samchain/econo-pairs-v1 huggingface dataset:
Because my view is that there are a number of trade-offs at play here, which need to be taken into account. For instance, if we don’t implement the necessary changes and succeed in properly restoring the credibility of risk-weighted capital ratios, a more important role will have to be played by other parts of the regulatory system, such as the leverage ratio. For now, our working hypothesis is a regulatory level for the leverage ratio of 3%, but to me this is more of a placeholder. What the final outcome should be will depend on the calibration of the whole system, in which the risk weights and leverage ratio are important pieces. 7  By end-2014 it is expected that all jurisdictions with GSIBs will have been assessed, in addition to some others (total 17 countries). By 2016, all Basel Committee member jurisdictions are expected to have gone through the assessment of their capital framework. BIS central bankers’ speeches  5  An important element in this calibration will be transparency – the more trans- parent banks are with methods and models to calculate risk weights, the better it will be for the credibility of the system as such. If we widen the perspective further, I think there is also an interesting issue of calibration linked to the concept of going-concern capital requirements on the one hand, and goneconcern capital requirements on the other.

Yet, vigilance in this area is important to prevent buildup and materialization of systemic risk. Last year was no exception in terms of close monitoring of the soundness of the banking system, and changes in the prudential regulation, which were an appropriate balance between the need to support private sector financing, while maintaining the health of the banking system at the same time. What was the monetary policy stance like in 2014 given the already elaborated economic and financial conditions? In general, the accommodative stance was maintained. The main interest rate was maintained at the historically lowest level, the targeted measures to support net-exporting and electricity producing companies were extended until the end of 2015, and certain credit-supportive macro-prudential measures were undertaken. This relatively loose stance was maintained as a consequence of the “benign” external position, which did not jeopardize the foreign reserves, and enabled a rather balanced foreign exchange market during the year. Low inflation was also in favor of maintaining the accommodative stance. Yet, the room for monetary policy accommodation appears to be largely exhausted. The outlook for the 2015–2016, is more or less expected to resemble the state of the economy in the previous year. Growth of the economy is expected to accelerate to 4.1% and 4.5% in 2015 and 2016. The fundamental factors to underpin the growth dynamics remain the same. The boost to the export and investment is expected by the new and the existing foreign companies, as well as those envisaged to enter the market.
Macroeconomic stability does not ensure financial stability  The general assumption before the crisis was that the intense wave of financial innovation which had characterized the decade leading up to the crisis had contributed to making the financial system, and therefore the overall economy, more resilient. This resulted from “spreading risk around”, and allowing such risk to be borne by those most able to absorb it. Such an assumption appeared to be validated by the experience of the two decades leading up to the crisis, the so-called “Great Moderation” era, which had been characterized by historically unprecedented decreases in macroeconomic volatility across advanced economies. There was also a broad consensus with regard to the U.S., that, if – due to the bursting of an asset price bubble – financial instability were to threaten to derail economic growth, U.S. monetary policy would have been able to effectively react by means of interest rates cuts, as occurred for example in the U.S. following the 1987 stock market crash and the bursting of the “dotcom bubble” of the second half of the 1990s. This was the so-called “mopping up” approach to dealing with asset price bubbles, which I will discuss in more detail later on. Of course, there had been a few dissenting voices questioning the dominant optimistic view.

