samchain/econo-pairs-v1 huggingface dataset:
Differences in reporting requirements can be seen as a barrier to achieving the full potential of this “single” market, to the extent that they impose an additional cost on those entities operating, or planning to operate, across borders. Not surprisingly, therefore, there have been a number of calls for regulators to work together to streamline the reporting requirements that apply to institutions which are active on a pan-European basis. The Committee of European Banking Supervisors, or “CEBS”, established two years ago and charged with promoting convergence of supervisory practices and cooperation and information sharing between supervisors, has risen to this challenge and has taken a major initiative in this respect, culminating in the publication of two sets of common reporting templates, one set for institutions to report their solvency ratio results under Basel II, and the other set for institutions to report financial information based on IFRS. These two projects take advantage of the two initiatives for convergence in international regulatory requirements I have already mentioned. Indeed, it would have been very difficult, if not impossible, to have made progress without them. Both the introduction of International Financial Reporting Standards and the implementation of Basel II are obliging supervisors to modify their existing reporting requirements and systems. This presents a window of opportunity to make progress on more convergent approaches. The benefits of a common reporting framework are clear, both for the institutions generating the information and for banking supervisors. From the standpoint of financial institutions, administrative costs will decrease, particularly for cross-border banks.

But, more than this, we should explore the possibilities to give greater feed-back to reporting institutions, from which they can derive benefits. 5  Taking advantage of new technologies  The final element that I want to mention today is certainly not the least important. I believe that we should make full use of the possibilities offered by new technologies and tools to collect, transmit, manage and analyse the increasing amounts of data we are faced with. A standard like XBRL can and should play a central role in enhancing information flows. Its great advantage is that it allows for a more precise, reliable and rapid interface between the generators and users of information. But XBRL is not only a tool for transmission of data. Through the development of “taxonomies” or dictionaries of terms, it allows information to be generated and interpreted on a consistent basis. XBRL  4  BIS Review 47/2006  therefore means that financial information from entities can be understood and assimilated in other parts of the world in an accurate and timely manner. In the banking sector, XBRL could be a means of finding a common language for financial information needs. It could thereby facilitate supervisory co-operation and promote a level playing field. It is for these reasons that CEBS has decided to promote the use of XBRL in the two common reporting initiatives that I mentioned earlier in my intervention.
Nor is it about taking only one step at a time with no view at each stage about what the necessary path of policy is likely to be further out. I do think it is important for the MPC to have such a view and to communicate it, broadly, to households and businesses and to financial markets. This need not require publishing precise paths for policy as both Mark Carney and Ian McCafferty have recently pointed out. 14  Rather, it implies a bias to needing a little more confirmation at each stage that the supply side is evolving as we have forecast – a somewhat higher burden of proof that I hope will diminish as we learn more and as we become more confident about the ‘model’ of the economy that we hold in our minds. Such an approach is not without its risks. The parable of the brick attached to a piece of elastic is never far from central bankers’ minds. Something pulls on the elastic with increasing force but nothing happens – until the brick flies towards you to high speed. 15  Domestic inflation pressure may increase more quickly than we imagine. Productivity growth may disappoint even the MPC’s relatively low forecast – increasing inflationary pressure for any given level of activity, though I have to say here that as my colleague Silvana Tenreyro has argued, there are reasons to believe productivity growth might recover more sharply than we expect.

