samchain/econo-pairs-v1 huggingface dataset:
The Eurosystem is primarily targeting market participants with market-making obligations and is monitoring the securities lending activities closely so as to ensure the ongoing effectiveness of the arrangements. In September 2017, securities on average worth € billion were lent out by the Eurosystem, of which around € billion were lent out against cash as collateral. For further 9 / 10  BIS central bankers' speeches  details please see the section Securities lending. 8 See Corradin, S. and A. Maddaloni (2017), “The importance of being special: repo markets during the crisis”,  ECB Working Paper No 2065. The authors study the case of ECB SMP purchases of Italian sovereign bonds in the second half of 2011. The SMP portfolio was strictly buy-to-hold and purchased securities were not lent out. 9 See D’Amico, S., R. Fan and Y. Kitsul (2014), “The scarcity value of Treasury collateral: Repo market effects of  security-specific supply and demand factors”, Finance and Economics Discussion Series Paper No 2014-60; and Jordan, B.D. and S.D. Jordan (1997), “Special Repo Rates: An Empirical Analysis ”, The Journal of Finance, Vol. 52(5), pp. 2051-2072. 10 See Cœuré, B. (2017), “Bond scarcity and the ECB’s asset purchase programme”, speech at the Club de  Gestion Financière d’Associés en Finance, Paris, 3 April. 11 One should note here the difference between the development of repo funds rate and the average specialness  premia after our decision to also accept cash as collateral in securities lending. While the former stabilised, the latter continued to increase.

Second, as can be seen on the next slide, increasing excess liquidity has led to a notable decline in the share of trades backed by general collateral (GC), which is traditionally used to obtain funding for cash management purposes. This may suggest that proceeds from the sales of securities, together with the ECB conducting its main refinancing operations at fixed rate full allotment, have increasingly acted as a substitute for funding in the interbank market. At the same time, we have observed an appreciable increase in collateral-driven or specific repos. You can see this on the right-hand side. In other words, repos are increasingly conducted as a means to move securities among market participants, not primarily to raise cash.6 There might be several reasons for this. Smaller inventories held by market-makers after the crisis, for example, may cause them to source bonds in the repo market more often. Alternatively, short-selling activity may have increased, a phenomenon often observed at, or close to, monetary policy turning points when investors expect yields to rise. One factor that is likely to have contributed to the rise in special repos is policy-induced scarcity, however. This can best be seen when considering the German Bund market. Here, our purchases have absorbed a multiple of net issuance in recent years, meaning that we have actively reduced the stock of outstanding bonds held by private market participants.
While happily walking and talking, they bumped into a giant black bear which was apparently in a bad mood and in need of some nutritious food. Even though this was their very first encounter of a big bear in the wilderness, the ferocity displayed by the bear cast no doubt in their minds that their lives were at stake. So the two of them ran as fast as they could downhill and soon they reached the flat land at the bottom of the hill. Unfortunately the bear appeared to be quite determined to get the catch of the day and was chasing them from 50 yards behind. Suddenly one man stopped running and took out his running shoes from his knapsack to put them on. The other guy was very puzzled and asked: “What are you doing, you stupid? I don’t think you can run faster than the bear even with your running shoes on!” The other guy replied: “Yes, I know this. But it would be good enough if I can run faster than you!” 5. What is the moral of this story? One, the world can be very dangerous and unpredictable risk may crop up from nowhere. So be prepared. Two, the world is a very competitive place. It is not about how fast you can run, but whether you can outrun your competitors. The marketplace is a wild jungle in which only the very fit or the fittest can hope to survive or succeed. 6.

