samchain/econo-pairs-v1 huggingface dataset:
Changes in prudential regulations, arising from the adoption of the new Basel III requirements, whose implementation has yet to be completed; possible rule changes that restrict banks’ business model (the so-called structural measures); far-reaching changes in the regulations governing the resolution of weak institutions and changes also in supervisory practices, with the foreseeable increase in capital requirements derived from stress tests, the development and deepening of Pillar 2, and the inclusion of macroprudential considerations, among other factors. In Europe, in particular, the reforms take on a special dimension following the start-up of a new unified regime for the prevention, management and coverage of banking crises. Following the approval last year of the Regulation setting up the single supervisory mechanism, preparations for which are – as I shall later mention – well under way, the political agreement reached last week on the single resolution mechanism allows us to envisage the start-up of an effective banking union in Europe. It is difficult to overstate the importance of the steps taken here, in light both of their scope and their speed. The combination of unified supervision, with the adoption of common rules of conduct for vulnerable institutions, the creation of the European resolution agency, with significant executive capacity, and the establishment of pan-European bank riskmutualisation mechanisms all mark a huge step forward for the monetary union and, by extension, for European integration.

Faced with these foreseeable changes in the regulatory and supervisory framework, and irrespective of whether the ongoing assessment exercise is likely to be generally satisfactory, Spanish banks must evidently seize every opportunity to strengthen their capital position as the improvement observed in financial conditions progressively firms, be this through gains in efficiency, retained profits or new securities issues. 5. Conclusions  To conclude, I believe the major structural changes sweeping the banking industry will have been reiterated in this conference. We should assume that in the future the banking sector will be better capitalised and safer. As a counterpoint, however, it will likely be smaller and, probably, less profitable. All these changes will have appreciable consequences for banks’ business models and competitive strategies. The concurrence of this global process and the start-up of the banking union in Europe poses, in the short term, additional and considerable logistic and strategic challenges. Yet far from being a disadvantage, the banking union will over the medium term improve the European banking sector’s competitive capacity. Banks will benefit not only from a genuinely unified market but also, more directly, from the added strength this project brings to the monetary union. And the soundness of banks and the stability of the financial system as a whole will hinge crucially on the proper functioning of this union. Thank you. BIS central bankers’ speeches  5
On this subject of the “Eckert Act", the insurance companies monitored by the ACPR paid out EUR 2 billion to the beneficiaries of unclaimed policies in 2015; banks, for their part, transferred 5.5 million inactive bank accounts to the Caisse des dépôts et consignations in 2016, representing a total amount of EUR 1.9 billion to be claimed by the account holders or their beneficiaries. The fourth challenge is the fight against money laundering and the financing of terrorism, which in 2016 was a higher priority for action. We carried out 30 missions among banks and insurance companies on this subject in 2016, as against 22 in 2015. These missions complement the substantive action of the ongoing supervision, which resulted last year in close to 700 follow-up letters. In total, we initiated and published six disciplinary sanctions against institutions. The year 2016 was therefore an active year in this field, raising to 22 the number of sanctions taken since 2010 for noncompliance with the regulations. * * * In conclusion, it is with pride that I look at what was achieved in 2016, but without any let-up or complacency: many projects await us in 2017, both nationally and internationally. A strong ACPR must have the necessary means to accomplish its missions: I would like to emphasise this imperative. I will now give the floor to Bernard Delas, who will present the prudential developments in the insurance sector. Rémi Bouchez will then discuss the work of the Sanctions Committee. Thank you for your attention.

The eurozone’s current economic and financial difficulties are due in part to the fact that, together with the US, the UK, and Switzerland, the euro area was one of the sources of the financial crisis that began in mid-2007 and peaked in autumn 2008. In the beginning, the crisis had little to do with flaws in the design of the euro area. Ensuing developments unveiled those flaws, however. When all is said and done, the flaws stem from the fact that, even though the euro area is referred to as an economic and monetary union, the economic and fiscal aspects were largely missing (see Chapter 15). Furthermore, the EU regulatory framework for cross-border banking operations is severely flawed in that EU-wide operational freedom was coupled with national supervision and deposit insurance – and, in the case of non-euro countries in the EU, national liquidity facilities. This made it much more difficult to address problems in the banking system at the peak of the financial crisis. To some degree, this may explain why the European banking system was not sufficiently restructured at that time and to a lesser extent than, for example, in the US. The banking system was therefore more vulnerable when the sovereign debt crisis struck several euro area countries as a result of prolonged lack of fiscal discipline (see Chapter 15), economic policy, and the financial systems of the countries affected.
The underlying long-term growth dynamics in Emerging Asia are good.   The demographics are favourable, with the proportion of the working age population continuing to rise in most Asian economies.   The emergence of a sizeable middle class and ongoing urbanisation will underpin a continued expansion in domestic consumption and investment. These underlying factors alone should support healthy growth in Emerging Asia, barring serious policy mis-steps or crises. But if Emerging Asia also undertakes the necessary structural reforms and achieves greater regional integration, growth could be even higher. For example, successful reforms and further integration could boost ASEAN’s growth from close to 5% currently to 6%. Structural reforms will help unlock the productivity gains that Asia needs for its next phase of growth. This will be increasingly important as countries move up the economic value chain. The structural reforms each economy needs are different. But what is encouraging is that these countries have moved economic restructuring to the top of their agenda.   In China, the goal is to orientate the economy towards domestic consumption and strengthen the role of the market in allocating resources. The Third Plenum reforms offer a comprehensive blueprint to do this.   In India, the critical task is to improve the business environment and build the infrastructure necessary for a strong manufacturing sector that will provide jobs and  BIS central bankers’ speeches  1  raise incomes. The new government has signalled clearly that India is open for business.

