samchain/econo-pairs-v1 huggingface dataset:
Banks’ experiences during the crisis, structural changes in the banking system, and post-crisis changes in financial regulations will likely increase the level and variability of the demand for reserves relative to before the crisis, but we don’t currently know the precise shape and position of banks’ demand curves. The FOMC has said that it expects to learn more about the underlying demand for reserves during the process of balance sheet normalization. In addition, the FOMC will need to decide what type of operating regime it wishes to run in the future—namely, whether it believes it will be efficient and effective continuing to use a reserve-abundant operating system (albeit with less abundance than seen at present) or returning to a reserve-scarce system, as the Fed used before the crisis. In sizing up the balance sheet, policymakers will also need to take into account several important non-reserve liabilities that are largely outside the immediate direct control of the Fed.15 On the asset side of the balance sheet, the normalized size of the securities portfolio is one whose level is consistent with the balance sheet’s longer-run trend.

It initially relied on outside investment advisors to support its first purchase program, before eventually bringing trading operations in house, and then later developing capabilities to conduct auctions on its proprietary auction platform.44  Conclusion The Federal Reserve and other central banks initially proceeded with asset purchases in a cautious way given that the tool was new. However, I believe we have learned that the benefits are notable and the costs likely less than feared. Moreover, U.S. fixed income markets were able to withstand more sizable purchase operations than we initially anticipated, and we now know that we can successfully maintain interest rate control with a large balance sheet as we raise rates. This experience could give policymakers greater confidence in using this tool to provide additional monetary policy accommodation in future zero lower bound episodes, and give market participants greater confidence in the effectiveness of the tool in mitigating the zero lower bound. With evidence suggesting the neutral fed funds rate has fallen notably, we should continue to absorb lessons from our and other central banks’ experiences. In particular, we will need to consider the importance of communications, how to organize an operating regime that transitions smoothly, and how to maintain operational readiness. As we normalize the Federal Reserve’s balance sheet, we continue to proceed cautiously given our lack of experience with this process.
The focus on the Internet as a distribution channel is eroding boundaries between financial service providers and technology firms. Banks are increasingly providing technology services to customers, such as providing account reconciliation software. Likewise, technology firms are making inroads into services once thought the domain of banks and brokerage firms, such as financial planning or paying  BIS Review 32/2000  2  bills. Banks and brokerage firms are also partnering with Internet “portals” such as Yahoo! and America Online to offer services to Internet users. It is still far too early to determine just how, or to what extent, the Internet will change the financial services sector. For instance, it is important to note that, with few exceptions, most banks view the Internet as an important supplementary distribution channel and not as a replacement for branches that give you a physical presence in the communities you serve. Moreover, the true value of cross-selling remains uncertain, and the ability to collect and use personal data will have to be balanced against the demand for more protection of consumer privacy. On the commercial side, the largest institutions are actively pursuing the emerging “business-to-business” e-commerce markets, but the experience there is still too fresh to offer much insight into how those markets will evolve.

We must ensure that banks’ lending decisions continue to reflect a disciplined approach, one that matches a clearly defined risk appetite - and a well understood risk capacity - with a real sense of the returns that are necessary to cover that risk. I see such a supervisory approach as increasingly essential to counterbalance the pressures of the fiercely competitive markets in which banks are operating. Maintaining sound credit standards is one of several significant challenges banks currently face. Another is that the spectacular rise in equity values and mutual funds has put competitive pressure on the core deposit base. As these lower-cost funds have been replaced with funding from the capital markets, principally commercial paper, pressures on interest margins and liquidity have intensified. Such funding shifts raise the important risk-management questions of how well institutions will function under stressful conditions, and whether enough has been done to maintain adequate liquidity. The decline in stable core deposits has also been coupled with a steady rise in average loan maturities, indicating a growing exposure to liquidity and interest rate risk. Another challenge is to maintain pricing that appropriately reflects risk amid fierce competition - from other banks and from non-banks. Some institutions are responding to these pressures by moving lower on the credit-quality spectrum in a reach for higher nominal yields. Too many lenders learn too late the difference between nominal and risk-adjusted yields.
The chain of events is familiar to all of us: As soon as a small central bank applied its policy instruments in an effort to cool down the economy – such as by raising interest rates – it would open the floodgates to a tidal wave of capital inflows that would cause the economy to flounder. And by the way, in this context nearly all central banks worldwide are considered small, apart from the US Federal Reserve and the European Central Bank. 2/5  BIS central bankers' speeches  It is important to bear in mind that the problem is created not only by foreign exchange market instability; capital inflows can overwhelm the financial system and create credit and asset bubbles like those we saw in Iceland in 1998–2000, and again in 2004–2008. And at some point in time, this capital will want to go back home – sometimes with no advance warning – leaving ruin in its wake. Therefore, it should come as no surprise that, in open economies with independent currencies, currency crises and banking crises usually go hand-in-hand in what are called twin crises. Hélène Rey proposed four options to create scope for monetary policy: 1. Targeted capital controls, to create space for independent monetary policy without disturbances from abroad; 2. International coordination of monetary policy, particularly the policy of the Fed and other large central banks; 3. Steering monetary policy transmission by applying macroprudential tools in order to control credit growth and leverage; 4.

