samchain/econo-pairs-v1 huggingface dataset:
This maps to a new risk-weighted assets number for the retail mortgage book, and a new capital ratio for this portion of the bank’s book (assuming the initial capital ratio is 100). This error is simulated 5,000 times for each of two banks and the chart shows the resulting distribution. 12  BIS central bankers’ speeches  Chart 3: Cumulative losses on trading book relative to capital requirements £ Capital held against trading book exposures (a) Cumulative trading book write-downs (b)  16 14 12 10 8 6 4 2 0  HSBC  Barclays  LBG  RBS  (a) As of end-2007. Capital charges against trading book exposures are calculated as the the sum of market risk and counterparty credit risk RWAs, multiplied by 8%. This might overestimate the amount of capital banks hold against their regulatory trading books as some market risk and counterparty credit risk capital charges relate to positions booked in the banking book. (b) Cumulative between 2007 H2 and 2009 H1. Includes writedowns due to mark-to-market adjustments where details are disclosed by firms. Not all these positions will necessarily be included in the regulatory trading book.

Anita Angelovska Bezhoska: The denar was and remains one of the key pillars of the stability of the Macedonian economy Address by Ms Anita Angelovska Bezhoska, Governor of the National Bank of the Republic of North Macedonia, on the 29th anniversary of the monetary independence, Skopje, 26 April 2021. * * * Monetary sovereignty is one of the main components of the sovereignty of any state. Today we mark 29 years since the laying of the foundations of our monetary independence – the day when the denar replaced the Yugoslav dinar, and the National Bank began to function as an independent central bank, facing numerous challenges in those turbulent times of separation from the former Yugoslav state. Looking back through years, we can freely say that the monetary independence took place in an extremely difficult period marked with high macroeconomic instability as its main feature. Frequent exchange rate devaluations, when there were almost no foreign reserves, along with structural problems, ignited inflation, which reached four-digit levels, and all this had strong effects on the economy and the living standards of citizens. The economy has been declining 1996, when economic growth of 1.2% was registered for the first time since independence. Hence, no doubt that establishing a stable macroeconomic environment required great courage, commitment and professionalism of the National Bank team. The efforts of the National Bank, together with other policy makers and the academic community, have played a key role in ceasing the inflation spiral and stabilizing the exchange rate of the domestic currency.
A system like ours, with high income taxes and transfers, naturally also influences the extent to which private safety-nets or reserves are built up. This includes everything from saving by households to contractual unemployment insurance. For the automatic stabilisers to function in full during future downturns it is important to stick to the current rules for fiscal policy and ensure strict compliance when times are bad as well as good. There may also be grounds for being even more ambitious about the budget surplus and aim for a level of, say, 3 per cent over the business cycle. Debt could then be repaid more quickly, giving us more room for manoeuvre in the future. The spending ceiling has functioned well both by breaking what was previously an almost automatic increase in government expenditure and by maintaining discipline in the central government finances. The same applies to the requirement that the local government finances are balanced; there is less talk of this requirement in contexts like the present but it has been an essential part of the framework that has held back the expansion of public spending in recent years. It is therefore important that these rule systems are not eroded. On top of all this there may be a  BIS Review 6/2002  3  case for some changes in the arrangement of budget work. Some of the proposals put forward recently by Svante Öberg can be considered as a way of strengthening the process still more.

At that time they considered there was a case for cutting taxes and argued on the basis of estimated resource utilisation that this was feasible without risking capacity restrictions. Our estimations suggested otherwise, though the differences should not be exaggerated. We still do not know who was right. But what we do know is that economic activity has declined far more than any of us foresaw and this has been accompanied by higher inflation. Concluding remarks Now for a brief summary of what I have said. Economic policy as a euro participant is not all that different from economic policy today. When discussing stabilisation policy it should borne in mind that the best way for us to achieve a favourable development – inside or outside the euro area – is to create conditions for a smooth adjustment to various markets, primarily the labour market, and for a good productivity trend. In these respects there are measures we ought to take in any event. But euro participation can help us to move in the right direction. By adopting the euro we would relinquish our national monetary policy. That would make the formation of fiscal policy more crucial. There are risks here, as we know from our own experience in the 1970s and ’80s, when policy was neither consistent nor focused on the long term. As a result, cyclical fluctuations were accentuated and the government finances gradually weakened. That limited the room for action when Sweden entered the 1990s.
Prices of commercial property are following the economic cycle Lower inflation and lower volatility in the inflation level has not led, however, to lower volatility in the prices in asset markets. As we all know, developments in the equity market have been unusually dramatic since 1995, with a steep rise up until spring 2000 and then three years of price declines. In the property market price developments have been somewhat more orderly, and less dramatic than they were at the end of the 1980s and beginning of the 1990s. When the Riksbank discusses developments in the property market, which is mainly done in the Bank’s Financial Stability Reports that are published twice a year, we usually divide it into two parts: the commercial property market and the housing market. Commercial property is defined as such property that is leased for commercial purposes, e.g. office premises, shops and industrial premises. Developments in the prices of commercial property, especially those of office premises, have tracked the economic cycle relatively well in recent years. Developments in the prices of commercial property  1  2  See, for instance, OECD working paper No 353: Macroeconomic policy and economic performance, 2003. BIS Review 28/2004  are largely determined by rent developments, which in turn depend on the demand situation. The weak economic situation in recent years has contributed to dampening demand for mainly office premises. This is evident partly in the number of vacancies, which continue to rise, with the exception of the Stockholm region.

