samchain/econo-pairs-v1 huggingface dataset:
In this decade, we have been able to tighten the collateral requirements somewhat, most recently in 2005, when we among other things restricted access to using bank securities as collateral. At that time, we announced that we would later go a step further. This promise remains intact. Central bank measures have curbed the fluctuations in interbank interest rates, but only for loans with short maturities. For longer maturities, premiums have continued to rise, and the premium on 12-month money market rates is now more than one percentage point. The turbulence has particularly affected banks with low deposits and considerable money market loans. Both Roskilde Bank, recently taken over by Denmark's Nationalbank, and Northern Rock, which had to be bailed out by the Bank of England last year, had fairly low deposit-to-loan ratios. Combined with large exposures in the property and construction sectors, this made them vulnerable. Norwegian banks generally have higher deposit-to-loan ratios, although there are differences. Banks and investors, both in Norway and abroad, are now charging higher premiums and higher prices for providing capital for acquisitions, restructuring and investment, and highly leveraged enterprises must pay high risk premiums when they borrow. It has become more difficult to obtain funding. Norges Bank’s survey of bank lending indicates that banks are gradually tightening their lending standards. Household debt growth has recently edged down. At the same time, consumption growth has slowed, but consumption is still higher than disposable income. Corporate credit growth remains high, at least for the time being.

Interest rate setting cannot remedy this. Banks primarily rely on lending funds that they have borrowed, either in money and securities markets or from depositors. Norwegian bank equity capital only accounts for about 6 per cent of bank balance sheets. By way of comparison, Norwegian limited companies have an equity ratio of close to 40 per cent. Since banks manage customer deposits and because they have low equity capital, it is important they have effective risk management systems. Banking activities are also subject to regulation and supervision by the authorities. The law establishes minimum levels of capital for banks. Banking activity is pro-cyclical. During an upturn, the value of assets increases more than debt. This strengthens bank earnings and solidity. Increased equity capital provides room for additional lending. During a downturn, securities values fall and loan losses rise. Banks will then tighten up. Banks state financial assets at market value. 8 When value changes rapidly come into evidence in the accounts, bank owners and creditors are provided with better insight into a bank’s financial position, and banks can then rapidly act to maintain their capital adequacy. The new capital adequacy rules – Basel II – are designed to strengthen the stability of the financial system. The capital requirements seek to ensure that a bank’s capital is commensurate with its risk profile.
International Capital Flows in the Post-crisis World, September 2019 CENTRAL BANK OF CHILE  Non-bank lenders  Household debt issued by NBLs has increased as a share of total consumer debt  15  Retailers CCAFs NBLs  13  Real annual growth of loans  Nonbank credit (*)  (real annual change, percent)  (percent of bank consumer loans)  Car dealerships S&Ls  F&Ls Bank  60  Retailers  Car dealerships  F&Ls  CCAFs  S&Ls  50  11 9  40  7 5  30  3 20  1 -1  10  -3 -5  0 13  14  15  16  17  18  13  14  15  16  17  18  (*) Based on individual financial statements, including for bank consumer credit, which is used as the denominator. Source: Central Bank of Chile based on data from the SBIF, CMF and Suseso. The steady growth of the nonbank portfolio is a potential source of vulnerability, given that most of these lenders are outside the consolidated debt perimeter. In terms of arrears in the nonbank consumer portfolio, retailers recorded a slight improvement relative to end-2018, to 3.8%. In contrast, for the CCAFs, delinquency has increased steadily since 2013—when they began to use accounting criteria more similar to the banks—and it is currently more than double the rates for the rest of the nonbank consumer lenders.

