samchain/econo-pairs-v1 huggingface dataset:
In the latest survey conducted by the Bank of Albania on “Money Market Issues”, 7 out of 14 respondents (commercial banks), (which possess 59 per cent of the market share), outlined “the excess structural liquidity” as the main barrier to the development of the interbank money market, while 4 out of 14 banks (which have a market share of 30 per cent) highlighted “the credit risk” as the second most important barrier. The tendency to keep excess structural liquidity as a bank policy was pinpointed by 13 out of the 14 interviewed banks, otherwise meaning that banks that share 92 per cent of the market do have a tendency to keep excess structural liquidity. We notice that the reasons and obstacles brought up by banks are mostly subjective, and their prevention depends more or less depend on their policies and behavior. Banks keep excess liquidity because there is no a developed money market where they could invest this liquidity at all times at a fair market price. This market can not be developed on its own! It is banks’ active liquidity management as opposed to a passive one that creates incentives for developing the markets. In this context, I would highly recommend you to implement stricter internal control policies and procedures, so that they can identify opportunity cost and missed profit opportunities. Such a thing will lead to improved efficiency and competitive positions of the bank on the one hand and market development on the other.

The situation was especially dire in the foreign exchange swap markets, and an acute global dollar shortage became a fact. Banks around the world had severe difficulties refinancing their foreign assets. It was against this backdrop that the Icelandic banks faced illiquidity. A number of other banks would probably have met the same fate if governments all over the globe had not made broad-based rescue efforts. The future will probably reveal just how close the global financial system was to complete collapse during those weeks. But the scope of governmental measures is unprecedented. They involved a dramatic increase in domestic liquidity facilities from central banks; new currency swap agreements between the US Federal Reserve Bank and other central banks, and expansion of existing swap agreements; direct lending to banks from various countries’ foreign exchange reserves; expanded deposit insurance schemes; government guarantees of deposits and wholesale financing; and capital injections. BIS Review 136/2009  1  Rescue efforts were also carried out in Iceland in connection with the banks’ failure. They were somewhat different in nature, however, as the Icelandic authorities did not, on their own, have the resources to rescue the banks, and international support was not forthcoming, even though it could be argued that the three banks concerned were systemically important because of the possibility of a domino effect throughout Northern Europe in the event of their collapse.
Furthermore, in economic terms, given that these deposits were used to a significant degree to finance illiquid assets outside Iceland, such a payment, if it had been possible, would have amounted to a net transfer of resources from Iceland to other countries – where the United Kingdom would have been prominent – at a time when Iceland was going through its deepest financial and economic crisis in the post-war period. That made no sense whatsoever! However, the preference given to deposits under the Emergency Act is a key element in the fact that recoveries on the failed banks’ estates will cover deposit claims from the foreign branches in full. In international discussion, there have been a number of misconceptions about this process. There have been claims that Iceland allowed its banking system to collapse, with what now seem reasonable results, and that others should consider doing the same. The fact is that Iceland kept the domestic part of its banking system running throughout, and at significant expense; otherwise, the consequences would have been dire. Some have claimed that the banks were nationalised. They were not. The failed private banks are private companies in winding-up proceedings governed by law. The Government fully recapitalised one of the new banks. The other two are private banks owned primarily by the estates of the old banks. Others have claimed that Iceland defaulted and got away with it. The opposite is true. The credit of the sovereign was preserved, and all debt obligations have been paid on time.

