samchain/econo-pairs-v1 huggingface dataset:
Clearly, at the international level, this now seems to be out of reach, but one could ask whether at least in the EU such an arrangement might be feasible sometime in the future. If ever put in place, an EU-level resolution authority could act as a resolution authority responsible for all the major cross-border banks of the EU, working together with national authorities as its agents, operating on the basis of a single crisis management, resolution and insolvency framework for EU banks. In the field of prudential regulation, something similar is already happening, since the new Basel rules will partly take the form of an EU regulation, thereby eliminating the room for national differences in transposition. In the future, the Single Rulebook could ultimately be one that also covers the crisis management, resolution and insolvency of banks. If we continue to unfold this vision, there would also be a need for robust arrangements to finance the measures of such an authority. An obvious option for that purpose would be an EU-level fund of resolution funds, or a single EU resolution fund. The benefits of such an integrated regime are most easily seen if we imagine how resolution under a loose cooperation framework would work. A previous mapping exercise by the ECB identified more than 40 banking groups with significant cross-border activities which were headquartered in the EU. Notably, 17 of them had a presence in at least ten Member States.

Second, a forward-looking element of the new framework is the concept of intra-group financial support, which could reduce the current legal uncertainty that surrounds asset transferability within groups. In today’s regulatory environment, group liquidity management may in some cases be suboptimal, making the survival of a group more difficult as a result of – for instance – supervisory ring-fencing measures. At the same time, some of these restrictions are in fact justified, since they serve to protect domestic creditors and shareholders from unfavourable transfers. This implies that the conditions for intra-group loans, guarantees and transfers of assets for collateral could be set out in group financial support agreements between parent banks and bank subsidiaries. However, progress in this area is extremely challenging, since group interest is not a well-defined legal concept, while national laws focus on protecting local creditors. Here I think the critical issue is whether we manage to include adequate safeguards in the framework to ensure that the financial stability of the transferring country is not exposed to undue risk as a result of the support provided according to the agreement. This means that host countries supervisors have to be involved in any solution implementation. Third, I also consider the involvement of the European Banking Authority (EBA) as a very promising element of the EU plans. The EBA could play two equally important roles in the future regime. As a standard-setter, the EBA drafts binding technical standards and nonbinding guidelines.
In addition, some member jurisdictions will continue to receive responses through their national rule-making processes up until late autumn of this year, during which time we anticipate hearing additional thoughts. What are some of the themes emerging from the public’s reactions? Certainly the complexity of the proposals continues to draw your attention. This is a matter we have discussed in the past and is a valid concern. It is important to remember that much of the complexity in the proposals stems from the concerns raised by banks earlier in the process. Throughout the process, various banks have requested that the Committee offer flexibility and a range of approaches to evaluate the particular risks and profiles of various businesses and specialisations. Indeed, one needs only to read a handful of the letters on our website to discover that some recommendations from the industry would tend to increase further the degree of complexity of the Accord. Nonetheless, the Committee is aware that it is easier to enforce a simpler rule than a complicated one. We have long sought ways to simplify those rules thought most complicated. Those efforts will continue. Another theme noted in the comments concerns the need to maintain a level playing field – or, at least, to avoid “unleveling” the playing field further. The Committee is very conscious of this matter, and I will say something about our efforts in this respect a little later.

