samchain/econo-pairs-v1 huggingface dataset:
Exiting before the underlying strength of key financial institutions is sufficiently well established runs the risk of leaving some of them vulnerable to adverse disturbances, possibly even triggering renewed financial system stresses. Late exits, on the other hand, can entail the risk of distorting competition, creating moral hazard risks that come with downside protection – including the possibility of excessive risk-taking – as well as exacerbating risks for public finances. To cushion the risks that lie ahead, banks will need to be especially mindful in ensuring that they have adequate capital and liquidity buffers in place. If the circumstances require it, some banks may need to raise new and high-quality capital. In addition, some banks, especially those which have received state support, may need fundamental restructuring in order to  BIS Review 168/2009  7  confirm their long-term viability when such support is no longer available. This could involve the shrinking of balance sheets through the shedding of unviable businesses with a view to enhancing their profit-generating capacities. At the same time, banks should take full advantage of the recent recovery in their profitability to strengthen their capital positions, so that the necessary restructuring of businesses and the enhancement of shock-absorbing capacities do not impinge materially on the provision of credit to the economy. Thank you very much for your attention. I am now at your disposal for questions.

A closer look at LCBGs’ financial results in the first three quarters of 2009 shows that risks of future substantial write-downs, and related liquidity and solvency concerns, remained and might have increased somewhat. While the LCBGs seem to be gradually getting over the valuation losses they have suffered on their securities holdings, the sizeable provisions for loan losses seen lately underscore the significant challenges for banks in managing their distressed loan portfolios. Using the same methodology as in the June 2009 Review, and benefiting from more detailed data on loan and securities exposures of euro area banks, Box 10 presents an update of the estimate and assesses the magnitude of potential write-downs that might be suffered by banks by the end of 2010. The results show that euro area banks could face cumulative total losses of EUR 198 billion on their exposures to securities and losses of EUR 355 billion on their loan book exposures over the period 2007–2010. The total potential write-downs on securities and loans is thus currently estimated at EUR 553 billion over the same period. This figure is EUR 65 billion higher than the June 2009 estimate. The increase is mainly be explained by a further deterioration in the commercial property market, which contributed to a higher estimate of potential write-downs on banks’ commercial property mortgages and commercial mortgage-backed securities, and also by the inclusion of an estimate of writedowns on securities originated in Central and Eastern Europe.
The shared response to climate change: turning momentum into action Speech given by Sarah Breeden, Executive Director, International Banks Supervision, Bank of England  Based on remarks made on 19 March 2018 following the second formal meeting of the Green Finance Initiative and Green Finance Committee, London  Published 14 May 2018  1  All speeches are available online at www.bankofengland.co.uk/speeches  Introduction Thank you for the opportunity to explain what might otherwise not be obvious – why the Bank of England has an interest in climate change. In addition to outlining our interests, I shall stress how this is a shared challenge – where the private sector and the financial authorities need to work together, respecting our different mandates, if we are to rise to the challenge ahead. And in doing so I will pay tribute to the work you have done here in the China-UK Green Finance Taskforce. Turning momentum into action is imperative. The practical work you are doing in the Taskforce is key to making a real difference. Climate change, financial risk and the Bank of England’s objectives Climate change, and society’s response to it, presents financial risks which impact the Bank’s objectives. Those risks arise principally on two dimensions: the physical effects of climate change (for example from more frequent or intense storms); and the impact of changes as we transition to the lower-carbon economy that is consistent with the commitments made by governments in Paris two years ago.

SIFMA (2017) “2017 Fact Book”. 8  All speeches are available online at www.bankofengland.co.uk/speeches  8
If any foreigner desired to avail himself of any services, he should necessarily have traveled to the country of services at great costs in terms of both time and money. This is why cross-border services were limited only to areas where foreigners could have them relatively at a low transaction cost. In this context, the services which played a prominent role in the global arena were shipping and insurance services where the service provider visited the buyer and travel, education and health services where the buyer visited the service provider. In all these areas, Sri Lanka had an upstart over other competitive countries. Sri Lanka’s university system at the time of gaining independence was one of the best in the world. It also had a very reliable and high quality curative health system. For shipping services, it had the best comparative advantage by being located on a very important naval route. Its ports in Colombo and Trincomalee had the best cost-advantage. Its highly literate work-force with professional qualifications from the UK and other advanced countries could have provided the best insurance and banking services to the rest of the world. But, due to the inward orientation of the policies adopted since independence, these comparative advantages got shifted to other countries such as Singapore, Hong Kong and Australia. For Sri Lanka, it is, therefore, a story of missed opportunities. It is too late now to lament over the failed past.