The senior management of the Central Bank protested vehemently against the separation, and I would like to quote from a letter on the topic, sent by the Board of Governors to the then Minister of Commerce in early 1998: “The Board of Governors is of the opinion that there are overwhelming arguments in favour of the Central Bank’s continued supervision of the activities of deposit institutions, other credit institutions, and securities market entities. The Board of Governors wishes to emphasise in particular that such supervision is a normal and appropriate part of the Central Bank’s activities. This supervisory role benefits just as much from its partnership with the Central Bank as various other Bank activities do from partnering with banking supervision.” If there is any single factor that foreign experts have identified as the main cause of the 2008 financial crisis, it is the fact that responsibility for and supervision of the financial system were spread across a large number of ministries and institutions, with the result that no single party had an all-encompassing overview, no single party was actually accountable, no single party had adequate power, and no single party had enough muscle to intervene. Actually, in other countries where financial supervision had previously been hived off from the central bank, the two functions were reunited after the 2008 crisis. The Ministry of Commerce was united with the Ministry of Finance for the same reason: to enhance the punching power of financial and economic administration.
This sort of finance, called “Development Projects”, is mainly used to finance SME-s’ credit needs accompanied with technical assistance. The credit line funds are given from donors as soft loans and the government allocates them to banks to be used as commercial loans without harming the banking practice and the use of own bank capitals. As a consequence, a larger part of financial crediting sources is converted into commercial funds. Today, the microfinance institutions are operating as self sustained institutions with an increasing customer base. In the last 5-7 years several other institutions have been focusing on microfinance. Currently we have 133 individual savings and loans associations organized under 2 Unions, which operate in rural areas. The number of their members is around 18 thousand and the stock of their outstanding loans is around 12 million euro. In addition, we have 7 microfinance institutions with total assets amounting to 50 million euros, and loans of 43 million euros. Banks are also getting more active in microfinance despite their little interest so far. This can be explained with tightening competitive conditions in the market and the need to explore new investment opportunities. Now we see an increasing amount of credit going to small businesses, which often helps them in the initial stages. Banks are particularly active for the microfinance in the urban areas. In fact, one of the banks has initially started to operate as a microfinance institution. It still holds a respectful position in this market segment, particularly in the urban areas.

