samchain/econo-pairs-v1 huggingface dataset:
Thus, is there an increased concentration of risk among other agents, such as pension fund companies and hedge funds, where this could create a problem? In general, the risks come to those who can manage them and therefore bear the risks. The question if whether we who oversee the system and those who operate in the markets know when risks arise? How do these developments affect our stability work? The reason I have chosen to talk to you about these issues today is partly that developments in the financial markets affect one of the Riksbank’s main objectives – to promote a safe and efficient payment system. The work on achieving this objective entails identifying potential risks in the financial system and assessing resilience to possible shocks. Our analysis is concentrated on the major banks, as they play a central role in the system. We are now – even in Sweden – more dependent on the financial markets. Although many of the tendencies I have mentioned are not as tangible here, we can still be affected by events in other countries, as in the case of autumn 1998. There is scarcely any doubt that the changes that have occurred have contributed to making the markets more efficient. This is good for the economy as a whole, very good even. The markets have probably also become more robust, with the risks better spread over the economy. Events in recent years would indicate this is so. However, financial crises can never be entirely avoided. They will recur.

Other key developments that took place during the last five years included: yearly state expenditure rising up to Rls 2.6 trillion; decline in public debt to Rls 167 billion (10.2 percent of GDP); annual current account surplus averaging $ billion and increase of more than Rls 550 billion in bank assets. According to the World Bank Group report, the Kingdom has been ranked eleventh in the world and first in the East region in terms of doing business and provision of competitive environment in 2010. The development witnessed by the Kingdom during previous years has been comprehensive and broad-based. Vast number of development projects to modernize infrastructure, and improve facilities to provide water, electricity, health and educational services have been approved. Therefore, it is expected that strong growth of the Saudi economy will continue unabated and this will expand the financial sector in general and the insurance sector in particular. Dear Audience, Insurance companies play a key role for the development and stability of public and private sectors by providing opportunities to individuals and firms to improve their risk profiles and obtain compensation for losses incurred. It is for this reason that SAMA has been keen in regulating the insurance sector in accordance with the national and international standards and practices. SAMA ensures that all companies operating in the insurance industry comply with such standards and practices and work according to prescribed rules and regulations.
But why should we care about these imbalances? After all, there is no reason why all countries in the world should be balanced at all times, as these imbalances simply reflect the need for funding current or future consumption and investment. However, excessive external imbalances may become a source of concernbecause the funding of deficit countries by surplus economies is subject to “sudden stops” and even reversals.1 Experience suggests that large imbalances are often a leading indicator of subsequent crises and sudden stops. As shown by Philip Lane in one of his numerous contributions to this topic,2 current account balances prior to the Great Financial Crisis exceeded levels consistent with underlying economic fundamentals and thus implied large and costly adjustments thereafter. These vulnerabilities are not confined to emerging market economies: large and persistent current account deficits may also precede financial crises in advanced economies,3 including in the euro area. I will structure the rest of my talk as follows. First I will talk about the determinants of the current account, focusing on the role of the exchange rate. In the second part I will say a few words about the composition of external funding (gross and net capital flows). Finally I will conclude with a discussion of available policy options that could address the persistence of current account imbalances, globally and within the euro area. * * *  1. The determinants of global imbalances, and their adjustment mechanisms The economic and social costs of correcting current account imbalances are potentially dramatic.

