samchain/econo-pairs-v1 huggingface dataset:
It is sometimes claimed that we regulators are hell-bent on pursuing the stability of the graveyard by crushing all life out of the financial system – in other words, that we don’t really believe in the mixed economy system. I will leave you to judge whether our regulation, which allows a medium sized bank to run a balance sheet that is thirty three times bigger than its shareholders’ equity, is consistent with the idea that we are insisting on a risk-free system. This is plainly not a zero-failure regime. I also sometimes find individuals in institutions we supervise and regulate who think we take a wicked glee in constantly rewriting the rules. That is also wrong. Revolution is not of itself an objective, so like all self-respecting revolutionaries we are focused on defined goals:   a strong and stable banking system with no taxpayers’ money spent on bailing out a PRA-regulated financial institution; and    a resilient insurance sector which does not pass risks back to policyholders when they crystallise. I think those goals are in sight, and the remaining path to them is now largely set. Therefore, while I cannot speak for other countries, my assessment is that here in the UK we have reached the end of the revolutionary period in which major reforms to prudential standards were required in response to the 2008 financial crisis.

•  China growing at 6% today adds $ billion of GDP compared to $ billion that a smaller China growing by 10% added 10 years ago. •  China contributed to more than one-third of world GDP growth last year, more than the combined contributions of the US, Europe and Japan. Addressing vulnerabilities Against this backdrop of moderating growth, China is also faced with the task of addressing vulnerabilities in its economy and financial system. The chief risk is leverage – both its level and its growth. •  According to the BIS, China’s credit-to-GDP ratio stands at around 250%, having risen by 100% points since end-2008. Nearly 70% of that increase is attributable to corporate debt. •  There are concerns that part of the corporate borrowing has been used to pay off existing loans, rather than being channelled towards productive activities. •  Many of the Chinese firms having difficulty servicing their debt are from the heavy industry sector facing excess capacity. China has the fiscal resources to backstop its financial sector’s liabilities and thereby stave off a systemic financial crisis. But the debt overhang will weigh on corporate investment and present a further headwind to growth. Indeed, with continuing producer price deflation, the real debt burden will keep rising, even as profitability falls. In a good scenario, the debt ratio stabilises at the current level, and then gradually declines as nominal GDP rises faster than credit; in other words, China grows out of its debt problem.
Recent developments nevertheless suggest that we have become more dependent on the return on those assets for financing tomorrow’s imports (Chart 16). 15  NORGES BANK  Chart 16 Growing dependence on the GPFG. Share of mainland GDP. Percent 13  13  12  12  11  11  10  10  9  9  8  8 7  7 Trade deficit excluding oil and gas 3 percent of the GPFG  6  6  5  5  4  4  3 2000  ECONOMIC PERSPECTIVES 13 FEBRUARY 2020  2005  2010  2015  2020  2025  2030  2035  3 2040  Sources: Ministry of Finance and Statistics Norway  Measured as a share of mainland GDP, the trade deficit is larger than the expected return on the GPFG further ahead. It should be noted, however, that a substantial share of Norway’s goods and services imports is related to activity on the Norwegian shelf. These imports will decline as oil activities wind down. On the other hand, lower oil prices or a decline in global equity markets will reduce the expected return on the GPFG. Moreover, the trade deficit has shown a substantial increase in a period where both demand in the Norwegian oil industry and the krone have weakened. For many years, Norwegian companies could afford to pay much higher wages than companies in neighbouring countries.

