samchain/econo-pairs-v1 huggingface dataset:
For instance, while a fixed-exchange rate regime in certain circumstances tends to support financial stability in a country (or group of countries – to refer to the European context) there might be situations in which such a system could have the opposite effect. To underpin financial stability, economic developments should be sustainable, transparent and predictable. This also applies to political decisions, which affect the financial system directly or indirectly. Completing the circle and reverting to my first observations on the increased global linkages, most countries’ financial systems are influenced by developments outside the domestic economy. Linkages come through different channels: macro economic events having international repercussions, for instance through international markets, or “micro events” such as via banks’ cross-border affiliates. BIS Review 52/2006  1  The FSAP – an attempt to tie together the loose ends Given the various pieces needed to shape and maintain a stable and efficient financial system we need a bird’s-eye view to see that they are all in place and that they do not counteract one another. The approach should also identify weak spots from which the financial system potentially might be destabilised. This need for a bird’s-eye view resulted in the creation of the FSAP. The FSAP is intended to cover the pieces I just mentioned – standards, preconditions and institutional setting and the interplay of these factors in the context of the domestic economy.

This covers almost all important countries in a global financial perspective, with a few notable exceptions such as the US and China. It is thus natural to start thinking about the future of the FSAP process. Several alternatives could be envisaged, and they are not mutually exclusive: •  Simple updates of earlier FSAPs to ensure that countries have taken care of their weaknesses and that no new ones have developed. •  A change in the scope of FSAPs, for instance to better take into account the cross-border aspects of financial sector strengths and vulnerabilities. •  A different dimension is whether future FSAPs should be open to all countries or mainly to those having a bearing on the stability of the international financial system. •  Another discussion involves to what extent there could be closer integration between the FSAPs and the Article IV processes. Some of these “future FSAPs” have in fact already started, albeit on a small scale and could be regarded as trial assessments in the search of the ideal format. There have been some FSAP update missions and the IMF is at this very moment embarking on so-called regional missions, in the BeNeLux and Nordic-Baltic regions. From what I have seen so far, these FSAPs are off to a good start, focussing as they should on the interlinkages between the large cross-border financial groups operating in these regions. Moving to regional FSAPs will substantially increase the complexity of the assessments.
In particular, thanks to the built in flexibility of its collateral framework, the Eurosystem has been able to step in effectively when intermediation in interbank markets deteriorated, without the need to make changes to its framework. As a side effect of the broad range of assets accepted as collateral, the framework helped us also during the turmoil to address liquidity squeezes in some markets, including the ABS market, as it mitigated refinancing risks for asset classes that had become illiquid. This has contributed to financial stability in the euro area. Other central banks may have had those effects in mind when they initiated changes to their operational framework in the wake of the turmoil, leading to a significant degree of convergence among the various frameworks. Of course, the ability of the Eurosystem’s operational framework to respond to the challenges for monetary policy implementation posed by the recent period of financial market volatility does not mean that there is no scope for further improvements and refinements. For instance, the eligibility criteria for marketable debt instruments have been kept general in order to ensure that the collateral framework of the Eurosystem is responsive to financial innovation. There is therefore a concomitant need for the Eurosystem to refine its collateral policy, including the risk control measures, and ensure that the collateral continues to meet the Eurosystem’s risk tolerance level and allows the effective implementation of monetary policy. This has already been done in the past from time to time, with a view to further enhance the collateral framework.

