samchain/econo-pairs-v1 huggingface dataset:
I believe, particularly in the case of physical collateral, that banks using the internal ratings-based approach must obtain a timely, third-party view of the collateral’s value. One test, for example, is that should the need arise, the bank must be able to dispose of it with relative ease. As a former commercial banker, I cannot see how any responsible banker would be able to sleep at night if these conditions are not met. On the other hand, it seems clear to me that if these conditions are satisfied, then the collateral does offer a bank protection against loss and banks will need to hold less capital against those loans. Let me try to anticipate an immediate question you may have. What do we expect will be the net effect of the changes I have discussed? I believe that the impact of more risk-sensitive proposals will be very positive for small and medium-sized businesses in many countries. I understand that Jochen Sanio, the very capable President of the BAKred and, as of the first of May, President of the newly established FSA, expressed a similar view at a recent parliamentary hearing. He pointed out that based on our current proposals, on average, German banks’ exposures to small and medium companies would require less than the 8% capital currently needed under the 1988 Accord. But the issue is not simply a question of impact. The principal motivation behind the Basel Committee’s efforts has been for bank capital requirements to take appropriate account of risk.

The Home Affordable Refinance Program, or HARP, was set up to facilitate refinancing of high loan-to-value prime conforming mortgages. The announced goal of the HARP was to  13  We should want the cost of misrepresenting loans to be invariant to the state of the jobs market. 14  Risk retention will also apply to some forms of mortgages in future. 6  BIS central bankers’ speeches  refinance 3 million to 4 million mortgages. However, shortcomings with the original program mean that less than a million HARP refinancings have taken place. Legal risks discouraged lenders from participating more fully in HARP to date. Notably, if a lender refinanced a loan made by another company, it was liable for the underwriting associated with the original loan. The profit from refinancing was unattractive relative to the risk of being forced to repurchase the loan. Given this, lenders had little incentive to compete to refinance loans and this led to higher mortgage rates and less refinancing. Many of these issues have been addressed by recent revisions to HARP and related decisions by Fannie Mae, but more could and should be done. Remaining legal issues could be alleviated by harmonizing standards between Fannie and Freddie. I would like to see refinancing made broadly available on streamlined terms and with moderate fees to all prime conforming borrowers who are current on their payments. This could substantially increase the number of refinancings.
Now that the MPR is at 5%, it is approaching the range that has historically been thought of as neutral. Still, a high degree of uncertainty surrounds the true neutral interest rate. There are many definitions and methodologies to determine what would be the interest rate consistent with inflation being at the target and the economy operating at full capacity. Although this is not the moment to get involved in a lengthy discussion over the level of the neutral rate, I think some observations are in order. On the one hand, the neutral rate is not a fixed number. It changes with the state of the economy and can even fluctuate in the short run. On the other hand, in an open economy the neutral interest rate depends not only on domestic factors such as the long-term growth rate, but also on external variables. The world is going through a period of low interest rates and in the short term the neutral interest rate is likely to be somewhat below previous estimates (figure 16). BIS central bankers’ speeches  5  I also want to point out that the objective of monetary policy conduct is not to attain a neutral rate, whatever its level is. The monetary policy interest rate (MPR) fluctuates around this neutral rate in order for the monetary impulse to be consistent with achieving the target. Accordingly, just as there are periods during which the MPR is below the neutral level, there are times when it is above.

  JPM has made material contributions to Singapore’s financial markets with developments such as the launch of the Singapore Kilobar Gold Contract with the SGX in October this year. 2  BIS central bankers’ speeches    JPM was one of the lead managers in Singapore’s first RMB corporate bond issuance earlier this year, which helped to broaden the range of RMB product offerings in the market. On this note, let me congratulate JP Morgan on 50 years of growth in and with Singapore. MAS looks forward to deeper partnership with JP Morgan in further developing Singapore’s financial sector. I am confident that your strong presence in Singapore will serve you well as you extend your footprint in Asia. Thank you for being part of the Singapore growth story. BIS central bankers’ speeches  3
Average earnings have been growing at around 4.5% per year, house prices have been rising by between 10-15%, and total consumer borrowing is the highest in real terms since 1988. But, even given these factors, consumption growth has been strikingly strong. There are, of course, downside risks to the outlook for consumption in the UK. Consumer confidence fell in September, even before the terrorist attacks. Despite the recent rally, equity prices are still much lower than their peaks eighteen months or so ago, and that will have reduced consumers' financial wealth. And there may be the first sign of easing in the labour market which, if it persists, will reduce disposable incomes. Despite this, however, there is little sign yet of any sharp reduction in consumer spending. Retail sales volumes grew by 5.9% in the year to September. That picture of continued strength is corroborated by the CBI Distributive Trades Survey measure for September (gathered largely after the 11 September attack), which was the highest since October 1996. And the higher frequency British Retail Consortium survey suggested that sales volumes by the end of September had returned to pre-attack levels. I focus on the continuing strength of consumption because it - together with its partial correlate on the output side, the retail service sector - is absolutely key to understanding why UK interest rates have fallen less far than in other countries. But, of course, elsewhere in the economy, things have been looking less bright for some time.

