samchain/econo-pairs-v1 huggingface dataset:
2  BIS central bankers’ speeches  •  Fourth, the range of instruments that allow long-term investment is limited: in many countries, bond, equity and securitisation markets that provide alternative avenues for long-term finance are underdeveloped. If finance is to play its role as an enabler of economic growth, it will be important to develop new avenues for long-term funding. Singapore’s value proposition as a financial centre MAS has been closely studying these trends in global finance and finetuning its strategies to develop Singapore as a premier financial centre. The emerging financial landscape plays to Singapore’s strengths. Singapore’s value proposition in this new landscape rests on four pillars: •  smart regulation;  •  diverse ecosystem;  •  pan-Asian focus; and  •  deep talent pool. I will take stock of Singapore’s strengths in each of these four areas and outline how we have refreshed our strategies and approaches. Smart regulation First, smart regulation. Since the global financial crisis, a higher premium has been placed on well-regulated financial centres like Singapore, which set high standards but implement them in a way that makes business sense. MAS has always required banks to meet high prudential standards, exceeding international norms in several areas. During the global financial crisis, this ensured that adequate safeguards were in place and confidence sustained. Post-crisis, our banks are well-placed to meet the new global capital and liquidity standards. Maintaining high standards is compatible with fostering a vibrant financial centre.

The firm had derivative portfolios at a number of CCPs across Europe, the US and Asia. All were auctioned, liquidated or transferred to other clearing participants by the CCPs in weeks, not years. And, with only one minor exception, this was achieved without exhausting the margin collateral the CCPs held. 1  I mention this aspect of the Lehman failure because it illustrates the drivers behind two of the key regulatory reforms we have made as a result of the financial crisis. First, incentivising and where appropriate mandating the greater use of central clearing for derivative transactions. And second, putting in place resolution regimes to ensure banks, particularly large, highly interconnected, wholesale market players, can fail without unleashing the disruption that followed the Lehman insolvency. I want to look today at the progress we have made in the post crisis reforms around derivatives and how we address the risks around the concentration of counterparty risk in CCPs – including what the objectives should be for a resolution regime for CCPs themselves. And I want to look also at the progress we have made, and the next steps we need to make, in putting in place an effective resolution regime for large banks internationally and in the UK. 1  The exception was HK Securities Clearing Corp (HKSCC) which made a loss to the CCP of approx. USD 20 mn, including cost and expenses. HKSCC announced it would claim this from LEH’s estate. Source Norman, P., 2011.
Workers aged 25 to 54 have been particularly prone to dropping out, which suggests that the decline in the unemployment rate may overstate the improvement in labor market conditions. Despite some improvements, the economy continues to operate with significant excess slack. Less than 59 percent of the U.S. working-age population has a job. This is unacceptably low – just about the same share as in late 2009 and well below the levels in 2006 and 2007. Once again, this large amount of slack is putting downward pressure on trend inflation. After a brief run-up during the second quarter of 2011 – reflecting the pass-through from higher commodity prices and supply-chain disruptions – inflation has retreated and may be headed down further. As I noted earlier, it is unlikely that the faster growth experienced in the fourth quarter of 2011 will be matched in the first half of 2012. In addition to the temporary nature of some of the recent improvement, there are significant impediments to a robust recovery that I’ll list briefly. First, global financial and economic conditions may impede faster growth. In particular, growth in the euro area is slowing and a recession may be underway with adverse direct and indirect effects on the U.S. economy. Second, fiscal policy has become more contractionary. Despite the extension of the payroll tax cut, the stance of federal fiscal policy has tightened and employment and spending by state and local governments continues to decline.

