samchain/econo-pairs-v1 huggingface dataset:
Significantly, the recapitalisation process has been accompanied by the transformation of most savings banks into banks, a move that has gone outside and beyond the group of institutions that had to increase their capital to meet the new requirements. 4  BIS central bankers’ speeches  The Banco de España considers that the capital requirements laid down by Royal DecreeLaw 2/2011 are sufficient to ensure the soundness of the Spanish banking system, not only under the most likely macroeconomic scenario, but also under harsher scenarios that are most unlikely to occur. As is known, some analysts estimated that the capital needs of our banking system may be greater in the future, under assumptions of a strong deterioration in the Spanish economy. In this respect, the stress tests being conducted at the European level will show to what extent banks need more capital to withstand the extreme scenarios envisaged in these tests. If, as a result of these tests, certain Spanish banks were to evidence additional capital needs that could not be covered by the banks themselves through resort to the markets or to other means, the FROB would provide the funds required, as envisaged in the Royal Decree. In any event, even under highly pessimistic scenarios about the Spanish economy, the use of public funds to recapitalise institutions would entail only a relatively moderate increase in the outstanding balance of Spanish public debt.

In this climate of nervousness, the high levels of private-sector debt, the need for balance-sheet write-downs in the financial sector and the difficulty the economy faced in growing at a sufficiently high level all weighed on the perception of the sustainability of our public finances. Moreover, the banking system, which had negotiated the first wave of the international financial crisis without excessive difficulties, came up against bigger problems when the main elements of the underlying macroeconomic crisis began to be felt at banks. Combining with this was the tightening of financing conditions for credit institutions raising funds abroad, as a result of the prevailing instability on financial markets. Faced with all these circumstances, it was vital to firmly show that matters could be turned around and that Spain was not bound to follow the path of instability of other countries. To do this, the change in economic policy stance last spring was essential, since it demonstrated a willingness to react to and redress the imbalances. Given the source of the tensions, the priority was to right the trajectory of public finances. To this end, an ambitious fiscal consolidation plan was approved in May last year. It brought forward the bulk of the adjustment to be made to the years 2010 and 2011. In parallel, there was a patent and pressing need to tackle the labour market shortcomings that were hampering the absorption of unemployment and the adjustment of the economy. Hence a labour market reform was launched.
The central government invests this amount abroad through the Petroleum Fund. This results in capital outflows and a balance-of-payments surplus. The central government builds up assets, but also obligations through the social security system. Even if a large share of oil revenues is set aside, it would appear that, in the long term, the level of direct and indirect taxes will have to be at least maintained in order to honour these obligations. Petroleum revenues would normally have resulted in substantial currency inflows into Norway. If we had used this capital domestically, we would have had to convert this currency into NOK. The attendant increase in demand for kroner would have resulted in an even sharper appreciation of the krone exchange rate. The capital outflow through the Petroleum Fund contributes to curbing the appreciation of the krone. With oil and gas production now reaching its peak, Norway has - and must have - a substantial balance-of-payments surplus. The return on the Petroleum Fund will to some extent make up for the fall in petroleum revenues in the period ahead. In about 15 years, the return on the Fund may exceed the cash flow from petroleum activities. Norway’s position as international investor may then overshadow its position as an oil and gas producer. Swings in capital markets may have a greater impact on central government finances than oil price fluctuations. We are now in a phase where petroleum wealth is being invested at home and abroad. Norway is and has to be - an international investor.

