samchain/econo-pairs-v1 huggingface dataset:
I see a need for us in the authorities to explain the issues of market-based valuation to the general public. I also support the international recommendations to only gradually introduce the new market valuation principles for certain items, such as some assets and bank liabilities. I have taken you on the journey from old-fashioned regulation to a modern banking system. Let me end with a few concluding remarks. Concluding remarks The development in Sweden from a highly restricted and limited financial system to a system which is quite open and flexible took more than twenty years and is still going on. The financial services sector has now become a source of strength to the overall economy. We found, and we paid a high price for this experience in the form of the crisis, that the correct way to move is to go gradually and carefully, but not too slowly because you then lose momentum. The side effects of your actions must be considered in advance and mitigating measures may be needed, for instance in updating legislation and other regulations or the capacity and mandate of the authorities. Modernising the financial system requires considerable effort and but it is well worth the price. Simply put: The industrial and service sectors of any economy can not run and develop smoothly and efficiently unless supported by a modern financial sector. In my presentation I have focussed on the domestic aspects of having a sound and developed financial system.

There are also rapid developments in these in the form of volume growth but also in new or improved activities and instruments. BIS Review 111/2006  5  The insurance sector which was as restricted in its activities as the banks during the regulation years has grown strongly in Sweden after deregulation, both for non-life and life insurance products. The demography of Sweden is such that we have an ageing population. Thus savings for retirement, for instance in the form of pension schemes, have become increasingly important. Some of the insurance companies are owned by banks, forming financial conglomerates, but others are independent. Mortgage banks have always played a strong role in Sweden. Most of them are owned by the major banks, but a few remain independent. The banks themselves are also allowed to extend mortgage credits so there is open competition. The market for mortgage loans is highly competitive because the product is simple and comparable so it is difficult to argue for a higher interest rate. Credit market companies, leasing companies, factoring companies, and card companies provide specialised financial services. Some of them are linked to the bank groups while others are independent. Many of them are quite small. Equity and bond markets and exchanges for specialised products such as derivatives have grown tremendously both in volume terms and in terms of offering a wide variety of instruments ever since the first Treasury bills were issued in Sweden in the early 1980s.
The left-most observation (labelled "Aug. 2016 no stimulus") is a counterfactual version of the August 2016 Inflation Report forecasts with the effect of the MPC's Bank Rate cut, Term Funding Scheme and Asset Purchases removed. See ’Lambda’, speech by Mark Carney at the London School of Economics, 16 January 2017, for further details and discussion. 19  16  All speeches are available online at www.bankofengland.co.uk/news/speeches  16  Initially, the Committee judged that balancing the trade-off between ensuring a sustainable return of inflation to target and supporting jobs and activity would require significant additional monetary support. It therefore implemented a timely, coherent and comprehensive package of easing measures, 20 which was reinforced by actions taken by the Bank’s other policy committees, most notably the FPC’s cut of the CCyB rate. 21 Collectively, these measures helped ensure domestic financial conditions remained supportive even as uncertainty rose – a contrast to usual experience. Despite this support, as well as much stronger-than-anticipated global growth and more supportive fiscal policy, UK growth significantly underperformed the MPC’s projections ahead of the referendum, which were conditioned on a vote to remain.

