samchain/econo-pairs-v1 huggingface dataset:
Our new approach is designed to counter the risk that policy is too accommodating in upswings and too harsh in downturns. Two important principles stand out for me: first, that we must carry out financial regulation with an eye on conditions in the real economy, which means promoting stable and sustainable credit creation and growth; and second, we should always be prepared to look to the risks ahead, and exercise sensible judgment. The financial crisis has taught us in the most painful way of the dangers of waiting too long to take action and then being unable to prevent the worst consequences of delay. The FPC has recommended that British banks make sure their capital level is high enough to withstand future threats. Some banks will need to increase their equity capital for a given level of risk in their balance sheets. Concerns have been expressed that this change will harm lending to the UK economy. I do not agree with these concerns. Equity capital is not money that has to be stashed away for a rainy day and thus put to no good use. It is the shareholders’ stake in the company. In nonfinancial companies, shareholder capital or equity is used to finance the acquisition of assets. The same is true for banks. Equity finances the provision of loans to households and companies, and those loans are the banks’ assets. In that sense, capital supports lending by banks and does not substitute for it.

It therefore seems that the Asian banking and financial markets are moving along the right track and we should congratulate each other for this accomplishment. However, I am not entirely sure if Asia can afford to feel complacent because I believe Asia’s finance is still facing many short-run and longer term challenges. In the interest of time, I would just highlight two key challenges. a.  Short-run challenge: clearly this has to do with the Fed tapering and the normalisation of the US interest rates. The key question is to what extent the unwinding of the dollar carry trade, which prevailed for over 5 years since the collapse of Lehman, would lead to significant outflow of funds and tightening of market liquidity across Asia. The risk of a “new normal” causing a rise in interest rates, re-pricing of assets and a slow down of economic growth would be a big challenge for Asia in the next year or two. BIS central bankers’ speeches  1  b. Longer term challenge: there are many structural reform challenges for Asia’s capital markets, but today I would just focus on infrastructure financing. It is beyond doubt that Asia needs heavy investments in infrastructure in the next decade or two. Some have estimated the amounts of funding needed for infrastructure financing to be in the order of $ bn a year. At the same time, Asia has accumulated a huge amount of savings, which are more than adequate to finance the infrastructural investments in the region.
However, the fact that the Riksbank clearly indicated that the development of household indebtedness and housing prices were not sustainable in the long term and that monetary policy considered this circumstance may have played an important role in curbing this development. In that case, this is exactly what is meant by leaning against the wind. The housing market today Housing prices have recently started to rise again, which has aroused some attention, not without reason. It is undeniably remarkable that housing prices are rising and that the rate of increase of the banks’ lending to households has started to grow again, at the same time as GDP is very weak and unemployment is rising. However, it seems reasonable to believe that this is because it is inexpensive to borrow money due to the low interest rates prevailing. Rising stock market rates and steadily-growing consumer confidence are certainly also significant. Household borrowing to invest in housing is also an effect we actually hoped to achieve by implementing a low interest rate. It is contributing to supporting demand and employment. Even so, household saving has risen rapidly since 2007, from approximately eight to around 13 per cent of disposable income. Over the short term, I do not consider the development of the housing market to be a problem. Housing prices in Sweden have certainly risen rather rapidly in real terms too, but there are good explanations for this.

Lars Nyberg: In the wake of the financial crisis Speech by Mr Lars Nyberg, Deputy Governor of Sveriges Riksbank, at the HQ Bank, Stockholm, 18 November 2009. *  *  *  I would like to start by expressing my gratitude for having been invited to discuss a few of my thoughts about what may follow in the wake of the financial crisis. Make no mistake, the crisis is not behind us yet. Many balance sheets in many countries must be adjusted before the world’s banking system can be given a clean bill of health. But the acute phase is hopefully over, giving us reason to reflect not just over why developments took the turn that they did – many others have already written volumes about this – but also over what should be done to prevent these mistakes from being repeated. Much of this discussion deals with regulation and supervision and, just like after every crisis, many political initiatives are being proposed, some better than others. This is what I intend to talk about today. But there is also reason to reflect over the interplay between financial stability and monetary policy. The current crisis has indisputably demonstrated that monetary policy and financial stability overlap in many important ways that we in the central banks previously may not have entirely considered. I intend to devote the main part of my speech to this issue.
Beyond broad effects on growth, it is also clear that the new regulations should neither derail financial systems nor favor some particular business models over others. 2  BIS central bankers’ speeches  Yet, there was, and still is, a need to move from a financial world of excessive risk taking and heavy regulatory arbitrage to a new system of better quality capital and increased risk capture. An implementation of the Basel III package endorsed by the G20 will provide the appropriate foundations for such a system, provided that phase-in arrangements are respected and implementation is coordinated globally. Thank you for your attention. BIS central bankers’ speeches  3

