samchain/econo-pairs-v1 huggingface dataset:
Major changes to the access arrangements to settlement accounts raise both policy and practical questions for the Bank – and could have implications for market participants and fellow regulators too – so it is right that they should be considered as part of the development  9  See Davey and Gray (2014). 10  Further information on the planned extension of RTGS opening hours http://www.bankofengland.co.uk/markets/Pages/paymentsystem/extending.aspx. 11  The Bank stands ready to act as a settlement agent for payment systems recognised under the Banking Act or whose access to settlement in central bank money is otherwise judged by the Bank to be likely to reduce the risk of widespread disruption. There are currently 6 payment schemes for which the Bank acts as settlement agent (as well as the CREST securities settlement system) and there are around 40 settlement account holders in RTGS. BIS central bankers’ speeches  can  be  found  here:  5  of a broader blueprint. Targeted extensions in access could bring benefits in terms of innovation. But we need to think through the implications for stability, market structure and costs. The final theme of the blueprint is the role of the Bank. The Bank developed the RTGS infrastructure itself, and is responsible for the maintenance and development of all elements of its hardware and software. The Bank is also responsible for the day-to-day operation of RTGS, although these running costs are in turn charged out to its users on a full cost recovery basis.

An integrated money market exists for liquidity transfers in euro; banks are inter-connected in a common payment system infrastructure; and wholesale securities market activities and corporate finance services do not recognise geographical borders. However, at the retail level, international banks must still treat each country as an individual market. This is because of localised demand and country-specific banking products, and differences in conduct-of-business and consumer protection rules. The remaining differences in regulatory and supervisory practices can also play a role. I believe that few institutions understand this as well as you do, as you still have to cope with the task of navigating business through various national environments. I should like to explore this double feature of euro area banking today. On one hand, there is the challenge for central banks and supervisory authorities to respond to the emergence of a common wholesale banking system in order to maintain financial stability. On the other hand, greater integration, also in the retail field, remains an important policy objective. I should like to address the two aspects in turn, starting with wholesale banking and then moving on to the retail side. A common wholesale banking system I share the view that a common currency and a common central bank actually determine a unified banking system. In a nutshell, access to a common source of central bank liquidity and a common money market – as well as confidence in the common currency – create strong interconnections between all banks operating in the single currency area.
According to forecasts by McKinsey Global Institute, off-shoring of services to countries with low manufacturing costs in the years 2003 – 2008 is going to grow at a rate of 30% annually. In 2003, the global trade in services was ca. USD 1.7 trillion, of which a mere 3% resulted from offshoring to low cost countries. It is expected that in 2008 the global trade in services will amount to ca. USD 2.4 trillion, of which 10% will represent offshoring of business and ICT processes to low cost countries. To compare, the travel industry represents 30% of trade in services in the OECD data, whereby transportation - 20%. Based upon an analysis of eight representative sectors, McKinsey Global Institute estimated that in 2003, 18.3 million jobs in services could have been transferred to other locations (this applies mainly to sectors such as IT - 2.8 million, banking - 3.3 million, insurance - 2.3 million, healthcare - 4.6 million and retail sales - 4.3 million). Extrapolating the results for the global economy, it may be estimated that in 2008 ca. 160 million jobs in services, i.e. 11% of the global employment in services estimated at 1.46 billion, may theoretically be performed at a distance from the customer. 8  European Restructuring Monitor is the European Commission service.

If cost pressures become higher than in the main scenario, the Riksbank may need to raise the repo rate more. This could occur if wages rise more quickly or if productivity increases more slowly than expected. If the financial unrest persists and international economic activity will be weaker than expected, the interest rate may instead need to be lower. The direction for monetary policy in practice will  BIS Review 132/2007  7  depend on how new information on economic developments abroad and in Sweden will affect the prospects for economic activity and inflation. (Slide 15) Conclusion The Swedish economy is doing well. And the essential purpose of our work is to ensure good economic growth that is sustainable in the long term. As things look today, we are assuming that the interest rate path in our forecast will contribute to inflation being in line with our target around two years ahead. We believe that this will at the same time contribute to a balanced development in production and employment. (Slide 16) And we also believe that the changes we have made in our communication will help enable us to fulfil the requirements made of us in a better way. We have made the changes in our communication to become even clearer and more open. We always have this ambition, and have had it since the inflation target was introduced. But it is not merely with regard to communication that we are constantly reviewing and trying to develop our methods of working.
For example how should internal TLAC be subordinated, should it always be issued directly to the resolution entity, what maturity should instruments have and how should they adjust as the risk profile of the material sub-group changes? And perhaps most importantly how should the joint contractual trigger that allows internal TLAC to be written down outside of resolution work in practice? The FSB is working on these issues and a consultation paper will be issued later in the year. Implementation of internal TLAC may also prompt the questions as to how internal TLAC relates to existing capital requirements – is there trapped capital, located in a subsidiary or holding company but which cannot be moved to the subsidiary that needs it? If so, in a world of internal TLAC, can it be released? Where should buffers be located in groups? Host regulators will still want subsidiaries to hold adequate capital and potentially additional buffers if these entities are systemically important to the domestic economy. But they may for example become more comfortable about a higher share of capital being held at group level. CMGs and supervisory colleges will provide the setting to think these issues through. Finally, now we have TLAC, we need to complete the work on how we will use it. That is, how in practice we will execute a bail-in. Part of this is ensuring that the right mechanics are in place.

