samchain/econo-pairs-v1 huggingface dataset:
Moreover, the Law incorporates a number of incentives for foundations to relinquish control of the banks in which they participate, something that will normally happen in most cases in less than four years. We believe that this approach will certainly promote better business management and facilitate access to capital markets. In doing so it will contribute to a smoother adjustment by saving banks to the new and very demanding environment, thereby contributing to the strength of the institutions themselves and to financial stability. But more importantly, the highly relevant social objectives of the cajas are fully preserved through the operation of the foundations. These foundations continue to contribute very 4/5  significantly to social welfare. It is just that the foundations´ wealth will now be more diversified and, therefore, they are likely to obtain a more robust stream of income with which to finance their activities. Of course, I would not dare claim that this formula be pursued everywhere. Other reform strategies may also work in other jurisdictions. Yet, I strongly believe that some form of restructuring is required in the European banking market and that the strategy followed in Spain is a reasonable response to the new challenges all credit institutions have to face while preserving the essence of the social value that saving banks have historically provided. Thank you for your attention. 5/5

In addition, the authorities should look into the possibility of supplementing the complex regulations with simpler and more robust indicators such as, for instance, more effective concentration limits and an upper limit for the indebtedness ratio. BIS Review 30/2008  1
11 By cash, I mean banknotes and coins held by the Swedish public as a proportion of total deposits in MFIs and central government. 12 The exception is when the Riksbank (or another central bank) introduces quantitative easing and purchases government bonds with newly created bank reserves, which is a form of newly created money. See Alsterlind et al. (2015) for a more detailed description of this. 4 [15]  actually create new deposits. In the same way, money is destroyed if I repay a loan to the bank. The new money created is thus private, electronic bank money and the amount of money is governed by lending. The Riksbank thereby indirectly influences demand for new money via the interest rate, but monetary policy does not attempt to steer the money supply directly. 13 Private bank money (sometimes called “inside money” in the sense it is inside the private sector) is a claim on the issuing bank. In the same way, money created by the Riksbank, for example Swedish banknotes and coins, is a claim on the Riksbank or Swedish government (known as “outside money”). It is thus possible to regard a 100-krona banknote as a kind of IOU with an eternal maturity that does not pay any interest. There is also another kind of central bank money in Sweden, namely the banks’ balances in the Riksbank. Liabilities on the Riksbank’s balance sheet are usually considered to be completely safe, as the Swedish government stands as guarantor.

If this second statement is correct, I see it as the Riksbank's obligation to investigate the possibilities of issuing an e-krona that can fulfil approximately the same role as cash previously did. If the Riksbank does not offer an electronic alternative, this also means, in practice, that all of our payments will have to go through banks or other financial institutions. Since the payment market has the imperfections it does, as I have described earlier, it is likely that monopoly situations, inefficient for the economy as a whole, would arise if the private market was allowed to act freely with no central government involvement. This problem could possibly be managed with the use of regulations, but it can be difficult to effectively regulate a monopoly. As long as a public alternative exists, this puts certain natural restrictions on the private players. Historically, cash has been this alternative. There are various possibilities for creating a technical platform for the e-krona. One possibility is to connect it to the existing infrastructure. Another alternative could be to develop a new system that could act as backup for other payment systems. This would give us an alternative independent platform that can build upon other technology, which would reduce vulnerability in comparison with only having one system. This could be particularly important if we decide to utilise the ECB’s system so that the main payment infrastructure becomes located beyond Sweden’s borders. 28 The Riksbank’s e-krona project. Report 1. September 2017. See also Bjerg, O.
Three, the ebbing of the pandemic could lead to a bigger surge in business and household spending than currently expected, reflecting pent-up demand. A third feature of the global economic recovery is that downside risks remain significant. The main downside risk is the emergence of more infectious or lethal virus mutations. Even if most countries can vaccinate their populations and significantly reduce the incidence of the virus, continued spread in the remaining countries may offer a rich environment for the emergence of new virus variants. If a variant emerges that proves resilient to the vaccine, the world is at risk of sliding back into widespread lockdowns, with their associated impact on economic activity. No country is safe until all countries are safe. Another source of downside risk is a sharp pick-up in inflation in the US. US consumer price inflation reached a stronger than expected 5% year-on-year in May, the highest rate since 2008. The rise in inflation reflects transitory factors to a significant degree, especially base effects from last year. US policymakers expect inflation to ease by the end of this year. The rapid pace of economic recovery in the US has, however, tilted the balance of risks towards a pronounced and persistent rise in prices. If the pandemic has caused some scarring of the economy, there may not be much spare capacity to absorb the sharp pick-up in demand. Signs that the inflation momentum was becoming too strong could force the Federal Reserve to withdraw policy accommodation sooner than currently indicated or expected.