If inflation is more than one percentage point either side of the target, we are required to write to the Chancellor explaining the reasons for the miss and the steps we are taking to bring inflation back to target. There was a flurry of excitement earlier this year when inflation reached 1.8%, and many commentators thought that we might soon have to polish up our letter writing skills. But so far we have not had to put pen to paper. Of course, a number of factors have contributed to the stability in inflation. Monetary policy takes time to affect inflation, so inflation in the early part of this period reflects decisions taken before the MPC was formed. And in the short term at least prices can reflect factors other than monetary policy. But, judged against previous policy regimes in this country, inflation targeting has been successful. Of course, you might expect me to say that. But the growing credibility of the arrangements is also reflected in measures of expected inflation in coming years, most of which remain close to the 2½% target. People often ask if this relative success at targeting inflation has come at a cost in terms of lost output or employment. It is increasingly accepted, I think, that there is no such trade-off in the long run. And, looking at the recent UK data, it is hard to see any trade-off even in the short run. Output has now risen for 36 consecutive quarters, the longest continuous expansion since post-war records began.
Everyday Economics Speech given by  Andrew G Haldane Chief Economist Bank of England  Nishkam High School, Birmingham 27 November 2017  The views expressed here are not necessarily those of the Bank of England or the Monetary Policy Committee. I would like to thank Guy Brett-Robertson, Shiv Chowla, Raakhi Odedra, Jasmine Stenning, Philippa Wall and Ann Whittaker for their help in preparing the text. I would like to thank Ben Broadbent, Claire Crawford, Neil M. Davies, Jonathan Fullwood, Richard Harrison, Ian McCafferty, Sandra Newton, Alice Pugh, Michael Saunders, Emma Sinclair, Sarah Smith and Arthur Turrell for their comments and contributions. 1  All speeches are available online at www.bankofengland.co.uk/speeches  Terrible title, right? Not the “everyday” bit – that’s fine. It is the word “economics”. For most people, this is an instant turn-off. “Economics” just sounds too conceptual, too academic, too impersonal, too dismal. 1  Stephen Hawking was once told that every equation he included in a book would halve its readership. The word “economics” probably has a similar effect. If I’d taken media studies rather than economics, I’d have gone about things differently. I’d have drawn you in with a “hook”, such as people or children or dogs. Had my title been “Economics for the People”, I’d have doubled my readership. Had it been “Economics for the Kids”, I’d have quadrupled it. And if I’d opted for “A Fluffy Labrador Puppy Explains the Economy”, the Bank’s website would have crashed. 2  It is too late now.

To conclude, I would like to reiterate the importance of preventive measures to combat fraud, and I applaud your efforts in holding a conference on this topic as it shows that you place a high degree of importance in this area. While no institution can ever be expected to be completely fraud proof, institutions maintaining key elements I discussed will have taken a big step towards fraud mitigation and avoidance. I wish you great success for this seminar. I hope you accomplish your objectives and I know you will all take a lot of valuable information from this timely and meaningful event. Thank you again for inviting me to join you today and thank you very much for your attention. BIS Review 52/2008  3
Several of these measures have had an impact on the Bank’s assets, either by reducing them (sale of foreign currency) or increasing them (purchase of bonds and loans to commercial banks). The adjustments on the asset side have counterparts on the liabilities side, either by active measures (repurchase of long-term bonds from the Central Bank), or by monetary sterilization or liquidity absorption, or finally, to respond to changes in the demand for cash. The net effect of these operations and portfolio revaluations has an impact on the Bank’s net worth. On aggregate, these operations have involved an 86% growth in the balance sheet in one year, the equivalent of almost 10 points of GDP. At the same time, there have been significant changes in the composition of the balance 6 For further detail on these measures, their operating margins and effective execution, visit https://www.bcentral.cl/web/banco-  central/medidas-excepcionales. 8  sheet (Figure 16). Now the Bank records on the assets side internal credit items (FCIC-LCL) and local securities. The latter yield more than international reserves, although with a somewhat higher credit risk compared to the sovereign securities that make up the former. On the liabilities side, the counterpart has implied an increase in short-term debt placements (PDBC) and the use of permanent facilities that drain the system’s excess liquidity. There has also been an increase in the monetary base, explained by an increased cash demand from the population.