We’ve also observed community banks participating with other banks on real estate lending, in part to better manage real estate concentrations. Community banks are also seeking to differentiate themselves from their larger competitors by marketing their more individualized customer service. In regard to liquidity, a number of community bankers have noted the influx in public deposits and the challenges associated with putting these deposits to productive use. Finally, although there has been a material improvement in asset quality over the last several years, it will be important for senior management to continue to be prudent in their underwriting practices and in monitoring any emerging risks in their portfolios. The economy continues to show a strong trajectory, but of course we need to remain alert to any potential slowdown. As Second District community banks grow in line with their national peers, we are encouraged by the increased reliance on core funding and strong asset quality. We will, however, continue to monitor developments that may pose a risk to the safety and soundness of the financial and banking system. Fintech A second major change for community banks—like all banking institutions—is the potential competition from new “fintech” firms. Since 2012 there has been over $ billion in US-based fintech investments including online lending-based platforms, capital markets, and payment and 2 2/4  BIS central bankers' speeches  settlement services.2 By offering traditional financial services to customers through new, innovative platforms and channels, these fintech firms pose a challenge to traditional banking business models.
In two reports 6, representatives of the private sector, the European Commission and the European Central Bank presented concrete recommendations on how, for example, regulatory barriers could be broken down. Almost 12 years have now passed since the second report was published and some of these proposals and recommendations have still not been implemented. For example, we still do not have an EU-wide framework for the treatment of interests in securities. Drawing once more on the comparison with the United States, a cross-border securities transaction costs at least ten times as much in Europe as it does in the United States. I think that makes it clear that Europe’s economy has a lot to gain from dismantling the relevant regulatory barriers as part of a capital markets union. 5  At that time with the caveat: “to the extent necessary for the proper functioning of the Common Market”. 6  http://ec.europa.eu/internal_market/financial-markets/docs/clearing/first_giovannini_report_en.pdf. http://ec.europa.eu/internal_market/financial-markets/docs/clearing/second_giovannini_report_en.pdf. 4  BIS central bankers’ speeches  In addition to harmonised regulation for securities, we should also seek to implement a harmonised legal framework for crisis management. The Council Regulation on cross-border insolvency proceedings has provided a common regulatory framework governing, for example, jurisdictions and the recognition of court judgements. But within this framework, there are substantial national differences, such as regarding the extent to which various stakeholders are protected in the event of an insolvency. In my view, a single resolution framework for non-banks, i.e.

As with the StabFund, we are convinced that – here too – we must take these risks in order to be able to avert other, even greater risks. Extraordinary times call for extraordinary measures. The financial market crisis has confirmed our belief that the SNB must have a strong capital base and a broad range of monetary policy instrument to ensure its capacity to act at all times. Chart 1. Effective exchange rate for Swiss franc Export-weighted against 24 trading partners, nominal, 1.2007=100 115 112.5 110 107.5 105 102.5 100 97.5 95  2007  2008  2009  Source: SNB Markets Analysis Platform  Chart 2. EUR/CHF and exchange rate volatility Implied volatility EUR/CHF 3M  EUR/CHF (rhs)  % 15  1.65  12.5  1.6  10  1.55  7.5  1.5  5  1.45  2.5  Jul  Aug  Sep  Oct  Nov  Dec Jan 09 Feb  Mar  Apr  May  Jun  1.4  Sources: SNB Markets Analysis Platform, Bloomberg  4  BIS Review 77/2009  Chart 3. Swap spreads Swap spreads Pfandbriefe Swap spreads financial  Swap spreads industrial Swap spreads utility  bp 300 250 200 150 100 50 0 –50  Jul  Aug  Sep  Oct  Nov  Dec Jan 09 Feb  Mar  Apr  May  Jun  Sources: SNB Markets Analysis Platform, Credit Suisse  Table 1.
But pure extrapolation from this recent past may not be appropriate due to the possible existence of threshold effects. The persistence of the current inflation shock also entails the serious risk that inflation expectations could become unhinged and that, as a result, our credibility as central bankers could be significantly damaged. It cannot be forgotten that there is a two-way relationship between credibility and effectiveness of monetary policy. Effectiveness depends on the credibility of central banks. But, no less importantly, the credibility of central banks depends critically on the effectiveness of the monetary policy that they have applied. The conduct of monetary policy has also been complicated over the recent period by sharp and abrupt moves in exchange rates, which might signal that the long-awaited correction of global imbalances is not proceeding in as orderly a fashion as we would have hoped. Against this background, the Governing Council is monitoring exchange rate markets closely. And, in this respect, the President of the ECB has repeatedly indicated that excess volatility and disorderly movements of exchange rates are undesirable for economic growth. BIS Review 132/2007  7  In summary, monetary policy is operating in an environment of heightened uncertainty. This is the result of the materialisation of some risks that we have been pointing out for a long time. First, the potential consequences of the turmoil in financial markets, which go beyond a sound reappraisal of risks and a less dynamic economic outlook. Second, renewed inflation pressures associated with the explosion of oil and commodity prices.

