samchain/econo-pairs-v1 huggingface dataset:
The prudent, fair and realistic valuation that resolution authorities must conduct in resolution (as required in the BRRD) will likely crystallise previously unrealised losses or expected losses on the asset side of the bank’s balance sheet. This suggests that GLAC should at least be equivalent to minimum Tier 1 capital requirements. It is likely to need a capital position at least as strong as other banks in the market. And for a bank that  6  4  BRRD article 43(3). BIS central bankers’ speeches  has undergone resolution to command market confidence, it is likely to need at least as much capital as other banks in the market. It would be sensible therefore for G-SIBs to maintain sufficient GLAC to be able at least to restore fully regulatory capital buffers above capital minima, in order to maintain market confidence that they would be able to absorb any further losses during the restructuring phase without re-entering resolution. One final point on quantum – the ability of stressed systemically important banks to raise their capital position by shedding assets in short order is not sufficiently reliable to warrant a lower GLAC requirement for G-SIBs. So, we can see how much loss-absorbency we might need, but how much of what, exactly? In principle, it should be possible to expose every unsecured, uninsured liability of a bank to loss in resolution, just as would happen in insolvency.

Miroslav Singer: Sovereign debt crisis in Europe – assessing the current European instruments – addressing the challenges ahead Speech by Mr Miroslav Singer, Governor of the Czech National Bank, at the European Parliament Committee on Economic and Monetary Affairs Public Hearing, Brussels, 23 January 2012. *  *  *  Members of the European Parliament, Thank you for inviting me to this forum and giving me this opportunity to comment on the European Financial Stability Facility (EFSF). The last few weeks have brought us three new events that are rightly or wrongly regarded as game changers and I would like to discuss the EFSF in the context of those events. They are: 1) the ECB’s long-term loans to commercial banks and the widening of the range of guarantees which the ECB accepts from commercial banks for them, 2) the fiscal pact and 3) the rating downgrades. I would like start by saying that the provision of liquidity to commercial banks in Europe by the ECB gives us time to define more precisely the mission, design and operation of the Facility as well its position among the institutions charged with resolving the debt crisis. If we want to reduce the probability that some European nations and their banking groups will face liquidity problems that they cannot solve by obtaining funds from the market, we need to eliminate the following uncertainties relating to the EFSF: 1. It is not clear what benefits we expect from the EFSF or how it is supposed to generate them.
Detailed analysis of trade exchanges confirms high concentration of Albanian exports in certain geographical regions or in certain product groups and their low value added. For stable growth of exports and sound adjustment of the trade deficit, the policy-makers’ attention should focus on increasing the competitiveness of domestic products and expanding the base of exports through accelerated structural reforms. Financial market developments have reflected the low risk premia and inflation, hence enabling better transmission of easing monetary policy signals that started at the beginning of this year. Interbank interest rates have performed in line with the key interest rate, with slight volatility. The primary market yields on government securities have dropped sharply, particularly on longer-term maturities. Over the last months, the interest rate cut was faster on deposits but lower on loans. Interest rates on loans responded more slowly than other market rates due to low lending to economy during the last months. Monetary developments highlight continuation of weak inflationary pressures in the economy. The annual money-supply growth acceleration reflected primarily the private sector’s added demand for financing over the last two months. Also, households’ and businesses’ demand for money remained weak. Private sector credit slowed down sharply, and at the end of May it was 0.2% lower than a year earlier. The weak lending performance  2  BIS central bankers’ speeches  is increasingly reflecting the businesses’ lower demand for loan, alongside the tight lending standards.

