samchain/econo-pairs-v1 huggingface dataset:
However, this is the first global regulation of liquidity, and our experience in this area is limited. Recovery and resolution frameworks The last component of this regulatory overhaul is the treatment of the systemic institutions. Much attention has been paid to the capital surcharge that will be imposed, as mentioned earlier, on the so-called Global Systemically Important Banks. However, key to dealing with problems posed by systemic – and non-systemic – banks will be the setting up of effective recovery and resolution frameworks as recommended by the Financial Stability Board (FSB). In this connection, let me note that Spain has just established a new resolution regime, strengthening the powers of our resolution agency, the Fund for Orderly Bank Restructuring (FROB), which was set up in 2009. Are further measures needed? Summing up, on the whole, capital requirements have been considerably strengthened. The largest banks, for instance, will have to hold at least seven times as much capital as before the crisis. These measures have undoubtedly strengthened the whole banking system. 4  BIS central bankers’ speeches  However, it is to be noted, and regretted to some extent, that while Basel III capital requirements had been carefully planned to be implemented gradually until 2019, markets and, in some cases, regulators have accelerated this process. In Europe, banks are generally already recording ratios of Common Equity Tier 1 of 9%. Banks have achieved this not only by raising capital in the markets but also by contracting credit and deleveraging.

To illustrate why some authors have gone as far as calling this “the credit rating crisis” (Benmelech and Dlugosz, 2009) consider that before the crisis more than half of the structured finance securities rated by Moody’s carried an AAA rating and, during the period 2007-2008, the tranches rated by Moody’s that were downgraded was close to thirty six thousand, where nearly one third of downgraded tranches bore the AAA rating. This is a complex issue, especially due to the prevailing incentives in this sector. A recurrent area of criticism on the incentives side is the simultaneous role of advisor and issuers of ratings. But the spectrum of potential conflict areas could be broader, and thus more efforts must be devoted to understanding in detail the operation and linkages of this industry. Final comments The subprime crisis has opened a debate on the risks of financial innovation. It reminds us that higher levels of sophistication do not guarantee the normal operation of the financial system. A reasonable level of regulation, control and monitoring is required. I think we should move forward in innovation processes, as they are positive, but we must move forward with caution. It is important to implement policy changes gradually to provide an adequate level of information and transparency that will ensure an adequate assessment of the risks involved. It is also crucial to review in detail the incentives and potential conflicts of interest arising from the new tools and processes.
These firms – the big techs – possess an enormous amount of customer data, and they make highly effective use of those data for their own ends. Recent experience shows that these firms have caused disruption in the sectors they have entered, taking over the most profitable business segments and supplanting existing firms. These developments have major implications for supervisors and regulators. First, proactive supervision must be the primary response to these changes, as the traditional regulatory framework may not be sufficient. Second, we should give consideration to the regulatory perimeter to ensure that the oft-cited mantra of ‘same activities, same risks, same rules” actually applies. And third, cooperation among different authorities will be essential, given the diversity of the sectors and issues potentially affected by these technological innovations. In this regard, customer data governance is a fundamental issue which we will need to reflect upon at great length. If it is deemed necessary for such data to be made available to all operators, then it seems reasonable that there should be no exceptions to the obligation to make it available and that the precise extent of this obligation should be clear. That said,  2  In particular, the impact of the SME and infrastructure supporting factors is reflected in the recent behaviour of solvency ratios. The effect of the exemption of software-related intangible investments from capital deductions will become evident at a later date. 6  individual incentives to collect and manage such information must not be undermined and customers’ rights must be respected.

