samchain/econo-pairs-v1 huggingface dataset:
Establishing these national contacts will also help to develop the informal networks and arrangements that may be needed in addressing other Y2K-related issues, for example, in formulating contingency measures. Finally, of course, the presence of the country pages may exert pressure on those countries where more vigorous action is needed. A blank or uninformative country listing would probably not be seen as a good sign by some financial market participants. In addition, the web pages of the Joint Year 2000 Council will also provide summaries of the efforts being undertaken by its Sponsoring Organizations as well as links to the relevant web sites. For example, reports on Y2K surveys of supervisors and regulators being undertaken by the Basle Committee on Banking Supervision and by the International Organization of Securities Commissions are planned to be made available on the Joint Year 2000 Council web site. Public papers produced by the Joint Year 2000 Council will also be available on the web site. A listing of international conferences and seminars related to Y2K will be posted on the web site, together with links to other Y2K web sites and documents. At this stage, each member of the Joint Year 2000 Council is in the process of finalizing the country page for its respective country. Last week, I wrote to every contact provided by 3  The web pages of the Joint Year 2000 Council can be reached at the web site of the Bank for International Settlements (www.bis.org).

[The chief executive of Northern Rock, Mr Adam Applegarth, in unveiling his bank’s first-half results last July, announced that “the medium-term outlook for the company is very positive,” He spoke of a credit book that was “robust”. But, who would have guessed that less than two months later, Britain’s fifth-largest mortgage lender would be fighting for its life, its branches besieged by customers demanding their savings back? The run on Northern Rock is the most dramatic symptom of the contagion gripping the financial markets. Here was a bank that had grown rich from the innovations of recent years, using abundantly stocked wholesale markets to fund its lively growth, using those same markets to offload bits of it loan book as and when they became unattractive. But the very innovations on which Northern Rock thrived have savaged its business. The company does no lending overseas. Nevertheless, its fate was determined by the distant turmoil in America’s mortgage market. When that spilled over into the securities markets, the money markets that Northern Rock had depended on for years, dried up in a single day at the start of last August. The brave new world that enabled banks like Northern Rock to grow so fast is founded on “securitization” – the process that transform mortgages, credit-card receivables and other financial assets into marketable securities – and the innovation it spawned in “structured” products. This was a revolution that brought huge gains.
In my opinion, we are now entering the third phase of the crisis, which banks are facing from different starting points, according to the extent to which they have been penalised in the first two phases. The basic characteristic of this phase will be the sharp slowdown in the most developed economies which will, in turn, be adversely affected by the global slowdown in lending. The recessionary tendencies are going to pose further problems for banks in the next few quarters although they will be more traditional, limited and familiar than those experienced so far. The factors which have given rise to such a dismal outlook as that described are diverse and have all interacted with one another. Let me present them now, merely so as not to bore you,  BIS Review 133/2008  3  as a chain of errors committed by all the agents that have participated in the financial system. To start with, the institutions that granted loans made mistakes, especially in the United States, where the originate-to-distribute model became widespread. In the United States, in the years preceding the summer of 2007, lenders granted mortgage loans against collateral (real estate), whose value rose ever higher, generating incentives to lend to individuals with the lowest credit quality.

The first step is to build the skills required at the tertiary level to ensure that the curriculum at our universities and colleges equip graduates with the relevant knowledge and skills that meet the needs of the industry. In this respect, closer cooperation between the industry's training institute and the academia will help to develop a new breed of graduates who will be much better prepared to enter the workplace. At the post-employment stage, we need incentives for continuous learning and upgrading of skills and an infrastructure that delivers the appropriate training. For the development of banking sector workforce, the International Centre for Leadership in Finance (ICLIF) was established to pave the way for the development of future leaders in the industry, while Institut Bank-Bank Malaysia (IBBM) provides the avenue for competency building among the various levels of staff. With the onset of financial liberalisation, the traditional lines of business are likely to expand into new areas and new business models. As a consequence, the skills requirements have also evolved with the growing diversity and complexity of businesses in which banks are engaged, the increasingly sophisticated customer needs, technological innovation, and the expectations for sound risk management. In this context, there is a need to analyse the essential competencies for current job functions and to anticipate future skills requirements, with a view to building a competency framework for banking and finance that is relevant to the changing financial landscape.
A second, related, factor is that even where the data has been collected, in many countries the default experience is distorted by the 1997-98 financial crisis: the question for banks is to what extent this experience should be factored into their risk management systems. A third issue is the extent to which off-the-shelf models that have been developed primarily for the US market can capture the behavioural characteristics of Asian borrowers. None of these problems are in principle insurmountable. However, they do suggest that a degree of caution is in order before banks make the leap to IRB. That is why we have been advising those banks that are considering using IRB approaches to "look before you leap." The most important consideration is for banks to make sure that their IRB systems are robust and well-founded, and that they are integrated with their overall systems for identifying, managing and controlling risk, for making credit decisions, and for product pricing. We are willing to allow banks as much time as they need to achieve these objectives. The implementation dates for the IRB approaches should not be taken as a deadline. Banks that feel they need longer to work on their systems will have our full support. Getting it right matters more than a specific date in the calendar. Looking ahead, both the regulators and the industry will continue to face many challenges over the coming months and years. Putting Basel II in place has been demanding for everyone involved, and will continue to be so.

