samchain/econo-pairs-v1 huggingface dataset:
However, lending to the government increased by 41.7% from 108.9% in June 2010 and contributed 13.1 percentage points to the total domestic credit growth. On a sectoral basis, households (personal loans category) continued to account for the largest share of outstanding credit, accounting for 26.3% (26.2%) 6 in September 2010. The agricultural sector was second at 17.1% (18.5%), followed by manufacturing 13.4% (13.0%), wholesale and retail trade, 12.0% (11.7%), transport, storage and communications, 5.3% (5.4%) and real estate, 5.4% (5.2%). Interest rates Demand for Government securities remained strong although it was relatively lower during the quarter under review. The average rate of subscription at the Treasury bill tenders was recorded at 123.7% down from 129.5% in the preceding period. Similarly, the average rate of subscription rate for Government bonds was down at 123.5% compared with 126.6% recorded in the second quarter. Although participation at the auctions was strong, yield rates trended higher across all tenors, as investors sought to sustain recent gains on government paper. 5  Estimates used before monetary survey is compiled. 6  Previous quarter. BIS Review 148/2010  7  In the Treasury bills market, the composite weighted average yield rate increased by 2.5 percentage points to an average of 7.4% from 4.9% recorded in the second quarter. Similarly, the composite weighted average yield rate for Government bonds increased by 109 basis points to 11.5% during the third quarter, up from an average of 10.4% recorded in the previous quarter.

In any  2  BIS central bankers’ speeches  event, as it takes a long time for any drive of this nature to mature, it is also in everybody’s interest to set about studying and putting in place the necessary arrangements as soon as possible. Progress in correcting the external imbalance It is in the external sector where the swiftest and sharpest correction of imbalances is being made. The adjustment in the external sector continued in 2012 and, as a result, after posting a surplus in the second half of the year (an unprecedented development since the launch of EMU), the current account was practically in balance, with a deficit of only 0.2% of GDP for the year as a whole. Current forecasts point to surpluses on the current account for 2013, 2014 and successive years. In addition to the contraction in imports attributable to the fall-off in domestic spending, this performance reflects the restoring of the competitiveness lost by the Spanish economy during the expansion that ended in 2008. By late 2012, two-thirds of the gap built up since 2000 between Spanish unit labour costs and those for the euro area on average had already been corrected. These gains in competitiveness have been accompanied, in the most recent period, by notable growth in the number of exporting firms and by greater geographical diversification of our exports, with an ever-increasing weight of those targeted on emerging markets.
Market making means the temporary transfer of risk to intermediaries to smooth out imbalances of supply and demand. But market makers have to be able to bear the risks. Pre-crisis, market makers funded their inventory with short-term borrowing and very small amounts of loss absorbing capital. As a result, when exposed to a severe stress, market makers simply disappeared from the scene. So liquidity is a good thing. It does play a key role in the functioning of effective markets. And financial market intermediation and engineering can help ensure the price is as low as possible, consistent ultimately with an asset’s underlying characteristics. But taken too far, these can create the illusion of liquidity rather than liquidity itself and expose the system to risk when the illusion disappears. We should not in particular refer to metrics of the pre-crisis period to see what some “good” level of liquidity looks like. Some markets may indeed not function as smoothly or cheaply as they did in the run up to this crisis. But that may well be the counterpart of less poorly priced liquidity risk in the system. Promoting true liquidity That is not to say that nothing can be done in this area. First, we should ensure that regulatory changes are coherent. Regulators have dealt with the under-pricing of liquidity risk in part by remedying inadequate capital requirements.

