samchain/econo-pairs-v1 huggingface dataset:
This is a reflection of the increased ability of upgraded monitoring systems to detect suspicious transactions on the one hand, and the willingness of banks to report suspicion where they see it as well as to take robust actions to mitigate the risk on the other hand. But these same developments have also resulted in “casualties” – a clear example of which is the “de-risking” phenomenon – and this has led to financial inclusion being one of the priorities for the current FATF Presidency. This is also something that we in Hong Kong are very committed to addressing. 15. The reality is that we often see institutions implementing more capable AML systems, and in that process collecting a lot more information on customers or including more scenarios in transaction monitoring. This is all good, but this may not always translate into greater effectiveness, and too often there is not a sufficient focus on answering the questions of : “Does it deliver the right results or outcomes?” And “Is the system more effective in detecting and preventing criminals from abusing the institution?” 16. So I would highlight in particular three issues as having the potential to significantly change how effective we are in this work and which are being discussed at this event. 17. The first issue is technological innovation - both in the form of financial technology and regulatory technology. Regionally, technology is making our financial institutions and their customers more connected than ever. Technology is an enabler, while it also brings risks along with rewards.

In 2022, when the oil price exceeds the cut-off level, the current account balance will return to positive territory and the accumulation of reserves will be resumed via fiscal rule-based foreign currency purchases. We do not expect a noticeable change in the private sector financial account balance over the forecast horizon. According to our estimates, the private sector financial account deficit will reduce from USD 18 billion in 2019 to USD 15 billion this year. This is linked to decline in GDP, decrease in economic revenues, as well as less possibilities for borrowing in foreign markets at the end of the first quarter — the start of the second quarter amid intensified volatility and uncertainty. Further ahead, as global markets stabilise, the potential for external bollowings will recover and this will pass through to a reduction in the private sector financial account deficit to USD 10 billion in 2021–2022. This baseline scenario, without doubt, has many uncertainty factors. They concern both the duration of the restrictions in Russia and worldwide, and the pace of recovery of the global and Russian economies. Besides, new spikes of volatility may occur in global financial and commodity markets. Therefore, in our discussions of the key rate decision and its path, we have a proper regard to the objective of sustaining financial stability. As I noted, the baseline forecast incorporates only the fiscal decisions already made by the Government. We assume that further on the situation may require additional decisions to support the economy.
In Spain, economic activity since the pandemic broke has closely followed the path marked by the introduction of the lockdown measures and their subsequent lifting. The data for the 1  See ECB staff macroeconomic projections for the euro area, September 2020. 1  first half of the year show record declines in GDP, with a 22.1% reduction relative to end2019. This fall-off is greater than for the euro area on average, owing to the fact that the lockdown measures adopted during the state of alert were stricter. And it is also because of certain structural characteristics of our economy, such as the greater relative weight of the sectors most affected by this crisis, a Spanish business sector mostly comprising small and medium-sized enterprises, and a substantially higher temporary employment ratio. The progressive lockdown-easing steps were accompanied by a gradual improvement in activity, leading GDP to grow in the third quarter at a double-figures rate following the sharp decline in the second quarter. However, we should not be led by an excessively benign interpretation of these apparently favourable figures. As I stressed, the current recovery is, across the various regions, partial in nature. But the incompleteness of the rebound is more evident in Spain than in other economies. As a result, the level of activity attained in the third quarter this year in Spain would still be some 12.3% and 9.5% below that of the same period a year earlier, according to the two scenarios recently published by the Banco de España.

