samchain/econo-pairs-v1 huggingface dataset:
Such considerations mean that it is essential that banks have a sound strategy and good systems of risk management. The main responsibility for this rests with the board of directors and with senior management, although the regulators also have a responsibility to check that they are doing their job properly. To assist us in that process, we have recently issued a guideline which sets out the standards which we expect the board of directors to observe. One important feature of the guideline is the need for a strong independent element on the board provided by non-executive directors who can bring a fresh perspective to strategic planning based on their expertise and outside experience. Having said that, non-executive directors with the right degree of independence and expertise are not easy to find. This is one of the main challenges in corporate governance in Asia. Although sound strategic direction from the top and good internal systems of control are the primary defences against increased risk, banks also need to make sure that they hold sufficient capital to support that risk. The present capital adequacy regime formulated by the Basel Committee has been in place since 1988. Although it has served its purpose well, it is showing signs of its age and needs to be 3  BIS Review 93/2000  replaced. The Committee is therefore proposing to introduce a new Capital Accord, the guiding principle of which is that it should be more risk-sensitive.

One priority has been to take account of the e-banking developments I have already mentioned. A particular landmark was the guideline on virtual banks which we issued in May of this year. I will not go into the details of this except to say that it was first drafted when the dot.com frenzy was at its peak, and I believe that the cautionary notes that we uttered have stood the test of time. In particular, our guideline stressed that virtual banks must have substance rather than being a concept, and that  BIS Review 93/2000  2  virtual banks are subject to the same risks as conventional banks and should be subject to the same prudential criteria. Essentially, we were warning of the need not to be blinded by the technology. We also warned against over-aggressive pricing and of the need to strike an appropriate balance between acquisition of market share and earning a reasonable return. As with other new banks that we authorise, we would normally expect a virtual bank to be making a profit by the end of its third year. This was criticised in some quarters as being unrealistic and not in keeping with the internet business model. However, as events have turned out, it was that model that was unrealistic rather than our guideline. Under our current rules, it is not possible to establish from scratch a new locally incorporated virtual, or indeed conventional, bank in Hong Kong.
This, of course, seeking to preserve the conditions that will foster economic growth and the welfare of the population. Thank you. 6  BIS central bankers’ speeches  Figure 1 Banks' average CDS (1) (basis points)  Liquidity conditions (4) (basis points)  500  500 100  100  400  400  80  80  300  300  60  60  200  200  40  40  100  100  20  20  0  0  0  0  08  09  10  U.S. (2)  10 Jul. 11 Jul. ene.10jul.10ene.11jul.11  11 Europe (3)  U.S.  Japan  Eurozone  (1) Simple average of 5-year CDS premiums. Dotted line marks statistical cutoff date of previous Report. (2) U.S. includes Citigroup, Goldman Sachs, Merrill Lynch, JP Morgan Chase and Bank of America. (3) Europe includes Société Générale, Deutsche Bank, UBS AG, Santander, BBVA and UniCredit. (4) Difference between the Libo rate and the overnight indexed swap (OIS), both at three months. For the Eurozone, difference between Euribo rate and respective OIS. Source: Bloomberg.

It showed that there existed areas in which we needed to think further or maybe even revitalise old knowledge. Not least, it  6  BIS Review 68/2010  made it apparent that, while central banks had become more adept at handling normal shocks to demand and supply, there remained a great deal to be learned regarding the manner in which imbalances on the financial markets ought to be handled. So what consequences can we expect the crisis to have for central banks’ method of working in the future? Is there reason to supplement current monetary policy reasoning – and, if so, how? A large part of what I will address here today consists of matters that are currently the subject of intensive international discussion. The final result of these discussions remains to be seen. Nonetheless, let me think aloud on the manner in which central banks’ work may be affected and on the challenges we will face. Effects on potential output and growth? One challenge concerns attempting to assess the manner in which the crisis will affect the economy’s long-term production capacity or potential output. This is significant for several reasons. Firstly, the deviation between actual and potential output, the output gap, is a measure of the stability of the real economy. Secondly, the output gap can affect the manner in which inflation develops. If the production of an economy exceeds its long-term production capacity (that is to say, if the output gap is positive), this tends to exert upwards pressure on inflation.
Many feared the worst for the U.S. economy—and especially for New York City. After all, the stock market crash in 1929 was followed by the Great Depression. As a young economist working on Wall Street, I certainly was worried—the situation didn’t seem consistent with future job stability. I went out that evening and bought myself a leather jacket. If I lost my job, I wanted to leave with something on my back, something tangible. As it turned out, although the city’s economy and Wall Street did indeed sustain a steep downturn, both were able to recover and to prosper. Not only was there no depression, the economy avoided falling into recession. And, importantly to me, I was able to keep both my job and my leather jacket. In retrospect, the 1987 crash was just a hiccup in what ultimately turned out to be a remarkable upturn in the city’s performance and prospects. However, to really understand this story of the city’s resilience, we need to take a look back at one of the darkest periods in New York City’s history: the 1970s. I remember New York City in the 1970s from my freshman days at Columbia University. Columbia was a great place to be a young student. There were engaging professors and I had the opportunity to read the great books of the university’s core contemporary civilization curriculum.

