samchain/econo-pairs-v1 huggingface dataset:
I think it is positive that the issue of capital flows is once again on the IMF’s agenda as it is an important issue that requires careful analysis as volatile capital can cause serious problems. …as clearly demonstrated by the crisis in our region The need to analyse capital flows became clear in connection with the crisis in our region too. If capital flows had been systematically analysed prior to the crisis, we would have seen that capital flows to the Baltic countries were dominated by bank loans from Nordic parent banks to their Baltic subsidiaries and not, for example, by more sustainable direct investments. Perhaps this would have led the alarm bells to ring sooner and louder. In our constituency we have carried out an empirical study of Iceland’s and the Baltic countries’ experience of capital flows and capital controls before and during the crisis. The aim of the report is to help the IMF to collect “best practices” but also to identify “bad practices”. According to the study, there were clear shortcomings in the policies conducted in Iceland and the Baltic countries and in the supervision of the financial system throughout the region. However, even if the countries had managed to conduct a much tighter fiscal policy, they would still not have been able to do anything about the major capital inflows. Other tools would have been needed for this, for instance various kinds of macroprudential-policy tools.

speech by Ben S. Bernanke, “Monetary policy since the onset of the crisis”, Federal Reserve Bank of Kansas City Economic Symposium, Jackson Hole, Wyoming, 31 August 2012. 3  In a foreign exchange swap, a given amount of foreign currency is purchased and sold simultaneously for two different dates. Consequently, this is a money market transaction that does not involve any exchange rate risk, thus differing from foreign exchange interventions. 2  BIS central bankers’ speeches  monetary conditions. Once the economic recovery had gained hold, the foreign currency purchases were suspended in June 2010. However, in summer 2011, the situation became so acute that the SNB had to take action again. After having employed the less far-reaching measures which I mentioned before, we set a minimum exchange rate against the euro on September 6, 2011. Since then, the SNB has made it perfectly clear that it is prepared to enforce this minimum rate through unlimited foreign currency purchases, if necessary. In setting a minimum exchange rate against the euro of CHF 1.20, we were reacting to the extreme appreciation in the Swiss franc. As you may recall, the price of the euro temporarily fell to as little as CHF 1.00 and that of the dollar to 70 centimes. The SNB’s aim with the minimum exchange rate is not to fine-tune the economy, but to provide the market with some guidance during a phase of great uncertainty.
The FOMC decided at its November 2010 meeting to expand the amount of domestic securities held in the System Open Market Account (SOMA) portfolio by $ billion by purchasing longer-term Treasury securities through the end of June 2011. Those purchases were in addition to ones already being made to reinvest the principal payments from SOMA holdings of agency debt and agency mortgage-backed securities (MBS) into longer-term Treasury securities. The purchase program was implemented by the Open Market Trading Desk (Desk) at the Federal Reserve Bank of New York. To be sure, it was a busy period for the Desk. Over the life of the program, we conducted 140 outright purchase operations to meet the directive set out by the FOMC. That meant that we were active on nearly every day possible over that period. In those operations, the Desk bought $ billion of Treasury securities, which included the $ billion expansion of the portfolio and $ billion of reinvestments. Our operations ranged in size from just over $ billion to around $ billion, with an average size of about $ billion. Those operations brought the amount of domestic assets held in the SOMA portfolio to $ trillion. The current directive from the FOMC instructs the Desk to continue to reinvest the principal payments on all domestic assets held in SOMA into Treasury securities. Thus, the amount of assets held in the SOMA will remain at that level until the FOMC decides to change the directive. Of course, the portfolio at these levels is unusually large.

