samchain/econo-pairs-v1 huggingface dataset:
Bringing the issue up to date, this is why there are clear benefits to banks if they issue contingent convertible capital instruments with a trigger point that is safely above the point at which there is likely to be a question mark as to whether the bank remains a going concern – in other words before it is too late. Also, holders of these instruments have to be very clear that they are at risk of conversion or write-down. We cannot have a situation where holders gamble on an assumption that the trigger will not be pulled – it will. 1  2  Canada introduced the “asset-to-capital” multiple in the early 1980s. The definition pre-crisis was defined as on and some off-balance sheet exposures as a ratio of total capital. Generally, this was set at the assets being no more than 20 times the total capital amount. However supervisory discretion could permit a higher multiple (up to 23 times) if the firm met certain conditions. In the US a minimum everage ratio was introduced in the early 1980s. Pre-crisis, the definition used was Tier 1 capital/on-balance sheet assets, as measured under US GAAP. Firms had to meet a 3% ratio if considered “strong”, and 4% otherwise.

Basel II was first published in June 2004, though it was not widely implemented prior to the outbreak of the financial crisis in 2007. It introduced the concept of “three pillars”: Pillar I, minimum capital requirements; Pillar II, supervisory review which enabled additional capital to be required on a firm-by-firm basis; and Pillar III market discipline through greater transparency of information on the application of the capital regime to each bank. In doing so, Basel II extended the ability to use firms’ own models to credit and counterparty credit risk. It also introduced the requirement to hold capital against operational risk. Basel II did not make major changes to the definition of capital, or the quality of capital, required to meet banks’ risks. One further point to note is that a leverage ratio was not a feature of Basel I or II. Some countries maintained leverage ratio requirements alongside the risk-based Basel regimes eg  BIS central bankers’ speeches  1  the US and Canada1 (though importantly neither incorporated all off balance sheet items, something that the Basel III leverage ratio seeks to amend) but many, like the UK did not. I want to turn now to looking at why the pre-financial crisis capital regime failed to provide the necessary protection to the financial system when the crisis hit. There are a number of reasons, which cover both the numerator and denominator of the capital ratio.
The ECB is accountable for the achievement of this objective. All this is understood by other policy-makers. By acting in a transparent way consistent with its mandate, the ECB creates an environment of price stability within which other authorities can take decisions under their responsibility in order to achieve their own objectives. Clarity of responsibility, independence of action and accountability for decisions in an environment of open and frank exchange of information among policy authorities produces the best results. These principles can be readily applied to the relationship between monetary policy and macro-prudential policies. Of course, monetary policy decisions can have implications for financial stability. And the degree of freedom accorded by the medium-term orientation of monetary policy can be used to contain excessive risk-taking by banks. In this sense, monetary policy can support financial stability objectives without prejudice to its primary objective of price stability. But this does not imply that monetary policy should be held jointly accountable for maintaining financial stability, still less that it be assigned an additional financial stability objective. Such measures would only serve to obscure the accountability of monetary policymakers for price stability and dilute the accountability of those authorities responsible for financial stability. All this leads me to re-iterate my earlier conclusion: the primary objective of monetary policy must remain price stability. By contrast, the institutional structure for prudential supervision and regulation at the European level remains at an embryonic stage, especially on the macro-prudential side.

However, despite the success attained in reducing inflation, I would like to underline the fact that we have not reached our final target yet. Turkey is one of the very few countries where double-digit inflation prevails. As I have mentioned repeatedly both at the very beginning of the disinflation program and the point we reached today, our final target is to achieve and maintain price stability. Now let me emphasize once more what price stability stands for. The well-known definition of price stability relates to the currently low inflation rate in one hand, and the expectation of economic agents that the ongoing decline in inflation will continue in the future. Such an inflation rate is so low that people do not need to take it into account in their investment, consumption and saving decisions. At the point we have reached in inflation, it is clear that our economy is surviving from chronic inflation. However, I would like to draw your attention to the fact that we have not fully maintained the price stability that I have just mentioned, and our economy is still in a “falling inflation” period. Honorable guests, The point we reached in the fight against inflation is remarkable. Both the dynamics of inflation and economy go through changes along with the transition from chronic inflation to falling inflation process.
The capacity of economies to cope with these headwinds related to the financial cycle recovery will rely upon providing resilient policy framework and keeping sufficient policy buffers in all segments of the economy. Obviously, many aspects on the economic and financial cycles have already been observed, with even more still awaiting to be explored. Our latest experience is mainly related to the bust of the cycles, however we need to know if the size of spillovers or effectiveness of our instruments will be the same in the boom stage of the cycle. The seminal work by Borio from 2012, has already provided some stylized facts regarding frequency, duration and leading indicators of the cycles, incorporating the period of the last global crisis. However, we need  BIS central bankers’ speeches  1  to disentangle country’s specific features of the cycles as a basis for the policy mix design. In analyzing financial cycle, it is necessary to go deeper into bank’s balance sheet, and therewith to head towards data granularity as an important platform to better assess banks’ risk attitude as well as to appropriately link banks’ specifics and their market behavior. Consequently, increasing knowledge of economic and financial cycles requires stronger modeling abilities, enlargement of the analytical base and combining information of both domestic and cross border spillover channels, as a floor for adequate policy responses. Touching upon the issue of economic and financial cycle spillovers in the case of Macedonian economy, I could refer to the following points.

