samchain/econo-pairs-v1 huggingface dataset:
8  In 2021 extraordinary gains were recognised as a result of two mergers € billion in total), the spin-off of an insurance company € billion) and restructuring costs at the two big banks € billion). In 2020, extraordinary items included the negative adjustments to goodwill of the two banks with the largest international presence € billion), the adjustment for deferred tax assets € billion), restructuring costs at one bank € billion) and capital gains on the sale of business lines € billion). 9  However, as the year-on-year increase in net interest income (1.4%) in 2021 was lower than the increase in average total assets (3.8%), its contribution to the change in ROA in 2021 was negative. 10  This decline is explained by the larger drop in interest income than in interest expenses. The fall in consolidated net interest income over the last two years, concentrated in 2020, is due to a narrower interest rate spread (price effect) and a drop in the volume of assets combined with an increase in the volume of funding (volume effect). The latter represents an important difference compared with business in Spain, where the volume effect partially offset the likewise negative price effect. 11  Since 2015, net fee and commission income as a percentage of total assets has increased from 0.41% to 0.45%.

10.05.2022  The Spanish banking industry and the economic challenges ahead* 17th Banking Industry Meeting - IESE Pablo Hernández de Cos Governor *iEnglish translation from the original in Spanish  Introduction Good morning. I wish to begin by thanking the IESE for the invitation to this meeting, which gives me the opportunity to address the main challenges for, and developments in, the Spanish banking industry. The Russian invasion of Ukraine is a new shock for the world economy, just two years after the pandemic triggered a shock to economic activity unprecedented in recent history. The long-term consequences of the war in Ukraine are difficult to predict, but they will foreseeably be severe, not only from a geopolitical standpoint but also from an economic one. In the short and medium term, the Russian invasion and the western world’s response, imposing unprecedented sanctions, have significantly stepped up the uncertainty. This has had adverse consequences for economic activity and has given rise to further inflationary pressure. All this, in a setting in which the Spanish economy was gradually recovering from the economic effects of the health crisis. Yet this recovery was still incomplete and uneven across economic sectors, and it continued to be affected by the course of the pandemic and by the sharp increase in inflation which began in the second half of 2021. When this new shock emerged, the Spanish banking sector’s resilience remained generally high and it had returned to pre-pandemic profitability levels. But the war introduces new risks for financial stability.
DYNAMIC BUT VIGILANT  ADDRESS BY DR MARIO VELLA GOVERNOR, CENTRAL BANK OF MALTA DELIVERED DURING THE IFS MALTA ANNUAL DINNER  30 NOVEMBER 2018  Dear President and Members of the Committee of the Institute of Financial Services (IFS) Malta, distinguished guests, personally and on behalf of the Board of the Central Bank of Malta, I thank the IFS for this traditional annual opportunity to address this distinguished audience and, through it, all stakeholders. I also join the President in welcoming to Malta the representatives of the Chartered Banker Institute, the London Institute of Banking and Finance, the International Compliance Association and the European Banking and Financial Services Training Association (EBTN). Mr President, it is encouraging to hear of all the initiatives the Institute has undertaken in the area of financial services education. The topical theme of your recent Annual Seminar on ‘Digital  Transformation’ and your pro-activeness in developing a Diploma in Digital Technology for our sector, demonstrate your willingness to embrace change and adapt to the evolving needs of the marketplace. Let me assure you that the Central Bank of Malta will continue to support you. I wish the Institute every success in the future. Last year, I highlighted the fact that the performance of the Maltese economy had exceeded the Bank’s expectations and those of other institutions. Key economic indicators were among the best in Europe, with the European Commission at the time projecting continued, though moderating, strong GDP growth through 2019.

