samchain/econo-pairs-v1 huggingface dataset:
With the social need to ensure general access by the population to financial services having largely been met, an area in which the savings banks have undoubtedly made a historical contribution, the endowment and management of the welfare project fund – which should be maintained given its great public usefulness as the distinguishing mark of the foundations – can be perfectly fulfilled, and indeed strengthened, on the basis of the return on diversified assets that do not necessarily comprise a controlling position in a specific bank. 4. What results have been achieved? I consider that the effort made has essentially enabled the objectives set to be achieved. This has been corroborated by the assessments made both domestically and by international organisations. In particular, the ECB’s comprehensive assessment of banks at the end of last year, as part of the groundwork for the start-up of the Single Supervisory Mechanism, was illustrative in this respect. As you will recall, the comprehensive assessment exercise comprised two legs: an asset quality review and a stress test. The asset quality review revealed that Spanish bank balance sheets broadly reflected the risks derived from their investment with greater rigour than that observed in other jurisdictions, with fewer shortcomings having been detected in respect of valuation or provisioning for the exposures analysed. Hence, the incidents encountered in this review subtracted, on average, 14 bp from Spanish banks’ common equity tier 1 (CET1) ratio, compared with an average impact three times greater at the participating European banks.

The former savings banks that exceeded a specific size have had to convert into foundations, whose main function is the management of their welfare projects drawing on the  1  See “Background note on public financial assistance in the restructuring of the Spanish banking sector (2009–2015)”. BIS central bankers’ speeches  3  return on their assets. Likewise, the Law provides for various mechanisms – such as the requirement, where appropriate, for a management protocol, a financial plan and the settingup of a reserve fund in foundations – to safeguard the independence and professionalism of bank management and to generate incentives for the orderly reduction of the stake of these foundations in banks, to levels compatible with the absence of control. I believe the new regulations – soon to be complemented by a Banco de España circular – point the way for a new organisational model for the sector more in keeping with the current demands which include ever-stricter prudential and corporate governance requirements. Under this model, and after a suitable transition period where necessary, significant banks would generally adopt the form of a listed public limited company, so that they are able to compete in the market to raise the capital and funding required for the orderly pursuit of their activity in the new regulatory environment. I believe that in this forum – sponsored by La Caixa – I need not insist on the viability and reasonableness of this model for the former savings banks.
Changes in the regulation of the rental market or increased subsidies for rented housing would increase the share of accommodation to rent, thereby dampening demand for cooperative housing and thus housing prices. However, increasing the number of cooperative houses and changing the structure of the Swedish housing market can take a long time to implement. Over that time we will be obliged to look at different measures which could dampen demand for housing and mortgages. Measures which can dampen household demand for mortgages Raising capital requirements important to reinforce the resilience of banks, although the effects on household indebtedness are limited One option is to focus on the banks and raise capital requirements, which I think we should do. If the banks were forced to change the funding mix on their balance sheets towards a higher share of equity, lending rates could then increase which would mean lending volumes would decrease. However, our own analysis suggests that the effects on banks’ lending rates and lending to households would be limited. 14 The main effect is in fact that the resilience of  14  See the article “Stricter capital requirements for banks – effects on the macro economy”, Monetary Policy Report, July 2014. BIS central bankers’ speeches  11  banks is strengthened. But this is a central point seen against the background of financial stability risks I described earlier.

When the crisis hit and the mood changed, these households radically reduced their consumption back to a more normal level. This has been highlighted as an explanation for the negative link between indebtedness and consumption developments among Danish households (see Figure 7). 8 Substantial falls in housing prices impact households’ balance sheets, in that the relationship between assets and debts rapidly deteriorates. There were clear signs of this in the countries in which housing prices fell heavily in conjunction with the financial crisis. For example, over a short time, the average loan-to-value ratio among US households with mortgages increased from under 60 per cent to over 90 per cent, while the average loan-to-value ratio among households in Denmark increased from under 45 per cent to over 60 per cent (see Figure 8). 8  See Andersen, A.L, Duus C. and Lærkholm Jensen T., “Household debt and consumption during the financial crisis: Evidence from Danish micro data”, Working Paper, Copenhagen University, 2015. BIS central bankers’ speeches  7  Figure 8 Households’ loan-to-value ratios in the United States and Denmark Per cent  Sources: Gelain, P, Lansing, K.J., and Mendicino, C., “House Prices, Credit Growth, and Excess Volatility: Implications for Monetary and Macroprudential Policy”, International Journal of Central Banking, 2013, and Andersen, A.L, Duus C. and Lærkholm Jensen T., “Household debt and consumption during the financial crisis: Evidence from Danish micro data”, Working Paper, Danmarks Nationalbank. When debts take up a larger share of the value of housing, consumer demand decreases.
The new set of liquidity requirements will provide for a better monitoring of risks on banks’ balance sheets and will limit the social cost of liquidity crises. It has to be combined with actions ensuring a proper functioning of the money market, such as reform and oversight of reference rates. It should be seen as a complement to regulatory reforms that improve market discipline in other segments of the banks’ liability structure, such as capital buffers and the new bail-in rules for senior bond-holders and uninsured depositors. A more far-reaching question, which I did not address in this speech, is whether the increased risk-sensitivity of bank liabilities under the new regulatory regime will constrain the role of banks as providers of liquidity services to the economy, or as creators of “quasimoney”. If so, this could put undue pressure on central banks as producers of the only truly safe and liquid asset – bank reserves. This makes it even more important for governments to be fiscally responsible so that Treasuries can keep or regain their role as safe and liquid instruments. Going forward, central banks will continue to act as lenders of last resort, but the crisis has helped us better understand the conditions for it to be socially useful. One of these is an effective liquidity regulation that constrains the business models of banks in a way that ensures that liquidity risk is self-insured. If properly priced, instruments such as a Committed Liquidity Facility can complement liquidity regulation while protecting monetary policy.

