samchain/econo-pairs-v1 huggingface dataset:
Various indicators suggest that yields have fallen further from a low level, and that prices have risen once again. Moreover, there are isolated signs that risk appetite among the domestically focused banks has, if anything, increased again over the last six months. For example, affordability risk and direct interest rate risk at domestically focused banks have risen once more. The SNB will continue to monitor developments on the mortgage and real estate markets closely. Accordingly, it will regularly reassess the need for an adjustment of the countercyclical capital buffer. Announcement of issue date I would like to round up my speech with a few remarks on the new banknote series. On 14 August 2015, the SNB announced that it would begin issuing the new Swiss banknote series in April 2016. The first denomination to be released will be the 50-franc note. Today, we can announce the exact issue date. The new 50-franc note will be presented to the public for the first time at a news conference on 6 April 2016, and will first be issued on Tuesday, 12 April 2016. The new notes will be put into circulation continuously from that date onwards. A largescale information campaign will inform the general public about the new note and on ways to check its authenticity. The remaining banknotes in the series will be issued subsequently at half-yearly or yearly intervals. The SNB will announce each new issue date well in advance. The current eighth banknote series will continue to be legal tender until further notice.

The date on which the current series is to be withdrawn from circulation will also be announced well in advance. 2  BIS central bankers’ speeches
This has reduced their capacity and willingness to provide new loans, and a number of the largest financial institutions in both the US and Europe have had to raise substantial new capital. Crises and turbulence are built into the workings of the market. The search for yield and market shares may at times become too intense. One lesson from the turbulence so far is that developments in the financial system, with new financial products combined with a possible lag in legislation and regulation, have rendered the financial system vulnerable. The turbulence has also shown that in a situation of widespread uncertainty and turmoil, different segments of the financial market are interconnected, which is not evident under normal circumstances. An important aspect of the current turbulence is the sharp increase in the price of interbank liquidity. History shows that there have been periods where the spread between banks’ funding costs in money markets and risk-free interest rates has increased sharply, but these periods have been relatively short. The persistence of the wide spreads today suggests that banks’ confidence in other banks’ credit quality has been reduced. This would also indicate that banks prefer to hold substantial liquidity in order to limit their own funding costs. The persistently wide spreads is also an indication that this episode of turbulence is not yet a closed chapter. 2  BIS Review 45/2008  Orientation of monetary policy Monetary policy in Norway is oriented towards annual consumer price inflation of close to 2.5 per cent over time.

Experience has also shown that financial crisis and economic recession entrenches the cycle of poverty. During a financial crisis, the poor lose their income by several times more compared with the average household. We saw this happen during the recent Global Financial Crisis, and we also saw how many that were displaced suffered "hysteresis" thus deeply affecting their income prospects. We also risk facing a severe setback in our fight against poverty. In the more recent years, the international community has accorded greater attention to addressing this agenda and to achieving more balanced and inclusive growth. Malaysia, while achieving growth and progress since the 1960s has always given attention for it to be a shared prosperity. Given the role of the financial system in facilitating this, Bank Negara Malaysia has always given priority to the financial inclusion agenda to not only bring the underserved segments of society into the financial mainstream but to promote a more effective participation in the financial system which will in turn strengthen the potential for enhancing economic well-being. Before I conclude my remarks, allow me to congratulate the World Bank Group on its many achievements realised in the Asian Region. Bank Negara Malaysia is pleased to partner the World Bank Group in its initiatives in the region.
In particular, the systemic risk concentration in a small number of global financial institutions is further increased and an increasing number of foreign jurisdictions are exposed to risks arising from the potential default of those banks. This aggravates the risk that these financial institutions may act as contagion channels for financial disturbances and may become or be perceived to be “too big to fail”. In addition, as several countries outside the European Union and the United States have observed, an unfair cross-border distribution of the costs for central clearing could arise. Finally, corporate governance arrangements of central counterparties may not be sufficiently reflective of the interests of all stakeholders, particularly as regards indirect clearing members. I am aware that several measures to control these risks are underway. Rules for central counterparties have been strengthened to ensure that they limit access restrictions to what is really necessary in order to manage the incurred risks and to ensure the central counterparties’ orderly default management processes. Similar governance rules now explicitly require central counterparties to adequately take into account the interests of clients and not only those of their direct members. Similarly, arrangements for the segregation and portability of client positions and collateral are being made. However, we will need to monitor very closely how these new requirements will work in practice, given the strong interest of global dealers in preserving their dominant position in the market.

