samchain/econo-pairs-v1 huggingface dataset:
If a firm is easily resolvable as described, then the authorities may care less about the potential for recovery. That could be a matter left for the shareholders. The more difficult a resolution would be, the more interest the authorities have in removing any barriers to resolvability in advance. Failure is usually more problematic for banks than for other commercial firms. When a bank is known to be in trouble, its customers may withdraw funds quickly, creating a liquidity run that might spillover to similar institutions. That places an emphasis on speed of action. In 2009 the UK government introduced permanent legislation that enables banks to be resolved by the authorities, and designated the Bank of England as the UK resolution authority. For the EU as a whole, the Banking Recovery and Resolution Directive (BRRD) took effect at the start of 2015, and brings European legislation on recovery and resolution into line with the FSB’s international standards. It requires there to be a resolution authority in every EU country and, amongst other things, specifies how decisions are made to put banks into resolution, how resolutions may be conducted, and what tools should be available to resolution authorities. But there is not yet a special resolution process for insurers. That remains on the wish-list for now. Effective resolution can be greatly enhanced if the authorities have prepared for the event, with the assistance of the firms concerned. The larger and more complex a firm, the more complex and challenging such planning is likely to be.

The NSFR is a somewhat different calculation designed to incentivise banks to hold longermaturity funding: different liabilities are weighted together according to estimated maturity (reflecting, among other things, their degree of stickiness) and a minimum standard is applied. The NSFR was agreed internationally in the BCBS and announced in October 2014. All jurisdictions have committed to implement by January 2018. The EU is to make legislative proposals based on a report by the European Banking Authority (EBA) due in December 2015. Recovery and resolution, MREL, total loss absorbing capacity As described above, having sufficient capital to meet both anticipated and unexpected losses may still not be enough for a firm to continue trading. Part of the reform agenda is to put in place requirements for greater loss absorbing capacity such that, after a stress, a firm can be recapitalised sufficiently to continue to supply its critical economic functions. To deliver this, the firm’s management team needs to have put together a credible plan for recovery, to return the firm to a stable footing. And if even that is not enough, then we want firms to be easily wound down by the authorities i.e. for firms to be able to fail in an orderly fashion, with as close as possible a continuing provision of financial services, minimal spillovers to other firms and no public money involved. That process of managing the failure of a financial firm is what we call resolution. There are judgements to be made here about how much to rely on these different approaches.
Given the rapid pace of innovation in financial markets and products and the low level of risk premia, investors may need to take particular care to understand the risks they are exposed to. More than in the past, they may need to ask some searching questions about how funds are being invested and how risks are being managed. One approach might be to put greater emphasis on stress test results as well as more conventional risk metrics. Failure to ask probing questions could prove costly for those directly involved – and, of greater concern, to others in the system – as and when the credit cycle turns. BIS Review 124/2006  9

Very soon we will reach out to stakeholders to join us in this most meaningful project. 13. Thank you. 2/2  BIS central bankers' speeches
In Malaysia, the old British unit of the “shilling” lived on long after it ceased to exist in the United Kingdom. There is no end to the links that can be found between the different countries and their coinage. Nusantara was at the centre of this international network, leaving us with a diverse inheritance of numismatic material. Much of the physical evidence of this global trade has, however, been lost. Evolution is an intrinsic part of the nature of money; coins have been melted down, misplaced or sometimes incorporated into other items such as jewellery; banknotes have been destroyed. We are left with shipwrecks as some of the most useful sources information on the money that was in circulation in our history. What remains is a faint reflection of the millions – literally – of coins that once circulated in the archipelago. Some are of the highest rarity while others may not be. Bank Negara Malaysia has for many decades been a custodian of local numismatic heritage, resulting in an unrivalled collection of Malaysian coins and banknotes. This is a natural role for a central bank to adopt. BIS central bankers’ speeches  1  We would like to thank the input of private collectors such as Mr. William Barrett, whose passion for Nusantara numismatic material has produced the core of the present exhibition. “Knowing Nusantara” is the first numismatic exhibition of this nature to be held at Bank Negara Malaysia.

