samchain/econo-pairs-v1 huggingface dataset:
It is at its heart about a few regulators getting together with the top management of the firms and saying this is what we would plan to do to you if the only alternative was liquidation, and working out how to operationalise that strategy. That is something the key countries, the key governments, have every reason in the world to co-operate on. In the FSB, we are putting in place a process where the most senior officials will talk to each other to reassure themselves on the resolvability of globally significant firms. From that will follow detailed operational planning, and requirements to remove impediments to executing resolution strategies. And flipping from my global hat to my domestic hat, at the Bank of England we have been working closely with the FDIC on how we would operationalise resolution strategies in a cross-border setting. You shouldn’t doubt that this will happen. Don’t listen to siren voices who question our capability or will. Financial protectionism and the FSB agenda Which brings me, in conclusion, to a broader point. The international authorities are committed to maintaining global finance – global capital markets, the free flow of capital across borders. We are not trying to create a new order that incorporates financial protectionism. On the contrary: the balkanisation of finance would cut against the extraordinary historical changes towards a much more globalised real economy. But allowing a fragile financial system to persist would also be a threat to globalisation.

More relevant to today’s conference, following the FSB’s recent Plenary meeting in Tokyo we announced that in the next few weeks we will issue a consultative paper on resolution planning and, in particular, on resolution strategies. The paper, drawn up by a subcommittee led by Christine Cumming of the New York Federal Reserve Bank, will cover three areas. The first is Recovery Triggers and Stress Scenarios used in recovery planning. Firms need to ensure that triggers are not linked mechanically to metrics that lag behind their true financial condition – a problem with some previous earlyintervention frameworks. Recovery actions must start sufficiently early. But care must be taken to avoid markets overacting to the fact of such actions being taken. That is not easy. Second, the consultative paper will outline a possible framework for national authorities to use when identifying the critical functions and support services of firms that need to be sustained in distressed conditions. What matters here is focusing on those services that are vital to the economy. The third, and most important, area of consultation is about the development of Resolution Strategies and Operational Resolution Plans. This guidance aims to capture the main issues that authorities should address.
26.10.2020  The banking sector and the challenges posed by the pandemic III Foro Banca de El Economista: The present and future of the financial system Pablo Hernández de Cos Governor  *English translation of the original speech in Spanish  Ladies and gentlemen, good morning: I should like to start by thanking the organisers of this event for inviting me to participate in the III Foro Banca. Allow me also to mention in relation to the content of my address that, as a member of the Governing Council of the European Central Bank (ECB), I am required to observe the so-called “quiet period” preceding meetings at which monetary policy decisions are to be taken. Accordingly, my reflections should not be interpreted as indicating the monetary or economic outlook. In the context of the COVID-19 pandemic and its already significant impact on the economy, the specific challenges facing the banking sector, both in Spain and internationally, are particularly relevant, given the role it plays in supplying financing to the productive sectors of the economy and households. It is evident that the crisis generated by the pandemic has intensified the credit, market and operational risks faced by the banking sector. It is also evident that the improvements made by the sector over the last decade, as regards the quality of its balance sheet and its solvency levels, have placed it in a better position to absorb this crisis and to continue supplying the financing that the economy requires.