The double-digit deficits in the years before the crisis have been replaced by sizeable surpluses from 2009 to this day. Iceland had significant fiscal surpluses in the years leading up to the crisis. As expected, the crisis had a big impact on government finances: through the direct fiscal costs of the banking crisis, the loss of tax revenue, and higher unemployment expenditures as the economy went into recession. This impact was big as can be seen on Figure 6 showing the direct and indirect impact of selected banking crises on government debt and fiscal balance. But yours was bigger! A deficit on the central government amounting to 8% of GDP opened up in 2009. It had to be financed domestically. Capital controls helped in that respect. To build confidence and open external market access, a medium-term fiscal consolidation plan was implemented as a part of the programme with the IMF. In 2009, automatic stabilisers were mostly allowed to do their work, but in 2010 a phased deficit reduction plan set in, with a primary surplus targeted for 2012 and an overall surplus for 2014. This fiscal consolidation was sizeable in international comparison, as can be seen from Figure 7, but it did not derail the recovery that began around the middle of 2010. It helped that monetary policy could be relaxed over the course of 2010, as the closure of loopholes in the capital controls in late 2009 contributed to the stabilisation of the exchange rate.
François Villeroy de Galhau: Europe at a crossroads – how to improve economic governance and growth performance of the Eurozone? Presentation by Mr François Villeroy de Galhau, Governor of the Bank of France, at the German Institute for Economic Research – DIW Berlin, Berlin, 8 June 2016. *  *  *  I am delighted by the opportunity, kindly offered by DIW, to share some remarks on Europe here in Berlin. As you may know, I have strong ties with Germany. In particular, I completely share the German culture about the importance of responsibility and long-term vision. At this juncture we probably all agree on two things – and my focus today will be that these two things are closely intertwined: •  Monetary policy cannot be the only game in town. •  Although Monetary Union is a success, Economic Union remains to be built. I want to pay tribute to Helmut Schmidt, who said in October 2011: “There was a failure to set the economic rules of the game for the currency union. A powerful authority with responsibility for fiscal and economic policy was not set up.” 1 I will first argue that monetary policy has been doing its fair share (I). I will then discuss the need for a “full coordination” of national economic policies in the Euro area, and discuss what concrete progress can be made (II). Finally, turning to private risk-sharing in the Eurozone, I will focus on the importance of building an efficient Financing and Investment Union (III).

The data has not been transparent, especially for privately-held investments, it has not been put together, and this is what EDHEC  4  BIS central bankers’ speeches  is doing. So that’s one dimension of it. Getting the data together to allow institutional investors to allocate a desired portion of funds to infrastructure as an asset class. 35. Second, the regulatory treatment for insurers has to evolve so as to make possible long term investments, including infrastructure investment. Some rethinking is already underway globally on the design of capital frameworks for insurers. It has to be aimed first of all at ensuring that individual insurers are on a sound prudential footing, not just for the short term but for the long term. It should also support efforts to ensure that our economies are able to grow and to remain healthy, which is also in the interests of every player. This means we have to support long term investment. •  The European regulators are already in close consultation with the industry, on providing some measure of capital relief for long term investments. Globally too we have to do this. We need lower risk charges for equity held by insurers for the long term, including infrastructure. I hope globally regulators will arrive at an understanding that makes this possible. •  Here in Singapore, MAS is engaging closely with the industry in this regard.
5 In either circumstance, the Bank will need information on the bank’s liquidity position and planning, and a lot of detailed information on the collateral it would be offering. I therefore urge the BBA’s members to send the Bank (as well as, of course, the FSA) your Contingency Funding Plans; and, secondly, to pre-position collateral with us for the DWF. Overall, we need to engage together constructively on what information the authorities need in order to handle incipient or actual distress. 5  Paragraph 14 of the Memorandum of Understanding between HM Treasury, the Bank of England and the Financial Services Authority says: "In exceptional circumstances, there may be a need for an operation which goes beyond the Bank's published framework for operations in the money market. Such a support operation is expected to happen very rarely and would normally only be undertaken in the case of a genuine threat to the stability of the financial system to avoid a serious disturbance in the UK economy." BIS Review 83/2009  5  Orderly wind down: writing “wills” There is a broader issue lurking in the background here, and in today’s environment we can and must address it openly. Last Friday, in the Bank’s latest Financial Stability Report, we emphasised the importance going forward of enhancing market discipline, notably through much better disclosures.

The 8 Qualifying Offshore Banks will be given priority in the upgrading. Existing Offshore Banks as well as banks that do not yet hold a banking licence in Singapore are encouraged to apply. After these 20 licences are granted, we will review the pace of upgrading the remaining Offshore Banks. Enhancing competition in retail banking In retail banking, we will maintain the momentum of liberalisation by improving on the first package of measures. We will take applications for the two outstanding QFB licenses. We will also expand what a QFB is allowed to do: a. With immediate effect, they will be permitted to establish up to 15 locations (previously 10), of which up to 10 (previously 5) can be branches, and the rest off-site ATMs. BIS Review 61/2001  5  b. From 1 July 2002 QFBs will be allowed to provide debit services on an EFTPOS network. QFBs can negotiate with an existing EFTPOS network such as NETS, Visa or Mastercard, for access on fair commercial terms. QFBs will then be able to provide debit services such as debit cards, and cashback at retail outlets. Using the Visa network alone to provide debit services will open up more than 23,000 terminals to the QFBs. With cashback services, each EFTPOS terminal, whether run by NETS or a credit card company, becomes a potential cash withdrawal point.
A consultative paper will be issued by end of the year for industry to give its feedback. Conclusion As the takaful industry matures, all stakeholders will continue to set higher expectations. Consumers today expect seamless experience and quality service in every aspect of the business operation. Shareholders, of course, expect financial entities to offer sustainable returns 4/5  BIS central bankers' speeches  on investments while exploring innovative business opportunities. Regulators expect financial institutions to adopt business strategies and operational models that are sustainable and valueadding to the economy and society. The window of opportunity for takaful to deliver meaningful propositions for all its stakeholders is wide open. The takaful industry must step up with strong stewardship towards meeting these expectations. I believe the discussion at this conference today can help us better navigate the path towards purposeful transformation of the takaful industry. I look forward to engaging dialogues ahead and productive sessions with all of you. Thank you. 5/5  BIS central bankers' speeches