By promoting a more consistent approach to supervisory review, we intend to strengthen the quality of supervision across countries. We recognise as well the special function the Committee can offer in strengthening the ability of host supervisors – particularly those in emerging market economies – to regulate the local operations of foreign banks. Harmonisation of accounting standards and the New Basel Accord  Supervisory review helps to create very direct incentives for banks to evaluate and manage their risks carefully. Transparency can supplement that incentive by leveraging the power of financial markets to encourage prudent risk-taking, and I would like now to address the third pillar of the New Accord, namely market discipline. Even just over the past few months, the popular press has reported on several examples of corporations that failed to disclose adequately the kinds of activities in which they were involved and the degree to which they bore risk. Both inside and outside the banking industry, the renewed focus on sound corporate governance practices has highlighted the importance of appropriate disclosure to the market – and the dangers that ensue when companies fail to disclose their risks adequately. These failures in disclosure have added fuel to the drive to harmonise accounting and disclosure practices worldwide. With reference to the New Accord, many respondents quite correctly noted the need to align the supervisory framework more closely with the converging accounting practices worldwide.
Second, the speed and intensity of normalisation has been a prudential process, guided by the new information and harmonised with the fiscal policy direction, as well as with developments in the financial market. In this view, I would like to highlight that the reaction of our monetary policy has been - on one hand sufficiently strong to guarantee the return of inflation to the target, within a reasonable time horizon, and - on the other hand – sufficiently gradual, in order to have the least possible impact on both economic activity and financial stability. In addition, I would also like to emphasise, that the normalisation speed in Albania has been lower than that implemented by our trading partners, due to the fact that fiscal policy has followed a consolidating trend throughout 2022, while the strengthening of the exchange rate has restrained the imported inflationary pressures pass-through to the domestic market. In absence of these factors, the increase in interest rate would have been faster and more aggressive, with negative consequences on both consumption and investments of private sector. Third, the monetary policy, even in presence of normalisation, continues to retain the overall accommodative stance for the growth of consumption and investments. Nevertheless, it provides better financial conditions for a more balanced performance of demand and aggregate supply in economy in the future. The monetary policy has been transmitted smoothly across financial markets.

The aim of the CBRT’s road map is to improve the resiliency of the economy to external shocks through (i) maturity lengthening – encouraging banks to shift their non-core liabilities from short-term to long-term (Figure 17); (ii) providing incentives to banks for borrowing and lending  BIS central bankers’ speeches  7  directly from and to the Central Bank in times when foreign players are reluctant to engage with banks in Turkey due to heightened volatility in global markets; (iii) bolstering safety-nets – making sure that the banking sector has access to adequate foreign exchange liquidity in times of market stress; (iv) supporting financial stability – providing incentives to banks to improve loan to deposit ratios; and (v) simplifying the monetary policy framework to improve the communication of the monetary policy stance. All but the interest rate corridor simplification step on the roadmap have already been taken and the focus is now firmly on fine-tuning their parameters. Overall, these measures ease the policy tradeoffs posed by the excessive volatility in cross border flows, enabling the interest rate policy to concentrate on the primary objective of price stability. So far the financial market performance of Turkey suggests that the measures undertaken since August 2015 have helped Turkey outperform many peer EMEs. Of course, on the way, Turkey also enjoyed the benefits of lower oil prices relatively more than many EMEs and reduced political uncertainty after the general election result in November 2015.
As banks develop new methods of evaluating capital adequacy, we can consider whether these approaches provide new tools for assessing capital adequacy from a supervisory perspective. The second area is transparency. The challenge of understanding the impact of changes in the financial system on banks and financial markets should add impetus to our efforts to increase transparency in the financial markets. As understanding the nature of the borrower and its risks becomes more complex, the demand for better and more timely information is increasing. Moreover, we supervisors have a special interest in putting good information in the hands of investors, lenders and counterparties, and that is the powerful assistance that market discipline can provide supervisors. We have seen how a bank’s equity price, its funding spreads and its access to markets can provide feedback on the bank’s prospects, and how these market signals can be a decisive factor in motivating management to address problems. We also have seen through current events how the absence of sufficient information can mask critical weakness in the corporate and banking sectors, leading initially to an over-optimism that is followed by excessive risk aversion. The Basle Committee has created two working groups, the Transparency Subgroup, led by Susan Krause of the Office of the Comptroller of the Currency, and the Accounting Task Force, led by Nick LePan, of the Office of Supervision of Financial Institutions in Canada, to suggest ways in which banks, bank supervisors, the accounting community and others can further transparency.

