samchain/econo-pairs-v1 huggingface dataset:
The tests carried out by the Bank should, however, be complemented by parallel tests conducted by individual institutions. In particular, banks should make an in-depth, bottom-up assessment of the potential implications of critical events to identify potential weaknesses at an early stage so as to be in a position to take early corrective measures. This would also serve to reduce the pro-cyclicality of such measures. In recognition of the need for a strong risk management framework, the Central Bank of Malta, in cooperation with the MFSA, has been working with a number of banks on their contingency funding plans and stress testing capacity. A new supervisory regime The lessons that are emerging from the financial crisis will almost certainly change the shape of financial regulation and supervision as we know it. The globalisation of financial institutions and markets, and the associated interdependencies, imply that a regime that has only a narrow institutional and geographic focus will prove inadequate. There is now a heightened recognition of the importance of the macro-prudential dimension of supervision and of the need to have mechanisms in place to address systemic risks, within and across national borders. In this regard, the recommendations contained in the de Larosière Report constitute an excellent basis for action. The Report distinguishes between micro-prudential supervision (the supervision of individual institutions) and macro-prudential supervision (the limitation of the distress of the financial system as a whole to protect the overall economy from significant losses in real output).

These attributes are complemented by a competitive tax regime. In the 2008 Forbes Tax Misery and Reform Index, Malta was classified as the fifth most tax-friendly country worldwide for companies and the most attractive in the EU. In addition, Malta has an extensive network of almost fifty double taxation treaties, and income earned overseas may be exempted from double taxation even when no bilateral treaty exists. Malta’s development as an international financial centre is reflected in the range of financial services available. Complementing the traditional retail functions, banks are increasingly offering private and investment banking, project finance, treasury services and syndicated loans. Malta also hosts a number of institutions specializing in trade-related products such as structured trade finance, factoring and forfeiting. At the end of last year, the number of banks stood at 22, up from 17 in 2004. The assets of the banking system, including both the domestically and the internationally-oriented banks, totalled € billion at the end of 2008, an increase of 10.5% over 2007 and nearly double the total in 2004. Other areas, too, have experienced rapid growth. These include fund management and collective investment schemes, captive insurance, asset management, back office  2  BIS Review 65/2009  processing facilities and call centres. Following the recent legislation on professional investment funds, considerable interest has also been shown by the hedge fund industry.
Recurring financial crises have made it clear that there will always be problems that need to be tackled and that the authorities can therefore benefit from a structured approach to financial stability. What can the Riksbank do if it considers that financial stability is threatened? There is no direct steering instrument or lever to pull in the same way as for price stability. Moreover, the Riksbank cannot intervene in the banks’ operations at a microeconomic level. The work is instead largely concerned with preventing crises. This is achieved partly by regulations that establish the framework within which financial companies can operate, and partly by regular monitoring of the system. There must also be an emergency system so the central government can manage any crises that may nevertheless arise. With regard to the first part of the stability work, the responsibility for regulations in the financial markets lies mainly with the Ministry of Finance and Finansinspektionen (the Swedish Financial Supervisory Authority). However, the Riksbank can affect financial market legislation by responding to consultation documents, participating in commissions of inquiry and in the international work on  BIS Review 8/2006  5  developing regulations. On the basis of my own earlier experiences of the management of bank crises in different countries, I consider it particularly important to complete the Swedish legislatory work on how banks in distress should be managed.