4  The total number in employment (aged 16+) increased by 296,000 between the three months Nov 2009– January 2010 and Nov 2010 to Jan 2011, according to the latest labour Force Survey. BIS central bankers’ speeches  3  Chart 2 – Employment intentions* Bank of England Agents’ scores 3 2 1 0 -1 -2 -3  Manufacturing  -4  Services  2000  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010  -5 2011  *: Employment intention scores reflect firms’ expected changes in workforce size over the next 6 months. Source: Bank of England  Vacancy levels are also holding up well and employment surveys – such as the Bank of England’s Agents’ survey also show a reasonably positive picture for employment intentions, as Chart 2 shows. Business surveys from the early months of this year are also consistent with a continuing economic recovery. In the manufacturing sector, all the major business surveys published in the early months of this year – from the CBI, the British Chambers of Commerce, and purchasing managers – are showing record or near-record responses for output and orders, consistent with the strong growth reported by the official output figures. Indeed, the latest CBI Monthly Trends Enquiry of manufacturers, released today, shows one of the strongest responses for expected output growth that we have seen in the past two decades. But – sadly – manufacturing industry is now a small proportion of the UK economy.
Again in the same vein, resources must be made available for farmers to better their production methods or change the nature of their farming so that costs can be reduced or farmers can change to more valuable products needing bigger investments or having larger gestation periods. No doubt in doing this, old debts, being quite considerable and pervasive, will also have to be looked at. In industry, the problems and the roles of the SMEs are obvious. There is no major industrial economy without SMEs. I would say that over half the SMEs are NPL. And a lot of the owners have abandoned their old companies because they don’t need historic records or quota, for instance. They could assume some other identity and live another life and become SMEs again in a not too difficult way, but it is a big burden on the banks. A lot of SMEs can’t do that because they need past performance records. Efforts to prod these SMEs into viability are obviously going to need some government assistance. The problem is too big for commercial banks to handle alone. 3  BIS Review 108/2000  The government has made some efforts in improving the technology, marketing and management of the SMEs. How well it has done this depends on who you ask and I am not really in the field of the SMEs well enough to know the generality of what most people are thinking.

Moreover, the market preoccupation with short-term stock price, rather than long-term creditworthiness also presents potential risks to financial stability. Notwithstanding these challenges, several recent positive developments in emerging economies have augured well for market discipline to have a more effective role in reinforcing sound governance. In particular, the development of financial markets have resulted in more efficient markets with wide options for investors to exert discipline. The adoption of international financial reporting standards, efforts to strengthen auditor independence as well as financial capability initiatives will also reinforce market-based discipline going forward. All of these initiatives will improve the prospects for financial stability by preventing problems from occurring at the level of individual institutions. However, the recent events in the international financial environment have demonstrated the increasing complexity of banking activities which has raised the broader challenges for financial regulation and the design of safety nets in the context of managing systemic risk. Regulators have begun to carefully consider the need to re-calibrate current regulatory approaches to appropriately address risks to the financial system stemming from large and complex institutions that are increasingly engaged in non-traditional activities. This has, in turn, placed new demands on financial regulators as well as for institutions to develop a deeper understanding of the interlinkages between the financial system and the economy, and in particular, the macroeconomic transmission of financial risk.
Stronger competition stimulates a more efficient use and allocation of resources thereby increasing allocative efficiency, exerting downward pressure on costs and triggering price reductions. The extension and deepening of the EU internal market is among the policies that are needed to further improve the functioning of product markets. With service-related activities representing around 70% of value added and employment in the euro area (against almost 80% in the US), more competition in EU service markets is required. The gap between the euro area and the United States in labour productivity has widened considerably since the 1990s and some services sector, such as retail and wholesale trade, account indeed for a large part of this gap: labour productivity growth per person employed was 0.7% in the euro area in 1996-2002 compared to 5.5% in the US in 1996-2001. The euro area should step up measures to boost services market competition in order to increase economic efficiency and economies of scale. This would support a higher level and growth rate of labour productivity in the services sector and promote a more dynamic economy. Moreover, measures aimed at increasing services market competition may have a dampening impact on relative price  7  See Blanchard, O. (2004): “The economic future of Europe”, The Journal of Economic Perspectives, vol. 18, pp. 3-26; and also Gordon, R. J. (2004): “Two centuries of economic growth: Europe chasing the American frontier”, CEPR Discussion Paper, No. 4415.

