samchain/econo-pairs-v1 huggingface dataset:
Perhaps surprisingly given the significant share of ethnic minorities in the workforce, ethnicity pay gaps are larger in London than outside London, for all qualifications (Chart 12). These gaps are larger for those with higher levels of qualification, such as a degree. This presents a second puzzle in the unconditional pay gap data. Recent data do not change this picture. In the latest calendar year (2018), ethnicity pay gaps are positive across all qualifications, averaging 8%. They remain larger in London than elsewhere, with the highest ethnicity pay gaps in degree and A-level qualification categories. Unconditional ethnicity pay gaps are still consistently smaller than unconditional gender pay gaps. 15  All speeches are available online at www.bankofengland.co.uk/speeches  15  Chart 12: Median ethnicity pay gap by qualification, sample average Ethnicity pay gap, per cent  London  20  Other 15  10  5  0  ‐5 Degree or equivalent  Higher educ  GCE A Level or equiv  GCSE grades A‐C or Other qualifications No qualification equiv  Ethnicminority minority ethnic  White white  Source: ONS Labour Force Survey and Bank of England calculations. Note: A positive ethnicity pay gap in this chart indicates that ethnic minorities earn less than their white counterparts, whereas a negative ethnicity pay gap indicates that ethnic minorities earn more than their white counterparts. Ethnicity pay gaps differ significantly by occupation and sector.

We are of course not yet in a position to observe the actual outcome; there may, as last year, be surprises in store. My examples have been based on 12month HIBOR; there may, of course, be benchmarks higher or lower than this reference point which are more relevant to individual decisions. I hope that I have succeeded in demonstrating that the measurement of real interest rates is rather more complex than may appear at first sight, and is dependent also on the context. If you were to look at only the popular measure of the real rate - the nominal rate deflated by a measure of past inflation - then the recovery in asset prices in Hong Kong over recent months would seem inexplicable, because real rates would have appeared so high. The recovery in asset prices would, however, be consistent with a reduction in perceived real rates - which is in fact what I am suggesting has occurred, on a fairly significant scale, as expectations of inflation have probably become positive while headline recorded inflation remains negative. For those who see some downside in all of this from the implication in the consensus forecasts that general inflation is now expected to resume, it is worth noting that the forecast magnitude is only very modest. I would not pretend that every piece of evidence unequivocally supports my thesis today. For instance, the continuing lethargy of bank lending to business in Hong Kong might suggest that high real interest rates remain a deterrent to borrowing and investment.
2/7  BIS central bankers' speeches  Arrears grew more in the retail loan portfolio than in the corporate portfolio but also moderately — from 6.6 to 7.9%. Impairment was mostly seen in unsecured loans, while mortgage quality has remained consistently high. At the same time, non-performing loans are well covered by reserves (more than 75%). Significant loan impairment was avoided thanks to numerous support measures for borrowers by the Government and support measures for banks, and the easing of the reserves on restructured loans adopted by the Central Bank. Since the start of the pandemic, banks have restructured within the framework of their programs as well as repayment holidays about 10% of the total portfolio; the significant amount of 1.5 trillion Mr Aksakov referred to mostly concerns small and medium businesses and individuals. And if you take all the restructuring that banks carried out on large loans and large enterprises — it comes to more than 5 trillion, i.e. it is a rather large amount of restructuring. Its peak was in May, and as of July there has been a steady decline in the demand for restructuring from borrowers, which also suggests there is a normalisation and gradual recovery of economic activity. Restructuring was really important during the most serious period of the pandemic when a significant chunk of businesses ceased operating and many people’s incomes declined.