Philipp Hildebrand: Principles for sound compensation practices Summary of a speech by Mr Philipp Hildebrand, Vice-Chairman of the Governing Board of the Swiss National Bank, at the Economic Outlook 2009 (Unternehmer NW-Schweiz), Basel, 23 April 2009. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  Most financial institutions viewed compensation systems as being largely unrelated to risk management and risk governance prior to the crisis. Short-term profits were rewarded with generous bonuses with little regard to the longer-term risks taken on behalf of the firm to generate those profits. With hindsight, it should therefore be no surprise that these bonuses fueled the excessive risk-taking that has ultimately undermined the global financial system. It is important for the future stability of our financial system that compensation systems be viewed as an integral part of the risk management system in financial firms, and designed and governed with this in mind. The Financial Stability Board (previously the Financial Stability Forum) has drafted a set of sound compensation principles for large financial institutions with exactly this goal in mind. The Principles were endorsed by the G20 leaders at the London summit earlier this month and aim to be widely implemented by the 2009 remuneration round. BIS Review 50/2009  1
I have in mind, in particular, the framework for the development of decentralised finance (Defi), for which the usual regulatory frameworks come up against the absence of easily identifiable issuers or providers in an environment governed by protocols executed automatically without intermediaries, and the absence of an appropriate jurisdiction for the services offered. In order to build trust in the financial industry of tomorrow, we therefore need to follow together a two-pronged learning curve: exploring the transformation potential of new technologies on the financial sector, and identifying the regulatory, governance and best practice principles that must accompany this transformation. In this respect, I cannot emphasize enough the relevance for us of the experiments that we have recently conducted with the sector, for our activities of putting into circulation the currency that we issue as a central bank, as well as for our activities as supervisor of banks and insurers. The Banque de France thus performed nine experiments with “wholesale” central bank digital currency between mid-2020 and today. As for the ACPR, it conducted this year, following the publication of its July 2020 report on the governance of algorithms which outlines the principles of the proper use of AI in the financial sector, its 1st Tech sprint to test the market in practice on the concept of algorithm explainability.

by rules of the game that would be coded once and for all and for which respect would be entrusted to algorithms, even if they are encapsulated in “smart contracts"... Will the forces pushing towards decentralised finance make unbalanced relationships disappear? As well as failing governance mechanisms, the concentration of operational risks, and cyber attacks? In my opinion, the answer is no: trusted third parties, central banks and supervisors are not about to disappear... Secondly, and this is a corollary of my first point, confidence requires maintaining central bank money as the anchor of the financial system. Finally, confidence requires a regulatory framework that is clear, fair (“same business, same risk, same rule”) and balanced, i.e. capable of both encouraging innovation and maintaining the stability of our financial system. The search for this balance implies that regulators and supervisors be involved in innovation issues alongside the innovative players. I will come back to this. Once the principle of confidence has been established, central bankers and supervisors must also be able to distinguish between what changes quickly and what changes more slowly in the sector they supervise. First of all, the health of French fintechs should not mask the importance of another piece of good news: the “traditional” banking world is resilient and useful. It showed its robustness during the two major crises that have occurred since the beginning of the century.
In the March 3/4  BIS central bankers' speeches  23 statements, the FOMC also announced it would start to purchase agency commercial mortgage-backed securities (CMBS) to smooth market functioning in that market that helps to finance multi-family housing. For more on the deterioration of CMBS market functioning, the Fed purchases and their impact on the CMBS market during this period, see Woojung Park, Julia Gouny, and Haoyang Liu, Federal Reserve Agency CMBS Purchases, Federal Reserve Bank of New York Liberty Street Economics, July 16, 2020. 9 FSB Sets Out Action to Maintain Financial Stability during COVID, July 15, 2020. 10 John C. Williams, Rising to the Challenge: Central Banking, Financial Markets, and the Pandemic, Remarks at  the 16th Meeting of the Financial Research Advisory Committee for the Treasury’s Office of Financial Research (via videoconference) (July 16, 2020). 4/4  BIS central bankers' speeches

In tribute to the Governor, as I know that Fernando Pessoa is one of his favourite poets, I'd like to quote his “Odes by Ricardo Reis”, in which he reminds us of the importance of being truly committed to our work. “To be great, be whole: don’t exaggerate Or leave out any part of you. Be complete in each thing. Put all you are Into the least of your acts." Thank you all for being here. 5/5
Tharman Shanmugaratnam: Institute of Banking and Finance (IBF) – celebrating 40 years of excellence Speech by Mr Tharman Shanmugaratnam, Chairman of the Monetary Authority of Singapore, at the Institute of Banking and Finance 40th Anniversary Dinner, Singapore, 10 June 2014. *  *  *  Mr Ravi Menon, Managing Director of MAS and Chairman of IBF, Former Chairmen of the IBF, Distinguished Guests, Ladies and Gentlemen, I am sure I speak for everyone in saying what a pleasure it is for us to be here as IBF celebrates its 40 years – 40 years of building skills and capabilities for what has become a leading international financial centre, and financial activities that support consumers and businesses with a broad range of their needs. I congratulate IBF for its achievements. Credit must go to IBF’s pioneers for your leadership and foresight, and the many individuals and financial institutions who have brought us to where we are today. Singapore’s development as a financial centre Major anniversaries are a good occasion for reflection. Singapore did not start out as a financial centre. In the early years of the nation’s development, the finance industry mainly comprised a group of foreign bank branches and small local banks. They serviced the foreign merchant houses and local merchants involved in trade across the Causeway, and provided working capital to various domestic businesses. However, the corporate sector relied largely on internal finance. There was also very little consumer finance. Skills in finance did not need to be more than basic.