Michael Gondwe: Women’s access to financial services in Zambia Opening remarks by Dr Michael Gondwe, Governor of the Bank of Zambia, at the “Women’s Access to Financial Services in Zambia – Dissemination and Consultation Conference”, Lusaka, 24 June 2014. *  *  *  •  Permanent Secretary, Ministry of Finance;  •  Permanent Secretary, Ministry of Gender and Child Development  •  Permanent Secretary, Ministry of Commerce  •  Bank of Zambia Board Members  •  Your Excellences, High Commissioners and Ambassadors to Zambia present;  •  The United Nations Development Programme Country Director, Ms Viola Morgan;  •  The African Development Bank Country Representatives; Dr Freddie Kwesiga;  •  Representatives from the International labour Organisation (ILO);  •  Deputy Governor Administration, Bank of Zambia Dr. Tukiya Kankasa-Mabula  •  New Faces, New Voices Representative, Ms Nomsa Daniels  •  Chairpersons of the Boards of Commercial Banks,  •  Chief Executive Officers of Banks and Other Organisations;  •  Senior Staff and Colleagues from Bank of Zambia;  •  Members of the Press;  •  Distinguished Guests, Ladies and Gentlemen. It is my honour and privilege to welcome you all to this conference on Women’s Financial Inclusion in Zambia. May I extend a special welcome to delegates that have come from abroad. I wish you a good stay and hope you will have time to visit the various places of interest and sample the food that Lusaka offers.
William C Dudley: Regional and national economic conditions Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York and Chairman of the Committee on the Global Financial System (CGFS), before the Morris County Chamber of Commerce, Florham Park, New Jersey, 18 September 2012. *  *  *  Good afternoon, I am pleased to be in northern New Jersey to address the 8th Morris County Economic Development Corporation (MCEDC) Business Growth Forum – an annual event organized by the Morris County Chamber of Commerce. It is always a pleasure to speak with the business community and I thank you for inviting me here today. I get out of my office in New York City regularly to inform myself – first-hand – about economic conditions and challenges across the second Federal Reserve District. Each visit within the region helps me to strengthen relationships with the diverse people of this District and build a deeper understanding of the economic challenges that we face. Today, I want to talk a bit about the Fed – what we do and why we do it. Then I’ll provide some thoughts about the national and local economic outlook. Normally in these regional outreach speeches I say little about monetary policy. But since the Federal Reserve made some meaningful decisions last week and it is important for people to understand the reasons and motivations for our actions. I will conclude with a brief discussion of policy.

Ladies and Gentlemen, you will also note that this investment is being made at a time when the Zambian economy is facing some major challenges arising from the spill-over effects of the ongoing global economic crisis. It is therefore our expectations that it will have a positive impact on the economy due to the evident backward and forward linkages that infrastructure development of this nature have on various sectors of the economy. This investment has also come at a time when new banks are entering the Zambian market. It is our expectation that the repositioning by the bank is one way of ensuring that there is healthy competition in the banking industry. It has always been the view of the Bank of  BIS Review 88/2009  1  Zambia that competition is the major way by which the quality of products and customer services for the banking public as well as competitive pricing of banking products can be achieved. Chairperson, let me also take this opportunity to reiterate my concern regarding the general cost of banking services in Zambia. It is my hope that as your bank continues with these well meaning initiatives, it will also be looking into ways and means of making the cost of banking services to the general public more affordable. I wish to therefore reiterate our appeal to banking service providers that include Stanbic Bank Zambia Limited, to make some meaningful efforts in addressing the high cost of banking services.
They have greater resources to monitor and analyse information, and typically greater leverage on companies to encourage them to improve on standards of corporate governance and disclosure. The move towards market-based regulation will be given a significant push by the recommendations of two private sector-led committees that were appointed by the Government last year - the Corporate Governance Committee and the Disclosure and Accounting Standards Committee. The committees have recently completed an exercise of public consultation on their preliminary recommendations, and aim to publish their final reports by April. The development of a market-driven, disclosure-based regime is in progress. It will be naïve to expect an effective system of market discipline to have arrived in a day, or in three years. The transition will cause some uncertainties initially, and even the occasional revanchist call for a return to the regime of the past. Market participants will take time to develop high standards of corporate conduct and disclosure, and to discover the new boundaries. We can expect some of them to test the boundaries in the process, either wittingly or otherwise. But the boundaries of what is permissible to preserve fair and transparent markets should become quite apparent through a few salutary cases, which will help define the new dispensation. The MAS and SGX themselves have reviewed their respective roles in the new regulatory environment.