All in all, one may therefore expect a general increase in bid amounts and bid rates in tender operations, as well as adverse selection in the participation to these operations. Would this imply a changed risk profile of the Eurosystem’s balance sheet? In principle no, as the central bank is protected by its risk management framework, including a haircut schedule calibrated to the credit and liquidity risk of pledged securities. But higher average haircuts could imply a higher level of asset encumbrance on the balance sheets of banks, with potential feedback loops onto the perception of credit risk at counterparty or even at country level. Let me give a second example of how the interaction between liquidity regulation and monetary policy implementation might be expected to be complex, especially for the Eurosystem. On one side, the regulation aims at reducing banks’ undue reliance on central bank liquidity, which is an intended consequence of the regulation. On the other side, the regulation might lead to a situation in which some euro area banks, presumably the most fragile, would rely more on the Eurosystem than otherwise. The central bank then risks becoming a “lender of first resort”. Still, on this note, let me recall that the Eurosystem implements monetary policy in normal times in an environment of a large and structural liquidity deficit by using temporary liquidityproviding operations in the form of reverse repos. This implies that some reliance on central bank funding is not undesirable, but rather wanted.
In any event it will be fascinating to see what other contracts emerge over the coming months. Of course, not all contracts that are launched will be successful, and it’s interesting to reflect on what makes a successful derivative contract. Lessons can often be learned from looking back to the past. Not far from this location is the home of the London Metal Exchange. Its origins can be traced back to 1571, when traders in metal and a range of other commodities began meeting at the Royal Exchange. What was originally a domestic market in physical metal became a major global market, and by the early 19th century traders had been forced to use nearby coffee shops. As the UK started importing large quantities of metal from abroad during the Industrial Revolution, the need emerged for importers to protect themselves against price movements during the long voyage from places like Chile and Malaysia. The “futures” market which developed from those humble beginnings continued to grow and, in 1877, the London Metal Exchange Company was formed. That market was successful for a number of reasons. Volatility in the price of the underlying product made the contract attractive to hedgers and speculators alike. Technology - the telegraph would you believe! - encouraged the market’s growth by making shipment arrival dates more predictable. The LME had a first mover advantage that still stands. Liquidity flourished as traders followed one another in using the new market.

And all are competing for business in a way unthought of a few years ago witness the competition between LIFFE and Eurex for the long and short ends of the euro yield curve. The latest score in that particular England:Germany match is one all. No doubt German supporters think this score-line would have been a fairer result on Saturday night, given the balance of play! 1  BIS Review 51/2000  Role of technology But the common factor in all of these developments is technology. Physical trading floors for exchanges are fast-disappearing, particularly on this side of the Atlantic, replaced by virtual floors with trading conducted electronically. And exchanges are utilising their markets and system expertise to become trading system providers as well as market operators: OM has been a leader in this field for some time now, and LIFFE has announced some exciting plans - the creation of - fittingly enough “LIFFE.com” and its recent tie-up with Cap Gemini. On balance, these developments must be in investors’ interests. They reduce costs, improve access and allow exchanges to respond quickly and effectively to users’ changing needs. But they also present a number of challenges. To move from a trading floor, with its mix of locals, brokers and market makers, to an electronic order book, undoubtedly changes the dynamics of a market. For regulators, remote trading also brings some difficult challenges. Technology does not respect national boundaries; nor does it recognise different jurisdictions.
There is thus a need for monetary coordination, whose ultimate form is the creation of a monetary union and a single currency. France and Germany have had no difficulty in understanding this development and are deeply involved in the preparatory work for EMU. The Maastricht Treaty contains clear and efficient monetary provisions by setting specific deadlines for the creation of a single currency and by organizing three separate stages BIS Review 63/1997  -4-  for this process. These stages allow for a progressive but logical move to monetary union, which ensures that the single currency will rest on solid foundations. Moreover, the independence of the European System of Central Banks, made up of the European Central Bank and national central banks which is fully warranted by the Treaty, will guarantee price stability and the credibility of the single currency. Last, the Treaty allows for a balanced policy mix based on an independent monetary policy and appropriate fiscal discipline (in this respect, the stability and growth pact is a useful “user guide” to the provisions of the Treaty and not a new constraint coming from nowhere). We are now in the implementation phase of the monetary provisions of the Maastricht Treaty. The concrete preparations of monetary union are the responsibility of the European Monetary Institute.