Preventing Financial Problems The market disturbances of the past 18 months have focused a great deal of attention on the need for greater transparency and for increased attention to corporate governance, legal and accounting matters, without diminishing the traditional supervisory focus on credit, liquidity and capital. Recent events suggest that we are seeing new ways in which the links between credit and liquidity are increased in the financial system. Wider credit spreads in virtually all actively traded financial markets, accompanied by declines in liquidity in many markets, signal us that credit concerns are rising in the financial system. We, as supervisors, must interpret and respond to those signals, often in shorter time frames than we are comfortable with, and often in concert with a high level of market volatility. One anomaly is that these issues arise in the face of apparently genuine improvements in liquidity in the high-yield bond, syndicated loan, and emerging markets that we have seen at various times since the early 1990s. Four questions about the current developments appear to offer well-defined avenues which supervisors can pursue. First, are current market conditions signaling a loss of confidence in prior credit judgments, perhaps in response to the growing awareness of how capital markets instruments, especially derivatives, can transform the risk profile of customers and counterparties?
This can have implications for the macroeconomy and for financial markets. As a central bank, we must adapt to the economic effects of climate change. In Norges Bank, climate risk has long been on the agenda in the management of the GPFG. For the rest of the Bank, this field of work is a more recent addition. There is still a great deal we do not know about the economic and financial consequences of climate change. That is why we are working with other central banks to build up expertise in this field. Our aim is to play a role in strengthening the resilience of the Norwegian economy to the challenges posed by climate change and climate risk. Thank you for your attention. 1 Parker, M. (2018): “The Impact of Disasters on Inflation”. Economics of Disasters and Climate Change, Volume  2, Issue 1, April, pp. 21–48. 2 Regional Network 3/2019. Norges Bank. 3 Skånland, H. (1989): “Refleksjoner ved utgangen av 1980-årene” [Reflections at the end of the 1980s]. Speech  on 23 August 1989. Norges Bank. 4 Carney, M. (2019): “Remarks given during the UN Secretary General’s Climate Action Summit 2019”. Speech on  23 September 2019. Bank of England. 5 United Nations Office for Disaster Risk Reduction and Centre for Research on the Epidemiology of Disasters  (CRED) (2019): “2018: Extreme weather events affected 60 million people”. Press release, 24 January 2019. 7/7  BIS central bankers' speeches

Yves Mersch: Translating a shared vision into a winning story Closing remarks by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the T2S Launch Celebration, Milan, 2 July 2015. *  *  *  We chose to call this T2S launch celebration “Translating a shared vision into a winning story”. Listening to the speakers for the past two hours I believe the name was just right. We have heard how the T2S Community transformed the shared vision of an integrated securities settlement landscape into a winning story, culminating in the launch of T2S on 22 June. Stimulating views have been shared tonight and I would like to thank the speakers for presenting their perspectives on the capital markets union. It is evident that T2S, post-trade harmonisation and the CSD Regulation are among the elements that will be pushing this agenda forward. Looking around the room I am happy to see so many familiar faces. Faces of people who have been part of the project since the idea of T2S was born in 2006. The journey over the past nine years has been an inspiring one. There have been some bumps in the road, some twists and turns, but with the launch of T2S we have achieved a monumental milestone. We made the vision of a single securities settlement platform for Europe a reality.
a)  Credit Risk  Financial crises have traditionally arisen where the solvency of one or more institutions either crumbles, or is perceived to be in danger of doing so, in a way that threatens the financial system. So we need to focus on credit concentrations, credit aspects of prudential standards, credit pricing and terms etc. We need data and intelligence to do that. Understanding credit conditions and vulnerabilities is quite well developed territory. But new threats have arisen, particularly from sophisticated credit transfer instruments. This is a tricky and opaque arena. It is hard to know where concentrations of credit risk actually reside and even where credit risk ends and market risk begins. In addition there is the increasing range of participants who are also taking on credit risk. Of course in addition to this we can – and do – think about credit risk standards like Basel II. We focus on the systemic aspects of prudential design since in the UK FSA focuses on supervisory issues. b)  Market and Liquidity Risk  As the global capital market has expanded on the back of securitisation and derivatives increasing vulnerabilities arise. Change has been so rapid and development so fast that it has been hard for any of us to keep up. Given the multitude of new instruments and new markets that have appeared and the resulting increase in risk, this is a significant area of work for us.

