samchain/econo-pairs-v1 huggingface dataset:
06.10.2020  Parliamentary testimony: presentation of the Banco de España Annual Report 2019 Pablo Hernández de Cos Governor  Mr. Chairman, ladies and gentlemen: My appearance once more before this Committee is to present the Banco de España Annual Report 2019. It was approved by the Bank’s Governing Council last June and published that same month. This year the Report has been dedicated to the impact of the pandemic on our country’s economy, and to discussing what the role of economic policies should be to achieve our common priority objective: to minimise the impact of this grave crisis for our citizens’ well-being. Along with summarising the content of the Annual Report, in my appearance I shall offer an update of the economic situation caused by the pandemic and, where appropriate, a review of some of the Report’s messages. This is particularly appropriate in a setting like the present, which is rapidly changing and subject to high uncertainty. 1 The macroeconomic situation In the strictly economic area, the health crisis and the measures needed to contain it have caused a deep recession worldwide, with a high degree of synchrony. The high mark for this recession was last spring. Subsequently, the practically simultaneous lifting in most regions of the bulk of the antipandemic measures taken allowed global activity to rebound. However, the severe losses incurred while the strictest measures were still in force have been only partially recouped. As a result, current activity and employment is still clearly below the pre-crisis level in almost all world regions.

At the moment, both total, or headline, inflation and core inflation, which excludes the volatile food and energy prices, have increased but remain below levels consistent with our dual mandate objectives – which most members of the FOMC consider to be 2 percent or a bit less on the personal consumption expenditures measure. Moreover, the rise in commodity prices is likely to put further upward pressure on headline inflation in the coming months. Provided commodity prices level off around current levels, the effect on inflation should be transitory. But we will need to ensure that commodity price pressures do not cause inflation expectations to become unmoored. If that were to occur, it would be more difficult to keep inflation in check. To sum up, economic conditions have improved in the past year. Yet, the recovery is still tenuous. And, we are still far from the mark with regard to the Fed’s dual mandate. In particular, the unemployment rate is much too high. Economic conditions in Puerto Rico Now let me turn to economic conditions in Puerto Rico. In contrast to the situation during my last visit, I am pleased to see signs that the Commonwealth may finally be emerging from this painful recession. Nevertheless, conditions remain difficult for many families. The recession here has been deeper than the downturn on the mainland. By mid-2010, total employment in Puerto Rico had fallen by 13 percent or 138,000 jobs from its peak in 2005.
In this context, the SNB fully supports FINMA’s efforts to ensure that risk-taking by individual banks is reduced or backed by specific capital charges whenever the risk exposure is deemed exceptionally large by historical or industry standards. In parallel with these measures, the SNB will continue to monitor developments on the mortgage and real estate markets closely, and will reassess the need for an adjustment to the CCB on a regular basis. BIS central bankers’ speeches  3

William C Dudley: Key developments in the tri-party repo market Introductory remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Workshop on “Fire Sales” as a Driver of Systemic Risk in Tri-Party Repo and Other Secured Funding Markets, Federal Reserve Bank of New York, New York City, 4 October 2013. *  *  *  Good morning. I am pleased to have the opportunity to open this workshop and discuss key developments in the tri-party repo market. In my remarks, I would like to give a brief overview of some of the problems that surfaced in this market during the financial crisis of 2008, recognize the improvements that have occurred since then, and most importantly, highlight significant vulnerabilities that still persist despite the progress we have made. While we can feel proud of the enhancements that are currently underway in the tri-party repo market, today I want to underscore the fact that significant work remains to be done. The tri-party repo market constitutes a vital component of the U.S. financial system. It plays an important role in providing financing for broker-dealers that make markets in Treasury and agency securities, and is an important mechanism that supports dealer intermediation of credit. The market also provides a secure investment vehicle for those that manage large amounts of liquidity and need an investment vehicle to park these monies.
I maintain that all the measures taken during the pandemic include elements of both monetary policy and financial stability. Sweden has been a member of the EU for a long time and, like other Swedish authorities, the Riksbank must somehow relate to what happens and what applies in the EU. Other central banks in the EU have the right to far-reaching purchases of various securities for monetary policy purposes. It would therefore be strange to have national legislation giving the Riksbank a markedly different toolbox to what could be argued is the standard in the EU. In addition, the Inquiry’s proposals mean that certain measures may only be adopted under extraordinary circumstances. Such proposals are in sharp contrast to the flexibility central banks have needed to show over the last ten–fifteen years to manage shocks that few could have predicted. One critical issue concerns how much we believe (or fear) that the balance sheet will also have to be used under more normal circumstances in the period ahead. As I am one of those who believes there is a great probability that this will be the case, and who does not see the point of giving monetary policy a narrower interpretation than has been normal from a historical perspective, I do not consider it reasonable to introduce the type of restrictions that the Inquiry advocates. Accessible foreign exchange reserves provide security in crises As regards the matter of an appropriate size for the foreign exchange reserves, I have two comments.

