samchain/econo-pairs-v1 huggingface dataset:
I will thus comment on our current monetary policy at the end of my speech. Balance sheet expands due to measures against strong Swiss franc In the past few years, the SNB’s balance sheet total has risen sharply. Since the onset of the global financial crisis in 2008, it has multiplied by a factor of six. At the end of last year, it came to around CHF 640 billion, or almost exactly the value added by the Swiss economy in 2015. The growth in the balance sheet total is attributable to a rise in Swiss franc liquidity and an expansion of our foreign currency investments. This brings me to my first question: how did the increase in foreign currency investments come about? The short answer is that it is the result of monetary policy measures which the SNB takes to maintain appropriate monetary conditions in Switzerland. Thus, foreign exchange market interventions, which the SNB has been using to counter the appreciation of the Swiss franc since spring 2009, have led to the increase in foreign currency investments and, in turn, the SNB’s balance sheet total. Thus a high level of foreign currency investments is not an objective in itself. On the contrary. It forms an integral part of monetary policy. As observers of our monetary policy, you will be familiar with the reasons why we are active in foreign exchange markets. In the wake of the crisis which encompassed global markets eight years ago, demand for safe investments, including Swiss francs, rose rapidly.

Reconciling Switzerland’s minimum exchange rate and current account surplus, speech held at the Peterson Institute for International Economics, Washington D.C., 8 October 2013. BIS central bankers’ speeches  This changed fundamentally after the beginning of the global financial crisis in 2008. Uncertainty increased noticeably. Swiss companies were no longer investing their earnings from export business abroad to the same extent, and were instead increasingly repatriating them. Moreover, a growing number of investors, including institutional investors and private banks, sought the security of Switzerland. Consequently, demand for Swiss francs rose rapidly so that the Swiss franc, at times, was overvalued to an extreme degree. To counter the strength of the Swiss franc, the SNB began purchasing foreign currency against Swiss francs in the foreign exchange market. In statistical terms, this meant it was exporting capital, with the result that public sector capital exports increased. This can be seen from the blue bars in the chart. Without these interventions, the Swiss franc would have appreciated even more, with correspondingly negative consequences for the economy and for price stability in Switzerland. This also means that, with its foreign currency purchases, the SNB has, for some time now, taken onto its own balance sheet the currency risk which the private sector is no longer willing to bear. When we purchase foreign currency against Swiss francs, it is shown on the assets side of the balance sheet as the most important element in the foreign currency investments item.
Why by raising interest rates and not by reducing the size of our balance sheet? I see three important reasons. First, we understand better the transmission mechanism of interest rate rises than that of quantitative tightening. We have decades of experience with the former, but we have never reduced the size of our balance sheet from such large levels. Second, quantitative tightening could potentially cause market turmoil in certain market segments, as supply may outgrow demand and liquidity may dry up. This could imperil the policy normalisation path at a time in which all our efforts should be focused on it. Third, monetary policy transmission in the euro area is heavily dependent on bank credit. Loan pricing is typically benchmarked to short- and medium-term rates. Policy rates are thus a more effective instrument to tighten monetary policy. Going forward, a key question is: by how much should our key interest rates eventually increase? That is, what is the value of interest rates that guarantees that inflation converges to 2% by the end of our medium-term horizon? I will call this level the “target-compatible terminal rate”. A second, related question is: how fast should this terminal rate be reached? Let me address the second question first. What should the optimal path towards the terminal rate be? One possibility would be to raise rates to the terminal level straightaway.