As the industry navigates these issues, a shared commitment to a common set of values has never been more critical to build trust – with customers, with employees, with other financial institutions, and with the public at large. There are compelling economic, not just social or moral, reasons to do so. It encourages healthy competition, more efficient and sustainable markets, and consistently high levels of performance over the long term. The FSPB, however, cannot achieve this alone. Deliberate and sustained efforts by the industry will be needed to engage, to communicate, to educate and to internalise these shared values. By pooling inputs across the industry, richer worked examples can be developed to shed light on how ethical principles should apply in practice. The consequences of misconduct should also be clear and unambiguous to firmly entrench behavioural norms – both within individual financial institutions and at an industry level. As you are aware, moves in this direction are already being taken with the requirement financial institutions to capture and share information on employee misconduct to inform hiring decisions beginning from July this year. The Bank on its part will continue to provide a credible deterrent against misconduct through enforcement actions. With the enactment of the Financial Services Act 2013, the Bank has not hesitated to use wider enforcement powers that include stiff administrative penalties provided under the Financial Services Act to bring institutions to book for serious conduct breaches, and barring individuals from holding senior roles in financial institutions.
However, even if we were to find ourselves in such a situation we should not change the inflation target. It takes a long time to build up confidence in an inflation target, and to temporarily replace the inflation target with a price level target would damage credibility. Inflation expectations The question of the importance of inflation expectations has risen once again in that there has been greater discussion of deflation, particularly in the United States, where the policy rate is close to zero. In February, the Fed for the first time published its long-term forecasts for growth, unemployment and inflation. The forecasts show that the Fed is aiming to keep inflation between 1.7 and 2.0 per cent a year in the long term. According to the Chairman of the Federal Reserve, Ben Bernanke, this inflation forecast in actual fact represents an inflation target. The increased clarity over the Fed’s aims is intended to help stabilise inflation expectations. It is important for monetary policy that inflation expectations in the longer term are anchored firmly around the inflation target. Previously, when inflation was higher than 2 per cent it was important that expectations did not rise too far above two per cent. Now that inflation is lower than 2 per cent and the forecasts point towards CPI inflation being negative later this year, it is important that they do not fall too far below 2 per cent and in particular that there are no expectations of deflation.

The more a bank makes use of its risk rating system, the more confidence supervisors are likely to have in the results of the banks’ assessments of their capital needs. Data requirements and validation Clearly, a system is only as good as the inputs that go into it. Accordingly, banks using the IRB approach will need to be able to measure the key statistical drivers of credit risk. The minimum Basel operational standards provide banks with the flexibility to rely on data based either on internal experience or generated by an external source, as long as the bank can demonstrate the relevance of the external data to its own exposures. Regardless of source, sound data are critical for formulating meaningful internal risk assessments. From a broader risk management perspective, access to high quality data will enable a bank to evaluate the performance of its internal rating and risk estimation systems in a consistent and meaningful manner. The Basel standards outline the data history banks will need to use the IRB approach. The Committee recognizes that banks may not currently have all of the required information on hand. For this reason we have continued to engage market participants in a dialogue on this issue. As implementation of the New Accord approaches, we encourage banks to consider their data needs very seriously and to comprehend fully the techniques they will need to use to derive appropriate estimates of loss based on those data.
Such challenges have all been the preoccupation of your majesty, and you have been constantly urging the authorities concerned to overcome them. The most prominent of those challenges are the following: First: employment of the Saudi youth, which constitutes one of the major challenges facing the national economy. In spite of the good achievements made in the preceding period, estimates indicate that unemployment among Saudis amounted to about 9.6 percent in 2009. Given the rate of population growth and structure, it is important to continue intensifying current efforts to increase investment to develop the human capital with the active participation of the private and public sectors. Efforts should be intensified for Saudizing the jobs in the private sector, and obstacles hindering this process should be considered and eliminated. The percentage of Saudization fit for the nature of each activity and sector needs to be determined, and work should be made to activate the procedures and regulations that respect productivity and safeguard the rights of workers and employers alike. Second: good utilization of economic resources of our country, most notably oil and gas that represent the most important elements of the economic development of the Kingdom. Figures indicate that the rates of domestic consumption of the Kingdom’s oil and gas are growing at high rates, recording an average growth of 5.9 percent during the past five years. This is a high growth rate compared to the population growth and the size of GDP, which calls for investigating the reasons for such an increase and rationalizing it.