European securitisation issuance (EUR billion)  Source: European Securitisation Forum  9  See “Report of the Financial Stability Forum on Enhancing Market and Institutional Resilience”, FSF, April 2008. 8  BIS Review 68/2008  Chart 2. Funded issuance by collateral (EUR billion; by month)  Source: JP Morgan  Chart 3. European ABS spreads (relative to 3-month Euribor)  Source: JP Morgan  BIS Review 68/2008  9  Chart 4. Evolution of collateral held with the Eurosystem by asset type  Source: ECB  Chart 5. European securitised products: Publicly placed or privately retained? (EUR billion)  Source: Citi. European Secutitised Products. Strategy Analysis. Securitised Products. Europe 7 March 2008. Secondary Source: Bloomberg, International Insider, Informa GM, IFR, Citi. Note: Publicly-placed issuance includes only deals that have been publicly marketed. Private/Retained issuance includes deals that have been privately-placed or retained by the originator. The Private/Retained issuance figures include all such deals to Citi’s knowledge, but may not include such deals where there is no public information available. For some deals priced since August 2007 it has not been clear whether the deal has been fully placed. 10  BIS Review 68/2008
These trustees have a legally binding obligation to exercise all of their rights as majority owner of AIG in the best interests of the U.S. taxpayer, with the proceeds of any ultimate sale of shares going directly to the Treasury of the United States. Efforts to reduce risk at AIG Financial Products As has been widely noted, the activities at AIG's Financial Products unit (FP) were a principal cause of the losses that drove AIG to the brink of bankruptcy in September 2008. Risks of substantial magnitude – including derivatives positions with a current total notional value exceeding one trillion dollars – still remain in force at FP, meaning that not millions but billions of taxpayer dollars are potentially at stake as the orderly wind-down of FP continues to progress. The winding down of these risk positions at FP is a delicate and complex matter with systemic implications for the U.S. and global economy. Our oversight of this riskreduction process remains a top priority.

Moreover, the payments occurred during a time when so many Americans are struggling to find jobs, seeing their wages reduced or watching their retirement savings plummet as a result of a crisis they had no hand in creating. This feeling of outrage underscores the urgent need to reform the system of compensation at our financial institutions to more closely align the incentives of executives, owners and taxpayers. Congress saw fit to impose appropriate compensation restrictions on recipients of Troubled Asset Relief Program (TARP) funding, and we think it is crucial for Congress and the U.S. Department of the Treasury to continue to craft effective and sensible policies in this area. 2  BIS Review 35/2009  Although oversight of TARP-related compensation matters rests with the Treasury Department, the New York Fed has played a role since September in reviewing the adequacy of AIG's corporate governance procedures. This review has helped to identify longstanding deficiencies with respect to compensation committee governance, compensation benchmarking and lack of centralized control over compensation policy. We will continue to work with our colleagues at Treasury and the independent trustees to ensure that AIG's management properly addresses these deficiencies. Ongoing involvement with AIG The total package of assistance that the Federal Reserve and Treasury Department have committed to AIG has established a more durable capital structure for the company that gives AIG greater time and flexibility to execute its asset disposition plan to repay government funds.
With hindsight, one of the lessons of the last decade is that structural reforms should not focus exclusively on increasing “competitiveness” – defined as lowering costs and boosting exports. They should also focus on raising productivity and modernising our economies. But what is unique about NGEU is that it combines funding for investment with future-oriented structural reforms focused on making our economies greener and more digital. This combination is critical to ensure that the crisis does not leave lasting scars. The number of people who will need to find a different job by 2030 has risen by 25% in advanced economies due to the pandemic.4 We know that strong recoveries are key for people to move into new jobs quickly5 and the focus of NGEU on productive investment should provide a sustained boost to growth. Green spending is estimated to have a multiplier two to seven times higher than non-green projects.6 At the same time, targeted structural reforms should help ensure that freed-up resources are redirected to green and digital activities, and that demand flows towards the jobs and sectors of the future. The 22 recovery and resilience plans that have been presented to the Commission so far look encouraging. All of the largest economies are planning to dedicate at least 20% of their spending to digitalisation and around 40% to the energy transition and green infrastructure.7  Conclusion Martin Luther King Jr. famously said that “the arc of the moral universe is long, but it bends towards justice”.

