samchain/econo-pairs-v1 huggingface dataset:
From a resolution point of view, internal MREL requirements could be a tool to facilitate the resolution of institutions, but they would become meaningless if calculated on a national basis. Indeed, having internal MREL in all countries could be an obstacle to the single market and European banking crossborder mergers. Finally, we should address business and legal impediments to cross-border mergers: information asymmetry, non-performing loans (NPL) or anti-takeover legal structures in different countries. As a first concrete step, I suggest that the European Banking Authority publish a comprehensive stock-taking of all the regulatory and supervisory obstacles to cross-border activities and mergers. The aim is crystal clear: within a Monetary and Banking Union, a crossborder merger must not be more difficult and cumbersome than a “domestic” merger. The logic of the banking union is that it should be considered for banking purposes as a unique jurisdiction. Before I conclude, I would like to add a few words on financial regulation. No one, I hope, can seriously dispute that after the financial crisis it was necessary to significantly strengthen regulation to reduce risks. Is there any need to recall the disastrous consequences that this crisis inflicted on the real economy, the social dramas, and the democratic fragmentation with the rise of populism? Financial stability is a common good that needs to be guaranteed. Remarkable achievements have been carried out since 2009 under the impetus of the G20 and the Financial Stability Board.

The reactions and comments regarding a couple of our speeches in the early summer indicated that some analysts perceived them in a way that was not intended. The speeches were interpreted as though they pointed forwards although we had provided information on changes in our way of signalling and said that we did not intend to make any forward-looking comments that would provide clues regarding the next interest rate decision. Some concluding reflections on communication The fact that our message had not entirely come across is partly due to some market agents not understanding what we actually had communicated. But it is also partly because we have not been sufficiently clear in our communication. I believe this is quite simply a learning process. We at the Riksbank and those we want to communicate with – the general public, journalists and market analysts – must learn to understand one another. In this respect we will try to improve. One step in this direction is the decision to name the Executive Board members in the minutes of the meetings. In this way it is possible to follow how each member has reasoned. A further step that we recently decided on is to also publish forecasts for the repo rate and a small number of key variables at the monetary policy meetings held between the publication of the Monetary Policy Reports. If, for example, we had published a new interest rate path in May, I believe that the market would have been less surprised in June.
The crisis brought on several important changes in the conduct of monetary policy with implications for money markets. The first was the easing in the stance of monetary policy, with the FOMC’s reduction in its fed funds target from a point target of 5¼ percent in mid2007 to a target range of zero to ¼ percent by December 2008, where it remains today. The second change was a shift to liquidity and monetary policy operations that resulted in a high level of excess reserves. In the initial year or so of the crisis, the Desk offset the reserveadding nature of the Federal Reserve’s loans to support the liquidity of a range of financial institutions and to foster improved conditions in financial markets by reducing other assets on the Fed’s balance sheet, notably holdings of short-term U.S. Treasury securities. By September 2008, however, amid a deepening crisis and widening policy response, the capacity to offset completely the increase in the balance sheet was effectively exhausted.5 Consequently, additional credit provision and the initiation of large-scale asset purchase programs, the latter of which continue today to support continued progress toward maximum employment and price stability, began and continue to cause reserve balances to grow. A third and related change in the conduct of monetary policy was the introduction of our ability to pay interest on reserve balances held by depository institutions.

An important point to observe is that the rate for which the FOMC sets a target, the overnight federal funds rate, represents an unsecured lending rate between banks. But the Desk conducted its operations with its primary dealer counterparties – government securities dealers that have an established trading relationship with the New York Fed – in the secured financing market for general collateral repurchase agreements, or GC repos. This market serves as a hub in which broker-dealers and other market participants finance their  3  See my November 27, 2012, Remarks on the Role of Central Bank Interactions with Financial Markets. 4  The Federal Reserve also established a baseline demand for reserves through reserve requirements. Since the expansion of the Federal Reserve’s balance sheet and resultant increase in reserve levels, however, these requirements have been so far below the level of actual reserves that they can be met without any additional Desk actions. 2  BIS central bankers’ speeches  inventories of securities, frequently borrowing from cash-rich investors, such as money market funds. These financing arrangements are structured as repos, in which the security is technically sold with an agreement to repurchase at an agreed-upon later date. The transaction can be thought of in most respects as economically similar to a collateralized loan.
And oil option prices – admittedly a very imperfect measure – suggest that there is a 15% probability of oil prices rising above $ a barrel and a 5% probability of them falling below $ in six months time. If oil prices rise no further their impact on headline inflation should be temporary. But a series of positive oil shocks might have the effect of pushing up headline inflation for an uncomfortably long period. In contrast to the 1970s and 1980s, inflation expectations in major oil consuming nations have been well anchored for the best part of a decade. But there’s no room for complacency. The unfamiliar experience of higher inflation might well dislodge those expectations, if there was any wavering incentral banks’ perceived commitment to keep inflation low. This could also prove damaging to consumer and business confidence. 2/3  I claim no special insight into the oil market, and especially into its likely short term movements. But it is hard to miss the longer term challenges which the rapid economic development of China – and India – pose for resource markets, and especially energy markets. China is now the world’s second largest oil importing country after the US, and last year alone it accounted for nearly a third of the net increase in world oil demand. In per capita terms, its own oil resources account for less than 10% of the world average. Yet its oil demand is set to grow strongly in the longer term.

