samchain/econo-pairs-v1 huggingface dataset:
Peter Pang: Launch of the new cross-border collateral management service Remarks by Mr Peter Pang, Deputy Chief Executive of the Hong Kong Monetary, at the cross-border collateral management service signing ceremony and press conference, Hong Kong, 20 June 2012. *  *  *  Mr. Grimonpont, Mr. Bhatia, ladies and gentlemen, Good afternoon. It is my pleasure to welcome you to this signing ceremony. The bilateral agreements that I shall sign on behalf of the Hong Kong Monetary Authority with the Euroclear Bank and J.P.Morgan today will pave the way for the launch of the new cross-border collateral management service, a critical building block of the cross-border bond investment and settlement platform launched in March 2012. The new service, which will commence on 25 June, will bring significant benefits to the contracting partners and the money market as a whole. For Hong Kong, it will advance the development of our repo market, enhance the stability of our financial system and strengthen further Hong Kong’s role as the global hub for offshore renminbi business. The repo market is a key component of major international financial centres. It serves as the link between the money and capital markets, and is vital to the well functioning of the financing channels. By providing credit enhancement through the use of securities as collateral, the repo market also serves as the lubricant that keeps the financial engine running particularly during times of risk aversion.

At the same time, over 1,100 renminbi correspondent accounts were maintained by overseas banks with banks in Hong Kong. The amount due to and due from such overseas banks amounted to RMB 128 billion and RMB 146 billion respectively. This is a clear indication that banks from around the world are using Hong Kong’s robust platform and large liquidity pool to offer renminbi services to their customers at home. As more and more companies and financial institutions conduct business and transactions in the renminbi, we will see an increasing number of financial centres offering offshore renminbi business in different parts of the world. These centres can benefit significantly from having an access to the offshore renminbi platform and liquidity pool in Hong Kong. The HKMA is taking proactive steps to aid the private sector in this endeavour. The private sector led Hong Kong – London Forum is an excellent example of this effort. The Forum just held its first meeting in Hong Kong in May this year, and agreed on a number of joint actions in the areas of renminbi liquidity, payment and settlement arrangements and development of products and services, to bring mutual benefits to the growth of offshore renminbi business in Hong Kong and London. One of the key action points agreed at the Forum is to expand cross-market renminbi funding activities through the cross-border collateral management arrangement that will be launched jointly by the HKMA, Euroclear and J.P. Morgan on 25 June.
In January of this year, the Committee released a paper on the range of  BIS Review 32/2000  6  current practices in banks’ internal ratings systems. As the Committee builds on this work to develop operational proposals, we will be focusing on the need for banks to have robust standards and procedures governing the assignment of internal ratings, as well as the need for the Committee to establish appropriate supervisory guidelines. In this vein, we will be working to ensure that disclosure practices regarding internal ratings systems play an important role in the ongoing supervisory validation of these approaches. External ratings Of course, I also expect that a revised standardized approach will be a critical element of the new capital adequacy framework. As you may know, last June’s consultative paper described a revised standardized approach building on the current Accord by tying risk weights to external credit assessments, such as credit ratings. In other words, OECD membership would no longer be relied on for setting regulatory capital for sovereign or bank claims. For example, loans to similarly-rated banks located in OECD and non-OECD countries would receive the same risk weight. Industry participants have expressed support for the use of external ratings as an alternative to the current OECD/non-OECD distinction. Comments have also been received in favor of incorporating greater credit risk differentiation into the standardized approach, particularly for credit exposures to corporate entities. Some respondents have suggested that this might be achieved by introducing additional risk buckets into the framework.