In recent months, the Riksbank has decided on • • •  A lending programme to the banks of SEK 500 billion to facilitate lending to companies Purchases of covered bonds for SEK 145 billion Purchases of municipal bonds for SEK 30 billion  10 [25]  • • • • • •  Purchases of government bonds, in addition to those decided in 2019, of SEK 25 billion Purchases of commercial paper for SEK 32 billion 9 Lending of USD 60 billion to the banks Easing of collateral requirements so the banks can borrow from the Riksbank more easily Lower interest rate on the lending facility, to 0.2 percentage points above the repo rate (from 0.75 percentage points). Offering the banks unlimited loans against collateral with a three-month maturity in weekly extraordinary market operations  Common to many of these measures is that they lead to significant changes on the Riksbank's balance sheet. It may also be necessary to adjust the repo rate, although there is not very much scope for interest rate cuts at present. However, the major problem at the moment is not that the interest rate is too high, the risk of a credit crunch is more about the major difficulties faced by many Swedish companies and households. When the banks are to decide to give loans, they must of course consider whether the borrower will be able to repay the loan.
2 / 10  BIS central bankers' speeches  If trade barriers were to be reintroduced within Europe, it is estimated that GDP would be about 8% lower in Germany and 7% lower in Italy. [8] The case for working together to enhance sovereignty also applies to the relationship between the EU and the rest of the world. Few European economies are sizeable enough to withstand spillovers from large economies or to leverage power in external trade negotiations. But cooperating at the EU level increases their potential to do so. The EU accounts for 16.5% of global economic output,[9] second only to China, which gives European countries a large domestic market to fall back on in the event of trade disruptions. EU trade makes up 15% of world trade,[10] compared with around 11% for the United States, providing the EU with significant weight in trade negotiations. And the euro is the world’s secondmost traded international currency, which helps insulate the euro area economy from exchange rate volatility. Indeed, around 50% of extra-euro area imports are now invoiced in euro,[11] which reduces the pass-through of exchange-rate volatility to import prices. That in turn allows monetary policy to focus more on euro area economic developments rather than having to react repeatedly to external shocks. [12] For all these reasons, being outside the EU might lead to more policy independence, but not necessarily to greater sovereignty. The same is true of the single currency.

An analysis of inflation developments in terms of sub-categories reveals that the rapid decline in inflation was mainly driven by the waning base effects from unprocessed food, energy and tobacco prices and the favorable course of services prices (Chart 6). Meanwhile, the rapid increase in import prices and the depreciation of the Turkish lira caused prices of core goods to accelerate. Indeed, the rate of change across all subcategories of the CPI, except core goods, remained below past year averages during the first quarter (Chart 7). Chart 6. Chart 7. Contribution to Annual CPI Inflation  CPI by Subcategories (First Quarter Percent Change)  * Core Goods: Goods excluding food, energy, alcoholic beverages, tobacco and gold. ** Food and Energy: Food and non-alcoholic beverages and energy. *** Tobacco and Gold: Alcoholic beverages, tobacco and gold. Source: TurkStat, CBRT. While inflationary pressures by producer prices grew stronger in the first quarter, aggregate demand conditions provided less support for disinflation compared to previous quarters. Meanwhile, core goods inflation posted an increase, albeit remaining low (Chart 8). On the  4  BIS central bankers’ speeches  back of these developments, medium-term inflation expectations registered a limited increase in the first quarter (Chart 9). Chart 8. Chart 9. Core Inflation Indicators H and I  12- and 24-Month Ahead CPI Expectations*  (Annual Percent Change)  (Annual Percent Change)  *CBRT Survey of Expectations, second survey period results. Source: TurkStat, CBRT. Source: CBRT.
Or, expressed in a different way, without the countryside uprising in the name of liberal ideas, 184 years ago, we might not have the SNB today. In my presentation, I will, for once, devote less attention to current monetary policy. Instead, I will examine the Swiss monetary system from a more long-term perspective. My aim is to show you the significance of sound money, and why it is a major pillar of our society. In this context, I will also take a critical look at four proposals to reform the monetary system. My reason for doing this is that interventions of this kind in an existing monetary order can have grave consequences for our country and the entire population. Talking of reform proposals: In the “Uster Memorial” document there is a demand which particularly appeals to me as a central banker, that, in the case of property charges such as tithes, it should be possible to transform them easily into mortgage claims whose interest level is appropriate. Appropriate interest rates or “appropriate monetary conditions”, as it is expressed in central bankers’ jargon – that is what modern monetary policy is all about. So you see that the demands made in Uster remain just as valid today.