Lower interest rates imply higher bond prices. During the period of falling interest rates, the rise in bond prices has contributed to sustaining the return on the fund’s fixed-income portfolio. But this is a one-off gain. At today’s interest rate level, the fixed-income portfolio will yield much less ahead. The interest rate decline and massive central bank asset purchases have also driven up equity prices. In the search for yield, investor demand for equities has steadily increased worldwide. At the same time, low interest rates have increased the valuation of expected income further ahead. Over time, shareholders are well rewarded for taking risk, but at times it may also require patience. An investor with a broad equity portfolio in 1972 – the year before OPEC shook the world economy for the first time – had to wait more than ten years to recover the value lost (Chart 7). After the financial crisis, it took five years for the equity market to return to the 2007 level. With its long-term horizon, the fund has been able to earn solid returns since that time. Chart 7 We should factor in future downturns. Real return on global equities. Index.
In the specific Swedish case, with rapidly-rising housing prices and credit growth, it is a question of remedying the fundamental structural problems on the demand side and, perhaps most of all, the supply side of the housing market. This is quite essential to achieve a lasting solution, but it is beyond the theme of this speech. See also Jansson (2013). 20  See, for instance, Svensson (2013). 21  Sveriges Riksbank (2014). 22  It has been claimed in the debate that the calculated effect is not statistically significant from a classical statistical perspective. However, the calculations were made using a so-called Bayesian method and it is therefore misleading to use a classical approach to test the hypothesis that the effect is positive. Moreover, it is important to note that here we are talking about a systematic relationship. Of course, one cannot rule out the possibility that under special circumstances the debt ratio or real debt might decline when the policy rate is cut. But it appears very improbable that this is the case on average. 23  See, for instance, Sveriges Riksbank (2014) and Alsterlind et al (2013). BIS central bankers’ speeches  7  indebtedness. This type of communication could in itself affect households’ behaviour on top of the effects of the actual interest-rate policy.

Traders from both sides of the border are forced to carry cash and must first convert funds into United States Dollars from their respective countries and then into the domestic currency of the country they are purchasing goods or services from. By so doing, cross-border traders face many risks including theft, exchange losses and other conversion costs. Ladies and Gentlemen, although there have been some bilateral efforts towards formalising and facilitating small-scale cross-border trade in Southern Africa, these have not been  BIS central bankers’ speeches  1  enough. For instance, Zimbabwe signed a memorandum of understanding with Malawi to facilitate informal trade, especially between small and medium-sized enterprises. Mozambique and Zambia also signed a memorandum of understanding to facilitate the repatriation of currencies of the two countries that are accumulated by traders located along the common border areas. It is expected that this memorandum of understanding will be expanded to include Malawi. The lack of financial and payment services has not only hindered small-scale cross border trade but also led to the establishment and entrenchment of parallel currency markets at the borders. Needless to say, these are associated with vices such as counterfeiting, facilitating illegal trade, as well as enhancing cross-border money laundering activities. Moreover, to us monetary authorities, illegal cross-border local currency circulation creates the potential for complicating the conduct of monetary policy, especially if a significant amount of a country’s domestic currency is being used outside its jurisdiction.
The colour shading depicts the same probability bands as used in the fan chart for inflation that I showed earlier. Chart 8 illustrates the uncertainty about longevity. Of course, statistics and their visual representation can be both used and abused. The design of charts has gone backwards since that (shown as Chart 9) of Napoleon’s march to Moscow and subsequent retreat constructed in 1861 by Charles Joseph Minard, Inspecteur-Général des Ponts et Chaussées and, appropriately given tonight’s theme, en retraite. Brilliant in conception and the quantity of information which it conveys, the chart shows the devastating losses suffered in Napoleon’s fateful Russian campaign of 1812. So I do not underestimate the difficulties of promoting the better understanding of statistics in discussions of public policy.15 Too often figures are bandied about without a careful description of where they came from and what they might tell us. As we learn from the Rime of the Ancient Statistician (with apologies to Samuel Taylor Coleridge): Figures, figures, everywhere Enough to make us sink Figures, figures, everywhere But none to help us think. The second key principle governing the explanation of risk to the public is the open recognition of the limits of our present knowledge. The failure to do that is damaging to public confidence in policymakers. The BSE affair showed the danger of claiming greater certainty than the science warranted. And in the Angela Cannings case, the Court of Appeal observed that, “not so long ago, experts were suggesting that newborn babies should lie on their tummies.