De facto, we are already seeing some progress in the integration of financial stability within economic governance through the European Financial Stability Facility and the future setting-up of the European Stability Mechanism. The use of these facilities to provide loans for banking sector recapitalisation reflects the recognition that crisis management for sovereigns and for financial institutions is increasingly intertwined. Perhaps over time this will provide the foundation for a more integrated European system of crisis prevention and management for the public and financial sectors. Ultimately, it is every euro area country’s interest that the collective governance arrangements reflects the reality of economic and financial integration. Following this path of necessary gradual reforms is essential for the efficiency and welfare of the whole euro area. BIS central bankers’ speeches  7
There has been a tendency during the crisis to shift responsibility for banking supervision to central banks, making them responsible for macro-prudential supervision. As regards the euro area, one important thing has certainly been the realisation that our monetary union was incomplete. You can draw two conclusions from that: you can decide to scrap it altogether, which would, in my view, be a mistake; or you can decide to complete it. The banking union is the first step in that direction, but not the last. Many experts think that another necessary lesson is the importance of stronger international coordination of monetary policy, as action at national level is increasingly having spillover effects. They also point to the recent turbulence in emerging economies as a result of the debate surrounding the Federal Reserve. Perhaps I should first say a few words about the turbulence in emerging economies. The weakening observed in many countries is certainly related to the reversal of capital flows. However, it is also the case that this weakening is particularly affecting emerging economies that have large current account deficits and have failed to carry out reforms. You can protect yourself from such developments by doing your homework. And with capital controls? Even the IMF is no longer strictly opposed to those. I am very cautious in that regard. There are certainly extreme situations where that instrument can be used. But in normal situations, there is no doubt that free movement of capital supports growth. But let’s go back to international cooperation.

Will Portugal need more help and will it receive it? The country was set back by the political uncertainty in the summer. This uncertainty has now been overcome and the country can and should take up from where it stood in the spring of this year, when it was able to successfully issue a long-term bond. Market confidence could be won back through a full implementation of the programme. That is why it is essential to keep to the existing programme and all its objectives. The debate on a second package is heard in Cyprus too. Not least because the collapse of the economy was worse than forecast. When can we expect “Cyprus II”? This question never ceases to amaze me. The Cyprus programme has not even been operating for six months and it has a duration of three years. I fail to understand why the question of a supplementary programme is already being raised. Cyprus must now implement the programme. There has been one review so far and that was successfully completed. The issue now is to continue the programme – nothing more. Not much has been heard about Slovenia recently. Will that country seek a rescue package if the ECB’s asset quality review exposes all the trouble in the banking sector? 2  BIS central bankers’ speeches  Slovenia is now conducting a separate stress test for the country’s ten major banks. The results will be available in late November or early December.
Even for the natural sciences, dealing with physical constants and fixed laws of motion, the voyage of discovery can sometimes be a lengthy one. It took a century before estimates of the speed of light had converged to its true value. For much of this period, not only were best-estimates biased but the estimated confidence intervals around them often did not encompass the true value.6 Modelling complex, adaptive, socio-economic systems would make these estimation problems pale by significance. It is for these reasons that the Bank is also investing in its research capacity. For example, in our quarterly Inflation Report the Bank now shows alternative scenarios for inflation and output under different assumptions about how the world works. Alongside this, the Bank is putting greater effort into developing a pluralist set of approaches to model-building, drawing on other disciplines. Operating in the corridor In time, these investments in data and research will narrow the corridor of uncertainty. But for now, the key public policy question is what to do when operating in it? Rocket-scientists, of the real rather than metaphorical kind, have a clear answer to this question: avoid really bad outcomes.7 This is sometimes called a “minimax” strategy – the aim being to minimise the chances of the maximum possible loss. It is the policymakers’ equivalent of the Hippocratic oath – “do no harm”. So what, then, are these avoidable-at-all-cost scenarios? Let me consider three from a potentially long list.

Despite the upwards revision to growth, financial markets’ best guess of how rapidly the first percentage point of tightening will take place is essentially unchanged over the past year – around 20 basis points per quarter. So too is their best guess of where interest rates may settle in the medium run – around 2–3%. Views may in time differ across the MPC on the preferred lift-off date for interest rates, as you would expect at a difficult-to-predict turning point in the cycle. These will reflect individual members’ different reading of the runes, not their individual preferences. That is a real benefit of the MPC’s committee-based structure, with individual member accountability. It is not difficult to see why this choice over timing is a difficult one. The policymaker in this situation faces the self-same dilemma as the batsmen facing a ball pitching in the corridor of uncertainty. In that situation, the coaching manual no longer offers a clear guide. Two strategies are equally justifiable. The first is to stay on the back foot and play late. This has the advantage of giving the batsmen more time to get a read on the trajectory of the ball as it swings and darts around. It avoids the risk of lurching forward and then needing hurriedly to reverse course if the first movement is misjudged. This is the way, Joe Root, the Yorkshire and England batsmen, plays his cricket. If he were on the MPC, he’d be called a dove. But this strategy is not riskless.
Ten, strong underlying economic and financial fundamentals The underlying fundamentals in the region are expected to continue to remain positive. Sustainable current account surpluses and strong international reserves positions all continue to support the growth prospects. The high savings rate, of between 20-45%, which allows for financing of pro-growth policy measures from domestic sources will continue to support the growth prospects. Unemployment in the region as a whole is also relatively low. Financial stability has generally been restored and there has been a resumption in credit growth. The Financial Sector as an Enabler of Growth in Asia: The Vital Role of the Banking System in Facilitating the Economic Growth Process Ladies and gentlemen, The banking sector in particular and the financial sector in general have an important role in facilitating the growth process. The financial system in emerging market economies represents an important means to an end. For emerging market economies, the financial sector is an important enabler of growth. It is therefore important to embrace the long-term agenda of the economy. Despite the trend of the increasing significance of alternative means of financing, the banking sector in emerging market economies will for some time to come remain the most important source of financing in the economy. The banking system therefore needs to effectively and efficiently perform its intermediation function.