The future output sub-index of the global composite PMI recorded 67.1 in May, signalling strong expansion going forward. Asian businesses expect to share in the global recovery in the second half of the year. The corresponding reading for the Asia ex-Japan economies 4 stood at 60.3 in May, well above last year’s average of 53.2. The expected strengthening in momentum is due to two main factors: substantial policy stimulus in the US and brisk deployment of vaccines in the US and Europe. The strength of the rebound in the advanced economies should in turn provide a powerful tailwind for Asian economies, particularly those that are more actively engaged in global supply chains. Overall, the global economy is expected to expand by 5.8% 5 in 2021, after last year’s 3.0% contraction. 1/9  BIS central bankers' speeches  The global economy has probably already regained its pre-pandemic level of output. In fact, the global economy could potentially surprise on the upside. One, vaccination rates are rising in many advanced economies, allowing them to re-open earlier and more fully. Some of them may effectively suppress domestic transmission by the end of Q3 2021. Two, even if there are mobility restrictions on account of new outbreaks of the virus, businesses and households have become better at adapting to such restrictions. A review of the evidence by MAS 6 has found that economic activity has become less responsive to movement restrictions over time.
Indeed, high global liquidity is also the consequence of strong productivity growth, low inflation and improved government savings, especially in the United States, which has resulted in the strongest growth in world trade in decades. 6. With well-behaved inflation, the ample international liquidity has resulted in a global stock market boom in the 1990s, in both Europe and the US, as well as emerging markets in Latin America and Eastern Europe. But this has also caused a global compression of interest rate spreads and record levels of new issuance in both domestic and international bond markets. Such narrowing of spreads did not reflect the potential credit and market risks associated with the emerging markets. So when investors finally realize that the emerging markets are carrying more risks than they have assumed, the risk premium as measured by the yield spreads will widen sharply to reflect this. BIS Review 109/1997  -2-  7. This scenario was complicated by the fact that the flood of global liquidity has been largely channelled to the bond, equity and property markets of East Asia. Buoyed by optimism about the Asian miracle growth of the last decade, both domestic and foreign investors committed the classic “fallacy of composition”. Initially, each individual may perceive a high return and increase their investments in assets, leading in aggregate to excess demand and a market overshoot. A reversal of perception leads to a sharp market correction, which is exactly what is happening not only in Asia, but globally.

Mr. Sheng looks at asset prices, capital flows and risk management Address given by the Deputy Chief Executive of the Hong Kong Monetary Authority, Mr. Andrew Sheng, at the Asian Securities Analysts Federation Conference in Bangkok, on 17/11/97 (slightly abridged). 1. I am very honoured to be invited today to address this distinguished Conference. The title of my paper is “Asset Prices, Capital Flows and Risk Management”. All these factors have been the main players in the recent market turbulence in the region. I will therefore focus my discussion today on the lessons from the recent Asian market turmoil and also the impact on Hong Kong. The Surge in Capital Flows 2. In the past decade, capital flows surged within the Asian region and globally. According to IMF statistics, average annual net capital inflows to developing countries exceeded $ billion in 1990-96, and more than 40% of which actually came to Asia. In the last two years we saw even more capital inflows to the region, recording a net total of $ billion in 1996 and a similar growth rate in the first half of 1997. In some Asian economies, net inflows have averaged 5-8% of GDP over long periods, with over half of such capital flows in the form of foreign direct investment. 3.
Villy Bergström: Can we be best again? The importance of capital formation for long-term growth Speech by Mr Villy Bergström, Deputy Governor of Sveriges Riksbank, at a meeting in Kiruna, 8 December 2003. *  *  *  I would like to begin by thanking you for the invitation to come here and speak before the local group of the Center for Business and Policy Studies. I intend to speak today about the factors that affect a country’s long-term growth capacity. To this end, I will focus on the role played in this regard by capital formation, but will also discuss other important factors such as changes in both the labour supply and the age structure of the population in the coming years. Like many other countries, Sweden is facing the problem of an ageing population. This is going to place a greater burden on the public finances and will entail increased demands on the working population to forgo consumption in favour of supporting the elderly. Meanwhile, labour force growth in Sweden will be slower in the years ahead. Moreover, the rate of net investment in Sweden is low in comparison to previous periods. This affects Sweden’s long-term growth capacity and thereby also the prosperity of people in general. It is these topics that I shall be concentrating on in my speech today. But allow me first to begin with a few words about the Riksbank’s role in this context.