But our present degree of knowledge means that, in the terminology of Frank Knight (1921), there is both risk, which can be quantified, and uncertainty, which cannot. The extent of past uncertainty about life expectancy can be seen in the revisions to its forecasts made over the past 20 years by the Government Actuary’s Department. Nor has the financial sector itself proved better at forecasting. Chart 5 shows successive forecasts of expected length of life for men aged 60 published by the Actuarial Profession, a body of life assurance companies and annuity providers. It shows how reductions in mortality were expected by the industry to lead to rises in length of life. For example, the pink line shows the Actuarial Profession forecast made in 1980 that a man who was 60 in that year could expect to live another 20 years. At that time, it was thought that someone who reached 60 in 1999 would live a further 21 years. But by 1999 the forecast was that a man of 60 would live another 26 years. Over a twenty year period, expected length of life was revised up by 5 years. Length of life has risen faster than the industry anticipated, as can be seen by the  5  The first estimates of mortality rates using bills of mortality from the City of London were published by John Graunt in 1662.
Beyond regulatory capital requirements, euro area banks need to stabilise their earnings streams so that organic capital growth can be restored, solvency ratios can be safeguarded and asset growth can gradually resume. As I have already mentioned, in order for credit markets to recover, it is not only credit supply that will need to expand, but also – and possibly to a larger extent – credit demand, which depends on several factors, including GDP growth, unemployment and inflation, which in turn affect the expectations of banks’ customers. As regards the role of monetary policy, the exceptional circumstances related to the financial crisis led to the introduction of extraordinary measures. Our aim was to support the liquidity in the financial system and (indirectly) to enhance the flow of credit to the private sector, above and beyond what could be achieved through policy interest rate reductions alone. In particular, we have fully accommodated banks’ liquidity needs at fixed interest rates, we have further expanded the list of collateral that we accept in our operations and we have provided liquidity for longer periods, of up to one year. Through such one-year refinancing operations, we provided € billion in June and an additional € billion two weeks ago. In addition, we have provided liquidity in foreign currencies, notably the US dollar, to address the needs of euro area banks to fund their dollar assets. Finally, we have been buying covered bonds directly since July this year, as this market segment is an important source of funding for banks.

Hence, it is not surprising that both factors played a major role in bank loan availability, not only according to the assessment of banks in the bank lending survey, but also according to the assessment of firms in the new survey. However, in addition to such demand-related factors, firms are of the view that factors related to the supply of credit also played some role in the deterioration of bank loan availability. In their view, banks’ willingness to lend decreased, which may suggest that lending restrictions were in place. The situation in the largest euro area countries Let me now touch on some of the main results for the largest euro area countries. While overall developments are most important for the ECB’s monetary policy, it is also worth examining the considerable heterogeneity across different countries in the access to finance of SMEs in the first half of 2009. Regarding turnover and profit, SMEs in Germany and France were above the euro area average, in the sense that fewer SMEs reported a net deterioration. SMEs in Italy were around the euro area average, but those in Spain were far below the average. The economic situation is clearly reflected in SMEs’ assessment regarding the deterioration in the availability of external financing. Again, SMEs in Germany and France reported a smaller deterioration in the availability of bank loans than the euro area average.
To this end, we are in the process of preparing: An action plan for further banking supervision reforms with a focus on developing supervisory rules and procedures and the relevant IT infrastructure to improve compliance with the BCP; A strategy for reduction of NPLs, including the use of macroprudential supervisory review tools to promote sound bank practices for loan loss provisioning (following the IFRS but also specifying certain supervisory expectations), NPL write-downs, and collateral valuation; A joint BNB-MoF strategy for liquidity assistance to solvent banks facing liquidity pressure, that would ensure compliance with the Central Bank requirements for the highest quality of collateral. After the problems in 2014, all key elements of the crisis management framework are available now in Bulgaria. This framework is built on sound foundations and is fully consistent with the most recent EU legislation in the credit institution resolution area. In spite of the progress achieved, much remains to be done, mainly for the practical preparations for the implementation, if necessary, of the new rules and procedures. Hence, our immediate efforts are aimed at making arrangements and developing solutions that would be valid and efficient in the medium and long term. 2/2  BIS central bankers' speeches

