samchain/econo-pairs-v1 huggingface dataset:
These include, for example, commercial real estate. Risk premiums on these securities have been pointing in a clear upward direction of late (cf. graph 2). The same development can be observed for US corporate bonds. However, by historical standards, the delinquency rate on credit card loans remains at a very low level, even though it rose in the third quarter (cf. graph 3). 2  BIS Review 150/2007  Graph 2: Risk yield premiums on commercial mortgage-backed securities 2  Graph 3: Delinquency rate on credit card loans 3  6%  5%  4%  3%  2%  1%  06  05  04  03  02  01  00  99  98  97  96  95  94  93  92  07 20  20  20  20  20  20  20  20  19  19  19  19  19  19  19  19  19  91  0%  The second risk is that the excellent economic environment in which we have operated until now might deteriorate. Of particular note here is the global economy, which so far has proved to be extremely resistant to the sub-prime crisis. The same applies to the stock markets. Save for a few corrections, they have held up fairly well since the middle of the year.

In this respect, the measures announced by UBS, which are aimed at strengthening its capital base, are to be welcomed. The fact that UBS has been able to attract a large and internationally recognised Asian investor for this purpose serves  4  BIS Review 150/2007  as an illustration of one of the ways in which globalisation of financial markets has been to our advantage. BIS Review 150/2007  5
It is instead a qualitative judgement about the credibility and feasibility of the different types of resources of a CCP to absorb loss and replenish its going concern requirements. CCPs have different liability structures from banks and therefore the assessment of the absorbency of these structures and the appropriateness of additional forms of LAC is more likely to be different from banks than it is to be the same. That assessment of LAC will need to consider the extent to which unfunded commitments from members can be relied upon given the procyclicality of calling for them in stressed circumstances. It means assessing the credibility of allocating losses via cash calls or variation margin haircutting and the incentives that this generates in clearing members and clients to continue to clear through the CCP. And it also means looking not just at loss absorbency for clearing member default but also at the CCP’s capacity to absorb losses and recapitalise where a loss springs from operational or other losses not covered in full by loss allocation arrangements with its members. Point of entry to resolution One issue that is necessarily intertwined with the question of resources is the point of entry into resolution. As I have described, resolution is a financial reconstruction. For it to be effective it cannot be exercised only once the financial resources in a firm have already been exhausted.

Often these barriers are consistent across firms. Perhaps most notable is the requirement for loss absorbency – establishing a liability structure for G-SIBs that is consistent with bail-in, not bail-out. Again, there has been significant progress here. The Financial Stability Board (FSB) issued a consultation document 2 on a minimum standard for Total Loss Absorbing Capacity (TLAC) last November and is committed to producing a final standard ahead of the G20 summit next month in Antalya. This will be a major step on the road to ending “Too Big to Fail.” Additionally, we need to pursue the same TBTF agenda for other types of G-SIFIs, in particular central counterparties (CCPs). I want to spend some time today talking to what – if anything – can be taken from the resolution of banks that is relevant for CCPs. Context for CCP resolution CCPs form a key part of the global financial landscape. They have become ever more important since the crisis. This will continue as mandatory central clearing is introduced around the world. Addressing the systemic risks associated with over-the-counter (OTC) derivatives markets is one of the reasons why G20 leaders introduced mandatory central clearing. People tell us that we have thus created in CCPs concentration risk and critical nodes. This is true in part, but we did this on the basis that in CCPs risks could be better recognised and identified, better managed and reduced via better netting.
Jan F Qvigstad: On managing wealth Speech by Mr Jan F Qvigstad, Deputy Governor of Norges Bank (Central Bank of Norway), at the Norwegian Academy of Science and Letters, Oslo, 8 November 2011. The text below may differ from the actual presentation. This speech does not contain assessments of the economic situation or current interest rate setting. *  *  *  I would like to thank Amund Holmsen, Marie Norum Lerbak and Øystein Sjølie for their valuable assistance in preparing the speech. Thanks also to Ola Peter Krohn Gjessing, Espen Henriksen and Pål Winje for useful comments. I would also like to thank Helle Snellingen for her contribution to the translation of the Norwegian text into English. Introduction From Norges Bank we can see the corner of the two streets Tollbugaten and Kirkegaten. This is where the Collett building was situated until 1939 when it was dismantled and moved to the Norwegian Museum of Cultural History at Bygdøy. By then, the Collett family had not occupied the building for years and their wealth was long gone. Around the end of the 18th century, John Collett made a large fortune in the timber industry. He also ran the great Ullevål farm and by the time of his death in 1810 he was managing one of the country’s largest wealth portfolios. Collett was also known to spend extravagant amounts on lavish parties. The Napoleonic Wars and the English blockade took a heavy toll on the family business.