The function of settling inter-bank transfers lies at the heart of what central banks do and, arguably, explains how they came about (Shafik (2016); see also Goodhart (1988)). A “central bank digital currency” (CBDC) would involve putting these reserve deposits on a distributed ledger. And if it allows for securities to be exchanged more cheaply and securely, might the same not be true for these money balances? Yes, presumably. It’s not clear the savings would be as large as those for exchanging securities. The current set-up, which has the central bank as a single hub through which all inter-bank transfers take place, already involves significant economies of scale. That’s precisely the advantage of having a single, trusted third party at the centre: you don’t need so many layers to begin with. There are certainly new technologies that can reduce, and indeed already are reducing, the costs of the front end of the existing payments system (i.e. the flow of commercial bank deposits round the economy). The ability to pay one’s bills over the internet is a case in point: the more that happens, the less the need for expensive bank branches. But that is happening independently of any changes at the back end of the system, by which I mean the infrastructure for exchanging central bank money. Compared with securities settlement, that process simply has fewer middlemen for a distributed ledger to replace. However, things do not end there.
This exceptional intervention was necessary because AIG had engaged in the highly risky business of selling credit protection over the past few years, which left it vulnerable and very exposed to a turnaround in the US housing market. The uncertainty stemming from this situation gave rise to the risk of a domino effect, affecting one financial institution after the next. Fears that this effect could be fuelled by price manipulations and speculation resulted in a restriction of short selling, first in the United States and then in many other countries including France, the United Kingdom, Belgium, the Netherlands, Italy, Germany, Austria and Australia. It was against this backdrop that the idea of an "overall solution" emerged, marking a change in strategy compared to the case-by-case approach that had prevailed until then. This was the underlying rationale for the Paulson Plan adopted on 3 October. Three remarks on the latter: •  The general idea behind the Plan is for the Treasury to purchase currently illiquid assets. It aims to rid banks of the bad assets weighing on their balance sheets, and to eliminate uncertainty about their real value and, in turn, about that of the banks themselves. Indeed, under the current accounting framework, these assets are marked to market, which means that any uncertainty about their value affects that of the financial institutions themselves. •  The way in which the Plan is to be implemented still remains vague. One essential aspect is the price at which assets are to be purchased.

They have clearly demonstrated their will to take action when necessary. But governments are also intervening to bolster banks’ solvency and soundness. In this context and in order to ensure that national measures for dealing with the crisis are consistent, the international community is taking a collective stand. The G7 plan of action is a major step forward. It sets out clear principles to be applied by the whole international community – in particular the IMF’s International Monetary and Financial Committee – with a view to giving structure to national actions. It expounds the following principles: •  taking decisive action to prevent the failure of financial institutions;  •  taking all necessary steps to unfreeze credit and money markets;  •  ensuring that banks and other major financial intermediaries can raise capital as needed;  •  ensuring that national deposit insurance and guarantee programmes are robust;  •  ensuring accurate valuation and transparent disclosure of assets, as well as consistent implementation of high quality accounting standards. Thanks, in particular, to France’s leading role in discussions, Europe is organising itself.
So, in designing a policy to close resource gaps, I am going to take a careful look at the evolution of inflation and inflationary expectations to tell me if I am wrong about my assessment of the real-side shortfalls we need to fill. An explicit state-contingent policy Let me outline how this approach might work in practice. The Fed could sharpen its forward guidance by pledging to keep policy rates near zero until one of two events occurs. The first event would be if the unemployment rate moved below a 7 percent threshold. Reductions in the unemployment rate below this level would represent good progress toward the natural rate of unemployment; depending upon the state of inflation expectations, it might be time to lessen policy accommodation.7 The second event that would commit us to raise rates would be if inflation rises above a particular threshold that is clearly unacceptable. This trigger would be a safeguard against the possibility that our assessments of economic conditions and resource slack are wrong and the natural rate of unemployment is higher than 7 percent. If this were so, our experience from the 1970s suggests that a continuation of the low-rate policy would generate a further unexpected increase in inflation; by adjusting policy according to this trigger, the Fed would begin exiting from what would now evidently be excessive policy accommodation. We would not have the desired reductions in unemployment, but then again, there wouldn’t be anything that monetary policy could do about it.