In that context, both the ECB and the SNB conduct a careful analysis of monetary aggregates partly in an effort to assess the risks of long-term financial imbalances. Moreover, acknowledging the monetary source of long-term inflation helps avoid the build-up of excess liquidity in the first place. In closing, let me therefore repeat that the Fischer et al. paper could benefit from focusing more extensively on the admittedly complex but nonetheless important link between money, asset prices and long-term inflation perspectives. In the  4  For example, Nelson (2003) argues that movements in monetary aggregates provide useful indications regarding different yields usually not incorporated in economic models  5  Baltensperger, Jordan and Savioz (2001), Jordan, Peytrignet and Rich (2001)  6  Reynard (2006)  7  For example, Issing (2002) provides evidence of a close relationship between excess money growth and real asset prices, a relationship that does not appear by looking at a standard Taylor rule as a measure of monetary policy stance. Similarly, Friedman (2005) showed that pre- and post-financial market crash evolutions of stock prices and gross domestic products were strongly related to the pre- and post-market crash evolutions of monetary aggregates. White (2006) pointed to the need of pushing further the frontiers of economic research in the direction of incorporating financial variables to assess longer-term macroeconomic developments.
But even though the zero lower bound is not absolute, the effect of further cuts will diminish as rates approach or fall below zero. The most important limitation on how far down it makes sense to go is related to the existence of an alternative to bank deposits, i.e. cash. Negative bank deposit rates can always be avoided by holding cash instead. The disadvantage is that cash is more expensive to manage than electronic deposit money. Transport, storage and security all involve costs. For a bank participating in the settlement system, where large amounts are reinvested at frequent intervals across accounts and across banks, the costs involved in switching to cash will be considerable. Central bank deposit rates can therefore be below zero. How far below, is an open question. For many retail customers, exchanging bank deposits for cash will be fairly inexpensive. A safe deposit box can be rented for less than € a year. If bank customers choose to withdraw their deposits and hold cash, banks will lose an important part of their funding. This is probably an important reason why banks in countries with negative policy rates are reluctant to set negative deposit rates, particularly for households. If banks hold back on deposit rates, lending rates can only fall to a limited extent before banks’ earnings are reduced. A lower policy rate will probably have a less-than-normal effect on lending rates, weakening the impact of monetary policy via the demand channel.

But there were also important secondary effects on the relationships between the major industrial countries’ currencies. The dollar and sterling - which have in fact been reasonably stable against each other since we came out of the Exchange Rate Mechanism - strengthened, notably against the euro, notwithstanding reductions in our relative interest rates, perhaps on the expectation that an earlier or stronger pick-up in domestic demand would keep our economies operating closer to capacity than in the Eurozone. And the yen, which had been notably weak on the back of Japanese recession, has subsequently picked up as the prospect of economic recovery there improved. It is the strength of sterling’s exchange rate which gives rise to the most vociferous complaints. I am only too well aware that for many of the internationally-exposed sectors of the UK economy most of agriculture, much of manufacturing industry, and some services sectors - these developments came as a series of hammer blows - of varying intensity depending on the particular international orientation of the business. Companies trading with, or competing against, much of East Asia, but also other emerging and transition economy markets, saw their markets collapse and prices fall dramatically given the massive falls in many partner-country exchange rates. Trade with the Eurozone - by far our largest trading partner - was also adversely affected, until recently, by sluggish domestic demand in the major Continental countries and by the weakness of the euro.
But the krona fluctuates sooner than the time it takes to revise our forecast, as is clear from what has happened. In the discussion that followed the publication of the Inflation Report it has been suggested that the Riksbank has lost faith in the krona. I think that’s overdoing it. And regardless of the forecast we presented, I see no strong reasons for altering the appraisal of what is a reasonable fundamental exchange rate in the long run, any more than there were grounds for revising the basic principles for share valuation just because stock markets had shot up to record levels a couple of years ago. That does not mean that some time in the future there could be a case for a different opinion about the exchange rate’s reasonable level in relation to the real economy. But that would stem in turn from an altered view of Sweden’s relative production potential, terms of trade or some other fundamental variable. In this context it should be borne in mind that an unduly weak exchange rate generates effects that should favour an appreciation further ahead: the balance of trade continues to be strong, corporate profits become higher than elsewhere, making Swedish shares more attractive, and so on. Calculations of the krona’s fundamental value will no doubt become topical at the latest if Sweden is to adopt the euro and we require a picture of the exchange rate that will be serviceable in the longer run.