All this is not enough, but you should not doubt France too much, even in this election year. The soundness of our political institutions and majority system represent lasting advantages. From its significantly more positive economic situation, Germany should also continue with reform: demographic change is likely to result in a decline in the working population – and the present inflow of refugees will not change this to any significant extent. This means that growth will slow in the long term. However, it is obviously not for me to advise measures for your country. At European level, our competitiveness will depend in particular on creating a large digital single market. I know that when the French speak of coordination in Europe, Germans sometimes suspect it to be a new trick to avoid reform. We must break out of this dead-end: we need both national reforms and European coordination. As Helmut Schmidt repeated frequently, we must build economic union as well as monetary union. But this does not in my view mean a “Union of Transfers”, which Germany quite legitimately refuses. The second growth lever: create in parallel what I call a “Financing and Investment Union” (FIU). Why? Because numerous businesses in Europe wish to invest and innovate but are unable to find appropriate financing. Still, the funds are by no means lacking: the euro area has a savings surplus of 350 billion euro, i.e. more than 3% of GDP. The FIU would facilitate the mobilisation of these abundant savings towards investment.
Later on, merchants invented payment instruments, including promissory notes and cheques; and, in the 17th century, the first privately issued banknotes emerged in Europe. 3 These innovations significantly reduced the transport costs involved in making payments and simultaneously improved security. On my slide, this is the second phase: the transition from coins with intrinsic value to promissory notes, cheques and privately issued banknotes. 1 2 3  As reproduced in Rudolf Richter (1990), Geldtheorie – Vorlesung auf der Grundlage der Allgemeinen Gleichgewichtstheorie und der Institutionenökonomik, Berlin, pp. 120 et seq. Specifically: electrum, a naturally occurring alloy of gold and silver. The existence of paper money in China dates back to the 10th century. In Europe, the first banknotes were issued in 1661 in Stockholm. In Switzerland, the first banknote was put into circulation in Berne in 1826. Page 3/9  Central banks play a fundamental role in payment systems Now, it is important to remember that neither the promissory notes nor the cheques – nor even the banknotes – of this era were actual money, but merely a claim on money. Such instruments could not be used to settle payment obligations with finality. There was always a risk that the borrower would not have enough precious metal to honour the payment obligation on the due date. The use of payment promises in trade thus entailed substantial credit and liquidity risk. These risks could undermine confidence in payment instruments, bringing trade to a standstill. And this, ladies and gentlemen, is where central banks enter the equation.

Moreover, our statistics have been integrated into the euro area accounts, which provide an overall picture of the euro area economy. The next milestone is the release of the new investment funds statistics, today. For some years, the ECB has already published un-harmonised and partly estimated euro area investment fund statistics, at a quarterly frequency. Today we will present, for the first time, harmonised investment fund statistics that cover all investment funds resident in the euro area. This includes data for the main fund types such as bond, equity or mixed funds, but also other types of funds, including hedge funds. Our new dataset contains much more detailed breakdowns both on the assets held and liabilities issued by investment funds. The data provide, for example, detailed information on the residency and sector of the issuers of securities and shares held by the funds. New information is available, as well, on the residency of the holders of the shares issued by euro area investment funds. In addition to the detailed quarterly information, the ECB now also publishes key monthly information on the outstanding amounts and net sales of shares issued by the funds. A further important improvement concerns the timeliness of the publication of these statistics: as from 2010, the statistics will become available after one-and-a-half months (compared to 3-and-a-half months in the past). There are many reasons why high quality statistics on euro area investment funds are important for the ECB’s monetary and financial analysis.
According to the Work Foundation, the Reading and Bracknell area is assessed to have the best job growth potential of any UK urban conurbation and Swindon and Oxford also make the top 10 in their league table. 2 When I accepted the invitation to give today’s speech, I had not appreciated that today – 13th July – was a significant date in terms of my career and my position on the Monetary Policy Committee (MPC). Four years ago today, on 13th July 2006, Gordon Brown – who was then Chancellor of the Exchequer – announced my appointment in Parliament, and I joined the Committee just over two months later. The course of monetary policy while I have been on the Committee has been dominated by the effects of the global financial crisis, and the recession which ensued. It has also been a period when the Committee has found it more difficult to keep inflation on target than in the more stable global conditions which prevailed until 2007. In 36 out of the 45 months I have served on the Committee, CPI inflation has been above the 2% target. And it has been more than one percentage point above the target – the threshold which triggers an explanatory letter from the Governor of the Bank of England to the Chancellor – in 15 months, a third of the time that I have been on the Committee. That includes June’s inflation rate which was announced earlier today.