The resilience of equity flows shows that they have better risk-sharing properties than debt.8 So, even though important measures are taken to reduce trade balances (sometimes at a high cost), the way these current account deficits have been financed continues to impact current and future current account imbalances, thus limiting the efficiency of demand rebalancing. Valuation effects and income flows are increasingly driving net external positions, more than the trade balance itself [slide 10]. This implies keeping a close eye on the types of financial flows which finance current account imbalances, and watching out for the relative contribution of FDI, equity, debt and banking flows to the build-up of external imbalances as well as the exchange rate exposure both on assets and liabilities. 3. So what are the possible policy responses to limit excessive global imbalances? Let me start by stressing what the non-adequate responses are. First, protectionism is a temptation but it is not an option. From a macroeconomic point of view, an increase in protectionism is recessionary and inflationary, acting as a negative supply shock. Furthermore, as the current account is determined by the balance between savings and investment, there is no clear evidence that trade policies are likely to affect both variables. For example, due to the increasing integration of global value chains, any increase in tariffs on imported inputs immediately translates into higher production costs, thus undermining export competitiveness.
In a nutshell, a credible fiscal framework is more important than ever. The European Commission’s proposal for reform As a result, the European Commission is currently undertaking a review of the EU’s fiscal framework, with the aim of reducing its complexity, improving compliance, promoting a 3  See, for example, Badinger, H., and W. H. Reuter (2017). The Case for Fiscal Rules. Economic Modelling, 60, 334–343. 4  more countercyclical behaviour of fiscal policy and accommodating the new investment needs of the green and digital transitions. In this context, in its Communication of 9 November 2022, the Commission presented its orientations in order to promote and guide discussions among stakeholders about the reform. 4 Let me now spend a few minutes describing its main features so that I can then share with you my own views on the key aspects a functioning fiscal framework should have. While going through my “wish list”, I will reflect on the strengths and shortcomings of the Commission’s proposal, as a way to comment on the difficulties that any proposed reform will face. The main objective of the proposal is to ensure that public debt ratios are put on a downward path or stay at prudent levels, keeping the debt-to-GDP ratio of 60% as the reference value. And retaining the need for public deficits to stay below the 3% reference value over the medium term, which has proven effective in anchoring Member States' public accounts. 5.

Ravi Menon: MAS’ Annual Report 2014/15 Remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at MAS’ Annual Report 2014/15 Media Conference, Singapore, 21 July 2015. *  *  *  1. Highlight six areas. •  Economic growth – weaker than expected but not likely to deteriorate further  •  Inflation – coming in at lower half of forecast range  •  Monetary policy – considerations driving recent decisions  •  MAS’ financial performance – stable investment gains amidst volatile currency translation effects  •  Consumer initiatives – helping Singaporeans manage their finances  •  Financial centre development – broad-based growth across all segments  Economic growth Economy clearly lost some momentum in Q2 2. Real GDP contracted by 4.6% in Q2 on QoQ SAA basis  •  Trade-related industries declined, dragged down by weakness in pharmaceuticals, marine & offshore engineering, and electronics. •  Domestic-oriented industries pulled back after strong performance in Q1. But growth momentum not expected to deteriorate further in H2 3. First, global and regional economic recovery remains broadly intact – should provide support for Singapore’s outward-oriented sectors. •  US economy has regained momentum. o  o o •  PMI readings show manufacturing and services sectors expanding. Consumer spending should be buttressed by strengthening labour market. In China, picture is mixed. o  •  Contraction in Q1 largely weather-induced. Excess capacity has been weighing on production.
4  BIS Review 71/2002  10  split almost equally between intermediated and non-intermediated assets . Although credit still plays a prominent role in the allocation of financial resources, credit institutions themselves are relying on the financial markets to manage their balance sheets. These two points suggest that the benefits of enhanced liquidity entail the management of a new range of risks. This should not lead us to conclude that financial integration has necessarily negative side effects from the point of view of financial stability. Financial integration may help to foster financial instability. I would like to put forward three reasons for this: •  First, the setting up of a large currency area eliminates disruptions arising from currency risk that would otherwise prevail between the participating countries. Domestic economies are immune to currency misalignment episodes that disturb regional trade. Currency risk premia are eliminated from interest rates. •  Secondly, the setting up of a large currency area implies an overhaul of market infrastructure. In this respect both public bodies, such as national central banks and market participants, have a unique opportunity to pool best practices. Indeed, this has been the case in the euro area where, for example– the TARGET system, interlinking domestic real-time gross settlement systems, has demonstrated its ability to absorb large volumes of cross-border flows, and to perform well even in critical circumstances such as September 2001.

