samchain/econo-pairs-v1 huggingface dataset:
The level of activity in the Finnish economy is still poor, but will benefit, like the Swedish economy, from the global improvement in economic activity. In Denmark and Norway, private consumption will be stimulated by tax reductions. There are also signs of a turnaround in industrial activity in the UK, while private consumption continues to develop favourably. However, there are also risks for developments in Europe: in the euro area the main cause of uncertainty is wage developments. High wage increases for metalworkers in Germany may spread to other sectors and then to other countries in the euro area. There is thus some possibility that the rate of wage increase and inflation in the euro area will be higher than in the main scenario depicted by the Riksbank. The economic situation in Sweden The Inflation Report that was published at the same time as our interest rate decision paints a mainly bright picture of the Swedish economy in the near future. The assessment is that the downturn in economic activity will be shallow and relatively short-lived. The recovery in global market growth, which for Swedish goods amounts to 2-3 per cent this year, will lead to an increase in Swedish exports. Over the next few years, this increase is expected to become 7-8 per cent a year. At the same time, households’ disposable incomes are improving, which contributes to increased consumption.

The most critical challenge emerging Asia faces is to build economic and financial infrastructure fast enough to properly harness the growth energy and put these capital into productive use. Without adequate financial infrastructure, namely market and legal infrastructure, and financial literacy, there is potential risk that emerging Asia cannot absorb such flows. This could result in misallocation of resources, including asset bubbles and instability. In parallel, public investment in infrastructure projects, as well as social investments in education and healthcare, are keys for increased productivity and economic upgrade. The challenge lies in getting the right balance between growth and stability, in managing large and long-term financing, increasing public investment, while keeping financial discipline. These are complex issues on how to ensure efficient resource allocation. A key strategy is to enhance the role of the market mechanism of the financial sector in Asia to rise to the challenge, and to act as check-and-balance on public policy. In closing, we are at an important turning point where we face paradigm shift. This is one of the realignment of relationship between the market, regulators, and society. In crisis countries, the balance of the relationship between the financial industry and the society shifts because the cost of financial crisis is born by the society. In emerging Asia, public policy including financial regulation comes under pressure from social demand for financial access as well as consumer protection. These naturally accompany the take-off in growth as a result of economic and financial liberalization.
Work on margining requirements, counterparty credit risk and capital for banks’ exposures to central counterparties are examples of our efforts related to derivatives; and  •  revising the supervisory framework for large exposures to complement the Committee’s risk-based capital standard and to help improve banks’ measurement and control of large exposures. All of these projects are necessary to ensure that the regulatory framework adequately factors in the lessons from the financial crisis. The challenge, almost five years on from the height of the crisis, is to ensure that we bring closure to these projects and that they are in place before the next stage of the financial cycle begins. Underpinning the Committee’s policy initiatives is an extensive framework for the collection and analysis of data to help us assess the quantitative impact of a particular policy. Quantitative impact studies (QIS) have become a central element of the Committee’s work, and we have a full slate of QIS exercises planned for this year. Alongside the semiannual Basel III monitoring reports, almost all of the policy initiatives I have just mentioned have one or more data collections or impact studies planned. While this can be a burden for banks and supervisors, this hopefully makes for well informed policymaking – so is well worth the effort. In addition to all of the policy and analytical work, the Committee intends to: •  continue to monitor members’ commitments to the timely implementation of agreed reforms.