(2) Percentage corresponds only to FCIC1 and FCIC2 The LCL is limited to the reserve requirement of each banking company. These measures were complemented by a bank bond purchase program. Sources Central Bank of Chile based on the International Monetary Fund, central banks and budget offices. Peru  Table 2  Domestic scenario  (annual change, percent)  2019  2020 (f)  2021 (f)  MP Report Jun.20 GDP Domestic demand Domestic demand (w/o inventory change) Gross fixed capital formation Total consumption Goods and services exports Goods and services imports Current account (% of GDP) Gross national savings (% of GDP) Gross fixed nominal capital formation (% of GDP)  1.1 1.0 1.5 4.2 0.8 -2.3 -2.3 -3.9 18.9 22.4  MP Report Sep.20  -7.5/-5.5 -10.4 -6.8 -15.9 -4.2 -0.3 -14.1 0.8 17.5 20.0  -5.5/-4.5 -7.1 -5.6 -10.6 -4.2 -2.2 -9.4 -1.4 18.5 21.0  (f) Forecast. Source: Central Bank of Chile.
In light of the information currently available, and against the background of the Bank of Thailand’s long-run goals of price stability and sustainable economic growth, I believe that the risks at present are weighted mainly toward conditions that may generate economic weakness in the foreseeable future. Such weaknesses could come from further retrenchment of business and consumer confidence, undershooting of fiscal expenditure targets, and slower than expected recovery in the industrialized countries. Whatever risk ultimately materializes, we would make timely and decisive adjustment of our monetary policy. With strong international reserves, at 140% of short-term debt, we can afford to adjust our monetary policy to support growth, if needed. At this juncture, I would like to stress that the Bank of Thailand remains committed to the open and transparent monetary policy framework that has served us well since May 2000. Let me emphasize that inflation targeting is a framework, not a rule. Just as the case of a real-life anchor, inflation targets keep the economy on the desired growth path in the long run, while permitting it to respond in the short run to unpredictable tides and currents. As long as the inflation rate is within the targeted range, I believe monetary policy is allowed sufficient flexibility to address other challenges currently facing our economy. Given the supportive policy mix, the recovery process in Thailand should remain on track for next year.

Almost all NPLs of government banks have been transferred to AMCs, and all multi-creditor NPLs of private commercial banks have been transferred to the TAMC. And we will speed up our effort to clear them out. However, please be informed that when similar financial crises occurred in the US in 1982, the US economy was not in as bad a shape as Thailand has experienced in the past four years. At that time, Japan, Europe and the Middle-Eastern economies were strong and contributed certain capital flows into the US economy. But now, under current world economic conditions, where every country has its own problems to solve, we know well that we cannot expect foreign investors to help us clear this NPL mess, so we have to help ourselves. I do not see why we cannot do it. And we will do it. Back to the economic forecast for next year. One important source of growth in 2002 will be fiscal spending, and the projected central government deficit of 224 billion baht or 4.4 percent of GDP strikes a good balance between improving the economic infrastructure, raising external competitiveness, and fostering economic recovery. It is very important, however, that the fiscal stimulus program meets its spending target. 2  BIS Review 99/2001  Safeguarding the recovery would require timely as well as effective disbursements of the 58 billion baht emergency spending plan.
The Basel Capital framework was flawed: it didn’t provide adequate loss absorbency in going concern; and it failed to consider what would happen in gone concern states of the world. The global framework remains in that position until we can get agreement on, and implementation of, a Total Loss Absorbency framework. This is our single most important objective, at the heart of the global work of the FSB in respect of the largest banks – the globally significant. The huge effort to secure what will be an historic agreement comes to the table in Brisbane next month. I’m not going to  2  BIS central bankers’ speeches  tempt fate; but my fingers are crossed, and I should add that this is the nearest I get to insider trading, as I know the impressive quality of the work that has gone on in the FSB. The second area on which I will comment concerns the insurance industry, namely the introduction of Solvency II. It will happen in 2016. It is a major step forward as a framework for risk assessment. It is not the first time that insurance firms will be using models to assess safety and soundness and policyholder protection. That would be an absurd thing to say for an industry that has modelled from the outset. But, it does represent a step change in the use of models in the prudential process. Very briefly I want to be clear that we will be using these models in an appropriately diagnostic fashion.