5  Central Bank of Chile 29 June, 2017  Slide 8  Insurance companies coverage: international comparison Penetration of the insurance industry, 2015 (direct gross premiums as a percent of GDP) 40 35 30 25 20 15 Life  10  Non-life  5 LU IE KR US DK UK FR SZ JP IT SE PT DE BE AU NO AT FI ES NL SI IL CL CA NZ EE CZ BR PL AR SK CO IS HU LV MX GR PE TR  0 Source: OECD. [SLIDE 9] The development of finance in developed countries of course didn’t prevent them from getting into a big crisis a decade ago. But if you think that was big you should consider crises in developing countries, like the debt crisis of the early 1980s, the Tequila crisis of 1994 or the economic and political crisis in Argentina in 2001. [SLIDES 11 and 12] They devastated the entire financial system of those countries, evaporated or froze deposits, brought countries into deep recessions and massive unemployment and were only resolved after massive bailouts and debt write offs.
That the price of electricity for consumers can range between minus one cent and 400 cents per kWh, as we have experienced in Estonia, is a concern from the perspective of price stability. Governments are therefore facing important choices when designing appropriate policies for the energy sector. Looking beyond monetary policy, fiscal policy can have both a direct and an indirect impact on inflation. As I mentioned earlier, one of the reasons why inflation rates vary so widely between the countries of the euro area is that countries may at any moment be at a somewhat different point of the economic cycle. The Baltic countries for instance felt a more limited impact from Covid-19, and their subsequent recovery was strong. The strong cyclical position of the Baltic countries was also one of the key causes of the acceleration in inflation. As common monetary policy cannot solve cross-country differences in cyclical positions, fiscal policy must play a role. In countries where strong domestic demand is causing high inflation, a tighter fiscal policy can help reduce the pressure. 6/8  BIS - Central bankers' speeches  Governments also use price controls and subsidies for energy prices directly to keep prices under control, but do so in different ways. Price controls are usually applied when market mechanisms fail. If prices are high because markets are malfunctioning, then price controls allow the authorities buy time to fix the mechanisms that set market prices.

3 See for instance Bankowski, K., O. Bouabdallah, C. Checherita-Westphal, M. Freier,  P. Jacquinot and Philip Muggenthalerthe: "Fiscal policy and high inflation", ECB Economic Bulletin, February 2023. 4 See Sgaravatti, G., S. Tagliapietra, C. Trasi and G. Zachmann: "National fiscal policy  responses to the energy crisis", Bruegel Datasets, February 2023. 5 See for instance Enarch, C.: "What European countries are doing about windfall profit  taxes", Oct. 2022. 6 See ECB: "Eurosystem staff macroeconomic projections for the euro area", Dec. 2022. 7 Staehr, K., O. Tkaevs and K. Urke: "Fiscal performance under inflation and inflation  surprises. Evidence from fiscal reaction functions", forthcoming working paper from Eesti Pank. 8/8  BIS - Central bankers' speeches
This mix between an expansionary budgetary and fiscal policy during a period of abovepotential economic growth and the worsening global market sentiment towards emerging economies in general can enhance volatility and affect financial stability via several channels: the interest rate, the exchange rate, the inflation rate. The advance in household indebtedness can cause these risks to pass through from the macroeconomic level to the microeconomic level for debtors. Last years’ environment 5  marked by low interest rates and sustained increase in new loans favours the build-up of possible vulnerabilities concerning the sustainability of the level of indebtedness through both banks and NBFIs (Figure 26), especially for lower-income debtors. The fact that the great majority of the stock and flow of housing loans and corporate loans are variable-rate loans (Figure 27) is an aggravating factor for financial stability in the context of the start of a new interest rate hike cycle – for external reasons, domestic reasons or for a combination of reasons. The fact that the advance in household indebtedness occurs concurrently with the high economic growth rates indicates the problems of economic growth: it is unbalanced and it leads to deeper inequality between social groups. Debt service-to-income ratio for debtors earning minimum to average wage economy-wide stands higher than that for debtors earning double the average wage, notably among borrowers with housing loans (Figure 28).

Nevertheless, the developments in the twin deficits (the fiscal deficit and the current account deficit) are a cause for concern, as they signal exactly the abovepotential growth of economic activity at present, which may jeopardise medium-term financial stability. The expansionary fiscal policy pursued starting with 2016, by applying the 2015 Tax Code, has carried on in 2017, causing the fiscal space gained in 2010-2015 to be exhausted (Figure 23). The current account deficit-to-GDP ratio, though well below its pre-crisis levels, has posted divergent developments from those in the other EU emerging economies (Figure 24). The structural deficit significantly exceeded the 1 percent mediumterm objective in 2016 and is estimated to stand at 3.9 percent in 2017 (Figure 25). As a matter of fact, the European Commission has included Romania into the Significant Deviation Procedure from the medium-term objective. When actual GDP growth exceeds potential growth, it is recommended to make savings for fiscal consolidation reasons. Additional income from above-potential economic growth allows for the financing of extra spending in the short run only. Yet, this expenditure is of a permanent nature, while income is temporary, as it will decline, ceteris paribus, when the economy returns to normal (potential) growth rates. Therefore, above-potential growth conceals a structural deficit larger than the cash deficit. Today’s structural deficit is, however, the cash deficit of tomorrow which will need to be financed under circumstances that may turn unfavourable for emerging economies.
It concludes that the effects of (i) mandatory central clearing of standardised OTC derivatives, (ii) margin requirements for non-centrally cleared OTC derivatives and (iii) bank capital requirements for derivativesrelated exposures will result in overall net benefits for economic growth. I have spoken a lot about many technical issues. Let me therefore conclude by reminding you about the ultimate objective of this reform: to rebuild confidence in the financial system, which has been shattered in the recent years. Not only among market participants but in our societies as a whole, a good deal of trust has been lost. It is our shared responsibility that our societies regain this trust. I wish you, for the rest of today and tomorrow, a successful and fruitful debate and exchange of views. Thank you very much for your attention. BIS central bankers’ speeches  7