Given these challenges and potential shocks to the economy, it is important that as a nation we build resilience and fortify the foundation of the economy. Towards this end, it is critical for us to be able to transform our economy. Less than 50 years ago, the Malaysian economy was primarily based on agriculture and commodities such as tin and rubber. Today, we are a well-diversified nation, with the services, manufacturing, and mining sectors as key growth engines. Most notable, Malaysia has established itself as a key hub for the electrical and electronics (E&E) manufacturing industry, playing an important role in the global supply chain. Looking to the future, we aspire to become an innovation-based and high valueadded economy by leveraging on technology and high skilled talent. Similarly, at individual level, Malaysians must build financial resilience by equipping themselves with the necessary knowledge and tools to manage their finances. This is where you, as practitioners, play a vital role by professionally advising, educating and guiding your clients to ensure they are on the right track to secure a better future for themselves and their loved ones. 1/4  BIS - Central bankers' speeches  A comprehensive and effective financial plan is crucial to help an individual or a family build financial resilience. Financial resilience is critical in a time of economic uncertainty and in a shock-prone world. It provides households with the ability to withstand the negative financial impact in periods of shocks.
”Conduits” are the more common of the two and account for almost 80 per cent of the outstanding stock of asset-backed commercial paper. An SIV has a more advanced construction than a “conduit”. It is usually highly leveraged, 15-20 times the equity capital. It is not necessarily tied to a bank and the financing is largely for longer durations. But the need for financing in the short-term money market is nevertheless crucial. Although the investment companies in themselves are not banks, they conduct bank-like operations; they have their own balance sheets and names and are in principal independent of the banks. But if an investment company is for some reason unable to issue new corporate certificates when the old ones fall due for payment, the bank guarantees the ability to pay, wholly or partly. The guarantees may be of a formal nature, where the bank commits itself to redeeming the certificate if the investment company is unable to do so. But a guarantee can also be of a more informal nature and based on the bank being unwilling to abandon its investment company in order to protect its name and reputation. Whichever is the case, it means that if an investment company linked to a bank faces financing difficulties, the problem is referred back to the bank, which must provide the company with sufficient liquidity for a short period of time. This is to some extent reminiscent of the situation during the Swedish financial company crisis, which started the 1990s bank crisis.

At the same time, more and more conventional investors are also looking to diversify their portfolios into sukuk as a new asset class. So, issuing sukuk would enable fund-raisers to enjoy a wider and more diverse investor base. 20. Second, you would be able to diversify your funding sources. With the additional option of sukuk in your arsenal, you can choose to issue either conventional bonds or sukuk, depending on the pricing and liquidity in the market at the time of issuance. This would provide more flexibility and a more stable source of funding to fund-raisers, particularly at a time when the funding cost of sukuk is more attractive than that of conventional bonds or when there is difficulty in obtaining liquidity in certain markets. 21. Having said that, sukuk remain a relatively new product type in Hong Kong’s financial market. Some of you may have questions about the mechanics of sukuk, such as what would be suitable underlying assets, how to ensure Shariahcompliance, etc. Malaysia’s experience has clearly shown that there are readily available solutions to address these issues. In particular, while sukuk are assetbased, a number of different sukuk structures are available. So, for companies that do not have much fixed assets, some asset-light sukuk structures may be utilised to  BIS central bankers’ speeches  3  overcome issues concerning availability of tangible assets. I am certain that the experts present here today will be able to provide more guidance and address such questions in detail in later sessions. Concluding remarks 22.
Potential growth will then be at a higher level. On the other hand, increased demand from countries such as China and India combined with a synchronised economic upturn could contribute to the global output gap being closed more rapidly than we at present assume. In this case, inflation could rise earlier than anticipated. The major question is, of course, whether the low international price pressure will endure, and, if so, how long. One factor indicating that the developments we see now are a more lasting phenomenon is the combination of more independent central banks with inflation-targeting and increased global competition. In addition, rapidly-growing low-wage countries like India and China still have some way to go before they are completely integrated into the global economy. Events that could radically alter the picture are, for instance, increased protectionism and introversion, extensive armed conflicts and irresponsible fiscal policy. Protectionism may lie close to hand as a response to increasingly troublesome competition and difficulties in adapting national labour markets and production patterns, which is indicated, for instance, by the present US debate prior to the presidential elections. However, there is little that now indicates that these factors could grow sufficiently to outweigh the trend towards increased integration and globalisation. The conclusion is therefore that the low-inflation economy appears to have become established, although we cannot take it for granted. What consequences will this have for monetary policy in the future? Monetary policy in a low-inflation economy The target for monetary policy is price stability.