News conference  Berne, 12 December 2019 Fritz Zurbrügg  Introductory remarks by Fritz Zurbrügg  In my remarks today, I will begin with the current assessment of the situation at the big banks and domestically focused banks. I will then go on to discuss the significance of climate change for financial stability. The final part of my speech will focus on the issuance of the new banknote series, which was completed in September. Big banks  I will start with the situation at the big banks. Both Credit Suisse and UBS have made significant progress since the ‘too big to fail’ regulations were introduced almost ten years ago. They have strengthened their capital bases, reduced their risk positions and implemented key organisational measures as regards crisis management.. With respect to resilience, Credit Suisse and UBS have already achieved their targets. Both banks have increased their regulatory capital to the target levels and thus meet all final requirements on a consolidated basis. Compliance with the requirements of the ‘too big to fail’ regulations is necessary to ensure adequate resilience of the two Swiss big banks. This is confirmed by our loss potential analyses of both banks as well as historical loss experience during the last financial crisis. With respect to resolution, the statutory deadline for finalising the Swiss emergency plans is the end of this year. In their plans, Credit Suisse and UBS have to demonstrate that they would be able to maintain their systemically important functions without interruption in a crisis.
We know now that there are deep flaws in this framework and that these flaws are important elements in the current euro area crisis, but they also played a significant role in the case of Iceland’s banking crisis. A key issue here is the contradiction between these so-called European Passport rights, on the one hand, and national supervision, national deposit insurance, and national crisis management and resolution regimes, on the other. This is what recent European Union proposals of a banking union are supposed to address. Membership in the EU single market, along with the global conditions of cheap, abundant credit, made it possible for the Icelandic banks to expand phenomenally in the course of only five years, from less than two times GDP to more than 9 times GDP. Earlier in the decade, the banks had been privatised and became managed by relatively young, risk-loving former investment bankers. Much of the expansion was really off Iceland’s border, with both financing and investment taking place abroad. In Iceland’s case, there was a substantial additional risk compared to Ireland and Cyprus, as nearly 70% of the banks’ balance sheets were denominated in foreign currency, with the traditional maturity mismatch that is the bread and butter of banking but without a credible lender of last resort to back it up.

Some of that is inevitable, and some retrenching from the excess levels of finance in relation to the real economy is probably beneficial at this stage, both at the national and the global level. The risk, however, is that the process could go too far. Yes, there are risks to financial globalisation, but there are also benefits. In order to reap those benefits, we need a safer framework for cross-border banking at the regional and global level and some ground rules for capital flows and capital controls. Let me briefly turn my own country, Iceland, into a case study of some of the issues involved. During the financial crisis, three small European countries that had relatively big banking systems but no apparent fiscal problems prior to the crisis have suffered very serious financial and economic crises. These are Iceland, Ireland, and Cyprus. In all three countries, the balance sheets of the banks were around 8–9 times GDP. All three are members of the EU single market – in Iceland’s case, through the agreement on the European Economic Area. That includes free movement of capital and provision of financial services. The underlying principles are those of home licensing for operation anywhere in the area and of a level playing field for competition, where size and location are not supposed to matter. It therefore goes against the underlying principles of this framework to consider the size of banks relative to GDP as a metric for concern, as is now so rightly in fashion.
I view these two strands as complements rather than substitutes, with more work necessary on both. Turning first to the issue of reducing the consequences of failure, there are numerous elements of this effort underway. Some are focused on making the financial market infrastructure more robust so that when a failure occurs the shock is dampened, not amplified and propagated throughout the financial system. For example, considerable effort has been made to create incentives for firms to standardize over-the-counter derivative trades and to clear those trades through central counterparties. Similarly, extensive work has been undertaken by the Federal Reserve and the major clearing banks to make the tri-party repo system more stable. Money market mutual fund reform is also part of this ongoing effort. Other initiatives are focused on reducing the financial stability consequences from the failure of a systemically important financial firm. The major initiative here is the single point of entry framework for resolution proposed by the Federal Deposit Insurance Corporation. Under this framework, if a financial firm is to be resolved under Title II of the Dodd-Frank Act, the FDIC will place the top tier bank holding company into receivership and its assets will be transferred to a bridge holding company. The equity holders will be wiped out and sufficient long-term unsecured debt will be converted into equity in the new bridge company to cover any remaining losses and to ensure that the new entity is well capitalized and deemed creditworthy.