Nor Shamsiah Mohd Yunus: Shifting tides - future of finance Opening remarks by Ms Nor Shamsiah Mohd Yunus, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the MyFintech Week 2019 "Shifting Tides: Future of Finance", Kuala Lumpur, 17 June 2019. * * * I would like to welcome all of you to the inaugural MyFintech Week and Financial Industry Conference hosted by Bank Negara Malaysia. This event is being held at a time that brings together two important mileposts for the Malaysian financial services industry - the beginnings of an exciting era of digitalisation and a new chapter in the development of the financial sector as the current Financial Sector Blueprint approaches the end of its horizon in 2020. "Shifting tides: Future of finance" was deliberately chosen as the theme of the event for a reason. For much of history, human civilisation could not reasonably explain how ocean tides occurred. It was only through the discovery by Sir Issac Newton and the dedication of scientists over many centuries that we are able to understand it today. Like ocean tides, the future of finance may be hard to fathom at the beginning. Yet it offers many opportunities and risks. Perhaps most importantly, it also underscores the heavy responsibility and ownership that we collectively bear to build a financial system that is safe, reliable and truly serves the needs of the people. In my remarks today, I will discuss what this entails in order to develop a financial system for all Malaysians.
When such banks got into difficulties, the states in question had no option but to rescue them. 2 This has become known as the ‘too big to fail’ issue. International measures to strengthen financial stability  In the aftermath of the crisis, the relevant international bodies defined new standards and revised existing regulations to strengthen financial stability. In December last year, for example, the Basel Committee on Banking Supervision finalised the Basel III international regulatory framework for banks. Prior to that, the Financial Stability Board (FSB) had already adopted new rules to address the ‘too big to fail’ issue. These regulatory approaches have tackled the weaknesses that were uncovered. An initial set of measures sought to strengthen the resilience of all banks, with more effective rules being issued with regard to liquidity and capital adequacy. The new liquidity standards ensure that banks can absorb exceptionally high outflows of funds over a period of 30 days, and that they have sufficient amounts of stable funds to finance their activities for the next twelve months. 3 The capital requirements were amended in two respects. First, deficiencies in the riskweighted capital ratio (that is to say, the ratio between capital and risk-weighted assets) were remedied; the changes restrict the banks’ scope in calculating their risk-weighted assets. 4 Second, a non-risk-based measure was added to the capital requirement. I would like to look at this briefly now. In making business decisions, for example when granting a loan, banks have to weigh up risk and return.

Speech  Embargo 27 April 2018, 10.00 am  Comments on monetary policy and banking regulation 110th Ordinary General Meeting of Shareholders of the Swiss National Bank  Thomas J. Jordan Chairman of the Governing Board Swiss National Bank Berne, 27 April 2018 © Swiss National Bank (speech given in German)  Page 1/8  Mr President of the Bank Council Dear Shareholders Dear Guests It gives me great pleasure to welcome you to our Annual General Meeting. As is customary, the first part of my speech will be devoted to comments on the current economic situation and monetary policy. Ten years after the start of the global financial crisis, we can now look back on a year in which economic momentum has been much more positive – both in Switzerland and worldwide. The question is: has the global economy now finally completed its unusually sluggish recovery process? As I will show, there are indeed grounds for optimism, but it is still too early for this to give way to euphoria. In the second part of my speech, I would like to look at the state of play in banking regulation. A decade on from the global financial crisis, we should not just be asking whether we have recovered from the consequences of this event; we should also take stock of what we have done to improve the ability of our banking system to withstand future crises.
Instead, they need to equip themselves with the appropriate skills and knowledge, to enable them to ask the right questions and make the right decisions. Apart from experience, training is one important way to equip our directors. Current levels of directors’ training 10. Companies here are gaining awareness of the importance of having well-trained directors, and proactively providing training for them. Last year, SID and the Singapore Exchange, or “SGX”, published the “Singapore Board of Directors Survey”. According to the survey, the proportion of companies providing relevant training to non-executive directors increased from 25% in 2005 to 41% in 2008. But the survey also showed an increase in the number of directors who received no training. This is a trend that SID should address early. 11. I understand that SID and SGX are currently conducting another similar survey. Hopefully, this survey will show more companies providing training for their directors and more directors attending such structured training. Areas for focus 12. Next, allow me to outline some areas where directors can focus their training efforts on. The SID and SGX survey highlighted that risk management was the most important area for further training. Directors have a responsibility to manage the risks of a company. Their involvement in risk management extends from heading off cases of egregious fraud, to ensuring that management does not take on excessive risk. 13. Directors also need to stay abreast of the latest developments in regulations and best practices.