This somewhat contradictory, in historical terms, price picture is probably partly due to developments in China, where on the one hand the vigorous industrial expansion has led to a marked increase in the demand for commodities, while on the other hand the plentiful supply of low-wage labour has meant  2  BIS Review 21/2004  that production of cheap goods for the world market is accelerating rapidly. This clearly illustrates one of the conditions of globalisation, namely the increasing specialisation and increased utilisation of comparative advantages. These factors, among others, provide better resource allocation, increased productivity and greater efficiency, which in turn have a subduing effect on prices. The increasing strong international economic activity and the upturn in commodity prices indicate that international price pressure will increase gradually in the future. However, the globalisation process may mean that price increases remain moderate over the coming years, despite the economic upturn. China and India together have more than 2 billion inhabitants, which corresponds to one third of the total world population. So far, only around 10 per cent of the Chinese population is estimated to be affected by the modern economy. This means that there is a very large unutilised labour reserve that could contribute to keeping down price increases for a long period of time.
I began by saying that the State Bank of Vietnam is currently in a situation similar to that of the Swedish Riksbank just over a decade ago. However, it is also the case that the conditions are different in certain respects. One difference is that the Swedish credit and money markets had been deregulated completely during the 1980s and early 1990s. This meant, for instance, that the central government issued bonds, through public auctions and at predetermined times, and actively attempted to promote the development of a secondary market. Thus, there was already a clear channel through which monetary policy could have an effect. Another difference was that we in Sweden had the support of a long tradition of comprehensive production of public statistics that made our work easier. These are factors that, as I understand it, do not apply to the same extent here in Vietnam, at least not yet. Vietnam has thus – like all countries – its own special conditions that may need to be taken into account and may make it difficult to formulate monetary policy as an exact blueprint of the system in  7  For a detailed discussion of “central bank transparency”, see, for instance, Chapter 1 of Blinder, A.S., (2004), The Quiet Revolution – Central Banking Goes Modern, Yale University Press. 6  BIS Review 21/2006  another country 8 .

BIS Review 21/2006  5  optimism regarding the role monetary policy can play in long-term real economic growth was one important reason why inflation was so high during the 1970s. The value of independence How can one then construct a framework for monetary policy that provides the central bank with the best possible conditions to carry out its tasks? Here I intend to be fairly brief as this is something that will be discussed in more detail in the next contribution to this conference. Let me just note that there is currently general agreement that the central bank should be given the opportunity to work independent of the political system in order to attain the objective of price stability. It has been observed that if monetary policy is conducted at arm’s length from party politics, there is greater confidence in the price stability objective. This is linked to the fact that there has often been a tendency for politicians to use monetary policy for more short-term purposes which have conflicted with the long-term price stability objective and which have often entailed loosening the nominal anchor. Making the central bank independent is probably the element of the past decades’ monetary reform process that has triggered the most debate and has been perceived as the most controversial. It is probably natural for politicians to feel uncomfortable giving the central bank increased independence as it unavoidably means that they give up some of their decision-making powers, and moreover in a field perceived to be central.
Given our forecast of stable prices and a still slow path back to full employment, there is an argument for easing further. But, unfortunately, our tools have costs associated with them as well as benefits. Thus, we must weigh these costs against the benefits of further action. As long as the U.S. economy continues to grow sufficiently fast to cut into the nation’s unused economic resources at a meaningful pace, I think the benefits from further action are unlikely to exceed the costs. But if the economy were to slow so that we were no longer making material progress toward full employment, the downside risks to growth were to increase sharply, or if deflation risks were to climb materially, then the benefits of further accommodation would increase in my estimation and this could tilt the balance toward additional easing. Under such circumstances, further balance sheet action might be called for. We could choose between further extension of the duration of the Federal Reserve’s existing Treasury portfolio and another large-scale asset purchase program of Treasuries or agency mortgage-backed securities. Conversely, I would be willing to consider tightening policy at a somewhat earlier stage if growth strengthened sufficiently to materially improve the medium-term outlook and substantially reduce tail risks, or if there was evidence of a genuine threat to medium-term inflation, including a rise in inflation expectations. In such a case, I would anticipate that the first step would be to bring in the late 2014 date of the policy guidance.

