samchain/econo-pairs-v1 huggingface dataset:
Moreover, not everyone has a floating exchange rate and an inflation target, and countries that try to prevent adjustment of their real exchange rates have exacerbated the problem of spillover effects. Businesses in every country are conscious of how quickly their plans can be disrupted by unpredictable swings in exchange rates, asset prices and commodity prices. When those spillovers are sufficiently large and widespread, countries will want to engage with each other in a multilateral setting to discuss how they should be resolved. (b)  What commitments are needed? Before the collapse of the Bretton Woods system, the specific commitments made by countries to each other were very clear: fixed exchange rates and capital controls. In the wake of the collapse of Bretton Woods, the members of the IMF attempted to re-define their commitments. But the exercise of defining what practical commitments were needed focussed primarily on exchange rates and had rather little effect in practice. Two broad commitments are particularly important. First, countries should make public commitments about their targets for macroeconomic policies – fiscal, monetary and financial. That still allows countries considerable discretion in their choice of policy framework – for example, whether to adopt a fixed or floating exchange rate. Second, policy frameworks must be consistent across countries. Policies which try to prevent changes in real exchange rates in response to changes in fundamentals, or lead to an unsustainable build-up of external debt, are properly the concern of the international community. (c)  What tools are needed?

In my view, there are five principles that should be followed. First, create international institutions only when there is a need to do so. International institutions should focus on those areas of global governance where we need to tackle problems collectively – whether on trade, the environment, or large spillover effects of changes in macroeconomic policy. Second, ensure that the commitments countries enter into are clear. The job of institutions is to support those commitments. In many cases, like an umpire, their job will be to uphold them. That will only be possible if the players – countries – are very clear about the agreed rules of the game. Without that, any further design is pointless. Third, provide institutions with the necessary tools to umpire the commitments of nation states. But, just as umpires are accountable for their performance to the whole community of cricket-playing nations through the International Cricket Council, the staff and management of the international institution should be accountable to the whole community of nation states for their performance in upholding the rules. Fourth, recognise that we do not start with a blank sheet of paper. We must accept the constraints of history. Existing institutions have an institutional memory, talented staff and much of the infrastructure that will be needed in the future. But that is not to say reform will be easy – there are far too many vested interests for that to be the case. Fifth, avoid unnecessary duplication.
15 [30]  sitive when interest rates rise. Although public debt is low, which in itself is positive, it is a questionable combination, as not only the government but also households and companies need to have buffers. The debts of property companies have grown when interest rates have been low. Property companies obtain funding both via the banks and via the capital market. When there is a shortage of market funding at the same time as companies' funding costs rise, the profitability and liquidity of property companies can deteriorate and this can ultimately have a negative impact on financial stability. An excessively high level of private indebtedness that increases the risks in the financial system can limit the ability of monetary policy to act, known as financial dominance.25, 26 This could mean that the policy rate cannot be raised at the pace needed to bring down inflation. I do not consider us to be in a situation with financial dominance at present, but one cannot rule out the possibility of such a situation arising at some point in the future. We therefore need to continuously monitor developments and take measures to prevent this from happening. Responsibility for financial stability is shared between different authorities Monetary policy and financial stability are interdependent. Without a stable financial system, price stability is threatened and without monetary stability, financial stability can be jeopardised. Historically, financial regulation has primarily focused on individual banks.

Bank collapses in the USA and Switzerland The bank collapses in the United States and Switzerland in March created uncertainty in the global financial markets. To understand these developments, it is important to analyse the underlying problems. They are largely well known. However, there are also a number of new elements that may exacerbate the wellknown problems and that need to be analysed further. We want to avoid problems in the banking sector in one area spreading to other parts of the financial system or to other countries. At the same time, it must be possible to wind down banks with serious problems in an orderly manner. It is important to learn from crises. What we have now seen means that I think we will have to change some regulations. The financial regulatory framework is governed to a very large extent by global standards, so that is where the analysis must begin. Any future agreements reached at global level will also clearly affect the rules in the EU and thus in Sweden. Let me first focus on the more familiar problems and then return to what I see as new ones. In a sense, you can probably talk about the financial sector before and  2 See, for example, the discussion in Federal Reserve Bank of St. Louis (2022). 4 [30]  after the Silicon Valley Bank crash. I think it can be a watershed in the way we think about the design of some financial regulation.
Our definition of price stability is particularly beneficial for a small, open country such as Switzerland that is exposed to strong external shocks. Other approaches would have often required more drastic and disproportionate monetary policy responses in recent years. Given the openness of our economy, fine-tuning inflation is unrealistic. Our strategy has thus also made a significant contribution to the credibility of our monetary policy. The SNB’s mandate is clearly focused and should remain so, regardless of important societal problems such as climate change and the financing of pension provision. A narrow mandate allows a central bank to concentrate on the essential task of ensuring price stability, but is also of fundamental importance in safeguarding its independence. Independence seeks to achieve and requires distance from politics. This distance is therefore not something to be given up lightly. Page 12/16  Chart 1  Chart 2  Page 13/16  Chart 3  Chart 4  Page 14/16  Chart 5  Chart 6  Page 15/16  Chart 7  Chart 8  Page 16/16