1/2  I am aware that banks have their own methodologies to evaluate risks when granting loans and advances and recently, they have been adopting modern methods of credit risk mitigating techniques based on the Basle Principles. To begin with, the lack of adequate knowledge of the industry, poor credit assessment skills and ineffective follow-up and supervision of loans are the key to non-recovery of debt. A banker who lends only against collateral without looking at the viability of the project is obviously imprudent. Sometimes, banks are not familiar with the industry to which a loan is granted - it is imperative that they are conversant with yields, markets and prices to be able to assess the viability of the project. In others, follow-up and monitoring is virtually non-existent. The close monitoring of a project during the gestation period or grace will often leads project to fruition and in turn will bring in repayment according to the repayment plan. These areas call for special attention by banks and financial institutions. The banks try to mitigate these lapses by the use of modern technology and intensive evaluation processes in granting loans and advances. Even these attempts can be beaten by unexpected eventualities and by willful defaulters. While credit discipline and culture are of paramount importance for financial institutions’ viability and the stability of the financial system as a whole, we need to strike a balance between the system viability and revival of enterprises/industries, in a manner that they can be going concerns and repay their debts.
Obviously, it is part of our mission here at the National Bank of Romania to monitor, understand and assess these and related phenomena which may affect - both positively and negatively - the Romanian monetary system and banking system and more generally our economy. That being said, the reason we have invited her here today is related to this specific aspect of her more recent work. So far we have seen blockchain and cryptocurrencies mostly discussed and assessed from the perspective of information technology and economic theory. We are interested at the same time to see how the cryptocurrency problem is also perceived from the perspective of an analysis largely rooted in the experience of intelligence studies and practice, and of an expert in strategic decision making in conditions of risk and uncertainty. We are also interested to see how such an expert is framing the problem of cryptocurrency as a massive economic challenge to the national economies, a problem requiring a strategic assessment of the alternatives; to see how an expert in structured analysis may present the issue in a systematic, methodical way. Last but not least, we are interested in the evaluations which are emerging out of this exercise, including the opportunities as well as the warnings. Hence the title of the presentation: "Bitcoin Versus Central Bank Digital Currency (CBDC): The Most Important Economic Decision Nations Have Ever Faced. Analytical Frameworks for Comparative Assessment and Strategic Decisions." In terms of how we are going to proceed, the event will have two parts.

More generally, supervision and regulation are designed to both support productive financial intermediation and limit disruption and financial stability risks.3 Today, I will talk about a simple framework for one view of policy efficiency in a world of two policy objectives – financial intermediation and financial stability. As in traditional finance theory, one can think about an “efficient policy frontier” that maps the trade-offs among these objectives. One might choose a set of policies that supports a high level of financial intermediation and also accepts a higher risk of disruption or crisis. This might be achieved, for example, with relatively light oversight or low capital requirements. Alternatively, one might choose a different set of policies, such as more intensive oversight and stringent capital requirements that likely reduces risk, but also limits intermediation. An efficient policy is one that minimizes risk for a desired level of intermediation—it is on the efficient policy frontier. This efficiency idea is distinct from the policy choice itself, as any of these policy regimes can be efficient in the sense that risk is as low as possible for a desired level of intermediation. I’ll emphasize that this framework is agnostic to the merits of one policy choice or another. That is, it is a positive framework and not a normative one, and I won’t look at this from a normative perspective. Policy preferences can vary and they are set by policymakers.
Hence, the insignificant degree of EU cross-border banking integration is probably partly explained by economic factors. However, the existence of large differences in profitability and efficiency between individual EU countries’ banking systems indicates potential for cross-border expansion also within the EU. In competitive industries, such differences do not exist for a longer period, as less efficient firms would be pushed out of business or acquired by more efficient competitors. These wide profitability gaps should attract more efficient entrants. Against this background, it is interesting to note that many European banks seem more attracted to the US banking market. The US banking system is by many considered as the most developed and competitive in the world. You would indeed expect EU-based banks to find it easier to expand within the EU than into the US. Still, several major European banks have much larger retail operations in the US than they have in neighbouring European countries, e.g. HSBC, ABN Amro, and BNP Paribas. One cannot avoid the question of whether larger obstacles to cross border banking exist in Europe than in the US. Regulatory schemes and practices still a major problem for integration Given the gradual increase in harmonisation of EU banking and financial sector legislation, it is perhaps surprising to find regulation to be one of the most important barriers to further integration. In my view, there are two issues here. First, although the general legal framework has been converging, the practical implementation of rules and regulations still differs widely between member states.

