samchain/econo-pairs-v1 huggingface dataset:
The Basel Committee on Banking Supervision and the Financial Stability Board have stipulated that banks of international systemic importance should hold a substantial capital surcharge in relation to risk-weighted assets, which is over and above the Basel III standards.7 However, this additional amount does not take national systemic importance into account. Each country, therefore, must henceforth decide individually on an appropriate additional amount based on the risk. For example, even if the international capital surcharge was set at a low level of 1%, the “Swiss finish” would result in only 25% more common equity (cf. chart 8).8 Unlike in the case of risk-weighted capital regulation, however, Switzerland does not play a pioneering role as regards the absolute indebtedness (leverage ratio) of banks. The United States and Canada, for example, both introduced a leverage ratio some time ago. These countries are therefore stricter than Switzerland regarding leverage ratio. Furthermore, one thing is often overlooked in the current debate: banking regulation is by no means restricted to capital adequacy requirements. On an international comparison, it is the overall package of measures proposed for the regulation of (systemically important) banks that is decisive. In the US, for example, the Dodd-Frank Act9 severely restricts proprietary trading by banks that accept deposits. Sweden, for example, introduced a tax on systemically important banks. A variety of other proposals, such as the establishment of a permanent bailout fund or new regulations on the organisational structures of banks, are being planned in the EU (cf.

In the phase of debt-financed balance sheet ballooning seen between 1995 and 2007, the amount of credit available did not rise accordingly, nor did it decline in the following period when debts were being cleared. This observation is even more striking, given that, in autumn 2008, the regulatory authorities stated that as of 2013 both big banks will have to have twice as much capital as the Basel II minimum international standard specifies: According to current findings, the capital adequacy rules did not have a negative impact on lending levels nor did they increase lending rates (cf. charts 5 and 6).6 With a view to other possible economic repercussions of tighter regulation of the big banks, the question also arises as to whether and to what extent employment and value creation in Switzerland are at all affected. A glance at the statistics covering the period when UBS and CS saw their balance sheets expanding between 1995 and 2007 shows, among other things, that there is no clear-cut positive connection between the size of a balance sheet, on the one hand, and jobs and contribution to value creation at these banks in Switzerland, on the other. This implies that reducing the balance sheet as a result of stricter regulation would not necessarily have negative consequences in these respects (cf. chart 7). To conclude, it appears that there are no theoretical or empirical grounds to indicate that the Swiss economy will be adversely affected by the proposed regulation.
Anna Sweeney: Solvency II Review - protecting policyholders while improving the regime Speech by Ms Anna Sweeney, Executive Director for Insurance Supervision of the Bank of England, at the JP Morgan European Insurance Conference, 15 June 2021. * * *  Introduction In the Channel Four show Grand Designs, people set themselves the task of self-building a new house, starting with an empty field or sometimes an existing property, and finishing a number of years later with a beautiful new place to live. Along the way there are invariably dilemmas around which building materials to use, how best to deliver on the architect’s plans, and whether the end result will be as originally envisaged. Fortunately with the Solvency II Review we are not starting with an empty field. The task at hand is more like the considered modernisation of a listed building. We already have a well-embedded regime, where there is a shared understanding of the benefits as well as the limitations. Our house has ‘good bones’; we are committed to upholding the principles which underpin the current regime. There are many important features that we want to preserve. But like any good self-builder, we’ve been walking around with a notebook, making lists and early sketches for the areas that might most benefit from upgrading; extending; reinforcing; or streamlining. Some areas may only need thoughtful tweaks. Others may need structural work.

The information of the last few months, with activity in line with forecasts, lower-than expected inflation and nominal wages decelerating during 2018, suggests that so far, the dominant channel has been the expansionary effect on the supply of labor. Thus, it is possible to identify some recent economic phenomena that allow to analytically understand the fundamentals behind the lower inflation. Some of these phenomena (e.g. immigration and differences in exchange rate pass through) had been mentioned by the Central Bank in previous Reports, its effective translation into lower inflation only manifested with the calculation of the new CPI. III. Recent evolution of activity  Recent months’ data confirmed that the economy recovered its dynamism after the break of the third quarter of last year. As we reported in December, in said quarter activity slowed down more than expected because of, among other factors, a significantly higher calendar effect because of September’s many holidays. Fourth-quarter data that this effect was temporary, so total GDP closed the year with a growth of 4%, where 3.9% was non-mining. On the demand side, the greater dynamism of investment continues to stand out— especially in machinery and equipment—, which intensified over the year. Habitual consumption (i.e. non-  3  durable goods and services) continued to expand in tandem with GDP, while durable consumption decelerated significantly mainly due to the normalization of volume car sales (figure 5). About this year 2019, partial activity data for the first quarter show annual variations smaller than those at the end of last year.
All these issues must be tackled with the impact on the financial system as a whole in mind. And I think the ESRB is key in that endeavour. For every challenge we face and overcome, we learn. We learn and that makes us better prepared for tackling even more difficult challenges further down the road. That is in my view certainly true for the ESRB. We learned from the financial crisis and there has been a substantial amount of learning by doing since. I must say that the blueprint was good to begin with; pretty much all the necessary nuts and bolts were already in place to create a macroprudential body. Having central banks and supervisors around the same table as European institutions, and not least, adding the independent views of the Advisory Scientific Committee to the mix, is in my view a good set-up. Furthermore, I think that the plan for how all those nuts and bolts and other components should be connected and work together has proven to be a good one too. While many probably doubted that the ESRB’s somewhat complex set-up with so many members could function well in practice, the institution has gone all the way from that original blueprint in 2009 to where it stands today as the EU’s macroprudential watchdog. Its machinery brings together all the components that its founding fathers had in mind, with a set-up that has allowed the broad composition and large membership to, in my view, become main strengths rather than impediments.