In 1986, the General Banking Law introduced limitations on currency mismatch, constraints on related party lending, and restrictions for banks to receive goods instead of liquid resources; all of them, elements that were common practice before the 1982 crisis. Paradoxically, what could be considered harsher regulation did not hamper financial deepening. Instead, it fostered solvency and credibility of the banking system and allowed its healthy development in the ensuing decades. At the core of this development was the creation of a funded pension system, and subsequent capital market reforms, together with capital market openness, which dramatically changed the size, composition, depth, and strength of the financial sector in Chile. Now, during the transition toward fully implementing the current policy framework, Chile experienced a period of capital control that have been highly reviewed in the literature. The unremunerated reserve requirement (URR) implemented in Chile during the 1990s helped to change the composition of capital flows toward longer terms but was less effective in terms of reducing the aggregate level of capital flowing into the country. After removing the URR completely by the end of the 90s and allowing the exchange rate to fluctuate freely, the banking and corporate sector learned to operate in a completely different environment, characterized by an extensive used of the derivative market. In In particular, corporations have learned to operate in a flexible FX environment by using both, natural and market-based FX risk hedging instruments.
While it might be sensible for an individual firm to diversify its business lines to reduce its risk, if this same strategy is followed by all banks the end-result may be greater fragility across the whole system. Why? Because in their desire to look different than in the past, banks’ business strategies may end up looking identical in the present. The financial system could then become more prone to herdlike upswings and lemming-like downswings. There is more than a hint of this behaviour during the run-up to crisis. Banking strategies became a whirligig. Building societies transformed themselves into commercial banks. Commercial banks tried their hand at investment banking. Investment banks developed inhouse hedge funds through large proprietary trading desks. Hedge funds competed with traditional investment funds. And to complete the circle, these investment funds imported the risk all of the others were shedding. In their desire to diversify, individual banks generated a lack of diversity, and thus resilience, for the financial system as a whole. BIS Review 108/2009  7  So recent crisis experience highlights some of the costs of bundling banking services. Given that, there is an intellectually defensible case for some unbundling of these services. This would reduce the risks of spill-over between privately and socially beneficial banking activities. And it would help prevent banks making individually rational but collectively calamitous strategic choices. There are plenty of examples from the non-financial world, from genetics to geology, of diversity improving the robustness of systems. The financial system may be no different.

Andrew G Haldane: Credit is trust Speech by Mr Andrew G Haldane, Executive Director, Financial Stability, Bank of England, at the Association of Corporate Treasurers, Leeds, 14 September 2009. I would like to thank Paul Fullerton, Simon Hall and Salina Ladha for help in the preparation of this speech. *  *  *  It is good to be back in Yorkshire. I say back because I grew up around 10 miles north of here. When I left over 20 years ago, Leeds looked and felt very different to today. Nowhere is the contrast greater than in the financial sector. In 1995, almost 74,000 people were employed in financial and related business services, accounting for around 20% of employment in Leeds. By 2009 this had risen to over 116,000, or around 30% of employment. Today, Leeds has a legitimate claim to be the UK’s second largest financial centre. A short history of banking in Yorkshire The foundations for this success were laid much earlier. The history of banking in Yorkshire dates back over 250 years.1 Pease and Co of Hull, established in 1754, are thought to be Yorkshire’s oldest private bank. In the same decade, banks were founded in Leeds and Bradford. By the end of the 18th century, Yorkshire had a well-established network of over 40 banks in around 16 regional towns and cities. In the first two decades of the 19th century, private banking in Yorkshire continued to thrive, spreading to around 30 towns and cities.
3 To borrow from the English writer Robert Macfarlane, “proof of competence derived only from the absence of  catastrophe.” Robert Macfarlane, The Old Ways 133 (2012). Macfarlane was describing the navigation of the English Channel by night. In that case, perhaps the proof of competence is the absence of catastrophe. 4 See Onora O’Neill, What is Banking For?, Remarks at the Federal Reserve Bank of New York’s  Conference: Reforming Culture and Behavior in the Financial Services Industry: Expanding the Dialogue, Oct. 20, 2016. 3/3  BIS central bankers' speeches

In doing so, I shall reference the popular initiative “Save our Swiss gold” (also known as the “gold initiative”), on which the Swiss electorate will be voting on 30 November. After I have spoken to you, Sébastien Kraenzlin will outline some of the latest money market developments. The SNB’s currency reserves – an overview The SNB’s currency reserves currently stand at more than CHF 500 billion – 80% of gross domestic product (Switzerland’s annual economic output). With a share of some CHF 460 billion, foreign exchange makes up around 90% of our currency reserves. Since autumn 2012, the size of the SNB’s currency reserves has principally been determined by financial market valuations and by interest and dividend income. Given how large our portfolio of currency reserves is, fluctuations in value have a much greater impact today than they did in the past, as has once again become clear this year. The SNB reported a profit of CHF 28.5 billion for the first three quarters of this year. I should emphasise at this stage that our investment policy is always subordinated to monetary policy; it can only be understood in this context. Since September 2011, our monetary policy has been dominated by the minimum exchange rate of CHF 1.20 against the euro. With interest rates close to zero, the minimum exchange rate is the key instrument we are deploying to avoid an undesirable tightening of monetary conditions. The SNB will continue to enforce the minimum exchange rate with the utmost determination.
1 This scarcity produced a considerable volume of trading between banks; toward the end of the trading day, banks with more reserves than necessary would have an incentive to trade with banks that had too few reserves. 2 After three rounds of large scale asset purchases, aimed at stimulating the real economy, the level of reserves in the United States is about $ trillion today, orders of magnitude larger than the level before the crisis, as can be seen in Figure 1. 3 With such a large amount of reserves, very few banks ever need to borrow reserves to meet their requirements, and interbank trading has almost completely disappeared from the fed funds market. Instead, the market is now predominantly composed of trades between governmentsponsored enterprises – specifically, Federal Home Loan Banks – and banks. 4 In that respect, the fed funds market has come to resemble other segments of the U.S. unsecured money markets, such as the Eurodollar market, where nonbanks lend to banks. 5 This change in money market activity would clearly have been problematic if it had resulted in a loss of control over the policy rate, but there is no evidence that it has, as can be seen in Figure 2. So, to evaluate the consequences of this change, we are led to ask ourselves questions such as: Is the interbank market special? Ulrich suggests reasons why we might think that it is, but the answer is not clear to me, and further research would be welcome.