To begin with this was perceived as just a temporary dip - a blip in the stocks cycle, a minor adjustment in the IT sector or something else. But stock markets seemed to be clearly over-valued and it would have been odd, particularly after such a long upward phase, if this had not led to a certain amount of overinvestment. There were also clear signs of insufficient saving, particularly in the United States. Consequently there were grounds for believing that once a slowdown had started, it could prove to be both relatively deep and long. Against this background, in the March Inflation Report we talked not so much about a V-shaped path as a U-shaped one or a “banana”. Since then the outlook has become darker but more of that later. For monetary policy, turns in the business cycle are not inherently a major problem, apart from the difficulty of foreseeing them. Falling resource utilisation, for example, should normally led to lower inflation in the future. That in turn can pave the way for interest rate cuts. In the past year, however, things have not been quite as simple as that. Two partly interrelated factors have contributed to this. One is inflation, which has been higher than expected and also above our target. The other is the exchange rate, which has been weaker than anticipated and also weaker than the real economy warrants. During a period in the late spring, moreover, the krona fell rather uncontrollably in the absence of similar movements in other currencies.
Risk mitigation is not new to bankers all over the world and same is true for Sri Lanka. Most of you who are sitting here this evening are professional bankers of high calibre. Banking is like swimming across waters. Bankers know how to swim. Regulators need not teach you how to do it. We can warn you of bad weathers, choppy waters, high-tides and currents that can pull you down, but we cannot swim for you. That’s why the regulators expect the shareholders, boards of directors, CEOs, senior management and all employees of banks to understand potential risks of their own operations and be ready to deal with them if such risks were to occur. Therefore, all bank officials individually and collectively are responsible for risk mitigation. Basel II seeks to balance leveraging internal risk systems with supervisory prudence. It is also a reflection of the rapid change in financial market innovations, advances in risk management and enhanced supervisory approaches. In essence, we expect from the banking profession to objectively and reliably identify risks, evaluate them and come up with appropriate risk mitigation measures. Many enterprises fail due to unforeseen risks because they have not paid attention to risk mitigation. When it comes to banking and financial institutions, we need to be much more careful, because they are the custodians of other people’s money.

The second challenge I would like to comment briefly is: what role for public authorities, and especially for central banks? The trends I just mentioned require public authorities, especially central banks, to reflect on their role to ensure that retail payments changes underway support economic growth and consumer confidence. 1) The first way central banks can help bring about such an outcome is through their catalyst role, by fostering due cooperation and coordination between stakeholders in areas where it is needed. This role needs to be played both at national and European levels. In that perspective, the new Euro Retail Payments Board (ERPB) should play a pivotal role in Europe, by gathering -under the aegis of the ECB and the NCBs of the Eurosystem- actors from the supply side and the demand side to facilitate the development of an integrated, innovative and competitive market for retail payments in euro. Works on card payments have already been carried out by the ERPB, especially focusing on the next phases of standardization, to pave the way for further action by market stakeholders at European level. Nonetheless, these initiatives have to be complemented at the national level to be effective. This is one reason why a national strategy for retail payment systems has been elaborated by the stakeholders in France last October and endorsed by the Minister of Finance.
In this context, I should also highlight that ERM II membership should not be seen as a mere "waiting room" prior to the adoption of the euro, but rather as a meaningful and flexible framework for the achievement of further real and nominal convergence with the euro area. Compliance with the Treaty in the field of central bank independence and other legislation of concern to the ECB The ECB is not formally associated with the negotiations on accession, and we have no intention to compete with the European Commission and the other entities involved in this process. On the other hand, the timely implementation of the acquis communautaire within the ECB's field of competence is of crucial interest to the ECB for a number of reasons. One reason relates to the new status of the central banks of accession countries from the date of EU accession. At that point in time, these central banks will become members of the European System of Central Banks (ESCB). Moreover, commercial banks of accession countries will also be affected by accession, and we need to know that they operate in a sound and stable legal environment. For instance, the rules of the internal market and the "single financial passport" will allow credit institutions established in an accession country to obtain indirect access to Eurosystem facilities – such as monetary policy operations and payment systems – through branches located in the euro area.

Mohd Razif bin Abd Kadir: Malaysia’s life insurance industry Speech by Mr Mohd Razif bin Abd Kadir, Deputy Governor of the Central Bank of Malaysia, at the official launch of Axa Affin Life Insurance Berhad, Kuala Lumpur, 30 January 2007. *  *  *  It is indeed an honour to be here this morning to witness the launching of Axa Affin Life Insurance Berhad. The launch of Axa Affin Life Insurance Berhad today marks an important development where two players from different financial industries, i.e. Affin Holding Bhd and Axa Asia Pacific Holding Ltd., forge a strategic alliance to attain synergy for mutual business advantage. I wish to congratulate both companies on this momentous event. Ladies and gentlemen, The financial landscape had undergone tremendous transformation in the last decade. The life insurance industry continues to sustain strong performance amidst challenges in a competitive environment. The evolution in the financial landscape saw a shift in customers' preference, emergence of more complex products and increasing diversity in delivery channels. The growing acceptance by the insuring public for financial protection in the form of insurance coverage has gained prominence especially for investment linked products which currently commands a market share of more than 40% of new business. This period also witnessed the growing importance of bancassurance as a channel for marketing life insurance products. The life business written via the bancassurance channel currently accounts for almost 50% of the new business written in the life insurance sector.
But the point I have tried to emphasise this morning is that it is just one important factor among a number of others affecting our financial systems, so that one should not perhaps expect that it would have had a dramatic overall impact – certainly not in so short a period of time. And my message is that there are many other things beyond the introduction of the single currency that we can and should do, whether from inside or outside the Eurozone to improve the functioning of our financial systems. Nationally, certainly within the UK, apart from continuing to try to find the right balance generally between competition and necessary regulation, we need also – through the authorities and the financial markets working together – to continue working to ensure that the financial system reaches those parts of the economy that are traditionally most difficult to get at, including particularly the encouragement of smaller and medium-sized businesses and new enterprises as well as community development and regeneration. Regionally, within Europe, as I said earlier, we need to work away at developing the single financial market, pressing on with the Financial Services Action Plan. Most immediately, in line with the Lamfalussy recommendations, we need to address some of the regulatory obstacles to greater integration of securities markets. And we need to encourage the markets to find more efficient solutions to trading, clearing and settlement systems, particularly in securities markets, but also more generally.