It has no longer been possible to do both; the Riksbank has been forced to choose. I think it has been an absolute necessity in this case to prioritise confidence in the inflation target. It is not just because this is the Riksbank's main task. In my opinion, it is rather obvious that the problems on the housing market are deeper than the currently low interest rate. Housing prices and household debt have risen in parallel and almost constantly for twenty years, and during this time the interest rate has been both relatively high and very low (see Figure 9). Another observation that underlines the claim that the interest rate does not play the leading role is that developments in housing prices in Germany have been quite different from those in Sweden, despite a rather similar monetary policy (see Figure 10). As I see it, it is not reasonable given this to advocate that the Riksbank shall sacrifice its main task – to maintain confidence in the inflation target – to perhaps attain some easing with regard to housing prices and debt, which would in any case only be temporary unless other measures were taken. If we are to attain a long-term sustainable development in the Swedish economy there is no way around managing the risks in the housing and credit markets with targeted measures in housing policy, taxation policy and macroprudential policy. Anything else would be a very strange and ultimately untenable allocation of roles in economic policy. 9 See, for example, Jansson (2014).
The recovery should also be resilient to potential slowdown in world economic growth given that the initial pick up this year is mostly driven by domestic demand while growth momentum next year mostly reflects the continued rebound in tourists from abroad, which tend not to be sensitive to global economic activity. Bilateral inbound tourist flows in the past are relatively resilient to home economic conditions. This reflected the fact that there is a lot of pent-up demand and Thailand is a cost-effective value for money destination. 2. Balance of risk has tilted towards inflation Headline inflation is expected to peak in Q3/22 and gradually return to target range next year, but what’s concerning is that core inflation is increasing. a. Headline inflation is uncomfortably high and above the target range. It has been around 7.6% in June and July, the highest in 14 years. The rise of headline inflation has been supply-side driven and largely concentrated in food and energy-related categories. There has not been any sign of demandside pressure unlike in the US and UK. However, the risks are titled to the upside given possibilities of broader and faster cost pass-through and rising demand pressures as the economy gains strength. b. Core inflation has continued increasing for 4 consecutive months mainly due to faster cost passthrough such as from raw foods to prepared food prices. This is a sign or an indication that inflation engine might get fully started.