Jean-Pierre Roth: International monetary order – or disorder? Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at the Research Institute for Empirical Economics and Economic Policy, University of St Gallen, St Gallen, 14 November 2006. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  The term 'international monetary order' is misleading. Although international monetary systems may have appeared orderly in the past, they were actually dependent upon rigid compliance on the part of the industrial countries, first with respect to the gold standard and later with respect to fixed exchange rates. However, since compliance was in fact anything but rigid, the world experienced a series of currency crises and devaluations. Order existed on paper only. The reality was disorder. Nowadays we have an overwhelming impression of disorder, and yet our national monetary systems are based on sounder foundations than in the past. The risk of currency crises has been lessened by the transition to flexible exchange rates and the move towards monetary integration. In addition, the expansion in the free movement of capital is – to an ever increasing extent – subjecting national economies to the discipline of international competition. Inevitably, this has impacted on the role of the International Monetary Fund (IMF).
The ATM network of the country has doubled during the last five years and the number of credit cards in use have more than tripled. Improvements in Internet banking, tele-banking and mobile banking facilities are very significant and the progress is mind-boggling. There have been significant improvements in financial markets too. With the introduction of LankaSecure, the Scripless Securities Settlement System, in 2004, government securities are transacted on Delivery versus Payments (DvP) basis and now nearly 27,000 beneficiary accounts are maintained at the LankaSecure. Recently we also allowed foreigners to own 5% of government securities through a new TIERA account that we introduced, and so far, foreigners have purchased $ 55 million worth of Treasury bonds. This is a new instrument that has enhanced liquidity in the capital market Developments in the foreign exchange market are also immense. Helped by the continuous growth in imports and exports, and specially with the recorded improvement in migrant earnings, values and  BIS Review 24/2007  1  volumes of forex transactions through formal channels have improved significantly during recent years. The initiatives we are taking will also improve this sector further in the years to come. In conjunction with these improvements, banks have now stepped forward to introduce new derivative instruments to the market. As you all know, CPC has now started to use hedging mechanisms to minimize the exchange rate exposure, which we expect that would be followed soon by other large public and private sector organizations. Performance of the Share Market has of course been spectacular.

By way of conclusion, let me say that there is currently no shortage of challenges. However, the reforms introduced in the regulation and the efforts made by banks to enhance their resilience over the last decade have borne fruits and the European banking system has demonstrated with the Covid crisis not only its ability to withstand enormous shocks but also its ability to support public authorities efforts to overcome difficulties to the benefit of the European people. This is a major positive development. While this is not the time for complacency, this development should collectively encourage us to maintain our attention and efforts and to address the current and forthcoming challenges with both confidence and determination. 4/4  BIS central bankers' speeches
On top of this, the agency that would be operating the fund – presumably the European supervisory agency – would also have the power to reconstruct banks. Efficient supervision and crisis management may also warrant arrangements for prompt corrective action and structured early interventions. As far as I know, most EU countries lack the rules on how to handle large bank failures, which means it would also be very positive from a point of view of contingency planning and reducing moral hazard. With a strong legal framework, the EU would be able to let investors in even the largest banks take full financial responsibility. When it comes to crisis management, coordination of emergency liquidity assistance is also imperative. Today, there are some legal uncertainties remaining for national central banks considering providing cross-border liquidity support. One example of the effects of this is that differences in national lists of eligible collateral will probably lead to gaming situations. A more centralised lender-oflast-resort function is probably necessary. Here it can be noted that the Treaty does allow for a more prominent role for the ECB in this respect than it presently has. However, a number of problems remain to be solved first. Even in the presence of burden sharing arrangements for crisis resolution, one would have to come up with ways to avoid gaming of collateral. Merely extending the list of eligible collateral for emergency liquidity assistance will not do the trick.

We should envisage that terrorist financiers will attempt to benefit from anonymous transactions made possible by innovations of new payment products and services such as internet-based payment systems, prepaid cards and virtual currencies. Likewise, fundraising through social media and other online platforms such as “crowdfunding” have increased in prominence, in addition to other more traditional sources of funds such as proceeds of criminal activities, conventional donations, and funding from legitimate purposes. As change is a constant, collation of data points that this environment will continue to persist. Global internet users have increased from 397 million in the year 2000 to nearly 3.9 billion as of June 2017, an impressive growth of almost 1000%. Similarly, global investment activities in the FinTech industry have increased from USD9 billion in 2010 to USD25 billion in 2016. If this trend is anything to go by, the financial industry will be hard pressed to mitigate, identify and prevent cases of abuse in the system. There is no doubt that rapid technological developments have offered immense potential for economic growth. Unfortunately, they have also spawned new ways for terrorist organisations to acquire, move and manage their funds. There are other risks not anticipated before, such as remote radicalisation via the internet that has resulted in an increase in the number of small terrorist cells and “lone wolf actors” that makes detecting and halting terrorism financing even more challenging. In light of this development, the role of financial sector as a bulwark against terrorists financing becomes even more critical.
•  The next generation will use cards to a far greater extent than we do at present, even for smaller transactions. There are banks today which will, with the permission of the parents, issue simple debit cards to children who are 13-years-old and above. In addition, payments via text messaging will grow in importance. Mobile phones are here to stay. •  Cards will develop technically. They will become safer with chips instead of magnetic strips and they will have several different functions – identity cards, driving licences, passports? Technology appears to have no limits here. The opportunities with wireless communication further expand the areas of use. •  Use of e-money will grow. Not cash cards, where there are good substitutes, but the server-based network money. As e-trading increases so too does the need for secure e-payments. •  Finally, I believe that paper-based payments will die a natural death, just as cheques once did. They are expensive for the banks and impractical for consumers. In a few years we will see them on display at the National Museum of Science and Technology. Thank you! 6  “Electronic money from a central bank perspective”, speech by Stefan Ingves, Sveriges Riksbank, 4 March 1998. BIS Review 16/2008  5