INTERNATIONAL MONETARY AND FINANCIAL COMMITTEE  the IMFC Deputies meeting Tuesday, September 20, 2022, Statement by Mr. Mouatassem BOUDIAF Deputy Governor Bank of Algeria On behalf of Islamic Republic of Afghanistan, Algeria, Ghana, Islamic Republic of Iran, Libya, Morocco, Pakistan, and Tunisia Session 1 Global Economic Outlook Thank you Chair. I also thank the First DMD for the lucid presentation.  Since our last meeting, the global economy continues to face strong global headwinds, triggered by the cumulative negative spillovers of the two overlapping crises. Risks to the global outlook feared in April, and even as late as July, have materialized, and the outlook continues to be subject to unusually high downside risks, due to a number of global economic and political factors. We are also facing a global inflation crisis reflecting the consequences of the unprecedented policy support during the pandemic and the pandemic’s lingering impact on supply chains. In most cases, price pressures predate the conflict in Ukraine, but were exacerbated by direct and indirect impacts of the war.  Taming the global inflation would require a collaborative approach and coordinated policy action. It is understandably a delicate balancing act and policy slippage, in either direction, would potentially have severe consequences, including a prolonged global recession in case of over-tightening, that we can ill afford. In fact, the global tightening of financial markets and the sharp real appreciation of the US dollar are already having pronounced adverse impact on EMDEs through capital flows, currency depreciation and debt distress.
In order to succeed in the internet world, banks will need to ensure that they have the products that customers actually want, and the ability to tailor these to individual customer needs. But mass customisation of this kind requires enhanced management skills as well as investment in the necessary human and technological resources, including customer relationship management systems. Smaller banks may have to recognise that it is going to be difficult to achieve this on their own. I will not go into further detail as to how the banks should react to the changing environment because that will no doubt be covered by other speakers. Let me turn instead to what should be the response of the regulators. In doing so, I will be drawing upon our experience in Hong Kong. But I think that the same trends will be evident elsewhere in the Region. The first thing we have decided is that we have got to carry on the process of deregulating the banking system. In particular, Hong Kong has had controls on the interest rates that banks may offer on deposits since 1965. We believe that this is incompatible with a modern, competitive banking system, and has served to hinder innovation on the liabilities side of the balance sheet. We have been dismantling the controls over the last few years, and now all time deposits have been deregulated.