If an AI is able to demonstrate to us that it has a better way of allocating capital against these risks than our own SRP model, then we will be open to discuss with it a corresponding adjustment to its capital ratio. Thus one aim of this approach is to give banks an incentive to come up with a better mousetrap. There will be capital benefits from having a good internal capital allocation process. 3/5  Implementation challenges I'd like to say a few words next about the implementation challenges associated with Basel II. Although preparations for the implementation of the new capital framework are well advanced in a large number of jurisdictions, including in Hong Kong, the process has not been without its critics. It has recently been claimed that too much regulation is now itself the greatest source of risk in the global financial system, and the implication that is supposed to be drawn is that regulators are somehow engaged in a self-defeating exercise. At the root of this criticism is the compliance burden that arises from Basel II implementation taken in combination with other recent developments, such as the adoption of International Accounting Standards. The first point I should make is that the timing of these various initiatives is not completely under our control: the accounting profession, for example, has tended to plough its own furrow independently of any of the banking regulators. This has been the case in many leading international financial centres, not just in Hong Kong.
Fifth, the risk of default on the country’s sovereign debt must be viewed as negligible, to ensure both that the currency is a stable store of value and that continuous, deep liquid domestic markets will be available regardless of the economic circumstances. Sixth, the country must have a credible central bank that is insulated from political interference and committed to keeping inflation low and stable – a necessary condition for a reserve currency to be a reliable store of value. I think that the U.S. dollar satisfies these general criteria. That is why over 60 percent of foreign exchange reserve holdings are denominated in dollars – a share that has been quite stable in recent years. The dollar’s share has remained steady despite the presence of a number of currencies that broadly satisfy the attributes that I have just discussed. But should the U.S. be concerned if more countries satisfy the attributes needed to be successful reserve currencies? Would it be problematic for the United States if the U.S.  BIS central bankers’ speeches  1  dollar share of foreign exchange holdings slipped over time because of progress made elsewhere? I think the answer to both of these questions is “no.” It would seem positive to me if a decline in the U.S. market share reflected the following developments: a greater number of stable and effective central banks and fiscal authorities, more investors who are reassured about countries’ institutional arrangements and financial stability, and deeper and more liquid capital markets outside the United States.

Third, the U.S. has an independent central bank – the Federal Reserve – which has been successful in keeping inflation low and stable. As a result, the dollar has been a reliable store of value in recent years. Another point in the United States’ favor is the considerable steps taken to shore up areas of weakness revealed by the financial crisis. In particular, the safety and soundness of our financial system has been enhanced. Capital and liquidity requirements for U.S. banks have been raised significantly. Stress tests have been imposed to enhance the viability of large systemic institutions even in very adverse economic and financial environments. Reforms have been enacted to facilitate the recovery and resolution of troubled institutions. This  2  BIS central bankers’ speeches  includes living will requirements for the major systemically-important financial institutions, and the development of an improved resolution regime to ensure that institutions that do get into difficulty can be resolved without disrupting the stability of the financial system. In conclusion, I welcome other countries’ progress toward achieving the preconditions necessary for their currencies to attain the stature of a reserve currency. However, we should not act as if this is sufficient to achieve a well-functioning global financial system. In particular, the current regime is inefficient in a number of important ways. Countries have found it necessary to self-insure against the risk of large capital flow reversals. This has led to a very sharp rise in aggregate foreign exchange reserve holdings.
Because we definitely think this is an important issue, and we definitely want to be helpful and use the resources we have, both in terms of research and our convening power, to try to take this forward. So, let’s have a conversation. Dr. Olajide Oladipo: Next question please. I’m still expecting a student. 10 / 15  BIS central bankers' speeches  President Dudley: Good morning. My question will be in the form of appeal. This is for small homeowners. Recently, the Fed announced about increasing the interest rate. But I don’t know how long the Federal Open Markets Operations committee will actually sit for that. But what I’m appealing for is for that period to be extended. We just came out from an economic recession. Thank God we didn’t get to the depression part of that business cycle. Many homeowners basically, particularly small homeowners, they are struggling to fix their credits. And because their credit scores are so terrible, they cannot refinance, and therefore they are locked in with high interest rates – we are talking about thousands and thousands of dollars. Banks are making money off them because they cannot refinance. If you go ahead and increase that interest rates when they are still struggling to pay what they have now, I think many will lose their homes. So, my appeal is for the Fed to please, let the current interest rates stay – give a little bit more room for small homeowners to fix their credit scores so that they can refinance.

