samchain/econo-pairs-v1 huggingface dataset:
However, this is exactly what the proposed measures on convertible capital take into account. They create better conditions, so that capital structure will have less influence on a bank’s financing costs. Independently of this finding, it is argued that the reduction of the state subsidy – which is one aim of the new regulation – will lead to an increase in lending rates for clients. There are various arguments against this. On the one hand, structural factors within Switzerland’s banking sector limit the big banks’ scope for setting prices even today: There is a sufficient  5  Cf. Modigliani, F. and Miller, M. H., 1958. The Cost of Capital, Corporation Finance and the Theory of Investment. BIS central bankers’ speeches  3  number of domestic lending providers in the market, which keeps margins relatively low. On the other hand, the reduction in the subsidy will tend to lead to even more competition. The current disadvantage suffered by other banks active in the domestic market is lessened – the package of measures thus levels the playing field in the Swiss customer business segment. In this environment, an increase in lending rates by the big banks would lead to a loss of market share. A reduction in the subsidy is therefore more likely to manifest itself in lower returns on equity or lower compensation for the bank management than in higher lending rates. Empirically, there is no connection between the capital ratio and the credit volume, either.

It would make much more sense to implement the best possible measures within a suitable time frame, in order to achieve a significant reduction in the risk to our country as early as possible. I consider that the best possible measures are those which take account of the specific characteristics and risks inherent in our banking structure and have a high impact without incurring too high a cost. The package now before Parliament fulfils these criteria. On the one hand, the proposed measures are rigorously based on tried-and-tested approaches and instruments11 which have been in existence in all developed countries for decades and whose effectiveness cannot be doubted. On the other hand, measures with great potential for unintended consequences have been decisively rejected by the committee of experts and the Federal Council, and not included in the package. Conclusion I am now drawing to the end of my remarks. The failure of a big bank would have enormous and incalculable negative implications for Switzerland – not least because a state bail-out would be unavoidable. This risk is no longer acceptable. That is why strenuous efforts have been made over the past eighteen months to find a solution to the “too big to fail” problem. The Federal Council has recently presented a carefully thought out, balanced package of measures for Parliament’s consideration. 11  6  Regulations on capital, liquidity and risk concentration. BIS central bankers’ speeches  Implementing these measures in full will make an effective contribution to significantly reducing the problem in Switzerland.
Dimitar Radev: Bank supervision and resolution within the Single Supervisory Mechanism and the Single Resolution Mechanism Publication by Mr Dimitar Radev, Governor of the Bulgarian National Bank, in the Quarterly Bulletin of the Association of Banks in Bulgaria, issue 62, October 2020. * * * As of 1 October 2020, Bulgaria joined the Single Supervisory Mechanism (SSM) by establishing close cooperation between the Bulgarian National Bank (BNB) and the European Central Bank (ECB). The accession to the SSM comes as a result of Decision (ЕU) 2020/1015, made by the ECB on 24 June 2020. With its accession to the SSM, Bulgaria also joined the Single Resolution Mechanism (SRM). The SSM and the SRM are the two currently operating blocks of the so-called Banking Union in the euro area. Accession to the Banking Union was a precondition for the inclusion of the Bulgarian Lev into the Exchange Rate Mechanism (ERM II). 1. Participation in the Single Supervisory Mechanism The SSM is the name of the banking supervision system in the euro area. It comprises the ECB and the national supervisory authorities of participating Member States. Applicable to Member States outside the euro area is the so-called regime of close cooperation between the relevant national supervisory authority and the ECB – the mechanism established for Bulgaria. The main objectives of the SSM are to ensure the safety and soundness of the European banking system, to enhance financial integration and implementation of consistent supervision.