Chart: Change in market value since January 1998 So far, our nation has earned a solid return on its financial assets. The cumulative return on the GPFG since its inception amounts to over NOK 2 600 billion, equivalent to about a third of total GPFG capital at the end of 2014. BIS central bankers’ speeches  3  Chart: Lower yields Over a third of the GPFG is invested in bonds. Real yields on high-grade government bonds provide a basis for the rate of return that can be expected ahead. In recent years, those yields have been close to zero. Low bond yields reflect global economic conditions: Governments, businesses and households are seeking to save more, while demand for safe investments has increased. Central banks’ substantial asset purchases are pushing in the same direction. However, low yields may also reflect modest expectations of economic growth further ahead. There is no return without risk. The GPFG features a very long investment horizon and a sizeable capacity to bear short-term risk. This is why the chosen allocation to equities is relatively high. It is also the reason why the GPFG has moved into real estate. The authorities have asked Norges Bank to assess whether the allocation to real assets should be increased. Any increase in the allocation to real assets will probably be at the expense of bonds. Chart: Spending of petroleum revenues almost level with revenues Petroleum revenue spending over the fiscal budget has increased since the turn of the millennium.
These illustrations demonstrate that when there is a sudden jump in the risk premium embedded in the 3-month LIBOR, the way in which you respond to such a risk premium has important repercussions for the effective monetary policy stance. Let me illustrate this point with the example of John Taylor's acclaimed "Taylor rule" 18 . In generic terms, the Taylor rule is a simple monetary policy rule that prescribes how a central bank should adjust its official rate in a systematic way in response to changes in inflation and macroeconomic activity (usually the output gap). 19 While no central bank is relying solely on the Taylor rule, most central banks are deriving guidance from it in their monetary policy decisions. Assuming that the current turmoil has neither affected inflation nor the output gap the Taylor rule does not suggest a change in the official rate. In other words, the observed decoupling of the LIBOR from the official rates would have to be ignored in the conduct of monetary policy. So far, this is the approach followed by the ECB and the Bank of England. If one assumes that the level of the 3-month LIBOR plays a more important role in the transmission mechanism of monetary policy than a one or two week repo rate, monetary policy makers may want to be flexible in times of turmoil. Adhering too closely to rules might not lead to an optimal monetary policy. As John Taylor has said himself, "operating the rule requires judgment and cannot be done by computer."

5  SECO, 2006, "Kunjunkturtendenzen Winter 2006/07", page 48. 6  See Ben Bernanke, 1981, “Bankruptcy, Liquidity, and Recession”, American Economic Review 71, 155-159, or Ben Bernanke, 1983, “Nonmonetary Effects of the Financial Crisis in the Propagation of the Great Depression”, American Economic Review 73, 257-276. 2  BIS Review 141/2007  make sure that banks take appropriate precautions to prevent the occurrence of disasters. It is well known that those protected by insurance policies can have lower incentives to prevent damages than those who remain unprotected. One of our goals, therefore, is to counter this so-called “moral hazard” risk. More generally speaking, central banks are concerned with a broad range of market failures, of which moral hazard is just one prominent example. Other market failures include coordination problems between market participants. The classic examples of such coordination problems are bank runs, where the mere belief that a bank faces insolvency problems will render the bank insolvent – even though it may be fundamentally sound. Another important source of market failures are externalities. For instance, in case of a banking crisis, a large part of the costs of the crisis are borne by households and firms. These costs are not fully taken into account by banks when they determine their risk profile. To banks, it is: “Tails I win, heads you lose.” As a result, banks’ profit-maximizing risk choices are typically not socially efficient. There can therefore be an inbuilt tendency for “excessive risk taking”.
Niklaus Blattner: Economics is what economists do Speech by Professor Niklaus Blattner, Vice Chairman of the Governing Board of the Swiss National Bank, at the Opening Session of the Integrated Master Programme, Faculty of Economics and Behavioral Sciences, Department of Economics, Albert-Ludwigs-Universität, Freiburg im Breisgau, 22 October 2004. * 1. *  *  Introduction  This is an important moment in the professional life of all of you who have chosen to participate in one of the three Master Programmes starting today and offered by the University of Freiburg. Your choice was either the Master of Economics and Politics, the Master of Finance or the Master of Internet Economics. A common denominator of all these programmes is economics. I felt it might be worthwhile, right at the beginning of your undertaking, to draw your attention to what economics stands for. This begs the question of what economics is. Jacob Viner (an eminent international trade theorist, 1892-1970) gave a slightly disturbing answer: “Economics is what economists do”. This sounds less scientific than you might have wished. But Viner has a point: when talking about a subject that has a history of constant change and development, why not simply look at the empirical facts and take instruction from what one observes? This is exactly what I propose to do. - I base on my own experience and observation.