Bearing in mind the longer preparation period prior to actual EMU membership required in this alternative, it would actually take longer until Sweden could fully participate in all co-operation and decision-making forums in Euroland than would a gradual transition process. The advantage with this scenario is that there does not need to arise any uncertainty among the general public with regard to the position of the euro during the transition period, in that the euro could be used everywhere right from the start. We must therefore consider carefully what form a Swedish transition scenario should take, even if the discussions have generally favoured a gradual process. Here, Finland's experiences could certainly be of great value to us in the Swedish preparation work. Conclusions Regardless of whether or not Sweden chooses to take the same path as Finland and join the EMU, it is important to maintain a high level of ambition with regard to keeping our public finances in good condition, maintaining price stability and creating the right conditions for a good growth in productivity. This creates freedom of action, regardless of whether or not we join the union. There are both advantages and disadvantages in remaining outside. However, the question will not be determined merely by economic arguments, it is more a case of political arguments. It is important to remember this. BIS Review 9/2002  5
It’s 2001: Destiny’s Child is topping the charts, you were marveling over your Motorola flip phone, and I was a young economist at the Board of Governors in Washington, D.C. At the time, I was burning the midnight oil, along with a fellow economist, Thomas Laubach, trying to understand what the burst of productivity growth generated by the tech boom meant for interest rates, both in the short term and in the long run. This led us to develop a model for measuring r-star. I know what’s going through your mind: “What is this r-star that you speak of?” R-star is how economists describe the neutral or natural rate of interest. It’s the rate that we expect to prevail in the long run when interest rates are neither providing a boost to the economy nor trying to cool things down. It’s neither accommodative, nor contractionary. In other words, it’s the “normal” interest rate we expect in “normal” economic times. G-star One of the major factors determining r-star is… you guessed it, g-star! G-star is what economists mean when they describe trend growth, sustainable growth, or potential growth of the economy. The two main drivers of g-star are labor force growth and productivity growth. We started trying to understand where r-star was when productivity growth was very high. During the boom GDP growth averaged over 4 percent per year. Our estimate of r-star for that time was above 3 percent, a full percentage point higher than before the tech boom started.

2/4  BIS central bankers' speeches  The need for surveillance to extend beyond traditional boundaries of financial services can make it harder for authorities to “stay within their lanes”. This can be further complicated when the primary responsibility for financial stability is not always clearly defined. More authorities today have acquired expanded powers to access information and respond to financial stability risks. Even where there is a single authority charged with the mandate for financial stability, such powers will tend to rely on a system of regulation and supervision over different actors in the financial system that is often discharged by different authorities, using different instruments and approaches. Ensuring effective coordination across such a system depends on a number of factors. Institutional set ups such as inter-agency arrangements – of which there are many good examples – are important and clearly even necessary. But they are not a sufficient condition for effective coordination. The most important factors for effective coordination are more likely to be internal ones – the submission of institutional agendas to a higher collective goal, an internal resolve to overcome inherent conflicts, and the organisational flexibility to move in a common direction with others. In increasing their agility to shift gears where required, authorities must also find ways to do so while preserving the credibility and predictability of policy. Shorter policy cycles and more frequent adjustments in response to developing risks can make this significantly more challenging. Communicating financial stability policies effectively will be key.
This means that, with normal capacity utilisation and given a low level of inflation expectations, actual GDP can follow potential output. In such a situation some form of external shock is needed to shift inflation upwards or downwards. This can mean either that production falls below or rises above the level for normal capacity utilisation or that inflation expectations move up or down. The latter case is ultimately a matter of confidence in economic policy’s consistency and its future reactions. The ability of monetary policy to influence inflation has to do with the impact of the instrumental rate on the path of GDP and thereby on the degree of capacity utilisation, together with its effect on inflation expectations. In practice a period of restricted demand has frequently been necessary for the central bank to show that expectations of high inflation are unfounded. Besides monetary policy, expectations are affected by other factors. One of these is the budget. Unsustainably large budget deficits are liable to undermine confidence in long-term price stability. Our inflation forecast serves as a foundation for decisions about monetary conditions. If monetary policy is directed at stabilising inflation at 2 per cent, it will over time help to stabilise demand so that this is in line with the economy’s available capacity. In order to clarify our line of reasoning and our inflation assessments, the Riksbank publishes an inflation report four times a year.

