samchain/econo-pairs-v1 huggingface dataset:
5  SECO, 2006, "Kunjunkturtendenzen Winter 2006/07", page 48. 6  See Ben Bernanke, 1981, “Bankruptcy, Liquidity, and Recession”, American Economic Review 71, 155-159, or Ben Bernanke, 1983, “Nonmonetary Effects of the Financial Crisis in the Propagation of the Great Depression”, American Economic Review 73, 257-276. 2  BIS Review 141/2007  make sure that banks take appropriate precautions to prevent the occurrence of disasters. It is well known that those protected by insurance policies can have lower incentives to prevent damages than those who remain unprotected. One of our goals, therefore, is to counter this so-called “moral hazard” risk. More generally speaking, central banks are concerned with a broad range of market failures, of which moral hazard is just one prominent example. Other market failures include coordination problems between market participants. The classic examples of such coordination problems are bank runs, where the mere belief that a bank faces insolvency problems will render the bank insolvent – even though it may be fundamentally sound. Another important source of market failures are externalities. For instance, in case of a banking crisis, a large part of the costs of the crisis are borne by households and firms. These costs are not fully taken into account by banks when they determine their risk profile. To banks, it is: “Tails I win, heads you lose.” As a result, banks’ profit-maximizing risk choices are typically not socially efficient. There can therefore be an inbuilt tendency for “excessive risk taking”.

In the past year or so, I think we have made quite good progress in providing this peer perspective on risk management and controls. In such areas as corporate governance, economic capital estimation, and anti-money laundering, I think we have been able to be quite specific on how well a given banking organization measures up to evolving industry standards - including what needs to be done to move up to the top rung of performance. I also recognize that there is a tremendous demand for us to provide even more guidance in these dimensions. In the numerous feedback sessions we have had with individual institutions on the quality of our supervisory process, we have heard that message loud and clear. With the maturation of our organizational approach, I fully expect that we will register further improvements in this dimension. The New Accord’s emphasis on risk management processes This brings me to my second broad theme - how the New Basel Capital Accord supports further adjustments in risk management and supervisory approaches and how it fits with the current focus on corporate governance practices. Since many of you do not hail from banking organizations, I’ll take a moment to summarize the objectives the Basel Committee set for itself in re-writing the international rules on bank capital adequacy. The existing rules, which stem from the relatively simple 1988 Basel Accord, represented an important step in answering the age-old question of how much capital is enough for banks to weather economic downturns.
Since the mid-1990s, politicians had been encouraging these households to own their own homes by setting quantifiable targets for how much lending from the mortgage institutions should increase.2 Subprime loans had become increasingly common and many households bought houses in the belief that house prices would continue to rise. When prices on the saturated housing market then began to fall in 2007, many US households with subprime loans found themselves in a situation where they were too highly mortgaged in relation to their incomes, and the credit losses of the mortgage institutions consequently increased. The subprime loans are, however, not the only underlying cause of the crisis. One important cause is the imbalances in the global financial system that have built up over a long period of time. The years 2002 to 2006 were marked by strong growth in the global economy, the expansion of credit, historically low interest rates and a dramatic rise in housing prices and other asset prices. The United States built up large deficits in its current account, which it could fund because other parts of the world, mainly China and the oil-producing countries, built up large surpluses in their current accounts. securities are considered to have no credit risk, the TED spread can be interpreted as a measure of the uncertainty in the financial markets. 2  2  See, for instance, the Community Reinvestment Act. BIS Review 7/2009  Another cause behind the crisis is the structured credit products which form part of the financial innovation.