But unlike the market standard agreements addressed in the Protocol, scheme rules and commercial agreements provided by agency banks vary and preserve a good deal of discretion for the FMI or G-SIB acting as a quasi FMI. We are exploring how far that discretion can, or needs to be, constrained. Ultimately, there is a potential collective action problem we need to address. It should be in the interests of FMIs and agency banks to allow the resolution to succeed. After all, in an SPE strategy the legal entity they are dealing with is likely to stay outside resolution. But the temptation must be there, if you can in  4  International Swaps and Derivatives Association (2015) ‘ISDA 2015 Universal Resolution Stay Protocol’. 5  Financial Stability Board (2015) ‘Guidance on Arrangements to Support Operational Continuity in Resolution’. 6  In the US these are known as Financial Market Utilities (FMUs). BIS central bankers’ speeches  5  resolution, to grab collateral or to increase margin calls on an extraordinary basis. This is the behaviour we saw at various points in the crisis. We need to plan to avoid a repeat of that. This brings me to the other consultation paper 7 issued recently by FSB, related to funding in resolution. If it is clear on Monday morning that a bank in resolution can meet its obligations falling due, then the incentive for counterparties to remove liabilities or seize collateral should be reduced. The funding in resolution principles represent a step toward achieving this.
Michael C Bonello: Validating Malta’s strategy to create an international financial centre Remarks by Mr Michael C Bonello, Governor of the Central Bank of Malta, at the opening of the Mediterranean Bank plc, Valletta, 29 September 2006. *  *  *  I should first of all like to thank the management of Mediterranean Bank plc for inviting me to officiate at the opening of these premises. Mediterranean Bank is a welcome addition to Malta’s growing financial sector. Its focus on private banking, in particular on portfolio and wealth management services, represents a niche activity which offers much scope for further development. On this occasion I would like to reflect on two particularly significant aspects of Mediterranean Bank’s decision to locate in Malta with a view to servicing clients in the Mediterranean basin. The first is that it represents a further validation of Malta’s strategy to create an international financial centre as a major pillar of its economy. Here, I would like to salute the vision and pragmatism of those politicians and technocrats who in the early 1990s steered this project to a successful conclusion. Today, financial intermediation activities alone directly contribute between 6% and 7% of the country’s GDP. This success is a unique example of what a bipartisan approach to strategic economic choices can achieve. It should indeed serve as an encouragement to our political leaders to tackle to-day’s much needed reforms in a similar manner. Allow me to recall some facts to underline the impressive growth of the financial sector.

But we must also ensure that our financial system is truly reformed in a way that reflects the lessons of the financial crisis. At this Dinner six years ago, before the crisis began, I said, “Excessive leverage is the common theme of many financial crises of the past. Are we really so much cleverer than the financiers of the past?” We are all much wiser now. And this country can claim to have been in the vanguard in learning lessons. Much has been done. But we cannot be complacent. As the memories of the crisis fade, and those who saw it at first hand retire, it is vital that the ‘audacity of pessimism’ is not lost. We must deal once and for all with the problem of financial institutions that are too big, or too important, to fail. Some progress has been made. When the crisis hit, we in the UK had neither an effective deposit insurance scheme nor a resolution framework to deal with failing banks. Now we have both. But there is unfinished business. Although the UK is leading the way in the development of agreements among regulators worldwide as to how the largest banks could be resolved, managing cross-border resolutions is still fraught with difficulty. We also need to implement the proposals of the Independent Commission on Banking as soon as possible, including the ‘ring-fence’ to separate commercial from investment banking, and the leverage ratio.
As REFF provides risk mitigation 2/5  BIS central bankers' speeches  mechanisms such as guarantee and insurance in addition to financing, it has attracted the private sector as co-investors and guided the financial institutions to develop capacity in risk management of renewable energy projects. This demonstrates that with in-depth understanding of the sectors they are serving, DFIs can design solutions which achieve the desired impact, whilst crowding in private capital. Key Message 2 – Performance measurement framework anchored on developmental objectives will ensure alignment of business strategies to deliver the highest value My second point relates to adopting a performance measurement framework for DFIs that is anchored on development objectives. This is to ensure alignment of business strategies to deliver the highest value to society. DFIs play an important role in bridging financing gaps by participating in markets not adequately served by the private sector. These are often developing sectors and markets which are characterised by high risks and uncertainties. Therefore, by extension, we cannot evaluate DFIs using mere financial indicators as they are not adequate to capture the contributions of DFIs to the wider economy and growth of the nation. DFIs must also be measured by the additionalities they create.