There is a very nice paper in the latest NBER issue which is called “When Inequality Matters to Macro and Macro Matters for Inequality”. So indeed, that places within macro the question of inequality – inequality which has been increasing too much in the past few decades. Changes are being discussed and are taking place I just hope that progress could be quicker. How does that impact central banking? We thought we could just target inflation, now you are saying the next generation has to consider all of these different preferences of agents, multiple equilibria, inequality... Well first of all, central banks will always focus mostly on control of inflation, or more broadly macroeconomic stabilisation. The regime of flexible inflation targeting will not change in the visible horizon, and that is because it allows central banks to take a medium-term perspective towards hitting the inflation target. The advantage of adopting this gradualist approach to reaching the target, is – as [leading monetary economist and former Riksbank official] Lars Svensson has demonstrated very convincingly – that you can allow for some consideration of stabilisation of the 6/8  BIS central bankers' speeches  economy in trying to move gradually towards the inflation target. What will change are the models used to analyse the consequences of policy – and the set of instruments that will have to be used. Central banks in the future will have to respond in a different way if they want to achieve the overall objective of reasonable inflation and macroeconomic stabilisation.
In practice, these fan charts are constructed on the basis of the experience of past forecast errors and the MPC’s judgement of the present degree of uncertainty. Given that the period of the MPC has been characterised by a time of unusual stability followed by one of unusual volatility, the more subjective element of this approach has proved to be fully justified. However, an alternative guide to the MPC’s internal deliberations on this issue might also be provided by a more explicit consideration of a range of approaches to measurement of the output gap and its impact on inflation. The policy horizon In considering the policy decision month by month, the MPC has tended to put weight on the projection for CPI inflation around two years ahead. This has not meant simply changing policy in response to whatever the central forecast is at that horizon; policy decisions will also take into account the pattern of deviations from the target over the whole three-year forecast period, and, importantly, the balance of risks around the central projection. There are clear and familiar benefits to having a forward-looking policy regime. A Taylor rule regime based on current data would have the considerable disadvantage that it would be more likely to result in volatility of output growth, and also that policy might tend to react too strongly to unreliable current data. But it is less clear precisely how far ahead the policy horizon should be.

There have been a number of positive effects from the policy of injecting additional money into the economy – including a sharp fall in corporate bonds spreads, a rise in equity prices, and the fall in three-month LIBOR back towards expected Bank Rate. 12 In addition, the MPC’s continuing strong commitment to support the economy and therefore achieve of the inflation target over the medium-term has had a positive effect on confidence. Most indicators of consumer confidence have been improving fairly steadily from low points in early 2009, as have indicators of business confidence. A significant part of the transmission mechanism has been via the rise in the prices of riskier assets. As yet, I don’t consider the evidence suggests that this rise in asset prices has gone too far, and therefore do not believe that this has become another risk to future economic stability. Rather, my concern is that this channel might become less powerful if quantitative easing were to be extended, as confidence effects might be less apparent, and there might be reluctance to engage in further portfolio rebalancing as the price of risky assets rose. This could prove a concern, given that there are still some risks on the downside to the path of economic activity, including a continuing weakness in the world economy, particularly the EU. Credit conditions also remain a concern.
The cost to income ratio of the Cyprus Banking Sector, which amounts to 76 percent as at June 2022, is significantly higher than the respective EU average of 63 percent. Investment in technology can become the catalyst in the effort to strengthen efficiency and build sustained profitability, which will ultimately bridge the gap with the rest of the EU area banks. The second challenge relates to the risks of climate change. The ongoing effort to reduce the dependence on Russian energy may increase the transition risks and as such banks must enhance and adapt their climate risk mitigation strategies. The fact that certain banks have started making tangible steps in this regard is a positive development, but they are still early on the learning curve and behind their European peers. They must act faster and more decisively to meet our expectations of incorporating climate-related risks into their overall risk management frameworks, which will ultimately also target their clientele and the submission of detailed climate related information in order to feed the banks' risk management processes. Professional accountants also have an important role to play in this overall transformation of the economy by providing relevant advice to their customers to set up the appropriate management information systems that could enhance the relevant disclosures. And this takes me to the third challenge which is the overall interaction of credit institutions with their clientele. It is in the interest of both clients and banks to cultivate a relationship of mutual respect and trust.

