This process began soon after the end of World War II and represented an effort to forge stronger bonds between European nations and thereby, among other things, reduce the likelihood of further conflict on the continent. Although I shall not go into its history here, many notable milestones can be cited along the course that has been taken. One of the most notable was the formal establishment of the Economic and Monetary Union in the beginning of 1999. Now the abolition of the individual member nations’ separate currencies is in sight. As of next year they will be replaced by Euro notes and coin. Not only will prices of goods and services be calculated and stated in a single currency in the twelve EMU countries, but the same notes and coin will be used for business in them all.
Housing tools revisited Speech given by Sir Jon Cunliffe, Deputy Governor Financial Stability, Member of the Monetary Policy Committee, Member of the Financial Policy Committee and Member of the Prudential Regulation Committee  Bank of Portugal, Lisbon 3 July 2019  I am grateful to Iren Levina and Katie Low for their help in preparing these remarks. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches  I am very pleased today to be in Lisbon. The Bank of England has a long history. But we are relative teenagers compared to the Aliança Inglesa or Anglo-Portuguese alliance dating back to 1373 – that is, I think, the oldest alliance still in force in the world. We do however have a long history for a central bank. We were over 150 years old by the time the Banco de Portugal was founded in 1846. But a long history is not always a good thing.

stress testing which is applied not only to the banking sector, but also to other related sectors, as they may also be carriers of systemic risk, be exposed to systemic risk from banks or, conversely, pass this risk on to banks. Such sectors include insurance companies, pension funds and professional market participants. And, importantly, in this type of stress testing intermediaries’ involvement in financial groups and holding companies is taken into account. Work on macroprudential stress testing has already begun at the Bank of Russia, and we have already taken the first steps in this direction. In 2017, the Bank of Russia began to publish its “Review of Financial Market Risks”, instead of the previously published “Money Market Review”, and the results of comprehensive stress testing of the financial market can be found in this new edition. Reflected in this work is the interaction of different categories of financial intermediaries in different financial market segments by means of network analysis tools. Further steps to be taken involve linking financial sector risks to shocks to the real economy, in which the effects of stress may be further exacerbated due to the feedback effect. At the end of this year, we will present the results of macroprudential stress testing in our “Financial Stability Review”. In the future, we will be able to use this to further develop the measure and calibration of macroprudential tools.