2/3  BIS central bankers' speeches  I am also very happy to note the Association’s launch of the MSB App this evening —- which will provide consumers with convenient access to price comparisons, locations of MSB companies, customer reviews, and avenues to lodge complaints and report illegal MSB activities. This App reflects an increasingly digitalised society and business environment where demands for greater transparency, convenience and consumer engagement have become the norm. The MSB App is a great example of how financial technology, or fintech, is changing how customers experience financial services. The possibilities are almost boundless as we are discovering through Bank Negara Malaysia’s recently launched “fintech hacks”. This is a project where we are inviting the public to submit ideas to improve financial services. Let me mention some of the suggestions we have received in the area of money services. Allow tourists to exchange their unused foreign currencies for e-money that can be used to make purchases at any airport merchant worldwide. Develop a peer-to-peer currency exchange app that will allow travellers to meet up and exchange currencies. Provide an app that will allow individuals to book and pay for foreign currencies using their mobile phones, and have the currencies delivered directly to them. And enable e-KYC for remittances. These represent opportunities for MSB companies to innovate and continuously improve on products and services that are meeting the needs of today’s consumer.
Ladies and Gentlemen, the Conference is a dissemination and consultation forum aimed at presenting and reviewing the findings of a study on “Women’s Access to Financial Services in Zambia”. This conference is therefore a platform for reflection and consultation among various stakeholders present here today. Bank of Zambia recognises that an insight into the Women’s Access to Financial Services is critical to overcoming existing barriers to financial inclusion and devising appropriate strategies for empowering the women to realise their full economic potential and contribute to as well as benefit from the economic growth that the country is enjoying. It is in this regard that the Bank of Zambia commissioned the study on “Women’s Access to Financial Services in Zambia”. I invited New Faces New Voices to replicate the study on “Women’s Access to Financial Services in Mozambique” that was conducted for the Central Bank of Mozambique in 2013. Ladies and Gentlemen, Specifically, the study is expected to provide in depth understanding on the following two perspectives: 1. Understanding gender perspectives on usage of financial services; levels and trends, sources of finance; formal, semi-formal and informal, financial products provided; credit, savings, insurance, remittances, mobile banking and other financial products and services. The regional distribution; rural versus urban and the awareness versus  BIS central bankers’ speeches  1  understanding and perceptions of access to finance, the constraints, opportunities for financial education, financial decision making process, and household dynamics that confront women. 2.

There are a number of reasons that a financial conditions framework is likely to be useful when evaluating the economic outlook and the conduct of monetary policy. Most important, monetary policy works its magic through its effect on financial conditions; it does not operate directly on real economic variables. That is because the level of the federal funds rate influences other financial market variables such as money market rates, long-term interest rates, credit spreads, stock prices and the value of the dollar, and it is these variables that influence real economic activity. 1 This means that if the linkage between the fed funds rate and this broader constellation of financial indicators is not stable or completely predictable, then knowing what is happening to the fed funds rate is not sufficient to predict economic activity. The instability of the linkage between the fed funds rate and financial conditions indicators means that these indicators provide additional information about real activity and also are relevant in deciding the appropriate fed funds rate target. In contrast, if the transmission mechanism from the fed funds rate to financial conditions and onward to real economic activity were completely predictable, then there would be no need to focus on financial conditions as an intermediate target variable. The level and path of the fed funds rate matters, but it also matters how this gets transmitted to the real economy through the financial sector.
49  As part of its project to disseminate information about the central bank to various target groups, the Reserve Bank of India has made several comic strips for the benefit of school children. See http://www.rbi.org.in/financialeducation/Home.aspx. 50  See article “Bergen fikk Bislett Games 2004 (The 2004 Bislett Games goes to Bergen)”, NTB, 6 October 2003. 51  A more detailed explanation was probably available but was not included in the media coverage. 52  My predecessor, Jarle Bergo, delivered a speech a few years ago where he presented a mathematical equation that illustrated the assessments underlying our interest rate setting (see “Interest Rate Projections in Theory and Practice”, speech at Sanderstølen, 27 January 2007). I remember that we were uncertain about the reactions to this. My Swedish colleague Lars Svensson had recommended that such a target function be published in the interest of transparency, but no central bank had ever done this before. There was no firstpage news of the type “this equation determines the interest rate”. Our “bold step” proved to be fairly undramatic. It would seem that this is really the rule rather than the exception every time we have moved towards greater transparency. Bergo’s lecture was included in the curriculum of economics Professor Michael Woodford of Columbia University in New York. 53  Norges Bank Watch 2008 writes: “Norges Bank should facilitate a more open discussion regarding the empirical performance of their (mechanical) forecasting models by communicating the role played by the “judgment component” more clearly.