David Carse: Environmental issues and their implications for financial institutions in Hong Kong  Keynote Speech by Mr David Carse, Deputy Chief Executive of the Hong Kong Monetary Authority, at the Conference on Environmental Risk Management for Hong Kong Financial Institutions, held in Hong Kong on 29 November 2000. *  *  *  Ladies and gentlemen, I am pleased to be here to deliver the keynote speech for this conference on Environmental Risk Management for Hong Kong Financial Institutions. I congratulate the various organisers for putting together the conference, which I understand is the first of its kind to be held in Hong Kong. If so, it is long overdue. Environmental issues have come very much to the forefront of public awareness in Hong Kong in recent years, and cleaning up the environment has become one of the Government’s main preoccupations. There are all sorts of good reasons for wishing to do this, in terms of improving the quality of life and the long-term health and well-being of the people of Hong Kong. But there is also a growing recognition on the part of business, both here and elsewhere, that economic growth is inextricably linked with a healthy environment. At this year’s World Economic Forum in Davos, business leaders voted global climate change the most pressing issue facing the world’s business community. It is all the more disappointing therefore that last week’s UN summit conference in The Hague on climate change should have ended in failure.
Policies are needed to address the structural strains in the demand side (at household level), while structural reforms are still needed on the supply side as well. 1  Voinea, L. and Monnin, P. (Feb. 2017), “Inequality Should Matter for Central Banks”, Blog of the Council on Economic Policies, https://www.cepweb.org/inequality-should-matter-for-central-banks/  4  Figure 1. Home ownership percent 100 90 80 70 60  50 40 30 20 10 0 RO LT SK HU BG PL LV EE CZ ES SI PT CY FI  IT BE IE SE NL UK FR DK AT DE  Source: ESRB Report on Vulnerabilities in the EU residential real estate sector - 2016  Figure 2. Household gross debt-to-income ratio  Figure 3. Household mortgage debt-to-income ratio  Source: ESRB Report on residential real estate and financial stability in the EU, 2015  5  Figure 4. Overcrowding - Households with dependent children RO  70 LV PL  overcrowding %  60  BG  HU SK  50 IT  LT  40 CZ  30  AT  EE  20 DE  10  DK  SE  UK FR NL  IE BE  55  60  65  70  SI ES  FI CY  0 50  PT  75  80  85  90  95  100  homeownership % Source: Eurostat  Figure 5. Average no. of rooms per person No.

Despite the consensus among policy-makers on the importance of financial stability, the economic literature lacks adequate theoretical and empirical studies on the details of the transmission mechanism from financial stability to macroeconomic stability. At this point, academia is expected to do their share in this respect. The two-day conference will stage parallel sessions, panel discussions and presentations on these issues. Banking sector dynamics, macroprudential measures and their impact on macroeconomic stability, systemic risk issue and sovereign debt dynamics are among the topics that will be addressed at the conference. Two of our distinguished guests, Mr. Ricardo Caballero and Mr. Franklin Allen, will be delivering speeches. Mr. Caballero will be presenting a speech on the first day of the conference and Mr. Allen’s presentation is scheduled for the second day. On the second day of the conference, the panel discussion titled “How did the crisis challenge the Central Banking as we knew it? What should (not) change?” will be held, at which senior central bankers will be sharing their country experiences. I think this panel discussion will be very interesting and beneficial for all the participants. The studies that will be presented throughout the conference will contribute to better understanding of the factors threatening financial and macroeconomic stability and developing policies to achieve these two objectives simultaneously. I believe that the conference will also serve as a forum for the participants for exchanging views.
The oil companies convert some of their foreign exchange revenues to kroner in order to pay taxes and dividends to the government. In addition to tax and dividend revenues in kroner, the government has large revenues in foreign currency from its ownership shares in petroleum fields on the Norwegian continental shelf. 1 As long as government revenues in kroner from the petroleum sector exceed annual petroleum revenue spending over the budget, the government is left with a surplus of kroner. This was the situation up until 2014. Norges Bank converted this surplus into foreign currency, which was in turn transferred to the fund. The amount of kroner converted into foreign exchange partly offset the amount of kroner previously bought by the oil companies. Consequently, these operations should not have any impact on the real exchange rate. In 2015, government spending of petroleum revenues over the budget is estimated to be higher than the revenues received in kroner. Government petroleum revenue spending over the budget has increased over time, in pace with the increasing size of the fund. And recently, the government’s net cash flow from the petroleum sector started to decline. As a consequence, Norges Bank will move from a position of selling surplus kroner to selling foreign currency in order to finance petroleum revenue spending. However, the effect on the real exchange rate will still be determined by the amount of petroleum revenues spent over the fiscal budget. It is not Norges Bank’s intention to influence the krone exchange rate through these foreign exchange transactions.