Zeti Akhtar Aziz: Creating a sustainable pool of talent for Malaysia Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Kijang Emas Scholarship Award Ceremony, Kuala Lumpur, 30 April 2015. *  *  *  In preparing for the future, a future that is going to be fundamentally different from the current environment, talent development has become more important than ever before. The environment before us is rapidly changing and is continuously becoming more interconnected, more complex and certainly more competitive. It is also becoming more uncertain and unstable. Malaysia has, however over several decades, demonstrated time and again our ability to face the challenges arising from these transformative changes, supported by our resilience and strong foundations. Human capital makes up a critical component of these foundations. Developing the talent that we have and making greater investments in our talent pipeline will contribute to generating the development of our future leaders that will be able to effectively operate in this new environment. Education and capacity building to generate the new talent with the right skills, mindsets and values, as well as effective talent development strategies and their implementation, have now become key priorities of the nation. The Kijang Emas Scholarship Award is an eminent scholarship award that is part of the Bank’s commitment to creating a sustainable talent pool for the nation.
The SNB therefore monitors the situation on these two markets continuously. An environment of low interest rates also brings fundamental monetary policy challenges. One of these arises from the fact that it is possible to hold money in the form of cash. I have shown that the SNB’s negative interest rate is an effective monetary policy tool. But how far can nominal interest rates actually fall? If the interest rate level declines further, at some point cash will become more attractive than sight deposits bearing negative interest. As the SNB has no intention of doing away with cash, this results in an effective lower bound for interest rates, which limits the scope for monetary policy action. This lower bound is below zero, because holding cash is expensive and risky. Thus, people are prepared to pay a certain amount to hold their money electronically. In Switzerland, the cost associated with the current  Page 7/16  negative interest rate is clearly lower than the cost of holding cash. Consequently, demand for cash has not yet risen substantially. So the effective lower bound for interest rates has not yet been reached, but we know that it exists. Another monetary policy challenge is the fact that the expansionary effects of low interest rates on consumption and investment can fade over time. As I have noted, following the introduction of negative interest, some banks increased their lending rates in order to offset falling interest margins.

With a view to managing such a crisis scenario, Credit Suisse as well as UBS have increased their gone-concern loss-absorbing capacity by issuing further bail-in instruments, which can be converted into equity in the event of impending insolvency. As we explained in our Financial Stability Report published in June, since the ‘too big to fail’ regulations came into force, 1 Final requirements refer to the requirements that will apply after expiry of all transitional provisions, and in particular to the qualitative requirements for going-concern capital. Page 1/3  Berne, 14 December 2017 Fritz Zurbrügg  News conference  Credit Suisse and UBS have also taken important organisational steps to improve their resolvability. Despite these positive developments, the two big banks still need to make further progress if they are to fully comply with the second-pillar requirements. This applies both to their gone-concern loss-absorbing capacity and their resolution planning. Full compliance with all of the ‘too big to fail’ requirements will further strengthen the big banks’ going and gone-concern loss-absorbing capacity as well as improve their resolvability in a crisis. Both of these sets of requirements must be addressed if Switzerland’s ‘too big to fail’ problem is to be solved. Domestically focused banks  I would now like to turn to the domestically focused banks. These institutions’ biggest risks continue to stem from the mortgage and real estate markets. I will make three points in this regard. First, imbalances on the mortgage and real estate markets persist.
In fact, transition economies, as a whole, are as important as the US in terms of external demand addressed to the euro area: they both enjoy the same share, i.e. 13%, of our exports. And, during the last two years, transition economies contributed for two-thirds to the overall growth of our total external demand, while the US contributed for less than 0.1%. More generally speaking, Central and Eastern Europe countries are already major contributors to the overall growth on the European continent. In 2001, despite the international context, they remained at quite high a level of growth, around 2.8%. This contribution is bound to further increase given these countries’ considerable potential for growth. I would like to conclude on this topic with a last remark: the EU enlargement is indeed an historic challenge for European integration. It will represent the most important enlargement process the European Union has ever faced. As a result, it has to be prepared with a great deal of care, and much remains to be done. The process of convergence will be very gradual and needs to be enhanced through multilateral surveillance and co-operation between the current Members states and the accession countries. For its part, the Eurosystem is actively contributing to this task, by deepening its relationship with the accession countries central banks. *  *  *  To conclude, let me stress three words: rapidity, stability and union. Rapidity is a key word. We have not much time to meditate, decide, implement.