In the second quarter, sickness absence stood at 6.5 per cent of contractual person-days, although there are substantial occupational and geographical variations. In Rogaland, sickness absence is 1.4 percentage points lower than the national average. If sickness absence in the rest of the country falls as low as in Rogaland, nearly 30 000 additional person-years would be available for productive activity. Reduced sickness absence and reduced outflows into social security schemes – particularly among young people – would result in substantial economic gains. Economic developments The Norwegian economy is in a period of strong expansion after a marked upturn since summer 2003. The upturn followed a period of slow growth since 1998 and a mild slowdown in 2002 and into 2003. Growth in the mainland economy has been high since then, and higher than expected. When the key policy rate was reduced in 2003, demand and output picked up quickly. The upturn was supported by strong productivity growth, reflected in exports, petroleum investment and, after a period, public demand. So far in the cyclical upturn, the mainland economy has grown by an average of just over 4 per cent annually. The upturn is now in a mature phase. Even though output increased rapidly, it took a long time for employment to edge up. The increase in employment was for a long period slower than in the upturns in the 1980s and 1990s. Employment only began to pick up towards the end of 2005, and has since risen sharply.
Before I go through that list, I want to provide an overview on where we, at the Federal Reserve Bank of New York, are in our process. While cybersecurity has been on our agenda for quite some time, and we have been dedicating resources to assessing it in large complex firms and setting expectations for smaller firms, we have elevated our efforts in recent months and have formed a dedicated team focused on further strengthening our overall supervisory approach to cybersecurity. As I mentioned at the beginning, I think we’ve done a reasonable job in developing rules and regulations to ensure firms are prepared to withstand the other types of shocks we have experienced in the past. But, cyber adds an element to planning for the next crisis that goes beyond what additional capital and liquidity, for example, can provide to the system. The newly-formed team, led by Roy Thetford, the former Information Security Officer for the Bank, will be working with our examination teams to establish a new risk-based cybersecurity assessment framework, based on best practices in the field, as well as exploring additional standards that might be set out for supervised institutions. BIS central bankers’ speeches  3  In addition, to further strengthen and build out our program, we will be collaborating with critical stakeholders, including experts in security and cybersecurity; financial institutions, including both banks and non-banks; critical third-party service providers; domestic regulatory bodies; enforcement agencies; and international supervisors.

In an inter-institutional level, the commitment to be active on AML goes beyond full compliance with the regulatory requirements. We must be mindful of the role we have in the mosaic of the institutions that are relevant on implementing the AML program in the society. Furthermore, we should be sensitive and helpful toward such institutions, especially when we know the difficulties they face in performing their functions. More concretely, I do not believe that the banking industry and other nonbank financial institutions, are giving their maximum contribution, if they suffice with fulfilling rigorously some quantitative mandatory requirements of the law, and not focusing also on some non-mandatory but very important requirements. For example, a very low number of suspicious transactions is currently reported at Anti Money Laundering Directorate (FIU), while the number of reports about transactions above the threshold required by law, is huge. In this instance banks are acting in accordance with the law requirements, but are not in compliance with spirit of the law.
Those bondholders become the new owners. The group stays together. Under multiple-point-of-entry or MPE resolutions, by contrast, a group would be split up into some of its parts. Healthy parts might be sold or be maintained as a residual group shorn of  1  The accident of history arose from the McFadden Act ban on interstate banking. Banks set up holding companies so that they could own banks in different states. A variant of that story applies to broker dealer groups. BIS central bankers’ speeches  1  their distressed sister companies. The resolution of the distressed parts might be effected via bailin of bonds that had been issued to the market by a regional intermediate holding company. This is, of course, no more than a brief sketch, but I hope it will suffice for me to draw out some of the implications for the industry and regulators.2 For many financial groups, it is fairly obvious which broad resolution strategy (SPE or MPE) they are currently most suited to. But few major groups will escape having to make significant changes to their legal, organisational and financial structure to remove obstacles to effective resolution under that preferred strategy. For example, outside of the US, many “SPE groups” will need to establish holding companies from which to issue bonds that can absorb losses and be converted into equity through a resolution.

The high penetration rate affirms mobile phone networks as an increasingly popular channel for Malaysians to perform a plethora of activities beyond voice communication, encompassing all forms of digital communication, commerce, banking and payments. Indeed, payments via text messaging has the potential to grow in importance. With 25 million mobile phone subscribers in Malaysia, there are immense opportunities to leverage on mobile phones to accelerate the migration to electronic payments, to widen the reach and appeal of electronic payment services, to deliver innovative mobile payment products that offer speed, simplicity and convenience at minimal cost for the public, as well as to provide an efficient and cost-effective method of delivering financial services even in the remote areas. Also of significance is the high level of financial inclusion in Malaysia. With a population of 27 million, the banking system in Malaysia has 55 million deposit accounts indicating that a high percentage of the population have deposit accounts with the banking system. This is confirmed by a survey of a sample of 5,000 in 2003 that indicated 97% of those surveyed have a bank account. The financialisation of savings is also confirmed by the high percentage of deposits to GDP at 152%. The high percentage of mobile phone subscriber and the high rate of participation of the population in the banking system are important pre-conditions for the significant use of the mobile phone as an ideal platform for personal payments.