And at the very heart of that is their capacity to bring together financial resources not currently needed by their owners for expenditure on consumption or physical investment, and to channel those resources to wherever they can be most productively used – always allowing for risk. The free movement of capital, like free trade in goods and services, is an immensely powerful means of promoting efficient resource allocation nationally, regionally and globally, and as such it can make a major contribution to improving economic welfare – reducing poverty and raising living standards – which is, of course, what we all want to see. Certainly the free movement of capital, like free trade, needs to be governed by rules designed to minimise distortions and unfairness, and to reduce the risks of intermediaries being unable to honour their commitments or of broader, systemic, instability. I don't pretend for a moment that it works perfectly in practice: we could all well do without the wellpublicised institutional failures of recent years, for example, or the volatility which characterised the Asian financial crisis or the more recent "tech stock" bubble. But it is certainly the most effective means of financial resource allocation that we have so far discovered. The challenge is to make it work more effectively – more efficiently, both in terms of intermediation costs, and crucially in terms of the direction of the flow of resources – but also more reliably and securely for both savers and borrowers. This is largely down to financial markets themselves.
The focus has been on the efficacy of policy instruments needed to preserve financial stability, the structure and design of decision making frameworks and the institutional arrangements and accountabilities in regard to financial stability policies. An important part of this is that, with the accountabilities, is the need to have broad range of instruments and the policy space and flexibilities to achieve the specific financial stability policy objectives. In addition to this, for many emerging economies, an important mandate is also to develop the financial system. For most Central Banks in emerging economies, this developmental role is integral to maintaining the orderly development of the financial system and hence financial stability over the longer term. Intensified supervision and strengthened governance The global financial crisis has also prompted a renewal and further strengthening of supervisory approaches, and intensified efforts to deepen supervisory cooperation across borders. This reflects the growing significance of internationally and regionally active financial institutions. Although the risk based supervisory approach is already adopted in many countries and provides the framework for enhanced risk assessments with more informed supervisory judgments, the methods used to determine supervisory intensity may need to be regularly re examined given the continuous pace of financial innovation and changing market conditions. As more jurisdictions move to adopt more principle or outcome based approaches to regulation, ensuring rigorous and proportionate supervision, will become increasingly 2  BIS central bankers’ speeches  important to ensure prudent risk taking in the financial system.

François Villeroy de Galhau: Presentation of the 2019 Annual Report of the ACPR Speech by Mr François Villeroy de Galhau, Governor of the Bank of France and Chairman of the Autorité de contrôle prudentiel et de resolution (ACPR), at the press conference, Paris, 28 May 2020. * * * Ladies and Gentlemen, I am pleased to welcome you to this presentation of the 2019 Annual Report of the Autorité de contrôle prudentiel et de résolution (ACPR – Prudential Supervision and Resolution Authority), in the company of Bernard Delas, Vice-Chairman of the ACPR, Dominique Laboureix, the new Secretary General of the ACPR, and Alain Ménéménis, the new President of the Sanctions Committee. The circumstances are unusual and unprecedented. Indeed, we shall be talking about a year that has ended, at a time when, since then, we have found ourselves engulfed in an unprecedented health and economic crisis. We shall come back to this. In 2019 and since the start of 2020, the women and men of the ACPR have continued to work tirelessly to safeguard financial stability. I would like to take this opportunity to thank them. This morning, I shall focus my comments on an issue that cannot be ignored and that is at the heart of our concerns, without forgetting the other challenges we face – the profitability and solvency of French and European banks and insurers. I.