Solvency ratio of the banking system percent 20 18 16  14 12 10  Solvency ratio  mar.-18  sept.-17  mar.-17  sept.-16  mar.-16  sept.-15  mar.-15  sept.-14  mar.-14  sept.-13  Minimum regulatory capital requirements = 8%  Note: Solvency ratio = Total own funds/ Risk weighted assets  Source: NBR  mar.-13  sept.-12  mar.-12  sept.-11  mar.-11  sept.-10  mar.-10  sept.-09  mar.-09  sept.-08  mar.-08  8  Source: NBR Source: NBR NPL ratio (NBR definition)  Jun. 2018  percent  Mar. 2018  Dec. 2017  Sep. 2017  Jun. 2017  Mar. 2017  Dec. 2016  Sep. 2016  Jun. 2016  Mar. 2016  60  Dec. 2015  Loan-to-Deposit ratio, %  Sep. 2015  70  Jun. 2015  90  Mar. 2015  100  Dec. 2014  percent  Sep. 2014  Dec. 2017  Apr. 2017  Aug. 2016  Dec. 2015  Apr. 2015  Aug. 2014  Dec. 2013  Apr. 2013  Aug. 2012  Dec. 2011  Apr. 2011  Aug. 2010  Dec. 2009  Apr. 2009  130  Aug. 2008  Dec. 2007  Figure 11. LTD and NPL ratio Non-performing loans  25  percent 61  120 60  20 59  110 58  15 57  56  10 55  80 54  5 53  52  0 51  NPL Coverage Ratio (rhs)  Figure 12.
In particular, we can’t be confident about how much fiscal drag will blunt growth. Ultimately, though, the drag should abate. When that happens – presumably later this year, the economy should strengthen. Inflation, as measured by the personal consumption expenditure deflator, is currently below the Federal Reserve’s 2 percent objective (Exhibit 9). Substantial slack remains in labor and product markets, and underlying measures of inflation are subdued. With weak labor compensation growth, the trend growth of unit labor costs is less than 1 percent annualized, which is well below price inflation. Moreover, inflation expectations remain well anchored at levels consistent with our 2 percent longer-run objective. Thus, I conclude that the risk that inflation could significantly exceed our 2 percent objective is quite low over the next few years, even if the recovery were to strengthen considerably. U.S. monetary policy initiatives Beginning in September, the FOMC made a number of important changes to monetary policy in order to promote a stronger recovery in the context of price stability. First, the FOMC began purchasing an additional $ billion of agency mortgage-backed securities (MBS) each month.4 Second, the FOMC stated, for the first time, that it would continue buying assets and employ its other policy tools as appropriate until there was a substantial improvement in the labor market outlook5. Third, the FOMC stated its intention to maintain a highly accommodative stance of monetary policy for a considerable time after the recovery strengthens. Two additional initiatives followed in December.

