samchain/econo-pairs-v1 huggingface dataset:
This has a direct bearing on ensuring financial stability. But because Basel II is developed from the current practice among banks in developed countries, some banks in emerging markets may have a large gap to fill. For example, in moving away from collateralbased to credit-based loan approval, banks must focus more on the ability to pay of customers and to make loan decisions in a forward looking manner. This requires a different set of expertise that focuses on risk assessment in the environment changing economic cycle and asset quality. (ii)  Information system and resource and capacity building  Next is the information system which is the most important foundation for achieving financial stability through capital adequacy. Whereas developed countries generally already have in place the necessary infrastructure in this regard, financial institutions in emerging countries have to build the system from the ground up, involving areas such as data collection, storage, analysis, and ways to effectively embed the information in the decision making process. This step may take more time and effort because it involves building a knowledge base for quantitative analytical skills and ability to apply international best practices to the unique local settings of emerging market. (iii)  Involvement of stakeholders  Another difficulty in Basel II implementation is that other players in the wider financial industry will be playing more active role in the banking sector’s risk assessment.

Market-driven financial market developments need the support of critical infrastructure, namely: (1)  Information that allows efficient decision making and pricing on various asset markets, financial as well as related market such as real estate market, which are still very lacking in many emerging markets, and may be an area of public support. (2)  Legal reform to ensure enabling environment for innovation in products and business models of financial system. And  (3)  Human resource with proper competency in modern financial and risk management are scarce and is becoming a bottle neck for development. The authority may need to step in to facilitate training and accredition of professional standards, if it has external benefits. Notwithstanding these challenges, notable progress has been made by emerging markets in the past decade, much of which catalysed by comprehensive economic reform in which market-oriented economic and financial liberalization been main features. For East Asia, despite the progress made, significant gap still exists in diversification, efficiency and robustness when compared to the role played by financial markets in the developed economies. Looking ahead, in addition to the pressure from globalization, the shift in demographic structure will also be an additional pressure. This is to say some smaller emerging markets will face aging population and increase demand of wealth management, while supply of local products are limited for diversification. This will pose challenges for  BIS Review 89/2007  5  inter-temporal allocation of resource and risk.
Household net worth has rebounded from its levels after financial crisis and ensuing recession because of increases in asset values and decreases in liabilities. In fact, the financial obligation burden of the aggregate household sector, or long-term financial obligations expressed as a percentage of disposable income, is now the lowest it has been since the early 1980s. In addition to the firming in consumer spending, growth of exports was quite strong over the second half of last year. Following a few years of lackluster performance, economic growth among our major trading partners improved, providing a boost to employment and output in our manufacturing sector. In addition, a secular trend of increasing energy exports and declining energy imports is now providing steady improvement in our trade balance. Another contributing factor is that federal fiscal restraint lessened substantially over the second half of 2013. This development is in sharp contrast to the first half of the year, when the payroll tax cut expired, tax rates on higher-income households were raised, a series of taxes associated with the Affordable Care Act took effect, and owing to the sequester and the gradual winding down of foreign military operations, federal spending was restrained. Moreover, the sustained contraction in revenue, spending, and employment by state and local governments appears to be nearing an end. While overall labor market indicators for the second half of 2013 were not particularly strong, the unemployment rate did fall sharply over that period, from 7.5 percent in June to 6.6 percent in January of this year.