That said, this increase eased to 7.2% in July. One of the key factors behind the rise in credit over these months was the progressive activation of the Official Credit Institute’s guarantee facility for NFCs and individual entrepreneurs, which proved particularly favourable to SMEs. In fact, of the € billion lent to NFCs from December 2019 to June 2020 via new lending business, € billion (41%) corresponded to guaranteed loans. As a result, the sector’s aggregate debt-to-GDP ratio has risen for the first time since 2010, to 82% in 2020 Q2 (the highest level since 2017), owing both to the increase in debt and to the decline in GDP. True, the intensity of these rises will be corrected to some extent when the GDP data for the coming quarters are incorporated. But the simulations by the Banco de España also suggest a deterioration in the financial position, measured as each firm’s net debt relative to its net assets. This would be greater in the SME segment and in the sectors most affected by the pandemic. As was the case with firms, households’ financial position improved significantly following the previous global financial crisis. At the same time, mortgage-related lending standards have been much more prudent, although consumer credit has been growing at high rates in recent years and certain groups of households have remained in a situation of vulnerability. However, household income has been considerably cut in the current crisis, owing to the reduction in hours worked and the increase in unemployment.
First I want to talk about credit derivatives and the new markets for the transfer of credit risk. Second about the revised Basel Accord and what this implies for securities firms and securities markets. And finally about the implications of the shrinking share of government bonds in issue. The Bank's financial stability role But I ought to start by saying something about the Bank's role in relation to financial stability. As most of you will know, regulatory responsibility for individual UK financial institutions is now consolidated in the Financial Services Authority. The Bank is no longer a regulator of individual firms but as a central bank we retain a vital interest in the system as a whole. We are the ultimate provider of liquidity to banks and markets. This interest is reflected in a formal responsibility for the overall stability of the financial system set out in a Memorandum of Understanding between the Treasury, Bank and FSA. Responsibility for the overall stability of the UK financial system as a whole sounds a huge and slightly fuzzy task. It requires the Central Bank to try to see the wood from the trees - to identify and assess potential shocks, to understand how risk is distributed within the system, and to look for interlinkages that might cause a problem in one institution or market to spread and trigger wider difficulties. Given the importance of London as an international financial centre, for a full assessment of UK financial stability, we must look beyond this country.

I do think, though, that it is intrinsically more difficult to standardise the definition of a credit event compared to that of a price or interest rate - the underlying for most other derivative products - where data can be taken off screens or lifted from the pages of the FT. Market participants will therefore have to pay even greater attention to documentation - reviewing new and existing transactions regularly to see whether changes in market practice might leave them with imperfect hedges or basis risks. The 1999 ISDA standard documentation was a great advance. But firms will need to review carefully transactions into which they entered prior to 1999; and, of course, documentation is valid only if both parties have signed the agreement and confirmations have been exchanged. It is not a happy position if back and middle offices are struggling to keep up with traders, in particular to deal with unsigned master agreements or backlogs of confirmations. Basel proposals I have mentioned the new consultative package from the Basel Committee a couple of times. The Bank is of course a member of the Basel Committee, alongside the FSA, and we are keen to hear views from the market on the proposals. As the second theme of my address today, I would like to discuss the possible impact of the revised Accord on securities markets and capital flows. While the Basel Accord ostensibly applies only to international banks, directly and indirectly it will have a significant impact on securities firms.
These policies included: privatisation and limiting the role of the state in the economy; increasing the flexibility of labour markets; opening-up to foreign investments; liberalisation and eliminating barriers to competition; combatting corruption and other forms of public sector inefficiency, etc. The lessons from the previous crises and the EU accession experience are the major factor why emerging Europe is showing such resilience and flexibility now. These are the main reasons why the region has been weathering the current crisis relatively better than the rest of the continent. The case of Bulgaria: using growth to save for a rainy day By way of illustration, let me focus on the experience of Bulgaria. My country went through a severe banking and financial crisis in 1996–1997, when one third of the banks went bankrupt. There was hyperinflation and the confidence in the national currency vanished. That prompted the introduction of a very conservative monetary regime, the currency board, in July 1997. After that, inflation and interest rates went down swiftly and sustainably. Since then the Bulgarian economy has been growing in an environment of practically non-existent exchange rate risk, with highly flexible labour markets, hard budget constraints and fiscal discipline. The ratio of public debt to GDP fell from 105% in 1997 to 16% in 2010. The currency board arrangements are and will be our main anchor of stability and predictability till the euro adoption.