And today there are additional incentives for life insurers to offer new products that break away from the dual cash-liquidity guarantee, due to the lesser Solvency II capital requirements. And this brings me to the issue of regulation. Here too, insurers have an essential role to play, i n preparing the review of the Solvency II Directive’s new regulatory framework. The directive came into force almost two years ago now and you have implemented it with a great deal of professionalism. In many respects, Solvency II represents a very significant step forward for the insurance sector. But this does not mean that it’s perfect: we must analyse its impacts closely, particularly its effects on investment behaviour and the financing of the economy, in order to propose the adjustments that prove necessary. Progress has already been made on the financing of infrastructure projects and businesses, thanks to two amendments that came into effect in April 2016 and September 2017, respectively, which adapted the calibration of capital requirements. More generally though, the reviews of the standard formula and long-term guarantee package measures planned for 2018 and 2020, respectively, are important opportunities to make essential improvements. The work is already underway, and the more you 2/3  BIS central bankers' speeches  actively participate, alongside your European colleagues, the more our chances of success will be enhanced. III.
This is to ensure that the country’s overall payment system is fully integrated and contributes positively to the overall efficiency of trade and commerce within and outside the country. This in turn will enhance the country’s capacity to face competition and challenges in the international financial and investment environment, at the regional and global levels. Nevertheless, while information technology proceeds at the speed of light, the corresponding legislative reforms take time. The Bank of Thailand, along with other government agencies, is working hard to push forward for the enactment of crucial legislations such as the Electronic Transaction Act, Electronic Digital Law, Electronic Fund Transfer, to name but a few. Technological revolution in the banking and financial world, such as the advent of E-money, have had an impact on fundamental central banking concerns, particularly on the definition of “money”, the transmission mechanism of monetary policy and the traditional intermediation function of banks and deposit taking institutions. These, in turn, will likely make the conduct of monetary policy more difficult and challenging. Monetary authorities will need to stay on top of these developments. Finally, let me conclude by hoping that I have left you with some food for thought for your further deliberation and discussion. May I also take this opportunity to thank the organizers of the Conference on Finance and Capital Markets for inviting me here today. 3  BIS Review 85/2000

Joseph Yam: Fourth Hong Kong Monetary Authority Distinguished Lecture: opening remarks Opening remarks by Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, at the Fourth Hong Kong Monetary Authority Distinguished Lecture on the theme of Monetary Policy and Financial Stability, Hong Kong, 13 February 2001. *  *  *  It is an honour for me to welcome Mr Andrew Crockett to deliver this Fourth Hong Kong Monetary Authority Distinguished Lecture. I am also delighted to welcome Dato’ Dr Zeti Akhtar Aziz as the Discussant. Both are good friends of the HKMA, and it is a special pleasure to see them here today before this large and diverse audience. I extend to all of you, on behalf of the HKMA, a very warm welcome. The subject matter of this Lecture – monetary policy and financial stability – is at the heart of central banking. Much attention has been given to resolving the apparent conflicts between the two desirable objectives of monetary stability and financial stability, at the policy as well as the operation levels. The recent experience of a number of jurisdictions has indicated problems in achieving both simultaneously. Some have gone as far as to introduce institutional changes to alleviate the tension, or the embarrassment, or the risk of policy credibility being undermined as a result of such conflicts.
Third, the financial authorities, including the Banco de España, have recommended that institutions temporarily eliminate dividend pay-outs and apply prudent criteria in their variable employee compensation schemes, so that they may channel their resources into shoring up their capital positions. These measures will be reviewed before year-end but, in any event, institutions’ dividend distribution and compensation policies should remain highly prudent until the current uncertainty abates and a solid economic recovery takes root. For its part, the EU has approved a package of measures to encourage banks to make full use of the flexibility inherent in the European accounting and prudential framework. The measures also make a series of adjustments to the applicable regulations, to encourage bank lending to households and firms. Included in this package of measures is the Capital Requirements Regulation “quick fix”, which adapts the SME support factor in the calculation of risk-weighted assets (RWAs), applies a prudential filter to changes in the value of sovereign debt instruments and reviews the temporary prudential treatment of credit risk impairment, among other measures. This response from the prudential authorities, accompanied by the fiscal and monetary policy measures adopted, has enabled the initial impact of the shock to be absorbed and has prevented materialisation of a systemic risk in the financial system that would have exacerbated the crisis and made it more persistent.

Instead, it should aim to promote and support the adaptation of the productive system and workers to the new realities and the efficient reassignment of resources among industries and firms. In short, the design of economic policy measures should be adapted to the changing circumstances of the crisis itself. The ability, over the coming quarters, to recalibrate the support measures to ensure that at all times they match the needs arising from the course of the pandemic will determine our opinion in a few years’ time of the success of the economic policies of today in addressing this crisis. It is this spirit of needing to adapt to continuously changing circumstances that has inspired the recent agreement between the Government and the social agents to renew furlough arrangements (ERTEs) until 31 January 2021: the agreement has introduced new forms of temporary suspension of employment relationships, in response to activity restrictions that may arise entirely or partly as a consequence of the introduction of fresh pandemic containment measures. One particular dimension of the necessary redesign of these mechanisms is a more selective focus. The protection measures should be directed at those industries and firms most directly affected by the activity restrictions resulting from the course of the pandemic, this being an aspect of the latest ERTE extension. The rationale for this heightened focus is twofold. First, public funds are limited and already subject to considerable pressure, so they need to be channelled towards those uses that yield the highest returns.
By taking a small step towards the normalisation of the short-term interest rate level, we are thus gradually and cautiously siphoning off excess liquidity in order not to jeopardise price stability in the long term either. Financial markets Is the economic analysis on which our inflation forecast rests in conformity with that of the financial markets? In the recent past, a flattening of the interest rate curve was observed in Switzerland. Interest rates for maturities of up to ten years in particular moved up. This shows that the financial markets have anticipated a somewhat less expansionary monetary policy. Since economic activity  2  BIS Review 39/2004  began to pick up momentum more rapidly in Switzerland than in the neighbouring countries, it became evident that interest rates would rise sooner, which enhanced the attractiveness of the Swiss franc somewhat. Nevertheless, the competitiveness of Swiss companies remains intact. At the very long end of the interest rate curve interest rates have hardly moved, an indication of consistently low inflation expectations. The markets assume that the National Bank’s monetary policy is in conformity with its goal of ensuring price stability in the long term. Monetary policy still expansionary In March 2001, we initiated a series of interest rate reductions in response to the sluggish business climate and the enduring strength of the Swiss franc. In a particularly difficult international environment with deflationary trends we allowed the three-month Libor to finally fall to a historic low of 0.25% in March 2003.