What does it mean for an investment to be responsible or ethical? Certainly, human behaviour is the only one liable to be qualified as ethical. Actions by animals or acts of nature lack this dimension, irrespective of whether their consequences are good or bad. Finances, as an exclusively human activity, could thus also be analysed from this dimension. Broadly, we identify ethical or responsible investment as that which meets certain standards, namely ESG (environmental, social and governance) criteria. As I mentioned, this is a very topical subject in the press, but we are clearly dealing with something more than a passing trend. Large companies, credit institutions, multilateral banks, official credit agencies and even governments themselves have been making a growing number of debt issues that meet these criteria, generally under the name of “green bonds”, which are duly focused on environmental sustainability. But issues of “social bonds” are also beginning to emerge. However, these ESG standards go beyond any debt class. Companies are increasingly incorporating these criteria into their decisions and actions. And banks are certainly no exception to this trend. 1  Banks have, for some time, had corporate social responsibility areas. But their involvement needs to go further. As we supervisors have been insisting, banks also need to incorporate these elements into their risk analysis and management. In this respect, both the European Single Supervisory Mechanism (SSM) and the Banco de España have recently published supervisory expectations relating to the inclusion of environmental risk in banks’ management.
I didn’t expect to say “those were the days” about 2007. It was natural that the first response to the financial crisis in terms of reforms was focused on the bedrock prudential issues of capital and liquidity in banks. This has been supplemented by the drive both internationally and domestically to solve the too big to fail problem through a combination of resolution measures at the centre of which is agreement on total loss absorbing capacity for those banks which require such a bulwark to ensure orderly resolution in the event of failure. This is crucial to break the dependence of failing banks on injections of public money and likewise to break the impact of solvency problems in banks on the public finances. This is an international as well as domestic agenda of reforms aimed at fixing the fault lines that caused the financial crisis, building a more resilient and open global financial system, and deepening and building trust across jurisdictions. I have said before, but I think it justifies repeating, that we are unwavering supporters of an open global financial system which finances the investment and trade necessary to support strong, sustainable and balanced growth. As we see and seek to deal with new risks to the world economy and to global financial stability it is always important to remember that free trade and free capital flows are the foundation of a successful world economy with all the benefits that brings for the welfare of people.

The most prominent is wage adjustment – after a negative shock falling wages can help reduce the cost of production and as a consequence prices. This will increase demand and help the economy return to equilibrium. A crucial prerequisite for this channel to operate smoothly is a flexible labor market – only if wages adjust immediately can increasing unemployment and an economic slowdown be avoided. We know, however, that this downward wage flexibility is rarely seen in real life. Regarding asymmetric shocks one thing seems certain. We are not able to foresee if serious asymmetric shocks are going to affect the Polish economy after joining the euro or not. We can only speak in terms of probabilities, and given the data, it seems that the probability of huge shocks seems limited. The Polish economy is strongly integrated with the eurozone, with a majority of exports going to the common currency area. Moreover, most studies (e.g. Fidrmuc, Korhonen 2003, Eickmeier, Breitung 2005) show a relatively high correlation of business cycles between Poland and the eurozone. This substantially reduces, but does not eliminate, the risk of asymmetric shocks. Looking ahead one can see potential risk factors. One of them is production clustering. If the recently observed trend for country specialization (e.g. Slovakia specializes in producing cars, India in business process outsourcing) holds on, it may increase the risk of asymmetric shocks in the future (De Grauwe 2003). Another example of a possibly distant future asymmetric “shock” is global warming.
We are able to control the interest rates in the money market via various policy instruments through an efficient liquidity management and affect the money market rates in the favored direction and to the required extent. Accordingly, I would like to underline that in addition to the average funding cost, Interbank Repo Market rates shown in the chart should be closely monitored for a better assessment of the monetary policy stance. We will gradually raise this predictability of the monetary policy in the period ahead and ensure that interest rates in the Interbank Money Market to hover around 6.75 percent except the days on which the EPS is implemented. To enhance predictability in the funding strategy, we will limit the stock amount of the weekly funding we provide through the quantity auction method at 4.5 percent, not to exceed TL 10 billion until the year-end. Moreover, issues regarding the implementation procedures besides the funding amount to be made under this method as of 2014 will be elaborated on in the Monetary and Exchange Rate Policy for 2014 to be published in December 2014. Under this outlook with a gradual increase in predictability, I would like to remind you that our monetary policy will remain cautious until the inflation outlook becomes consistent with the medium-term projections. In the third quarter, interest rates were down from the previous reporting period across all maturities, with a larger decrease in the shorter end, while the yield curve trended upwards (Chart 5).