Here we see that the share of new mortgage borrowing by applicants of all credit scores below the highest quartile declined, while that of the highest quartile increased from about 40 percent to 70 percent. This suggests that lenders were far more selective in their underwriting standards for mortgages than they had been in the period between 2000 and 2006. Many of these powerful forces of demand and supply that together led to the decline in household borrowing, and hence to the fall-off in resources available for consumption, have either diminished or slowly reversed as the economic recovery that began in 2009 has continued. First, equity values, which dropped 51% between October 2007 and March 2009, as measured by the S&P 500 index, have recovered significantly, rising by almost 140% percent through the end of 2013 Chart 8 (Stock Market Wealth also Fell Sharply, 2nd half). In addition, as seen in Chart 9 (House Prices Peaked and Fell Precipitously, 2nd half) house prices have finally begun to recover, and have been doing so on a broad geographical basis. House prices are up 21 percent since their nadir in 2011. This has helped restore owners’ equity in their homes Chart 10 (Result was a huge decline in Owners’ Equity in HH RE, 2nd half). In sum, as seen in Chart 11 (Household Net Worth), aggregate household wealth has recovered substantially as a percent of disposable income, albeit with a lesser contribution from housing and a greater contribution from corporate equities.
It can address pockets of higher risk as they emerge, as for example the Financial Policy Committee has done in the UK in relation to consumer lending.28 It can address mechanisms in the financial system that could first encourage an overshoot in risk taking and then amplify economic downturns. 27 The ‘GDP at risk’ framework for financial stability pioneered by the IMF illustrates this point well. See International  Monetary Fund (2017). 28 See Bank of England (2017b). 14  All speeches are available online at www.bankofengland.co.uk/news/speeches  14  It can also, through rigorous stress testing of the banking sector, ensure that banks have the ability to absorb losses in macroeconomic tail events. And it can operate counter-cyclically in downturns through the release of macro-prudential capital buffers in the core banking system. Releasing buffers can have a powerful effect in a downturn by reducing the pressure on banks to cut back on lending and so avoid a credit crunch amplifying the macro-economic shock. Such buffers have been part of the macro-prudential armoury for some years now though not all jurisdictions have used them. The question perhaps is whether that buffer needs to be made more powerful in a low for long world given the greater risk of severe downturns. The macro-prudential toolkit is not complete. In most jurisdictions it is far better equipped with tools to identify and mitigate risks arising in the banking and insurance sectors than in market based finance. This gap needs in my view to be addressed.

And had Jane been living in the euro area today, in Germany for example, she would only have been able to invest for the long term at a negative interest rate – the 30 year bund yielded minus 0.27% in August. Nominal interest rates do vary through time of course. Since the Napoleonic wars and outside wartime, UK long term nominal rates moved mainly in a 2-5% range until the decades of inflation following the Second World War, during which they rose above 15%, before falling back as inflation was brought under control. They have been falling ever since. The fall in long rates is a phenomenon that has been building since the late 1980s, gathering pace after the financial crisis (Chart 1). During the past couple of months, UK long nominal rates have dropped to around, and sometimes even below, 1%. They have not been this low in the past 200 years. The same is true, more generally, for other advanced economies. 1 See Avery Jones (2019). 2  All speeches are available online at www.bankofengland.co.uk/news/speeches  2  Some of this likely reflects low current and expected inflation. But it is a great deal more than just an inflation story. Long term real rates – in the United Kingdom and in other advanced economies – are extremely low and indeed are negative. I want to look briefly today at why we are in a period of low interest rates and why we might expect it to persist – ‘low for long’ in other words.
Leah Pedersen, Senior Director at Convergence, will share more details later today. We have our work cut out for us. We have the right people in the room – leaders from the financial industry, public sector, multilateral agencies, philanthropic organisations, and global networks of expertise. Let us share our experiences and perspectives, and brainstorm ideas that we can pilot and learn from. Of course, our work will not be done in a day. We hope this conference will grow into a multi-year effort and be a convening platform for practical solutions and concrete projects to mobilise the financing required for an effective and inclusive transition to net zero and a more sustainable planet. Thank you and I wish everyone fruitful deliberations. 4/4  BIS - Central bankers' speeches

These and other propagation channels in turn, led to virtual stoppage of lending and borrowing activity in the money markets and, ultimately, a credit crunch that reverberated throughout the global financial system. For example, the crisis led to a sharp constraint on the availability of trade credit in the fall of 2008 that had a devastating impact on economic activity in emerging markets in Asia and Latin America, as well as Japan. This region felt the full economic consequences of the crisis even though banks in the region were generally healthy and far from the U.S. housing boom and bust and the subprime mortgage debacle that could be viewed as the initial spark that ignited the crisis. The crisis also underscored another area for further cross-border work: Our international approach to liquidity provision and lender-of-last-resort services to globally active institutions. Cooperation among liquidity providers, for example, through some central bank dollar swap arrangements, played an important role in stabilizing global money markets. However, the division of lender-of-last-resort responsibilities between home and host countries remained ambiguous through the crisis. This needs further attention. So what steps have been taken to address some of these sources of vulnerability? There are literally dozens of initiatives underway nationally and globally, not only in traditional bodies for such cooperation such as the Basel Committee on Bank Supervision, but also among newer international groups such as the Financial Stability Board.
William C Dudley: The outlook, policy choices and our mandate Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Society of American Business Editors and Writers Fall Conference, New York City, 1 October 2010. *  *  *  The deep recession that ended in June 2009 has been followed by a very tepid recovery. Economic activity has grown – but only slowly from levels far below the productive capacity of the economy. With demand growth barely keeping pace with firms’ ability to increase productivity, job creation has been too weak to significantly reduce unemployment, which stands today at 9.6 percent. And, as is typical in such circumstances of considerable slack, the rate of inflation has declined. Viewed through the lens of the Federal Reserve’s dual mandate – the pursuit of the highest level of employment consistent with price stability, the current situation is wholly unsatisfactory. Given the outlook that the upturn appears likely to strengthen only gradually, it will likely be several years before employment and inflation return to levels consistent with the Federal Reserve’s dual mandate. Today, I will discuss why the recovery has been disappointing and highlight some of the issues facing the Federal Reserve and monetary policy, echoing some of the themes laid out by Chairman Bernanke in his Jackson Hole speech in late August.