But in some countries, notably the US and the UK, low inflation has been coupled with an unusually low degree of output volatility; and this may have encouraged an exaggerated notion of the role that central banks can play in achieving exceptionally benign outcomes, in different circumstances. Unrealistic expectations invite disappointment. And disappointment – if it dawns suddenly – is liable to have a disruptive effect on financial markets and potentially on real economies. That is the dark side. But for now, low real interest rates are supporting activity, and the main puzzle is why companies are not taking more advantage of favourable financing conditions to increase their investment – though once they do, past experience suggests that spending could rise could rise quite quickly. Let me sum up. The immediate prospects for the world economy are still robust, despite the sharp rise in oil prices. The outlook for UK weighted activity is less rosy, with relatively subdued growth in the euro area – though even here the latest business surveys are brighter than they have been for some time. The UK is fully exposed to the impact of more adverse world pricing trends, notably higher oil prices. And there are some significant risks, with considerable uncertainty about oil prices. This outlook could provide some support for a rebalancing of the UK economy. But there is no guarantee of that. The MPC may face some hard choices in the coming months.
1 Keynote speech delivered by His Excellency Dr. Mohammad Y. Al-Hashel, Governor, Central Bank of Kuwait in the 12th  High Level Meeting for the Middle East & North Africa Region, jointly organized by the Basel Committee on Banking Supervision, the Financial Stability Institute and the Arab Monetary Fund, held on December 7, 2016 in Abu Dhabi, UAE. 1  To start with, technology is supporting the outreach of formal financial services to the millions of otherwise unbanked customers. According to the World Bank, the poorest 20% of the world population is more likely to have access to a mobile phone than to clean water and sanitation. Capitalizing on this opportunity, a number of countries have managed to swiftly expand access to finance in recent years. Globally, number of adults who were previously out of formal financial system has dropped by 20% during 201114 alone. As these encouraging trends suggest, digitalization offers an unprecedented opportunity to improve access to finance to the millions of people who have remained financially excluded so far. Likewise, programing breakthroughs like blockchain are potentially transforming the way we verify transactions and enforce contracts. By allowing parties to transact without central intermediaries, blockchain can strip off costs, reduce inefficiencies, and enhance customer services. Host of other innovations are reshaping the way we transfer money or obtain credit. For instance, mobile wallets are enabling payments by smart phones, peer-to-peer lending is providing new sources of financing, and roboadvisors are offering financial advice.

Ensuring Stability in Turbulent Times1  Your Excellencies, Distinguished Guests, Sabah-al-khair and a very good morning. I am very delighted to be here today and I am grateful to H.E. Dr. Abdulrahman A. Al Hamidy for inviting me to speak before this august gathering. Thanks to the active collaboration of the Basel Committee on Banking Supervision, Financial Stability Institute, and the Arab Monetary Fund, these high-level meetings provide a valuable forum for exchange of views for the regulators and supervisors in the region. The agenda of this conference adequately captures key developments, issues, and challenges that we need to focus our attention on. Today, I would like to touch upon two major forces that have swept across the financial world. First is the tech-driven revolution, which has brought its own set of risks and rewards. Second is the wide range of measures that have been introduced to strengthen the resilience of our banking systems. Let me start with innovations first. Innovation; opportunities and risks Tech-driven innovations have unleashed drastic changes in the way we conduct business, interact with each other, or consume various products and services. Financial sector, essentially an ‘information industry’, is experiencing a major transformation, fueled by advances in technology. Though the imprint of modern technologies is now ubiquitous, let me briefly highlight a few areas of finance where the developments are particularly significant.
While I still doubt big banks can fail safely, they are far less likely to inflict collateral damage on depositors and the wider financial system. In all of these respects, the regulatory reform agenda of the past decade has been strikingly successful. And the benefits of this have already been felt. During the Covid crisis, the global banking system has lived up to the expectations set for them by Mark Carney at its start: they have been part of the solution, not the problem.25 That is far from saying, however, that the financial stability job is done. In a complex, adaptive web, it can never be done. So from a potentially long list, let me discuss two areas of unfinished business: lending to small and medium-sized enterprises (SMEs) and the future of payments. 23  Haldane (2020). Aikman et al (2018). 25 Giese and Haldane (2020) 24  15  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  15  In 1929, Hugh Macmillan led a Government Commission into lending to SMEs in the UK. It included in its ranks John Maynard Keynes and Ernest Bevin.26 It concluded that many UK SMEs were unable to access adequate finance, restraining growth and job creation. The “Macmillan Gaps” were born. In the period since, there are few signs these gaps have closed. Indeed, with the retreat by UK banks from business lending and many high-streets, there are reasons to think the Macmillan gaps may have widened.