Let me elaborate a bit on the differences between these two types of market activity and their implications for rate volatility and market discipline. In the pre-crisis system, a bank’s reserves position evolved, in part, due to payment requests made by its customers, which were somewhat random and thus hard to anticipate. So an important share of interbank market activity was motivated not by fundamentals, but rather the need to fulfill a requirement imposed by the central bank. I always found this type of trading a bit artificial, but perhaps this is just a matter of taste. 1  A byproduct of the scarcity of reserves is that central banks had to lend a considerable amount of intraday credit to facilitate the settling of payments. In the U.S., the average of the daily peak level of daylight overdrafts provided by the Federal Reserve was roughly $ billion in 2006. 2  In the U.S., only depository institutions (banks) and a small number of other institutions, such as governmentsponsored enterprises, which include the Federal Home Loan Banks, can have an account with the Federal Reserve. Depository institutions are subject to reserve requirements. 3  In 2006, total balance requirements averaged approximately $ billion, composed of required reserve balances (the portion of reserve requirements not met with vault cash) and contractual clearing balances. The amount of reserves held in excess of requirements was about $ billion on average.
In this respect, the Bank looks forward to a code of conduct for the industry to be established and implemented by the industry this year. The code of conduct should comprise a set of key principles and guidance for proper business practices that instil greater market discipline and confidence, and to create a culture of healthy competition within the industry. This should be complemented by a process that ensures that individuals responsible for managing money services business operations have the relevant knowledge and experience to meet the minimum professional standards set by the industry, and are able to offer quality services to the public. In relation to this, the association should consider implementing a certification or qualification process, for example, by conducting entrance examinations for its members sometime in the future. We also expect the association to play a proactive role to improve the image of the industry players and weed out the black sheep within the industry, through the effective implementation and enforcement of the code of conduct, and by working with the relevant authorities to help combat illicit transfers of funds and unauthorised activities. Secondly, the association will also serve as the central platform to drive and implement development initiatives to enhance the capacity of the industry.

At the end of 2003 the foreign reserves of BoA reached $ covering 4.7 months of imports. BoA continues to maintain its view of a free exchange rate regime. This was reflected in the fewer episodes of BoA’s intervention in the foreign exchange market during the first half of 2003, when the purchase of foreign currency was almost four times that of the second half of the year. Nonetheless, this did not hold back the domestic currency from appreciating against the euro and the US dollar, with a stronger appreciating trend in place in the second half of the year. The appreciation of the domestic currency was one of the factors behind BoA’s 2.0% interest rate cut during year 2003. Monetary indicators have generally been performed in compliance with the forecasts set out in the Bank’s monetary programme. The annual growth rate of lek deposits was 19.1% by the end of the year, which is significantly higher than the annual rates of the pervious years. The credit balance rose by L11.9bn or 30.9%. The new credit increased by 50% meanwhile 76% is in foreign currency. The loans/GDP ratio is still low, at about 7%. The banking system experienced important developments during 2003 and in the beginning of 2004. The entry of two new banks of Albanian capital was soon followed by the successful privatisation of the Savings Bank from the Raiffeisen Zentralbank (RZB) Austria. Now, all in all there are 16 banks in the Albanian Banking system.
Because forefront technologies are based on the World Wide Web, central banks, supervisors and regulators will eventually need worldwide cooperation to ensure that their powers are still effective. Let’s take the example of crypto-assets. Everyone in France can bet their money in Bitcoin and the likes today (but think twice before doing so!). Yet, none of the Top 10 exchange platforms are located in France. This is the reason why back in February 2018 the Governor of the Banque de France and the French Minister of the Economy Bruno Le Maire, along with their German counterparts, asked that the issue be escalated to the G20 level. Thanks to this initiative, an international monitoring of the financial stability risks of crypto-assets is now in place and many initiatives are taken by international bodies to address the most pressing issues such as anti-money laundering, market integrity and consumer protection. (C) Finally, financial technologies should not only be seen as opportunities for the provision of new products and services or as a further threat to financial stability. Financial technologies can 4/6  BIS central bankers' speeches  also be an asset to enhance compliance with regulation or risk management practices: that’s what we call “Regtech”. They can also help the supervisor to perform its task more efficiently: we then speak about “Suptech” (supervisory technology). In both areas, the prospects are promising.