In my view, a DFI can be deemed to be successful when its participation addresses market failures and brings high value addition by: (a) Influencing project design and delivery in a way that will generate employment, increase income levels and welfare of targeted sectors, expand tax revenues and multiply economic spillovers; (b) Crowding in or attracting private investments or financing in new growth sectors/markets through innovative financial structures; and (c) Creating an enabling environment for economic segments to flourish by actively contributing to the sound design and implementation of public policies. The difference in measuring the success of the DFIs means that it is important to have a structured and comprehensive performance measurement framework. This framework must be anchored on developmental outcomes to create strong incentives for strategic alignment to achieve greater development impact. For example, the BancoEstado of Chile has for the past 4 years published integrated reports which are called the “Social Footprint of BancoEstado”. They showcase the achievements of the Bank’s development impact in terms of meeting the SDG agenda. BancoEstado embeds relevant SDGs and developmental KPIs in their performance measurement framework. They are then hardwired into key decision making processes to ensure productive and effective allocation and distribution of resources aimed at meeting the development objectives. Similarly, performance measurement of development impact is the backbone of FinDev Canada, where their success is not only measured by financial sustainability but whether they also improve the lives of those impacted by the businesses they support.
Despite a situation of increasing  BIS Review 168/2009  1  investment rates, the ratio of total savings to GDP reached 57% in 2008 against 48% in 2004, leading to a context of excess saving rates of 13% to 24,7% over the period. These developments have allowed sizeable reserve accumulation, particularly from 2004 $ billion 43) to 2008 $ billion 143) as a cushion against possible external shocks, including shocks of a “sudden stop” nature. Anchored to regained macroeconomic stability, a large public investment program was launched in 2001 (2001–04) followed by a larger one in 2005 (2005–09). Implementation of the two public investment programs significantly stimulated gross fixed capital formation, with public investments representing 56.5% of total investment in 2008 up from 40.8% in 2004. Over the past five years, public investments (economic and social infrastructure, housing, agriculture and water, others) amounted to $ billion 80 (representing 51% of a total of $ billion 156). It should be noted that foreign companies, particularly from Asia, hold a significant position in terms of implementation of the public investment programs. In parallel, the national oil company (Sonatrach) implemented ambitious annual investment plans over the past 3 years, increasing the annual investment envelope from $ billion 4.8 in 2006 to $ billion 8.5 in 2008. For the past 5 years, the ratio of Sonatrach’s investment to total investment reached 17.6% (17.1% in 2008). For 2009, Sonatrach’s investment program amounts to $ billion 16.5.