Given this scenario, the enhancement of the income from services by promoting the services sector would definitely help the country to have a stable balance of payments position. What should the country do to attain the goal of having a vibrant and efficient services sector? First of all, it should invest heavily in infrastructure so as to facilitate the production of services. In this connection, the proposed international airport and the port in Hambantota and the attendant roadnetwork would make a significant contribution to facilitate the promotion of global services. But the country should not stop there. As a top-most priority, the road network should be improved to be on par with global standards. Roads would create access to markets and reduce transaction costs. Since the services, like the visibles, should be produced at the cheapest costs to attract global customers, the maintenance of efficiency at all levels of the economy is a must. For this purpose, the country need be wired electronically covered by a reliable road network. The most important requirement for a sustainable services sector is the continuation of the development and supply of the needed human resources. The plan made by Singapore at the turn of the new millennium in this regard is a guidance for other countries. The Singaporean Ministry of Education is reported to have instructed, in 1999, all the tertiary educational institutions and universities to concentrate on courses on genetic engineering, ICT, nano-technology and entertainment so as to provide the skilled human resources needed for the future.
Some investments may be postponed if oil prices fall permanently below USD 60-70 per barrel, especially small investments and upgrades of fields in operation. Exploration activity may also be cut back. Large field development projects are probably being affected only to a limited extent, while small companies and smaller investment projects may be adversely affected by the reduced availability of credit. Growth in the Norwegian economy slowed markedly in the first half of this year. The effects of the financial crisis will most probably be greater than envisaged only recently. The slowdown in the Norwegian economy seems to be occurring rapidly and to be pronounced. Mainland growth is projected to be very low in 2009, then recover in 2010 and 2011. Petroleum investment will buoy up activity. The central government budget will also boost growth in public demand for goods and services. In the Monetary Policy Report, the results of monetary policy assessments are illustrated in a chart showing projections for the interest rate, inflation and capacity utilisation in the economy. We have illustrated the uncertainty surrounding our projections using fan charts. The width of the fan charts is based on historical disturbances, and therefore expresses the average that covers periods of high and low uncertainty. There is now unusually high uncertainty surrounding future developments in inflation and output and hence surrounding interest rate developments. It is difficult to determine probabilities of different outcomes of the ongoing financial crisis.

Norges Bank operates a flexible inflation targeting regime so that weight is given to both variability in inflation and variability in output and employment when setting interest rates. The Norwegian economy has in general exhibited solid growth since the beginning of the 1990s, although with a mild setback in 2002 and 2003. Over the past four years, the mainland economy has been in a sharp upturn, with annual growth averaging well over 4 per cent and particularly vigorous growth in 2007. Growth is now slowing markedly in the Norwegian economy. Household consumption has stagnated and house prices are falling. Growth in the Norwegian economy has slowed, while inflation has accelerated. In October, the year-on-year rise in the consumer price index (CPI) was 5.5 per cent. Electricity prices rose sharply through summer after unusually low prices last year. Underlying inflation has also picked up. Inflation adjusted for tax changes and excluding temporary changes in energy prices (CPIXE) was 3½ per cent in October. Wage growth is markedly higher and productivity growth has slowed considerably. The high rate of cost inflation has led to a faster rise in prices for domestically produced goods and services. Prices for imported consumer goods are no longer falling and are now on the rise. The slowdown in the real economy is expected to start pushing down inflation towards next  BIS Review 143/2008  3  summer. Higher unemployment and weaker corporate profitability will probably lead to low pay increases in the wage negotiations next spring.
We forecast that the temporary factors that are affecting the inflation outlook in the short term will lose their effect and inflation will assume a downward trend in the last quarter. We also expect that inflation excluding food prices will continue to be lower than headline inflation in the rest of the year. 7  When talking about the recent inflation dynamics, food prices require special attention. In food prices, we see a global increase reflecting unfavorable weather conditions, drought, particular restrictions on food exports in some countries, and an increase in stockpiling. In this respect, central banks and policy makers monitor the developments in food prices, core inflation and the effect of increasing inflation on inflation expectations. Indeed, in the recent update of the World Economic Outlook, the IMF noted that central banks should analyze price dynamics and take into account whether movements in inflation are transitory or not. In Turkey as well, food prices are on the rise, and food inflation hovered significantly above historical averages and non-food inflation in July and August. Another important issue regarding inflation dynamics is the difference between PPI and CPI inflation. Producer prices are high in advanced and emerging economies, as is the case in Turkey. This is driven by the increase in commodity prices as well as supply constraints arising from production failing to match the rapidly increasing demand. Another factor driving producer prices up are rising international freight costs and extended delivery times.