Conclusions The financial sector has taken important steps toward incorporating the financial risks of climate change into risk management frameworks, strategic discussions, and oversight regimes, but I think it is fair to say that this work is still in its early days. We all have much to learn with many challenges ahead of us. My perspective reflects, in part, the observation that understanding the impact of climate change from a risk management perspective is both a complex problem and a complicated one.4 It is complex in the sense of many interconnections and feedback loops; the likely existence of nonlinearities and tipping points; and massive uncertainty about key factors like the timing of climate impacts, policy choices, technological change, and adaptive responses by consumers and businesses. All of this tests our capacity to understand and manage the risks. At the same time, this is a complicated undertaking from an implementation perspective. Success will require us to process and analyze vast amounts of granular data and aggregate across business lines, sectors, and jurisdictions; to implement new governance and organizational structures; and to invest in our workforce to develop new skills and new expertise. In my view, these challenges are not a reason for a cautious approach, but rather a clear signal about the scale of the work to be done. Our shared success will depend on meaningful investments to build capacity and develop new tools, a willingness to innovate and look beyond traditional approaches, and an unwavering commitment to the public good.
The 1998 fall in domestic lending amounted to $ billion in absolute terms, of which over 60% was accounted for by the Japanese and Continental European banks combined. This withdrawal of credit drastically reduced the funding available to Hong Kong corporates and increased their financial difficulties. This in turn has fed through to increased bad debts for the banks. Hopefully, the economy has now bottomed out and economic growth will resume this year as forecast by the Government. The stock and property markets certainly seem to be indicating an improvement in confidence and if sustained this will reverse the negative wealth effect of 1997/98 and encourage a revival in consumer spending that is necessary to take Hong Kong out of recession. However, in the initial stages of the recovery the financial position of many companies will remain under pressure, particularly as the upturn in the economy will increase their need for working capital. In the meantime, an increasing number of companies are going into liquidation. The number of compulsory winding-up orders jumped to 763 in the financial year 1998/99. This is an all-time high that compares with the average of 480 in the previous five years. It is certain that without the alternative of workouts the number of liquidations would have been much higher. The role of the workout is to provide an alternative to insolvency and receivership which will allow commercially viable companies to survive as going concerns, thus preserving employment and productive capacity.

Second, we could impose higher capital requirements on large, systemically important institutions to offset the advantages such as lower funding costs that these institutions may garner by their perceived “too big to fail” status. This would recognize the interconnectedness of the financial system and the fact that the failure of a systemically important institution generates significant externalities, which are not, at present, borne fully by the equity and debt holders of such institutions. Increasing the size of the capital buffer would make the system more stable by reducing the incentive for firms to get big just to capture the perceived benefits from achieving “too big to fail” status. The first change – an improved resolution mechanism – would presumably reduce the number of institutions that – at any point in time – would be systemically important. The second change – the imposition of higher capital requirements on large, systemically important institutions – would reduce the likelihood of failure of such institutions. However, in assessing the efficacy of such changes, we need to be realistic about the difficulties in building a resolution regime that would be sufficiently robust to allow the failure of any institution under any circumstance and in designing a capital regime that imposes  BIS Review 125/2009  5  differential requirements on large, systemically important institutions. On the resolution regime side of the ledger, it is particularly difficult to build resolution regimes that can operate effectively across different geographic jurisdictions.
So regulators worldwide set about replacing the “straws and sticks”, to rebuild the system with “bricks”, so that it is better able to withstand the next financial stress. In keeping with the popular adage, there was a global consensus on “not letting a serious crisis go to waste”. 4. Indeed, much have been done by financial authorities around the world. The foundations of the global financial system have been strengthened, such as in the capital and liquidity standards that underpin the viability of our financial institutions. Global Systemically Important Financial Institutions (or G-SIFIs) and Financial Market Infrastructures (FMIs), as key pillars of the global financial system, have to meet higher regulatory standards as well as adopt new requirements on fail-safes through recovery and resolution plans. Coming back to my analogy, global regulators have gone beyond strengthening the “house” but also delved into the previously overlooked “garden” of OTC derivatives – and how this can be better landscaped around central infrastructure. In addition, market monitoring and surveillance tools have been augmented to spotlight on market-based finance (or shadow banking), allowing better visibility on hitherto darker corridors of the global finance house. 5. There are many more examples of regulatory reforms and initiatives. Now, after years of effort, the obvious questions will be whether we have done enough, will all the features and installations in the enhanced house of global finance come together in an effective and coherent manner, or have we overdone the repairs at a high cost to the occupants?