Our stock exchange for blue-chips is located in London, our future exchange is associated with the German exchange. While technical and professional know-how are important, integrity, reputation and trustworthiness are more and more of the essence. Swiss banking secrecy has sometimes proved a source of misunderstanding and even tension in our relations with our partners. The objective of our bank secrecy is to protect the private sphere and to enhance the depositors’ confidence in the banking system. It does not aim at encouraging tax evasion or protecting funds of dubious origin. As I mentioned earlier on, an agreement on the taxation of savings has recently been negotiated with the EU. EU deposits with Swiss banks will be subject to a withholding tax whose proceeds will be transferred to the country of origin of the funds. Within this new tax regime no harmful tax competition between Switzerland and the EU will take place despite the presence of bank secrecy. BIS Review 27/2003  3  The importance we give to the integrity of our banking system can also be highlighted by our efforts made to combat money laundering and terrorist financing. Switzerland has done much in this area to protect its good name as a financial centre. Six years ago it placed its commitment to the fight against money laundering on a statutory footing. Our anti-money laundering laws serve today as reference for many countries. Let me move on to the National Bank’s monetary policy and the significance of the euro. 5.
I said some time ago that markets had an excessive negative perception of European banks. In fact, euro area bank share prices, as well as price-to-book ratios, have been rising in recent months in part in anticipation of the assessment. This would suggest that investors expect the clarity provided by the exercise to be clearly positive for the euro area banking sector. Regarding the response to the exercise, if some capital shortfalls are revealed, the private sector is today in a position to play a major part in filling them. This is more feasible than in recent years given the improvement in market conditions. Indeed, since last year banks have been improving the robustness of their balance sheets by increasing capital and provisions in anticipation of our comprehensive assessment. In this sense, the exercise is already producing results – and it indicates the willingness of banks to resolve existing problems within the sector itself. In the same vein, given the number and size of European banks, there is scope for some consolidation within the banking sector without reinforcing the so-called “too-big-to-fail” problem. Our recent “Banking Structures Report” shows that this trend is already ongoing in Europe. Nevertheless, as a last resort, confirming the existence of public backstops is important to reassure all stakeholders of the credibility of the whole assessment exercise. Conclusion Let me conclude. Although various explanations exist for the crisis, I am pleased that what I view as one of its important lessons is now being learned.

In terms of risk-weighted assets, the median Core Tier 1 ratio of the largest euro area banks currently stands at 12.7%, above their American counterparts. The majority of significant euro area banks already comply with the minimum capital requirements of the fully implemented Basel III framework. In terms of leverage – as measured by the ratio of equity over total assets – EU banks may at first sight appear to have lower ratios than their US peers, but as FDIC Vice Chairman Thomas Hoenig has showed, if the same accounting standards are applied then the median of the leverage ratios of large EU and US banks are quite similar. In terms of absolute nominal size, if we look at the 20 largest banks in the EU and the US, the EU banks now have a capital level approximately 100 billion dollars larger. 2  Gabriel Jiménez, Steven Ongena, José-Luis Peydró and Jesús Saurina (2012), “Macroprudential Policy, Countercyclical Bank Capital Buffers and Credit Supply: Evidence from the Spanish Dynamic Provisioning Experiments” Sveriges Riksbank working paper. 4  BIS central bankers’ speeches  Where euro area banks do not compare so favourably with their US peers, however, is in their low profitability and fragile investor confidence. Investors seem to be uncertain whether banks have proper asset valuations and are adequately provisioned. But this is precisely the issue the comprehensive assessment should address – it is an exercise in removing uncertainty by giving investors all the facts.
Ladies and Gentlemen In conclusion, I wish to reiterate the importance of the real estate sector in economic and social development in the country. With your contribution, and that of other stakeholders Zambia could easily achieve the national socio-economic goals in the medium term. Every economic unit needs the services of a booming real estate and construction sectors for them to contribute more to economic growth and development. In this regard, I trust that the various institutions represented here will continue to facilitate and promote investments in the real estate sector in Zambia. On our part as the Bank of Zambia, we will continue to facilitate real sector economic activity by continuing to improve the macroeconomic conditions in the country that are critical to the mobilisation and expansion of business. In turn, it is expected that other sectors of the economy will benefit and contribute to accelerated economic growth and development. I THANK YOU. BIS Review 46/2005  3