On the other hand, the need of private businesses to carry out new investments has been low, against the backdrop of a moderate demand for goods and services and the existence of spare capacities in production. Fiscal policy has been stimulating during 2011. For the first ten-month period of the year, budget deficit posted ALL 30.9 billion or about 33.0% higher than a year earlier. The performance of budget deficit has been determined by the sluggish increase in expenditures and revenues by an annualized rate of 3.9% and 1.4%, respectively. The stimulating fiscal  BIS central bankers’ speeches  1  policy has been winding down steadily following the first quarter of the year, as also shown by the decelerated increase in public spending and budget deficit. This fiscal stance has contributed to maintaining the level of public debt under control. The Bank of Albania assesses the latter as one of the most essential indicators of macroeconomic stability at home. In this context, we encourage fiscal authorities to take appropriate measures, in order to ensure long-term sustainability of public debt. Foreign demand has supported the Albanian economic growth, notwithstanding the concerns surrounding the global economy and especially our trading partners. Albanian exports continue to grow, albeit at decelerated paces compared with the previous year. Exports grew 27.3% in the third quarter of the year, while imports grew 8.6% over the same period. Trade deficit increased 6.8% in the first nine-month period of the year.
Changes in the compensation instrument can also help – for example, remunerating in equity is better than in cash and remunerating in junior or convertible debt might be better than either.29  (d)  Taxation/Subsidies: Authors have suggested a variety of ways in which government could penalise short-duration holdings of securities, or incentivise longduration holdings, using tax and / or subsidy measures. These measures differ in detail, but the underlying principle is to link them to the duration of an investor’s holdings or the length or nature of a company’s investment.30  Some of these initiatives have been tried and tested in differing degrees, at different times and in different countries. They have not obviously arrested the short-termism trend. It might be time to increase the level of policy ambition if the telescope is to be corrected, the voting  26  Aspen Institute (2009), CFA (2006). 27  Duruigbo (2011). 28  Securities and Exchange Commission (2010), Aspen Institute (2009). 29  Haldane (2011). 30  Aspen Institute (op.cit. ), Poterba and Summers (1995). BIS central bankers’ speeches  13  machine socialised, the savage civilised. Public policy could help keep the plums in the pudding. Without intervention, the long could become shorter still. References Aspen Institute (2009), “Overcoming Short-termism: A Call for a More Responsible Approach to Investment and Business Management”, The Aspen Institute Business and Society Program, September 9. Barton, D (2011), “Capitalism for the Long Term”, Harvard Business Review, March.

Helgi S Guðmundsson: Brief summary of the Central Bank of Iceland’s accounts Address by Mr Helgi S Guðmundsson, Chairman of the Supervisory Board of the Central Bank of Iceland, at the Bank's Annual Meeting, Reykjavik, 30 March 2007. *  *  *  Honourable Prime Minister, Ministers of the Government, Speaker of the Althingi, Ladies and Gentlemen: On behalf of the Supervisory Board of the Central Bank of Iceland I welcome you all to the Bank's 46th annual meeting and declare this meeting open. At the end of my address the Chairman of the Board of Governors, Davíð Oddsson, will deliver his report on behalf of the Board of Governors. The Prime Minister of Iceland, Geir H. Haarde, will then address the meeting. When the meeting has completed its duties, I invite those attending it to a reception. At a meeting of the Supervisory Board today the Prime Minister ratified the Bank's financial accounts for 2006 with his signature. The Central Bank's Annual Report for 2006 is published today and will be available at the end of this meeting. The Central Bank's annual accounts are compiled on the basis of rules set by the Prime Minister, most recently in December 2005. According to its profit and loss account, the Central Bank of Iceland made a net profit of 11.8 b.kr. in 2006. The profit is explained almost entirely by exchange rate gain. Excluding this, the Central Bank produced a profit of 48 m.kr. before the transfer to the Treasury.
While the lack of economic convergence among Asian economies may make an Asian Monetary Union a more challenging prospect, it is interesting to note that quite a number of governments in this region have already chosen to sacrifice some monetary policy autonomy for exchange rate stability. Hong Kong, Mainland China, and Malaysia choose to fix their exchange rates against an external currency, the US dollar, while other regional economies operate managed floats. There are indications that some economies are considering using the renminbi as a reference currency in their currency regimes, although a hard peg to renminbi is still not possible until full convertibility is achieved. It might  2  BIS Review 19/2005  also be the case that, while Asian economies are more diverse than European economies, they are flexible in ways that can compensate for the loss of independent monetary policy, for example, in their high degree of price flexibility and fast adjustment to economic shocks. It may seem premature to turn now to the technical issues surrounding Asian monetary union, but the devil is in the detail. The first set of technical issues involves the exchange rate arrangements themselves, including the transitional arrangements prior to the introduction of a single currency. For example, would Asia adopt a basket peg or choose an anchor currency? If a basket, what would be the weights for individual currencies, and would the basket include external currencies, such as the US dollar?