The financial sector is key to mobilising Asia’s large pool of surplus savings more efficiently and channelling it to investment opportunities in the region. Situated at the heart of Emerging Asia, Singapore serves to intermediate the flows of savings and investments, helping to finance growth, manage risks, and connecting markets. Singapore’s financial centre is able to play this role because of four factors:   the credibility of its financial regulatory framework;    the competencies of its workforce;    the connectivity it has with the rest of Asia; and    the collaboration MAS has with the financial industry. Let me say a few words about collaboration. Working closely with industry is an important part of MAS’ work – be it in formulating regulatory policies or growth strategies. Regulation must be appropriate to the risks they are meant to address. We have not flinched from imposing high prudential standards – sometimes above international norms – but have always consulted industry actively to make sure that the prudential outcomes that we want are achieved at minimal compliance cost. Likewise, we have worked closely with industry to help create a strong financial ecosystem, deepening and broadening our markets, building critical infrastructure, and developing a skilled and competent financial sector workforce. JPM has been an important partner in our journey together to develop Singapore as a dynamic and vibrant financial centre.
In the post-crisis era, the conventional wisdom is that emerging markets should choose either a free-floating or fixed exchange rate system. But neither is a panacea. Fixed exchange rates are hard to sustain in a world of global capital mobility. Furthermore, they tend to be viable only when supported by large foreign reserves and strong institutional arrangements. Even then, the exchange rate can still become misaligned and vulnerable, as has happened in Argentina. In Hong Kong, strong foreign reserves and well-developed financial authorities and institutions made its currency board workable and credible. But even the Hong Kong dollar came under fierce attack in this crisis. In other countries a fixed exchange rate may be completely infeasible. Thus Professor Steve Hanke’s proposal to set up a currency board system to stabilise the rupiah was viewed with deep scepticism by policymakers both in Indonesia as well as the IMF and the World Bank. Neither does a free-floating exchange rate always work. Even developed countries do not remain impassive when capital flows overwhelm trade flows and threaten the competitiveness of the country’s exports. A prime example is Japan. And despite a free-float, the exchange rate may spiral downwards if there is a loss of confidence. This happened in Indonesia and Brazil after they abandoned their exchange rate pegs. Singapore operates a managed float. This policy has prevented the currency from getting too far out of line and rendering our exports uncompetitive as a fixed rate might have done.

William C Dudley: US experience with bank stress tests Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Group of 30 plenary meeting, Bern, Switzerland, 28 May 2011. *  *  *  Today I would like to comment on the U.S. experience conducting bank stress tests. I thought this might be of interest both in light of the lessons we learned and the relevance of these lessons as the European banking regulators conduct another important round of bank stress tests this summer. As always, what I have to say reflects my own views and not necessarily those of the Federal Open Market Committee (FOMC) or the Federal Reserve System. As way of background, the U.S. experience conducting stress tests across an array of large banks came out of earlier work doing horizontal supervisory evaluations of banks. We found these exercises useful in identifying best practices and to determine where particular banks were deficient. In talking about stress tests in the United States, there are three distinct sets of stress tests to consider:   Supervisory Capital Assessment Program (SCAP), completed in May 2009;    stress tests conducted as part of the larger Comprehensive Capital Assessment Review (CCAR), completed in April 2011; and    the Dodd-Frank Wall Street Reform and Consumer Protection Act mandated stress tests, which we have yet to implement.
8  BIS central bankers’ speeches  Figure 5 MPR and expectations (percent) 9  9  8  8  7  7  6  6  5  5  4  4  3  3  2  2  1  1  0  0 07  08  09  10  11  12  13  14  FBS, second half August 2013  EES, August 2013  Forward, September Report  MPR  15  Source: Central Bank of Chile. Table 1 International baseline scenario assumptions 2012  2013 (f) Mar. 13 Jun. 13 Report Report  GDP growth  Sep. 13 Report  2014 (f) Mar. 13 Jun. 13 Report Report  Sep. 13 Report  2015 (f) Sep. 13 Report  (annual change, percent)  Trading partners' GDP  3.4  3.6  3.4  3.3  4.2  3.7  3.6  4.0  World GDP at PPP  3.1  3.3  3.1  3.0  3.9  3.6  3.5  3.9  United States Eurozone Japan China India Rest of Asia (excl. Japan, China and India) Latin America (excl.