[15] Schrimpf, A. et al., op. cit. ; Duffie, D., op. cit. ; Liang, J.N. (2020), “  Corporate Bond Market Dysfunction During COVID-19 and Lessons from the Fed’s Response”, Hutchins Center Working Papers, No 69, October. [16] Cera, K. et al. (2020), “The role of bank and non-bank interconnections in amplifying recent financial contagion”, Financial Stability Review, ECB, May. https://www.ecb.europa.eu/press/key/date/2020/html/ecb.sp201119_1~4a1ff0daf9.en.html  6/7  20/11/2020  COVID-19 and the liquidity crisis of non-banks: lessons for the future  [17] Although LVNAV funds guarantee constant prices under normal market conditions, they are designed to lose this characteristic and convert into a variable net asset value (VNAV) fund if the price of the underlying assets changes by 20 basis points or more. The higher riskiness of the underlying assets was likely amplified by the risk of conversion into a VNAV fund, as a number of LVNAV funds were close to breaching the regulatory limits on net asset value during the recent period of volatility. Investors may therefore have redeemed early during the recent stress episode and contributed to additional outflows and liquidity shortages in these funds. [18] De Guindos, L. and Schnabel, I. (2020), “The ECB’s commercial paper purchases: A targeted response to the economic disturbances caused by COVID-19”, The ECB Blog, 3 April. [19] Swing pricing rules can discourage investors from selling shares in funds and can provide fund managers with additional time to adjust their portfolios, mitigating the risk of fire sales. There are mixed results in studies that assess the effectiveness of swing pricing.
32  Inflation rises by up to an additional 3.2 pp in average year-on-year terms in 2022-2023 under the adverse scenario and by up to an additional 3.6 pp under the severe scenario. GDP growth slows, by an average of 2.8 pp under the adverse scenario and 5.4 pp under the severe scenario. The impact on average growth in house prices is -5.4 pp and -8.6 pp, respectively. As for interest rates, the increase in short-term rates is larger under the adverse scenario (2.2 pp for 12-month EURIBOR) and smaller under the severe scenario (0.9 pp) on account of weaker demand. There is a notable increase in long-term rates under both scenarios, with the average 10-year sovereign bond yield climbing by 2.6 pp and 3 pp, respectively. 17  Overall, the adverse scenario entails a negative impact of 1.8 pp on the aggregate CET1 ratio of Spanish banks; this impact rises to 3 pp under the severe scenario. By components, the largest adverse impact would be on credit quality, leading to greater losses on loans to the private sector in business in Spain and a sovereign bond value adjustment. There would also be a lower generation of funds. In turn, the lesser need for new provisioning (owing to the greater use of existing provisions), deleveraging at banks and more enforcement of guarantees to meet the expected credit losses associated with ICO-backed loans, would mitigate the fall in the CET1 ratio in 2023.

The credit quality of loans backed by the State through the Official Credit Institute (ICO) deteriorated somewhat in 2021, although at a slower pace than in the previous half-year. At December 2021, 20.2% of ICO-backed loans were classified as Stage 2 exposures (up 3.9 pp on June 2021), and 3.5% as NPLs (up 1.4 pp on June 2021). It must be noted, however, that 30% of these loans continue to benefit from grace periods, which will come to an end in summer 2022.6 In the present setting, these credit exposures with some sign of impairment may, in turn, be more vulnerable to the materialisation of risk. Accordingly, careful monitoring is needed, together with early and correct recognition of potential losses. Third, profitability improved substantially7 in 2021. Specifically, return on assets (ROA) stood at 0.67% (compared with -0.21% in 2020 and with 0.51% in 2019). 6  In the sectors hardest hit by the COVID-19 crisis, the proportion of Stage 2 loans is higher (35.5% and 22.7% in hospitality and transport, respectively); this is also true of NPLs (6.5% and 4.5% in hospitality and transport, respectively). 7  Consolidated net profit totalled € billion in 2021, an increase of € billion on the losses recorded in 2020. 7  Extraordinary items, which were negative in 2020 and positive in 2021,8 had the most impact on profitability. Excluding extraordinaries, ROA stood at 0.57%, an increase of 37 basis points (bp) on 2020 and down just slightly compared with 2019 (0.63%).
Mr Gjedrem discusses various aspects of monetary policy, financial markets and the welfare state in Norway  Annual address by Mr Svein Gjedrem, Governor of Norges Bank, the Norwegian central bank, at the meeting of the Supervisory Council of Norges Bank, held in Oslo on 17 February 2000. *  *  *  We have just marked the turn of the millennium. Norway can look back at a century of upheaval - the dissolution of the union with Sweden in 1905, social conflict in the interwar period and the emergence of the welfare state. At the beginning of a new century it is natural to examine some of the threads running through our economic history. This may also shed light on the choices Norway is now facing. We have experienced periods of inflation and periods of deflationary recession. Vast changes in the world economy have led to shifts in monetary policy and financial markets. Technology has broken down regulations. Patterns of funding and ownership are changing. This creates unrest and uncertainty, but also offers new opportunities for growth and welfare. The welfare state is facing major challenges as a result of the ageing of the population and tax competition among countries. In this year’s annual address I will discuss various aspects of monetary policy, financial markets and the welfare state. Historical perspective One of the first endeavours of the Storting (Norwegian parliament) after its establishment in 1814 was monetary reform. In 1816 Norges Bank was founded. The specie daler was Norway’s first monetary unit.