Thus, for example, through its involvement with payment systems and the daily monitoring of the banks’ foreign exchange exposures, the Central Bank of Malta has daily information on the amount of liquidity and the extent of foreign exchange risk prevalent in the inter-bank market. Similar information, however, only becomes available to the Authority with a delay, through the monthly statistical reports submitted by the individual financial intermediaries. Furthermore, the Bank’s macro perspective assessment of financial developments may identify general risks to the system that may not be apparent when the prudential supervision of individual financial institutions is undertaken. This may occur, for example, if the risk profiles of the institutions in question show a high degree of similarity, making the system especially vulnerable to a particular type of shock. Supervision at the micro level, therefore, has to be complemented with a macro analysis of the interlinkages between different segments of the domestic financial sector and its links with the payment system, the rest of the economy and its counterparts abroad. On the other hand, it is also true that the Bank’s macroprudential analysis may not provide precise information on individual institutions, particularly those that may be on the brink of insolvency. Here, the Authority, through regular inspections of individual service providers will have a more in-depth knowledge of the health of single intermediaries and market segments, including those which play a peripheral role in the monetary policy transmission process and with which the Bank’s relationship is, at least on a one-to-one basis, rather distant.
Firstly we need to be clear why we are pursuing a particular deliverable. Is it a market failure justifying any intervention at all? What real impact will the work have on fulfilling our mandate? How closely does it relate to the “must dos”? Secondly we need to think through the costs, benefits and risks associated with the action from the points of view of both likelihood and impact. What will be the risks to society, the economy and even the Bank if we do not do it? How might these risks be reduced if we do do it? How well placed are we to do it as opposed to others? How confident are we of achieving the intended deliverables – particularly when we need to rely on others? Do we have influence to ensure action is taken? The answers – difficult as they may be to define – help us in prioritising and resource allocation; and provide sunset provisioning in deciding whether to continue with particular strands of work. 5. Ongoing Activities: The Matrix  i)  Uses for the Matrix  There are many types of activity, and many sources of threat where we could be active. So we need organising principles to make sense of where particular actions fit into the landscape of our financial stability work. It is only then that we can evaluate competing priorities, by subjecting each “bid” to a common set of challenges. To do this we find it helps to use a simple matrix.

a)  Credit Risk  Financial crises have traditionally arisen where the solvency of one or more institutions either crumbles, or is perceived to be in danger of doing so, in a way that threatens the financial system. So we need to focus on credit concentrations, credit aspects of prudential standards, credit pricing and terms etc. We need data and intelligence to do that. Understanding credit conditions and vulnerabilities is quite well developed territory. But new threats have arisen, particularly from sophisticated credit transfer instruments. This is a tricky and opaque arena. It is hard to know where concentrations of credit risk actually reside and even where credit risk ends and market risk begins. In addition there is the increasing range of participants who are also taking on credit risk. Of course in addition to this we can – and do – think about credit risk standards like Basel II. We focus on the systemic aspects of prudential design since in the UK FSA focuses on supervisory issues. b)  Market and Liquidity Risk  As the global capital market has expanded on the back of securitisation and derivatives increasing vulnerabilities arise. Change has been so rapid and development so fast that it has been hard for any of us to keep up. Given the multitude of new instruments and new markets that have appeared and the resulting increase in risk, this is a significant area of work for us.