Zeti Akhtar Aziz: Economic ties between China and Malaysia Address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the Launch of Industrial and Commercial Bank of China (Malaysia) Berhad, Kuala Lumpur, 28 April 2010. *  *  *  It gives me great pleasure to be here today on the official launch of Industrial and Commercial Bank of China (Malaysia) Berhad (ICBC). The establishment of ICBC in Malaysia, the largest commercial bank in the world today, represents an important development in forging stronger economic and financial ties between the People’s Republic of China and Malaysia. This licence is issued pursuant to the arrangement entered into between the Government of Malaysia and the People’s Republic of China in 2009, reinforcing a long-term relationship that has been strengthened over the years. The presence of ICBC, in our financial system will pave the way for increased business and investment opportunities between our two countries. As Asia leads the global recovery and with the progressive liberalisation in the region, the economic integration of the Asian region can be expected to strengthen further. Today, intraregional trade in Asia has increased to an average of 50% of the total exports of the region as compared to 32% in 1995. The underlying structural and demographic changes in Asia are expected to reinforce this trend. In addition, as domestic demand in the regional economies increases, it will provide further impetus to intra-regional trade and to the overall prospects for Asia.
Many observers criticised the Japanese central bank for having reacted far too slowly and for being too cautious about testing various methods to escape from their liquidity trap. I believe that we at the Riksbank should be prepared with analyses and measures at an early stage. Today I will therefore address the problem that a situation with a zero interest rate represents and the possible alternative solutions. I will, among other things, discuss a price level target and a method that in my research I have called the “Foolproof Way” of escaping from a liquidity trap. Finally, I summarise how effective the alternatives may be and how they can be selected depending on how serious the situation with a zero lower bound for the interest rate is deemed to be. In a situation with a zero lower bound for the interest rate, fiscal policy acquires a very important role. How effectively an expansionary fiscal policy can stimulate the real economy is, however, dependent on a number of factors, for example the degree of Ricardian equivalence – that is the extent to which a reduction in public saving gives rise to increased private saving. The initial size of the national debt, the structure of public expenditure and the distribution between expenditure increases and tax reductions in the national budget may also be decisive for the impact of fiscal policy on the real economy. Here, however, I only discuss monetary policy alternatives in the event of a zero interest rate.

The central bank does not thus attempt to compensate for the previously low inflation with a period of inflation above the target. If firms and households consequently believe that inflation will be very low in the short term and thereafter equal to the inflation target, then the average expectations in the slightly longer term will still be low and under the target. In such circumstances, with a zero interest rate, the real interest rate may still be too high even if the inflation target is credible in the longer term. One way to avoid this disadvantage is instead to have a so-called price level target, or what may also be referred to as “average inflation targeting”. A credible price level target A price level target in the form of a path for the price level, in which the rate of increase in the price level is given by the inflation target, has several advantages compared with a standard inflation target in a situation with a zero interest rate. Unlike an inflation target, a price level target has a “memory” in the sense that lower inflation or deflation during a period of time whereby prices fall below the target path will be compensated for by a correspondingly higher inflation in a later period to attain the price level target path once again. If the price level target is credible, the long-term inflation expectations will be stable, even if low inflation or deflation is expected in the short term.
Responding to this objective is the ambitious package of measures approved by the government on 22 May, complementing the initial consolidation efforts included in the State budget for 2010 and in the updated Stability Programme presented in January this year. The authorities committed themselves in the updated Stability Programme to reducing the budget deficit to 3% of GDP in 2013, in line with EU requirements under the Stability and Growth Pact. The package of measures approved in May involves bringing forward to 2010 and 2011 a sizeable portion of the drive to reduce the deficit. As a result, a deficit target of 6% of GDP was set for 2011. This fiscal consolidation objective, entailing a reduction in the deficit of more than 5 pp of GDP in only two years, is exceptional. But it is also vital so as to clearly bring public finances back onto a path of stability and dispel the risks perceived in connection with our fiscal position. This budget deficit target of 6% of GDP in 2011 should, moreover, be immovable and not conditional upon other factors, even though these are beyond the control of the authorities, such as lower-than-expected economic growth. The financial markets’ perception of the likelihood of this objective being met will be a yardstick for the authorities’ degree of commitment to pursuing an exit from this crisis, meaning this is the essential factor guiding decisions and budgetary conduct in the coming months.

