samchain/econo-pairs-v1 huggingface dataset:
As a result of this analysis, and having found it less necessary in the current setting than in the past to reinforce our accommodative monetary policy stance through net asset purchases, the ECB Governing Council decided that monthly net purchases under the Asset Purchase Programme (APP) would amount to € billion in April, € billion in May and € billion in June. This means reducing the monthly volumes for May and June compared with those agreed in December. We also agreed that the calibration of net purchases for the third quarter will depend on developments in, and our assessment of, the economic outlook. In parallel, given the current extraordinary uncertainty, we underlined the data-dependent nature of our decisions and increased flexibility and optionality in the use of instruments. First, we pointed out that we will adopt whatever measures are necessary to fulfil the ECB’s price stability mandate and to safeguard financial stability. This allows us to provide certainty to all economic agents about our commitment to these objectives during a particularly uncertain time. Second, we explicitly stated that, if in the coming months new data support the expectation that the medium-term inflation outlook will not weaken even after net asset purchases have stopped, we will end net asset purchases under the APP in Q3. However, should the medium-term inflation outlook change and should financing conditions be inconsistent with continued progress towards our 2% target, we stand ready to revise the net asset purchase plan in terms of both its amount and its duration.

So we are seeing many different effects emerge at the same time across the whole world. The likelihood of a recession has thus risen considerably. What is your expectation for economic growth? Our latest projections put euro area growth at 0.8% for this year. But that is now out of date. We will certainly have to adjust our projection significantly downwards. Below 0%? We don’t know yet. The greatest uncertainty is how long the crisis will last. Originally, many economists thought that there would be a short, sharp crisis and that things would subsequently pick up again quickly. It very much depends on how quickly the spread of the virus can be contained, but also on the economic policy reaction. You have done intensive research on financial crises of the past. Is there any crisis that was similar? The current situation cannot be compared with the 2008 financial crisis. That crisis originated in the financial system. Today we are looking at a shock to the real economy that is affecting many countries at the same time and for that reason is so devastating for the global economy. If we want to draw a comparison, we should look at other pandemics. The Spanish flu? Yes, for example – that pandemic was indeed devastating. The precise figures are not known, but between 20 and 100 million people died back then. Now we are in a much better situation. First, medicine is much more advanced.
Yet the most notable thing is that, despite these difficulties, we have succeeded in keeping the Libor around the middle of the target band. This is, after all, what counts for the implementation of monetary policy. So neither the current criticisms levelled at the Libor nor the actual movements in the Libor are an immediate reason to dispense with this rate as the operational target of the SNB. Conclusion Let me briefly conclude. Despite clear signs of a return to calm, the money market has not yet gone back to “business as usual”. The Libor/TOIS differentials continue to indicate a certain degree of tension. The various waves of turbulence also show how difficult it is to predict what will happen next. Central bank actions have helped to defuse the situation. Nevertheless, they can only treat the symptoms of the malaise, or fever. An effective cure and the restoration of confidence between market participants are primarily a matter for the banks themselves. The SNB’s tools – its medicine cabinet – have so far proved their worth during the turbulence. Yet the crisis provides a reason to review and where necessary adapt them. For central banks, it is important to consider, not just the immediate effect of an instrument, but also the longer-term repercussions. Thanks to their monopoly in issuing currency, central banks can engage in almost unlimited short-term intervention when markets and market participants are threatened with collapse. However, such extreme measures carry high risks for the longer term.