[4] The growing role of non-banks offers the benefit of diversifying sources of finance and can thereby help to ensure a smooth provision of funding to the real economy. [5] Evidence also suggests that a higher share of non-bank finance can help economies to recover faster from recessions,[6] when banks’ ability to lend may be impaired. [7] Crucially, however, the benefits of this diversification rely on making sure that the non-bank financial sector provides a stable source of funding, ensuring robust financing for companies in both normal and stressed market conditions. Liquidity and leverage – lessons from recent market events As the market footprint of non-bank financial institutions increases, new risks and vulnerabilities can arise. Let me discuss three in particular. First, the strong growth of the non-bank financial sector – especially the asset management industry – over the past 15 years has been accompanied by an increase in liquidity mismatches. A key contributing factor is that investors in open-ended funds – which account for the largest part of the investment fund sector – can typically redeem their shares on a daily basis without prior notice. This creates a liquidity mismatch especially in funds that invest in relatively illiquid assets, such as high-yield corporate bonds. Liquidity demand has become more procyclical as a result, especially during periods of financial market stress. During the pandemic, we saw how liquidity mismatches in open-ended funds increased demand for market liquidity, which amplified stress in financial markets.
Japan is experiencing renewed vigour. Prospects for ASEAN on the whole are good, though there are occasional hiccups. Asia is integrating through trade, tourism, people-to-people exchanges, investment flows and production chains. If there are no mishaps, by 2050, half of humanity – the more than 3 billion people in Asia – will enjoy a standard of living which their grandparents did not even dream of. Naturally, Asia's growth trajectory will not be a straight line. Asia has its share of problems too – the North Korean nuclear issue, tensions across the Taiwan Straits, Kashmir and terrorism. But these issues can be and are being managed. Many countries in the Middle East are keen to engage Asia but I have been told that their businessmen are not so familiar with doing business in China and Southeast Asia. This is where Singapore can play a role. As a key financial and commercial hub, Singapore is well-positioned as a gateway for Middle East companies to expand in Asia. Middle Eastern investors can leverage on Singapore's networks and knowledge to venture into Asian markets. There is much that Asia and the Middle East can do together, as we embark on this journey of rediscovery. Although there are significant differences between Asia and the Middle East, we also share common interests and common challenges. We both want to reconcile tradition with modernity and change, to develop without losing our core values. Both Asia and the Middle East can profit by sharing experiences.