Villy Bergström: Monetary policy and economic stability Speech by Mr Villy Bergström, Deputy Governor of Sveriges Riksbank, at a conference organised by the real-estate market magazine “Fastighetsvärlden”, Stockholm 12 May 2004. *  *  *  Thank you for the invitation to participate in Fastighetsdagen 2004 here at Grand Hotel. The property sector is an interest rate-sensitive component of the economy, and it is therefore interesting for me in my capacity as a member of the Riksbank’s Executive Board to come here and speak with you and discuss how the Riksbank views the current economic situation. The current economic situation In conjunction with the publication of the year’s first Inflation Report on 1 April the Riksbank cut its key interest rate, the repo rate, by a half percentage point. The reason was that the Executive Board judged that inflation would be below the target of 2 per cent inflation over the next two years. In the past year inflation has been low, averaging 1.3 per cent. This is attributable to a large extent to an adjustment of energy prices to more normal levels. But recently the drop in inflation has been sharper than expected and the Riksbank has gradually changed its view of inflationary pressures. Among other things this has been due to unexpectedly low import prices. The labour market has also been weaker than forecast and productivity has increased faster, resulting in lower domestic wage and price pressures.
This debt tends to increase over the periods of economic slowdown, in response to fiscal counter-cyclical policies and the impact of automatic stabilisers. However, given the essential role of fiscal sustainability in the overall economic and financial stability, and the high level of Albania’s public debt, the Bank of Albania has requested and supported the taking of measures to control and reduce this debt in the medium term. In this context, we reiterate our message for anchoring this process to a fiscal rule, which will orient the fiscal policy in the long term, and will be reliable and transparent for all Albanian and foreign economic agents. Developments in the external sector of the economy signalled a sluggish foreign demand in the third quarter of the year. Though trade deficit dropped, the external sector impacted negatively on the economic growth due to lower tourism revenues. In October and November, the external trade data show ongoing annual nominal contraction of the trade deficit, at 11.9%. This contraction was due to increase in exports by 12.0% and decrease in imports by 2.0%, over this period. The Albanian economy's capacity to maintain and speed up the positive export growth rates will determine the country's medium-term and long-term economic growth. In the medium term, increasing exports helps offset the domestic demand sluggishness, while in the long term, increasing competitiveness of the Albanian economy in the world markets should be to the core of Albania's new economic growth model.