Five years since the countries in this region emerged from the financial crisis we have seen financial stability restored and the financial systems significantly strengthened. Despite the more challenging environment in the more recent period, the financial systems in this region have demonstrated resilience. While this is a positive development, challenges remain. In view of the increasingly more difficult environment these efforts to strengthen the financial systems need to continue. Today, I would like to focus my remarks on the background against which these efforts are being undertaken. In particular, I will focus on the emerging changes that are taking place in our region that are likely to be important in sustaining the growth prospects for this region. In the context of these changes, I will touch on the important role that the banking sector has in contributing to the growth and development process. Ladies and gentlemen, The region is highly integrated with the world economy in terms of the high volume of trade and investment flows between the region and the rest of the world. While this has contributed significantly to the strong growth in the region, it has also brought with it increased vulnerabilities arising from shifts in demand and reversals in investment flows. Indeed, developments in the advanced economies arising from the bursting of the technology bubble, the unprecedented declines in the stock markets, uncertainties arising from international geopolitical tensions all had implications on this region.
Fritz Zurbrügg: Swiss banks from a financial stability perspective Introductory remarks by Mr Fritz Zurbrügg, Member of the Governing Board of the Swiss National Bank, at the Media News Conference of the Swiss National Bank, Berne, 10 December 2015. *  *  *  In my remarks, I will start with an analysis of the situation at the Swiss banks from a financial stability perspective, looking at both the big banks and the domestically focused banks. I will then finish with some information on the new banknote series. Big banks Since the publication of our Financial Stability Report in June, the two Swiss big banks have improved their capital situation further. The improvement was especially pronounced at Credit Suisse, following a capital increase. The Swiss National Bank (SNB) acknowledges the progress made by both big banks in this area. However, a further strengthening of the leverage ratio in particular is necessary. Strengthening the leverage ratio – and hence resilience – will be achieved by means of the measures recently decided upon by the Federal Council as part of the revised ‘too big to fail’ regulations. The substantially increased leverage ratio requirements will put Switzerland back among the international leaders in this regard. Given that the ‘too big to fail’ issue is particularly pronounced in Switzerland compared to other countries, these measures are, in our view, essential.

The SNB therefore welcomes the revision of the ‘too big to fail’ regulations as a crucial step in the overall process of resolving the ‘too big to fail’ issue in Switzerland. It is very important for our country that a lasting solution be found. The SNB will continue to play an active role in this endeavour and in the implementation of the approved measures. In the process of designing and calibrating the revised capital requirements, care was taken to retain the complementarity and interplay between risk-weighted requirements and leverage ratio requirements. Risk-weighted requirements should guide economic decision-making, while the leverage ratio should serve as a backstop. The leverage ratio requirement thereby takes into account the fact that the models used for risk-weighting are not perfect and do not always capture all risks accurately. To ensure this complementarity is also retained in the future, the Federal Council has already factored in the expected reforms by the Basel Committee on Banking Supervision with regard to risk-weighted capital requirements. Overall, these reforms are likely to result in an increase in risk-weighted assets and, hence, to a balance between the leverage ratio and risk-weighted requirements in Switzerland. The SNB will actively support the finalisation of the Basel Committee’s reforms as planned and the publication of these reforms by the end of 2016. In addition to these measures on capital requirements, the SNB still considers it necessary for the big banks to increase their transparency with regard to their risk-weighted assets.