samchain/econo-pairs-v1 huggingface dataset:
Enhancing the framework As I’ve said earlier, supervisors recognize it is important to ensure that the oversight framework continues to function efficiently. In that regard, the Federal Reserve recently participated in a review, as mandated by the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA), to identify rules that are outdated, unnecessary, or unduly burdensome. The full report covers 430 pages, so I’d like to highlight three of the recommendations that may be of interest to Second District community bankers. They relate to simplifying capital requirements; reducing regulatory reporting; and reducing the frequency of examinations for certain qualifying, smaller firms. Capital is in many ways the foundation of the health of the banking system. It’s important to note that more than 500 banks failed during and after the financial crisis because they lacked sufficient capital, and many of them were community banks. Nonetheless, we have consistently heard since then that some of the capital rules are too complex for community banks and not commensurate with their size and risk profile. This link with the risk profile is critical and an important part of our efforts to “tailor” our supervisory approaches. As part of the EGRPRA process, we are continuing to think about ways to simplify the capital rules. The agencies are developing a proposal and are planning to seek industry comments on certain proposed amendments to the capital rules.

Kevin Stiroh: Introductory remarks at 2017 Community Bankers Conference Introductory remarks by Mr Kevin Stiroh, Executive Vice President of the Financial Institution Supervision Group of the Federal Reserve Bank of New York, at the 2017 Community Bankers Conference, Federal Reserve Bank of New York, New York City, 6 April 2017. * * *  Introduction Good morning. I’d like to welcome you to the 2017 Community Bankers Conference. The Federal Reserve Bank of New York is pleased to once again host this conference and to continue to foster a robust dialogue on key industry trends and supervisory issues affecting community banks. In addition to about 130 representatives of community and smaller regional banks in the Second District of the Federal Reserve System, we are happy to welcome fellow supervisors from the states of New York, Connecticut and New Jersey; representatives of the FDIC and the OCC; and colleagues from the Board of Governors and Philadelphia, Cleveland, Chicago and Atlanta Federal Reserve Banks. In all, we have record attendance with 178 participants. As in past years, our goal for this conference is to promote a constructive dialogue between senior managers and directors of smaller financial organizations in our District and federal and state supervisors. This type of constructive engagement helps us reach our shared objective of resilient financial institutions operating in a safe and sound financial system that supports the growth and stability of the U.S. economy.
A recent publication by the Basel Markets Committee Working Group highlights how an overreliance on central bank  Page 8  interventions risks distorting market mechanisms and incentives and could increase system-wide externalities. [25] However, the results of the Liquidity Biennial Exploratory Scenario (LBES) stress-testing exercise conducted by the Bank of England suggest that banks would be unwilling to allow their LCR to fall below the 100% level, even in a severe stress. [26] Instead, in order to preserve the LCR, the hypothetical exercise suggested that banks would take defensive actions including cutting lending to households and businesses. These results, together with the experience from the pandemic, suggest that there is a liquid asset usability issue that needs to be addressed. Factors affecting HQLA usability We know that banks tend to have their risk appetite thresholds set well above the 100% LCR level. For example, a study of UK banks’ recovery plans showed that they typically have contingency plans in place to defend their liquidity positions with recovery triggers higher than the regulatory standard, meaning that urgent liquidity-increasing measures would be in place before crossing the 100% mark. [27] During times of stress, it might not be possible to adjust these thresholds quickly to allow banks to use more of their liquid assets, for example due to banks’ internal governance processes. Why are banks so reluctant to use their liquid assets? First, there is the regulatory environment and banks’ expectations around regulatory responses.

However, there might be unanticipated shocks, which could be very large, like Covid-19, but unlike Covid-19 may not be accompanied by the same levels of policy support. In such cases, the prevailing level of CCyB may be not be sufficient to absorb losses and support lending, so we need to ask ourselves whether an additional tool might be needed. Moreover, the impediments to usability of non-releasable buffers indicate that it is desirable to have a larger portion of releasable buffers to mitigate the impact of deep recessions. In 2019, BoE staff estimated the appropriate level of CCyB to absorb losses in a systemic crisis to be in the range of 3.5-5 percentage points[7] and noted that a gradualist approach to set the CCyB rates would be likely to make this level difficult to achieve before risks crystallise. To address this limitation of the CCyB framework the Financial Policy Committee of the Bank, along with a number of other regulatory authorities across the world, have introduced a positive cycle-neutral  Page 4  CCyB to the capital framework. But, despite this progress, for unanticipated shocks that occur at a time when the CCyB has not been built up or large shocks that do not originate in the financial system,[8] it is possible that the prevailing levels of CCyB will not be sufficient to absorb losses and support lending. So we must look at other supporting measures in such an event. We have two options.
The European Central Bank has therefore been fulfilling its mandate, which is to keep inflation below, but close to, 2% over the medium term. BIS Review 156/2010  1  With all the challenges we have faced since 1999 – the cash changeover, the oil price spikes, the internet bubble, the turbulences in the aftermath of 11th September and, of course, the global financial crisis – maintaining price stability is a notable achievement. What is more, looking ahead, inflation projections and inflation expectations are well anchored in line with price stability. The launch of the ESRB My main topic for today is macroprudential oversight and the new body that the European Council and the European Parliament have decided to create: the European Systemic Risk Board or ESRB. The legislation has been finalised yesterday and the ESRB will soon become reality. I am honoured to speak to you today not only as president of the ECB but also in my future role as Chair of the ESRB. The new European body will be part of the new European System of Financial Supervision and it will be located here in Frankfurt. The city can therefore be proud to host three European authorities: the ECB, the European Insurance and Occupational Pensions Authority (EIOPA) and the ESRB. The function of the ESRB will be to provide macro-prudential oversight of the European Union’s financial system.

