samchain/econo-pairs-v1 huggingface dataset:
That process is at the heart of the events unfolding here in the UK and around the world. But the crisis here was not triggered by rising household defaults or corporate failures in the UK; in fact they have started to rise only recently. The crisis started in the US housing market and spread to the rest of the world through the banking system. And the problems in the US were themselves a reflection of global imbalances in trade and capital flows between advanced and emerging economies. The rapid growth of exports from Asia, and latterly the Gulf, was reflected in a substantial build up of savings which financed a rapid growth of credit in the West. When losses emerged in US sub-prime market, they ricocheted through the international financial system, including British banks. Not only did they face losses on their portfolios of structured credit but sources of funding on which they had become dependent, particularly securitisation, dried up. A global economic slowdown Initially, the impact of the crisis seemed to be concentrated in the US and a handful of European banks while the emerging economies of Asia continued to boom. With wages and prices rising, many of the people I met in India and China this time last year rather welcomed the prospect of a fall in Western demand as a means of taking a little of the heat out of their own economies. But the picture has changed since then.

Out of this intellectual vacuum, a new framework for regulation has been born – macroprudential regulation. This explicitly recognises the links that might tie together individual nodes in the financial system. These might arise from correlated asset exposures, the type of which has historically emerged during the upswings and downswings of the credit cycle (Aikman et al (2015)). Or they might emerge from financial exposures, on- or off-balance sheet, between intermediaries operating in the global financial web (Haldane and May (2011), Arinaminpathy, Kapadia and May (2012)). Over the past decade, a lot has been written in the area of macroprudential policy (Galati and Moessner (2013), Aikman et al (2013), Freixas et al (2015)). A sizeable number of countries are now undertaking macroprudential policy in some shape or form. Table 5 in the Annex provides a rough summary of current international macroprudential practices (for a more comprehensive overview, see Cerutti et al (2017)). By any historical metric, however, macroprudential policy remains a fledgling framework. Understandably, many of its key facets remain contentious. And the macroprudential policies put in place internationally so far are more notable for their differences than their similarities. This is providing a diverse body of case law. We discuss two key aspects of this framework: its appropriate objectives; and the choice of instruments. Objectives of Macroprudential Policy  The Bank of England entered the debate on the potential role of macroprudential policy in a discussion paper published in 2009 (Bank of England (2009)).
Michael Gondwe: Economic and financial sector developments in Zambia Speech by Dr Michael Gondwe, Governor of the Bank of Zambia, at the official launch of the Zambia National Commercial Bank Limited (Zanaco) Ndola West Branch, Ndola, 27 June 2013. *  *  *  The Managing Director, Zanaco Members of the Executive Management Team Members of the Press Distinguished invited Guests Ladies and Gentlemen Let me begin by tendering apologies on behalf of the Governor of the Bank of Zambia, Dr. Michael Gondwe who is not able to be with us this evening as he is attending to other commitments. He however requested that I represent him at this important occasion. It is therefore my honor and privilege to officiate at this important occasion to launch the new Ndola west Branch of Zambia National Commercial Bank Limited. I am told that the Branch was initially on Maina Soko Road opposite Barclays Bank and that the bank decided to move here because the place is bigger, which I believe will provide a better and spacious environment. Distinguished Guests, the Bank of Zambia is reliably informed that since the inception of the bank more than 37 years ago, Zanaco has grown its customer base to over 640,000 and has grown its network of branches and agencies to 64, in addition to the branch being launched today, 53 Zanaco Xpress offices and 26 Zanaco agents. The bank has also invested in more than 162 ATMs and 465 Merchant POS terminals.

As we have shown, it is entirely feasible to steer secured money market interest rates effectively in negative territory. This is due in no small part to the fact that the secured Swiss franc money market is efficient, is based on a modern infrastructure, and can count on committed market participants. The SNB will continue to help shape this money market infrastructure in the future. Ladies and gentlemen, many thanks indeed for participating in this event this afternoon. The fact that you have made the effort to tune in, despite the unusual format, demonstrates your interest in the Swiss money market, and we thank you for this interest.
As a consequence, the bank capital framework de facto becomes a partial substitute means of achieving more forwardlooking provisioning, through the internal models regime for credit risk which requires the deduction from capital of expected losses in excess of provisions. A forward-looking approach to provisioning based on expected losses would help move to a more appropriate position where the accounting standard requires a prudent valuation of banking book assets and the capital regime can focus on unexpected loss. I hope that implementation of the new accounting standard for provisioning, IFRS 9, is a step in this direction. I now want to turn to the issues around risk-weighted assets in the capital framework. Basel I was a simple framework, as I described earlier. In my view, that was its strength and weakness. The strength was that it was quite easy (certainly by today’s standards) to see the balance sheets even of the largest banks laid out and broken down by broad risk weights. The weaknesses were two-fold. First, it provided little insight into how firms measured and managed risk. As a supervisor in the late 1980s and early 1990s, I remember well meetings with firms which would start by the firm reminding that while they had filled in the risk weighted assets form faithfully, it bore no resemblance to how they assessed and managed risk in the business – what is often called “economic” as opposed to “regulatory” capital.