The HKMA BIS central bankers’ speeches  3  takes the view that an overseas bank that wishes to undertake retail business in Hong Kong should operate in the form of a locally incorporated subsidiary. This is to offer appropriate protection to the retail depositors in Hong Kong and to do that the HKMA needs to have an effective supervisory handle on every aspect of a retail bank’s operation, especially its capital adequacy ratio. We cannot achieve this if the bank operates as a branch in Hong Kong. 17. However, we also recognise that subsidiaries may not necessarily be an efficient model of operation if an overseas bank intends to undertake only corporate or private banking in Hong Kong. For example, a branch can leverage on the capital of the entire bank to finance a loan for a large corporate, which would otherwise be impossible if it operated as a subsidiary with rather limited capital in Hong Kong. Likewise, some private banking clients may prefer to deal with or book their investments with a branch of an overseas private bank rather than a subsidiary of that bank. So the HKMA keeps an open mind on whether an overseas bank operating in Hong Kong should take the form of a subsidiary or a branch. It all depends on the business model of the bank concerned.
Smaller firms have been the most vulnerable to the shock and, despite the mitigating measures put in place, are more likely to be affected by solvency problems. Naturally, differences in credit risks across sectors of activity (besides the most directly affected sectors) and in the geographical distribution of the exposures may also contribute to the possible future heterogeneity of the impact of the crisis on banks. As regards the geographical aspect, the high impact of the pandemic in 2020 H1 in some foreign countries that are material to Spanish banks suggests that the benefits of geographical diversification could be lesser in this crisis than during the global financial crisis. However, the contribution of foreign business to Spanish banks’ return on ordinary activities increased in 2020 as a whole, and the growth in impairment allowances was relatively contained in various material countries. In any event, the potential uneven performance of the banking business in the different geographical areas needs to be monitored. Moreover, in view of the possible materialisation 9  Indeed, the distribution among banks of the percentage of credit exposure to the sectors hit hardest by the pandemic (e.g. hospitality and transportation and storage) is very concentrated, at values of close to 20%. 9  of permanent damage to some sectors of economic activity with asymmetric recovery paths, it is important to continue monitoring changes in credit quality.

NPLs to the resident private sector continued to decrease, albeit to a lesser extent than in previous years. In 2020, the stock of NPLs fell by 3.8% year-on-year (down 4% in March 2021), compared with steep declines in 2019 (-19.1%) and 2018 (-29.1%). The NPL ratio also continued to decrease, again more moderately than in recent years, to stand at 4.4% in December 2020 (the same rate as in March 2021), down 0.4 percentage points (pp) on the previous year. The public support measures for firms and households would largely explain the lower sensitivity of NPL rates to changes in activity during this crisis. These measures appear capable of absorbing a significant share of the potential impact of the crisis on banks’ solvency, thus limiting solvency risks.2  2  For instance, according to the FLESB stress tests published in the Financial Stability Report (Autumn 2020), the volume of public guarantees considered in the exercise could absorb approximately 30% of the expected credit loss, improving the CET1 capital ratio by between 1.5 pp and 1.75 pp in the period 2020-2022 under the different scenarios envisaged. It should also be noted that the exercise identified a wide confidence interval around these figures. 4  Third, the impact of the pandemic has also squeezed the Spanish banking sector’s profitability. In 2020, the consolidated net profit of Spanish deposit institutions as a whole was negative (around € billion). This translated into a return on assets (ROA) of -0.21% and a return on equity (ROE) of -3.1%.
Internationally, we have contributed expertise and advice to the standard setting process via bodies such as the Basle Committee and the International Accounting Standards Board. And we contribute actively in the work of official international bodies like the Financial Stability Forum, the Group of Twenty and the G10 central banks’ Committee on the Global Financial System. On a separate tack, we have also increased our focus on insurance, where the FSA is developing a prudential approach along the lines of Basel II for insurance companies. We recently led work in the CGFS to better understand techniques of credit risk transfer and their implications - particularly important for reinsurance. We also wanted to obtain better data on who was shedding and who was taking on what risk. This should in due course allow more effective monitoring of the transfer and accumulation of risk. And earlier this year, I was myself heavily involved in drawing up the Group of Thirty study “Global Clearing and Settlement: A Plan of Action”. It detailed 20 recommendations in relation to interoperability, risk management and governance that once implemented should improve efficiency and reduce risk in securities clearing and settlement. The task now is to get them implemented: and we are involved in that process too. So in these areas we try to help to influence standards that are being set at a global level. Standards which of course also bear directly on much UK-based activity.