I am not going to reflect on that tonight, but while the original announcement came as a shock to some business models, the PRA’s assessment was that it did not appear to compromise the safety and soundness of firms in way that threatens our objective, and nor did it threaten our insurance objective of policyholder protection. No firm has failed, but bear in mind that orderly failure is very much consistent with our objectives being met. That is what should happen in my view, namely the prudential position should be sufficiently safe and sound to accommodate changes in other areas of public policy. It is not easy in our world to point to indications of when our objectives are met, a point made to us quite rightly by the National Audit Office. I would offer this as one such indicator. I will spend the rest of my time commenting on a four areas where we are either taking action or watching very carefully to determine whether action may be required. The first is the capital framework for banks – which is distinct from, but related to, the capital position of banks that I mentioned at the start. There are now three planks to the capital framework: a risk-based assessment which may be based either around firms’ internal models or a standardised approach; a measurement of leverage; and stress tests.
Such approaches were used for more than 80 per cent of the relevant banking assets at 1 January 2008. I would also like to point out that the impact of Basel II on credit institutions’ capital goes beyond the capital requirement calculation stipulated in Pillar 1 (even though it provides more comprehensive coverage than Basel I of new risks, such as securitisation activities). Regarding Pillar 2, the new regulations call for major additional arrangements to refine banks’ risk management and planning for capital cushions. This could lead to additional capital requirements, or other appropriate measures to enhance bank stability by considering risks that are not dealt with or are inadequately dealt with under Pillar 1. By the end of the year, this approach should lead to individual ratios for each institution that the Commission Bancaire sets on the basis of structured dialogue with each institution. BIS Review 82/2008  3  We have also undertaken a series of major actions that are directly in line with the general framework of the recommendations made by the Financial Stability Forum. Many spheres of action have been defined, but I would like to speak about three that I think are priorities, starting with transparency and valuation, followed by adapting the capital requirements set by Basel II for certain instruments, and finally, liquidity risk. First of all, enhancing transparency and financial disclosure was quickly identified as one of the key requirements for ending the crisis.

On the one hand, productivity growth has serially disappointed and could continue to do so in future. In that case excess demand could build more quickly and inflation could stay above target. That said, I am optimistic about the potential for Fintech and other new technologies to lead to productivity gains, either directly or by driving competition, and in turn to potentially higher, and non-inflationary, wage growth. 15  One thing to emphasise about our central forecast is that it is conditional on the market yield curve. At the time of the May Inflation Report that yield curve was pricing in roughly three rate rises over the three years covered by our forecast. And those three rate rises were one of the forces preventing excess demand rising faster in the forecast and inflation from remaining persistently above target. To demonstrate what would happen without those rate rises, we also publish a version of the forecast in the Inflation Report showing what would happen if Bank Rate remained unchanged (Chart 13). In that version of the forecast inflation does not fall back to target. Instead excess demand and domestic cost pressures build much more rapidly. And so inflation stays persistently at around 2.4%, little changed from where it is now and materially above our inflation target. 15  I set out my views on the opportunities presented by Fintech in a speech in March – see: Ramsden, D (2018), “The Bank of England – Open to Fintech”, speech at HMT’s International Finance Conference, London, 22 March 2018.
Furthermore, the central banks of the Eurosystem observe the issuing behaviour of Member States, banks and market players for signs of collusion. If, for example, a country were to convert all its bond issues to a short maturity (of up to three years), we would react. BIS central bankers’ speeches  3  Possible consequences of the ECB’s measures for national budgets The rapporteur has also asked us to address the possible consequences of our measures for national budgets. Of course, conducting monetary policy will always be associated with risks. For this reason, central banks hold capital and set aside funds for provisions and reserves as a pre-caution. This adds to their financial independence. In view of the expansion in balance sheets in previous years and the added risks associated with this, the central banks of the Eurosystem have further strengthened their financial buffers. By the end of 2012, funds for provisions had increased to € billion and those for reserves to € billion. The Eurosystem is obliged to keep financial risks under control as best it can. The institutional framework for OMTs is therefore designed in such a way that risks for the Eurosystem are manageable and controllable, for example through the aforementioned orientation of the programme towards short-term maturities. The risks associated with OMTs would materialise only if a Member State operated un-sound policies and failed to service its debt.

And I would like to share with you that some banks have launched what we may call a “pre-vetting” process for account opening. This means an applicant may request to first submit the documentation and information required for opening an account to the bank by mail, fax or email, and the bank will “pre-screen” or “pre-vet” them before arranging the applicant to have a face-to-face meeting in Hong Kong. I trust this change in process flow would be welcome by customers based overseas. 8. We are also working closely with the industry to explore the use of technology to enhance the efficiency of account opening processes, such as KYC Utilities (“KYCU”) and technology to allow remote account opening. You may have heard about KYCU, which are third-party platforms that aim to manage data as a strategic asset across banks to reduce duplication and cost and assist banks in making decisions, on all types of risks, including but not limited to AML, and as a result to make smarter business decisions. For example, a single source of customer data or documents would remove the need of a customer to provide KYC documentation to every bank, and may shorten the turnaround time for new account opening. We have had a number of discussions with major banks and relevant technology providers and steps have already been taken by both the HKMA and some major banks to take this work forward.