Two years into the crisis, the world economy has entered a new stage, in which fiscal policy is increasingly being discussed. The joint effects of monetary and fiscal policy have been central in averting a much deeper crisis. However, disentangling the effects of each one on the economy’s performance and determining the best course of action remains the topic of heated debate within academia and in policy circles, in particular, on the speed and timing of the fiscal retrenchment. This is largely dependent on the strength of each country’s fiscal accounts. The ten papers to be presented during the Conference will be organized into three sections. The first will assess the effects of fiscal policy on macroeconomic outcomes. The first contribution to this section, by Tommaso Monacelli, Roberto Perotti and Antonella Trigari, will focus on the effects of tax cuts on the labor market. Joachim Voth will present work that  BIS Review 143/2010  1  analyzes the extent to which fiscal retrenchment can take place before civil unrest is provoked. Rodrigo Caputo and Miguel Fuentes will examine the long-run effects of fiscal transfers and investment on the real exchange rate in a broad panel of countries. Mauricio Villafuerte, Pablo López-Murphy, and Rolando Ossowski will close with an examination of fiscal policies among resource-exporters in Latin America and the Caribbean. The second section will investigate the interactions of fiscal and monetary policy.
It states that the Bank communicates with the public by way of official notices and publications, minutes, previously announced public conferences, interviews or public declarations made by board members. It also says that the Governor is directly responsible for all the information the Bank puts out, except for whatever the individual board members might publish or say in public. At the same time, the policy rules that the Bank must publish all information or resolution relevant to the market as soon as it has been validated, thus obliging itself to give out all market-sensitive information as quickly as possible. Whenever a board member or Bank executive gives a talk with information that could be relevant for the market, it is published on the website. Any public presentation given by the Governor is posted on the web as soon as they begin so that the general public has access to the information at the same time as those present. In my own case, and so that there is no discrimination between those who attend the presentation and those who do not, I leave a written text of my speech which is not an easy task to do, but ensures providing a precise message. For you as journalists, this is useful to your work and contributes to avoiding the use of the old excuse “I was misinterpreted”, which may occur, but in most cases is the fault  4  See Blinder and others (2008) for more details on communication in central banks and relevant references.

However, in the context of inflation targets, where this variable is not controllable in the short run – and, as we are currently witnessing, it is subject to many shocks – it is important to monitor to what extent targets are met and for that it is not enough to simply monitor inflation figures since the scheme itself allows for deviations. The Central Bank must report these deviations and explain its strategy to correct them. In an ideal world – without uncertainty and where all agents have the same information and also the same chance of protecting themselves from any contingency – transparency would be unnecessary. However, it is a good exercise to ask oneself what are the frictions that require communication, beyond being accountable to the executive and legisltive. Friction in this case is the incomplete information market participants have about the Central Bank so transparency is fundamental to generating credibility, and credibility is at the heart of a good monetary policy. There are two kinds of asymmetries of information that require communication: one is the uncertainty about the preferences and objectives of central banks and the other is the uncertainty about the central banks’ technical ability to achieve their target. By publicly justifying their decisions, central banks enhance their credibility. Moreover, decision-making is improved by ensuring coherence between the decision and the communication and this obliges central bankers to profoundly think upon and evaluate their decisions thereby improving their monetary policy results.