This is the first time in 60 years or so that a sovereign crisis has hit the developed world, the rich world, not the developing one, the hardest. To demonstrate that: almost 80% of all the IMF’s rescue loans have gone to Europe! Over 40% have gone to the Eurozone itself, and the share is going to rise. The developed world is not accustomed to this. 3. This time the problem of sovereign debt has appeared at a time of peace and prosperity. 4. Moreover, the Eurozone – a monetary union without a state – is a completely new, unprecedented arrangement. Typically, the solution to such a crisis used to be: inflation, default or monetary reform, very often accompanied by currency devaluation, or a combination of all these. Please note that typically when the IMF organizes a programme for a developing country, it requires a partial default or devaluation to disburse funds. Nothing like that is possible within the Eurozone – monetary solutions are unavailable for the weakest sovereign links. And only default remains. Or, of course, a bail-out, i.e. shifting the debt burden from some countries to others. But, history seems to suggest quite clearly that without some form of debt reduction (or default, if you wish) it will be really hard to get sovereigns functioning normally again. Are there any OTHER alternatives? Yes, either very fast growth or slow deleveraging. The first option is possible, but unlikely. The second option might mean not one, but two “Japanese” lost decades.
Coupled with a sizeable fiscal impulse, both types of actions were successful in delivering the stimulus needed to counteract the shortfall in aggregate demand, stabilise output and initiate the economic recovery. Unemployment in both jurisdictions, which had spiked in the early phase of the crisis, levelled off and began to decrease. 1/7  BIS central bankers' speeches  At this point, however, the euro area entered the second phase of the crisis, causing its growth trajectory to diverge substantially from that of the United States. It experienced a sovereign debt crisis in 2011–12 which was unique among advanced economies. Fears about the sustainability of the sovereign debt of some euro area Member States triggered a sharp widening of sovereign spreads and introduced the fear of redenomination risk: that some countries would revert to national currencies, invariably weaker ones, and thus leave the euro area. Moreover, banks in some countries came under intense scrutiny over their domestic sovereign holdings and some national banking systems completely lost access to wholesale funding markets. Private investment contracted as the cost of capital rose and uncertainty spiked. The fiscal stance in the euro area shifted from expansionary to contractionary as governments acted to restore market confidence. The euro area entered a renewed recession. The second phase: unique institutional challenges The ECB responded to the sovereign debt crisis with various new monetary policy measures, such as our long-term lending operations, and even began purchasing sovereign bonds under the Securities Markets Programme.

Yet there is an effective limit to lowering rates since ultimately this conflicts with the ability of citizens to hold cash. Therefore some scholars have called for the imposition of electronic money and the abolition of cash. As I have discussed at length elsewhere, I see serious problems with such an approach.8 It risks gambling with central banks’ credibility at a time when credibility is paramount. And perhaps even more importantly, it denies the crucial social function of cash. Another option proposed by some observers is for central banks to raise their inflation objectives and therefore to lift equilibrium nominal rates. Leaving aside the debate about the costs of higher inflation, I am not sure that this idea is entirely convincing. The reason is that the mechanism through which it works is the signalling channel – people expect higher inflation, so inflation rises. But at a time when inflation is low everywhere, and when central banks are running very accommodative monetary policies just to achieve that, one can question whether such signals would really be credible. I see a risk, in fact, that changing our strategy to rely on fuzzy concepts and unobservables would only end up damaging our credibility. So what we need today, in my view, is to shift the debate away from its narrow focus on monetary policy. Rather than concocting more and more innovative solutions for central banks to get around the lower bound, we should focus instead on what other policy areas can contribute.
Mr Carse discusses the importance of ethics in banking  Speech given by Mr David Carse, Deputy Chief Executive of the Hong Kong Monetary Authority, at the Banking Conference on Business Ethics in Hong Kong on 15 September 1999. *  *  *  Ladies and gentlemen, I am pleased to have the opportunity to speak today at this important conference on business ethics. This is an area that is becoming a growth industry, and it is one that it is particularly relevant to banks given the position of trust that they occupy. Indeed, this is one of the daunting things about giving a speech about the importance of ethics in banking. It all seems too obvious. After all, what do we mean by ethics in business? It means, I would suggest, trying to be a good corporate citizen; trying as an organisation to adhere to certain ethical values; and trying to do the right thing by all the various stakeholders – customers, employees, suppliers and shareholders – that any business organisation has. It means, as one writer has put it, “choosing the good over the bad, the right over the wrong, the fair over the unfair”. Put this way, is there any respectable bank that would claim not to attach high importance to core ethical values such as honesty, integrity, fairness, responsible citizenship and accountability? Is there any bank that would claim that it was right to accept bribes in return for loans, to lend to connected parties and to cheat customers?

The board of directors has an important role to play in establishing the overall culture of an organisation. It is also the ultimate body for resolving the type of complex ethical dilemmas I referred to earlier, and ensuring in particular that the reputation risks in new business strategies or products are carefully addressed. I hope that this conference and my speech, have demonstrated that high ethical standards in banks are neither a luxury nor an abstract ideal. Rather, they are a vital aspect of protecting and enhancing the bank’s brand image, and ensuring its long-term business survival. Behaving ethically is not only the right thing for banks to do, it also makes sound business sense. BIS Review 98/1999  4
Nonetheless, the NPL ratio can be an imperfect indicator of the effect that non-productive or problem assets may have on a bank’s solvency, since it does not take into account the asset collateral or the provisions set aside. The so-called Texas ratio, an approximation to which is  2  According to data for Spain from the EBA 2015 transparency exercise (consolidated data, significant institutions). With data for business in Spain, drawn from individual financial statements, the related ratio for the resident private sector in Spain stood at 10.4% in December 2015. BIS central bankers’ speeches  3  illustrated in Chart 4, offers a much broader view in that it also includes in its calculation the provisions and capital available to the bank. Chart 3  Chart 4 TEXAS RATIO PROXY (a)  NPL RATIO  1.6  %  30  1.4  25  1.2  20  1.0  15  0.8 0.6  10  0.4  5  0.2  0 UK  DE  FR  EU Avrg. SSM Avrg. (a)  ES  DECEMBER 2014  PT  IT  IE  JUNE 2015  0.0 UK  DE  FR  EU Avrg. DECEMBER 2014  ES  SSM Avrg. PT  IT  IE  JUNE 2015  SOURCE: European Banking Authority. Transparency Exercise 2015 (104 institutions). SOURCE: European Banking Authority. Transparency Exercise 2015 (104 institutions). a. The SSM average includes data on 15 of the 19 euro area countries.