The overall economic structure was not competitive while growth declined as external demand collapsed and domestic demand suffered from higher uncertainties, higher risk premium and lack of funding. On the financial side, our economies suffered as foreign banks deleveraged and reduced their exposure to SEE. On top of this, several countries faced high vulnerabilities in the financial system, as the NPL’s grew rapidly on a combination of weak growth and FX currency loans to un-hedged borrowers. This picture is of course a generalization. Different countries have had different experiences, depending from their initial conditions and policy responses. However, the crisis exposed several weaknesses of this economic model. At the same time, to the extent that there are differences among countries, we can draw more conclusions from our experience: •  Countries with favorable initial conditions suffered the least. Albania has been one such case. We have not entirely avoided the build-up in imbalances, but we have been careful enough to avoid currency mismatches in bank lending, to foster a prudent business model for the banking system, to avoid short-term currency inflows and to focus on overall stability as a precondition for long term growth. •  Countries with stability and long-term oriented policies have performed better. The policy dilemma in SEE has largely been whether to support economic growth through countercyclical policies or to prioritize economic and financial stability through tough corrective action. Providing macroeconomic stimulus if your economy is import-oriented may prove to be a futile exercise.
Conversely, it is not surprising that those institutions in a better position should call for the swift winding up of the institutions facing problems. Yet as one of the articles in the book being presented today clearly explains, bank-resolution processes can entail enormous costs for taxpayers, which must be set against the unquestionable benefits of shortening restructuring time. Moreover, insofar as these costs may affect sovereign risk, the cure might prove worse than the illness. But let us talk about the present, about what we should do now. Evidently, not only have we not exited the crisis, but the information reaching us shows that the crisis may worsen in the coming months. Exit will depend on what the reaction is on the domestic, European and global fronts. At present, the key to our future lies in the capacity of the European institutions, the European Council, the Eurogroup and the ECB, and the national governments, to act in unison, each in its own area of responsibility, with a single, shared objective: to halt the dangerous current market dynamic. In the absence of joint action, any piecemeal and uncoordinated progress on any of those fronts will be worth little. European progress is absolutely vital so that the adjustment drive in the national economies should not prove sterile. Headway in these adjustments is likewise vital for preparing the terrain on which the European institutions must progress.

9  See May 2020 Federal Reserve Financial Stability Report 6  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  6  From where they are today, these highly indebted companies may find equity to be the only – if any – source of finance to minimise the damage to their productive capacity. This leads to the second motivation for equity. Some of these companies may struggle. As will others who were already being challenged by underlying structural shifts in the economy, some of which have probably been accelerated in recent months. A fifth of the companies facing cash-flow deficits had poor profit performance even before the virus disruption. It would always be tough for companies in that position to raise new finance to withstand the disruption. These issues – debt and structural change – mean some companies will be forced to make cuts and some may fail or close. The number of paid employees has fallen by around 700,000 since February10. And we have seen announcements of plans for over 100,000 redundancies. Unemployment and business insolvencies will rise. If we are to limit the extent of economic scarring, new muscle must be created to replace that which is lost. Businesses must be born and be able to grow, to seize new opportunities, create new productive capacity and new opportunities for employment. And that will require new equity.
Economic analysis involves a great deal of peering into the future, so it is not surprising that there should be differences of view. And the opportunity to explore and explain these differences in a rational and open way is an important part of getting to a better answer. The outlook for the economy I now want to turn briefly to the current policy debate. The key focus of the MPC's recent discussions has been the implications of the slowdown in world growth, which became apparent in the US during the first half of last year, but was exacerbated by the tragic events of 11 September. World trade rose by only around 1½% in 2001, less than a quarter of the average growth in the previous three years. That of course has had very serious implications for businesses exposed to international trade, of which I know there are many in Northern Ireland. Monetary policy has not been idle in the face of this challenge. Interest rates have been cut by 4¾% in the US since the start of last year, by 2% in the UK and by 1½% in the euro area. How far monetary policy by itself would be able to insulate the world economy if the slowdown were to persist is I think hard to say at this stage. Very significant uncertainties remain. But recent news from the US has been encouraging.

Prasarn Trairatvorakul: The rise of Asia – finding the right balance for policy Address by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at the Japan Bank for International Cooperation (JBIC) seminar on “Outlook for the Global Economy and Financial Markets 2011”, Bangkok, 8 February 2011. *  *  *  Distinguished Speakers and Guests, Ladies and Gentlemen, It is my honor and pleasure to address today’s distinguished audience on the outlook of and the main challenges facing the global and Thai economies. Rather than giving you data and projections, which are readily available, I would like to take this opportunity to share with you my observations on the economic future of Asia and Thailand. While economic recovery in the West will likely be constrained by crisis legacies, the rapid bounce-back in Asia and its fast rising role in the world economy have made many believe that Asia is on the continued rise, to the extent that Asia is entering a golden age. Nevertheless, there are questions whether Asia can manage the risks associated with continued growth, particularly inflationary pressure and the impact of volatile capital flows. In line with this introduction, my presentation today will focus on four related topics. First I would like to pose a question whether Asia is truly approaching a golden age. Secondly, to sustain the rise of Asia, I would like to highlight the need for Asian economies to build capacities, as well as strengthen innovation and productivity.
My objective has also been to focus on European issues and to highlight the special conditions of the euro area and the role of the ECB and the Eurosystem in fostering financial stability. Thank you very much, ladies and gentlemen, for your attention. 6  BIS Review 53/2003