BIS central bankers’ speeches  5  In short, the country is prepared to face a somewhat less favorable external scenario next year, which undoubtedly will have effects on the domestic economy. For years we have built solid macroeconomic balances, which yield their fruit when adverse situations hit. We are confident that, in such a scenario, this will be no exception. Our institutions, solid but flexible at the same time, distinguish us in the world. This allows us to look at the country’s future with calm and optimism. We as central bank will continue to contribute our own efforts to the stability of the currency and the normal functioning of the internal and external payment system, the development and welfare of the Chilean population. Thank you. 6  BIS central bankers’ speeches  Figure 1 Nominal exchange rate variation in 2013 (*) (percent) South Africa India Indonesia Australia Brazil Turkey Peru Colombia Malaysia Philippines Russia  Emerging Asia  Chile New Zealand  Latin America  Thailand  Other  South Korea Poland  Emerging Europe  Mexico Hungary Czech Rep. Bulgaria Slovakia China  -5  0  5  10  15  20  25  (*) An increase denotes a depreciation. Sources: Central Bank of Chile and Bloomberg.
(a) Bank of England (2007), 'Decomposing corporate bond spreads', Quarterly Bulletin, December, pages 533-37. (b) Customer funding gap less securitised debt. Where not available, stocks of securitisations are estimated from issuance data. 8  BIS Review 50/2008  Chart 3: Financial market liquidity(a)  Chart 4: Sterling liquid assets relative to total asset holdings of UK banking sector  Liquidity index 1.0  Definition of liquid assets: Broad ratio: Cash + BoE balances + Money at call + Eligible bills + UK gilts Reserve-ratio eligible assets  0.8  Narrow ratio: Cash + BoE balances + Eligible bills  0.6  35  0.2  +  0.0 0.2-  30 25 Cash ratio deposits (1981)  Sterling Stock Liquidity Regime (1996)  0.4 0.6  92  94  96  98  00  02  04  06  20 15 10  0.8  5  1.0  0 1967 1971 1975 1979 1983 1987 1991 1995 1999 2003 2007  08  Sources: Bank of England, Bloomberg, Chicago Board Options Exchange, Debt Management Office, London Stock Exchange, Merrill Lynch, Thomson Datastream and Bank calculations. Percentage of total assets (all currencies)  0.4  Competition and Credit Control (1971)  Year  Sources: Bank of England data and calculations. (a) The liquidity index shows the number of standard deviations from the mean. It is a simple unweighted average of nine liquidity measures, normalised on the period 1999-2004. Data shown are an exponentially weighted moving average.

Moreover, in addressing this question the authorities also need to take into account that some actions taken today to limit the likelihood and costs of financial instability if risks do crystallise may lead agents to underinsure again future risks. They may thus raise the probability and amplitude of future problems. Resolving these issues raises major challenges for the global regulatory community given the strong increase in financial market integration and the substantial growth in internationally active banks. Action is underway internationally 7 as well as domestically 8 to improve and strengthen the management and supervision of liquidity risk and to promote greater consistency of approach. The Basel Committee on Banking Supervision is working on producing revised Sound Practices for the management and supervision of liquidity risk. These will be released for consultation in the early summer. The Committee of European Bank Supervisors is undertaking work in parallel. The aim is to strengthen the platform for the management and oversight of liquidity risk. Among other areas for improvement, supervisors are driving higher standards for stress testing and subjecting contingency funding plans to more rigorous cross-examination before they are validated. Section V: Conclusion To conclude, developments in financial markets have increased the importance and complexity of liquidity risk management over the past decade. That, in turn, increased the vulnerability of banks to a system-wide liquidity shock. Preparations for such a shock proved inadequate and insufficient.
Tony Latter: Hong Kong's currency board today - the unexpected challenge of deflation Speech by Mr Tony Latter, Deputy Chief Executive of the Hong Kong Monetary Authority, at the conference on "Alternative exchange rate regimes in the globalised world", organised by Eesti Pank to mark ten years of the currency board in Estonia, Tallinn, 11 June 2002. *  *  *  The conquest of inflation Those of us here today who once studied economics almost certainly did so in a period of at least mild, if not quite rapid inflation. And those of us who are central bankers have for the majority of our working lives been struggling to cope with inflation. So it's hardly surprising that back in 1983, when the Hong Kong authorities pegged the Hong Kong dollar to the United States dollar, we didn't seriously contemplate any deflationary scenario. The US inflation rate in the early 1980s was averaging some 4% pa and, not possessing any special forecasting capability in this field, we must have reckoned that it would remain near that figure. In addition, the textbooks would have told us that structural and developmental factors would tend to make Hong Kong's inflation rate somewhat faster than that of the US - as indeed it was for the ensuing fourteen years. Neither a significantly lower rate of US inflation nor a situation where Hong Kong's rate was significantly below the US rate would have been considered at all likely.