Aggressive hike is not warranted as the Thai economy is still in the early phase of recovery, while it could risk derailing the recovery. A gradual approach is needed to strike a balance between facilitating a smooth take-off of the recovery and minimizing the impact from potential bumps. • Measured: Policy decision will be calibrated taking into account economic conditions and circumstances prevailing at the time. If a pause is required, we will pause. If 50 bps is necessary to meet our policy objective, we will raise 50 bps. But with the current circumstances, aggressive rate hikes or too early withdrawal of financial measures can jeopardize the economic recovery given pockets of vulnerabilities and the uneven impacts on different groups. c. We have taken first steps towards this at the Financial Institutions Policy Committee (FIPC) meeting on June 30th and the Monetary Policy Committee (MPC) meeting on August 10th. • The FIPC decided to withdraw some of the blanket-type measures including FIDF fee cut and bank dividend payment restrictions. • The MPC voted 6 to 1 to raise the policy rate by 25 bps. Part 3: What is our rationale for monetary policy normalization? [3.1 MPC decision: 10 August] Two weeks ago, the MPC has delivered the first policy rate hike after having held the policy rate at its historically low level for more than two years.
As a result of the substantial expansion of liquidity to combat the strength of the Swiss franc in August, some short-term interest rates turned negative. They have been close to zero since the previous monetary policy assessment. Long-term interest rates also declined further. The yield on ten-year Confederation bonds reached a new low. The expansionary effects of monetary policy are also evident in the growth of the money supply and in real interest rates, which have remained at a low level. Since the introduction of the minimum exchange rate on 6 September 2011, the Swiss franc exchange rate to the euro has been above CHF 1.20. Compared to August, the Swiss franc has even depreciated more against the US dollar than against the euro. Nevertheless, even at the current exchange rate, the Swiss franc is still high. In August, the SNB had substantially expanded Swiss franc liquidity, in order to weaken the heavily overvalued Swiss franc. Since then, banks’ sight deposits with the SNB have been at historically high levels. The SNB will continue to maintain liquidity at exceptionally high  2  BIS central bankers’ speeches  levels, but has decided not to set a specific target level for sight deposits at present. My colleague Jean-Pierre Danthine will discuss the SNB’s liquidity measures and their effects in more detail. Both domestic mortgages and corporate lending in the real economy have continued to see robust growth. In the third quarter of 2011, lending standards and conditions for mortgages remained largely unchanged.

As such, it is of utmost importance that we consider the principles of sound and prudent financial management in this undertaking. We cannot in good conscience, overburden and cause anyone to enter into financial difficulty in pursuit of owning a home. This fundamentally goes against the intention of owning a house. Therefore, based on the principles of fairness, justice and prudence, it is necessary for us to be absolutely clear on what ‘affordable’ means. This will influence both the diagnosis of the issue and the solutions to be implemented. We must be fair and just to the needs of the ordinary person. At its core, affordability is a function of two things; the income of the individual and the price of the house. A house is affordable if its price does not overburden the person’s finances and reflects its true value. It is crucial that the percentage of income spent to service the mortgage does not go beyond the person’s financial capacity, and that they are able to pay for other obligations on top of this commitment. To this end, at the individual level, we need to put emphasis on the value of financial literacy and financial education. For example, the Credit Counseling and Debt Management Agency recently launched the “Rumahku” portal to help potential borrowers in Malaysia to understand the financial commitments associated with owning a house. It also helps them to understand their capacity to meet these commitments.
And in this context, there is clearly a need to improve financial education and promote the development of digital skills among the public at large. The main challenge bank customers face is entering into financial contracts. If they are aware of the importance of the commitment they assume in signing each contract – and by “signing” we also mean ticking the box that reads “I accept the terms and conditions of the contract” in digitally executed transactions – they will appreciate the importance of being fully aware of this commitment before signing, and of knowing what demands they can make during the life of the operation and which unavoidable obligations they may have during that time. Banks benefit from having properly prepared customers, avoiding the unwanted consequences of poorly conceived consent that ultimately gives rise to legal risks and which may seriously compromise their reputation. For this reason banks, while improving the information they give to their customers, should promote customer awareness, integrating financial education not only into their corporate social accountability programmes but also into their product design and governance strategies. However, this responsibility for financial education does not fall exclusively or chiefly on banks. It must extend to other sectors of society, including, inter alia, third persons whose mission is to ensure the proper understanding and scope of contractual terms. And, above all and primarily, financial education must be an essential part of individual learning from a very early age.