In the first analysis there is comfort from the improved risk management and supervisory processes that have been developed over the past decade. But we need vigilance in terms of the possible knock-on implications for the financial systems. Moving to a more specific, and very topical, example I would like to mention complex financial instruments. We have all read alarmist stories. But Alan Greenspan often makes the point that one may over estimate some of the risks and under estimate the benefits. Shocks such as the Asian crisis, LTCM, 9/11 have been successfully absorbed by the financial system. The fact is that they have not triggered a systemic financial crisis and the instruments themselves contribute to flexibility and resilience in the system. They enable financial institutions such as banks to transfer or diversify risk to a wide variety of participants including mutual funds and insurance companies, and hence reduce concentration. My own view is that this may be true but equally we would be unwise to take too much comfort for granted. At the Bank, we certainly feel the need for vigilance. We need to understand the implications and threats of these instruments. We start by breaking down the whole area of complex instruments into a more granular form. We focus specifically on four key aspects. Firstly there is the question of opacity and data. It is very hard to know both where risks have been transferred from and who is now on the receiving end.
Capital regulations will have to be complemented with prudent banking that includes enhanced underwriting standards, effective internal controls and risk management, as well as strong corporate governance. In achieving your future goals and aspirations, significant benefits can be derived from Basel II provided that your institutions undertake the necessary efforts to align your strategy and business orientation with the new standards. Your interest, participation and decisive actions on the new accord are therefore important in positioning your institution in this increasingly competitive and more dynamic environment. Thank you. BIS Review 21/2004  5

The work done by the BNB in this area is the logical extension of the reforms in the banking sector that started in 2015 and is expected to continue throughout 2019 with the following focal points: • Development of an efficient organization for cooperation with the ECB within the supervisory colleges and joint supervisory teams; • Streamlining the supervisory strategy to match the new institutional reality resulting from the close cooperation arrangements; • Dividing the supervisory focus among important and less important institutions; • Organisation of collection of supervisory and statistical data for supervisory purposes and validation of supervisory reporting; • Development of information systems consistent with the new stage in the supervisory activities. The third working block relates to the organisation and carrying out of the asset quality review and the stress test. The process is under way for the selected six banks and is conducted by ECB in line with an ECB-adopted methodology and macroeconomic scenarios for the purposes of the stress test. The bulk of the assumptions and parameters are determined by the Central Project Steering Committee at the ECB with an established working communication between the BNB, ECB and SSM in this process. The Banking Supervision activities will continue through implementing the European regulatory framework applicable to the credit institutions with a focus on the consistent implementation of the technical standards and regulations, the Guidelines of the European Banking Authority and the recommendations of the European Systemic Risk Board.
And our White Paper MAP breaks down this process into five key areas — Under “M”, the white paper lays out new developments in Regtech, and explores their importance to Hong Kong’s banking industry Under “A”, the white paper assesses prevailing practice, and attempts to define and evaluate existing barriers to Regtech adoption As for “P”, there are three elements involved. The first element is about laying out a common practice framework for implementing Regtech in Hong Kong; the second element involves making practical recommendations for initiatives that can contribute towards the wider adoption of Regtech; and the third element is about delivering a practical roadmap of the HKMA’s plans for promoting Regtech adoption. 20. The White Paper is actually based on findings from a survey of banks and Regtech providers, interviews with industry stakeholders, benchmarking against other jurisdictions, and an analysis of Hong Kong’s Regtech progress so far. Some of you may have offered your valuable contributions to it. So, taking this opportunity, I thank those of you who have done so for your generous help and support. 21. The White Paper will be available for public download through our official website later today. Here, let me give you a quick snapshot of some of its key contents. 2/6  BIS central bankers' speeches  Regtech adoption barriers 22. First and foremost, about Regtech adoption barriers. 23. We note that Regtech adoption in Hong Kong has made significant progress in recent years.