James McAndrews: Mortgage contract design – implications for households, monetary policy, and financial stability Opening remarks by Mr James McAndrews, Executive Vice President and Director of Research of the Federal Reserve Bank of New York, at the “Mortgage Contract Design: Implications for Households, Monetary Policy, and Financial Stability” Conference, Federal Reserve Bank of New York, New York City, 21 May 2015. *  *  *  The views expressed in this speech are those of the author and do not necessarily reflect the views of the Federal Reserve Bank of New York or of the Federal Reserve System. Accompanying charts can be found at the end of the speech. Good morning, and welcome to the Federal Reserve Bank of New York. Today is the second and final day of our conference on mortgage contract design. We are hosting this conference, in association with the NYU Stern Center for Real Estate Finance Research, because we view mortgage design as an important policy issue, with implications for monetary policy, household finance and risk management, as well as for the structure and stability of the financial system. Mortgage debt is, by far, the largest household financial liability. According to New York Fed data 1, mortgages and home equity lines of credit make up 73 percent of U.S. household debt, amounting to $ trillion in liabilities outstanding.
Active participation in this endeavour by the State and local authorities, academic institutions, private, non-profit and public organisations is crucial for its success. Official endorsement is thus of paramount importance. The participation of private and not-for-profit stakeholders in the National Strategy's implementation will be further supported by the development of a code of conduct and prior agreement to specific protocols. A code of conduct is envisaged to provide a uniform framework for the contribution of stakeholders in order to achieve the common objectives set. Public awareness on financial literacy through tailored campaigns is equally important, as it will facilitate the receptivity and usefulness of a National Strategy for financial education. Last but not least, a challenge lying ahead is the proper governance structure for the body that will undertake the implementation of the National Strategy on financial literacy. International organisations such as the World Bank2 have clearly opined that national strategies should be initiated, developed, and monitored by a credible and unbiased authority with financial education expertise and appropriate flexibility and resources. In many cases it is deemed that Central Banks can play such a role. Concluding remarks At this point, I would like to emphasise once again my personal interest and my commitment to assist the Committee's role in achieving its goals. Enhancing the population's financial literacy is an ambitious but needed goal.

For the big banks, in particular, it is crucial that a sufficient capital base be laid down as soon as possible, so that losses can be fully absorbed. The SNB welcomes the fact that, in 2010, both big banks already took important first steps in this regard, and we would like to encourage them to keep up the pace of their capital expansion. The capitalisation of most domestically focused banks is good by historical standards. However, a combination of high interest rate risk exposure and strong mortgage lending growth has been reported by a number of banks. In order for these banks to bear the risks in the medium term, it is important to ensure that their capital base is strong enough. I would now like to take a closer look at the situation of the two big banks, before turning my attention to the situation of the domestically focused banks. Situation of big banks Compared to 2009, the two Swiss big banks saw a marked improvement in their profitability and capital situation last year. In 2010, these institutions reported combined net profits of around CHF 13 billion, as opposed to roughly CHF 4 billion in 2009. This positive development was driven by UBS, whose situation improved further over the course of last year. In addition, both UBS and Credit Suisse continued to increase their regulatory capital ratios (ratio of Tier 1 capital to risk-weighted assets), which were already very high by international standards. Moreover, their financial strength ratings also improved.
The securities and capital markets are another important source of capital for enterprises. During an upturn, many enterprises find that capital is "cheap", because the outlook for the future is regarded as very bright. There is a risk of over-investment. Optimism may rapidly give way to pessimism if investments fall short of expectations and negative news starts to spread. As a result, the risk that has accumulated during the upturn period may materialise. The financial sector may choose to interpret developments as a sign that the risk associated with new projects has also increased, with the result that this risk may be overestimated. A drying up of credit and capital may trigger or amplify a crisis. The costs of financial instability may be very substantial. Therefore, it is necessary to dampen financial cycles. The outlook for financial stability The outlook for the global economy is now weak. The terrorist attacks on the US on 11 September have increased uncertainty. We have witnessed a bubble in technology shares. From 1998, the price of technology shares rose substantially more than earnings, and since March 2000, there has been a sharp correction in prices. Life insurance companies and pension funds, both at home and abroad, have lost a substantial portion of their buffers due to the decline in share prices. Telecommunications companies have been through a phase marked by substantial borrowing. Credit rating companies have downgraded many telelcoms due to high debt levels in relation to future prospects. This has increased funding costs.