Consumers themselves would be more risk averse and prefer to stick with simple transactions and products. As mentioned already, regulatory framework would be strengthened, especially the use of macroprudential oversight that focuses on system-wide stability. As such, closer supervision of systemically important financial institutions, including non-banks, would be required. Finally, the microprudential oversight would also be strengthened to rectify previously identified shortcomings, particularly the Basel II framework, corporate governance, and incentive misalignment. Though it looks as if we could be in the process of creating a “new world order”, given what we have done so far in strengthening our financial sector resilience, I believe that this transition would be a smooth one and add further strength to our financial system. Needless to say, a strong financial system is the backbone of sustainable economic growth in the longterm. Thank you for your attention. 4  BIS Review 131/2009
In the light of experience of this practice, consideration can later be given to do the same for the minutes of meetings of the EFAC. Accountability 26. The third area that requires attention in the political process of monetary management concerns the accountability of the HKMA. Here again, there are certain characteristics peculiar to Hong Kong. Unlike arrangements in other jurisdictions, the HKMA, as the institution responsible for issues generically called central banking, is not a body established by law. The legal entity is the Monetary Authority, as a person, appointed by the Financial Secretary to assist him in the performance of his duties under the Exchange Fund Ordinance. I have the honour of being the person who has been so appointed. That means I am accountable to the Financial Secretary for my actions when exercising the authority delegated to me by the Financial Secretary under the Exchange Fund Ordinance. The Financial Secretary is advised by the EFAC appointed by the Chief Executive of the HKSAR, whose authority has been delegated to the Financial Secretary. 27. It is through the Financial Secretary that the Monetary Authority is accountable to third parties, and the form this takes is determined by the Financial Secretary. If the Financial Secretary wants me to appear before the Legislative Council and formally present a report to the Council every six months, as suggested by some, I am quite happy to do so. But the Financial Secretary must of course make an assessment of whether the implications of such a practice are acceptable.

It would be naive to think that we can be right all the time. Nobody can be. We can only be less wrong. But more importantly, public support should not be built merely upon faith in an esoteric and aloof BIS Review 87/1998  -3-  HKMA being professional and acting in the best interest of Hong Kong. Whatever reputation the HKMA has been able to achieve, domestically and internationally, such support could never be sustained for long. We do run a system that, at times, inflicts considerable pain on the community. Many of the decisions taken by the HKMA are unpopular. The pain and the unpopular decisions may become too severe to bear just on the foundation of faith, particularly in the peculiar political setup of Hong Kong. 11. An essential part in the management of the political process concerning monetary issues, therefore, is to promote a better general understanding on those issues. This is not easy. Not only are those issues technical, but they are also changing all the time with the rapid changes in the global financial scene. Financial liberalization and the globalization of financial markets, encouraged by the advance of telecommunications and information technology, have drastically changed the behaviour of money. On top of all this, we have the complication that Hong Kong’s monetary system has really only started to take shape in the past ten years or so, as monetary reform measures were introduced to modernize it so it could cope with the demands and expectations of modern finance.
Aggregate labor market statistics on earnings, employment and labor market transitions are readily available, yet relatively little is known about the expectations and search behaviors of labor market participants and how these change over time. Our SCE Labor Market Survey collects rich information on respondents’ actual and expected wage offers, as well as their reservation wage, which is the lowest wage or salary they say they would accept for a new job. We also elicit expectations about future labor market transitions, such as the likelihood of staying with the same employer, switching employers, finding a job or being laid off. Over time, changes in responses to these questions can shed light on how workers’ expectations evolve, and how these changes relate to observed trends in aggregate earnings and employment dynamics. Our preliminary analyses of the data suggest that these expectations measures are predictive of respondents’ subsequent labor market outcomes. In coming years, as we generate a longer time series for the survey, we will be able to explore whether the expectations we collect can be used to construct leading indicators of the job market. Now, I’d like to turn things over to our economists, beginning with Olivier Armantier, who will provide further background and specifics about our survey. 1 Olivier Armantier, Giorgio Topa, Joseph Tracy, Wilbert van der Klaauw and Basit Zafar assisted in preparing  these remarks. 3/3  BIS central bankers' speeches