German inflation has been lower under the aegis of the ECB in the past 20 years than in the two preceding decades: 2.9% on average from 1979 to 1998 compared with 1.4% since 1999. The permanent stability of exchange rates between our economies is an undeniable advantage for German exporters: in 2018, 36% of German exports were to euro area countries. The low level of interest rates is itself partly a reflection of Germany’s large savings surplus. And Switzerland, another country that is in surplus but that is not part of the euro area, has to apply interest rates that are even more negative! Let us be in no doubt: the euro is an asset and not a burden for Germany. This brings me finally to the fourth cliché: the ECB’s monetary policy has betrayed its mandate. This idea was propagated in a recent “memorandum” by a number of former central bankers. I have every respect for them as people,  Page 4 sur 7 but I disagree with their argument. They unfortunately chose to ignore the positive results of non-standard monetary policies. Jean-Claude Trichet himself, who can hardly be accused of laxity, underlined these benefits, and I would just like to remind you of them: estimates of the effectiveness of the ECB’s policies put the impact on growth at around 2.5 percentage points and the impact on inflation at between 1 and 1.5 percentage point for the period 2014-18. What is more, since 2013 the euro area has created 11 million jobs.
Meanwhile, it became clear to us that the standardisation of mortgage origination documents would facilitate the securitisation of mortgages more efficiently, by removing the need for due diligence review of documentation by credit rating agencies and investors. The HKMC therefore spent considerable efforts in promoting such standardisation. With the generous support of the legal fraternity and the banking industry, the HKMC introduced, in July 2001, the Model Mortgage Deed and the Model Deed of Guarantee and Indemnity. Fourteen major mortgage lenders have since adopted these model documents. Further standardisation of mortgage origination documents is in progress. It was against this background that the HKMC found it able to embark on another MBS programme the Bauhinia MBS Programme. The first series of MBS under that programme was issued in March 2002 and amounted to $ billion. The paper issued was in the form of bonds that investors are familiar, with a secondary market of considerable liquidity. Great care has been taken to design the Programme in such a way as to provide a convenient, flexible and cost-efficient platform for the issue of MBS. Benefiting from the standardisation of product structure and legal documentation, the leadtime for arranging an issue has been shortened substantially, from six to nine months for a standalone issue, to a few weeks under the Bauhinia MBS Programme. The current issue of $ billion of MBS is the second series under the Bauhinia MBS Programme. We are grateful and greatly encouraged by the enthusiastic response of the underwriting banks and investors.

The amount of $ billion has been fully subscribed by a diversified group of investors. They include not only banks, but also institutional investors and fund managers. The participation of these latter groups is especially welcome as a sign of the potential breath of the investor base for good  BIS Review 47/2003  1  quality Hong Kong dollar debt securities. The opportunity has been taken to offer more choices to investors. These are explained in the technical note attached to the press release. The CEO of HKMC will be happy to explain these to you and answer any questions that you may have, later in the press briefing. What I would like to do here in conclusion is to thank HSBC, the Lead Manager of this MBS issue for marketing it so effectively. I would also like to thank the Senior Co-lead Managers, Bank of China, Bank of Communications, Bank of East Asia, International Bank of Asia, Mitsubishi Securities (HK) and Co-lead Manager, BNP Paribas for their staunch support. The HKMC team has enjoyed working with all of you towards this successful result, and we look forward to your continuing active participation in future HKMC issues. Thank you. 2  BIS Review 47/2003
Chart 6: UK self-employment Per cent of total employment 16 14 12 10 8 6 4 2 0 1855  1870  1885  1900  1915  1930  1945  1960  1975  1990  2005  Sources: ONS, Thomas and Dimsdale (2017) and Bank of England calculations. 19  All speeches are available online at www.bankofengland.co.uk/speeches  19  Chart 7: ‘Zero hours’ contracts  Per cent of employment  3 2.5 2 1.5 1 0.5 0  2000 Q4 2002 Q4 2004 Q4 2006 Q4 2008 Q4 2010 Q4 2012 Q4 2014 Q4 2016 Q4 Sources: ONS Labour Force Survey and Bank of England calculations. Chart 8: Frequency of terms in job postings  Sources: Reed and Bank of England calculations. Notes: Chart shows the share of job postings in a data set of job vacancies posted online in the UK which include the terms ‘self-employed’, ‘flexible hours’ and ‘contractor’. 20  All speeches are available online at www.bankofengland.co.uk/speeches  20  Chart 9: Distribution of offered wage by occupation, with and without the term ‘self-employment’ in the job advert  Sources: Reed and Bank of England calculations. Notes: ‘SOC code’ refers to standard occupational classification code. The area labelled ‘True’ shows the distribution of offered wages for job adverts which include the term ‘self-employment’, and the area labelled ‘False’ shows the distribution for adverts which do not. The data are drawn from a cross-section of online job vacancies. Distributions are constructed using data covering the period 2008-2016.