This reduces the need for private and public borrowing following a natural catastrophe. Public and private sectors each has its role to play in increasing insurance penetration 8. The responsibility of ensuring adequate insurance coverage does not reside solely with the governments. Individuals and businesses, too, should have vested interests to ensure that their respective exposures to natural catastrophe risks are sufficiently mitigated and insured. 9. However, increasing insurance penetration is certainly not without its challenges, and here I will highlight three: (i)  Firstly, the lack of awareness of natural catastrophe risk and solutions amongst individuals, businesses and governments; which can go some way to explain the lack of appetite for catastrophe risk transfer solutions in Asia. This is where I think the insurance industry can play a proactive role in raising awareness, through lending expertise and offering risk management advice, engaging governments and organizations in regional collaborative efforts, ,and through industry conferences such as the ICRM Symposium. (ii)  Secondly, a lack of quality Asian catastrophe risk data, which impedes the industry’s ability to conduct robust risk assessments, modeling and underwriting for the region. In response to the importance of quality quantification of catastrophe risk in the region, we have seen many notable efforts being undertaken in various quarters. 4  “Loyd’s Global Underinsurance Report, October 2012”. 5  “Peter, Dahlen, Saxena (2012), ‘Unmitigated disasters? New evidence on the macroeconomic cost of natural catastrophes’”.
Page 4  Normalisation of the monetary policy stance With the failure of Lehman Brothers in 2008, policy rates across the world were reduced quickly and substantially, generally being floored at what were then seen as their effective lower bounds. Additional monetary easing was then provided through large-scale asset purchases or quantitative easing (QE). The resulting very supportive overall stance was justified by the emergence of downside risks to inflation targets, a weak economic outlook and tensions in the financial system, all of which had emerged in the aftermath of the financial crisis. Although the details varied from one jurisdiction to another, this very supportive monetary policy stance was maintained for the bulk of the next decade: through the euro area sovereign crisis, through the challenges of Brexit, through the Covid pandemic and its aftermath. This prolonged period of policy support was exceptional. To give a sense of this: when I joined the MPC in September 2021, the Bank of England’s policy rate – Bank Rate – was at the lowest level seen during the Bank’s more than three centuries of existence. And – at least in absolute nominal terms – the Bank’s balance sheet was larger than it had ever been. As the recovery from the pandemic became better established and risks to inflation became first more balanced, and then shifted to the upside, the need to normalise the monetary policy stance became evident across many jurisdictions, including in the UK. This has been an important driver of monetary tightening over the past year.

In the US, demand has played an important role: the US economy has more than recovered pre-pandemic levels of activity. So there are grounds for seeing US labour market tightness as a symptom of ‘overheating’ in the broader economy. This case is harder to make in the UK, where aggregate activity has still to regain pre-pandemic levels on the latest vintage of data. As a result, adverse supply effects seem to play a larger role in Britain. That said, vacancy rates have reached historical highs in the UK over the past year, perhaps redolent of strong demand for labour and echoing developments on this side of the Atlantic. But high vacancy rates have been associated with high hiring rates: the labour market has exhibited a high degree of ‘churn’, with many people moving jobs. In part, this may reflect a process through which workers are allocated to more productive activities, after the pandemic – and the UK’s furlough scheme introduced in response to it – had constrained their flexibility to move from one job to another. Behind labour market tightness in the UK lies a decline in participation rates among the working age population, particularly those in the 50-65 age group. The reasons behind this decline remain the subject of debate, but the impact of the pandemic on early retirement and long-term health, as well as underlying demographic developments, all seem to have played a role.
And third, how to compensate for the democratic deficit of technocratic monetary policy decision-making. Concerning the first issue, empirical research has found out that greater central bank independence is on average associated with lower inflation, but not with higher volatility. This “free lunch” was a bit surprising in the light of the “conservative central banker theory”. It reflects the fact that the actual institutional and policy design has evolved over time to guarantee that the mandate to achieve low inflation is not interpreted rigidly. In fact, most central bankers pay attention to real economic developments in their policies. In the last decade, this fact has been formally and institutionally reflected in the “flexible” inflation-targeting regime. This regime is often described as “constrained discretion”, meaning that it aims at making the monetary policy-making constrained by understandable procedures and at the same time flexible in responding to unforeseen shocks. As far as the democratic deficit is concerned, this issue has been addressed by moving to greater transparency and accountability of central banks. The burden of proof in central banks’ communication has shifted over the last two decades. At present, it is necessary to give convincing arguments if one thinks that the central bank should not give out some information, rather than to argue why something should be revealed. This has been a significant shift in the central banks’ mentality. Regarding the issue of communication and co-operation between the central bank and government, no universal solution has been found so far.