This concerns a quite substantial segment of the European banking sector. Consider that almost 70% of banks supervised by the SSM have not issued listed shares, 59% have not issued convertible bonds and 18% do not have subordinated debt on their balance sheets (see Chart 5). Many of these banks will foreseeably have to make adjustments to their business model, to align it to the change in size and composition of bank balance sheets required under the new regulations. Chart 5 SSM SIGNIFICANT INSTITUTIONS BY OWNERSHIP STRUCTURE 100% 90% LISTED  80% 70% 60%  COOP. and SAV.BANKS  • 59% have not issued any AT1 instrument (e.g. convertible bonds)  50% 40%  STATE OWNED  30% 20%  NON-SSM PARENT  • 18% have not issued any T2 instrument (e.g. subordinated debt)  10% OTHER  0% SOURCE: Banco de España  3. Possible responses by the banking sector  Macroeconomic and regulatory developments support the increasingly widespread perception that there is excess capacity in the European banking industry that will heighten competition and jeopardise the viability of those institutions least able to adapt to the new environment. BIS central bankers’ speeches  5  3.1  Efficiency  Naturally, credit institutions’ first line of defence is to gain in efficiency. In recent years, as observed in Chart 6, cost-to-income ratios across the European industry have not appreciably improved in the different banking systems and they remain significantly heterogeneous. That suggests there is considerable room for improvement.
Controls over the rating system  Of course, a ratings system is useless without the necessary system of checks and balances, or control structure, which is the second area I will discuss as needing banks’ attention. Banks must have the proper controls in place to ensure that the rating system is performing as intended, and that its ratings are accurate - that is, that a "5" rating really is a "5" and that a "7" really is a "7." There are at least three major structural elements that are necessary in any good ratings system control structure: •  The first is independence in the process of assigning ratings; the people assigning ratings (and even approving loans) should be independent of the marketing department and revenue producers. •  A second check is having a subsequent review of ratings by an independent review group. This group is charged with reviewing ratings after the fact - that is, after origination - for accuracy, timeliness and consistency. Moreover, both the ratings system and individual ratings should be subject to review by the internal audit department. •  A third and final critical element is transparency in the ratings process. Here, what we would expect is that the ratings criteria are objective, and that the bank has in place policies and procedures that clearly document the rationale for each ratings category. The more transparent the process is, the easier it is for a third party to audit the ratings through some form of replication of the analysis.

These three elements - independence of the ratings process, internal review of those ratings, and transparency - all contribute toward stronger controls over the ratings process. Such controls over the risk ratings process must be complemented by the collection of good data on which to base those ratings, which is the third area of focus for banks. c.  Data requirements and validation  Clearly, a system is only as good as the inputs that go into it. Accordingly, banks using the IRB approach will need to be able to measure the key statistical drivers of credit risk. I would emphasize that the Basel Committee clearly recognizes that there is more than one way to accomplish this purpose. The minimum Basel standards provide banks with the flexibility to rely on data derived from experience, or from external sources, as long as the bank can demonstrate the relevance of the external data to its own exposures. Regardless of source, high quality data are critical for formulating meaningful internal risk assessments. From a broader risk management perspective, access to such  BIS Review 15/2003  3  data will enable a bank to evaluate the performance of its internal rating and risk estimation systems in a consistent and meaningful manner. The Basel standards outline the data history banks will need in order to use the IRB approach. The Committee recognizes that banks may not currently have all of the required information on hand.
Ravi Menon: Monetary Authority of Singapore's Annual Report 2019/20 Remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at MAS' Annual Report 2019/20 Virtual Media Conference, Singapore, 26 July 2020. * * * Good morning, and welcome to MAS’ first virtual media conference for the annual report. I hope everyone has been keeping well. GLOBAL ECONOMY Let me begin with the global economy. There are three points I’d like to make. The world is facing an unprecedented economic situation. The outlook is highly uncertain. Recovery will be uneven. The world is facing a public health crisis and a consequent economic crisis. The COVID-19 virus has now spread to all corners of the world. Measures necessary to contain the pandemic – lockdowns, movement restrictions, border controls, and safe distancing – have brought many economic activities to a grinding halt. We are now in the midst of an economic recession without modern precedent. The global economy contracted nearly 14% q-o-q [1] in the first quarter of 2020 – this is almost three times deeper than the sharpest decline seen during the Global Financial Crisis. The contraction in the second quarter is likely to have been even deeper, since this is when economies outside China were most severely affected by the virus and shutdown measures. The policy responses to the COVID-19 crisis have been equally unprecedented – in scale and in speed. Governments injected massive fiscal stimulus, estimated on average to be twice the fiscal impulse in 2009.