And, according to Congressional Budget Office projections, even if remittances drop sharply in future years, cumulative remittances would still likely be higher compared to the counterfactual regime in which the Fed had not expanded its balance sheet (Exhibit 14). In addition, because Fed purchases put downward pressure on long-term interest rates, this  12  Asset Bubbles and the Implications for Central Bank Policy, Economic Club of New York, April 7, 2010. 13  If the Fed’s net income fell below zero in a year it would record a deferred asset that it would redeem with future net income. Paid in capital and surplus would remain positive in a very wide range of scenarios. See The Federal Reserve’s Balance Sheet and Earnings: A primer and projections , Seth B. Carpenter, Jane E. Ihrig, Elizabeth C. Klee, Daniel W. Quinn, and Alexander H. Boote, Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System, 2013-01. See also SOMA annual report (forthcoming). 6  BIS central bankers’ speeches  generates interest savings for the Treasury, and this benefit should be included in the fiscal cost calculations. Finally, and most importantly, to the extent that asset purchases are effective in pushing the trajectory of economic growth above what would otherwise have been the case, this will lead to higher federal government tax revenue and lower safety net spending outlays during the recovery period.
Apart from our continuous efforts to put in place a conducive platform, it is also crucial for market players to maximize their readiness to grasp the opportunities brought by the development of Islamic finance in Hong Kong. After all, market players will be the ones who drive the growth of the market ultimately. So, I highly encourage you all to gear up for the new opportunities ahead of us. On this, I am pleased to note that some financial institutions have already started to get ready by mobilizing their staff in the Middle East or Malaysia to Hong Kong, as well as providing training to their staff in Hong Kong. The fact that you are here today is also a good indication that you are keen to prepare yourselves. I hope you would take the most out of this workshop. 14. Thank you. BIS central bankers’ speeches  3

Since the vast majority of household debt is related to housing, it is not surprising that debtto-income ratios were highest and rose most in places that experienced rapid rises in home prices. So, for example, debt-to-income ratios are among the highest in the nation in those places most associated with the housing bubble, such as California, Florida, Nevada and Arizona. This relationship can also be seen within our region. For example, household debt grew more slowly than nationally and has remained relatively low in upstate New York, which was largely bypassed by the housing boom. The key exception is New York City, where a large share of residents rent their homes. Overall, city residents still have relatively low levels of mortgage debt, even though these debt levels rose during the run-up to the recession. Elsewhere in the region, debt levels tended to rise most in places where housing prices increased the most, such as Long Island and parts of New Jersey. During the crisis, in most parts of our region, households reduced their debts. But, because they had not accumulated as much during the run-up, the decline was well below the national average. In general, households in our region – with some exceptions that I will mention in a moment – have not been under as much pressure to deleverage. It’s particularly notable that in upstate New York, where debt levels are well below the national level, households have actually continued to very slowly add to their debt.
But new holders of such risk may not have the same understandings of what the risks consist of, as those who generate them. And accordingly they may behave in unexpected ways when shocks arise. For example in banking, confidence in the liquidity of the system and expected behaviour is underpinned by the presumption that, in the absence of a credit event, obligations will be honoured at a known time and date. This would typically beon the expiry of a loan contract - the crystallising event if you like. In general insurance on the other hand, the industry is used to handling crystallising events differently. Rather than acting as the trigger for immediate payment of due amounts, it may instead lead to discussion - even dispute - the results of which will determine how much is eventually paid and when. So risk transfer contracts straddling the two areas may engender expectations that in practice may harbour surprises; with unexpected outcomes and adverse behaviour. 8. Implications of the new environment: new types of financial player  A key ingredient of life in today’s financial world of course is the new players, or the increased significance of previously smaller players - encouraged as they have been by liberalisation and new risk transfer techniques. Firstly there is the advent of globally active Large Complex Financial Institutions - LCFIs. These create a particular challenge for public policy. They are built on highly sophisticated understandings of the global market place. Their deployment of intellectual capital has been dramatic.

These focus both on “hard infrastructure”, including payment and settlement systems, and on “soft infrastructure”; standard-setting in areas like accounting, audit, prudential and legal standards. We also analyse key developments in the international arena, for example in relation to threats of failure of emerging market economies and response to this. 12. Public policy response - institutional  As to the second area - the institutional response - there are both national as well as international dimensions. On a national basis, countries increasingly recognise the distinction between supervision (looking at the individual institutions and markets) and the systemic factors involving concentrations, interrelationships and behaviour in relation to the system as a whole. Each is an essential element in the provision of financial stability oversight. In relation to supervision, in some jurisdictions - including the UK, Japan and Germany - all the supervisory functions are carried out within one institution. In others they are handled by different agencies. Certain countries have combined questions of the systemic issues with those of prudential oversight, and then put the investor and consumer protection aspects of regulation into separate agencies [the “twin peaks” approach adopted in Australia and France]. Yet others still survive with a multiplicity of agencies. The US is a case in point - and it is worth noting that, despite all its complexities and conflicts, the health of the US financial sector as well as its economy do not appear to have suffered unduly, despite episodes like the savings and loan crisis.