But corporate governance rose to prominence only in the last two decades, starting with the UK’s Cadbury Report in 1992. Since then, there has been a continuous stream of reforms in the UK to strengthen corporate governance, culminating in the UK Corporate Governance Code, which operates on a “comply or explain” principle. Corporate governance reforms in the US took a slightly different trajectory, leading to the Sarbanes-Oxley Act. Unlike the UK Code, Sarbanes-Oxley is enshrined in legislation and compliance is mandatory. 5. In Singapore, our corporate governance journey began in 2001, with the introduction of the Code of Corporate Governance. Since then, the Code has undergone two reviews to take into account changes in our corporate landscape as well as international developments. The most recent review was conducted by the private sector led Corporate Governance Council in 2010. MAS accepted all of the recommendations of the Council, with minor modifications, and issued a revised Code of Corporate Governance earlier this year. Key changes to the Code focused on strengthening Board independence, enhancing remuneration practices and disclosures, clarifying the Board’s responsibility in risk governance, and providing further guidance on companies’ engagement with shareholders. Going beyond the rules 6. Rules on corporate governance – mandatory or otherwise – have been considerably enhanced in most major jurisdictions. Yet, rules alone cannot assure us of high standards of practice. The recent financial crisis has exposed significant shortcomings in the governance of companies. We have seen monumental failures in risk management, a spate of accounting scandals and outright fraud.
We adopted prudent fiscal policies, and directed monetary policy to achieve medium-term price stability. Our MNC-led growth strategy has worked well but others are pursuing the same strategy. So for the next phase of our development, we are also building a second platform based on entrepreneurship, innovation and knowledge. New areas of focus include Research and Development, biomedical sciences and the creative industry. As the competition intensifies, we break old moulds of thinking and reinvent the way we do things. For example, we overturned our longstanding policy of disallowing casinos in Singapore. To remake Singapore into a city with buzz, we are developing Integrated Resorts, with convention facilities, world-class entertainment and casinos. And Crazy Horse, the famed Paris cabaret, is performing in strait-laced Singapore. Implementation is key The third critical aspect of growth is implementation. Right policies are no guarantee of success, if the capacity to implement is missing. Good implementation is founded on three key pillars: effective leadership, sound institutions and social cohesion. First, leaders are responsible for devising and implementing pro-growth policies. They must have the unifying vision to foster economic growth, the political will to overcome resistance and implement reforms, and the ability to mobilise people and engender social consensus. Leaders must also have character, compassion, conviction, commitment and persuasive power. Above all, they must enjoy the trust of the people. The second pillar of effective implementation is sound institutions. Effective leadership must be supported by sound institutions like the legislature, judiciary, civil service, central bank and a responsible media.

The subject of growth and development is complex and fascinating. There is no "one-size-fits-all" magic formula. But a country must have the necessary conditions of effective political leadership, sound institutions and social consensus on reforms, and the sharing of fruits. A country must also have the capacity to adapt as the world changes; otherwise, it will soon fall behind. I hope that your stay in Singapore over the next few days will be fruitful, enjoyable and memorable. Thank you for visiting us. BIS Review 86/2006  5
But it has also brought risks and instabilities that can only be tackled through co-operation between governments. Over the last two months an international consensus has emerged about the dangers of unmonitored, highly leveraged cross-border capital flows. In August we talked about the dangers to small or medium markets, such as Hong Kong. Since the LTCM debacle in September, the focus has been on the damage that huge international hedge funds, which are subject to virtually no regulation, are capable of inflicting even on the larger markets. We now have a situation in which the global financial market is outgrowing its infrastructure, or, to quote Charles Goodhart of the London School of Economics, ‘Finance is rapidly becoming global; but laws and BIS Review 98/1998  -7-  regulations are national.’ The world financial community has now awoken to the dangers, and seems to be unanimous on the point that action is needed. The G7 communique in late October calling for strong global action to promote greater transparency in highly leveraged fund flows is a step in the right direction. This has been reiterated at the APEC Summit last week in Kuala Lumpur. The challenge will be in translating these calls into an effective system to ensure that the kind of turmoil that has ravaged economies throughout our region does not repeat itself.