In the course of the last 20 years, a revolution has taken place in global financial markets. Capital restrictions have been removed. Companies around the world are experiencing a wave of mergers, acquisitions and demergers. These transactions reflect a higher required rate of return among all companies and all areas of a business. At the same time, there is an increased willingness to take risk, with a soaring number of start-up companies. This trend has been particularly evident in the US, but European countries are also part of this process. Increased possibilities for using information improves financial markets’ ability to act as a catalyst for profitable restructuring and growth. Companies financed through equities, bonds and commercial paper are continuously monitored through a transparent process. Owners and potential investors follow company performance closely. There are ever-stricter requirements concerning information. A poorly performing enterprise can be acquired by others who feel they can either run it more profitably or use its resources more effectively elsewhere. One may be sceptical with regard to these developments, which seem to have created a situation where a few keyboard operations can lead to wealth and losses. Financial markets are driven by forces and psychological mechanisms that may result in extreme volatility. Financial bubbles fuelled by unrealistic optimism may lead to the darkest pessimism and fears. The so-called new economy may be a bubble. The concept “new economy” was first introduced prior to the stock market crash in 1929.
And if these shifts turned out to be more persistent they’d in time be matched by corresponding reallocations of supply. For tradable goods, I still think this is a reasonable central case. The shift towards goods demand is unlikely to endure forever and there may already be some early signs that consumer spending – here and in other countries – is rotating back to services. And in many of these markets supply looks to be reasonably “elastic”, at least over the medium and longer term: it responds positively to higher prices, ensuring a degree of self-correction (you can think of this as a flattening out of the cost curves in Charts 3 and 5). For most non-oil commodity prices, for example, periods of rapid growth tend to be followed not just by lower inflation but by rates of inflation that are actually below average. There’s evidence of the same mean-reverting tendency in manufacturers’ input prices in aggregate. It may also be a reasonable central case in the domestic economy but here things are more uncertain. Some shifts in spending may stick. If significant numbers of people continue to work from home, for example, the resulting changes in the pattern of spending – away from city centres, and on transport, and towards other areas and other goods and services – could endure. And it would take time to shift resources – people, capital, know-how – accordingly.

This, after all, was the new economy and massive profits were apparently waiting round the corner. Yes, that was almost the case, wasn’t it? An argument that was frequently put forward when share prices broke new records was that the “new economy” would lead to higher profit growth. Today we know that that has not been the case so far. The share price rise left many companies notably over-valued. Then what always happens happened. A bubble is bound to burst, sooner or later. From the high, the Swedish stock market in general has fallen by around 50 per cent, IT shares by almost 90 per cent and telecom shares about 75 per cent. In a historical perspective these are dramatic figures. Such a large average fall has not occurred since the major corrections in the early 1920s and 1930s. But it is not only on the Stockholm exchange that share prices have fallen so markedly. Much the same has happened in other countries, not least on New York’s technology-oriented Nasdaq exchange. Now let us take a slightly closer look at corporate profits in connection with earlier shifts in technology. A strong expected increase in corporate profits is bound to be mirrored in expectations for the total economy. A country’s GDP represents the aggregate incomes that are earned in the course of a year. The national accounts show the shares of total income that go to owners of capital and to wageearners, respectively.
It has highlighted the importance of improving our knowledge and assessment of interconnectedness in the financial system, both via the direct links between financial institutions and the indirect ones created in financial markets. Micro-supervisory assessment, institution by institution, typically investigates the vulnerability of each entity, under various assumptions of stress. In contrast, systemic risk assessment investigates the possibility of the whole system, or significant parts of it, being vulnerable, and considers that major risks may emerge from the financial system itself. Such risks may arise, for example, because large parts of the system might have similar exposures, may rely on the same funding sources, can be exposed to rising financial imbalances, may comprehend large similar currency or maturity mismatches inducing liquidity vulnerabilities, and can be exposed to large scale underassessment and mis-pricing of risks. In the assessment of the systemic risk of the financial system itself, the judgement on the robustness of financial infrastructures is particularly important. One important issue in assessing systemic risks is to measure the degree of procyclicality which is embedded in the financial system itself, namely the capacity of the system to amplify fluctuations and to produce after a certain period of time, excessive booms and busts starting from relatively modest initial shocks, up or down.