I strongly encourage all financial market participants - commercial and investment banks, domestic and foreign - to approach the issue of disclosure as users of financial statements rather than as issuers. Clearly, a full appreciation of risk cannot be achieved without  BIS Review 32/2000  4  sufficient information. What we need to know about each other to be comfortable and secure in making our credit decisions should drive the debate. While effective bank level management and meaningful market discipline are crucial elements of an overall strategy for promoting and preserving financial stability, neither can substitute for the critical role played by official supervision. While banks perform functions that are indispensable to the success of any market economy, these same functions, by their very nature, introduce risks that are capable of undermining the prospects for such success. This reality was acknowledged by Adam Smith over two centuries ago in his seminal tract The Wealth of Nations. It is with this fundamental reality in mind that governments have long recognized that banking and other financial institutions must be subject to some form of regulation and official oversight. The Gramm-Leach-Bliley supervisory framework The Gramm-Leach-Bliley Act presents major challenges to US supervisors. Under the terms of the Act, the Federal Reserve will continue to serve as the umbrella supervisor of all bank holding companies, including the newly authorized FHCs.
My colleagues at the Dallas Fed and I submit that Louisiana’s and the nation’s community and regional banks play on an uneven playing field against the giant moneycenter banks. The Fed is coming down hard on the big guys to ensure they are adequately capitalized and liquid. We are using all means within our power to make sure they never again place the American taxpayer at risk by bringing the financial system to its knees. But the fact remains that the big banks have a greater share of the deposit market than ever, are coming into our communities and regions to lend money on terms and at prices that any banker with a memory cell knows from experience usually end in tears, and are putting independent bankers in a precarious position. And as to Dodd-Frank, I am skeptical that the bureaucracy and rules and regulations this massive legislative initiative has created, even with the careful execution by the Fed, will vanquish too big to fail – the law’s very intention as stated in its preamble. But of this I am certain: It has made the lives of community and regional banks vastly more complicated. Like almost anything that comes out of the U.S. Congress, it has primarily been a boon to lawyers and consultants and compliance officers, adding to expenses but doing little to help you grow your businesses. We at the Dallas Fed are acutely conscious of this.

Now that Sweden’s economy seems to be moving into a stronger phase, in large measure as a result of higher domestic activity, it is of the utmost importance that we do not land in a situation with wage drift and overheating as a consequence of an unduly expansionary fiscal stance. Against this background, I shall be talking today about the conditions for monetary policy and its interaction with fiscal policy and labour market developments. 1  BIS Review 77/1999  Interaction with fiscal policy Fiscal policy affects the chances of success in monetary policy in various ways: via its impact on general confidence in monetary policy, via short-run effects on demand and by modifying the longterm conditions for economic growth and low inflation. Let me begin with credibility. If the direction of fiscal policy is perceived as being unsustainable in the longer run, economic policy’s overall focus on low inflation and stable growth is liable to be questioned. Few industrialised countries have experienced this as recently and tangibly as Sweden. The massive budget deficits in the early 1990s, with rapidly accumulating government debt, made Sweden’s economic future uncertain and pushed interest rates up. With the consolidation of government finances, however, and the long-term ambitions for fiscal policy that the Government, supported by the Riksdag (Sweden’s Parliament), has presented, confidence has improved.
In the euro zone, developments during the fourth quarter were roughly as expected, but the indicators published since then point towards slightly more favourable developments there than was expected in February. At the same time, the oil price has risen much more than expected and forward prices for oil have also risen. We can therefore assume that oil and petrol prices will remain at a high level for some time to come. This of course comprises an uncertainty factor for the economic assessment and it is difficult to ascertain what consequences it will have. The experiences so far indicate that the international economic upswing has been resistant to the increasing oil prices. At home, a considerable amount of new statistics have been published since February, including the national accounts for the final quarter of 2005. GDP growth during the fourth quarter was slightly lower than expected, but for the year 2005 as a whole growth was nevertheless in line with our forecast because the outcomes for earlier periods had been revised upwards. The figures show that exports increased more than anticipated last year, which with hindsight is not surprising, given the strong international growth. On the other hand, both household consumption and investment were weaker during the fourth quarter than in our earlier forecast. Judging by the recent economic indicators, developments so far this year have been better than at the end of 2005.

Stefan Ingves: The Riksbank and monetary policy Speech by Mr Stefan Ingves, Governor of the Sveriges Riksbank, at the School of Business, Economics and Law, Göteborg University, Göteborg, 23 May 2006. *  *  *  Let me begin by thanking you for the invitation. It is always a pleasure to have the opportunity to come and talk about monetary policy and our work at the Riksbank - but I shall refrain from commenting on whether it is always a pleasure for the listeners. I hope that you will in any case get a picture of our view of the economy and inflation prospects and of our method of how we conduct monetary policy. I shall begin with a rough outline of what I intend to discuss in my speech and the main conclusions: First, I shall describe my view of the current monetary policy situation. A brief summary of my conclusions is: •  The upswing in the international economy appears to have been slightly stronger than we envisaged in the February Inflation Report. •  With regard to Sweden, the statistics received since the Inflation Report was published indicate that the economy has developed approximately in line with our assessment, although inflation temporarily rose more rapidly than anticipated as a result of developments in energy prices. •  Our earlier monetary policy considerations from February and April still apply to a large extent. Monetary policy will need to be less expansionary in future.
A key lesson of the crisis is that there is scope to strengthen what is known as macroprudential supervision and regulation. This should be seen as complementary to monetary policy, to aid attainment of the twin goals of price stability and financial stability. Allow me to explain this in more detail. A framework for macroprudential supervision and regulation Put simply, macroprudential supervision and regulation is concerned with the stability of the entire financial system, rather than that of individual institutions, which is the domain of microprudential supervision and regulation. Macroprudential supervision and regulation involves examining systemic risks that arise from the interaction between individual banks or the risk that the default of a single bank – because of its size or market share – could jeopardise certain functions that are vital for the economy, such as payment transactions or lending business. For example, one solution that could significantly reduce such problems would be progressive capital adequacy requirements. In other words, the greater a bank’s systemic importance, the more equity it would be required to hold. If capital adequacy requirements rise in step with systemic importance, banks have an incentive to stay smaller and thus less systemically important. Capital reserves for systemically important banks in excess of a minimum level could also act as a kind of “automatic stabiliser”. Reserves built up in “good times” allow banks to absorb losses in “bad times” without having to cease normal business operations.