Constantinos Herodotou: A resilient banking sector in an everchanging economic environment Speech by Mr Constantinos Herodotou, Governor of the Central Bank of Cyprus, at the Deloitte Annual Conference, Nicosia, 28 September 2022. ***  Introduction Distinguished co-speakers and guests, ladies and gentlemen. Thank you for inviting me to this conference. It is a pleasure to have this opportunity to speak to you today. I will start with a brief overview of recent euro area and Cyprus economic developments and the monetary policy decisions taken in response to the new challenges of persistently high inflation and elevated economic uncertainty. I will continue with the developments in the Cyprus banking sector which needs to address a number of challenges in this fast evolving economic environment. Euro area Euro area economic developments In the euro area in general, GDP is growing at a slower pace this year than previously expected due to the negative geopolitical developments, mainly caused by the war in Ukraine. Growth is hampered by soaring energy and commodity costs, low confidence and supply chain disruptions. At the same time, inflation is approaching double digits, and a winter with possible energy shortages and high energy prices is on the horizon. Nevertheless, a recovering tourism industry, decreasing unemployment, and EU funding payments help to boost activity and limit, to some extent, output loss. More specifically, the Euro area quarterly economic growth reached 0.8 percent in the second quarter, following a 0.7 percent rise in the first quarter.
Basel II will not only help banks to measure and allocate the provisions and capital necessary to withstand expected and unexpected losses, but it will also help supervisors and market participants to ensure that banks have done so in a way that will maximise the likelihood that they can continue to operate, even in the most difficult of circumstances. BIS Review 34/2005  3  Sound corporate governance The second reason I believe Basel II will promote financial stability is that it promotes more effective corporate governance. Risk management must be based on a strong foundation of corporate governance. A bank can have the most sophisticated measurement tools in the world, but if it is poorly governed, it will be vulnerable to financial and operational weaknesses. The Basel Committee recognised this when it developed the qualifications that banks must meet in order to adopt the most advanced approaches under Basel II. While much attention has been paid to some of the more complex quantitative aspects of Basel II, I believe the most important qualifying criteria are those that address how the bank’s risk management framework is governed. Banks that adopt Basel II will be expected to have a comprehensive and sound planning and governance system to oversee all aspects of their risk measurement and management process. The board of directors, senior management, and audit and other control functions will be expected to exercise their duties in a rigorous manner. I believe that better managed banks under Basel II will be safer, sounder, and more resilient.

The banking groups operating in Estonia are able to manage capital and liquidity in a flexible way at group level. The integration of the banking system consists in the readiness of banking groups to promptly channel money flows to various subsidiaries and branches according to need. The integration of banking is supported by cooperation in the Nordic-Baltic region. I am convinced the daily information exchange and cooperation agreements of our region set an example of ensuring financial stability for the entire European Union. In the final months of 2008, Sweden initiated support schemes, which have had a very positive impact on banking groups as a whole, i.e., national support measures have been implemented from group level also on subsidiaries and branches. In this context, Estonia has in the EU actively supported the principle that the implementation of rescue packages must not discriminate against other Member States. 2009 economic policy priorities in Estonia Now I would like to say a few words about the current monetary and economic policy situation and the most important priorities for 2009. By now it is clear that the Estonian enterprises and households have thoroughly changed their behaviour and expectations over the past half a year. In this respect, a big part of the adjustment process has already taken place and Estonia's primary macro vulnerabilities have considerably decreased. The current account, i.e., the difference between investment and savings, has practically balanced and the financing of the economy's current expenditure is ensured by current income.