We stabilised interest rates and verbally supported a strong koruna. In a speech at Masaryk University in November 2022, I presented the conditions under which our koruna would be strong again (Michl, 2022). Although we did not raise the CNB's repo rate further to more than 7%, we managed to have a record-strong currency. The average monthly exchange rate of the koruna to the euro was the strongest ever in April 2023, reaching CZK 23.44 to the euro (for comparison, it was CZK 23.55 to the euro in July 2008). I will always be proud if we have a strong koruna during my mandate. In 2023 Q1, the strongest-ever koruna together with the highest interest rates since 1999 created the tightest monetary conditions in more than twenty years (a more detailed analysis is available in our blog post published on the CNB website today, see Adam and Michl, 2023). The strong exchange rate made imports cheaper and tightened monetary conditions also for exporters. The large ones in particular had not been influenced by our monetary policy too much until then, since they were taking out loans in euros. 1/7  BIS - Central bankers' speeches  I estimated that inflation should be below 10% in annual terms within three months. The disadvantage of measuring inflation using year-on-year changes is that prices are compared to those observed a long time ago. If we want to know current developments in inflation, we should analyse the inflation momentum.
9)  1  𝐿 = (𝜋12 + 𝜆𝑦12 ) + (1 − 𝛾1 )𝛽𝐸1 𝐿2,𝑁𝐶 + 𝛾1 (1 + 𝜁)𝛽𝐸1 𝐿2,𝐶 2  Loss function  In period 1 the policymaker seeks to minimise the traditional monetary policy goals of avoiding deviations in inflation and output from their targets, with a relative weight of 𝜆 placed on the output goal. In period 2, loss is exogenously greater in crisis states (𝐿2,𝐶 ) than in non-crisis states (𝐿2,𝑁𝐶 ). This gives the policymaker an endogenous financial stability objective of trying to minimise 𝛾1 . The policymaker also places an additional, exogenous weight 𝜁 on financial stability. 19  The authors calibrate the model largely using a range of empirical estimates for the UK from various models developed by Bank of England researchers. Importantly, the calibration interprets each time period as three years, longer than most business cycle models, where each period is typically one quarter or one year. 18  The equations determining the crisis probability are given logistic formulations to ensure that the probability is between 0 and 1. This aims to capture many real-world central bank financial stability mandates, which arguably place additional weight on avoiding very costly outcomes such as financial crises, over and above quadratic inflation and output losses present in typical monetary policy loss functions. This could be motivated via a desire by taxpayers to avoid bearing the bailout costs of future systemic crises, or a desire to avoid other distributional effects of crises.

When the krona appreciates it is thus a negative event to the extent that it leads to exchange losses that are booked in the Riksbank’s balance sheet. If these losses are too large, there is a risk that they must be covered by the capital the Riksbank has allocated for use in potential financial crises and to cover the Bank’s day-to-day operations. There is therefore reason to limit the impact of a krona appreciation on the Riksbank’s results. However, the possibility to do so is limited by the fact that we must have currency assets in order to intervene in the foreign exchange market. The need for intervention capacity in the form of foreign assets is determined by the prevailing exchange rate regime. Under a fixed exchange rate regime the central bank may need to intervene relatively often, which means that the need for intervention assets is considerable. This need is usually much lower with a floating exchange rate regime 7 . However, according to law, the Riksbank must be able to implement the exchange rate regime that the Government has stipulated for the krona, regardless of whether this is fixed or floating. This means that the currency holding is ultimately determined by the needs of a fixed exchange rate regime. At present, however, we have a floating exchange rate regime, which gives us scope to limit the currency risk. We do this by ensuring that our holdings of the important intervention currencies, i.e.