By re-regulation, I don’t mean the return to tight control by regulators, but rather “smarter” regulation that focuses on systemic risks. Let me show my point with some examples. As a regulator, I would not be doing my job if I did not talk about Basel III. To avoid going overboard on its massive details, I will highlight just a few of its key features. In a nutshell, there are three parts to Basel III: capital requirement, liquidity risk management, and supervision of global systemically important financial institutions. Of the three, the capital part is in the most advanced stage with national implementation started last year in many countries including Thailand. It is expected that by 2019, most countries will be in full compliance with Basel III capital standards which include a countercyclical capital buffer that varies with credit cycles and a leverage ratio that limits excessive buildups of leverage. The liquidity part is new and aims to strengthen banks’ management of liquidity risk. A stress-test-based liquidity coverage ratio and a longer-term net stable funding ratio will be mandated in 2015 and 2018, respectively. The final part of Basel III deals with supervision of global banks whose failure could trigger the meltdown of the global financial system. Identified global systemically important banks will be subject to an additional capital surcharge above Basel III capital requirement. This extra loss absorption capacity is to be met with common equity and will be phased-in between 2016 and 2018.
At the same time, indications of a possible slowdown in momentum became visible during the course of 2013.8 Taken together, these developments make it difficult to judge precisely where we are in the credit cycle or the direction in which we are heading. This situation is an example of the fundamental identification difficulty  8  Nominal growth rates for mortgage claims have slowed to about 4.5% from around 5% in the two preceding years. At the same time, apartment price growth has slowed from 6.8% (average growth rate in 2012) to 5.2% in Q2 2013 (annual growth rates of nominal transactions prices based on quarterly data provided by Wüest&Partner). 4  BIS central bankers’ speeches  pertaining to the analysis of the financial cycle. Further academic advances in the development of new tools to help identify cyclical risks would be highly welcome. The lessons are clear, however. In the current environment of significant uncertainty and persistent risk, prudent behaviour on the part of all actors is called for. For banks, this means applying conservative lending criteria in terms of both loan-to-value ratios and affordability. For borrowers, it means bearing in mind that real estate prices are already at elevated levels and ensuring that, even if interest rates were to rise sharply, they could afford to service a loan. And finally, for regulators, it means continuing to monitor the situation very closely and being ready to take further regulatory measures, if the hopes of a soft landing are not fulfilled. References Bank for International Settlements (2011).

Mr. Meyer considers the approach of the Euro Address given by the Chairman of the Governing Board of the Swiss National Bank, Dr. Hans Meyer, to the Swiss-American Chamber of Commerce in Zurich on 4/11/97. European Monetary Union (EMU) is set to change the monetary landscape not only in the participating countries, but also in Europe and worldwide. By the sheer size of the European Union (EU), the new single currency -- Euro -- will become the second most important currency in the world, surpassed only by the US dollar. Dealing with the likely consequences of the introduction of the Euro is therefore a must for both policymakers and business leaders. Creating a single currency and thus a single monetary policy in the member states of the EU is by no means an easy task. Its complexity, its need for technical expertise, and its tight time schedule all make the creation of the EMU one of the most daring and most far-reaching monetary experiments in history. The national currencies of a number of countries will cease to exist. In addition to losing their currencies, these countries will also lose their prerogative to conduct an autonomous monetary policy. A new institution -- the European Central Bank (ECB) -- will henceforth determine the course of monetary policy in the participating countries. These countries will be able to influence the ECB’s monetary policy only to the extent that they will all be represented in the decision-making body of the new central bank.
Muhammad bin Ibrahim: Developments in Malaysia’s money services business Speech by Mr Muhammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia, at the Launch of the Malaysian Association of Money Services Business, Kuala Lumpur, 9 January 2014. *  *  *  Over the last two years, this industry has experienced significant change with the introduction of a new and strengthened legislative framework for the industry. We have been encouraged by the positive developments that have been achieved during this period. Many of you supported this change and are well on your way to build businesses that will succeed through time with higher standards of professional service and integrity. Through our interaction and engagement with members of the industry, we hope that by now, the industry is clear that the status quo cannot be an option. The industry must be able to operate with a high degree of transparency and in full compliance with applicable laws and regulations. This is important not only to build confidence in the services that the industry provides, but also to protect the integrity of the broader financial system. The sanctity of financial system is of utmost importance as it is the pillar for our economy. Vision and regulatory expectation for the industry With the enactment of the Money Services Business Act 2011, the law provides the powers to create an enabling condition to deliver better consumer protection, improve business opportunities, and strengthen safeguards against the risk of money laundering and other illegal activities.

Significant resources have been devoted by the Bank in the last two years to achieve these objectives. One of it was the relicensing process. We had reassessed a total of 839 money changing companies and remittance service providers and issued new licences to those that met the necessary requirements. We have also provided time for companies to improve their operations. These companies had demonstrated that they are able to comply with the required rules. For those that qualify the licensing processes, improvements in their operations could be achieved within a reasonable timeframe. We have also made it clear to the industry that companies found to be carrying out unauthorised activities will be firmly dealt with through enforcement actions. Out of the 839 licenses issued earlier, the relicensing process had reduced a total of 365 licenses as a result of revocation, merger, voluntary surrender of license or industry players themselves decided to convert to become an agent of a larger entity. We have significantly increased our interactions with the industry to help companies understand the regulatory requirements that must be observed. These engagements have also helped the Bank better understand the practical issues that are faced by the industry and we have responded accordingly to some of these issues. I can assure you that we will continue to work with the industry to find solutions to legitimate issues raised by the industry but the industry must act responsibly and with the public’s interest in mind. Enforcing compliance will continue to be an important focus of the Bank.