I trust that it will provide an incentive to internalise the system-wide dimension in the industry’s own risk models and stress-testing. Ladies and gentlemen, less than two years after the publication of the de Larosière report, Europe will have its own macro-prudential authority up and running. This is a remarkable achievement. We are now moving from designing the framework to implementing it. We have to make the enhanced resilience of the financial system our highest priority. I thank you for your attention. 4  BIS Review 156/2010
Without the confidence that we will do that, expectations of economic downturn will prompt the financial system to become risk averse; to hoard capital; to de-risk; to rein in. To create the very amplifying effects on the real economy we are trying to avoid. A truly countercyclical approach means banks, for example, know their capital buffers can be depleted as they take impairments; Households can be confident that our rules won’t choke off the refinancing of their mortgage. 42  And insurance companies know their solvency won’t be judged at prices in highly illiquid markets. We must be just as bold in loosening requirements when the economy turns down as we are in tightening them in the upswings. 43  Boldness in the upswing to strengthen the system creates the space to be bold in the downturn and allow that strength to be tested and drawn on. Macroprudential fortune favours the bold. Conclusion  To conclude, boldness is needed in general to set policy while the practice is so far ahead of the 44  development of the theory – the playbook. We are many years from having rules to guide macroprudential policy. But the absence of the playbook doesn’t excuse an absence of clarity about what is guiding macroprudential policy setting. The principles I have outlined aim to provide a little more clarity; to begin to fill in the ‘how to’ guide for macropru.

And yet, if you ask ten economists what precisely macroprudential policy is, you’re likely to get ten different answers. 1  So the time has come to take stock. I want to lay out what I believe to be five guiding principles for macroprudential policy. My aim in doing so is twofold: first, to help to build a common understanding of what it is and how it works; and second, to engage the finest minds – you – in partnership to push the frontiers of knowledge in ways that can make it better. 1) “It’s the real economy, stupid”  2  The first of my five principles is the one that motivates the whole exercise of macroprudential policy. For all that macroprudential policy may seem to be about regulating finance and the financial system, its ultimate objective – borrowing from James Carville’s famous election campaign advice – is: the real economy, stupid. 3  It is captured more precisely by Eric Rosengren (President of the Federal Reserve Bank of Boston) as avoiding circumstances in which “problems (or concerns about potential problems) within institutions, markets, payments systems, or the financial system in general …substantially impact the expected path of real economic activity.”  4  2  All speeches are available online at www.bankofengland.co.uk/speeches  2  These problems typically arise when the financial system is overwhelmed by events in the economy; when it doesn’t have the resilience to absorb them and so amplifies them as:  Credit dries up. Lenders are not matched with borrowers.
Developments in technology, both to enhance resilience of existing payments and to innovate in new forms of payments, are important to support the Bank in advancing its objectives. This is equally true for physical and electronic payments. In my previous role as Chief Cashier, I led our work to issue banknotes printed on polymer. We harnessed innovative technology both in the security features selected, and in introducing a tactile feature on the new £ polymer banknote to help blind and vision impaired people identify our notes. This meant we exploited technology to produce banknotes which are not only secure, but inclusive. And now we are assessing how we can embrace diverse technologies through RTGS Renewal. Although the Bank has concluded that Distributed Ledger Technology (DLT) is not yet sufficiently mature to provide the core for the next generation of RTGS, we still place a high priority on ensuring the new service is capable of interfacing with DLT. In summer 2018 we ran a Proof of Concept12 with four firms to develop payment arrangements using innovative technologies. Importantly, the results demonstrated that participants using such technologies could connect to and settle in RTGS. This has informed our thinking on how RTGS could support settlement in a more diverse range of systems, and provided broader insight into the range of functionality the Bank might need to offer to support this sector.