We acted swiftly to defeat the manipulators at their own game with a series of measures that threw them off their guard, drove them out of the market, and raised the defences against future attacks. First, drawing on the official reserves, we went into the stock and futures markets. In the second half of August we accumulated $ billion worth of shares: I am happy to say they are now worth $ billion, but our aim was not to make money; it was simply to deter manipulation by making sure that it did not pay off. That objective was achieved. The manipulators were forced to close out their short positions, in many cases with heavy losses. And we followed through with a package of technical measures to strengthen our currency board arrangement to make our money market less susceptible to manipulation. These measures are working well. Further reforms are being introduced in the securities and futures markets to reduce the possibility of market dislocation. Our actions served their purpose of deterring market manipulation. We could not passively sit through the speculative attack and see our markets overshoot to produce profits for the manipulators, and our entire financial system brought to the brink of collapse. We do not pretend that our intervention in the markets was not a controversial act. This was not a decision that we enjoyed taking. It involved many risks, not least among them the risk of being misunderstood.
Overall, in the years following the COVID-19 crisis, the average CET1 ratio has been slightly more than 1 pp above the average ratio of the period between the end of the global financial crisis and the start of the pandemic. In any event, Spanish banks’ CET1 ratio is at the lower end of the distribution for European banks of different sizes and business models. But it is well ahead of the average requirements and offers good aggregate loss-absorbing capacity. Final assessment Over a broader timescale, it is clear that the solvency and liquidity of both the Spanish and the European banking sector have improved substantially over the last decade. This has been driven, in part, by the internationally agreed regulatory reform, which in the European Union applies to all banks, irrespective of size. Indeed, the strengthening of the banking sector and the regulatory reform have proved vital to enable the sector to successfully overcome the extraordinary stress episodes of recent years. In Spain, the fact that business models are strongly oriented towards the retail segment bolsters their capacity to absorb adverse shocks to wholesale market financing conditions and has enabled them to record a favourable financial performance of late, both in terms of higher profitability and improved balance sheet quality. However, confidence in our banking system must not allow us to overlook the existing risks, which remain significant in both the short and the long run.

10  Over the three year period 2008–2010, HBoS incurred losses of £ This amounted to around 5% of its 2008 risk weighted assets £ on a Basel III basis). In the same period, RBS incurred losses on trading activities and impairments on all assets totalling £ or 5% risk weighted assets £ on Basel III basis). These banks failed because they entered the crisis with very low capital strength. On a Basel III basis, RBS is estimated to have had a CET1 ratio of just 1.97% at end 2007. HBoS had 4.1%. See FSA (2011) and Bank of England/FCA (2015). BIS central bankers’ speeches  5  That’s why, although they are well meaning, mandatory restrictions on distributions of dividends, coupons and pay when capital buffers are used can have a perverse effect. They create incentives to avoid dipping into capital buffers by taking actions that have broader economic effects. 11 Our baseline standards mean the biggest banks will be subject to a baseline capital buffer of nearly 5% of risk weighted assets, sitting on top of an 8.5% hard floor for tier 1 capital (see table 1). 12 A buffer of 5% goes beyond agreed international standards. Basel III sets a minimum buffer of 2.5% for all banks (the conservation buffer) and supplements it only for banks of global importance. We are intending to go further for big banks of domestic importance, just as the United States is going further on capital buffers for its largest banks.
In fact, economic indicators for July showed the continued expansion on both production and demand sides. Farm income from major crops was up by 69.5 percent from the same period last year, due to expansion of both production and prices of paddy rice, rubber, and oil palm. Manufacturing production also registered a satisfactory growth of 11.3 percent during the first seven months. On the demand side, private investment and consumption continued its recovery trend. Exports also expanded well in line with production expansion. Meanwhile, imports accelerated, partly in response to improvement in domestic demand. Even though this resulted in a current account deficit, strong external stability has been reflected by high level of international reserves and low external debt. For the entire 2008, the central bank’s July Inflation Report has projected a growth rate of 4.8-5.8 percent with a more moderate growth in the second half, in line with the global economy. While this forecast has already taken into account a number of key risk factors, potentially prolonged political tension and uncertainty remain a prominent one, with little known about when and how it will unwind. This is reflected in the recent plunge in consumer confidence index. In a pessimistic extreme scenario, the government budget disbursement may delay if the upcoming budget process in parliament is disrupted and mega-project investment could fall behind schedule. Prolonged disagreement could also soften domestic demand and tourism, which would be unfortunate given that the tourism high-season is approaching.