This is also true for most of the other countries in the region as well. As the crisis unfolded, the quality of assets deteriorated with NPLs reaching 11.9% by December 2010 (up from 2.4% at the end of 2008) but sufficient capital buffers were preserved. The banking system continued to make profits despite the rise in non-performing loans and the subsequent increased provisioning. Today the average capital adequacy ratio  BIS central bankers’ speeches  3  exceeds 17%, with Tier 1 capital adequacy above 15% and overall liquidity ratio of around 24%. That is not the case in the most developed markets. Beware of superficial announcements It is equally important to stay aware of the consequences of speculative public speaking and bad communication. Despite even the most prudent policies and sound financial fundamentals, stability may be put at risk by repeated negative superficial public comments. Let me tell you now that an important share of our work during the crisis was devoted to monitoring and promptly reacting against the numerous ridiculous statements that were coming from abroad, even from international financial institutions of good reputation. That is why two months ago the Bulgarian National Bank organised a seminar for the local media where we presented a “Top 30” list of failed doomsday scenarios and forecasts made by foreign and Bulgarian observers since 2008. The Greeks are well aware how the accumulation of adverse market sentiments may lead to “self-fulfilling prophecies”. And a few words on the so-called “Greek” banks in Bulgaria.
And are the authorities in the latter countries prepared to relinquish the responsibility for an essential part of their financial system to the home country of the parent bank? These are not just abstract issues, as can be seen from the fact that Nordea, domiciled in Sweden, is now the largest bank in Finland and that Swedish banks own the major part of the banking systems in the Baltic states. Thus, it seems that the supervision of international bank groups could lead to problems of coordination and duplication. On the whole, there appears to be no lack of incentives to supervise cross-border banking operations. The problem is rather that in certain cases the rule system prevents the most active countries for exercising supervision, so that this is liable to fall between two stools. On the other hand, an excessively generous right to supervise can lead to the burden of supervision being unduly heavy for individual banks. That could hamper integration as well as efficiency. Formalising crisis management is more difficult than other parts of the work on stability. Discussing crisis management can be perceived as sensitive and troublesome because to some extent it concerns the state’s willingness to assist the financial sector with liquidity. The dividing line between whether or not this should be discussed openly often runs between countries that have experienced a financial crisis and those that have not. Those which have lived through a crisis are generally in favour of a transparent process.

Ardian Fullani: Cooling down the liquidity situation in Albania Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the 6th Vienna Economic Forum, Regional Cooperation – Challenges and Chances: "20 Years after the fall of the Iron Curtain", Vienna, 9-10 November 2009. *  *  *  The argument the organisers have found is very relevant, particularly when it comes to central banks of the Western Balkan. Actually, as far as I am informed from my colleagues, constrained liquidity (especially in foreign currency) and lending tightening are two fragile points, which may put us in a difficult position in the months to come. This set of two arguments carries over a dual problem: the short-term one, which puts banking system stability at risk, while providing its own implications even on the economic activity and on macro stability in a broader sense. The second problem is related to the financial support of the country’s economic activity in the future, given the recent years, when lending to the economy has constituted one of the main contributors in this regard. So far I deem that we have been effective in short-term management of these problems. Similarly to the European Central Bank and other central banks of the developed countries, we (the central banks of our region) have succeeded in supplying the market with ample liquidity, combining a variety of operational tactics and instruments.
[12] The non-life sector would also see a material capital release. Some insurers strongly question whether our proposals do in fact loosen the regime overall in this way, and we will need to look at this carefully as the consultation closes. Part of this is about transitional arrangements, which we think we could come to in any discussions about implementation. But another important area of difference appears to be what assumptions should be made about how much longevity risk is re-insured off-shore into other jurisdictions in the future. [13] We have assumed that roughly half of longevity risk is off-shored in this way, consistent with the current stock on the balance sheets of the sector. Some insurers argue that we should assume something much higher, such as 90%. Although this is the current practice for some insurers for new business, in steady state we are not convinced that we should build a regime that bakes in such very high levels of off-shoring across the industry. Baking in such an approach sector-wide could create concentration risks around a few reinsurers and an excessive dependence on other countries’ regimes which are not designed with UK policyholders primarily in mind. Page 9  However, this debate on capital impacts is clearly an important one and we will study carefully the evidence and data which insurers provide in response to the consultation, in order to inform our view. Second, the current structure does not particularly incentivise insurers to invest in the sorts of productive assets the government wishes to encourage.