As Bulgarian is not a member of the euro area and the ECB’s decisions have no legal force in the country, the BNB will issue individual administrative acts regarding the significant institutions upon a request by the ECB and in full compliance with it. For the purposes of direct supervision over the banks determined as significant, the BNB has appointed sub-coordinators, and representatives of Joint Supervisory 1/4  BIS central bankers' speeches  Teams who are to take part in all stages of the supervisory process. The Joint Supervisory Teams are responsible for the overall assessment of the risk, stability and vulnerability of each of the significant credit institutions. They also determine the relevant supervisory measures, as needed, including additional capital requirements under Pillar 2 of Basel II. The Joint Supervisory Teams assess the adequacy of the internal ratings of capital and liquidity, and the risks to them, the recovery plans, and the adequacy of the business model and corporate governance of each bank. With regard to prudential supervision related policy issues, the BNB’s representatives participate in other committees and structures assisting the ECB’s work in relation to the tasks conferred to it under Regulation (EU) № 1024/2013. The ECB is responsible for monitoring of less significant institutions and for the general procedures applicable to all credit institutions. Direct supervision over institutions classified as less significant is exercised by the BNB, but with full harmonization of the supervisory process with that of the ECB.
But it is increasingly accepted as the best means we have raising the sustainable rate of growth - and employment - and living standards - at the macro-economic, and international, level. BIS Review 11/2002  1  These trends together have resulted in substantial economic progress in most of the developed economies. But - and this is the third theme I would draw attention to this morning - there was growing recognition of the fact that not all countries were equally well-placed to share in the potential benefits of free markets within a stable macro-economic framework, and of the need - as a matter of self-interest and not just social responsibility - to help draw other countries in to the global economy. Emerging markets and transition economies have increasingly gained access to international capital markets. And there is an increasing emphasis on the need to help the poorest countries that are seeking to help themselves to participate. This last concern will be on the agenda of the Monterrey conference next month. Now, all of these developments have had - and will continue to have - enormous influence on the evolution of the financial environment, including bond markets internationally. Monetary stability has brought a sustained decline in nominal government bond yields in industrial countries, and a narrowing of yield differentials, which was inconceivable during much of the earlier part of my working life.

Joseph Yam: Hong Kong Institute of Bankers Beijing Representative Office Address by Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, at the inaugural ceremony and dinner, Beijing Representative Office of the Hong Kong Institute of Bankers, Beijing, 10 June 2005. *  *  *  Chairman Liu, Vice Governor Xiang, Mr Sullivan, Ms Li, ladies and gentlemen, I would like to thank the Institute of Bankers for inviting me to attend this inaugural ceremony of its Beijing Representative Office. On behalf of the Hong Kong Monetary Authority, I would like to extend our warmest congratulations to the Institute for making a major step in its development. As we all know, the savings rate in Mainland China is among the world’s highest, accounting for more than 40% of its GDP. The effective channelling of private-sector savings into fixed-assets investments is a major function of the financial system. Such is also an important responsibility of the many employees engaged in the normal workings of the financial system. The proper functioning of the financial sector, with effectiveness in financial intermediation, is crucial for the promotion of economic growth and development. Mr Deng Xiaoping once said, “Finance is very important; it is the core of modern economics.” Presently Mainland China relies preponderantly on the banking system in intermediating funds. Last year bank financing remained the most important channel for raising new funds for the non-government non-financial sector, accounting for over 90% of total funds raised.
Making assessments on the basis of long averages means that adjustments are made to take account of cyclical and temporary shocks. However, this might lead us astray. It would be incorrect to claim that the strong employment results achieved over the last ten years are exclusively due to the euro. The improvement is more likely to stem from the structural reforms implemented in the Member States over the years. A third objective of the euro was to move forward the integration of the financial markets. The results in this field are positive, but also uneven, depending on the market segment. Integration is more advanced in the areas close to the single monetary policy, but it also depends on the degree of integration of the underlying market infrastructure. The euro area money market, the segment closest to the single monetary policy, reached a stage of “near perfect” integration almost immediately after the introduction of the euro. The malfunctioning of recent months is common to all currencies. On the other hand, short-term debt securities (i.e. commercial paper and certificates of deposit) have remained much more fragmented. Financial integration has been fastest in the government bond market, where yields have converged and are increasingly driven by common factors, although local factors and perceived differences in credit risk continue to play a role. Likewise, the corporate bond segment is also more integrated as the various markets have merged into a single, yet diversified euro market.