Some would say that part of the answer would be to cap particularly retail interest rates charged by banks. Do you see that as part of the answer? This is a long-running debate here. Even though the ECB rate is quite low, when you look across Europe, the mortgage lending rates in Ireland are higher. The ECB has provided a legal opinion on the draft law, and it highlights, in line with the Central Bank of Ireland analysis, that a policy that caps the interest rate runs the risk of having an unintended effect, which is that it will deter entry. The Irish banking system is quite concentrated. Many people would like to see more banks enter to compete and, through competition, lower the rates. If you have a legal approach, where there is a legal regulation capping the interest rate, then the incentive for foreign lenders to come in is less. We have this long-running debate about the contribution of the quite high default risk in Ireland being built into those higher rates. I understand the intent: trying to make housing more affordable is a big issue. But personally, and in terms of the official advice of the ECB, we think capping interest rates is not the advisable way to go. You don’t even see a role for it, say, if you were to consider the housing situation to be an emergency scenario; that it would be a temporary measure given to the central bank? Well, again let me come back to the basics here.
Figure 9 Latin America (*) 2017 growth outlook  Headline inflation  (annual change, percent)  (annual change, percent)  5  5  11  11  4  4  9  9  3  3  7  7  2  2  5  5  1  1  3  3  0 mar.15 Mar.15  0  1  1  mar.16 Mar.16 Argentina  mar.17 Mar.17 Brazil Chile  14 Colombia  15  16 Mexico  17 Peru  (*) As per responses to Bloomberg survey. Source: Central Bank of Chile. 17  Table 2 International scenario 2015  2016 Mar'17 Report  Terms of trade Trading partners' GDP World GDP at PPP World GDP at market ex change rates United States China Eurozone Latin America (excl.

16  Table 1 External scenario (annual change, percent)  2015  GDP Domestic demand Domestic demand (w/o inventory change) Gross fixed capital formation Total consumption Goods and services exports Goods and services imports Current account (% of GDP) Gross national savings (% of GDP) Nominal gross fixed capital formation (% of GDP)  2016  2017 (f)  2018 (f)  Mar'17 Report  Jun'17 Mar'17 Jun'17 Report Report Report  Mar'17 Report  Jun'17 Report  2.25-3.25 4.1 2.8 3.0 2.8 2.7 7.2 -2.1 20.5 22.6  2.5-3.5 3.9 2.9 3.0 2.9 3.9 6.6 -1.9 20.3 22.2  2.3 2.0 1.7 -0.8 2.4 -1.8 -2.7 -2.0 21.4 23.6  1.6 1.1 2.0 -0.8 2.8 -0.1 -1.6 -1.4 20.2 23.2  1.6 1.1 2.0 -0.8 2.8 -0.1 -1.6 -1.4 20.2 23.2  1.0-2.0 1.0-1.75 2.3 2.5 1.9 1.8 0.2 -0.9 2.5 2.6 1.6 0.7 4.3 4.3 -0.9 -1.0 20.3 20.2 22.5 22.1  (f) Forecast. Source: Central Bank of Chile.
Moreover, as our population is ageing fast, we should all start to save for retirement now, and I strongly encourage banks to develop and promote more products to satisfy this growing customer segment. There is also a growing class of older people who have too little knowledge or weaker capabilities to manage their own financial wealth after retirement. This is another area that banks can help. For SMEs, which contribute significantly to employment in Thailand, we need to work together to promote their access to funding. This calls for a joint effort between the government, banking sector, and SMEs to improve available information and its flow. In this regard, as bankers, such as guests here today, are close to the SMEs, see their account movements, and provide financial advice you will play a key role here. I believe there are a lot of rooms for banks to provide funding for SMEs, both directly and indirectly, perhaps through more innovative products that can benefit from banks’ own information and more collaboration between banks. Equity financing, including venture capital, for SMEs will also be promoted in our plan. In my opinion, innovation and entrepreneurship of SME, which need supports from banks, is one of the most important drivers for Thailand to overcome the middle-income trap. As for large corporates, Thai conglomerates now operate in multiple countries, and as their businesses grow, they would require more cross-border services to meet their needs.

To that end we have raised required reserve ratios to control the rapid credit expansion by restricting the supply of loanable funds. Another issue we considered is lengthening the maturity of capital inflows. This is important for improving the quality of capital account, limiting maturity mismatches, and avoiding exchange rate misalignments. To this end, we lowered the policy rate and widened the corridor between overnight borrowing and lending rates so as to create some extra volatility in the short-term interest rates. Although it looks quite complicated at first sight, the framework we adopt in spirit is not significantly different from the conventional inflation targeting framework. The only difference is that, previously our policy instrument was the one week repo rate, but now our instrument is a “policy mix”—which consists of a combination of short term interest rates, reserve requirement ratios and interest corridor. We seek to use these instruments in right combination in order to cope with both inflation and macro-financial risks. The monetary policy stance in this framework is not only determined by the path of policy rates, but as a mixture of all policy instruments outlined above. Just like the conventional inflation targeting framework, the policy is forward looking and contingent on the economic outlook. The exact  4  BIS central bankers’ speeches  setting of the policy mix depends on the factors affecting price stability and financial stability. Although it is too early to assess the success of these policies, initial impact so far seems promising.
Our estimates of the potential output level have increased in pace with the emergence of new information. Our best guess is nevertheless that the output gap is now positive and widening. Low inflation combined with high growth in output and employment is therefore a challenge to monetary policy. 2  BIS Review 49/2006  Even though economic growth has been strong over the past 15 years, business cycles have fluctuated. A pronounced upturn in the years from 1993 to 1998 was followed by a period of more moderate growth and a mild recession in 2002 and into 2003. Since summer 2003, there has again been a clear upturn in the Norwegian economy. Wage developments reflect and influence business cycles. Strong employment growth in the 1990s resulted in a rise in labour costs, which in turn had a dampening impact on growth. Moderate wage growth in recent years has been accompanied by a strong cyclical upturn. So far, the upturn has been marked by strong growth in output, with an ample supply of labour and unusually low inflation. For a longer period employment showed a smaller rise than in previous cyclical upturns, partly reflecting the decline in sickness absence since summer 2004 and solid growth in productivity. Employment showed a turnaround last autumn and the number of persons employed is now increasing sharply. Unemployment is falling rapidly.