Richard Dzina: Four questions on the state of cyber resilience and endpoint security Remarks by Mr Richard Dzina, Executive Vice President of the Financial Services Group of the Federal Reserve Bank of New York, at the Clearing House and Bank Policy Institute's 2018 Annual Conference, New York City, 26 November 2018. * * * As prepared for delivery I want to thank The Clearing House for this generous invitation and, especially, for assembling such a compelling and topical program. The relationship between The Clearing House and the Federal Reserve is multi-faceted: across one plane competitor, as CHIPS and the Fedwire Funds Service, and EPN and FedACH, vie for volume across common service lines; across another plane collaborator, as peer infrastructures seeking to maximize the value and minimize the disruption to customers in response to common industry initiatives, with our coordinated plans for adoption of ISO 20022 standard message formats representing a cardinal example; and across a final plane as overseer and overseen. When it comes to the resiliency and security of our infrastructures, however, there is no ambiguity in role or relationship: we rise, or fall, as one. Standing before an audience like this never fails to elicit a visceral sense of accountability. When the subject is the resiliency and security of the foundational elements of our nation’s financial system, on which market function and economic vitality ultimately depend, that sense of accountability resonates even more keenly.
(The UK is also unusual in that foreign exchange reserves, and any profits earned on them, belong to the government rather than to the central bank, although the Bank of England does of course have responsibility for managing the reserves). European integration 3 Maxwell Fry, Charles Goodhart and Alvero Almeida, Central Banking in developing countries,  Routledge, 1996, pages 97-99. BIS Review 33/1997  - 10 -  Looking at the European continent as a whole, it is interesting that, whereas the common history of central and eastern European countries over the last half century has produced broadly similar central banks in the different countries - at least in those which are contemplating accession to the European Union - the central banks of the existing member states are a disparate bunch. What remains to be seen is how far the advent of Economic and Monetary Union may induce more homogeneity and, indeed, reduce costs. It ought to be the case, after all, that one monetary policy is cheaper to administer than 15, or 25. The European Central Bank will appear a much more concentrated creature than the central banks we have been looking at. It will be responsible for the issuance of euro banknotes (known to the cognoscenti as bridging finance) but beyond this, in terms of the diagram I have been using, the ECB will be almost uni-dimensional (figure 7). According to the Maastricht Treaty its independence in setting interest rates will be unparalleled.

32000 4800 1255 3892 2220 3262 1648 1485 25465 6188 9445 16494 15220 52805 333 100  34,630 1,270 18,340 19,510 13,440 18,000 22,010 25,880 2,410 19,300 25,580 23,420 2,650  Log data Staff/pop staff 38 38 55 67 76 83 93 96 98 161 165 202 263 357  8.48 7.13 8.27 7.71 8.09 7.41 7.30 10.15 8.73 9.15 9.71 9.63 10.87  popln staff/pop  18.64 16.94 17.88 17.19 17.48 16.69 16.55 19.38 17.47 17.86 18.22 17.87 18.81  -10.17 -9.80 -9.62 -9.48 -9.39 -9.29 -9.25 -9.23 -8.74 -8.71 -8.51 -8.24 -7.94  gdp  #NUM! #NUM! 1.31 1.11 #NUM! 1.65 1.69 1.07 #NUM! 2.93 2.29 2.58 #NUM!
The Bank in this way provides a kind of ACAS for syndicated lenders, known as the London Approach. Like ACAS, the London Approach is voluntary, informal and by mutual agreement. It is also less active now than previously, certainly since my own first encounter with the Bank in the mid-1970s, hopefully a good sign for Financial Stability. Management of the Bank Having dealt with the policy implications of the changes announced by the Government in May 1997 the advent of the Monetary Policy Committee and the transfer of line supervision for banks to the FSA - I would now like to turn to the profound impact that the changes have had on the Bank as an institution and to the third part of my job, responsibility for day-to-day management of the Bank. With the new responsibilities for monetary and financial stability came a recognition of the need for less generalist and more specialist analytical skills, and in particular for highly trained economists. At the same time, in our banking and other operations, as in other financial organisations, the introduction of new technology brought increasing demands for staff with emphasis on IT and not purely clerical skills. These have presented huge challenges for the management of the Bank and its staff. Looking back over the last three years, we have made changes in many areas, but I would like to pick out four in particular. Increased efficiency First has been the move towards greater efficiency and a reduction in overheads.

All this has resembled at times an economics version of Big Brother; indeed I expect the viewing economics community will ask next for the right, through a telephone poll, to vote members off the Committee! Occasionally the differences of view that surface in the Committee arise from different views about the workings of some economic relationship; on other occasions they represent a difference in tactical views. There is more than one interest rate path which would give an inflation profile consistent with the target. And so there can be differences between those who might at any moment prefer to wait and see - recognising that this might require a sharper movement in interest rates later on - and those who might prefer a more pre-emptive activist approach to setting rates, what might be termed the Macbeth School of Economics: “If it were done when ‘tis done, then ‘t’were well it were done quickly”. The fact that there are different paths to achieve the 2.5% target is one reason why there is no automatic link between our inflation forecast, which we publish on a quarterly basis, and that month’s interest rate decision. I mentioned that the setting of interest rates requires one to peer into the future. Unfortunately it is more difficult than that. It also requires policy makers to have a view about what is happening currently.