The founding fathers of the euro knew this. Yet, we know from psychology that the first seven years of a person’s life are the most important ones and critically influence how he or she will behave as an adult. Judging from the first years of the euro, we can be confident that our currency will be up to the challenge. Thank you for your attention. 6  BIS Review 20/2009
Within a five-to-ten year time frame, I could see at least a portion of Fedwire large-volume transfers of funds and securities -- with real-time gross-settlement -- handled over the Internet. Please do not ask me exactly when this will come about. On the other hand, with potentially enormous, secure, bilateral netting arrangements occurring between clearing banks in real time over the Internet, volume on existing large-value transfer systems could decrease dramatically. The clearing banks could, conceivably, save themselves some real money. Jurisdictional Issues Any discussion of banking or any form of commerce over the Internet today would not be complete without at least a few words on the legal jurisdictional issues that the Internet presents. This is arguably the area of law most in flux, the most subject to change on a monthly or even daily basis, depending on the specific jurisdiction and long-arm statute under discussion. In the United States, cases have already been decided regarding court jurisdiction and the Internet over alleged trademark violations,14 contract disputes,15 and advertising disputes.16 Although I am as yet unaware of any banking organizations that have become embroiled in litigation over jurisdictional issues from being on the Internet, I cannot promise you that such a suit will never occur. If a State banking agency or a State attorney general decided one day that a Web-site or an Internet-based transaction conferred sufficient minimum contacts with a state resident so that the state’s long-arm statute applied to the bank, a suit could easily be filed.

Miguel Fernández Ordóñez: Global rebalancing, asset prices and policy responses Opening remarks by Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, at the Fifth High-Level Seminar of the Eurosystem and Latin American Central Banks, Madrid, 10 December 2010. *  *  *  Good morning and welcome again. More than three years after the global financial system started to show serious signs of instability and two years after being on the verge of a global economic and financial meltdown, the world economy seems to have avoided that risk, backed by a strong and coordinated policy response. Nevertheless, the strengthening has been uneven and the risk of economic and financial instability is still persistent and significant in some regions, like the euro area. Indeed, it is hard to emphasise sufficiently the challenges ahead and how crucial the present juncture is for the future of our Monetary Union. On the contrary, Latin American economies had learned the lessons from the severe financial and economic disruptions they experienced in the not so distant past, and the challenges they currently face are more similar to those that characterised the period of strong growth prior to the financial crisis. These very different sets of present circumstances make today’s exchange of mutual experiences and policy discussion particularly interesting. The title of today’s Seminar was chosen almost a year ago, but it couldn’t be more timely: Global Rebalancing, Asset Prices and Policy Responses.
So growth in capital per employee was slower from the mid 1970s, and new technology was not employed to the same extent as before. Such a dramatic change has to have consequences. This is evident in the bottom curve showing the current account, which was almost always in deficit during the 20 years after 1975 because Sweden’s saving declined even more than investment. It was only during the first half of the 1990s that a surplus was restored, as a result of a weaker krona, higher capital formation and even higher saving. Figure 1. Saving, investment(net) and the current account, as percentage of disposible income 20  15  10  5  0  -5 1950 52 54 56 58 1960 62 64 66 68 1970 72 74 76 78 1980 82 84 86 88 1990 92 94 96 98 2000 02 Saving  Investment (net)  Current account  Source: Associate Professor Lennart Berg, Uppsala University  BIS Review 56/2003  3  In order to illustrate the importance of the lower capital formation, I have compiled productivity data from the period when the marked change took place (see Table 1). In the 1980s, the lower capital growth had been established. Capital per employee - capital intensity - had been more than halved both in industry and in the business sector as a whole. Productivity growth followed this trend and was more than halved from the high growth levels of the 1960s.

All Saudi banks now provide a range of products that are compliant with Shari’a requirements and with financial engineering specifications of the highest levels under the supervision of well-reputed Shari’a committees and top class financial professionals. In the context of supporting such efforts, SAMA’s IOB has offered many programs, courses and symposia in the area of developing, marketing and supervising Shari’a compliant products. The number of bankers benefiting from those programs stood at 6,300 who participated in 374 programs during the last seven years. These endeavors have considerably helped in developing Islamic banking in Saudi Arabia without undermining compliance with Islamic Shari’a or the technical flexibility needed by an emerging and dynamic market. Dear Audience, It is very important to mention that the industry of Islamic financial services should be completely integrated into the global financial markets while maintaining at the same time its distinguished nature and unique services. The industry should also be subject to the same level of supervisory control as other financial institutions. Any breach of standards, practices or application by Islamic banks will not only be an obstacle to their services and products, but it will also serve as a hindrance to accepting their services and products by international financial markets. Consolidating a bank’s financial data with those of all its subsidiaries and branches is another principle that must be applicable to all banks, and such principle is necessary for ensuring consolidated and comprehensive supervision by the supervisory authorities in the bank’s home country.
Let me touch on five broad areas, though these cover only part of the landscape of the financial stability agenda. First, it is important that the standards applied to the largest financial institutions at the core of our financial system are calibrated to reflect their systemic relevance. Relative to the standards appropriate for a smaller financial institution with a similar risk profile, capital should be targeted to achieve a greater proportional ability to absorb shocks and thereby attain a lower ex ante probability of failure. This makes it important that management of these large firms maintain an ample capital cushion over and above the high regulatory thresholds. Similarly, the funding and liquidity management framework needs to provide a larger buffer against potential shocks. The internal risk management regime - for credit and market risk, operational risk, compliance risk - needs to meet a more exacting standard. The requirements for operational resilience for technology systems are necessarily more demanding. Because of the broader implications of a failure for the financial system and for the economy as a whole, the supervisory framework for the largest systemically significant banking organizations, as well as the firms themselves, needs to produce a higher level of financial soundness than might be indicated by measures of economic capital or expected by shareholders and creditors of the institution. This is important for banks and financial institutions built around banks because of their access to the safety net and their special role in the payments system.