Conclusion I would like to conclude my speech by quoting Bill Gates: “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.”3 The Banque de France tries to heed this warning. Although we do belong to the (very) “old world” – the Banque de France was created more than 200 years ago by Napoleon –, as any incumbent, we need to adjust and adapt to the “new world”. In order to do so: We have adapted our organisation and governance with the creation of a Fintech hub within our supervisory function, the appointments of a Chief Digital Officer and a Chief Data Officer, and the launch of a Lab to foster innovation within the Banque. We experiment with new technologies: the Banque de France was the first central bank to implement a full-scale project based on DLT which is fully operational 4 and we successfully run eight artificial intelligence projects. We also host discussions between regulators, academics and industry: for example, the ACPR task force on artificial intelligence delivered an issue paper last December for a twomonth consultation period (ending 28 February). But this call for action is addressed to everyone, and especially to you, the new generation.
When the crisis struck Asia in 2008, there were fears of a drying up of trade finance as European banks started deleveraging and cutting back from the region. As it turned out, Asian banks stepped in decisively and trade finance volumes recovered strongly. •  Between 2008 and 2013, trade finance volumes at Chinese and Hong Kong banks have more than doubled while those at Indian banks rose more than half over the same period. •  Eurozone banks have since recovered some of their market share, but the Asian banks remain significant players. This afternoon I would like to discuss three key forces that will shape the course of banking and finance in Emerging Asia over the medium term: •  economic growth;  •  financial regulation; and  •  technological innovation. Economic growth Let me begin with growth. The near term economic outlook for Emerging Asia will be shaped by two themes: the ongoing recovery in the G3 economies and the slowdown in the Chinese economy. •  The underlying growth momentum in the US appears intact despite a disappointing start to the year. BIS central bankers’ speeches  1  •  The Eurozone is recovering from a double dip recession and financial stresses have abated. •  In Japan, domestic demand is strengthening, following the negative consumption tax shock of last April. •  However, China, which had been supporting global demand in recent years, is experiencing a deceleration in growth amid a property downturn and softer exports.

•  Basel III calls for an increase in both the quantity and quality of capital that banks must keep as a buffer against unexpected loss. •  Basel III will also put in place a new global liquidity standard. Banks will be required to hold enough liquid assets to survive a 30-day period of cash outflows. There are also efforts underway in advanced jurisdictions to reform banking structures. The details vary but the overall thrust is to separate retail banking from riskier activities like proprietary trading and investment banking. The objective is to simplify business models and facilitate the resolvability of large and complex banking groups. On the whole, the reforms will help to make banks safer and financial systems stronger. But they are not without some negative consequences, and their distributional impact is uneven. For many global banks, the new regulatory standards and reforms to national banking structures will mean a fundamental review of their organisation and activities. In fact, the international operations of global banks are already being affected. •  According to the IMF, direct cross border lending as a share of total banking assets has declined, mostly due to the retrenchment of Eurozone banks. For many Asian banks, the transition to the new regulatory standards will probably be less demanding. First, many of them had already bitten the bullet after the Asian Financial Crisis and built up their capital and liquidity buffers. They are thus starting from a stronger position to meet the new standards.
In contrast, the associated disadvantages could be linked to explanatory issues, the need for human resource adaptation, new data related concerns (privacy issues), or increased dependence on third parties. Nevertheless, as consumers and companies are embracing these new technologies, it is the policymakers’ role to identify potential risks and vulnerabilities and to formulate adequate policy responses and tools in order to adequately address them. Then again, Big Data is not the only example where views have dramatically changed over time – other relevant cases are the negative interest rates employed by the European Central Bank, an unthinkable measure in the pre-crisis era, or the unconventional monetary policy programs implemented by central banks worldwide. A valuable lesson to be learnt here is to always challenge preconceptions and the “status quo” in an ever-changing financial system. I will stop here saying that I believe financial stability should always look towards the future. In this direction, significant progress has been made recently through the development of Environmental, Social and Governance – or ESG – investing. In this new paradigm, policy makers should first and foremost learn to assess and monitor new types of risks, such as climate change, and evaluate their growing impact on financial sector stability.

If necessary, it will therefore remain active in the foreign exchange market to influence monetary conditions. Thank you very much for your attention. I will now be happy to answer your questions. BIS central bankers’ speeches  1