The type of auction for the injection of liquidity changed to fixed-price auctions, the collateral base for repo agreements expanded, the use of the required reserve increased from 20 to 40 percent, and the spread between the Bank of Albania’s key interest rate and overnight loan dropped from 175 to 75 basis points. Third, through a special act, the Bank of Albania required higher capitalization of banking activity from the banking sector, adding to the guarantee of the banking sector’s financial soundness. Making a generalization, I deem that the measures adopted over this period are unusual, extraordinary and contrary to the “constitution” of modern central banks as regards the liquidity, money market and monetary policy transmission channels. However, we well  BIS Review 146/2009  1  understood the philosophy that “the purpose justifies the ways”. For the sake of financial stability, all the measures taken are justifiable and have proved effective. So far so good. However, I think that the current situation makes the central bank more vulnerable from the viewpoint of monetary policy independence and efficiency. Liquidity by all means, whatever the size, whatever the maturity, and whatever collateral for an indefinite period of time, would damage irremediably the monetary policy and the financial stability in a second round. Preserving balances is more complex, if we take into consideration even the other major vulnerability related to high degree of euroisation (high share of foreign currency component to money supply structure) and lack of convertibility of our national currencies.
Although the main determinants – such as the behaviour of employment – will not be favourable, the high level of the household saving rate makes it conceivable that, if the factors of uncertainty were to progressively dispel, consumption might recover significantly. The main factor underpinning activity in 2010 should therefore be the external sector. The fact that the recovery in the Spanish economy lags that in the other European countries somewhat may provide for more expansionary behaviour of exports, whose trajectory has been reasonably positive. Foreseeably, then, a gradual growth phase based on recovery in the external sector and on the progressive extension of its impulses to business investment and employment will begin over the course of next year, laying the bases for a demand-led expansion. However, as a result of the spillover effect of the negative 2009 rates, average growth in 2010 might post a moderate decline. This trajectory of slow recovery in activity broadly matches the government’s macroeconomic projection that acts as a basis for the State Budget for 2010. Yet as I said, there is a risk that business investment may perform somewhat worse than foreseen in this scenario. But in my view, what is most important at present is not the exact date on which activity will begin to post a positive rate or whether its rate of increase will be greater or less than forecast in 2010; rather, it is the scale of the medium-term challenges involved in exiting the most complicated situation the Spanish economy has faced in recent decades.

This inaugural conference is set to mark a significant step to enhance collaboration and deepen financial linkages in Islamic finance between Malaysia and Hong Kong. The theme “Sukuk as a Viable FundRaising and Investment Instrument” is most apt, given that the ethical-based fixed income instrument has increasingly gained recognition by the global financial community as an attractive source of funding for real sectors and long-term development. Adoption of best practices for sukuk issuance The growth of the global sukuk market has been very promising. It reached a stock value of USD268 billion at the end of 2013 and since 2000 has grown at a cumulative average rate of 50% per annum. The creation of a sukuk market in Hong Kong is a timely initiative as it has the potential to further spearhead its foray into Islamic finance. Sukuk, as a new asset class, is ideal for portfolio diversification and is increasingly well-accepted all over the world. From our experience, the new venture by Hong Kong into the sukuk market may be able to deepen its bond market further and open the opportunity to tap the burgeoning investor pool seeking good quality Shariah compliant and ethical-based instruments. Being a player in an increasingly developed sukuk market, Hong Kong has the opportunity to adopt the best practices in sukuk issuances. Firstly, in the area of Shariah standards where it provides principle-based guidance on the execution of Islamic financial contracts. Such standards are designed to cover the needs of different jurisdictions.