Investment in the remaining sectors of the economy have also been, to a large extent, selffinanced (44.2% during the period 2004–08) while financial savings of private enterprises and households increased. The share of bank financing, mainly domestic, represented 50.5% while bond issuance covered 5.3% of financing needs. Domestic medium and long term bank loans, which have been substantially increasing over the past 5 years, have been oriented to investments in productive non-oil sectors, notably energy and water sectors where investments have significantly increased. Anchored to relatively stable and sustainable resources, the development of credit allocation has been notable, with credit to the economy increasing by 15.7% in 2007 and 18.6% in 2008. Growth in the credit to the economy in 2009 remained strong (19.4%, twelve months increase by June 2009) at a time where many emerging economies faced bank credit contractions. Credit to private enterprises and households represents a large share of total allocated credit (54 to 55% over the past 3 years). Medium and long term (investment) credit  2  BIS Review 168/2009  increased by 20.9% in 2008 and 12.9% in the first half of 2009, reflecting favorable domestic bank financing conditions. In this favorable financing context, additional measures have been introduced in the Supplementary Budget Law of July 2009, aimed at further promoting credit to small and medium size enterprises (SMEs), including increasing the maximum government guaranteed credit amount. In the same vein, banks are allowed to extend credit to their affiliates up to 25% of their tier 1 capital.
If the Riksbank had left the repo rate at 8.91 per cent – its level before the cuts were initiated early in 1996 – then the direct interest expenditure effect could have been avoided. Economic activity would have gradually weakened, however, and this would have pushed down the CPI excluding the interest expenditure effect. But that would have taken time and to begin with the macroeconomic effect would have been rather small. Sooner or later, however, the macroeconomic effect would have begun to surpass the interest effect on the CPI. In theory, that could have been prevented by raising the interest rate and thereby increasing the interest expenditure effect. Such a strategy could have been implemented for a time but in the end the economy would have become so sluggish that the macroeconomic effect would still have gained the upper hand. The situation would probably have caused the exchange rate to collapse. The marked depreciation would have led to rising import prices and perhaps CPI inflation would then have moved back up to the targeted rate. That is what could have happened, though I want to stress that the scenario is theoretical and hypothetical. The Riksbank would have fulfilled the CPI target but at the cost of marked instability in interest rates and the exchange rate as well as in the real economy. I find it hard to believe that such a strategy would have been supported for any length of time by either the political system or people in general.

Monetary policy could obviously have been given a more expansionary turn than was the case at the end of 1996 and during 1997, in which case UND1X inflation might have been higher and more in line with the 2 per cent target, quite apart from the interest expenditure effect on the CPI. In this context one can, of course, discuss the Riksbank’s basic forecasts of inflation excluding the transitory effects from interest expenditure and taxes. The Riksbank made a forecasting error in failing to foresee the economic slowdown inherent in the Asian crisis and the ensuing fall in commodity prices. Unfortunately, you might say, we shared this error with a clear majority of observers. With the long time lag that applies to monetary policy, measures should really have been taken before the end of 1996 or early 1997, which was before the crisis had even arisen. If the commodity price fall does not leave any traces in inflation expectations, it should not affect policy either. CPI and underlying inflation in a longer perspective4  10. CPI and underlying inflation The estimated indicator of underlying inflation broadly corresponds to UNDINHX (see Inflation Report 1999:1) Determinants of inflation: Underlying inflation  1. Expected inflation trend 2. Economic situation 3. Supply shocks, e.g.
sick and all absent from work 1987:01-2002:04 The series are seasonally-adjusted with a 3-month sliding average  45000  45000  43000  43000  41000  41000  39000  39000  37000  37000  35000  35000  33000  33000 31000  31000 29000  Sysselsatta minusthose frånvarande pga. egen sjukdom Employed minus on sick leave  29000  27000  Sysselsatta minusall samtliga Employed minus leave offrånvarande absence  27000  Total number of employed Sysselsatta totalt  25000 1987  25000 1989  1991  1993  1995  1997  1999  2001  Source: Statistics Sweden (AKU)  5. CPI and inflation expectations of households and firms, per cent 7  7 CPI Households, Statistics Sweden  6  6  Households, National Institute Firms  5  5  4  4  3  3  2  2  1  1  0  0  -1 -1 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Sources: National Institute of Economic Research and Statistics Sweden  6.

Furthermore, after rising in the second half of 2018, credit default swap premia are now back at roughly the same level as in mid-2018. In the area of resolution, the Swiss big banks have improved their gone-concern lossabsorbing capacity since last year’s Financial Stability Report. Credit Suisse and UBS already meet all look-through requirements on a consolidated basis. Page 1/3  Berne, 13 June 2019 Fritz Zurbrügg  News conference  In addition to those at group level, the Federal Council has drawn up requirements on big banks’ loss-absorbing capacity at the level of individual group entities, and in early April initiated a consultation on a corresponding amendment to the Capital Adequacy Ordinance. These requirements are intended to ensure that not only the group as a whole, but also material group entities have sufficient loss-absorbing capital in the event of a crisis. The SNB supports the proposed amendments to the Capital Adequacy Ordinance. Work is also underway with regard to liquidity in a crisis, known as ‘funding in resolution’. It is aimed at ensuring that the big banks have sufficient liquidity during preparations for and in the phase immediately after resolution. For this purpose, FINMA is drawing up resolution funding plans in line with international standards. In cooperation with the SNB and the two banks concerned, it is currently assessing the big banks’ liquidity needs under possible crisis scenarios.