Meanwhile, the past three months recorded households’ higher demand for loan, hence signalling a probable revival of this loan. Our projections for the economic outlook support the assessment that the Albanian economic activity will grow slowly over the period ahead, at levels comparable with those of the first half of the year. Foreign demand will be the driver of economic growth in the coming quarters, while the first-half fiscal stimulus is likely to lack in the second half of the year. Indirect data do not yet reveal any signals for consumption and private investment recovery. The below-potential economic growth will be associated with weak demand-side inflationary pressures and in the absence of any unforeseen supply-side shocks, consumer prices will increase at low rates. Annual inflation, as to four quarters ahead, is expected to fluctuate around the 1.1% – 3.8% range, with a 90% probability of occurrence. Against this setting, our monetary policy will keep on preserving its stimulating nature even over the quarters ahead. Also, we will continue to provide the banking system with all the liquidity needed for a smooth functioning of financial markets. Concluding, the Supervisory Council decided to lower the key interest rate by 0.25 percentage points, to 3.50%. The Supervisory Council deems that this lowering would create better monetary conditions to meet our medium-term inflation target, which will continue to guide our monetary policy. BIS central bankers’ speeches  3
Monetary policy therefore involves balancing the risks of acting too soon against those of acting too late. Acting prematurely is liable to lead to unemployment being higher than it need be. If the Riksbank acts too late, on the other hand, price and wage increases may already have got under way. In that case, the economy may ultimately land in a recession, perhaps with even higher unemployment. Fortunately, it is not a question of either/or. A monetary policy adjustment can be decided gradually, with stepwise changes in the repo rate. Consequently it is always possible to compare forecasts with outcomes, assess the policy stance continuously and make the adjustments that are considered to be necessary. If monetary policy is successful, a foundation is laid, not only for low, stable inflation in line with the target and the Riksbank’s statutory objective, but also for a stable long-term growth of output and employment. Seen from this angle, low inflation, besides being our objective, is accordingly a means of trying to achieve a stable economic development in general. That is something which should be underscored. Inflation prospects In an analysis of the situation in the run up to the next Inflation Report, due to be published on 7 December, the following can be noted: •  The price trend to date is approximately in line with the forecast that was presented in the October Report. •  As expected, there have been signals that international economic activity is tending to become somewhat slacker.

We would do well to remember, however, that people’s perceptions of the future are often shaped not so much by words as by actions. So, after a series of purposeful decisions by the Government, the Riksdag (Sweden’s parliament) and the Riksbank, economic policy’s general commitment to macroeconomic stability began to inspire confidence. Economic policy’s credibility gave the Riksbank greater freedom to act The growing confidence accordingly meant in turn that, without jeopardising the objective of price stability, the Riksbank was able to lower the repo rate relatively markedly, from almost 9% to just over 4%. Interest rates for longer maturities also fell. This led, as we have all seen in recent years, not just to higher GDP growth but also to a more uniform development of demand in different sectors. When the cyclical upswing began towards the end of 1993, most of the growth came from the export sector. However, lower levels of interest rates benefited Swedish households and firms by easing the heavily restrictive effect of the high level previously. This contributed to an increase in domestic demand as well and broadened the economic upswing. That can be said to have instigated the considerable reduction of unemployment we have seen in recent years. Neither the Asian crisis in 1997 nor the turbulence in international financial markets in the autumn of 1998 had much of an impact, thanks not least to a monetary policy realignment in many countries. The Swedish repo rate was also cut, to a low of 2.90%.
The nagging concern is whether this determined pursuit of macro-economic stability will be maintained - whether in fact the degree of macro-economic convergence that has been achieved is likely - in the terms of the Treaty - to be “sustainable”. A particular worry is that macro-economic stability, on its own, is not enough. It has not been enough to prevent the progressive emergence of very high, and very different, levels of unemployment in a number of the major Continental European economies. Unemployment has been for some considerable time, and it remains, much the most urgent and important economic issue confronting us in Europe. I do not suggest for a moment that the right answer would be to abandon macro-economic discipline and revert to old-fashioned demand management policies. In anything other than the very short term that would be likely to make matters worse. I share the broad consensus view that Europe’s unemployment problems originate essentially in rigidities on the supply-side of the economy. The point is that unless we are all more successful in bringing down this structural unemployment, through micro-economic policies designed to improve structural, supply-side flexibility, then some countries could find it difficult to continue to live with a common macro-economic discipline without significant tensions.