EMU requires a sound legal basis to foster the credibility of the changeover to the single currency. The Madrid European Council asked the Commission to prepare a draft Council regulation on the legal framework for the use of the euro. This regulation is of the utmost importance. Market participants need legal certainty, not only as regards the new instruments in euro, but also as regard the continuity of instruments denominated in the former national currencies or in ECU. Besides financial markets, legal certainty is also important for citizens, as the emergence of a new currency is inevitably, at the first stage, a source of uncertainties. In this respect, technical preparatory work on the legal framework for the use of the euro is almost achieved. The European regulations that have been drafted and should be endorsed by the European Council in Amsterdam clearly state that the euro will be the BIS Review 63/1997  -6-  currency of the European monetary union as from the 1.1.1999 . As a consequence, the national currencies, in particular notes and coins, will continue to circulate during a transitional period, as subdivisions of the euro. Two other key elements are that the changeover will ensure the continuity of existing contracts denominated either in national currencies or in ECU and that the ECU will become the euro at a rate of 1 to 1. Besides legal security, EMU will reinforce monetary stability in Europe. The Maastricht Treaty provides for a monetary framework very similar to that prevailing in Germany and in France.
Lastly, I would like to emphasize that the most effective and lasting way to ensure a more stable and prosperous future, with lower interest rates for both private investment and public sector financing, is a clear commitment to fiscal and monetary responsibility and progress in micro and macroeconomic reforms. The attainment of stability is a permanent and complex challenge, but it will be accomplished, as long as there is consistency in economic policies over time. In Brazil, we have experienced periods of high inflation, periods of high interest rates, and both, with deleterious consequences for society. An important factor in this scenario has been the low quality of the public sector accounts and credit. We must create conditions to keep both low inflation and interest rates, at the same time. But this is not a matter of Central Bank's desire. The Central Bank's role is to set the necessary and sufficient interest rate so that the inflation target is achieved. This is what we will do. A fiscal surplus, which unmistakably guarantees the stability of the public debt, associated with the social security reform, as a first step, and of tax reform, in a second round, together with the Monetary Responsibility Law, are the most direct way to reduce country risk and interest rates. Minister Palloci's speech in this auditorium clarifies this matter.

Tharman Shanmugaratnam: Opportunities in Asia for long-term growth and a look at the role of Singapore’s local banks Speech by Mr Tharman Shanmugaratnam, Chairman of the Monetary Authority of Singapore, at the Official Inauguration of DBS Asia Central, Marina Bay Financial Centre (MBFC) Tower 3, Singapore, 17 October 2012. *  *  *  Mr Peter Seah Lim Huat, Chairman, DBS Bank Limited Mr Piyush Gupta, Chief Executive Officer, DBS Bank Limited Distinguished Guests, 1. It is a real pleasure to be here with you for the official opening of DBS’ new headquarters at the MBFC – DBS Asia Central. 2. Established in 1968 as the Development Bank of Singapore, DBS played a key role in helping to drive Singapore’s industrialization efforts. As Singapore moved to develop into a key financial centre in the Asian timezone, DBS also evolved into a full-fledged financial services group, offering a comprehensive range of products and services. 3. Over the last few decades, DBS has also expanded strongly into Asia, and has established a strong regional footprint. Apart from its key markets in Singapore and Hong Kong, DBS is strengthening its franchise in Southeast Asia (SEA), China, India and Taiwan. Today, with its network spanning 12 markets in Asia, DBS is not only a leading bank in Asia Pacific but also ranked by some as one of the strongest banks in Asia1. Leveraging on opportunities in Asia to anchor long term growth 4. The global economy continues to face many risks and uncertainties.
For investors, inflation is the biggest bear to watch because monetary policy could tighten at a quicker pace than expected by the markets. Markets are currently pricing in only about three Fed rate hikes to end-2019, so it may not take much to unsettle the markets. Equities, whose valuations are premised on low discount rates, could sell off in a hurry. “Mama Bear” - Protectionism Let me now turn to “mama bear” protectionism. And let us not take a hibernating bear for a dead one. This is a bear that may not wake up for a very long time, maybe never. But if it does, it could be ferocious. Protectionism was the biggest fear this time last year. There were populist backlashes against globalisation, represented most vividly by the results of the Brexit referendum in the UK and presidential elections in the US. The great relief of 2017 was that this risk did not materialise sufficiently to threaten the global economy or financial markets. But globalisation continues to face challenges. The WTO ministerial meeting last month ended inconclusively. 4/7  BIS central bankers' speeches  The US pulled out of the Trans-Pacific Partnership (TPP) early last year and has threatened to leave NAFTA. In Europe, the risk of a hard Brexit is not trivial. If negotiations break down, both the UK and EU will bear high disruption costs. Protectionism can do much harm to the global economy because its reach extends beyond the flow of goods and services, to the flow of capital and technology.