Starting with the analysis under the first pillar of our monetary policy strategy, the three-month average of the annual growth rates of M3 stood at 8.0% in the period from November 2001 to January 2002, compared with 7.8% in the period from October to December 2001. The high level of the annual growth rates of M3 is very much related to portfolio shifts to liquid positions, most of which occurred in the autumn of 2001 in an economic and financial environment characterised by high uncertainty. While many investors still seemed to be "parking" some of their assets in M3 in early 2002, some moderation in the short-term dynamics of M3 could be observed around the turn of the year. The Governing Council continues to hold the view that the information from the first pillar thus far does not indicate risks to price stability, as the portfolio reallocations which drove M3 growth in 2001 should remain temporary. In addition, the slowdown in the rate of growth of loans to the private sector has been continuing over the past few months. However, we will need to analyse monetary developments closely in the coming months. As regards the second pillar, there are further signs that the trough in economic activity may have been reached at the end of last year. Coincident and forward-looking indicators increasingly point to improvements in economic conditions. A similar picture is reflected in financial market expectations, especially those embedded in bond yields.
Despite such immense progress, many citizens in advanced economies are facing heightened uncertainty, lamenting a loss of control and losing trust in the system. To them, measures of aggregate progress bear little relation to their own experience. Rather than a new golden era, globalisation is associated with low wages, insecure employment, stateless corporations and striking inequalities. These anxieties have been compounded by the twin crises of solvency and integrity at the heart of finance. When the financial crisis hit, the world’s largest banks were shown to be operating in a “heads-I-win-tailsyou-lose” bubble; widespread rigging of some core markets was exposed; and masters of the universe became minions. Few in positions of responsibility took theirs. Shareholders, taxpayers and citizens paid the heavy price. As a consequence of all these developments, public support for open markets is under threat. Turning our backs on open markets would be a tragedy, but it is a possibility. It can only be averted by confronting the underlying reasons for this risk upfront.

And focus the message on the needs of those shaping our economy, companies and households, not those trading financial instruments. This is the direction the forward guidance puck, in my view, needs now to travel. Whatever Next? From September I am moving a mile west from one roughly 270-year old building to another – the Royal Society of Arts (RSA). The RSA is an 18th century Enlightenment institution. Like the Bank, it has delivered large and lasting social change by combining brains and hands. Although no longer in the public sector I will remain a public servant, seeking social change on some of the signature issues of the day - good work, fair education, lifelong skills, natural capital, place and belonging, good governance. Before I start, I shall be writing a book for students on Why Economics Matters. If history is any guide, it is unlikely to trouble the bestseller list. I have written extensively about the failures of economics, which are well captured by Robert Heilbroner’s “mathematics has brought rigour to economic, but it has also brought mortis.” Yet, more than at any time in my professional life, economics really does matter, especially to young people writing the next chapter. The aim of any job is to leave the place slightly better than when you arrived. While I can claim no credit, the Bank I leave is a far more transparent, powerful, analytical, agile, engaged, diverse and meritocratic institution than the one I joined.
Fourth, the banks are accountable for having their external auditors submit their audit program to the Bank of Thailand every year and for allowing the auditors to supply all documents to supervisors upon request. In addition, the auditors must report the banks’ material non-compliance with any laws or regulations derived from the Commercial Banking Act as well as any material internal control deficiencies. If any auditors fail to meet these requirements, the Bank of Thailand will either oppose the appointment of such auditors and/or revoke their existing appointment. On the supervisory side, the greatest reduction in supervisors’ workload is in internal control and irregularities assessment. Our supervisors use these two reports to determine the breadth and depth of on-site examination planning. For example, if supervisors determine that the external auditors’ work on internal control assessment is adequate, our examination efforts in this area may be reduced. Delegation of these two tasks aligns with the Basel guidelines, as they are both within the external auditors’ technical and practical competence. BIS Review 55/2004  1  The Bank of Thailand has long recognized that to derive the greatest benefits from external auditors, the auditors need to have a good understanding of not only prudential regulations, but also key supervisory concerns at the client banking institutions.