Decisions about monetary union will quite rightly be taken by elected politicians, according to their perception of its long-term political impact on the future of Europe, as well as its impact on the future prosperity of their countries, and they will have to carry their electorates with them. As a central banker I have nothing to say about the politics of monetary union. But it is also, of course, about economics, and the economics of monetary union could go either way; if it goes well, that certainly could yield political benefits, but if the economics were to go wrong, then that could blow back on the politics of Europe and give rise to tensions. I shall concentrate my remarks this morning on the economics of EMU. The economic pros and cons have in fact been exhaustively debated in the United Kingdom and the arguments are now reasonably well defined, even though different opinions inevitably attach different weights to them. On the positive side, the crucial and unique economic advantage of monetary union is exchange rate certainty within the euro area - not just the reasonable de facto stability that might result from each EU member state individually pursuing disciplined macro-economic policies in parallel - but actual exchange rate certainty. And that is a very real economic advantage as UK exporters presently suffering from the strengthening of sterling over the past eighteen months will readily tell you!
Már Guðmundsson: Iceland’s economy and monetary regime – a series of crossroads Speech by Mr Már Guðmundsson, Governor of the Central Bank of Iceland, at the 50th Annual General Meeting of the Central Bank of Iceland, Reykjavík, 7 April 2011. *  *  *  Honourable President; Prime Minister; other Ministers; Speaker of Parliament; Chairman of the Board; Party Chairmen, Bank Directors; Directors of Public Institutions; Ladies and Gentlemen: This year’s Annual General Meeting of the Central Bank of Iceland is held on the Bank’s 50th anniversary. But it would hardly be accurate to say that the Bank is facing halcyon days at this milestone. Quite the contrary: times are turbulent. Furthermore, Iceland’s economy and monetary regime are standing at a complex series of crossroads, and the paths we choose could have a profound impact on future developments. This is reminiscent of the situation that reigned when the Bank was founded, but I will come to that later. What exactly are these crossroads, then? The first fork in the road lies in the changing economic situation. Instability and recession are giving way to better equilibrium and recovery. The current account deficit from Iceland’s overheating period has been turned around to an underlying surplus that has supported the króna, which is now over 7½% stronger than it was at the beginning of last year. At the same time, the Central Bank has bought foreign currency in the market for about 33 b.kr., as part of its plan to accumulate non-borrowed reserves.

The next steps will be determined more by the newest indicators of economic developments and prospects than they have been in the recent past. At its next meeting, the Monetary Policy Committee will probably assess whether and how the Icesave referendum results and the newly published capital account liberalisation strategy will affect monetary policy in the near future. The strategy divides liberalisation into two main phases, with Phase I dedicated to unwinding offshore króna positions by allowing owners to exit through auctions or by investing in the Icelandic economy. Only when these measures have generated acceptable results can controls on residents’ capital outflows be lifted. If conditions are right, the latter phase could proceed relatively quickly, but if not, it will be executed more gradually. It is difficult to say how long Phase I will take, as its duration will depend on a number of uncertainties, such as access to foreign credit markets. But it is important for near-term monetary policy that Phase I be designed to minimise potential negative effects on the exchange rate and the foreign exchange reserves, at least at first. It is only in Phase II that the interest rate differential with other countries begins to assume much greater importance as regards exchange rate developments. In the recent past, monetary policy has been an element in the larger economic policy formulated by the Icelandic authorities in co-operation with the International Monetary Fund. The key features of that policy have been exchange rate stability, fiscal sustainability, and financial system reconstruction.
In addition, the BoE launched an 18-month, £ billion corporate bond purchase program in September 2016. The monetary policy framework of the Bank of Japan (BoJ) now targets both the levels of interest rates across the yield curve as well as the pace of expansion of Japan’s monetary base. Its current interest rate targets include a negative deposit facility rate at –10 basis points for the short-end and a 0 percent yield target for the 10-year yield. Of note, the BoJ’s three-tier deposit system exempts the majority of its system reserves from the negative rate. As for the quantity target, the BoJ pledges to maintain an expansion of “around” ¥ trillion per year until realized inflation exceeds a 2 percent target in a sustainable manner by purchasing primarily Japanese government securities. 5 During the Bank of Japan’s Quantitative Easing Program, which lasted from 2001–06, the BoJ targeted the  liability side of its balance sheet by explicitly targeting the level of bank reserves. This was accomplished via repurchase agreements and purchases of Japanese government bonds with a remaining maturity of less than 5 years. 6 In a speech on January 13, 2009, then-Federal Reserve Chairman Ben Bernanke discussed the differences  between “Quantitative Easing” and “Credit Easing". 7 A prominent exception is the central bank of Chile. See Section 27 of theBasic Constitutional Act of the Central  Bank of Chile.