I hope our history will shed some light on those that view the undoing of large interventions as a cause for concern. Shortly after the collapse of Lehman Brothers, the Central Bank of Chile began reducing the policy rate from an initial level of 7.25 percent until it reached the effective lower bound of 50 basis points in July 2009. The rate remained at that level for one year until June 2010. During that period, the Central Bank also took unconventional measures aimed at providing liquidity to the financial markets. For instance, we offered financial institutions access to a term liquidity program (FLAP) at the monetary policy rate of 0.5 percent. During January 2010 we reached a peak of 6.5 billion dollars on the liquidity program, equivalent to 40% of the banking system’s capital and reserves.2 Our exit strategy from this expansionary policy was free from major difficulties. We started unwinding these special facilities in November 2009 by gradually shortening their term. As we finished dismantling our special programs we slowly began increasing the monetary policy rate to a neutral range. The withdrawal of the monetary stimulus at an appropriate pace allowed us to maintain inflation expectations at a two year horizon close to our target of 3 percent.
In several parts of the business sector, however, the shortage was greater than normal, for example in the manufacturing industry and the construction industry, and for several types of labour, for example technical white-collar workers in the industrial sector and computer consultants (see Figure 21). The fact that the shortage of labour is already so high even though unemployment is still higher than normal indicates that matching on the labour market has deteriorated. This is also indicated by the Beverage curve, which shows the relation between unemployment and vacancies. This has shifted outwards, that is a certain level of vacancies is compatible with a higher rate of unemployment. In part, this may be a cyclical phenomenon, but the change is so large that it may also relate to a structural deterioration (see Figure 22). 16  One difficulty at present is to assess whether the normal rate of unemployment has changed due to the financial crisis and economic policy. In connection with a severe downturn, the sustainable rate of unemployment (NAIRU) usually increases, at least initially. But the NAIRU will probably also be affected by the labour-market reforms implemented in recent years. Some of these reforms will probably reduce the NAIRU while others may increase it. It remains to be seen what the net result of these factors will be. BIS central bankers’ speeches  9  Repo rate level I also believe that we should take the level of the repo rate into account when deciding on monetary policy.

However, this adverse result was influenced by the negative extraordinary adjustments made during the year at some of the system’s main institutions.3 Excluding these adjustments, the sector’s profitability would be positive, albeit considerably down on the previous year, with ROA standing at 0.3% and ROE at 4.3%. The decline in the sector’s return on ordinary activities essentially owed to the reduction in net interest income and fees and, particularly, the increased provisioning in anticipation of credit impairments. Meantime, the appreciation of the euro against other currencies, particularly those of some emerging countries, has lessened the contribution made to results by business abroad, whose figures, measured excluding the exchange rate effect, have been more stable. In the year as a whole, losses due to provisions for impairment losses on financial assets amounted to € billion, up on the 2019 figure. In any event, the bulk of this increase was recorded in the first half of the year,4 and slowed significantly from June. The sector’s results were positive in 2021 Q1, albeit largely conditioned by the positive extraordinary results arising from a merger.5 These extraordinary elements aside, the 3  In particular, the two largest institutions recorded adjustments to goodwill for an amount in excess of € billion, along with other adjustments such as those linked to tax assets € billion). As a result of the approval of its merger, another institution recorded a fair value adjustment for an amount exceeding € billion in its year-end accounts, in accordance with accounting regulations.