Likewise, digital banking has become the norm. A rapidly growing volume of financial transactions in our banks are now performed digitally – be they account opening, signing up for credit cards, or receiving wealth advisory services. A private sector survey of retail customers [8] released earlier this month noted that: 70% of respondents have used online banking frequently since the start of the pandemic. 80% of Singaporeans agree that they will continue to bank online even after the pandemic dies down. Businesses too are making greater use of online financial services and channels. MAS is pleased that our financial institutions are stepping up their digitalisation efforts despite the challenging economic environment. The take-up of the Digital Acceleration Grant that was announced in April as part of the $ million support package has been very encouraging. More than 350 financial institutions and FinTech firms have applied for the grant to adopt digital solutions to strengthen operational resilience, improve productivity, and better manage risks and engage customers. We are also pleased that the FinTech sector is alive and kicking despite COVID-19. FinTech firms in Singapore have raised $ million in equity funding in the first half of this year, 19% higher than over the same period last year. This is further boosted with $ million in M&A. That this was achieved at the height of the COVID-19 crisis demonstrates investors’ confidence in the long-term value FinTech firms will create. We now have an estimated 1000 FinTech firms in Singapore, compared to 600 last year.
Speech by Mr William A Ryback, Deputy Chief Executive of the Hong Kong Monetary Authority, at the Macro Prudential Supervision Conference: Challenges for Financial Supervisors, organised by the Korea Financial Supervisory Commission / Financial Supervisory Service and the International Monetary Fund, Seoul, 7 November 2006. *  *  *  Ladies and Gentlemen, I am pleased to be here today to add my thoughts to this important discussion on emerging insights into the macro prudential end of the supervision business. I also am pleased to be back in Seoul one of the most dynamic cities in Asia and to be hosted by my friends in the Korean Bank supervisory community - many of whom I have known for a number of years. It is almost ten years from the financial crises that affected many parts of Asia. This conference then is being held at an opportune time to allow us to reflect on the lessons learned. There has been considerable change over the last decade. Risk management in the regions banking systems’ have become more robust. There has also been a step-change in the standards of supervision. Risk-based supervision has replaced compliance checking. There are also now moves under way to improve regional cooperation on issues like Basel II implementation, in which EMEAP will continue to play a leading role. Clearly, no financial system can be considered stable unless the individual institutions that comprise its whole are themselves healthy.

Carlos Massad: New economy, old cycle? Remarks by Mr Carlos Massad, Governor of the Central Bank of Chile, in a panel discussion organised by the Bank for International Settlements, Basel, Switzerland, 10 June 2001. * 1. *  *  Introduction  The new economy involves changes: faster and cheaper communications, higher labor productivity, savings in the supply chain in the business to business sector, and improvements in inventory control. It also involves growing integration of world markets. As a counterpart, we are experiencing increased volatility in stock prices and terms of trade. Krugman has gone even further, to assert that “growing 1 integration does predispose the world economy to more crisis” . What are the consequences of these changes on emerging market economies? Furthermore, we Central Bankers have faced many changes, and must be prepared for changes, whatever their source. How should these economies respond to those changes? These are critical issues today for almost every emerging economy. 2. Any impact on the real economy? Globalization of international financial markets over the last decade, a by-product of cheaper and faster communications, has led to an increase in asset return correlation around the world. Swings in the Dow Jones, NASDAQ and in fixed rate instruments lead to adjustments in portfolio decisions the world over that have implications for the real economy. The higher the correlation of returns, the lower, on this ground, the incentive for short-term capital movements.