This involved several key financial education initiatives for students and households in Malaysia, including the School Adoption Programme that was supported by the Ministry of Education and the financial industry. More recently, it has progressed to the integration of financial education into the school curriculum. This has been made possible through the successful collaboration between Bank Negara Malaysia and the Ministry of Education. Ladies and gentlemen The compilation of caricatures in Financial LATeracy is organised according to specific money management themes while the exhibition allows visitors to experience and appreciate the fine works of Datuk Lat while highlighting key money management messages. The timeless caricatures showcased in Financial LATeracy also embodies the true essence of a multicultural Malaysia, depicting the diversity of our people, cultures and traditions. Of significance is the  BIS central bankers’ speeches  1  influence that his works have had in promoting social harmony and benevolent values that bring the diverse people of Malaysia together. Most Malaysians have grown up with his drawings. His works have touched on so many aspects of the lives of Malaysians, providing us with powerful insights into the social and political scenes of this country. The power of story telling by Datuk Lat transcends beyond the drawing of cartoons. He is among the artists who have been observers that are the most honest and critical of developments in our society.
The development of this market in Hong Kong is a story very familiar to you, so let me focus my remarks on three specific questions which I am often asked. First, is the RMB liquidity pool in Hong Kong big enough? Over the past year or so, the growth of RMB customer deposits has turned modest. On occasions there have even been month-on-month declines. Some commentators have seen this as a sign that the RMB liquidity pool in Hong Kong is beginning to plateau and might not be able to support future RMB bond issuances and other financial activities. Frankly, I think this should not be a cause for concern. One needs to recognise that the level of RMB customer deposits is a useful but incomplete measure of RMB liquidity. For instance, banks have been increasingly issuing RMB certificates of deposits as a means to tap RMB funds. Taking RMB customer deposits and certificates of deposits together, these added up  2  BIS central bankers’ speeches  to 700 billion yuan at the end of July 2012, with a modest 5% increase from the end of 2011. In other words, the RMB deposit pool has remained largely stable, at a time when we are seeing very vibrant RMB dim-sum bond issuances and expansion in other RMB financing and investment activities. This is a healthy sign that market forces are balancing supply and demand, and that the offshore RMB market in Hong Kong is maturing.

Underlying this situation are challenges many and varied. Overshadowing them all is the risk of contagion from weaknesses in the advanced economies. The high level of sovereign debt at the peripheral eurozone countries, and its potential vicious feedback into economic recession, is now the principal threat to the global recovery. Meanwhile, in the US, it is still unclear whether recent encouraging signs will be sustained. A big concern there is whether public sector deleveraging will play out in the form of a fiscal cliff or a more gradual, manageable fiscal slope. Either way, via budget cuts or continued fiscal uncertainties, the near-term responses will likely continue to hold back private investment and employment. The aggregate risk of all these challenges for us in Asia is clearly a knock-on drag on Asian economies. There are also two important side effects: first, the impact of monetary loosening in advanced economies on consumer and asset prices in Asia. And second, the potential loss of lending for infrastructure projects in Asia as European banks deleverage and retrench. For policymakers, this is a triple-whammy: subdued growth, asset inflation and capital retrenchment. And compounding this are very high levels of uncertainty and volatility, as markets alternate between risk-on and risk-off. All of which makes policy calibration highly challenging and economic forecasting somewhere between extremely difficult and impossible. Position of Hong Kong’s banking system Given this backdrop, it is very important that we understand and monitor the developments in the US and Europe as closely as possible.