BIS central bankers’ speeches  5  England’s regional agents suggest that the supply of loans on offer has increased, but businesses are understandably cautious on the take up. Looking at the broader picture, the post-crisis adjustment of the capital adequacy standard is a welcome and necessary correction of the excessively lax underwriting and pricing of risk which caused the build up of fragility in the banking system and led to the crisis. I do not however accept the view that raising capital standards damages lending. There are few, if any, banks that have been weakened as a result of raising capital. Analysis by the Bank for International Settlements indicates that in the post crisis period banks with higher capital ratios have experienced higher asset and loan growth5. Other work by the BIS also shows a positive relationship between bank capitalisation and lending growth, and that the impact of higher capital levels on lending may be especially significant during a stress period6. IMF analysis indicates that banks with stronger core capital are less likely to reduce certain types of lending when impacted by an adverse funding shock7. And our own analysis indicates that banks with larger capital buffers tend to reduce lending less when faced with an increase in capital requirements. These banks are less likely to cut lending aggressively in response to a shock8. These empirical results are intuitive and accord with our supervisory experience, namely that a weakly capitalised bank is not in a position to expand its lending.
In it, we distinguished between two types of CBDC: wholesale CBDC that is limited to selected financial institutions, and general purpose currency for use by the public. The report highlighted the potential benefits in wholesale CBDC for more efficient and secure wholesale payment systems, although more exploration will be required to fully understand these benefits. 2 4 . MAS started on our wholesale CBDC journey two years ago when we introduced a digital token representing the Singapore dollar on distributed ledger technology (DLT) to settle interbank debts. Last year, we delved deeper into the problem of decentralised netting while preserving privacy, and demonstrated that these could be solved in the three major DLT platforms Corda, Hyperledger Fabric and Quorum. This year, MAS, Bank of Canada and Bank of England embarked on a project to explore how wholesale CBDC, underpinned by DLT, can be used to address the 25. 5/6  BIS central bankers' speeches  inefficiency that correspondent banking faces. It will identify pain points that commercial banks experience when making standalone cross-border payments, or payments as part of trade financing, securities services and foreign exchange. The project also looks at resolving settlement issues between commercial banks, and settlement of reserve between a central bank and a commercial bank. After these use cases are developed, a technical proof-of-concept will be conducted, building on the success of Jasper and Ubin, which are the DLT platforms from the Bank of Canada and the MAS respectively.

Those three or four e-wallets may hold smaller amounts of money each, but in sum might add up to more than what he/she would have otherwise held in cash in one physical wallet. He/she needs to topup each e-wallet separately, because each wallet has a different top-up and refund mechanism. b. Merchants may proudly display all the schemes that they accept, whether by card or contactless or QR codes. Underneath all that, the merchant needs to deal with different acquirers that send him settlement files in different formats, at different times, and pay him on different days. 3/6  BIS central bankers' speeches  c. Between the consumer and merchant, instead of counting cash and change, the payment ordeal could transform into checking which payment instrument is accepted, which card to dip into which terminal, or which QR code to scan. Fortunately, we have not reached that e-payment nightmare. While competition from many payment providers benefits consumers with lower prices, convenience and more innovative solutions, e-payments still need to interoperate in order for the industry to continue growing. Let me share three areas where MAS is enhancing interoperability of e15. payments, namely point-of-sale terminals, QR codes and regulatory powers. 1 6 . First, Unified Points of Sale (UPOS) terminals. Singapore is a highly-carded market, with over 349 payment cards per 100 inhabitants9. Many merchants, if they accept e-payments, have a terminal, usually provided by a bank acquirer. Five years ago, we started noticing that some 15% of merchants had more than one terminal. Why?
Nonetheless, Table 1 suggests that the average cycle has typically been in the range 3 to 5 percentage points – towards the upper end in the period since 1970, towards the lower end in the period since 1994. Fairly sizeable degrees of interest rate headroom have been necessary in the past. An interesting thought-experiment is to assess the likelihood of future interest rates having risen sufficiently to give monetary policy the headroom necessary to cushion a recession. Chart 13 plots a set of cumulative probabilities of official interest rates exceeding a set of interest rate thresholds – 2% (the “John Bull threshold”), 3% (the average loosening cycle since the 1990s) and 5% (the average loosening cycle since the 1970s). 7 With yield curves currently low across the major advanced economies, the probabilities of interest rates exceeding these thresholds are modest. Even at a ten-year horizon, the probability of UK rates exceeding 2% is only around 50%, 3% around 40% and 5% around 20%. If financial markets’ guesses about interest rates are realistic, it is odds-against there being sufficient monetary policy headroom to cushion a typical recession. If we now compare the probabilities of interest rates being at these thresholds with the probabilities of recession, a striking conclusion emerges. Recession probabilities exceed interest rate threshold probabilities by a factor of anywhere between 1.5 and 4 (Chart 13). For example, a conservative estimate of the probability of recession over a ten-year horizon is around 80%.