Against this backdrop, we continue to expect the economy to grow by around 1.5% in 2019. As is the case with the global economy, the risks for this scenario remain to the downside. In particular, an unexpectedly sharp slowdown internationally would quickly spread to Switzerland. Exchange rates, interest rates and inflation expectations  Let me now move on to address monetary conditions – that is to say, exchange rates and interest rates – as well as inflation expectations. My comments here relate to the developments since our last news conference in December, and not just those during the past quarter. Monetary conditions are similar today to six months ago. The Swiss franc remains highly valued. The situation on the foreign exchange market is still fragile. When the trade dispute between the US and China escalated again in May, the Swiss franc and the Japanese yen appreciated. Both currencies are sought after as safe havens in periods of uncertainty. In light  Page 4/5  Berne, 13 June 2019 Thomas Jordan  News conference  of the high valuation of the franc and the fragility of the situation, our willingness to intervene remains necessary, as does the negative interest rate. This brings me to the development of interest rates since December. At the beginning of the year, the US Federal Reserve signalled that it would be patient with regard to raising interest rates further.
In doing so, it would steer clear of the pitfalls that other countries have fallen into and maintain its growth path. In this respect, I will focus on a number of important considerations. On the fiscal side, government spending can be increased on a sustainable basis if government revenue increases on the back of a growing economy. Furthermore, increased expenditure on pensions and health services must be financed in a sustainable way. As the population ages we have to pay sufficient attention to the dynamics that this implies, and of the options available, such that the chosen path would not impinge on economic growth. Government policies must, above all, enhance the efficiency of the productive system, promote investment and incentivise entrepreneurial initiative. Labour market The local higher level of labour force skills and qualifications, as well as its adaptability, have been instrumental in attracting investment in new areas of activity and have therefore reduced the vulnerability of the domestic economy to shocks in foreign demand. Chart 9 shows how Malta’s wages compare with those abroad. On the basis of the purchasing power standard which measures wages by taking into account the cost of living, the average Maltese wage ranks towards the middle of a broad range of selected countries that are shown in the chart. The issue arises as to how to increase living standards in a sustainable way, without losing competitiveness. One should be mindful of the relationship between all costs (including wages) and productivity.

Rapid changes in technologies, globalization and increasing competition are the challenges of the day for the business community. In the dynamic economic environment of the 1990s, business communities have been taking not only the risks of their new investments on technology, but the risk of inflation as well. In an inflationary environment, businesses and individuals end up spending more time and money either protecting themselves against inflation or trying to benefit from it. The rapidly changing environment affected not only the business decisions but the monetary polices as well. The traditional anchors for monetary policy and of central bank accountability - exchange rate targets and money aggregate targets - have fallen victim to liberalized capital mobility, inter-dynamic markets namely, by the introduction of new financial instruments, technology, financial globalization, and as a result unstable money demand. At this juncture, the role of the central banks and the framework of the monetary policy needed to be drawn more clearly. The ultimate goal of monetary policy has become reasonable price stability, which is generally understood to point the inflation at rates low enough not to affect economic decisions. Thus, the rise of an inflation targeting monetary framework is not a surprise but it is a natural reaction to a dynamically changing economic environment. Here I would like to briefly review the footsteps of inflation targeting framework. The first issue that I would like to touch on is the time-inconsistency problem in monetary policy. Monetary policy works with relatively long lags.
This work is conducted using methodological and procedural approaches devised and published by the FROB late last May, following advice from a panel of experts in order to include best market practices. Under these approaches, financial due diligence must pay particular attention to loans and receivables, real estate assets and the investment portfolio, along with potential one-off transactions envisaged, and to potential areas of risk from a legal, tax and labour-related perspective. Business plan due diligence will focus on the reasonableness of macroeconomic assumptions, growth, revenue, doubtful assets ratios and provisioning, costs, synergies and disposals. Based on the institution’s financial statements, on the business plan and on the due diligences, three independent experts – all acknowledged authorities in their field – hired by the FROB will deliver their opinion on the institution’s market value and the percentage of capital to which the new investment is equivalent. To ensure the quality of the result, the FROB will use the conclusions of three experts, although it will not take into account valuations that deviate by more than 15% from the resulting mean value.

BIS central bankers’ speeches  3  These plans will be – and indeed are already – subject to scrutiny by various parties: by the Banco de España, which must give final approval; by the FROB and its external advisers, who may demand inclusion of commitments on top of those proposed, considering these as an essential input in the process of setting the price to be paid for the shares in which the FROB invests; and by the European Commission, as the aid provided must be compatible with the European criteria on “State aid” and budget deficits. All three institutions are currently analysing the plans received. The savings banks, for their part, are taking the necessary steps remaining to adjust their structure to the new requirements. In some cases they have already created the new bank to which they will transfer their banking activity, and in others the necessary procedures are at different stages of completion. Subsequently, in July, their assemblies will adopt the resolutions segregating their assets and liabilities and definitively transferring their financial business to the new bank. A key aspect will be the setting of the price at which the FROB will participate in the capital of the new banks. As an initial step, the leading audit firms hired in this connection are performing both financial due diligence (to confirm the reliability of the institution’s financial statements) and business plan due diligence (the reasonableness of the plan). Both provide relevant information for the economic valuation of the new bank.