Not only is this outcome unacceptable from an equity or fairness perspective, but it is also undesirable because it can increase the incentives for firms to become even bigger and more complex. Over time, this may lead to a greater number of systemically important firms and expose the financial system to greater systemic risk. This suggests that we need to maintain our focus on two goals: (1) Making the financial system more stable by reducing the degree of disruption when failures occur – that is, shrinking the size of the externalities – and by lowering the risk of failure in the first place, and (2) eliminating the artificial advantages that large, complex firms might have that create incentives for them to become bigger and more complex. One more point deserves emphasis. Only eliminating the competitive advantage of large, complex firms from the too big to fail subsidy will not necessarily make the financial system more stable. For example, consider a regime in which interventions to prevent the failure of large, systemically important firms were impossible. In that case, the funding advantage that comes from being perceived as too big to fail would be eliminated because such firms could fail putting the firm’s equity and debt holders at risk. But, this would not be a good outcome from a financial stability perspective because the failure of such firms could still be  2  BIS central bankers’ speeches  catastrophic for the financial system and the economy.
– it would be impossible, I think, to respond with a categorical ‘yes’. There are a number of enhancements which need to be made. In each case there are signs of progress. But there will be a continuing need to push and prod, if we are to overcome the forces of inertia built into the existing cumbersome system. The new Chairman of the Financial Stability Forum will find a sizeable agenda of work in his in-tray. BIS Review 25/2003  7

The commercial banks should also respond to changing macroeconomic indicators consistent with low interest rates, while borrowers need to improve their credit culture. As for the Bank of Zambia, we continue monitoring financial conditions and take appropriate actions to contribute to lowering of interest rates. (iii)  A relatively stable and competitive exchange rate has a positive impact not only on inflation, but also on the performance of the external sector. In this regard, policies for stabilising the exchange rate must aim at increasing the export earning capacity of the country through stimulation and maintenance of strong export sector by, among other things: •  Developing a diversified and competitive export base; and  •  Ensuring food self-sufficiency to reduce food imports. In addition, continued implementation of appropriate monetary and fiscal policies, particularly the reduction in the fiscal deficits, is critical to maintaining stability in the exchange rate. BIS Review 5/2005  3  (iv)  External debt should be contracted to finance the productive sector so as to lessen the burden of debt service. Otherwise, it will result, as we have seen in the last 40 years, in huge outflows at the expense of expenditures on social and economic infrastructure development, which are pre-requisites to sustainable poverty reduction efforts. (v)  The need to diversify the economy, including the external sector, cannot be overemphasised. Diversification is a sure way of preventing external shocks to the economy and will contribute to maintenance of macroeconomic stability.
In many of the Central and Eastern European (CEE) countries of the EU, vulnerabilities have been reduced since May, but the economic and financial situation remains fragile. In particular, further economic contraction is forecast for a number of these countries next year. In this environment, a combination of rising unemployment and falling household incomes could be expected to raise the credit risks on consumer loans and residential mortgages. Corporate default rates are likely to be high in such a context as well. Given these fragilities, the possibility of a resurfacing of risk aversion towards the region can not be excluded. In several CEE economies, vulnerabilities stem from the fact that a sizeable proportion of outstanding bank loans are denominated in currencies other than the currency in which the borrower’s income is denominated. Such mismatched foreign exchange currency positions mostly affect households. In countries with flexible exchange rates, currency depreciations earlier this year have meant that households would have to repay larger amounts than they expected. Recent developments serve to underline the risks that exist when large stocks of foreign currency credit are outstanding. The share of foreign currency lending in many of these countries has been rising, owing to wide interest rate differentials. This has left them increasingly vulnerable to a renewed weakening of their currencies, which could trigger a significant further deterioration in banks’ asset quality. 2  BIS Review 168/2009  The general recovery of risk appetite has benefited the hedge fund sector.