To say something about my academic qualifications, I graduated with a Bachelor of Laws degree from University of Zambia, thereafter a Master of Laws degree from Harvard where I was a Fulbright Scholar and a PhD from University of London, Centre for Commercial Law Studies, Queen Mary and Westfield College. Allow me to mention that all my studies were done on scholarship. BIS central bankers’ speeches  1  Apart from my work, I am also involved in service to the public and to the Church through sitting on various Bodies. I was not appointed to this position my chance; it took effort and hard work to be noticed. I believed in myself and knew I had to put in the best to achieve anything I wanted to achieve. So what message do I carry for you this afternoon? My Theme is that YOU CAN DO IT! To you the students, I want to encourage you to see yourselves as leaders. You are the future of this nation. You are part of the cream that need to push this country forward. I would like you to realise that academic and professional qualifications are an integral part of settings yourselves up for one’s life. By being here, you are establishing a path for your successful career whether as an employee or an entrepreneur. The knowledge that you are gaining is assisting in developing and enhancing your ability to think and perceive as well as manage the various situations that life offers.
But there are risks to this scenario. They are twofold. First, that strong global growth continues to generate upward pressure on the prices of commodities and tradable goods more generally. And, second, that the period of elevated inflation causes medium-term inflation expectations to drift up, leading to higher rates of increase of both wages and prices. Measures of near-term household inflations have moved up in line with the MPC’s own assessment of near-term inflation, but the rise in longer-term measures has been considerably more muted. And measures derived from inflation swaps suggest that the expectations of financial market participants five years ahead have remained stable. But given the unexpected strength of inflation in recent months, this risk has probably increased of late. So we shall be watching these indicators, and their impact on wages and prices, like proverbial hawks. What are the implications of all this for monetary policy? The recovery has so far turned out to be broadly in line with that expected a year ago, but the outlook for growth remains highly uncertain. Though inflation has been running well above target and is likely to continue to do so for a while yet, beyond the end of next year it should fall back to near the Committee’s 2% target. In the light of that outlook, I believe we have made appropriate use of the “constrained discretion” granted to us in the Chancellor’s remit, looking through the temporarily elevated inflation to the medium term in order to avoid unnecessary volatility in output.

This would then imply that there is an unusually low growth potential in the global economy, as in the 1930s. There is little we can do to achieve high returns on investments if global growth is weak. In this situation, not even investments in our own business sector - or for that matter in long-term bonds or infrastructure - would generate returns of any size. But even in an economy with low growth, we can basically expect to be compensated for risk. The global business sector must be profitable in the long run. This must imply that equity investments can, in the long run, generate a solid return in relation to other alternatives. If prospects for achieving a return should deteriorate, another question is whether we should save less and spend more now. However, there are good reasons to maintain the saving ratio. It will be even more demanding to finance future pensions for an ageing population if the economy stagnates. Conclusion The global economy is in the doldrums. Swings in capital markets have a substantial impact on the value of wealth accumulated by the central government. However, it is highly unlikely that investing in global business will not be profitable in the long run, and with a high portion of wealth invested in bonds the risk is spread. It is unlikely that we will achieve the substantial productivity gains seen in the 1990s. The Norwegian business sector is facing pressures on profitability, a high cost level and declining investment.
Also, as the IMF has recently indicated, it would be desirable to assess the suitability of bail-in strategies in the event of systemic crises, given their potentially adverse effects on the financial system as a whole, which may ultimately raise social losses and the cost to the taxpayer. In order to make further progress in reducing the risk of financial fragmentation within the euro area, it is necessary to boost private-sector risk-sharing channels, such as the credit and capital market channels, so that they work alongside the public-sector risk-sharing mechanisms. This requires, first, removing obstacles to the creation in the medium term of genuine pan-European retail banks. In particular, a single deposit insurance fund needs to be created, the euro area needs to be treated as a single jurisdiction for regulatory purposes and, above all, market pressure needs to reach broad segments of the European banking system, such as public-sector banks, cooperative banks and savings banks. Second, progress needs to be made on the various Capital Markets Union initiatives. The implementation of this project should lead to more efficient and integrated capital markets, enabling European businesses to diversify and broaden their sources of funding and to reduce their excessive dependence on bank finance. However, this is a complex objective that requires action on various fronts, including the development of market infrastructures, the review and harmonisation of market regulation and supervision and of insolvency procedures, and the elimination of the bias in favour of debt financing in some countries’ tax systems.

With both foreign and Swiss interest rates close to zero, the spread between euro and Swiss interest rates disappeared. This created upward pressure on the Swiss franc. A narrower interest rate differential acts like a bonus on Swiss franc holdings. The appetite for Swiss franc assets increased among both foreign and Swiss investors. In the context of a financial and debt crisis, and in a world of high geopolitical risks, a narrower interest rate differential makes the Swiss franc particularly attractive for investors. At the same time it is important to recognise that the current situation cannot be compared to that of 2011. At that time, the Swiss franc was appreciating strongly against all currencies, and, as a response, we introduced the minimum exchange rate. Now the situation is characterised by a general weakness in the euro. Thus, at the end of 2014 and the beginning of 2015, the euro lost substantial value, not just against the Swiss franc but also against other important currencies such as the US dollar and the pound sterling (cf. chart 5). In this new environment, we introduced negative interest rates to partially restore the traditional differential between interest rates on euro and Swiss franc assets. Monetary conditions were adjusted, as the monetary policy stance relative to that abroad had changed. With short-term interest rates in the euro area at zero, negative Swiss interest rates helped restore, at least partially, the pre-crisis interest rate differential.
The objectives and means of central banks have changed over time, usually as a result of economic crises. This has led to rethinking of the prevailing consensus view of monetary policy. Experiences from the 1990s crisis showed the importance of having a credible nominal anchor, which led to an increased element of “norm-based thinking” in monetary policy. For the Riksbank, this resulted in the inflation-targeting regime we have now. With regard to the experiences of the most recent global financial crisis, we are to some extent still on a learning curve. But personally, I think that one important lesson is that financial stability is a necessary condition for macroeconomic stability and price stability. Developments in the wake of the financial crisis have also shown how dependent Sweden’s economy is on developments abroad. I think that current monetary policy reflects all of these lessons. We are conducting a very expansionary monetary policy to preserve confidence in the nominal anchor provided by the inflation target for more than 20 years. At the same time, we are emphasising the importance of managing the risks linked to household indebtedness, as financial stability is a necessary condition for attaining the inflation target in the longer run. 12  BIS central bankers’ speeches