Such testing is becoming an increasingly integral part of the risk management process within banks and, for that matter, the supervisory process. For example, if you have a good understanding of the extent to which your asset quality might be affected by an economic downturn, or how the value of your holdings of securities might be affected by changes in interest rates, this is valuable information in helping you manage your risks. So this is a technique that can be very useful indeed, and which I am sure many banks will want to explore further. All this talk of greater use of modelling and of quantitative techniques raises, of course, the question of whether there is sufficient availability within Hong Kong of the necessary expertise and skills. This, I would suggest, offers many opportunities - not the least, I would add, for our hosts and sponsors today, as both the academic fraternity and specialist service providers can potentially play an important role here. I hope that these thoughts on Basel II have been of interest, and possibly have brought out some aspects that may not have been picked up on before. From what I have said it should be clear, at the very least, that Basel II is not some abstract regulatory compliance issue of no real value to the banking industry.
Your Excellency, distinguished guests, with the increase in the number of banks, the Bank of Sierra Leone has taken steps to ensure that commercial banks are adequately capitalized to absorb shocks and enhance their capacity to extend credit. In this regard, the Bank has increased the required minimum paid-up capital from Le15 billion in 2009 to Le30 billion over a five year period and preliminary indications are that most commercial banks have met this minimum capital as at end December 2010. Cross-border challenges Your Excellency, distinguished ladies and gentlemen, as investors extend their investment outreach across national frontiers, the Bank of Sierra Leone has in addition to signing a memorandum of understanding for information sharing last year in the WAMZ member states, has also seen the need for further action to enhance cooperation with other supervisory bodies in the sub region. To this end, Sierra Leone became a member of The College of Supervisors of the West African Monetary Zone in 2010, an institution set up to coordinate and harmonize supervisory information and practices among central banks of WAMZ member countries. At its recent meeting held in Accra, the College agreed, amongst others that:   Capacity building through training to be delivered by WAIFEM, should be central to its future operations;    A common supervisory framework for member countries should be established;    Financial Stability Reporting should be standardized and uniform; and    Regional corporate governance guidelines should be developed.

The Bank has benefitted from capacity building, training, technical assistance, and funding from:   The African Development Bank (AfDB);    The Association of African Central Banks (AACB);    The British Department for International Development (DFID);    The Economic Community of West African States (ECOWAS);    The European Union (EU);    The German Technical Cooperation (GTZ);    The International Monetary Fund (IMF);    The International Fund for Agricultural Development (IFAD);    The Reconstruction Credit Institute (KFW);    The United Nations Development Programme (UNDP);    The West African Monetary Agency (WAMA);    The West African Monetary Institute (WAMI);    The West African institute for Financial and Economic Management (WAIFEM); and  BIS central bankers’ speeches  9    The World Bank  This list is by no means exhaustive. We want to assure these organisations of our cooperation at all times and we know that with their continued support we shall maintain the course despite the challenges of our time.
Ladies and Gentlemen, the financial turmoil facing the world today has affected all of us and we as regulators are trying to ensure stability in the financial markets. In this regard, the Bank of Zambia has put in place measures to moderate the impact of the global meltdown on the Zambian financial system. The Government also remains resolved to continue with prudent fiscal policies and economic management, which have seen a buoyant financial sector in Zambia, thereby resulting in the mushrooming of branches in different locations of the country, such as the one we are inaugurating today. In spite of the uncertainties in the global economy, Distinguished Guests, we remain confident that the financial sector in Zambia will rise above the challenge and continue to provide services to the communities where they operate. Ladies and Gentlemen, I have stated at various fora that it is important for banks in Zambia to take actions which support the development of our economy: •  Banks need to open more outlets such as this one, to increase our people’s access to banking services, thereby empowering our citizens  •  Banks should provide more loans to the productive sector, such as Agriculture and SMEs. In striving to meet these demands, banks must always comply with the regulations as stipulated in the Banking and Financial Services Act to ensure the safety of customers’ deposits. I am proud of the stability that has been exhibited by our economy.