… Beginning on March 2, 2010, the New York Fed began to use internal staff to execute MBS purchases.” See FAQs: MBS Purchase Program. 12 In a speech at Jackson Hole on August 31, 2012, Ben Bernanke discussed a cost-benefit framework for  evaluating non-traditional monetary policy tools. He noted the tools’ potential impacts on market functioning, financial stability, and the Fed’s ability to exit policies when needed, as well as the risk of financial losses. 13 In the Federal Open Market Committee’s Rules and Authorizations, the “Guidelines for the Conduct of System  Open Market Operations in Federal-Agency Issues” note that “open market operations in federal-agency issues are not designed to support individual sectors of the market or to channel funds into issues of particular agencies.” These guidelines were temporarily suspended in January 2009. 14 For  trading volumes, visitwww.sifma.org/research/statistics.aspx. visit www.embs.com/secure/cgi-bin/asp/AnalyticsMenu.asp. For  outstanding  MBS,  15 There are no other non-sovereign debt markets that are of comparable depth and liquidity. 16 For more information on the TBA market, see Vickery and Wright (2013). 17 8 / 10  BIS central bankers' speeches  17 Dollar rolls can be used to address a shortage of a specific security that is expected to be transitory. This tool is  used somewhat regularly for a small portion of SOMA agency MBS purchases. Coupon swaps can address shortages of a specific security that are not expected to be resolved quickly.
They provide confidence for financial institutions and customers to do business here. MAS pays close attention to the design of financial regulation to ensure that they are risk-based and not more burdensome than necessary to meet regulatory objectives. •  An example is the Financial Holding Companies (FHCs) Bill that is currently before Parliament. •  MAS will not regulate all FHCs. The Bill will give MAS the flexibility on whether or not to regulate a particular FHC, taking into consideration, for instance, whether the FHC’s subsidiaries are important to Singapore’s financial system. MAS consults the industry and other stakeholders when introducing significant new regulation. The exception of course is where the issue is market sensitive. We consult at an early stage on the broad policy proposals as well as in the later stages of detailed rule-making. We carefully consider all feedback on the impact of new regulation and implementation issues, and adjust the proposals where appropriate. This helps MAS to calibrate the rules in a way that is appropriate for our market. •  Take for example, the recent proposed changes to the regulatory capital framework for holders of capital markets services licenses. MAS briefed the industry, consulted extensively, and conducted quantitative impact studies. •  In response to feedback, MAS has decided to provide a longer transition period of two years for industry to comply with the new rules. BIS central bankers’ speeches  3  •  MAS will also revise its calibration of the operational risk capital charge.

Switzerland is a good example of this: thanks to the inclusion of the major political players in government responsibilities, and to the extension of direct democracy processes even to financial matters, a deeply rooted culture of stability has developed. It is this which provides the foundation for the stabilising effect of the well designed and constitutionally anchored debt brake. This has made a decisive contribution to ensuring that federal government finances are in good shape despite the financial and economic crisis. As a general rule, any efforts to establish a sustainable fiscal policy in countries with debt problems can ultimately only bear fruit if they succeed in fostering a broad-based culture of stability. BIS central bankers’ speeches  1
Jaime Caruana: Asset price bubbles - implications for monetary, regulatory and international policies Speech by Mr Jaime Caruana, Governor of the Bank of Spain, at the Federal Reserve Bank of Chicago, Chicago, 24 April 2002. *  *  *  One of the central topics of debate among economists has traditionally been the reasons for economic cycles, the factors that may amplify or smooth them, whether the authorities should aim to iron them out and, if so, how this can be done. More recently, the role of the financial sector in the dynamics of economic cycles has emerged as a key question in this debate. I would like to focus today on some problems posed to regulators and policy-makers by asset price bubbles and the credit cycle, and to share with you some thoughts on a regulatory device we have recently introduced in Spain to deal with some of these problems: the so-called forward-looking provisioning, also referred to as the dynamic or statistical provision. The pro-cyclical behaviour of the banking sector, which is now generally accepted in the literature, is receiving increasing attention by academics, policymakers and market participants. There is a growing feeling that the financial sector contributes to the swings in real activity and may even intensify and accelerate them. Feedback effects between credit growth and rises in asset prices are increasingly evident, although not yet well understood. Transmission channels from the financial sector to the real sector are becoming more and more flexible, rapid and complex.

However, in a slowdown, as the impaired assets rise, the specific provision requirements increase and the statistical provision becomes negative. This means that the statistical fund (accumulated in previous years) starts being used, its proceeds (the difference between the latent risk and the specific provision) being credited to the profit and loss account. Therefore, thanks to the mechanism of the statistical provision, the burden of credit risk on the profits of banking institutions is better spread over the cycle and more in accordance with the evolution of expected losses. The new scheme offers banks two options. First, to use their own internal measurements of the statistical credit risk and second, to use a standard method. The Bank of Spain expects that in the future an increasing number of institutions will be able to show robust computations, in the framework of an integrated credit risk management system. However, probably in the next year or two, most banks will use the standard method. In the standard system the supervisor sets the parameters. The portfolio is distributed in six blocks, according to the relative riskiness of the different assets, or off-balance sheet items with credit risk. A vector of coefficients (ranging from 0 to 1.5%) is applied to the exposures contained in the six blocks. The resulting figure is the estimated expected loss for the bank portfolio. The computation produces an aggregate annual gross burden (i.e.