At the same time, euro area governments need to further strengthen the macro-prudential framework at the national and the European level. As you know, the European Systemic Risk Board is developing tools to identify and address potential future sources of systemic risk in the EU. And the three new European supervisory authorities – for banking, for insurance and occupational pensions, and for securities and markets – are strengthening our focus on spillovers within the EU’s financial system. However, one important element in the framework for macro-prudential supervision in the euro area is still missing. We still have no clear mechanism in place to deal with the systemic risk emanating from large cross-border financial institutions. We should intensify ongoing work on the establishment of a mechanism for the resolution of bank failures at the European level. This brings me to the third challenge that euro area governments face: the elimination of remaining institutional deficits in the euro area governance framework. European governments have made considerable progress on this front. In particular, they have reinforced the Stability and Growth Pact, with more “automaticity” and less room for discretion in the application of the preventive and corrective arms. In addition, the European fiscal compact will ensure strong national budgetary frameworks in order to facilitate compliance with the government’s obligations under the Stability and Growth Pact. And EU Member States have introduced a surveillance mechanism that aims to prevent and correct macroeconomic imbalances within the EU. It is now essential that the new governance framework is implemented to the letter.
But this would obviously have to be a temporary solution, for a period of no more than a year or so, and would also have to be tied to a strict timetable for the adoption of EMIR 2. We now hope that the European institutions manage to finalise this “security clause” as soon as possible. Our primary focus of attention today would then concern the protection of customers that have taken out contracts with UK firms, particularly in the insurance sector. It is of course the responsibility of the insurance industry itself to actively prepare for the consequences associated with the loss of EU passporting rights. And the majority of the major players have taken the necessary steps. Some of them have already been granted authorisations by the ACPR which is also currently assisting more than 50 institutions from all sectors with the relocation of their activities. But we are keeping an especially close eye on the small and medium-sized players, particularly the smaller investment firms, as well as electronic money and payment institutions. 1/3  BIS central bankers' speeches  An ACPR study conducted in July 2018 found that only 24% of investment firms and 22% of electronic money and payment institutions operating under the freedom to provide services regime wished to obtain authorisation by the end of 2018. We must therefore be ready to deal with situations where UK firms may not have already transferred their activities.

This kind of flexibility is explicitly provided for in the new SFBC capital regulation. The orders already issued by the SFBC relating to the reform of the capital regulation state that the big banks will not be required to comply with the higher risk-weighted capital ratio and the leverage ratio until 2013. However, if the situation on the capital markets or the individual earnings position of the big banks make it impossible to achieve the objectives by 2013, it may be possible to defer this date. The long time period allowed for implementation is crucial. It will prevent the new regulation from having a procyclical effect. In the short term, priority will clearly be devoted to managing the crisis. In the area of liquidity, the SFBC and the SNB are in the process of drawing up a new regulation. The basic objective is to obtain higher liquidity buffers that better reflect the great complexity of liquidity risks. When calculating liquidity requirements for various crisis scenarios, the authorities use internal model calculations by the banks. In order to ensure the comparability and transparency of the internal calculations, the new regime foresees certain standardisations. The conclusion of the project is scheduled for early 2009. Both regulatory measures – capital regulation and liquidity regulation – are in line with proposals made by the Financial Stability Forum and the G20 action plan. The reforms are also compatible with the strategy of the Basel Committee on Banking Supervision for implementing the lessons from the crisis.
Any risk management framework that is driven by the correlation structure of short-term moves alone would most likely be proven too rosy in the event of clusters of defaults. The issue is that the correlation structure locally may be very different than that in the tail of the distribution. Of course, there  2  When the Bank of England takes collateral, it is solely to guard against the risk of default and so all correlations in that state of the world are relevant to what collateral is taken and the haircuts applied. See Breeden and Whisker, 2010, “Collateral risk management at the Bank of England”, Quarterly Bulletin, Q2, pp 94–103. 2  BIS central bankers’ speeches  are many practical problems in analyzing what could happen statistically in the tails, since these scenarios are, by definition, rare and the pay-offs may be non-linear3. Taking this second example a little further, assume that most big banks follow similar strategies. Most banks will then end up with a more diversified credit portfolio than if each bank was only holding the loans it originated itself, but they may also end up with similar portfolios of risk. In such a scenario, the system can easily absorb small shocks, but because of the diversification, a really big shock may threaten to bring down all of them instead of just the ones that happened to have originated the most problematic loans.

Fahad Almubarak: Brief review of financial developments in Saudi Arabia Speech by His Excellency Dr Fahad Almubarak, Governor of the Saudi Arabian Monetary Agency (SAMA), marking the Seventh Anniversary of Blessed Allegiance Pledge to the Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz, Riyadh, 17 May 2012. *  *  *  Saudis celebrate on the 26th of Jumada II 1433H (May 17, 2012) the Seventh Anniversary of the blessed allegiance pledge to the Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz. The celebration is a true image of loyalty to the Custodian of the Two Holy Mosques, who is faithful to his nation’s interests. It is based on well-established bases, in the forefront of which are the tributes of our wise leadership such as the great keenness on the welfare of citizens and the enhancement of the development process. It is difficult to enumerate the achievements of the Custodian of the Two Holy Mosques in a few words, but, however, I will touch upon some of them.