Fritz Zurbrügg: Swiss banks from a financial stability perspective Introductory remarks by Mr Fritz Zurbrügg, Member of the Governing Board of the Swiss National Bank, at the Media News Conference of the Swiss National Bank, Berne, 10 December 2015. *  *  *  In my remarks, I will start with an analysis of the situation at the Swiss banks from a financial stability perspective, looking at both the big banks and the domestically focused banks. I will then finish with some information on the new banknote series. Big banks Since the publication of our Financial Stability Report in June, the two Swiss big banks have improved their capital situation further. The improvement was especially pronounced at Credit Suisse, following a capital increase. The Swiss National Bank (SNB) acknowledges the progress made by both big banks in this area. However, a further strengthening of the leverage ratio in particular is necessary. Strengthening the leverage ratio – and hence resilience – will be achieved by means of the measures recently decided upon by the Federal Council as part of the revised ‘too big to fail’ regulations. The substantially increased leverage ratio requirements will put Switzerland back among the international leaders in this regard. Given that the ‘too big to fail’ issue is particularly pronounced in Switzerland compared to other countries, these measures are, in our view, essential.
I do understand these concerns. Let me assure you now that I will not bore you with a recollection of past events. I intend my exposé today to be forward-looking, as should the exposé of any central banker. I want to discuss what lessons for the future we can draw from over-optimistic expectations related to so-called regime shifts, such as the supply-side shock of a perceived “new economy”, and the subsequent financial boom and bust cycle in asset prices. How should monetary policy-makers deal with the resulting financial imbalances and reconcile monetary stability with financial stability? In my presentation today, I shall first briefly discuss the challenges that have been presented by the new environment for monetary policy-makers, in particular by the “new economy” and the growing importance of capital markets. Then, I shall look at what I call the excesses of this new environment, which for me are the speculative boom in asset markets and evidence of a corporate culture infatuated by short-term considerations. Finally, I shall look at the financial stability concerns and conclude by presenting some lessons for the future. The paradigm of the “new economy” Without a doubt, the world has experienced overwhelming progress in technology and productivity over the previous century, resulting in enormous growth in economic activity and individual wealth. It has been calculated that the industrialised countries were about 20 times better off at the end of the 1 20th century than they were a hundred years earlier.

At root was the rapid enlargement of stock market capitalisations in the latter part of the 1990s that arguably engendered an outsized increase in opportunities for avarice. An infectious greed seemed to grip much of our business community.”  BIS Review 23/2003  3  5  the widespread use of certain reward mechanisms such as stock option schemes. As Alan Greenspan aptly put it: “The highly desirable spread of shareholding and options among business managers perversely created incentives to artificially inflated reported earnings in order to keep stock 6 prices high and rising”. Trust, as has been demonstrated for example by Francis Fukuyama in his best-seller Trust: The Social Virtues and the Creation of Prosperity, may be invaluable for economic processes, as it facilitates 7 economic interactions and lowers transaction costs. Recent economic research is increasingly emphasising that social capital represented by trust may be as important as physical capital for 8 economic growth and prosperity. Policy-makers and regulators can help to restore trust in financial markets and auditing processes by enhancing corporate governance mechanisms. I fully support measures which promote adequate governance of corporate behaviour and thereby contribute to the restoration of trust in financial statements and capital markets. However, at the end of the day the crucial contribution to restoring trust has to come from the corporate sector itself. The sector has to recognise that easy profits are like killing the goose that lays the golden eggs. Executives in private business have a collective interest in promoting high standards of ethical behaviour.
To conclude, let me wish you a very fruitful discussion during this conference, as well as a very pleasant stay in Prague. Thank you for your attention.

European growth figures were slightly revised upwards within the framework of the “Consensus Forecast” results and the assumption that European Union Harmonized CPI inflation would almost reach the targeted two percent in 2006 and 2007 was retained. Moreover, the news that the European Central Bank would presumably continue to raise interest rates was considered while producing our inflation forecasts. Along with those of the Euro zone, monetary policies of other developed countries were also carefully monitored during the forecast-making process as regards foreseeing the course of international liquidity conditions. Following a relative stable course, crude oil prices entered an upward trend in the last period. Due to the difficulty in making a precise forecast relating to oil prices, while producing inflation forecasts under the main scenario, it was assumed that oil prices would follow a horizontal course at their current level. Hence, a level above that assumed in the first Inflation Report was foreseen. In this context, the assumptions about oil prices were updated upwards while producing forecasts. Finally, a number of assumptions were made on the likely course of the risk premium throughout 2006 and 2007. The favorable outlook for the course of the risk premium specified in the first Inflation Report was preserved for the first two months of 2006. However, both the deterioration tendency in the global risk appetite and the increase in the uncertainty perceptions about the Bank of Japan’s liquidity policy led to a rise in the risk premium in March.