It is true that people who get their pension from an insurance company which fails should have some protection from a compensation scheme which spreads the cost of failures across the industry, but we should not underestimate the risks to them, the industry and the public purse of a major failure – we need to be sure that the basis on which pension promises are  Page 5  made is solid. What have we learnt about the Matching Adjustment since its invention? Given its size and the very important role in plays in our economy, it might surprise some listeners to learn that the MA is a relatively recent invention. It only came into force in the UK as part of the EU’s implementation of Solvency II a little over six years ago. Before that we had for many years allowed insurance companies to take some capital benefit from future returns – the MA took the basic idea of this older regime, and through the process of EU negotiations turned it into a new form. In many ways the EU’s MA has done its job well over those six years, but our experience of seeing it in action has made us worry about three things: First: the past may not be a good guide to the future. I explained that the MA allows insurance companies to recognise as capital up-front part of the income they expect to earn on their assets in the future.
The broader point is that everyone needs to have confidence that the Fund is fair and impartial in the way it goes about its work. Surveillance needs to be free from any perception of bias if it is to be credible. This is sensitive territory. Members are prohibited from attempting to influence staff as they discharge their functions. But present arrangements offer plenty of scope for misperceptions. There is a fuzzy boundary between legitimate concern for the quality and relevance of surveillance and improper pressure on staff to fudge difficult issues or water down unpalatable conclusions. A surveillance remit would clarify the boundaries between staff and members without sacrificing accountability. The role and performance of the Executive Board is clearly a critical issue. Putting to one side the long-running debate about the case for shifting to a non-resident Board, there is ample room for modernisation and improvement. Could the conflicts inherent in the MD’s dual role be more transparently managed? And could the Board refocus it own efforts to better support the wider surveillance agenda? Last year, for example, it spent just 5% of its time mulling over multilateral surveillance issues – at a time when global imbalances and energy prices were headline news. Finally, reform is a process not an event. The structure, processes, incentives and culture of an organisation whose core activity is surveillance are likely to be significantly different from one whose primary focus is on lending to countries confronting financial crises.

The growth and integration of financial and capital markets has been even more spectacular, especially over the past 20 years. Financial openness – defined as the ratio of external assets and liabilities to GDP - has risen seven-fold for both groups of countries. Second, the dramatic rise of new economic powers has been simultaneously adding to global productive capacity, and changing the balance of world trade and economic activity. The entry of China, India and Eastern Europe into the global market economy has effectively doubled the world’s supply of labour. The sheer scale and speed of economic development in China alone has been quite without precedent. After 25 years of double-digit growth, it is now the world’s fourth largest economy, having overtaken the UK this year. Its share of world trade has more than doubled over the past decade, making it the third largest trading country behind the US and Germany. Increasingly, a small group of industrialised countries will no longer dominate the world economy in the way they did 30 years ago. Measured at market exchange rates, the G7 still accounts for 60% of world output. But if current growth differentials persist, this share will fall to 40% within the next 20 years. And if output is measured using purchasing power parities – to give a higher, and arguably more accurate, weight to relatively cheap non-traded goods and services in emerging markets - the G7 world share has already fallen to that level. Emerging markets are already a major force in the world economy.
This is anything but a typical recession, and it has called for a new set of measures to address the economic consequences of the virus. Amid all the change we’re experiencing, you can be assured of one thing: our unwavering commitment to limit the economic damage from the pandemic and foster conditions for a strong and sustained recovery. 1 See Board of Governors of the Federal Reserve System, Federal Reserve Issues FOMC Statement, March 3,  2020; and Board of Governors of the Federal Reserve System, Federal Reserve Issues FOMC Statement, March 15, 2020. 2 See Board of Governors of the Federal Reserve System, Federal Reserve Issues FOMC Statement, April 29,  2020. 3 See Board of Governors of the Federal Reserve System, Federal Reserve Announces Extensive New Measures  to Support the Economy, March 23, 2020.

What we don’t know is what the shape or timescale of the recovery will be. It’s going to be some time before we have a clearer view of the effects on other industries, including autos, higher education, manufacturing, and professional services. Our Response Despite this extraordinary uncertainty, at the Federal Reserve we worked quickly to put measures in place to support the economy and set the foundation for a strong recovery. During the first half of March, the Federal Open Market Committee (FOMC) brought the target range for the federal funds rate to near zero.1 The FOMC has indicated that it expects to keep interest rates at this level until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.2 Bringing interest rates down to near zero serves two purposes. First, low interest rates make it easier for households and businesses to meet their borrowing needs. Second, they foster broader financial conditions that will help promote the rebound in spending and investment needed to return the economy to full strength. The New York Fed The New York Fed has important and unique responsibilities in supporting liquid and wellfunctioning financial markets. Working alongside our colleagues in the Federal Reserve and other agencies, we are taking rapid and significant actions to supply liquidity and to stabilize critical parts of our financial system.