And it means we have to understand the dynamics and interrelationships of markets; how new products work; and the possible behaviour patterns of intermediaries, investors, and borrowers. Above all we need to be focused on where major risks are most likely to emerge and the market dynamics if those risks start to crystallise. And we need to distinguish those which are systemic from a myriad of fascinating developments, many of which are just “noise” but which could otherwise distract us. b)  Risk Reduction: Oversight of Payment Systems  The second area where we, and typically other central banks, are required to perform is oversight of payment systems. Payment systems facilitate economic transactions of goods, services and financial assets and are an essential component of a well functioning financial system. So reduction of risks in these systems, for example through the introduction of our Real Time Gross Settlement system, is clearly a priority from a systemic perspective. c)  Provision of Liquidity and Preparation for a Financial Crisis  And thirdly the MoU stipulates that we need to be in a position to inject liquidity at all times. This means that we must be able to provide liquidity in normal times, as well as in times of stress or crisis. This puts an increased onus on well developed and tested crisis management plans, and a particular focus on ensuring that we are able to undertake a range of official financial operations in exceptional circumstances. 4.
14  BIS Review 130/2009  For example, in the latest World Bank's Doing Business in 2010, Malaysia ranks first in the category of ease of getting credit. Baele, L, A Ferrando, P Hordahl, E Krylova and C Monnet, 2004, "Measuring Financial Integration in the Euro Area", ECB Occasional Papers, No. 14, April. Centre for Economic Policy Research (CEPR), 1999, "Financial Integration and Asset Returns", Discussion Paper No. 2282, November. International Monetary Fund (IMF), 2002, "Chapter 3: Trade and Financial Integration", World Economic Outlook: Trade and Finance, September. EMEAP Task Force Report on Regional Financial Cooperation in Asia (2006). BIS Review 130/2009  15

The result is that scarce resources are stolen in these schemes and the general population pays the price. Sadly, we have seen too many examples of this type of behavior. But banks in the United States are on notice. They are aware of their obligation to look for transactions that support corruption schemes, often involving agents and consultants receiving payments on large infrastructure projects. All too often these intermediaries are the conduit for kickbacks. 1/3  BIS central bankers' speeches  The schemes to provide the bribes can be simple or complicated: cash payments; free family vacations; payments for personal credit card bills; payments to friends, spouses or significant others for non-existent services; payments to shell companies controlled by the government official; free cars or housing, or the rental or sales of these assets at below market values. The list goes on. Some clear examples of this type of egregious behavior include: 1MDB in which billions in debt guaranteed by the government of Malaysia was illegally siphoned off by criminal actors and corrupt government officials so that the country was left without the promised infrastructure. This was a brazen scheme carried out by corrupt government officials in multiple countries and was supported by corrupt bankers. In response, the U.S. and governments across the globe took strong action against the individuals and financial institutions involved and helped recover billions of dollars to offset losses from the scheme.
Concluding remarks  Let me conclude with a few reflections on the general issue of this talk, namely monetary policy and Basel II. I have tried to highlight those distinctive features of the revised capital framework which, in my opinion, are more likely to exert some influence on the terrain in which central bankers design and implement their monetary policies. Only the passage of time will reveal the consequences of the most ambitious bank-capital regulatory framework ever envisaged at a multinational level for the conduct of monetary policy. Still, I feel we can lay hands on some basic, but valuable, equipment for performing this jump into the future by looking at the past. So far, I have drawn on some important lessons imparted by past monetary and financial episodes and experiences. Let me now draw on one further lesson. The enormous success of monetary policy in bringing us the benefits of low and stable inflation could have hardly been possible without a preliminary diagnosis of the causes of high inflation and its effects on welfare, including an assessment of what the objectives of monetary policy should be, their relative importance over different horizons, and a comprehensive analysis of the best institutional framework and the instruments required.

Financial market participants pay considerable attention to the monetary policy decisions made by central banks, for these are, in a broad sense, the “guardians” of liquidity. Excessively expensive liquidity is likely to result in a suboptimal volume of investment and, in turn, in an inefficient under-use of society’s productive resources. Likewise, when monetary conditions are excessively lax, some liquidity may be directed to financing projects with poor returns. If this situation prevails for some time, inflation arises, the average productivity of investment declines, asset prices deviate from their normal or fundamental values and the economy as a whole loses its ability to maintain a sustained growth path. When deciding on monetary conditions, central banks must understand the mechanisms underlying the workings of the economy in order to react to potential dangers and opportunities in due manner and course. No diagnosis could ever be complete without a careful analysis of how the entire circulatory system is behaving. From that standpoint, central banks can then be thought as of being the heart, initially controlling the price of the transactions conducted in the money market. Commercial banks would naturally fit into this analogy as the veins and arteries, for they have the last word on the destination of the funds they are being endowed with, a decision that pertains greatly to the sphere of banks’ credit management.