The FPC has published its assessment of Brexit risks and it’s ‘Checklist’ of actions necessary on both sides of the Channel regularly since 2017. The FPC also published, in response to a request from Parliament, its severely adverse Brexit stress scenarios. This approach has not been without some criticism – in the UK and in the EU. I would argue however that not only is it our statutory duty to report on risks to financial stability but that by making our assessments public we have encouraged others to prepare for the risks.3  And by making transparent not just our assessment of the resilience of the financial system but the assumptions and judgments that underpin them, we reduce risk by ensuring people can have confidence in the system even if it comes under severe stress. Looking further forward, there are two Brexit related financial stability risks that may surface after we have left the EU. The first are the risks that may arise from our future relationship with the EU. The choice of that relationship is for government and parliament and not for central bankers. It will need to balance very different economic and social objectives on which views are, as we have seen in recent months, very divided. Financial stability, which is my responsibility in the Bank, is I think an important consideration in that equation, but it is only one consideration.
Requiring the largest banks in the UK to maintain additional loss absorbing capacity has made a significant contribution to remove these distortions. Removing this hidden subsidy has made the financial system more transparent, and banking sector competition more effective. The risk of unexpected events – such as the Covid pandemic – is the very point of having strong prudential standards and a credible resolution regime, and underlines the need for the financial system and those active in it to be capable of responding successfully to maintain financial stability. The significant progress the UK has made in strengthening its prudential standards and in developing and implementing a resolution regime can be seen clearly from the response to the current Covid pandemic. The major UK banks and building societies have so far proved resilient to the pandemic, and the FPC’s reverse stress tests have shown that banks are can withstand a wide range of scenarios.8 In the Global Financial Crisis the banking system amplified the shock. In the current Covid crisis, the banking system has not just been resilient to the shock but, supported by the authorities’ actions, has played its part in cushioning the shock, providing credit to help minimise longer-term scarring from the shock. Although next week’s Budget will update on the very significant fiscal impact of the shock, this will reflect the consequences of supporting households and business through this unprecedented period rather than supporting banks.

Firms whose failure is unlikely to have financial stability consequences also have a part to play: they need to take a forward-looking realistic assessment to ensure they prepare for the event that they fail, which is likely to be a bank insolvency, and meet PRA rules on The RAF applies to such firms where they are a ‘material subsidiary’ of an overseas-based banking group for the purposes of setting internal MREL in the UK. 20  9  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  9  depositor protection. In placing an emphasis on the responsibility of individual firms to understand and plan for their own resolution, we are making firms accountable for this essential planning, reinforcing the credibility of those plans and the regime as a whole. Conclusion  Resolvability is better regarded as a spectrum than as a binary judgement. It is about ensuring authorities have credible options and the flexibility to respond to a crisis. A resolution is ultimately a transaction which occurs in a crisis situation and is unlikely to ever be a smooth process. But the work done by firms under the RAF should increase the chances that resolution is conducted in an orderly fashion and disruption to the financial system is minimised. Banks and building societies need to prepare themselves fully for these situations now.