Taking into account the write-  BIS Review 168/2009  5  downs on loans and securities recorded until end-October 2009 and the loan loss provisions until end-June 2009, the potential further write-downs of euro area banks until end-2010 could reach EUR 187 billion. The euro area insurance sector Turning to the euro area insurance sector, it continues to be confronted with challenging conditions. The results for the second and third quarters of the year remained rather subdued, as premiums written declined on average. Reduced demand for life insurance products, in particular unit-linked products – where the investment risk was borne by the policyholder – have contributed to lower premiums written. Premiums written growth in the non-life segments has been hampered by the weak economic environment, which kept demand from households and firms muted. However, investment income, which has benefited from the improvements in the capital markets after mid-March 2009, was on average higher than in previous periods. The improvement in investment income has, however, not been enough to avoid a broad-based decline in profitability. Large euro area insurers have continued to increase their investment exposure to government and corporate bonds during the first half of 2009, as they have continued to shift their investment strategies away from equities in an attempt to de-risk their investment exposures At the end of the first half of 2009, a sample of large euro area insurers had about 70% of their investments in bonds, up from about 50% at the end of 2007 (See Chart 13).
The ageing of the population will be a reality across emerging Asia in the coming years, with the exception of South Asia. Population ageing is happening alongside rising affluence – a combination that underpins strong demand for pension funds and retirement savings products, to provide peace of mind in one’s golden years. Feeling well is about investing with a purpose, to do good while doing well. Where we put our money drives action. And an existential issue demanding action on a global scale is climate change. Investing in sustainable assets imbues investment with a larger social purpose. Let me elaborate on each of these dimensions of wellness in investment. Eating Well: Investing for Yield in Private Markets First, eating well – or investing for yield in private markets, namely private equity and venture capital investments, PE and VC in short, as part of a diversified portfolio. Globally, private market capital has grown at more than double the rate of public capital in the last 20 years. For the first time since 2006–07, the value of listed US companies going private in 2018 exceeded the value of private companies going public, causing a net outflow from the US public markets. An allocation to investments in private markets is becoming more common – and necessary – for a well-diversified portfolio aiming for decent returns. Private market opportunities are growing strongly in Asia. The PE and VC industry in the AsiaPacific1 achieved record growth last year.

May I conclude by extending my warmest congratulations to all of those involved in taking forward this important project. I hope that this project will prove to be a success and I look forward to further cooperation in the future with all who have an interest in developing the debt market in Hong Kong and in the region as a whole. BIS Review 84/1999  2
If the financial institution does fail, in my view some of the provisions of the Model Law,  BIS Review 67/2001  3  especially those relating to judicial cross-border co-operation, are potentially helpful in providing a starting point for negotiations. There used to be a clear distinction between banks and securities houses, fund management and insurance, and financial institutions of different nationalities. Restructuring could be to some extent contained within one market or one jurisdiction. Now the distinctions between different markets and types of firm have become blurred and the increasing consolidation of financial groups has given rise to a range of large complex financial institutions or LCFIs. Restructuring one of these groups would be far from straightforward. The steps involved with winding up an LCFI have been the subject of recent discussion among central banks. This has involved not only co-ordination and information sharing arrangements but also how the wider risk to the system would be assessed in these circumstances. Winding up a firm on this scale could be a large undertaking in itself. But the wider repercussions in terms of dislocation of markets could be enormous. Thankfully, as yet, we have had little if any experience of restructuring or winding down an LCFI. As with corporates, however, the first step would be an assessment of the long-run viability of the institution prior to the restructuring.

They are thus peculiarly vulnerable to a loss of confidence, individually and as a group. The potential for contagion – the threat that trouble in one bank will result in a run on others that might endanger the system as a whole – makes monitoring banks’ solvency and liquidity a core activity for central banks. Whether responsible day-to-day for supervision or not, central banks still need to stand ready to act as lender of last resort. However, any such operation must be carefully considered. Any decision to support an institution, particularly in circumstances of underlying insolvency, creates a moral hazard that undermines market discipline. Designing effective arrangements for restructuring financial institutions is thus a particular challenge – there is a need to act quickly and finally; intermediate arrangements are much more difficult to sustain. The challenge is complicated by the degree to which financial markets are now global and financial groups operate in a number of different jurisdictions. The G30 report on international financial insolvencies, published in March 1998, raised several themes that are rather similar to those relating to cross-border corporate insolvencies. In particular, it emphasised that a close degree of international co-operation was necessary to prevent the disorderly failure of a bank or insurance company. Effective co-operation would help to bring about a reorganisation or if necessary an orderly disposal of assets, and avoid the delays, uncertainties and loss of value often associated with formal legal proceedings.