Such risks may be particularly relevant in the context of close ownership links between banks and funds. For example, banks in certain circumstances may feel a need to step in to protect their brand. To tackle this issue, the Basel Committee on Banking Supervision (BCBS) has published guidelines on step-in risk that would require banks to self-assess and report their material step-in risk exposures to supervisors, who should have the possibility for supervisory action if deemed necessary.8 We also need to work on the different layers of interconnectedness between ETFs and their counterparties. In our view, the rapid growth of ETFs, coupled with their potential to transmit and amplify risks to financial stability, warrants further evaluation of regulatory action. 9 This may include enhanced rules to limit counterparty risk exposure of ETF investors, and measures that provide more transparency around ETF liquidity provision. The enhanced microprudential framework for the European fund sector is a key element in boosting the resilience of the financial system overall. But the sector’s rising role in shaping the financial cycle, and the potentially systemic nature of its risks, require a more ambitious approach. We should aim at extending the macroprudential framework beyond banks to encompass the asset management sector.10 In particular, we need to equip macroprudential authorities with the necessary tools to address systemic risks both ex ante and ex post. The recent ESRB recommendation to address systemic risks related to liquidity mismatches and leverage in investment funds11 is a crucial step towards this goal.
Closing remarks for the 13th edition of the Regional Seminar on Financial Stability Florin Georgescu, First Deputy Governor of the National Bank of Romania Bucharest, September 13, 2019 Distinguished Guests, Ladies and Gentlemen,   We have reached the end of the 13th edition of the Regional Seminar on Financial Stability and it is my pleasure to provide some closing remarks.  After two days of interesting presentations and intense debates, I will try to summarize some of the ideas presented here.  In this year’s edition of the Financial Stability Seminar, whose topics was “Inclusion and Financial Stability”, we have discussed about: o Financial inclusion and income inequality o Correlation between macroprudential policy and financial inclusion o Access to banking financing o Climate-related risks All these were discussed in the context of financial stability.  Some of the subjects, like macroprudential policy and its effects, were discussed in-depth these days, but also in the previous editions of the seminar. And that’s how it should be. This policy represents a key element in ensuring financial stability.  Macroprudential policy, according to ESRB recommendation, has ”the ultimate objective to contribute to the safeguard of the stability of the financial system as a whole, including by strengthening the resilience of the financial system and decreasing the build-up of systemic risks, thereby ensuring a sustainable contribution of the financial sector to economic growth”.

Available at: https://www.creditsuisse.com/corporate/en/media/news/articles/media-releases/2012/07/en/42035.html 2  All speeches are available online at www.bankofengland.co.uk/news/speeches  2  The Bank of England values diversity for three reasons. First, it is the right thing to do; a public institution should reflect the people it serves. Second, diversity can build the trust required to deliver our remits, as people are more likely to trust people they recognise, reducing misperceptions that we are experts making esoteric decisions in ivory towers for the benefit of others.5 Third, diversity leads to better decision-making, more creative thinking and reduces the risks of groupthink and bias.6 This last point is critical. Almost all decisions in finance are taken under uncertainty, making it especially important that decision makers are exposed to a range of views, and engage in open debates with people whose perspectives challenge the prevailing wisdom. Articulating why diversity and inclusion are important has helped the Bank move the dial. When I joined the Bank, only 17% of senior managers were women, so we set an ambitious target to reach 35% by 2020. The Bank is on track to achieve this: today, 32% of senior management are female, considerably above the 14% industry average. Our pipeline of future leaders also looks healthy: 46% of colleagues below senior management are women. This didn’t just happen. Reaching this point has required a deliberate, concentrated effort throughout the organisation. The power of organisations like the WIBF is that they help such approaches permeate through the industry.