And we also need to identify the needs in the areas of monetary and prudential policies, where the CEF’s member countries have urged it to continue expanding its activities. This is a full agenda, and I am sure it will not be the last time we get together to exchange views on these issues. I believe strongly that we stand to gain immeasurably from considering these challenges on a regional basis. We can learn from each other’s experience; we can engage at times in a joint dialogue with the external actors in the region; and perhaps our political leaders can find some opportunities to launch reform initiatives in parallel – for example, in developing structural reforms to help promote a flow of new capital to, and within, this region. In this spirit, I look forward to very fruitful discussions – now in Tirana and in the future! 2  BIS Review 162/2009
I note with interest that the workshop will discuss potential solutions to this dilemma. It is important that as the credit reporting landscape continues to evolve and assume more prominent roles in influencing borrowing and lending behaviours, appropriate attention is paid to consumer education to mitigate consumer anxiety and ensure that consumers understand and can exercise their legitimate rights. As uncertainties continue to cloud the global economic outlook at a time when borrowers have become more financially literate, lenders have become more innovative, and financial products have evolved to become more sophisticated and intricate, the need for an effective and efficient financial infrastructure becomes increasingly more critical to ensure the prudent expansion of credit and risk taking. This workshop addresses a key part of that infrastructure that can contribute towards avoiding damaging effects of a financial crisis induced by credit excesses. 2  BIS central bankers’ speeches  Before I end my remarks, allow me to say a few words about this magnificent building, Sasana Kijang. Designed to be a nexus for thought leadership and collaboration in central banking, “Sasana” is a Sanskrit word that describes a site, centre, building or arena where communities gather for meetings, while the Kijang is a small yet very intelligent animal that is depicted in Bank Negara Malaysia’s logo.

Bordo M., Stock Market Crashes, Productivity, Boom, Busts and Recessions: Some Historical Evidence, Rutgers University, unpublished manuscript. Bordo M. Jeanne O., Boom-Bust in Asset Prices, Economic Instability and Monetary Policy, NBER Working Paper, No. 8966, June 2002. Borio C., Lowe P., Asset Prices, Financial and Monetary Stability: Exploring the Nexus, BIS Working Paper, No. 114, July 2002. Cecchetti S., What the FOMC Says and Does When the Stock Market Booms, article presented at the conference held at Reserve Bank of Australia, Asset Prices and Monetary Policy, Sidney, 18-19 August 2003. Cecchetti S., Genberg H., Lipsky J., Wadhwani S., Asset Price and Central Bank Policy, Geneva Report on Global Economy. Cecchetti S., Measuring the Macroeconomic Risks Posed by Asset Price Booms, NBER Working Paper, No. 12542, September 2006. Chadha J., Sarno L. Valente G., Monetary Policy Rules, Asset Prices and Exchange Rates, IMF Staff Papers, vol. 51, No. 3 International Monetary Fund 2004. Filardo A., Monetary Policy, Asset Price Bubbles: calibrating the monetary policy trade-offs, BIS Working Paper, No. 155, June 2004. 6  BIS Review 134/2007  Gruen D., Plumb M. Stone A., How Should Monetary Policy React to Asset Price Bubbles?, International Journal of Central Banking, December 2005. Helbing T., Bayoumi T. Are they in all the same boat: The 2000-1 growth slowdown under the G-7 Business Linkage, IMF Working Paper 2003. Kohn D., Remarks by Donald Kohn at Monetary Policy: A Journey from Theory to Practice, An ECB Colloquium held in honor of Ottmar Issing, 16 March 2005.
In very brief terms, these measures must, first, be conducive to maintaining market order, second, aim to tackle the structural causes of systemic crises wherever possible, third, contribute to the robustness of the regulatory setup and fourth, be consistent with international regulatory principles while, at the same time, not fail to take account of national circumstances. This list of criteria must be  9  Cf. Buiter/Sibert (2007): The Central Bank as Market Maker of Last Resort. 10  Cf. Nikolaou (2009): Liquidity (risk) concepts. Definitions and interactions. 11  Cf. Tucker (2010): The Crisis Management Menu. In: Ayadi et al. (ed. ): Crisis Management at Cross-Roads, pp. 13–25. 6  BIS Review 146/2010  interpreted as a systematic and pragmatic set of procedural instructions – or, to use the term I used before, a roadmap. By observing these criteria, we can make a significant contribution to better managing the challenges that arise in connection with systemic risk in the financial system. To a large extent, ongoing international regulatory reform fulfils these criteria. For instance, the narrower definition of capital and the adjustment of risk weighting under Basel III removes a number of key weaknesses in the Basel II standard. The individual regulatory efforts undertaken in Switzerland are also in line with these criteria, in particular the TBTF package and the leverage ratio. However, the reforms have not yet been fully carried through. For example, work to contain the TBTF problem at international level has only just begun.