So, although growth will not be very strong I do not see them entering a recession again. Even the hardest hit Southern European and Mediterranean countries have the potential to see growth as early as next year. Which is a positive indicator for our more traditional export firms; as several of these countries act as their largest trading partners. Our confidence is building. If this year we will see a 2.2% increase in overall growth we predict next year can yield 3.5% and it can certainly grow from there to over 4% in ensuing years. First-movers entering this market will be the ones benefiting from the immediate and privileged market access Do you see Macedonia’s current inability to enter the EU due to the naming dispute with Greece as a component that is putting a relative cap on the growth figures you just mentioned? If we look from an economic point of view, judging from rating agency criteria that takes into consideration political uncertainties such as the ongoing naming issue, it is safe to assume that our rating is lower than what it could be. The resolution of this dispute and the resulting  2  BIS central bankers’ speeches  increase in rating will certainly lead to greater investor confidence as well as better terms on financing in the international markets. There would also be access to more EU funds that could be used for critical infrastructure developments.
Over 2017 as a whole, euro area inflation should reach 1.5%, against just 0.2% in 2016; for the coming years, we foresee inflation at 1.2% in 2018 and at 1.5% in 2019 – with a change in composition: less “energy” inflation, more underlying inflation. This represents a first success: our monetary policy measures have succeeded in warding off the risk of deflation which was still threatening the euro area last year – we mustn’t forget that inflation was declining, standing at 0.2% in April 2016. That said, despite the progress made towards our target, it is still too slow. The underlying trend in inflation is still not strong enough to support prices in the medium run. Underlying inflation, excluding energy and food, has admittedly increased – rising from 0.8% in the first quarter of 2017 to 1.2% in July and August 2017 – but it still remains at subdued levels, despite the strong 1/4  BIS central bankers' speeches  recovery in activity and employment. A significant factor is the relatively low nominal wage growth. Among the cyclical factors, I would like to mention two in particular: first, persistent slack in the labour market – the unemployment rate has fallen sharply in the euro area, to stand at 9.1% in July 2017, but it is still too high; [slide] second, backward looking wage bargaining, which means that low past inflation is feeding through to wages today. The influence of these two causes should nevertheless diminish with the recovery in economic growth and inflation.

As regards our asset purchases, we have to reduce their intensity in a pragmatic manner, as we already decided successfully in December 2016. I insist on the word “pragmatic” because, while keeping the current rules, we should on the one hand exploit the margins of flexibility of the programme and on the other hand hold in reserve an additional purchasing capacity – if needed. That said, monetary policy is not limited to QE, and QE is not limited to net asset purchases: we can keep a substantial degree of monetary accommodation even if we reduce our monthly flow of net purchases. 1/ On QE, the academic literature provides consistent evidence that the impact of asset purchase programmes on the yield curve and asset prices is primarily driven by the total stock of assets held by the central bank (the so called “stock effect”), rather than by the flow of transactions conducted over a given period (“flow effect”). In-house studies of the effects of the PSPP find that holding a stock of bonds equivalent to 10% of GDP lowers the 10-year yield by about 45 bps in the euro-area.5 By contrast, flows of purchases have no significant additional impact. These results imply that our current programme lowers the 10-year euro-area government bond yield by about 100 bps.
I do not think it is coincidence that arguably the two most significant monetary policy decisions taken over the past year – the decision to reduce Bank Rate by 1.5 percentage points in November and the announcement in February that the Committee had sought approval to use the Asset Purchase Facility to conduct large scale asset purchases – occurred in months when the Inflation Report was published. The quarterly forecast round provides an opportunity for the Committee to reassess thoroughly its view of the economic outlook. This view is then explained and communicated via the Inflation Report and in particular through the projections for GDP growth and inflation contained in the Report. In both November and February, the judgement of the Committee was that, without further substantial easing in monetary policy, there was a significant risk of a large and persistent undershoot of the inflation target. Given the transparency of these judgements and the clarity of the target, it would have been courageous not to have taken the decisions we did. The inflation target is symmetric. Likewise, the discipline it imposes on the MPC is symmetric. The inflation target has been instrumental in ensuring that monetary policy has responded boldly and decisively to the events that have unfolded since the autumn. And, when the time comes, the clarity and transparency of the inflation targeting framework will ensure that the Committee takes the right decisions on the way back up, however courageous or unpopular those decisions might appear.

Second, a set of resolutionrelated reforms are intended to limit the consequences to the financial sector if a failure by such an institution still were to occur. Given the limited time on this panel, I will not review in detail the post-crisis comprehensive capital and liquidity framework that the Federal Reserve has put in place. However, from the perspective of addressing too big to fail, it is important to highlight the Federal Reserve rule finalized this year that imposes risk-based capital surcharges on the handful of U.S. global systemically important banking organizations (GSIBs). Under this framework, a GSIB’s riskbased capital surcharge will reflect the degree to which its failure would impact the financial system. In effect, the risk-based capital surcharge confronts each U.S. GSIB with the choice to either reduce its systemic footprint or instead to hold more capital. The policy approach to too big to fail recognizes, of course, that we can reduce but cannot completely eliminate the possibility of a large financial institution’s failure. Therefore, a second aim of our post-crisis reforms has been to limit the adverse consequences that would result if a large financial institution were to fail. That is, large financial firms need to be capable of being successfully resolved without creating unacceptable collateral damage to the rest of the financial system and to the economy.
The realisation is setting in that bank creditors are at risk if the bank gets into trouble. There certainly appears to have been a jump in awareness at the beginning of this year. The average spread for senior debt issued by European G-SIBs increased by over 25% within little more than a week. In part, this is a result of the entry into force of the BRRD, and in the UK the Bank’s consultation paper on the setting of MREL.12 But it has almost certainly been reinforced by other events that have brought the issue into sharper relief. As a result, perhaps not surprisingly, there have been calls to amend the regime before it has even been implemented, on the grounds that it will raise costs for banks and make them less able to lend to the real economy and that it is politically impossible to bail in bank creditors. There are clearly some very important and difficult transitional issues here. And no major shift in preventative regulation is ever universally welcome. But, it is, however, possible to view this greater awareness of the new regime in a more positive light. I have mentioned already evidence that expectations of taxpayer bailouts have diminished.