Yves Mersch: Euro clearing - the open race Keynote speech by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the Frankfurt Finance Summit, Frankfurt am Main, 29 May 2018. * * * During the 2008 financial crisis, counterparty risks became infamous. Obviously, every finance textbook deals with the risk that, when you enter into a financial contract, the other party may not fulfil their part of the agreement and may even default on their obligation. But the failure of Lehman Brothers and the large losses suffered by AIG in over-the-counter derivatives markets revealed that there were counterparty risks throughout the entire financial system. This was due to the domino effect of counterparty defaults in leveraged products. As a response, G20 leaders agreed at the 2009 summit in Pittsburgh to move all standardised derivatives contracts to clearing through central counterparties (or CCPs). CCPs address the weaknesses exposed during the crisis by insulating counterparties from each other’s default risk. They specialise in managing counterparty credit risk, and by doing so they reduce the risk of defaults spreading across the financial system. But CCPs can only make the financial system safer if they are safe themselves. In the European Union, they are subject to a comprehensive regulatory framework. The European Market Infrastructure Regulation (or EMIR) ensures that they hold robust resources to deal with financial distress.
in  ad Abro  Sources : Statistics Norway and the Norwegian Central Securities Deposit SG Kommunalbanken, 30.august 2002  The largest holders of Norwegian bonds are insurance companies, but the government, private companies and foreign investors also account for a large share of bond holdings. The largest issuers are the government and financial institutions. Kommunalbanken is also a fairly large issuer in the Norwegian bond market. At the end of 2001, the Bank’s total bond and commercial paper debt came to about NOK 26 billion. This accounted for a good 6 per cent of total outstanding bond and short-term debt issues in Norway at the end of last year. There are historical reasons for the thin securities market in Norway. From the post-war period and up to the beginning of the 1980s, the Norwegian bond market was subject to direct regulation. It was only in the late 1980s that the market for bonds and short-term debt was liberalised and it is now part of the international market. BIS Review 48/2002  5  Outstanding holdings of domestic debt securities issued by non-financial enterprises.

Key rates and rise in labour costs1) Per cent  Key rates April 2002  8 Norway New Zealand  6  Australia Sweden UK  4 Euro area  Denmark  Canada  2  US Japan  0 0  2  1) Manufacturing  4  Rise in labour costs, 1998-2000  6  8  Sources: OECD and Norges Bank SG Kommunalbanken, 30.august 2002  2  BIS Review 48/2002  Interest rates are higher in Norway than in most other OECD countries. This is a direct result of the markedly higher level of nominal wage growth in Norway. Wage growth has ranged between 5 and 7 per cent every year since 1998. This year’s wage settlement appears to be following suit. Strong wage growth is the result of a tight labour market. Wage increases in this year’s settlements were high. Wage settlements in the internationally exposed sector did not set the trend for wages. Wage growth in several sheltered sectors, including the local government sector, is likely to be considerably higher. This is a break with the pattern observed a few years ago. The phasing in of petroleum revenues increases demand for labour in the public sector and in enterprises selling goods and services to households. The contest for labour is reflected in high wage growth and a deterioration in competitiveness in exposed industries. Many enterprises in the sheltered sector can, in principle, pass on higher labour costs to customers.
Over the last 15 years, the national agreements have largely entailed wage levels that have been very compatible with low and stable inflation and the positive development of production and employment. The collective bargaining rounds have begun in good time before the expiry of the old agreements. The sector that is exposed to international competition has normally come to an agreement first and has thus set the norm for other parts of the economy. The agreements have usually run over three years. They no longer contain flexibility clauses that lead to wages and prices chasing one another in an upward spiral. At the same time, wage formation within the national frameworks has provided scope for considerable variations between companies and individuals. The number of labour market conflicts has been lower than before. BIS Review 154/2008  3  The fact that wage formation has worked relatively well over the last 15 years has also made it possible for Sweden to maintain, or even increase, its international competitiveness since we stopped pegging the krona to the ecu in November 1992. One difference compared to previous episodes is that, since 1993, unit labour costs in Sweden have increased at the same rate as in Germany. This is an important explanation of the similar development of inflation in the two countries. The nominal exchange rate has been strikingly stable up to the point when the financial crisis worsened in September.