The main issue of this block is how effectively the monetary policy pursued achieves its operational objective, which is to keep money market rates close to the key rate. We will also consider whether we need to adjust our operational procedure given the evolution of the Russian financial market. Work stream 3. Retrospective assessment of the effectiveness of the monetary policy pursued. This block of topics is probably the most challenging one technically. Within this work stream, we will try to estimate, relying on our model-based approaches, what results we could have achieved through our monetary policy if we had known what we know now when making our earlier decisions. I would like to stress straight away that we will not assess our actual decisions as they were made when we had less information than today. Nevertheless, this is a very useful practice to analyse the robustness of the monetary policy pursued, which will provide helpful insights for the future. Work stream 4. Communication as a monetary policy instrument. I may say straight away that we have been consistently developing our communication practice throughout the entire period of inflation targeting and continue to improve it now. We are to assess how well the society understands our communication, how predictable our actions are, and what areas of our communication we should prioritise in the future in order to strengthen confidence in the policy pursued. Work stream 5. Monetary policy and financial stability.
Similarly, although the flooding in June 2013 was the most severe in Germany since the 1950s, its macroeconomic impact was limited. As a result, the ECB, in its short history, has never yet been compelled to take action in response to climate-related shocks. So far their largely temporary effects on output and inflation have allowed us to look through them. This meant that central bankers thought the horizon of climate change was extending well beyond the one of monetary policy. But this may change. Indeed, I would argue that the horizon at which climate change impacts the economy has shortened, warranting a discussion on how it affects the conduct of monetary policy. That is, climate change is likely to affect monetary policy one way or the other – whether it 2/9  BIS central bankers' speeches  is left unchecked or humankind rises to the climate change challenge. This is my second corollary. Let me start with the more disturbing scenario in which both the private and the public sector fail to take prompt action to cut CO2 emissions in line with the COP21 commitments. On this trajectory, climate change is likely to affect the conduct of monetary policy in three important ways. The first relates to our ability to correctly identify the shocks hitting the economy. In recent years, for example, we have repeatedly observed an unusual blip in economic activity in the United States in the first quarter.

Today, we are well into our ninth consecutive year our thirty-third consecutive quarter of relatively steady growth (despite having to absorb the global emerging markets financial shock of a couple of years ago) at an annual average rate of 2.8%; the number of people in employment has risen to an all-time high; the rate of unemployment, on a claimant count basis, has fallen to 3.6%, which is the lowest rate for 25 years for the UK as a whole and the lowest rate for 20 years in every individual region of the UK; and retail price inflation on the target RPIX measure has now averaged 2.7% over the past eight years, and on the standardised HICP measure is currently the lowest rate in Europe. And if you ask me today the same question - can we keep up that performance, my answer is still a cautious yes - on the same three conditions - low and stable inflation, fiscal prudence and supply-side flexibility. Now I am very well aware that some of you - perhaps many of you - thinking of your own businesses may conclude that I’m living on a different planet.
This work is conducted using methodological and procedural approaches devised and published by the FROB late last May, following advice from a panel of experts in order to include best market practices. Under these approaches, financial due diligence must pay particular attention to loans and receivables, real estate assets and the investment portfolio, along with potential one-off transactions envisaged, and to potential areas of risk from a legal, tax and labour-related perspective. Business plan due diligence will focus on the reasonableness of macroeconomic assumptions, growth, revenue, doubtful assets ratios and provisioning, costs, synergies and disposals. Based on the institution’s financial statements, on the business plan and on the due diligences, three independent experts – all acknowledged authorities in their field – hired by the FROB will deliver their opinion on the institution’s market value and the percentage of capital to which the new investment is equivalent. To ensure the quality of the result, the FROB will use the conclusions of three experts, although it will not take into account valuations that deviate by more than 15% from the resulting mean value.

BIS Review 10/2004  1  The authorities responsible for the institutions and for financial stability, mainly Finansinspektionen (the Swedish Financial Supervisory Authority) and the Riksbank, had not built up sufficient competence regarding the financial risks. Nor did the legislation suffice as a basis for the authorities to limit imprudent credit-granting. The oversight of the banks and other credit-granting bodies therefore became formalistic and fragmentary. We were not always looking in the right places. In defence of the banks’ management and the authorities it can be pointed out that risk assessment was made difficult for many different reasons. Several important factors counteracted a sound financial development, such as the high inflation rate, misleading tax incentives and central government subsidies. In addition, there was a lock-in effect in that currency regulation, which was in force until 1989, had kept our capital inside Sweden and contributed to a form of hothouse effect. The banks did not take these factors into account in their risk assessment, or not to a sufficient degree. They then suffered the consequences when the government made some decisions that were desirable in themselves, but which altered conditions drastically. Inflation was pushed down, the tax system was reformed and subsidies were erased. Developments in the property market were a central component in the banking crisis, as the banks’ credit-granting meant they were highly exposed to the property sector. Property prices rose at an unreasonable rate, regardless of how one measures them. They left the basis for normal pricing, i.e.