5  In addition to New Zealand and Norway, the central banks in Sweden, the Czech Republic and Israel currently publish interest rate forecasts. In addition, the Federal Reserve publishes the individual interest rate forecasts of the members of the Federal Open Market Committee (FOMC). 6  Norway’s sovereign wealth fund (the “Government Pension Fund Global”) is managed by Norges Bank Investment Management (NBIM) and is invested in international capital markets. 7  For details on our institutional framework, see Qvigstad, J. with I. Fridriksson and N. Langbraaten (2013): “Monetary policy committees and communication,” Norges Bank Staff Memo 2/2013. BIS central bankers’ speeches  3  [Chart:Timeline: The first years of Norges Bank forward guidance] In 2004, we started to publish our first quantitative guidance in the form of a “strategy interval” for the key policy rate four months ahead. In November the following year, we published for the first time our own interest rate forecast for the next three years. Prior to that, we had established and published criteria for an appropriate interest rate path. 8 Up until November 2005, the analyses and forecasts in our reports had been based on either a constant interest rate path or an interest rate path as implied by the forward market. At this point however, our conclusion was that it would be easier to interpret, evaluate and communicate our view of the economy when it was based on a path for the interest rate that we considered to be appropriate.
The US Federal Reserve has been most prominent in this connection, conducting a far-reaching review of its operational framework. In this connection, I am of the opinion that the ECB should launch a similar exercise. Among other factors, it should reflect on a clarification of our quantitative price stability objective, in order to align it with the specific definitions of other developed countries’ central banks and provide for better communication and anchoring of agents’ expectations.10 The latest Annual Report of the Banco de España, to which I referred earlier, analyses the most favourable and least favourable aspects of several possible strategic options in this area. 9  See P. Lane (2019), “Policy and Below-Target Inflation”, address delivered at the Bank of Finland on 2 July 2019. See Chapter 3, “Monetary policy design in the medium and long term”, in the Annual Report 2018, Banco de España. 10  10/16  The contribution of non-monetary economic policies is pivotal That said, the participation of non-monetary economic policies is essential for shoring up the recovery, entrenching higher growth rates and, thereby, smoothing convergence by inflation towards its medium-term reference. The need to create a fiscal stabilisation instrument in the euro area Recent experience has highlighted the difficulty of achieving a more appropriate macroeconomic policy mix for the euro area as a whole under the current framework of rules and institutions in which European fiscal policy operates. In the euro area each country decides its fiscal policy.

However, the adverse effects have spread to many other economies through global value chains. The euro area, in particular, has slowed significantly since early 2018. This is mainly due to the strong easing in its exports. As a result, average GDP last year grew by 1.8%, 0.7 pp down on 2017, and year-on-year growth in late 2018 and early 2019 fell to around 1%. The euro area’s high degree of openness (its trade flows with third countries account for 50% of the area’s GDP, compared with 38% for China and 28% for the United States) means it is particularly sensitive to external shocks and to the slowdown in world trade. Moreover, the above-mentioned uncertainty over Brexit has prompted a contraction in exports to the UK economy in recent years. Also contributing to the slowdown in growth in the euro area have been specific circumstances in certain sectors and countries. I refer in particular to the difficulties the automobile industry is undergoing in adapting to the new environmental regulations, to new production technologies and to protectionist threats. 2  For a summary of this literature, see, for example, A. Estrada, J. Martínez-Martín and F. Viani (2018), “Una revisión de la literatura económica sobre los efectos de la globalización en el crecimiento y la distribución de la renta”, Notas Económicas, Boletín Económico, 2/2018, Banco de España.
Furthermore, the FSM Bill would extend current Bank and FCA regulatory regimes for payment systems and e-money to cover the use of ‘stablecoins’ for payments. The Bank will have responsibility for any such payment systems which are systemic or likely to become systemic. The Bank intends to consult early this year on the regulatory framework that will apply to such systemic payment systems. The PRA’s intention is that new standards for PRA-regulated firms will be coherent with rules for other sectors. 14. ‘Implementing Basel 3.1 in the UK – speech by Phil Evans’, 07 December 2022. 15. For clarity, I note that tailoring must always be carried out in a way that is consistent with the PRA’s objectives and ‘have regards’. 16. Financial Services: The Edinburgh Reforms. The PRA is contributing to reforming the Ring-Fencing Regime for banks, removing rules for the capital deduction of certain non-performing exposures held by banks (the PRA will consult soon on removing these rules), a review into reforming the Senior Managers & Certification Regime (the PRA published an ‘Evaluation of the Senior Managers and Certification Regime’ in December 2020 and will soon issue a discussion paper with the FCA in coordination with the Government), changes to the Building Societies Act, and work on a potential UK retail central bank digital currency. 17. PRA Consultation Paper 16/22 – ‘Implementation of the Basel 3.1 standards’, November 2022. Page 10 18. ‘Fundamental Spreads − speech by Sam Woods’, 20 February 2023. 19.