In this way confidence in the financial institutions can be restored, and the vicious cycle of liquidity bottlenecks, forced fire sales and bank runs can be ultimately avoided. By providing emergency liquidity assistance, central banks aim primarily to stabilise the precarious liquidity situation faced by solvent institutions. Above and beyond this, the increasing importance of systemic risk has made the emergency liquidity provision to entire markets ever more imperative. Markets can also be faced with liquidity runs. This was only too evident from the high risk premia observed in the interbank market during the recent crisis. It is conceivable that central banks will take on the role of market maker of last resort in such situations in order to secure key market functions. Indeed, in certain situations it is essential. 9 In an acute crisis, the costs and probability of a system collapse can be reduced in this way. However, the assumption of a lender of last resort or market maker of last resort function is not without problems. First, it does not guarantee long-term stabilisation in every case. Second, these crisis measures are no substitute for tackling the root causes or for lack of robustness on the part of financial market participants. In particular, the presence of a market maker of last resort is associated with a variety of incentive problems. 10 It can, for instance, encourage market participants to enter into excessive risk exposure in the expectation that the central bank will step into the breach if necessary.
Nevertheless, the United States could be doing better. The U.S. fiscal policy program, for example, does not appear well-calibrated to the current set of economic circumstances. We have too much fiscal restraint in the short term, and too little consolidation in the long term. The degree of fiscal restraint this year (about 1¾ percent of gross domestic product [GDP] in 2013) is quite large relative to the forward momentum of the economy. Thus, we have a tugof-war between the improving economy and the current large negative fiscal impulse. How this tug-of-war gets resolved – which force dominates – won’t be known for some time. In other words, the level of uncertainty about the near-term outlook in the United States remains quite high. Meanwhile, the long-term fiscal outlook for the United States is still troubling. So far, partisan divisions in Washington have limited progress in reaching the type of “grand bargain” needed to put the United States on a sustainable long-term fiscal path, though of late we have at least seen some renewed talk about this. Nor have we yet deployed a comprehensive set of policies to support the rebalancing of the U.S. economy toward a growth path based more on business investment, trade and broad-based income gains than the type of asset price gains and credit-fuelled consumption, which dominated the last business cycle. For Europe, the near term macroeconomic outlook seems less bright. The good news is that the peripheral countries have made substantial efforts to bring down their structural budget deficits.

BIS central bankers’ speeches  1  To its advocates, the wave of innovation sweeping through the world of financial technology promises nothing short of revolution. ‘FinTech’ heralds the dawn of narrow banking and portfolio optimisation. It will change the nature of money, 1 shake the foundations of central banking and deliver nothing less than a democratic revolution for all who use financial services. Revolutions are not always abrupt, and sometimes their origins remain obscure. In noting the possibilities at the start of the Twentieth century, Keynes remarked that “the inhabitant of London could order by telephone, sipping his morning tea in bed … the various products of the whole earth … adventure his wealth in the natural resources and new enterprises of any quarter of the world…; [or] decide to couple the security of his fortunes with the good faith of the townspeople of any substantial municipality in any continent that fancy or information might recommend…” Such global portfolio management was made possible by technological developments stretching back decades, ranging from the ‘pantelegraph’ of the 1860s – capable of transmitting signatures to verify bank deposits – to the cable buried deep beneath the Atlantic that could transmit eight words a minute. Such remote trade confirmation and low latency that made the Flash Boys of the day possible. The financial globalisation these innovations enabled was built on a much earlier, simpler, and more profoundly transformational development: the ledger. For there is no finance without the ability to record transactions, balances, and obligations.