Some of these risks, singularly or collectively, can lead to potential insolvency and financial instability. In more recent times, the regulators world over have introduced prudential norms on single borrower exposures, group exposures and concentration of credit risks. The underlying principles of such norms indicate some degree of compulsion on the observance of CG principles. To further augment such prudential norms, regulators may even consider introducing mandatory disclosures by banks and financial institutions. Where does good governance fit in this scenario? Obviously, Corporate Governance is now identified and acknowledged as a powerful tool to generate trust and confidence in an institution. In that context, good Corporate Governance is essentially important for banks, because such institutions (a) deal with funds raised from the public; (b) are likely to encounter greater risks including frauds and failure; and (c) if such frauds or failures occur in such institutions, it may pose issues relating to public confidence in the financial system stability itself. All these reasons have led to Banks tending to depend upon risk management practices based on principles of prudence rather than complying with only minimum requirements. It is also as a result of such realization that many stakeholders and regulators are now consciously looking towards good Corporate Governance, as one of the prime instruments in its overall effort to maintain financial system stability. In Sri Lanka, the CBSL has already issued a voluntary code of best practice on Corporate Governance to banks.
There should also be adequate rules for accounting and auditing; a well developed infrastructure for the payment system and a financial safety net. Only under such an overarching set of good preconditions will the banks develop favourably. Macro economic volatility is harmful to banks. Periods of rapid credit growth may be followed by problems for many companies. Bankruptcies could then increase leading to high credit losses in banks. High inflation will disguise the underlying profitability of a loan project and could lead to an erroneous credit decision being taken by a bank. Also, bank loans extended in foreign currencies could lead to losses if the local currency depreciates when the borrower who earns his money in the local currency runs into difficulties repaying his loan. In order to ensure credit discipline, there must be clear legislation as well as court proceedings that are predictable and reasonably fast. If a bank cannot rely on seizing the collateral given for a nonperforming loan it will be reluctant to provide loans against such collateral. Of course, the laws and the courts should also protect the depositors and borrowers from any abuse from the banks such as unfair contract terms. In countries where the accounting and auditing rules are weak, or where the accounting and auditing firms are inadequate, various financial problems may occur. Banks will not be able to rely on the financial statements when assessing their borrowers’ creditworthiness. Nor can the depositors and other creditors to banks rely on the banks’ own financial statements.