We need to take these international regulatory developments into  2  BIS Review 59/2010  consideration to ensure the global competitiveness of our financial centre. Yet, as the past two and a half years have shown all too clearly, in the event of a crisis each country must take responsibility for its own banks. The formulation and implementation of measures at the national level must take into account the specificities of the country concerned. Here in Switzerland, the “too big to fail” issue is particularly pronounced, hence the need for a “Swiss Finish”. Reform of financial sector regulation and oversight is, without a doubt, a tough challenge. But the SNB is also faced with equally tough challenges in the area of monetary policy. III. Review of monetary policy in 2009  In 2009, the SNB’s monetary policy activities were focused entirely on combating the financial and economic crisis and the associated deflationary trends. Price stability, which is not compatible with either deflation or inflation, remained the core objective. As early as autumn 2008, the SNB had adopted an expansionary monetary policy stance as a result of the increasingly unfavourable economic outlook and the prospect that inflation would be low for the foreseeable future. Between October and December 2008, the SNB lowered the target range for the three-month Libor by a total of 225 basis points, to only 0.0–1.0%. The SNB also ensured a generous supply of liquidity to the money market. The economic situation continued to worsen into the spring of 2009.
9  All speeches are available online at www.bankofengland.co.uk/speeches  9  Chart 7: UK companies facing multiple uncertainties Geopolitical risk index UK Economic uncertainty  UK Policy uncertainty  Standard deviations from mean, 2 2.5  Iraq invasion Paris attacks  9/11  2.0  Madrid bombings Gulf war USS Cole bombings  Kuwait invasion  Ukraine/ISIS  London bombings  1.5 1.0  US bombs Libya  0.5 0.0 -0.5 -1.0  Transatlantic aircraft plot  -1.5 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Notes: economic policy and geopolitical uncertainty indices are de-meaned and shown relative to their respective standard deviations. Chart shows two-year centred moving average for each measure. See ‘Uncertainty, the economy and policy’, speech by Mark Carney, 30 June 2016, available at http://www.bankofengland.co.uk/publications/Documents/speeches/2016/speech915.pdf, for more details. Chart 8: Greater uncertainty drives hurdle rates up Option value of waiting (percentage points) 30 25 20 15 10 5 0 0  5  10  15  20  25  30  35  40  45  50  Earnings volatility (percentage points) Notes: the chart shows a simple Black-Scholes model of the required hurdle rate given earnings volatility. For individual firms, the standard variation of annual earnings was around 30 percentage points in the period before the crisis.

All of the Federal Reserve Banks have their areas of specialization. In my opinion, the New York Fed has at least four that are worthy of mention today because these affect the work of the New York Fed’s economists. First, we are the operational arm of the Federal Reserve, responsible for the implementation of monetary policy. This means we have a unique set of relationships with the securities dealer community and with respect to monitoring financial markets. It also means that we work very closely with the Board of Governors and the Federal Open Market Committee (FOMC) in implementing monetary policy. Second, we have a unique endowment and responsibility by virtue of our location. New York City is a global financial center, and finance is a very important aspect of the Second District’s economy. Most of the largest global financial institutions have a major presence here. With delegated authority from the Board of Governors, we are responsible for the supervision of most of the major financial institutions headquartered in our district, as well as numerous foreign banking organizations that do business here. Third, we are the fiscal agent for the Treasury and conduct the Treasury debt auctions on their behalf. Additionally, we are responsible for Fedwire, which along with Clearing House Interbank Payments System (CHIPS), is one of the two large-dollar, real-time payment systems in the U.S. Fourth, we have a unique set of international duties. We provide banking services to foreign central banks, including investment of reserves and administration of foreign exchange swap lines.
Domestic demand should also be further supported by our monetary policy measures leading to ongoing improvements in financial conditions, as well as by the progress made in fiscal consolidation and structural reforms. Moreover, demand for euro area exports should benefit from improvements in price competitiveness and from the global recovery. However, the euro area recovery is likely to continue to be dampened by the necessary balance sheet adjustments in various sectors and the rather slow pace of implementation of structural reforms. This assessment is also broadly reflected in the March 2015 ECB staff macroeconomic projections for the euro area, which foresee annual real GDP increasing by 1.5% in 2015, 1.9% in 2016 and 2.1% in 2017. Compared with the December 2014 Eurosystem staff  BIS central bankers’ speeches  1  macroeconomic projections, the projections for real GDP growth in 2015 and 2016 have been revised upwards, reflecting the favourable impact of lower oil prices, the weaker effective exchange rate of the euro and the impact of the ECB’s recent monetary policy measures. The risks surrounding the economic outlook for the euro area remain on the downside but have diminished following recent monetary policy decisions and the fall in oil prices. According to Eurostat’s flash estimate, euro area annual HICP inflation was –0.3 % in February 2015, after –0.6% in January. The negative outcomes largely reflect the impact of the significant fall in oil prices since July 2014.