I stress their importance because they promote a multilateral cooperation framework agreement and set minimum requirements for achieving the rapid and consistent conclusion of the cooperation agreements between deposit guarantee schemes (DGS). These cooperation agreements will address operational cross-border challenges, 1 such as ensuring that depositors in EU branches of institutions headquartered in other Member States are treated similarly to depositors in the home Member State. The H2C (home-host cooperation) project, which has just been extensively presented is also a remarkable new step towards finding and experimenting with solutions to shared problems, and this must be encouraged. It is an example of the constructive cooperation between DIS operators or authorities despite their diverse regulatory or operational approaches. 1  2  These guidelines concern (i) the modalities for repaying depositors by local DGS at branches of banks established in other European Member states, (ii) the modalities for the transfer of contributions from one DGS to another in the event of a credit institution ceasing to be a member of a DGS and joining another DGS, and (iii) modalities for mutual lending between DGSs  BIS central bankers’ speeches  From a regulatory perspective, there is the example of the FSB Key Attributes that have been applied through the Crisis Management Groups, with relevant authorities holding discussions to find ways to tackle the recovery and resolution of GSIBs.
Unsecured loans, in particular, are rising substantially. During phases of favourable economic development, there is greater willingness to grant unsecured loans. This was the case in 1999, when the economy found itself in a similarly robust state. There is a long-term correlation between loan volume and the M3 aggregate. Loan development typically lags behind the development of money supply. Monetary aggregates have grown only moderately for the past three years. The M3 monetary aggregate is currently growing at a modest 2%, while M1 and M2 are even registering a decline. The measured development of the monetary aggregates suggests a slowdown in lending. The development of the Swiss franc attracted considerable attention as it has weakened vis-à-vis the euro since the beginning of the year, although it has firmed against the US dollar. To gauge the effects of exchange rates on the economy, we need to make use of the inflation-adjusted exchange rate that is also weighted to take account of the importance of individual trading partners. Measured by this real, effective exchange rate, the Swiss franc today is at the same level as it was in 2000. In what way do exchange rate developments enter into our decision-making process? The exchange rate is important to the extent that it influences inflation, either directly via the prices of imported goods or indirectly via the business cycle. Volatility of the Swiss franc against the euro has been negligible as of late. This relative calm should not, however, deceive us. It is not necessarily going to last.

Jean-Pierre Roth: Recent economic and financial developments in Switzerland Introductory remarks by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at the end-of-year media news conference, Zurich, 14 December 2006. *  *  *  As stated in our press release, the Swiss National Bank is raising its target range for the three-month Libor with immediate effect by 0.25 percentage points to 1.50–2.50%. The SNB intends to hold the rate in the middle of the target range for the time being. Economic activity in Switzerland is very robust. Next year, the economic trend is likely to continue favourable, albeit somewhat less pronounced. This will have a positive effect on the labour market. The National Bank is expecting real GDP to grow by just under 3% in 2006 and by around 2% in 2007. Declining oil prices have pushed back inflation. Average inflation for 2006 is likely to stand at 1.1%. By lifting the target range, the National Bank ensures that the inflation outlook will remain favourable, even in view of the high level of utilisation of economic resources. On the assumption of an unchanged three-month Libor of 2.00%, it expects annual inflation to reach 0.4% in 2007 and 0.9% in 2008. If the economy performs as expected, the SNB will further pursue its strategy of gradual normalisation of its interest rates.
In 2009, industrial employment contracted by 7 percent, whereas, employment in the construction sector and services sector increased by 0.6 percent and 1.4 percent, respectively. Employment by Sectors (Percent) 80  60  40  20  0 2004  2005  2006 Farm  2007  2008  2009  No n-Farm  Source: TURKSTAT. 19. Demographic changes in Turkey leads to an increase in the share of the working population in the overall population and this, in turn, results in the unemployment to persist. However, the recent upsurge in the unemployment rate is mainly attributable to cyclical rather than structural factors. The economic contraction in 2009 increased the labor force participation rate while significantly curbing the pace of employment growth; hence the unemployment rate increased rapidly. BIS Review 68/2010  7  20. The labor force is comprised of 23,8 million people in 2008 and rose to 24.7 million people in 2009 by an increase of 4 percentage points, whereas, employment increased by a mere 0.4 percent, from 21.2 million to 21.3 million people. In this period, the rapid increase in labor force participation while employment remained much the same, caused the unemployment rate to climb to 14 percent in 2009 from 11 percent in 2008. Meanwhile, the non-farm unemployment rate increased from 13.6 percent to 17.4 percent. 21. As I mentioned in my previous presentations, creating new employment opportunities for the growing labor supply in Turkey is contingent upon carrying out cost-reducing and resilience-enhancing reforms in labor markets.