The frequency of financial crises must be reduced by fostering solid financial enterprises. Risk systems must be improved. Market access to information on developments in micro and macro performance must be enhanced in order to strengthen market discipline in the financial industry. Better and uniform standards for accounting and statistics are important. Financial safety nets may offer greater security to households and small enterprises, which have difficulty obtaining an adequate overview of the risks in the financial system. At the same time, however, they must not be so favourable that they encourage irresponsible risk2  2  Bordo, M., Eichengreen B., Klingebiel, D. and M. S. Martinez-Peria (2001). Is the crisis problem growing more severe? CEPR  BIS Review 86/2001  taking. Central banks are also faced with the challenge of ensuring financial stability through their analyses and monetary policy. Developments from the 1800s to the present The regulation of financial institutions has undergone considerable changes. In the 1800s and up to World War I, the regulation of banks and other financial institutions was very limited. Norway was one of the most liberal countries. Regulation in other countries such as the US and the UK was more extensive. In Norway, savings banks were subject to separate legislation, because they were to have a more social function than commercial banks. There were no guarantee funds, and the law for savings banks was designed to ensure that they were operated in a manner that safeguarded depositors’ funds.
If I am to mention a couple of examples, these would be the Bank for International Settlements, which now devotes a much larger part of its analysis capacity to stability issues, and where we are members of a couple of groups entirely focussed on stability. The most well-known work is that being done on the new capital adequacy rules - Basel II. Another example is the work the Riksbank is heading in surveying central banks’ work on oversight of the financial infrastructure. The Riksbank is also heading the work on reviewing the principles for how public authorities should work with regard to banking supervision. Within the European System of Central Banks we are taking part in the work on producing a European stability report. The Riksbank is also heading the working group that analyses issues regarding cross-border banks with a special emphasis on crisis management. This group reports to both Frankfurt and Brussels. The fact that our analysis work has developed since we published our first report in 1997 does not mean that we can rest on our laurels. We have taken outside assistance in our endeavour to focus and develop our analysis work. A few weeks ago, we presented the assessment of our work on the Financial Stability Report made by an American researcher, a manager at IMF and a manager from a Swedish commercial bank over the year. Happily, the three authors considered that we essentially devoted ourselves to the right issues and used the right approaches.

Ladies and gentlemen, allow me to illustrate the elements I have just described and the logic behind our profit appropriation using this table (Slide 4). In 2020, the SNB recorded a profit of nearly CHF 21 billion. We first made an allocation of around CHF 8 billion to the provisions for currency reserves. We did so because strengthening the balance sheet takes precedence over the distribution of profits, as I mentioned before. The remaining amount of the annual result together with the available distribution reserve (i.e. the profit carried forward from the 2019 financial year) gives a net profit for 2020 of just under CHF 97 billion. This amount is then used for the payment of a dividend and the distribution to the Confederation and the cantons. The level of the distribution is determined by the new agreement – which I will come to in due course – and amounts to CHF 6 billion for the 2020 financial year. The not quite CHF 91 billion remaining forms the profit carried forward to the next year, in other words the new distribution reserve. This is how we implement both statutory requirements, namely the precedence of building provisions over making distributions, and the smoothing of distribution payments. New agreement on the SNB’s distribution of profits This brings me to the new profit distribution agreement concluded between the Federal Department of Finance (FDF) and the SNB at the beginning of this year.
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Keynote Speech made by Dr Indrajit Coomaraswamy, Governor, Central Bank of Sri Lanka at the International Conference on Social Enterprise & Social Finance Monday, 28th January 2019 at Waters Edge A Social Enterprise is recognized as an important business model that applies new commercial strategies to maximize improvements in financial, social and environmental well-being. In fact, it is a tool for creating positive social impact; promoting social change; and achieving environmental sustainability. Social enterprises contribute in multiple ways to enhance social inclusion while nurturing women and youth with economic empowerment. Sri Lanka’s efforts to increase Social Enterprise & Social Finance date back to the late 20th century. The early efforts took the form of loans that were granted to overcome the major barriers SMEs faced in raising capital through traditional methods. Thereafter, various measures have been taken to promote and support social enterprises by providing educational, technical and business support services in addition to finance: ❖ Numerous schemes over the years to promote SMEs. They have had a very mixed track record. ❖ Plethora of institutions. Highly fragmented institutional infrastructure with weak coordination ❖ Need holistic approach focusing on training, inputs, finance and markets ❖ Marketing most intractable problem. MSMEs need to be linked to supply chains to address the marketing challenge. To achieve balanced and inclusive growth, it is necessary to have all stakeholders connected to markets: goods and service markets as well as factor markets. Interconnected markets enable the economic ecosystem to foster synergy and enhance productivity for all stakeholders.