On its part, the Bank will continue to support transition activities through the RM1 billion Low Carbon Transition Facility and other funds for SMEs which will complement funds extended by financial institutions to help SMEs implement sustainable low carbon practices. By 2024, we have also required all FIs to make disclosures in line with the recommendations of the Task Force on Climate-related Disclosures (TCFD). Given that such disclosures by FIs will ultimately depend on disclosures provided by their customers and counterparties, this will have implications on demands for climate-related information from businesses. Significant efforts are also being pursued to support climate risk management and transition through the Joint Committee on Climate Change, or JC3, which is co-chaired by the Bank and the Securities Commission. The JC3 serves as an industry-regulator collaborative platform to drive and coordinate the financial sector’s response to climate change. As part of efforts to scale up transition finance, JC3 is actively exploring pilot programmes to test new green solutions and instruments. In identifying suitable pilot projects, priority will be given to climate-friendly projects that can help develop the broader ecosystem for green finance, such as carbon accounting and measurement frameworks, climate data aggregators, or green credentialing standards. Another key deliverable of JC3 this year is the upcoming publication of a data catalogue that will point users to credible sources of critical climate data needed to support identified use cases.
The recent episode clearly shows that they have not been very successful, to say the least. In the current crisis it is hard to find clear regularities with respect to early warning indicators (Rose and Spiegel, 2009). Furthermore, in small, open economies, these crises can be triggered by external events on which policy makers have no control. Crises are very costly, but are also the result of innovation and risk taking, which are important for progress. Obviously we must try to avoid them, especially their propagation and amplification, with good economic policies that cushion the impact of a large global crisis, but certainly they cannot be eliminated altogether. In the extreme, to prevent global financial crisis, the economy would have to be totally isolated from the world, forbid risk-taking completely, and close financial markets altogether. Naturally this is not the best way to progress. Making an analogy with car accidents, the best way to avoid them would be to ban  6  De Gregorio (2009) argues that low interest rates are not responsible for the bubbles or for the financial meltdown, because a number of countries had neither bubbles nor financial instability (e.g., Canada and Chile), while others had housing bubbles but their financial system was much more resilient (e.g., Spain). 7  It should be noted that there were some important warnings of the risks that were being incubated. Worth singling out is the work by Raghu Rajan presented in Jackson Hole in 2005 (Rajan, 2006).

3 Under the RBC model in its more traditional versions, the economy is fully flexible and there is no role for macroeconomic policies, whereas under the NKM there are sticky prices that result in money not being neutral, which assigns a role to monetary policy. These provide the conceptual basis for the formulation of inflation-target regimes. It is important to place both types of models in their right dimension. The strategy of RBC models is to try to replicate economic fluctuations in the simplest, least distorted model possible. It originated in the attempt to use the neoclassical growth model to explain the business cycle as a result of productivity shocks, which is surely an interesting effort with theoretical consistency. These are very elegant models, but the difficulty of solving them analytically results in having to solve them using calibrations. As a result, there are often doubts regarding the values of the parameters, which in general are unobservable. To the extent that these models are free of distortions, there is no role for active monetary policies, since economic fluctuations are socially optimal. Certainly this is an attractive theoretical proposition, but it is absurd to think that this is how the world works. It will be difficult to explain the financial collapse with this type of model, because it has no frictions and provides very limited policy implications.