Ivan Iskrov: Growth and the financial system – lessons from emerging Europe with a focus on Bulgaria Speech by Mr Ivan Iskrov, Governor of the Bulgarian National Bank, at the conference on “Achieving sustainable growth in South East Europe: macroeconomic policies, structural reforms, socio-political support, and a sound financial system”, organised by the Bank of Greece and St Antony’s College (Oxford), Athens, 11 February 2011. *  *  *  Ladies and Gentlemen, It is a pleasure to be here at this conference, organised by the Bank of Greece together with St. Antony’s College, Oxford. Above all, let me thank Governor Provopoulos for the invitation and the opportunity to come here and, together with my distinguished colleagues from South East Europe, to be able to talk before such a reputable audience. As a central banker, certainly the financial industry is of direct interest to me. But although the topic of this panel is “growth and the financial system”, I would also like to go beyond it and touch upon other issues discussed so far today. Politics and politicians do matter The topics of the panels overlap and the four main sessions are arranged in a very logical sequence. I am saying this, because the financial sector does not function in isolation from the rest of the economy and the political stance. A strong financial system cannot co-exist with a fragile economy and political instability (at least not for long). The opposite is also true: weak financial markets and weak institutions hamper the sustainable growth.
This translates into a more competitive and more innovative financial system, one that is more flexible and resilient, with weakness in one part of the system more likely to be offset by a capacity for expansion elsewhere. And, because their overall risk profiles are likely to differ from banks, the greater importance of non-bank financial intermediaries, and of the capital markets more generally, offsets some of the potential concern associated with consolidation in the banking system. Within the universe of non-bank financial intermediaries, there are other material changes worth noting. Let me highlight three. First, the role of the major investment banks in the United States as market makers and providers of liquidity in a broad range of foreign exchange, securities, and derivatives markets has continued to grow over the past decade, as has the international importance of these firms. These institutions are now key participants in the domestic and international clearance and settlement processes associated with these activities. Second, a sustained period of rapid growth in the major mortgage GSEs has left us with two very large financial institutions, whose balance sheets and associated off-balance sheet positions today account for a much larger share of the U.S. mortgage market than was the case a decade ago. This means that the credit and market risks associated with the home mortgage business in the U.S. are now in some respects more concentrated. It means that the actions taken by the GSEs to manage interest rate risk can have a substantial impact on interest rate volatility.

It is important that knowledge among practitioners of this art of bank resolution does not fade with time and is not dulled by the comfort of the relative stability and financial resilience we have been fortunate enough to enjoy over the past decade and more. I want to reflect tonight on the changes in the structure of the U.S. financial system of the last 20 years or so, and what implications these have for the nature of systemic risk. For those of us who are responsible for thinking about the overall stability of the financial system, the questions we face are, of course, broader than the potential insolvency of a large bank and the most appropriate resolution methodology. They include not just how to make the system better able to withstand the failure of a major bank or financial enterprise built around a bank, but also how to better withstand the failure of a major non-bank financial intermediary or a systemic liquidity crisis that may or may not arise from a solvency problem at a large supervised financial institution. The central bank of the United States was legislated into existence in the wake of the banking crises of the early 20th century. And the framework that evolved in the decades that followed was directed specifically at dealing with the special risks posed to banks and by banks to the economy as a whole.
5152  This is because the effects of changes in migration on the supply of labour are largely balanced  by corresponding changes in demand. This means that any reduction in net migration after Brexit could therefore ultimately have only a modest impact on prices in general equilibrium. Over a shorter horizon, however, abrupt decreases in migration could result in shortages in some sectors that have become reliant on migrant labour, and contribute more materially to inflationary pressures. In addition, the ease with which UK employers have been able to source labour from abroad and move operations offshore as a result of globalisation may have weighed on wage growth – though the size of such contestability effects is difficult to judge. To the extent that such effects have operated, any restrictions on 49  Pessoa, J (2016), ‘International competition and labour market adjustment’, CEPR Discussion Paper No. 1411. Bank research replicating the work of Autor et al, ibid, finds that areas in the UK with a high exposure to Chinese competition have experienced large falls in manufacturing employment, with offsetting rises in non-manufacturing employment. 50 The largest effects are for lower-skilled workers in services industries. See Nickell, S and Saleheen, J (2015), ‘The impact of immigration on occupational wages: evidence from Britain’, Bank of England Staff Working Paper No. 574. 51 See the box on pages 30-31 May 2015 Inflation Report. 52  When this speech was originally published on 18th September this sentence contained typographical errors which have subsequently been corrected.