The ECB’s asset purchases are being expanded in terms of both size and composition: the monthly purchase volume has been increased from € billion to € billion and the universe of eligible assets now includes non-bank corporate bonds. Purchases are intended to run until the end of March 2017 – or beyond, if necessary – , and in any case until the Governing Council sees a sustained adjustment in the path of inflation to levels close to 2% over the medium term. Taking into account the current outlook for price stability, the Governing Council expects the ECB’s key policy rates to remain at present or lower levels for an extended period of time, well past the horizon of the net asset purchases. We are confident that the very accommodative monetary policy stance will provide further support to the euro area recovery and will accelerate the return of inflation to levels that we consider to be consistent with our objective. The Governing Council has done and, within its mandate, will continue to do whatever is needed to pursue its price stability objective. Our very accommodative monetary policy stance has provided considerable support for the euro area recovery. By supporting growth prospects, our actions have also been beneficial for financial stability.
Durmuş Yilmaz: Press conference for the presentation of the Inflation Report Press conference by Mr Durmuş Yilmaz, Governor of the Central Bank of the Republic of Turkey, for the presentation of the Inflation Report, Ankara, 27 July 2010. *  *  *  Distinguished Guests and Members of the Press, Welcome to the press conference held to convey the main messages of the July 2010 Inflation Report. The report typically summarizes the economic framework addressed in monetary policy decisions, elaborates global and domestic macroeconomic developments and presents the medium-term inflation forecasts, which have been revised in view of previous quarter developments, along with the monetary policy stance. Before moving on to the Central Bank’s assessments on the inflation outlook and economic activity, which I will share with you in detail shortly, I would like to summarize the current global conditions. The recovery in global economic activity continued during the second quarter of 2010. However, with the deepening financial distress, the euro area experienced weaker growth than other advanced economies, pushing down the growth rate for advanced economies, whereas, emerging economies continued to grow faster than advanced ones (Figure 1). Furthermore, it is noteworthy that that the modest recovery in growth in advanced economies has not yet been reflected on labor markets (Figure 2). This situation continues to have a detrimental effect on sustainable recovery in these countries. Despite the recovery in global economic activity, recent developments have confirmed that the global economy remains fragile.

Boards of regulated subsidiaries need to be able to take decisions where required to meet their own legal and governance responsibilities or in the interests of the safety and soundness of the subsidiary. But, that does not mean they should operate outside the general governance and objectives of the group to which they belong. Independence in this context is carefully defined and limited. As you will all be aware, we have undertaken significant engagement with the boards of banks and building societies on governance. Through our supervisory work, we are seeing improvement but in our view there is more to do. Board effectiveness will therefore remain a key priority. To conclude, governance matters a lot, I can’t understate that. Effective boards are central to the success of firms and the financial sector, and central to the delivery of our objectives. Thank you. 4  BIS central bankers’ speeches
Sit out the dance, and you risk getting swallowed by a competitor. In many ways the ideal risk management system for a single bank is one which lets it dance until the music stops but then to get to the exits before its competitors - to take the profits when they are available and to close out risks as near as possible to the downturn (or even better profit from their competitors’ remaining exposures). It is noticeable that the investment banks which did best in 2007 were not those which had stepped back from the new markets well in advance but those which reacted most quickly and cohesively when the trouble started in the summer of 07. Of course other banks need to learn from their example and improve their own information and control systems. But in a competition someone always has to come last and what matters for the authorities is how much the weakest will be damaged and how far that damage will spread through the system. What we saw in the autumn was that even the most successful investment banks were put at risk by the failure of the weaker ones. So one lesson we have learned from this crisis is that we cannot leave risk management to the banks.