The experiences from the beginning of the 1970s and 20 years thereafter indicate that high inflation, devaluations that fuelled economic growth followed by austerity measures to prevent overheating, entailed weak productivity growth and a drop in the standard of living compared with other industrialised nations. The Riksbank can help to create a favourable environment for rapid economic growth but the growth itself must come from other sources than monetary policy. Nevertheless, the Riksbank has every reason to take an interest in these sources of economic growth since fast growth facilitates the Riksbank’s task. This task involves tightening or easing monetary policy to regulate demand, so that it keeps even pace with our country’s growth capacity. In that way inflation is stabilised. A higher potential rate of growth allows scope for higher aggregate demand without giving rise to inflationary pressures. Long-term growth and demand The Riksbank distinguishes between two concepts of growth: potential growth and demand-driven growth. Potential growth is the rate of growth that is sustainable in the long term, taking account of resource growth in the economy and how effectively these resources are employed. Thus, you could say that potential growth is determined by a combination of labour force growth, investment activity and scientific and technological progress. The latter determines how efficiently the labour force and capital can be utilised. None of these fundamental factors can be influenced by the Riksbank other than temporarily. The Riksbank’s work is, however, affected by potential growth.
Many say today that households’ debt overhang has caused as big a problem for the macroeconomy as the crisis in the banking system (see, for instance, Krugman, 2013). 5  Bech, Gambacorta and Kharroubi (2012) find that expansionary monetary policy has greater difficulty contributing to a recovery from a financial crisis than after a normal economic downturn. 6  That taking risks into account is not the same as “pricking bubbles” is pointed out by, for instance, Woodford (2012). 4  BIS central bankers’ speeches  macroeconomy. Denmark and the Netherlands are examples of otherwise well-managed economies that have suffered this in recent years.7 One risk factor that may be quite specific to Sweden is that the banks’ mortgage lending is largely market-funded and also to a large extent financed from abroad. If confidence were to be shaken for some reason, investors might choose to reduce their exposure to the Swedish banking sector. The banks’ access to market funding would thus decline. This could cause further negative developments or even be a factor that in itself triggers a downturn. The policy is not problem-free Of course, the type of policy we have conducted is not free of complications and problems. Although our policy has aimed to attain a good economic development and target attainment in the longer run, the consequence is that it has contributed, at least on the margin, to inflation approaching the target more slowly than would have been the case with a more expansionary policy.

in the best case these people were not particularly gifted or responsible bankers, and as a result they triggered the collapse of their credit institutions. Here we are faced with a question about which objectives and targets the Association can deliver 1/4  BIS central bankers' speeches  on. Should it set standards (including ethical ones) for the banking sector; should it be the voice of the banking community in dialogue with the regulator or should it stand up for ‘bad’ banks? I would like to place special emphasis on the fact that when the Bank of Russia withdraws unstable or fraudulent credit institutions from the market, it first, protects the interests of depositors and creditors, and only thereafter is interested in protecting the interests of scrupulous banks. The clearing of the banking sector is yet to be completed, therefore corporate customers will not just choose from banks offering products and services they need, but seek to mitigate the risk of losing money. In particular, it also manifests itself in the authorities’ efforts to determine specific criteria for banks, or a list of banks, which can be entrusted with budget funds and the funds of public companies. The ARB raised the point that these criteria restrict competition. Let me repeat, competition is undermined by fraudulent banks which remain on the market, while attempts to limit risk by means of registers and criteria are just a corollary.
Participating will also have the added advantage to have first-hand knowledge of the decisions made in this context and thus avoid having partial and/or distorted information communicated by parent banks in accordance with group-level agendas. The second argument relies on the fact that, in many of the non-euro area new Member States, the domestic banking systems are dominated by banks headquartered in the euro area – in the case of Romania, for example, euro area banks account for 80 percent of the banking system’s assets; the same is true for the Czech Republic and Hungary (where foreign-controlled banks hold above 80 percent of total assets) and to a lesser – though still significant – extent in Bulgaria and Poland (around 70 and 60 percent respectively). Subsidiaries and branches of these banks are often important enough so that they are deemed systemic at the host country level, even though their balance sheets are small relative to their parent entities. Non-euro countries are therefore already well integrated into the European financial market. Clearly, the objective of preserving the integrity and ensuring the smooth functioning of the European financial market is not something that concerns only the euro area, but is relevant at the EU level. In this context, it is hardly surprising that Romania embraced the Banking Union idea – it makes perfect sense that the reality of a significant, even systemic, cross-border presence in the banking systems of non-euro area countries is matched by effective cross-border supervisory and regulatory institutions.