While this reduces inflationary pressures in the economy as a whole it has 24  contributed to a long and painful period of adjustment for lower-skilled workers. The secular disinflationary  effects from this steady integration of additional workers into the global labour market need to be taken into account in addition to the cyclical inflationary pressures from changes in labour market slack. The various channels through which globalisation affects the relationship between domestic slack and inflation can be illustrated using the Phillips Curve (Figure 1). 18  See ‘Understanding the downward trend in labour income shares’, Chapter 3 of IMF WEO April 2017. These effects – an example of factor price equalisation (Samuelson, 1948) – have been well documented for example by Autor, D, Dorn, D and Hanson, G (2015), ‘Untangling Trade and Technology: Evidence from Local Labour Markets’, The Economic Journal, Vol. 125, No. 584, pages 621-46. Bank staff analysis, using OECD data, suggests this mechanism has operated widely, with a range of countries seeing strong growth in non-tradeable employment compensate for declines in sectors most exposed to international labour substitution. 20 This channel also increases the role of the exchange rate in determining inflationary pressures, since it will affect the home-currency value of the wage workers from abroad would earn by relocating and therefore their willingness to move.
For this to happen in the best possible way, customers themselves need to pay due attention and obtain accurate information on bank products and services. When necessary in this process, more specialised external expertise may be requested. Secondly, Bank of Albania aims to offer a concrete incentive in this process for commercial banks, by further reducing their costs for the use of AIPS and AECH, payment systems during their transactions in Lek, on their own or their clients’ behalf. We believe that through a more competitive policy in products pricing by the banking sector clients get more benefits and we may see an increase in their number and, subsequently, generate an increase in the revenues of the banking sector. Third area, in which we are focused relates to the requirements to increase accountability in banking institutions management, asking repeatedly that professionalism, dedication and accountability be transformed into a work culture for all banking institutions staff. For that matter, we are continuously reviewing the processes through which the banks realise their decision-making, ensure control of certain activities and reporting chain within their institutions, as well as their interaction with the public. Internal control systems define, mostly, the capacity of an institution to operate securely. These are necessary to avoid any gap that may be abused to the disadvantage of the institution. Hence, in its regular communication with banks, the Bank of Albania has requested that they undertake all necessary measures; in terms of money, human resources and technology; to guarantee the security of any banking [trans] action.

Indeed, the inflation rate fell to around 2% (2.2% in July and August), taking the differential with the euro area to half a percentage point, although some rise can be expected in the rest of the year and in the first quarter of next year. The smoothly slowing path of household consumption in 2006 and the first half of this year reflects, as mentioned above, the foreseeable adaptation to more normal monetary and financial conditions. The rise in interest rates that began at the end of 2005 has been spreading gradually to the various financial and banking markets, stimulating household saving and increasing the interest burden on indebted households. Also, the lower rates of household wealth appreciation (mainly due to the gradual containment of house price rises) have reduced the expansionary influence of wealth effects on consumption. Counterbalancing this, the strength of employment, which continues to grow at more than 3%, and the high levels of confidence have played a significant role in ensuring that this process of adjustment of household consumption to more sustainable levels has been smooth. Also perceptible since the beginning of 2006 has been the lesser vigour of residential investment which, as in the case of private consumption, was also in response to the interest rate rise and to the lowered expectations of house appreciation following the sharp price increases of previous years.