(a ) Le ve ra ge ra tio de fine d a s to ta l a s s e ts divide d by to ta l e quity e xc luding m ino rity inte re s t. (b) Due to da ta lim ita tio ns , the c ha rt o nly pre s e nts info rm a tio n o n A&L, B &B , B a rc la ys , HB OS , HS B C , Llo yds , No rthe rn R o c k a nd R B S . (c ) The re is a bre a k in the s e rie s due to the intro duc tio n o f IF R S in 2004.
While these links are not new, they now warrant closer attention for two reasons. First, the financial system has come to rely more on central counterparties. The introduction of mandatory central clearing requirements in response to the crisis has made financial markets safer and more transparent. This is in large part thanks to the European Parliament’s push for stronger financial regulation, such as the European Market Infrastructure Regulation (EMIR). While this strengthening is of course welcome, it also means that CCPs have become more systemic. Second, the United Kingdom’s decision to leave the EU means that, under the current legislative regime, several CCPs clearing significant volumes of euro-denominated business will be operating outside the framework of EU regulation and the safeguards this provides. In this context, the Commission’s EMIR II proposal, currently being discussed by this committee, is a welcome and necessary initiative. The existing regime was never intended to cope with large-scale euro-denominated clearing activities being carried out in a country outside the EU. The EMIR II proposal would enable EU authorities to directly supervise systemically important third-country CCPs on the basis of EU regulatory requirements using EU supervisory instruments. The proposal provides for an enhanced role for the central bank of issue in this context, reflecting the strong links between clearing and monetary policy. The indispensable corollary to the EMIR II proposal is the recommendation to amend Article 22 of our Statute, which was unanimously adopted by the ECB’s Governing Council last June.

Only ambitious policies will deliver concrete benefits for the people of Europe. This is also what our common history tells us. This year marks the 25th anniversary of the Single Market and of the Maastricht Treaty’s entry into force. Those were bold decisions and we continue to benefit from them today: goods, people, services and capital can move freely and EU legislation ensures that commensurate rights and obligations apply throughout our Union. With the creation of Economic and Monetary Union (EMU) we went further by adopting the single currency. It is in this spirit that I look forward to the coming months and the pivotal discussions we will have on reforming EMU governance. Thank you for your attention. I am at your disposal for questions. 1 www.ecb.europa.eu/press/key/date/2018/html/ecb.sp180205.en.html 2 See “Low inflation in the euro area: Causes and consequences”, ECB Occasional Paper Series, No 181,  January 2017. 3 See “Domestic and global drivers of inflation in the euro area”, ECB Economic Bulletin, Issue 4 /2017. 4 General Court’s judgment in Case T-496/11 United Kingdom of Great Britain and Northern Ireland v European  Central Bank. ECLI: EU:T:2015:133. 4/4  BIS central bankers' speeches
Low demand abroad contributes to low demand in Sweden, too. And low price increases abroad contribute to low import prices at a given exchange rate. However, this does not mean that monetary policy lacks the ability to counteract these developments. I usually think of this as a rowing boat in a strong current. If we do not row, the current (global developments) will determine what direction the boat moves in. But if we row, we have a better ability to get where we want to go, particularly if we try to keep away from the parts of the water where the current is strongest. The monetary transmission mechanism is usually divided up into different channels (see Figure 6).20 The channel most often mentioned is probably the interest rate channel. A lower interest rate makes it more attractive to consume and invest. This increases demand in the economy. And in the long run, the higher demand means that prices and wages rise, that is, inflation increases. In an economy like Sweden’s, which is so dependent on international developments, the exchange rate channel probably has greater importance, at least for the development of inflation. An (unexpected) repo rate cut means that the krona weakens. The weaker krona leads to an increase in demand for Swedish goods at the cost of foreign goods. In addition, there is a direct inflation effect that arises when imports become more expensive as a result of the weaker exchange rate.

Svensson has argued in favour of this point of view in several papers and commentaries (for example Svensson 2013a). 12  It is difficult to quantify how much higher unemployment becomes when inflation is low. According to Svensson (2013b), unemployment was on average 0.8 percentage points higher during 1997–2011 than it  6  BIS central bankers’ speeches  But wage formation will probably deteriorate even if the low inflation is entirely anticipated. This is because it is difficult to reduce nominal wages. If inflation is low, it will be more difficult to adjust real wages between different sectors and between the individuals in a company. This could also mean that average real wages increase faster than is justified by the growth in productivity, particularly if the rate of inflation is very low or negative. Both problems in adjusting relative wages and unjustifiably high real wages would lead to a rise in unemployment. Repo rate has a lower bound A low inflation rate can also make it difficult for monetary policy to be sufficiently expansionary. The economy’s real interest rate is comprised of the nominal interest rate minus the (expected) inflation rate. As the nominal interest rate has a natural floor somewhere around zero per cent, a lower (expected) inflation rate will raise the lowest level that can be attained for the real interest rate. After the financial crisis, many central banks have long been limited by the lower bound for their policy rates.13 The problem has, however, not been as acute in Sweden.