The issue here is not only the financial effort involved, but also the difficulty, from a political perspective, to explain to the public the need for a financial contribution to mechanisms benefiting wealthier countries for the time being. A case in point is the fall of the Radičová cabinet in Slovakia in 2011. Euro adoption – a conclusion In my view, euro adoption is in the best interest of EU Member States in the long run – given the high degree of business cycle correlation and market integration –, but several essential preconditions, added to the nominal criteria, need to be cumulatively fulfilled in order to make the most of these benefits. I have been on this job long enough to remember a time when the dominant view was that fulfilling nominal convergence criteria was enough for successful euro area membership. The paradigm appears to have shifted. First, the emphasis falls now on the sustainability of nominal criteria fulfilment. Second, achievement of a relatively high degree of income per capita convergence, prior to joining the euro area, is considered increasingly important, since too much catching-up in terms of real convergence poses the risk of more intricate economic cycle management in the absence of independent monetary policy. Third, another essential prerequisite is that the new institutional framework of the euro area has to prove its efficacy in preventing and addressing the imbalances menacing economic activity.
While the existing arrangement has worked well, experience in other developed markets has also demonstrated that such a facility is particularly useful in times of unusual market volatility, as this enhances confidence that liquidity needs in the banking system will be met. 18. Hence, to enhance the robustness of the system, MAS will widen participation in the Standing Facility to MEPS+ participating banks, subject to necessary documentation. The PSA/ISMA Global Master Repurchase Agreement continues to be a requirement for banks to access the borrowing facility which will remain collateralised against Singapore Government Securities. We will provide more details on this to the banks over the next few weeks. Corporate governance, market conduct 19. Apart from dealing with issues relating to the safety and soundness of banks, and the stability of financial system, MAS has also been working on improving the responsiveness of our rules, as well as on improving corporate governance and market conduct. 20. MAS is proposing amendments to the Securities and Futures Act and the Financial Advisers Act. The amendments aim to facilitate new business activities and products in response to market needs, to enhance the market misconduct enforcement framework and to fine-tune the legislation to achieve greater clarity, consistency and operational efficiency. Policy and legislative consultation on the proposed amendments to the Acts have already been conducted. We will table the Amendment Bills within the next few months. 21.

The international financial system and the global economy are still facing significant challenges and downside risks. So far, prompt action by financial authorities in the US and Europe has helped avert a wider crisis. But financial markets remain uncertain and volatile. 11. Singapore banks have limited exposure to US mortgage related securities, and they remain well capitalised. Over the past year, MAS has intensified our monitoring of financial markets and our supervision of financial institutions. We have also conducted stress tests of Singapore banks and the domestic operations of the large foreign banks here, and the results reported by the banks showed them to be resilient. Nevertheless, there is no room for complacency. The current crisis provides important lessons on the areas we have to work on to enhance the resilience of the Singapore financial system. MAS is also participating in several international working groups that are reviewing ways to strengthen supervisory practices and standards. 2  BIS Review 94/2008  Strengthening resilience: Basel II, liquidity management and standing facilities 12. As new international regulatory standards and practices are finalised, MAS will consider strengthening our standards and market infrastructure where appropriate while taking care to avoid a disproportionate response. Let me highlight three areas, where we had started reviewing our regulatory framework before the crisis and have proceeded to implement these new measures to further strengthen the resilience of our financial system. 13.