These interventions have largely succeeded in avoiding deflation and a cumulative fall in GDP during the most acute phases of the crisis. It remains true, however, that, contrary to past episodes which followed deep recessions, the current recovery appears sluggish, uncertain and fragile. The global growth environment remains affected by significant uncertainties. Today, I would like to reflect upon these developments and focus on the challenges facing central banks in the post-crisis environment. 1. Let me start with a few stylised facts The first, and most visible, is the spectacular expansion in central banks’ balance sheets. In all advanced economies, their size has been multiplied, over four years, by a factor of two to five. This is an unprecedented development. Beyond advanced countries, central banks in emerging economies have also, to a lesser extent, expanded their balance sheets, mainly, but not only, as a result of foreign exchange interventions. A second, and related, feature is the diversification of central banks’ interventions. Prior to the crisis, central banks would conduct monetary policy by determining the policy rate, and, in some countries, by imposing compulsory reserve requirements on banks. The crisis has led to the development and proliferation of so called “non-conventional measures”, with two objectives. First, to remedy financial market disruptions; and second, to provide further monetary accommodation once policy rates have been brought down to very low levels and hit the so-called “zero lower bound”.
Households in the Albany region did not accumulate as much debt as did households in the rest of the state and country during the run-up to the crisis. Recent data indicate that the average adult in Albany has about $ of debt, which is about 20 percent lower than the average across the state and country as a whole. Thus, financial strains on many families in the Albany area were lower than in many other places around the state and nation. However, the number of delinquencies did rise significantly during the recession in the area, so it is clear that some households face strong financial pressures. About 4 percent of debt balances currently are 90+ days past due in Albany, which is twice the 2 percent delinquency rate in 2005. Although this is less than half of the rate in New York State or the nation, this doubling of delinquencies in the Albany area still troubles me as a sign of heightened distress for many families here. Stepping back from the current challenges, the capital region possesses a number of fundamental strengths. These strengths show through in some key ways:   Albany is growing. The recent Census shows that the population in the region expanded by 5.5 percent over the past decade, more than double the statewide average. Saratoga County saw an especially strong gain of nearly 10 percent.   Incomes in the region are high. Albany is the state’s most affluent area outside the New York City metropolitan region.

Jean-Claude Trichet: Interview with Die Zeit Interview with Mr Jean-Claude Trichet, President of the European Central Bank, and Die Zeit conducted by Mr Marc Brost and Mr Robert von Heusinger, 23 July 2007. *  *  *  DIE ZEIT: Monsieur le President, fifty years ago the German Bundestag created the Bundesbank, one of Germany's best-known brands in the world. What is its legacy? Trichet: Monetary stability. Independence. Credibility. These principles are very favourable for sustained growth and job creation. Today it's globally recognized that this is the right way for monetary policy to deliver price stability and, by way of consequence, sustainable growth. DIE ZEIT: What do you admire most in the history of the Bundesbank? Trichet: One of the most impressive episodes has been the open conflict with Chancellor Konrad Adenauer who wanted the Bundesbank to decrease interest rates. But the Bank refused. It proved to be really independent. DIE ZEIT: That was 1956. Long ago. Trichet: Yes, but at the beginning of 2004 shortly after I became President of the ECB, three heads of member states asked publicly to lower rates: The Bundeskanzler of Germany, Gerhard Schröder, the President of the French Republic, Jacques Chirac and the Prime Minister of Italy, Silvio Berlusconi. The ECB demonstrated its independence. We did not comply. DIE ZEIT: Which personal episode with the Bundesbank do you cherish? Trichet: For me the whole history of the euro has an important personal touch with German friends in the administration and in the Bundesbank.