Simplifying somewhat, the former view was that monetary policy operated effectively by surprising economic agents. Today, economic theory posits that monetary policy works best if it is predictable. I will come back to the economic theory, but allow me to start by some changes in society at large. Transparency of economic policy The economic crisis in the 1930s shattered confidence in free market forces. Markets had to be controlled. The British economist John Maynard Keynes was working on ways of regulating and improving markets. Prominent Norwegian economists, with Ragnar Frisch at the fore, went even further. They advocated that the market economy must be replaced by a planned economy. Ambitions were high. One could almost say that transparency, in carefully selected portions, was a tactical tool. 7 It reached a head in 1973 when a commission led by  4  Preben Munthe (1994): “Økonomen (The Economist)” in Jan. F Qvigstad, Sigbjørn Atle Berg and Kjell Storvik (eds. ): Stabilitet og langsiktighet: festskrift til Hermod Skånland (Stability and a long-term perspective: Festschrift for Hermod Skånland), Aschehoug, p. 73. 5  See for example Alan S. Blinder, Michael Ehrmann, Marcel Fratzscher, Jakob De Haan and David-Jan Jansen (2008): “Central Bank Communication and Monetary Policy: A Survey of Theory and Evidence”, in Journal of Economic Literature, 46, no. 4, pp. 910-945 and Petra M. Geraats (2002): “Central Bank Transparency”, in The Economic Journal, 112 (November), pp. F532-F556.
The second is the belief that the ability of the central bank to act with speed and force to mitigate the effects of financial crises is substantially greater if responsibility for the monetary policy and lender of last resort instruments that are most critical in crises is combined with authority for bank supervision and payment system oversight. The confidence to make quick judgments about liquidity and solvency – judgments that are central to effective decision making in a crisis – is significantly enhanced by our direct involvement in the supervision of the core institutions of the U.S. financial system. Put another way, we are more comfortable managing the moral hazard risks that are inherent in having the capacity to respond to systemic financial crisis if we have a direct role in assessing the appropriate level of capital and the overall risk profile of the institutions that are the most likely sources of systemic financial distress. The rationale for this integrated model is closely related to the belief that our financial system works better without combining in a separate, single entity supervisory authority over banks and non-bank financial institutions and responsibility for market regulation. The special role of banks in the economy, the special nature of the risks in the types of intermediation they provide, and their access to the safety net justifies a different type of supervision and a different relationship to the central bank than would be appropriate for non-bank financial institutions.

This pragmatic case for independence is valid regardless of the economic context of the country at issue. It is compelling in countries that face the challenge of ending a period of high inflation, but also in countries that have achieved a sustained period of low inflation. It’s important for mature economies and for emerging markets. It is important regardless of the nature of the monetary policy and exchange rate regime, and the nature of the mandate given the central bank. The choice of regime – adoption of an inflation targeting framework, or the use of an exchange rate target as a nominal anchor, for example – may help improve credibility even for central banks that are not independent. But credibility is likely to be higher across different regimes where the central bank is truly independent. It will be higher, for example, for independent inflation targeting central banks, than for inflation targeters that are not independent. To say that the benefits of independence are essentially universal, however, doesn’t mean they are equivalent in magnitude across different contexts. Where credibility is most vulnerable and the memory of default and high inflation more recent, the benefits of institutional independence for the central bank are likely to be substantial. The academic literature provides reasonably strong empirical support for these arguments in favor of central bank independence. Independent central banks do, in fact, do a better job of achieving price stability.
The Swedish banks have had comparatively minor loan losses and provisions since 2008. But there is nothing to say that the banking sector will not be affected more severely next time. Allow me to use a rough estimate to give you an idea of how a crisis can impact the banks’ equity. In 2007–2010, 35 of the largest banks in the EU had loan losses and provisions of about SEK 350 billion. Today, these same banks have Common Equity Tier 1 of about SEK 780 billion. So if we incur similarly large loan losses in the next few years, about 45 per cent of the banks’ Common Equity Tier 1 would disappear. 4  BIS central bankers’ speeches  The important point here may not be the exact amount of the total loan losses – the estimate has been, and still is, uncertain. The important point is that, in such a situation, confidence will be a hard currency. Uncertainty over the banks’ resilience affects confidence. When confidence is undermined, the banks’ funding disappears. For the Swedish banks, this could be particularly devastating. Other countries with large banks have more stringent regulations than Basel III Earlier experiences, not least from the latest financial crisis, have also been studied by other major banking countries. Authorities in these countries wish to proceed faster and set higher requirements than the minimum standards of Basel III.