The financial system is built on a fundamental (and ever-present) mismatch. Savers want access to their money instantly, if necessary. But borrowers are usually unable to give it to them anything like as quickly. BIS Review 142/2007  1  The banks have traditionally bridged that gap. But the only way they can do so is to borrow short and lend long. This mismatch makes them vulnerable. That is why governments have imposed regulations on the banks, requiring them to hold reserves against emergency. But if there is a complete loss of confidence among depositors, there is really not much an individual bank can do. The central bank is usually obliged to help. Modern innovations in the financial system have seen banks, rather than holding on to the loans that they have made, parcelled them up and sold them on. The aim was to disperse risk; in the case of default, it was better for a lot of investors to lose a little than for a few banks to lose a lot. However, all the clever types of “securitization and structured products” have not eliminated the fundamental mismatch. Someone still has to borrow short and lend long. Northern Rock, the stricken British bank in recent weeks, is a case in point. In relation to this case, I just want to paraphrase an interesting article in the latest publication of The Economist headed “A generation has prospered from the wholesale transfer of risk through securitization. Now it is paying the price”.
The more we develop such a leadership group, the better our chances will be.”  BIS Review 19/2003  5  Collective response Third, while strong and visionary leadership is necessary, it is not enough. To be effective, the leadership must evoke a response, a resonance from the society as a whole. The society must rise to the challenge of changing itself and establishing a new order. There needs to be broad consensus among the population in support of the changes. In the Meiji Restoration, crucial roles were played by the peasant class that formed the armies and the merchant class that financed the military. In 19th century China, the reformers failed because of infighting within a weak leadership, as well as the advanced state of decay of the entire society. But a century later, Deng Xiaoping's reforms took root as the people experienced the benefits of rapid growth and the widespread improvements in living standards. In post-war Britain, the turning point in the public mood began with a sense of humiliation when the Labour Government had to call in the IMF in 1976, after the Exchequer ran out of money. In Singapore, our previous remakings succeeded because we mounted a strong collective response at independence a determination to beat the odds and survive, in 1985 a sense that if we made sacrifices together, we could make our economy competitive again.

The experience of Japan and Germany over the last decade shows how difficult and painful this process can be, even in wealthy, advanced countries. What more for a small and vulnerable economy like Singapore? Over the past three decades, we have built up significant strengths that will stand us in good stead for the challenges ahead. We have weathered many shocks since independence - regional recession in the mid-1980s, and most recently, the Asian financial crisis and global electronics downturn. Each test has made us stronger. We must now rise up to the latest challenge, and by remaking our economy, lay the basis for many more years of progress and prosperity for Singapore. BIS Review 19/2003  7
There is still considerable debate amongst Islamic scholars about the acceptability of the various forms of derivative products from the perspective of Islamic jurisprudence. Hence, there is a need for more investment in intellectual capital in the field of Islamic finance to promote innovation that  BIS Review 11/2004  3  integrates the appropriate Syariah principles within the Islamic financial instruments. Our efforts to keep abreast with such developments will facilitate more rapid development of Islamic financial instruments for the purpose of risk management, using derivatives. It is evident that the derivatives business has global opportunities since risk in today’s financial environment is a product of uncertainties prevailing in the global markets, whether financial or non-financial. The ISDA Master Agreements have been the universal means of bringing order and certainty to the complex and rapidly developing world of OTC derivatives. The culmination of the new 2002 ISDA Agreement, 10 years after its predecessor, comes in the wake of many financial crises. Legal documentation of derivative transactions has a role in mitigating risks for banks and businesses. The world has changed considerably in this recent 10 years - financial liberalization driven by rapid advances in information technology is altering the financial landscape at an unprecedented pace. The legal and regulatory infrastructure must keep pace. We must continuously learn, un-learn and re-learn. The acquisition and application of knowledge must be a deliberate strategy and activity in pursuing the path of excellence.

26  See for example Bean, C. et al (2011) “Monetary Policy after the Fall”, in Macroeconomic Challenges: The Decade Ahead, Federal Reserve Bank of Kansas City. BIS central bankers’ speeches  9  if there was collateral damage, it could be justified for a period of time to offset the danger of a much larger risk to price, financial and economic stability in the future. When imbalances are regional or sectoral in nature, however, interest rate policy would seem too blunt a tool. We need more surgical instruments, namely an effective macro-prudential policy framework. For example, tools such as loan-to-value ratios or debt-to-income ratios could be used to limit credit misallocation to non-productive sectors, without at the same time harming sectors where capital needs to flow. Conclusion Let me conclude. Real economic convergence supports the cohesion and smooth functioning of monetary union. What I have tried to illustrate today, however, is that there are no shortcuts to achieve it – and least of all by riding the upswing of the financial cycle. As Hyman Minsky demonstrated, what goes up must sadly come down. One way to begin a more sustainable convergence process, in the near term, is through reallocating resources where they are most productive. But the challenge for euro area countries does not stop there. Raising productivity is a complex process that reaches across the economy and into many different policy domains, be they education, judicial systems or administrative capacity.