We will also be examining, if not now then at some time in the future, whether it is possible to introduce a risk-based element into the setting of the premium so that well-managed banks pay less. It will also be necessary to keep the administrative structure of a DIS as lean as possible to minimise operating expenses. If the go-ahead is given, these and other details will take some time to work out and to enshrine in legislation. It is unlikely therefore that a DIS could be introduced before next year. One advantage of this is that it will give us time to evaluate the impact of interest rate deregulation before the DIS is introduced. Conclusion I hope that I have been able to give you a picture in this speech of some of the trends in the Hong Kong banking sector and how our reform measures fit into these. In the time available I have not been able to discuss all the issues that the HKMA is currently addressing, including the proposal to set up a commercial credit reference agency in Hong Kong. However, the issues that I have talked about – deregulation and deposit insurance – are probably enough for you to think about for the time being. Assuming that they go ahead as planned, they will play a major role in helping to shape the future development of banking in Hong Kong. 4  BIS Review 29/2001
20  All speeches are available online at www.bankofengland.co.uk/speeches  20  Chart 17: Ethnicity pay gaps by gender  Gender  Female  Male  ‐15  ‐10  ‐5  0  5  10  15  Ethnicity pay gap, per cent Sample average  2018  Source: ONS Labour Force Survey and Bank of England calculations. Note: A positive pay gap in this chart indicates that ethnic minorities of this gender earn less than their white counterparts of this gender, whereas a negative pay gap indicates that ethnic minorities of this gender earn more than their white counterparts of this gender. Section 4: Explaining Pay Gaps In this section, we explore the factors contributing to gender and ethnicity pay gaps. Accounting for individual and job characteristics helps us to estimate conditional gender and ethnicity pay gaps. Can pay gaps be explained by characteristics of the individuals (such as their level of education or location) or the jobs they are doing (such as the sector or occupation)? How much of the pay gap remains “unexplained” once these characteristics are accounted for? As well as providing a greater understanding of the drivers of pay gaps, this approach helps resolve some of the puzzles otherwise apparent in the unconditional pay gap data. The ability to “explain” pay gaps in terms of worker or job characteristics does not necessarily imply these pay gaps are justified or are not therefore a policy problem.

As those of you who have been in Hong Kong recently will know, this has been a very stormy summer from a meteorological point of view: we have just had the worst typhoon in sixteen years and the wettest typhoon since records began more than a hundred years ago. 1  BIS Review 103/1999  Economically, the most recent figures suggest that our wet and windy summer has brought with it a distinct turn for the better.
With a higher inflation target, say 3 per cent, the nominal interest rate would be higher, which in turn would create greater scope for stimulating the economy in the event of future recessions and prevent the policy rate’s effective lower bound becoming binding. This is very much an ongoing discussion and it remains to be seen how it will end. The target level is not set in stone but a change should not be made lightly. There may be reason to wait until a reasonable degree of consensus has been reached among central banks and in the research community. This would probably increase confidence in a change to the target level. This is an example of how the scope for an individual central bank to take action entirely on its own is restricted. I will return to this issue anon. But there are parameters in our framework other than the target level that are perhaps more in need of adjustment. Which target variable is best? Ever since the Riksbank introduced inflation targeting, the inflation target has been expressed in terms of the CPI. The reason for choosing the CPI as the target index is not only because it is a broad price index that represents normal purchases, but also because CPI statistics are of good quality, not normally revised and published shortly after the end of the month.

As at 9 March 2012, the outstanding amount in the Malaysian bond market was RM899 billion compared to RM301 billion at the end of 2001. This represents a 300 per cent increase over the last decade. Within the region, both Hong Kong and Malaysia have participated actively within the EMEAP Group in promoting regional bond market development initiatives such as the Asian Bond Markets Initiative and the Asian Bond Fund. I am confident that this pilot platform will bring benefits, not only to Hong Kong and Malaysia, but the region as a whole. We envisaged that this pilot platform will increase the efficiency of issuance, investment and settlement of bonds through the increased harmonisation of cross-border processes and standards. We expect this initiative to strengthen the cross-border linkages and facilitate the intermediation of surplus funds within the region. This increase in cross-border flow of funds will further enhance the efficiency in the mobilization of surplus funds to meet the rising investment needs of the region. The implementation of this pilot platform is indeed timely and opportune and, will serve as an important catalyst for further development in linking financial markets within this region. This, I believe, is a development that we should all welcome. Thank you. 2  BIS central bankers’ speeches