So transposed to Swedish conditions, around SEK 2 000 billion is at stake. This happens to be in the same order of magnitude as the balance sheet total of three of the four major Swedish banking groups. And, of course, this kind of shock to the national economy would not spare the country’s citizens in their role as taxpayers. Financial crises impact severely on the public treasury. A recently-presented British investigation – the so-called Vickers report – shows how the  BIS central bankers’ speeches  1  financial crisis, since 2007, has increased the United Kingdom’s public net debt by about 100 per cent of GDP. Basel III is strengthening the system’s airbags… The crisis of recent years has made us painfully aware of the financial system’s vulnerability and its importance for the real economy. The need for bigger and better airbags is obvious. These lessons lie behind the global Basel III agreement. The most important areas of Basel III deal with the quantitative requirements for capital and liquidity being placed on the banks. …with a substantial amount of equity… The Basel Committee’s analysis has concluded that the banks need substantial resilience. The crisis has shown the risk of considerable losses. So capital requirements are being increased in Basel III, above all for Common Equity Tier 1.1 The minimum requirement for the banks’ equity is being set at 4.5 per cent of riskweighted assets – more than double the requirement under Basel II.
This is particularly pertinent to the Distributed Ledger Technology 2/3  BIS central bankers' speeches  platform for trade finance that we are building with the industry. This is why we have earlier announced a collaborative initiative with Singapore in this area. And I am also very pleased to note that HM Treasury and the HKMA have just started a dialogue to explore further cooperation under this project. Green Finance If I am asked to predict what will be an emerging theme for the financial services sector in 2018, green finance looks like a safe bet. Green finance is growing rapidly and Mainland China has become one of the major markets for green bonds. Hong Kong is also keen on tapping into the green finance opportunities. The Hong Kong Government plans to issue a green bond for the first time next year. There is much we can learn from and collaborate with London, which has been a forerunner in this segment of the market. One of the burning issues is the divergence in various green bonds standards and assessments currently in the market. I hope today’s Seminar could shed some light on this and also the way forward for green finance development. Conclusion The future is not all rosy though. Challenges and uncertainties abound and this calls for stronger cross-border collaboration. The success of this Forum in the past six years shows that London and Hong Kong can be an all-weather friend. And I wish all of you a very fruitful discussion today. Thank you.

Since the start of the year, there have been signs of stabilisation in the offshore RMB liquidity pool in Hong Kong, now hovering at around RMB 600 billion. On the other hand, our RMB RTGS system continues to record a high volume of turnover of some RMB 900 billion per day, indicating that a large amount of RMB financial intermediation activities have been taking place in Hong Kong. July this year, the HKMA and the People’s Bank of China jointly launched the Bond Connect. It provides an additional channel for international investors to gain access to the vast bond market in Mainland China, using international common practice in securities settlement and custody. This is made possible thanks to new infrastructure linkages between HKMA’s Central Moneymarkets Unit and relevant onshore institutions. So far, over 200 investors have successfully registered as Bond Connect investors, holding some RMB80 billion Mainland bonds. Daily turnover averaged RMB2 billion per day. This is not bad in four months’ time, but we foresee considerable headroom to grow further. The investment thesis is compelling – Mainland China’s solid economic fundamentals, RMB internationalisation, inclusion of RMB bonds in major indices, etc. And from an investor’s perspective, the nominal yield of around 4% on 10-year government credit is simply attractive. The Stock Connect schemes have been running smoothly and next year, A-share will be included in the MSCI Emerging Markets Index, which is tracked by some $ trillion in assets. This will be a big boost to Stock Connect trading.
As I have already noted, under the current circumstances, making any projection is a very challenging task. The key factors in play are the economic outlook and the rise in interest rates. The performance of the financial system in 2023 will be shaped by how these factors interact. On the one hand, the European banking system is currently in a strong position. We have also observed robust profitability in H1 2022, taking advantage of higher interest rates, especially in Q2, resulting in a 5% increase in net interest income, the highest quarterly increase in recent years. Spreads of non-financial corporations increased by 14 bp in H1 2022, compared to 4 bp for households, due to more issuances and faster repricing. Although profitability has increased,7 RoE remains heterogeneous across business models and countries. Investment banks and corporate/wholesale lenders lag behind other business models. The biggest improvements were recorded for diversified lenders. Moreover, although we have not yet observed any significant increase in deposit rates, it is clear that we will soon begin to see an increase in deposit remuneration. This will also have an impact on margins. 6  https://www.ecb.europa.eu/stats/ecb_surveys/bank_lending_survey/html/ecb.blssurvey2022q2~ce6d1a4597.en.html# toc5 7  Only one business model (small market lender) has seen a fall in profitability, although it remains the most profitable model. 5  Meanwhile, although impairment flows are still low, we expect this trend to change as the economy slows down and disposable household income falls due to inflation.

Nevertheless, while the financial system is robust enough to navigate these troubled waters, prudence will once again guide banks to a safe harbour. This is not a financial crisis, but rather a mix of geopolitical, energy, trade and, above all else, humanitarian aspects that will require firm decisions in order to avoid greater evils. 6