It is also one reason why aligning with international standards - when they are appropriate to the UK makes Britain an attractive place for international firms to do business  We will tailor our rules to the UK Alignment with international standards leaves considerable scope for national authorities to make decisions about specific rules, and about risks not covered by those standards. So I’m going to move on now to explain another important way we can harness the UK’s strengths as a global financial centre. That’s by tailoring rules to UK circumstances. [15] This is something we work hard at. We are working alongside the Government to implement changes announced in December as part of the Edinburgh Reforms. [16] Meanwhile, we have used UK data to propose adjustments to some calibrations in the package of banking rules known as Basel 3.1 which we think would be overly conservative if applied here. That includes rules about unrated corporate borrowers, which form a very important sector of the UK economy. [17] We’re consulting right now on those Basel 3.1 proposals. So this is a good time for me to stress something important. That is that we are very open to evidence-based arguments about how we might change the tailoring we’ve suggested, or tailor other rules. In stressing this, I have in mind particularly some areas where the evidence is sparse, such as for infrastructure lending, or incomplete, such as for capital requirements for exposures to SMEs.
The government has a direct interest in an efficient insolvency and resolution framework So the stakes are still high for the government in a banking crisis. While owners have little to lose when capital is low, and many creditors are protected by the deposit insurance, the state – and the whole economy in the end - may at worse suffer enormous losses. Therefore, unlike the situation in ordinary companies, the lack of an efficient insolvency regime will not primarily be a creditor problem only, but a problem which will fall right into the government’s lap. And if the insolvency framework is not efficient and cost effective, it may be rational for the government to intervene beyond the ordinary regulatory framework. If there is no other way to deal with the problem, it may even be rational to contribute capital directly. This may be the case even if such an investment cannot be justified on the basis of a corporate capital investment appraisal. The alternative of not intervening may simply be very much more expensive. Now, if this intervention by the government makes the owners and creditors better off than they would have been otherwise, the rules of the game change completely. If owners and creditors can speculate on a bail-out, market discipline will be eroded. Clearly, this needs to be avoided. And the conclusion is that, if anything, it is even more necessary to have effective and efficient insolvency and resolution frameworks for banks than for companies in general.

But I think that it is also clear that in some severe situations, a different framework will need to be applied. In case of an epidemic disease, such as the avian flu, there may be a need to direct those infected to separate hospitals. And it may be necessary to establish an order of priority for the allocation of the scarce medical resources. One where the guiding principle may be the survival of the society as a whole. It may also be the case that the crisis regulations clash with the normal regulations. For instance, you are normally not entitled to take a sick day if you are actually healthy. Now, even healthy people may be asked to leave their offices to avoid the disease from spreading, while the key employees may be asked to go to work to keep the operations running. When the principles clash, it will be vital for society that the ones needed to contain the epidemic will prevail. And if that special framework is not already in place, the politicians will need to get involved. Clearly, a bank failure cannot be compared to a serious injury or sickness in terms of personal suffering. But it can be an event which will make many people’s lives very difficult. And a systemic banking crisis, like an epidemic, may stall the functioning of our entire economies. It is therefore important to be able to deal with an ordinary bank failure as well as a more serious systemic crisis.