These lessons are helpful when it comes to thinking about the future UK regulatory landscape. For example, some early observations. Solvency II was written to facilitate insurance business by eliminating significant differences between Member States’ regimes and thus aims for uniform rather than dynamic application. We could think about measures that would improve the PRA’s ability to supervise firms through a cycle. An alternative could have been for firms to hold additional regulatory capital during more benign times, buffers which the PRA could then allow to be released during a market down-turn. 4  All speeches are available online at www.bankofengland.co.uk/news/speeches  4  This would be similar to the effect of the symmetric adjustment. At present, buffers held in excess of the solvency capital requirement (SCR) are determined by each insurer’s risk appetite to avoid breaching the SCR, and are thus less likely to be used in a stress. In relation to internal models, we could review the balance between assessment against tests and standards and supervisory judgements concerning calibration of the overall capital requirement. Ultimately, the extent to which the UK’s regulatory framework is similar to or different from EU regulation after the implementation period is a political choice. But as Solvency II is based on the same principles as the preceding UK regime, revolution is less likely than evolution.
As customers have become more willing to consume products online, they have also become more open to buying other services bundled with their payments provided by fintechs, which often have better ways than banks for leveraging customer data. This is particularly evident in the case of the "BigTechs", especially those which have acquired a Payment Institution or Electronic Money Institution license, and have challenged banks' traditional data gatekeeper role. There are two schools of thought when one sees these developments from a traditional bank's perspective. One is that, a number of banks have been viewing PIs and EMIs as competitors, and have been avoiding any business relationship with them other than the minimum required by the legal framework. The other approach is the banks which have  3/5  BIS - Central bankers' speeches  viewed these entities as facilitators, an opportunity for growth and development. There are benefits to be reaped when combining the network reach and regulatory expertise of incumbent banks, with the versatility and innovative, agile operating model of fintechs. A few weeks ago, we had an example of a global bank which views these entities as facilitators. In the European Fintech landscape, JPMorgan agreed to acquire a 49% stake in Viva Wallet, an EMI based in Greece. This is subject to Regulatory Approval. According to JPMorgan, this strategic investment sets the stage for expanding their digital payment offering to European SMEs. So, What will be the landscape of banking in the near future.

The resolution authority could, in turn, better take into account certain strategies, and thereby accept a certain level of risk. A likely effect of recovery options or transfer tools is that the structure of the remaining group might become less complex and therefore carry less risk. Besides, the stance on waivers of internal requirements for entities located in the same Member State (or even in the same Banking Union) has proven overly conservative. We need pragmatism, and consistency between the SRB and the SSM: when an entity has been waived from capital requirements, or is simply not subject to capital requirements, the resolution authority could apply the same on MREL. Proportionality to risk could entail other changes, such as the calculation of banks’ contribution to the SRF. As of today, the size of institutions has an overwhelming importance in the determination of these contributions. This is more than questionable: size does matter in order to bring an institution under the scope of resolution, but size and risk are two different notions and they should be more clearly differentiated in technical implementation. In order to ensure the fairness of contributions, and greater adherence to the SRM overall, it is necessary to adapt formulae accordingly. Beyond fairness, penalising the largest banks or groups prevents the emergence of pan-European groups, which is one of the Banking Unions’ objectives. Here let us acknowledge that  Page 5 sur 5 we have collectively failed so far; we have a Banking Union without really crossborders European banks. This is a major weakness.