We expect domestic demand developments to support the downtrend in inflation and the improvement in current account deficit in the months to come. To sum up, a co-analysis of domestic and foreign demand reveals that forecasts are based on an outlook in which the contribution of aggregate demand conditions to the end-2013 inflation has slightly increased compared to the previous reporting period. This revision drove the end-2013 inflation forecast up by 0.1 points. As you all know, food, energy and import prices also play a great role in inflation forecasts. Therefore, before moving on to forecasts, I will briefly talk about our assumptions regarding these variables. Import prices remained below the assumptions of the July Inflation Report in the third quarter. On the other hand, oil prices materialized slightly above the assumptions (Chart 20). In line with the average futures prices in the first three weeks of October, the average assumption for 2013, which was set as USD 107 in July, was revised upwards to USD 109. This revision added 0.1 percentage points to the end-2013 inflation forecast. We preserved our assumption for the annual rate of increase in food prices as 7 percent. In other words, it was assumed that the recent unfavorable course of unprocessed food prices would be temporary. Before moving on to forecasts, I will talk about our assumptions regarding public finance. Medium-term projections are based on the assumption that no additional tax adjustments will be introduced to tobacco and energy products the rest of the year.
Likewise, to achieve greater consistency in the regulatory framework, it has also been necessary to review the national application of the various options permitted under European regulations. European solvency regulations – namely the Directive and Regulation on capital requirements – confer some degree of discretion upon Member States and national supervisors in the implementation of specific regulatory aspects. Such aspects include the timetable for the progressive adoption of new solvency standards and the granting of exceptions in respect of compliance with certain prudential requirements. This degree of national flexibility had to be accepted at the time by European legislators in the complex Directive and Regulation negotiations. Naturally, the fact such a diversity of rules are in place hampers supervisory action and prevents the homogenous treatment of banks based on their objective position. Accordingly, in recent months, the SSM Supervisory Board has worked intensely in this field. Their efforts have seen a preliminary agreement allowing a common approach to be adopted in relation to the application of these “national options and discretions” in the hands of the supervisory authorities. The terms of this agreement are now being subjected to public consultation, a process which will finalise on 16 December.

Moreover, as you know, the national  2  BIS central bankers’ speeches  supervisory agencies keep functions relating to the direct surveillance of the so-considered less significant banks. This all explains why the start-up of the SSM has meant no saving in supervisory resources at the national level. On the contrary, the national authorities have had to address the considerable challenge posed by the loss of human resources to the ECB. In our case, thanks to the success of Banco de España candidates in selection processes, approximately one-quarter of our supervisory staff have moved to work for the ECB, including three senior managers who today occupy high-responsibility posts – one Director General and two Deputy Directors General – in this institution. The third milestone has been the setting in place of an operational framework for the pursuit of the supervisory functions of the SSM. In this connection, work has been performed since the outset of the project to define common frameworks for action enabling the different practices pursued by different national authorities, with their greatly differing supervisory cultures, to be overcome. This work saw a Supervisory Manual devised in which processes and the operational methodology are described. Naturally, certain key aspects of supervisory procedures have still to be smoothed. In fact, the Manual should be seen as an evolving document, the regular update of which on the basis of experience accumulated is needed to complete convergence towards better supervisory practices.