Indeed, the growth rate of real nonfinancial corporate bonds outstanding during this expansion has been roughly similar to that of previous expansions (Figure 7). A similar pattern is evident in the commercial paper market (Figure 8). Notwithstanding the robust performance of debt markets during this expansion, the sharper decline in outstanding bank loans to businesses that I mentioned earlier was likely a contributing factor to the slower economic recovery we have observed this time around. These developments appear to have had adverse consequences on the cost and availability of credit for bank-dependent borrowers. Also, in the early years of this recovery, bankdependent firms appear to have deleveraged more and invested less than firms with access to capital markets. So, the impairment of banks’ ability to extend credit still has the potential to hinder investment and adversely affect the overall economy. We see similar correlations when it comes to lending to households. The expansion in auto lending that commenced in 2010 coincided with a recovery in auto sales, which have now essentially regained the ground they lost during the recession. Until recent quarters, overall consumption growth has been slow, consistent with a pattern of slow growth in credit card balances. The most obvious case is mortgages where – after a massive tightening from 2007 to early 2010 – underwriting standards remain very tight. This tightness, especially for nonprime borrowers, has likely been a factor behind a persistently sluggish housing market that has held back this recovery relative to earlier ones.
The Deputy Governor shall be appointed by the Government following a proposal by the Governor and must meet the same conditions as the Governor. The six elected Council members shall be appointed by the Government following a proposal by the Minister for Economy and Finance, after consultation with the Governor. They must be Spanish and have recognised competence in economy or law. Finally, the two elected members of the Executive Commission shall be appointed by the Governing Council of the Banco de España, following a proposal by the Governor, from among the Council's elected members. 5  Only prosecution for deliberate crimes, permanent disability, incompatibility arising during the term of office or serious non-fulfilment of obligations can be causes for dismissal. 5  3 Formal independence: a necessary but insufficient condition Although independence must be based on a sound legal framework, formal “independence” is a necessary but insufficient condition for independent agencies. Independence must be effective and, therefore, it must be credible. In other words, an “independent” agency must be recognised by society as one that operates independently within its area of competence. This requires there to be complete trust that its actions are governed exclusively by true and fair compliance with the mandate entrusted to it, because this is the best way in which to serve the general interest. In consequence, connecting channels with society must be maintained and reinforced. This should result in a pro-active exercise in institutional transparency and accountability in the fulfilment of our mandate, as I shall detail later.

Banks that believe the authorities consider them to be too big to fail may assume excessive risk and their creditors may supply them with credit at a cost that is too low. For instance, if banks believe that the central bank will solve any liquidity problem, this will weaken their efforts to prevent such problems from arising - and if they occur, from solving problems in the interbank market. The use of credit on special terms in situations where financial stability is not threatened is associated with indirect costs. The situation must thus be carefully examined before loans on special terms are granted. If it is widely known and recognised that if an institution’s problems are confined to liquidity, it should be possible for the institution to raise loans in the market. A problem bank’s creditors - often other banks - will in such a situation make their own assessment of the bank’s solvency. In principle, it is not a foregone conclusion that the central bank and other authorities would be in a better position to evaluate an institution’s solvency than its own creditors. Implicit insurance schemes, which are in fact what loans on special terms are, may impair the effective functioning of markets and lead to excessive risk-taking among banks. It may take a long time before the costs come into evidence. In a crisis situation it is important to take into account the long-term benefits of not providing support such as better functioning markets and more appropriate risk-taking.