Competition-weighted exchange rate, TCW index Index, 1992-11-18 = 100 150  150  145  145  140  140  135  135  130  130  125  125  120  120 00  01  02  03  04  05  06  07  08  09  10  11  Note: Outcomes are current rates to 081201 and the forecasts are quarterly averages. Broken line is the Riksbank’s forecast. Source: The Riksbank  14  BIS Review 154/2008  Figure 13. Labour costs, labour productivity and CPI in Sweden and the euro area Average of annual percentage change 2000-2008 4,0  4,0  3,5  3,5 Sweden  Euro area  3,0  3,0  2,5  2,5  2,0  2,0  1,5  1,5  1,0  1,0  0,5  0,5 0,0  0,0 Labour cost index  Productivity  CPI  Source: Eurostat  BIS Review 154/2008  15
Currently, there are several international institutions that are working towards international Shariah-compliant standards which include the IFSB and the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). 7. Recognising the current state of Islamic finance and its different pace of development in different jurisdictions, it is important for us to step back a bit and carefully plan the efforts going forward. In this regard, let me share with you my thought on four areas of focus whereby greater attention should be given in order for us to achieve further progress in the development of takaful in particular, and Islamic finance in general. I will also take this opportunity to share with you on the experience and approach that Malaysia has adopted in our endeavor to develop a comprehensive and effective Islamic finance system. Firstly, there should be greater inter linkages of components of Islamic finance supported by strong legal and regulatory framework. 8. The effective functioning of the Islamic financial system will largely depend on the development of a comprehensive package of the core components of the overall Islamic financial system. This would involve the development of the Islamic banking sector, the takaful sector, the Islamic inter-bank and capital markets as well as other non-banking financial institutions. The future development of the Islamic finance will rely on the strength of these core components and their interlinkages, due to the interdependence of the respective components within the package.

Since one of the banks’ major tasks still is to strengthen their loan portfolios, the slower growth rate of the economy and the slower improvement in the economic profile of some categories of clients would force banks to look for new niches for business. This may lead to greater specialisation in certain types of services and to more intense competition for every new client. I would like to point out that the increased competition does not exclude the need for you to keep up a high level of correctness in your relations with one another and with your clients. While the bank services market is getting saturated, consumers’ awareness is being raised. The stronger competition in the banking sector also promotes new approaches in the dealings with clients1. One possible room for competition between credit institutions is, for instance, the transparency and predictability of structuring, and especially of pricing, their products and services. One should work more for the benefit of clients, adopting a more individual approach to those facing difficulties, summing up and analysing the experience gained and drawing conclusions that could be put to good use in new and better banking practices. The happy client is the cheapest advertising for the bank. The work done in each of the above problematic areas allows for a more active presence – at an expert level and in the public area – both of the individual banks’ representatives and of the ABB as their legitimate and highly reputable association.
On the contrary, we should reinforce the multilateral economic policy coordination mechanisms already in place internationally. This need is particularly evident as regards the euro area members, since they share the same currency. For each and every member, joint action - beyond the common monetary policy response - is the most effective means to ensure that the economic effects of the pandemic are vanquished in a shorter time and at a lower cost. This coordinated action is also needed to shore up the solidarity of the European project: although the shock has been a common one, the effects across countries have not been even, and the starting position of each country in facing its effects also differed. The elements needed for an appropriate European response to this crisis largely coincide with those already deemed vital before COVID-19 to complete the institutional architecture of the euro area: the creation of a powerful, pooled budgetary resources mechanism that, in the context of the current crisis, smooths the financing of government spending that has arisen as a result of the pandemic and of those other needs that may arise during the 2  recovery; the completion of the banking union, with the launch of a European deposit guarantee scheme; and the full roll-out of the project to achieve a genuine European market for capital. In this specific field of joint European action there is clearly room to boost the response so far to the crisis.

Priorities for Emerging Nations in a New Global Environment Remarks by Veerathai Santiprabhob, Governor of the Bank of Thailand  34th Annual G30 International Banking Seminar Enrique V. Iglesias Conference Center, Inter-American Development Bank 20 October 2019  I would like to first thank the Group of 30, especially Chairman Tharman, for inviting me to be a part of this panel on a very important topic: what should be the priorities for emerging nations in a new global environment, which is changing rapidly, full of unknowns, and driven mainly by factors beyond control of emerging nations. As we all know, the world is changing rapidly, especially in technology, demography, climate, international trade pattern, domestic politics, and international geopolitics, which affect the structure of our society and economy and the way we conduct our business and policy. All of these rapid changes are challenges for all of us advanced economies and emerging market economies alike. But let me speak from the perspective of an emerging market central banker: within this new landscape, how do I see the priority economic areas for EMs. In the short time I have today, I would like to highlight three issues that should be among the top items on an emerging nation’s economic policy agenda. Safeguarding SMEs competitiveness from global challenges The first issue is the supply chain disruption which comes as a result of the technological changes and is further complicated by the ongoing trade tension.