Supervisors should never act in a way which implies that they assume responsibility for the banks’ ongoing activities. Third, the supervisors must have a broad range of powers at their disposal to address different banking problems. This range should include limited measures such as requesting changes in the bank’s management or requesting improvements in risk management or control management. Also more far-reaching measures should be available such as stopping or restricting certain payments or activities, or the ultimate measures, to withdraw the banking license or to liquidate the bank. Preferably, some of these powers should be “pro-active” so the supervisor is allowed to act even before a problem becomes acute, for instance when the capital ratio is declining but has not yet reached the minimum level. Fourth, the supervisors must have a well defined and documented work process. This includes a set structure of approaches to collect and analyse information and to use this as a basis for taking action. The approaches are, for instance, offsite monitoring, onsite examinations and ongoing contacts with the bank. Offsite monitoring means analysing regulatory and financial reports from banks, from their internal and external auditors, and from external media. Onsite examination is a tool to ensure that the bank actually works as reported and to gain further insights into the bank’s operations. The modern approach in this field is not to look at all transactions and documents but rather at a sample of those, including the more important ones.
Should global conditions and consequently domestic economic activity further deteriorate, the CBRT would consider another cycle of rate cuts, and then maintain policy rates at low single digits for an extended period of time. Another possible scenario is a surge in capital inflows to emerging markets owing to the relative improvement in creditworthiness of these countries. In this context, receding risk premia and appreciating currencies would present downside risks regarding inflation prospects. These circumstances could also trigger acceleration in rate cuts, or another easing cycle, which could then bring policy rates which hover around low single digits for a prolonged period of time. Increasing budget deficits worldwide continue to pose risks on inflation expectations and thus on global interest rates in the long term. The medium-term forecasts presented above envisage that the slow recovery in global economic activity and rising saving rates will keep global interest rates at low levels for an extended period. However, the lack of a clear exit strategy from global fiscal stimulus packages creates upside risks regarding global inflation rates and therefore longer-term global interest rates. Counter-cyclical fiscal policies to curb the contractionary effect of the crisis on economic activity, which have also been introduced in Turkey in line with global trends, have accelerated the rise in budget deficit. The relatively low level of public sector indebtedness in Turkey compared to other countries implies that we have a broad fiscal space.

The vitality of the manufacturing, financial and construction sectors, which have fuelled economic growth in our country over the past few quarters, is likely to diminish, particularly in view of the expected slowdown in global demand. Growth in Swiss GDP will probably amount to a little over 2.5% in 2006 (this is a cautious forecast), falling back slightly in 2007 yet remaining in the vicinity of 2%. Consumer prices rose 1.4% in July, marginally above our figure for core inflation, which at 1.2% is the highest since April 2002. However, these rates are well below the level of 2% that we consider the upper limit for price stability. For 2006 as a whole, we expect the average rate of inflation to remain below 1.5%, and this is unlikely to change much in 2007. With respect to monetary policy, the healthy economic outlook in both the world and domestic economies, together with the high level of capacity utilisation in manufacturing, require us to further pursue normalisation of the target range for the three-month Libor. This is particularly necessary in view of the significant relaxation in global monetary conditions – due to the depreciation of the Swiss franc against the euro – that has occurred since our last monetary policy assessment in mid-June. BIS Review 78/2006  1
The decoupling of the peso from the global trend of emerging currency strengthening with respect to the US dollar that began in mid-July, coincided with the building up of carry trade positions that used the peso as funding currency, and with increased dollar exposure of institutional investors. These aspects may have been favored by the low level of the monetary policy rate and the adoption of complementary monetary policy measures. Later, some of these operations eased, and the peso aligned itself with the path of other emerging markets’ currencies (figure 13). Considering the nominal exchange rate at the closing of this Monetary Policy Report, the real exchange rate (RER) is within the range of values believed to be consistent with long-term fundamentals, so the baseline scenario uses the working assumption that, over the long run, it will be close to where it stands today. This level is nearly 6% lower than at the statistical closing of the September Report, and thus has an important effect on the projected path of inflation in the coming months which will be taken into account in future policy decisions. 4  BIS Review 9/2010  Labor cost pressures show no significant changes. Y-o-y growth in nominal wages has continued to fall, responding to the drop in inflation. Real wages deflated by the CPI have increased but, if the implicit deflator in non-natural resource GDP is used, they fall. The annual variation of unit labor costs increased because of the sharp cyclical fall in measured labor productivity.

Furthermore, as suggested by these projections and private expectations, in the fourth quarter the GDP will post a positive annual growth rate. Annual inflation, in turn, is expected to begin rising and become positive during the first half of 2010. Our financial system has been able to weather the external turmoil and the Central Bank has taken actions to avoid inconveniences in the provision of liquidity and implemented a highly expansionary monetary policy, not just reducing the policy rate to its lowest possible. However many risks are still there and we must be extremely careful in our decisions. The economy is beginning a recovery process that is yet to be well grounded. Output gaps are significant and will close gradually; probably taking more than the next two years. Inflationary pressures are generally low. We have said in our communications that we will hold the policy rate at its lowest at least until the second quarter of 2010. However, it is not a mechanical commitment in the sense that after that time we will begin to withdraw the monetary impulse. Experience has taught us the importance of moderation, and a hasty withdrawal could severely hinder economic recovery and jeopardize convergence to the inflation target. As in earlier occasions, our inflation-targeting regime and the credibility it has earned allow us to handle monetary policy very flexibly. Accordingly, we reiterate that the Board will use all the policy tools at hand so that projected inflation stands at 3% over the policy horizon.