•  Fabrication demand for gold, by contrast, for jewellery as well as for industrial uses, has contracted in recent months. In the industrialised countries, this decline has been mainly brought about by the economic slowdown. The high gold price, however, has also played a role, especially in developing countries. In countries such as India, which accounts for a quarter of gold demand, the precious metal is held in the first place for saving purposes. Investors use a more or less fixed portion of their disposable income to purchase gold. In times of rising gold prices, investors buy correspondingly less gold. From these developments we can draw two conclusions: •  In the long term, the main elements influencing gold price expectations are changes in private investors' demand, mines' production costs as well as the central banks' fundamental attitude towards their gold reserves. •  In the short and medium term, any change in producers' hedging policies and in the central banks' gold holdings, as well as speculative demand can trigger noticeable shifts in the gold price. These price movements, both upward and downward, may be relatively significant because the gold market is not very liquid, as experience has shown. Under this point of view, the central bank gold sales agreement of September 1999 has had a stabilising effect, since it has made the operations of central banks transparent and eliminated an important source of uncertainty. Our sales will continue until we have completed our programme, i.e. until we have sold 1,300 tonnes of gold.
As a result, an inflationary bias may be generated. This inflationary bias is ultimately anticipated and incorporated into agents’ expectations, and, therefore, into price-setting and wage bargaining. The upshot is higher inflation without hardly improving the level of output and employment in the economy. This means monetary policy loses its effectiveness and the commitments to price stability cease to be credible. 2/9  Figure 1 INFLATION RATES 1970-1994  25  1994-1998  %  5  20  4  15  3  10  2  5  1  0 70 72 74 76 78 80 82 84 86 88 90 92 94 EURO AREA  %  0 94  95  96  97  98  SPAIN  The independence of the Banco de España, along with the new monetary policy framework based on direct inflation targets, was decisive in bringing inflation down and in fulfilling the Maastricht requirements in a short period of time.2 In this regard, the Spanish experience in relation to EMU accession meant a qualitative leap forward in terms of credibility, communication and transparency, which facilitated the anchoring of inflation expectations to a new regime of price stability, providing a focal point for collective wage bargaining, the setting of regulated prices, etc. The task of taming inflation did not fall entirely on the shoulders of the Banco de España, as Spain showed a strong and credible political will to lower inflation that helped bring about the anchoring role of the whole European institutional setting.

This cooperation has also included active participation in public-private partnership initiatives, including the National Scams Response Centre. As a member of the Financial Action Taskforce or FATF, Malaysia will once again be undergoing a Mutual Evaluations Exercise in 2024 and 2025. For the uninitiated, this is an in-depth assessment of the country's measures to combat ML/TF risks and its compliance with the international standards set by the FATF. This will be the fourth time for us and the last one was done in 2014. It is my hope that the stride made in Malaysia's AML/CFT ecosystem, strong commitment of all institutions towards a highintegrity financial system, and effective cooperation between the industry and public authorities will be reflected in the eventual outcomes of the Evaluation Exercise. In particular, it is paramount for all staff of reporting institutions to maintain high professional standards, adhere to existing confidentiality requirements, and undergo adequate AML/CFT trainings. Ladies and gentlemen, I would like to leave you with a line that is often quoted when speaking about integrity: "Integrity is doing the right thing even when no one is watching". While the quote may have been over-used, it has not dimmed its truth one bit. It is much easier to do the right thing under other watchful eyes, the safety barriers of procedures, or even the instruction of prescriptive rules. But oftentimes, the decisions that will matter most are what we choose to do when nobody, but our conscience is watching.