The gains from financial intermediation across jurisdictions, from international risk diversification and risk sharing, and from access to financial instruments to fund pension schemes are multiplied when we allow individuals, enterprises and fund managers access to each other’s markets in addition to our own. Clearly there is a case for linking markets together in order to be better prepared to withstand possible turbulence in global financial markets. Speaking from experience, there is, I believe, other things being equal, a non-linear relationship between vulnerability to financial instability and the size of financial markets. The very small financial markets are not attractive to international capital because of the lack of liquidity and so there is little volatility generated by the inflow and outflow of international capital. At the other extreme, where financial markets are very large relative to international capital, sudden movements of the latter will only lead to ripples, which are not big enough to cause any financialstability concerns. The most vulnerable financial markets, other things being equal, are the mediumsized ones, which have adequate liquidity to attract international capital but which are small enough for short-term trends to be dictated by large operators looking for short-term gains. Unfortunately, many financial markets in the region fall into this category. Of course, merely increasing the size of a financial market cannot be a substitute for sound macroeconomic policies as a guard against volatile capital flows. Indeed, I believe that the authorities in the region are committed to prudent monetary, exchange-rate, and fiscal policies.
When one additionally considers our many exports to neighboring, non-EU countries, but who maintain a Euro-centric policy we can see an indirect detrimental effect; which in turn means roughly 90% of our exports were hit by the crisis. For example, we experienced a decline in GDP of 1% in 2009 with a recovery of 3% in the next two years before declining again by –0.4% in 2012; which is reasonably low when compared to other countries in the region. Although this does not mean the effects from the Euro Zone crisis were not harsh, they clearly were; however, there were compensating policies such as a fiscal stimulus from the government which substantially mitigated the negative impact which is most likely why Macedonia had the slowest decline in the region. What were some of those hedging fiscal policies? Traditionally, Macedonia has had low fiscal deficits, ranging from –1% to +1%, but during the crisis in 2009 this grew initially to 2.5% then to 2.8% with our highest in 2012 at 3.8%. This year, due to the financial stimulus we are forecasted at 3.5%. We were able to mitigate successfully because our public debt was low at around 20% of GDP which afforded us room for expansion which we used during this crisis period. Apart from the macro-economy concerns, the crisis with the Euro as a currency helped boost confidence in our domestic currency [MKD denar]. This is because people naturally began to wonder what would happen with Europe; therefore, its primary currency.

Of course strong and growing exports are a main target for most countries due to their balancing of payments. In our case, these FDIs in automotive and electronics have contributed primarily to our economic growth in regards to manufacturing. Other manufacturing sectors are struggling due to their continued dependence on the European Union’s growth; as such, their success is dependent upon overall growth and stabilization within the EU, which is showing signs of alleviation. Clearly a growing focus is a diversification of export markets. This can be remedied by establishing further value-added capacities in manufacturing which can allow for non-EU exports. Is it safe to assume that the growth factors mentioned previously are a result of the Economic Zones established within Macedonia? Yes, most of these FDIs in production of tradable goods and their resulting benefits to the overall Macedonian economy are located within the Economic Zones. We have been speaking about the EU and its effect on Macedonia’s economy. Compared to the US, if only marginally, the EU is experiencing a more stagnant rate of growth. You mentioned you see the EU beginning to recover slightly. What is your outlook on the future of the Euro Zone? This is true; the US is ahead in terms of growth. The EU economy in Q2 of this year went out of recession but remains in a fragile state and questions certainly remain regarding its long term stability. They are not out-of-the-woods yet but are heading in that direction.