The improved conditions in financial markets have indicated that not all our liquidity measures are needed to the same extent as in the past. Similarly, it is our intention to discontinue the 6-months refinancing operations after the last operation at the end of March next year. Liquidity developments in non-euro area EU countries Allow me to say a few words on the broader implications of our decisions on non-standard measures, with a particular focus on the EU Member States outside the euro area. Macroeconomic and financial conditions in these countries seem to have stabilised, although there are significant differences across the region. A general “sudden stop” in capital flows to  2  BIS Review 161/2009  central and eastern Europe has not materialised. The significant presence of foreign banks seems to have had a stabilising effect in this regard, as parent banks have to a large degree been able to maintain their exposures to the region. The ECB’s extensive liquidity provision to parent banks established in the euro area has contributed to this. In addition, the ECB has provided liquidity support to some non-euro area central banks in cases of market malfunctioning or to facilitate the functioning of the international financial system. Fiscal policies in the euro area Finally, I should like to add a few comments on fiscal exit strategies. Many euro area governments are faced with high and sharply rising fiscal imbalances, which are not sustainable over the longer term.
When the flight to safety and quality occurs, it will be those countries and companies with robust standards of corporate governance that will be better placed to keep the loyalties of investors. Corporate governance developments in the region We should therefore keep up the momentum of progress. Since the crisis, the Asian Roundtable countries have indeed made substantial progress in important areas of corporate governance reform. I will run through two key areas of progress very briefly. Growth and strengthening of standard-setting bodies Institutions matter. Several countries in Asia have established national committees on corporate governance since the crisis . The private sector has also strengthened its act. We have seen a number of institutes of directors set up in many countries, including China, Hong Kong, Indonesia, South Korea, Malaysia, Thailand and the Philippines. Minority shareholder watchdog groups are also now in place in countries such as Malaysia, South Korea and Taiwan. And Institutes of Directors, in particular,  BIS Review 73/2007  1  now play a key role in developing training programmes for both directors and management. In some countries – for example, Malaysia and Thailand, such training programmes have become a mandatory prerequisite for directors of listed companies. So we have seen a strengthening of both public and private bodies aimed at the common objective of scaling up standards of corporate governance.

Corporate governance regulations and best practices We have seen considerable reform in the regulations and codes of corporate governance, as well as the actual practice of corporate governance in the Asian Roundtable economies. For instance, Pakistan, Chinese Taipei and Thailand all adopted new codes in 2002, while new or updated codes have been adopted in Bangladesh, Hong Kong, Indonesia and Korea since 2003. This has yielded visible benefits. There is greater clarity in many Asian economies regarding the fiduciary duties of the directors of listed companies. There has also been progress made in terms of more independent directors being introduced to the boards of listed companies in the Asian region . Accounting rules have also been beefed up across the region. Some of the Asian Roundtable countries have made significant moves towards convergence with international standards and best practices on accounting. China, India, Indonesia and Philippines, have for example revised their accounting standards to bring them more in line with international standards. Corporate governance in Singapore Corporate governance in Singapore has similarly undergone evolution. I shall leave it to the speakers from the Singapore Institute of Directors and the Singapore Exchange to share on these more fully. I will talk briefly instead about our overall approach to corporate governance. Regulatory framework – balance of mandatory rules and best practices First, let me touch on the regulatory framework for corporate governance. In recent years, we have moved away from a merit-based approach towards a disclosure-based approach.
Their participation brought international best practice and standards to this landmark transaction which we expect will have a developmental impact on the local bond market. It is also our expectation that other intermediaries will look to this initiative to motivate them to seek to do more in this area for the benefit of our economy. So, in conclusion, what we as Bank of Zambia can do is to understand the dynamics of the debt market, how it is evolving, and whether it is sufficiently liquid and transparent. We can also help ensure that banks perform their proper role and enhance the price discovery process by promoting transparency in the conduct of our own monetary policy actions. Finally, and most importantly, we can strive to help create conditions in our economy that will support sustainable, non-inflationary growth and so promote the overall welfare of all citizens. It is this is a role that the Bank of Zambia is committed to playing effectively. Ladies and Gentlemen, with these remarks, I wish to thank all stakeholders in this important initiative. Thank you. 2  BIS Review 35/2007

Current supporters control balance sheets totalling $ trillion and include the world’s top banks, asset managers, pension funds and insurers. The supply of disclosure is responding, with four fifths of the top 1100 global companies now disclosing climate-related financial risks in line with some of the TCFD recommendations. On every recommended metric in TCFD, disclosures have been steadily increasing. Three quarters of major investors surveyed are now using available TCFD disclosures when investing. Mike Bloomberg’s path-breaking initiative on climate disclosure is creating the platform to bring sustainable to the finance mainstream. Now we must build on this foundation by: First, over the next year, enhancing both the quality and quality of disclosures to make TCFD standards as comparable, efficient and as decision-useful as possible. And, by COP26, exploring pathways to make TCFD disclosure mandatory. 2  All speeches are available online at www.bankofengland.co.uk/news/speeches  2  Second, risk management For the market to understand where climate risks and opportunities lie, disclosures need to go beyond the static to the strategic. That means assessing the resilience of firms’ strategies to transition risks. This is hard. Only half of TCFD supporters systematically conduct scenario analysis and, of those that do, three fifths don’t disclose it. Fortunately, a number of promising initiatives are currently in train to build best practice. First, TCFD case studies – from Rio Tinto to Unilever and Citi – detail characteristics of good scenario analysis. Second, the TCFD Knowledge Hub provides guidance, research, tools, standards, frameworks and webinars.