“How synchronized are central and east European economies with the euro area? Evidence from a structural factor model”, Discussion Paper 20/2005, Deutsche Bundesbank Estrada, A., López-Salido, D. 2001. “Understanding Spanish Dual Inflation”, Documento de Trabajo n.º 0205 Banco de España Fidrmuc J., Korhonen I. 2001 “Similarity of Supply and Demand Shocks between the Euro Area and the CEECs”, BOFIT Discussion Paper No. 14. Financial Times “EU’s grim climate change”, 6 January 2007. Gourinchas, P.O., Valdes, R., Landerretche, O. 2001. “Lending Booms: Latin America and the World”, NBER Working Paper 8249. Kenen, Peter B. (2002) “Currency Unions and Trade: Variations on Themes by Rose and Persson” Reserve Bank of New Zealand Discussion Paper 2002/08. Kiss, G., Nagy, M., Vonnák, B. 2006. “Credit Growth in Central and Eastern Europe: Convergence or Boom?”, WP 2006/10, Magyar Nemzeti Bank. Micco, A., Stein, E., Ordonez, O. 2003. “The Currency Union Effect on Trade: Early Evidence From EMU”, Economic Policy, 316-356. NBP 2004. “A Report on the Costs and Benefits of Poland’s Adoption of the Euro”, ed. J.Borowski, National Bank of Poland Persson, Torsten (2001) “Currency Unions and Trade: How Large is the Treatment Effect?”, Economic Policy 33, 435-448. Rose A.K. (2000): One Money, One Market? The Effect of Common Currencies on International Trade, „Economic Policy” No. 30, pp. 449-461. Rose A.K., van Wincoop E. (2001): National Money as a Barrier to International Trade: the Real Case for Currency Union, „American Economic Review” Vol. 91, No. 2, s. 386-390. Mundell R. (1961): A Theory of Optimum Currency Areas, „American Economic Review” Vol.
As the interest rate differential had hardly changed, and these countries’ currencies were less sought after as safe havens than the Swiss franc, they were subjected to considerably less upward pressure against the euro than the Swiss currency. The situation in Switzerland was made even more difficult by the fact that, as a result of the minimum exchange rate, both the Swiss franc and the euro lost value against the US dollar and the pound sterling. This put the broad overvaluation of the Swiss franc that had led to the introduction of the minimum exchange rate into perspective. Both of these factors, i.e. the disappearance of the interest rate differential and the reduction of the overvaluation, finally led to rapidly increasing pressure on the minimum exchange rate. At the beginning of 2015, it became clear that the minimum exchange rate of CHF 1.20 per euro was no longer sustainable from a monetary policy perspective, and would require everlarger foreign currency purchases to enforce it. If the SNB had ignored the changing reality and attempted to maintain the minimum exchange rate, the extensive interventions would have led to the bank losing control over its balance sheet and thus over longer-term monetary conditions in Switzerland. Putting this decision off would also not have helped the economy. The minimum exchange rate was introduced as an instrument against widespread and extremely pronounced Swiss franc strength. In this new phase of general euro weakness, it was no longer the right tool.

The Riksbank was thereby able to slow the economic downturn and simultaneously prevent a further appreciation of the krona and a decline in inflation expectations (cf. chart 10). Interest rates in the Czech Republic touched 0% at the end of 2012, and the Czech National Bank (CNB) announced its intention to intervene on the foreign exchange market if necessary. At the end of 2013, the CNB intervened to weaken the Czech koruna and ease monetary conditions (cf. chart 11). Thus, like the SNB, the CNB also decided to use the exchange rate as an instrument for easing monetary conditions. The Danish krone, explicitly pegged to the euro since the inception of the currency union, also suddenly found itself having to contend with upward pressure. This reflected concerns about the future of the euro, and market assumptions that Denmark could become a member of a Nordic euro should the euro area split. At the end of 2011, Danmarks Nationalbank reacted by cutting its reference rate to below that of the ECB, and continued to lower it in successive steps thereafter. At the same time, it intervened on the foreign exchange market. In mid-2012, when the ECB once again lowered its rates, Danmarks Nationalbank lowered its deposit rate into negative territory in order to keep pace with the ECB’s monetary policy easing (cf.