Given the scale of the challenges facing us, it is vital that the economic policy response be sufficiently ambitious and resolute, so as to speed the adjustment of the accumulated imbalances and to lay the foundations for a more stable and flexible economy. This would not only be to the benefit of the Spanish economy; it is also essential for the very stability of the common European project. On this economic policy response will hinge the strength of the recovery, which in Spain’s case has hitherto been very incipient and very reliant on temporary stimuli, that will tend to peter out in the short run. Even without the high degree of uncertainty surrounding us in recent weeks, the recovery would only be gradual and would take some time to attain a pace of expansion sufficient to generate employment, which underscores the need to act decisively to avoid prolonged low growth. BIS Review 92/2010  1  The Annual Report of the Banco de España addresses the current situation of and outlook for the Spanish economy in great detail. Accordingly, given the limited time for my testimony, I shall focus on three issues that are essential in my view in order to be able to exit the current situation and bring about a rapid return to sustained growth: fiscal consolidation; the steps that must be taken to set in place an efficient labour market that rapidly promotes job creation; and, lastly, the restructuring of the financial system, where substantial progress has been made in recent weeks.
Now none of this means that we have closed our minds to the possibility of a more benign relationship between the demand and supply sides of the economy, which would allow us to sustain for a time stronger growth consistently with meeting our inflation target. But we can’t afford to bet the Bank on that happy state of affairs either. When people approach me with the sound-bite “give growth a chance” what I hear them saying is “take a risk with inflation”. But equally when they say “you must take no risks with inflation” I hear them saying “the world will never change”. The truth is that nobody knows with any great confidence. The important thing is to keep an open mind and to monitor intensively all of the data as it becomes available to us, and draw what inferences we can as to how those data affect the balance of risks around the inflation target looking ahead. What is encouraging, Mr Chairman, is that for all these uncertainties and complications the broad prospect for the UK economy - including the Scottish economy - over the next couple of years is for continuing relatively strong growth, with continuing relatively high employment, and continuing relatively low inflation. The monetary policy debate is a narrow one, it is about just how strong the growth, just how high the employment and just how low the rate of inflation. It’s a very long time since any of us could describe the debate in that way with any degree of confidence.

Eddie Yue: Opening keynote speech at HKIB Annual Banking Conference 2020 Keynote speech by Mr Eddie Yue, Chief Executive of the Hong Kong Monetary Authority, at HKIB Annual Banking Conference 2020, Hong Kong, 28 September 2020. * * * Mr Patrick Fung, distinguished guests, ladies and gentlemen, 1. I am delighted to be with you here this morning for the annual banking conference of the Hong Kong Institute of Bankers (HKIB). It is great to see everyone in person, and I am grateful to the organisers for the hard work they have put into making this possible. 2. The past year has been a testing time for Hong Kong as it faced challenges on three fronts. We experienced prolonged social unrest of a kind not seen for many decades. Geo-political tensions and trade wars have raised fundamental questions about globalisation. And, as in the rest of the world, the COVID-19 pandemic is causing severe disruptions to our economy and threatening people’s livelihoods. 3. All this turmoil has put our institutions, not least our banks, to the test; they have had to adapt rapidly to constantly changing conditions. Hong Kong’s banking sector has largely met these challenges and continues to be resilient. 4. This resilience stems from the fact that our banks entered the current crisis with some of the strongest fundamentals in the world. Through sheer hard work and by learning from past experience, banks have been able to respond to operational challenges posed by both the pandemic and the social unrest.
Thank you for your kind attention. I would be happy to take a few questions. BIS central bankers’ speeches  7

Thank you, because the allocation of funds from the pre-accession funds for the implementation of this Project, means a trust that we are ready to work on strengthening the institutional capacity and on the mutual cooperation in order to implement the recommendations that will arise from the project activities. I am sure that we will justify the trust. Not only with the level of our commitment to the Project in the next eight months, but also with the willingness to implement all necessary activities for establishing a strong and efficient system for fight against counterfeiting of euro in the country. These activities are already outlined in the strategic commitments of our institutions, because our ultimate goal is to provide a system that, in all aspects, will be at the level of the system of a European Union member state. Only with full dedication, readiness and professionalism, the trust will be fully justified and we will prove that the Project was indeed successful – that the 250,000 Euros intended for its implementation were channeled in the right direction. I am firmly convinced that the Ministry of Interior and the National Bank, as beneficiaries of this Project, will jointly succeed in doing so.