We remain flexible and ready to make adjustments to our operations as needed to ensure that monetary policy is effectively implemented and transmitted to financial markets and the broader economy. Conclusion I’ll conclude with this: The coronavirus poses evolving risks to the U.S. economy. Our policy action this week positions us well to support the economic expansion. We are carefully monitoring the effects of the coronavirus on the U.S. economic outlook and will respond as appropriate. Our focus remains trained on serving the American people by pursuing our dual goals of maximum employment and price stability. Once again, thank you for this evening’s award. 1 1 Board of Governors of the Federal Reserve System, Federal Reserve Issues FOMC Statement, March 3, 2020. 2 2 Board of Governors of the Federal Reserve System, Statement Regarding Monetary Policy Implementation,  October 11, 2019; Federal Reserve Bank of New York, Statement Regarding Treasury Bill Purchases and Repurchase Operations, October 11, 2019. 2/2  BIS central bankers' speeches
The adjustment in public finances undertaken by the Spanish economy is three-pronged: the gradual reduction in the budget deficit in line with the targets set, the strengthening of the fiscal governance framework and the reform of the pensions system. In light of the budgetary exercise under way, compliance with the fiscal commitments acquired at the European and national level should be the cornerstone of our budgetary policy. Fulfilment of these objectives will allow us to build on the gains in credibility already attained and to turn around the upward trend in the public debt/GDP ratio. Both goals are prerequisites for a durable economic recovery. BIS central bankers’ speeches  3  One of the main changes to the institutional framework of Spanish fiscal policy has been the creation and start-up of the Autoridad Independiente de Responsabilidad Fiscal (Independent Authority for Fiscal Responsibility – IAFR). The IAFR will be playing a most prominent role throughout the budgetary cycle, monitoring compliance with the principle of budgetary stability in the general government sector, in accordance with the provisions of Article 135 of our Constitution and with European regulations. In this way Spain is moving to enhance its economic governance, joining those EU countries – practically all of them – that have this type of agency.

The IAFR, adhering to the principles of independence, transparency and accountability, will contribute to improving control over fiscal policy and to introducing greater budgetary discipline in all tiers of general government, in line with the Law on Budgetary Stability and Financial Sustainability approved in 2012. More specifically, and focusing on the budget for this year, the IAFR has recently published a report on macroeconomic forecasts (Informe sobre las Previsiones Macroeconómicas), endorsing the Government’s macroeconomic projections that underpin the draft State Budget and analysing the consistency of the projections made in previous years. Furthermore, by 15 October, the IAFR is to publish its report on the draft Budget (Informe sobre el propio Proyecto de Presupuestos), in which it will assess its suitability with a view to meeting the objectives of stability, debt and the rule that ties spending to economic growth. As regards the sustainability of public finances in the long term, the latest key development has been the approval and entry into force of the new revaluation index and the pension sustainability factor. The reform entails a structural change, since benefits are to be linked to the system’s ability to generate revenue. The information available on the budget outturn to date this year shows headway in the process of fiscal consolidation. The overall general government deficit in National Accounts terms was 3.43% of GDP to June, 0.5 pp down on the figure of 3.94% in the same period a year earlier.
Conclusion Unquestionably, the trend towards greater digitalisation of the economy, which has accelerated to an unprecedented degree since the onset of the health crisis, has illustrated the payment ecosystem’s ability to adjust to the health restrictions affecting our economy on an everyday basis. But this positive assessment must not cause us to overlook the challenges connected with payment innovation, which touch on issues of safety, accessibility, competition and sovereignty. At the Banque de France, we are committed to supporting the development of an independent, innovative and resilient European payment market that can maintain confidence in the currency while also strengthening our monetary and financial sovereignty. This commitment, which stems from our core statutory tasks, has a central place in the roadmap followed by our institution. As you may have seen in the annual report that we published a few days ago, payments have their rightful place in the Banque de France’s strategic guidelines for 2024, with three initiatives centred on modern, safe payments and on maintaining confidence in the currency in all its forms more broadly. Thank you for your attention. 4/4  BIS central bankers' speeches

As far as Sweden is concerned, the importance of the National Swedish Pension Funds is self-evident. The funded wealth is not as large as the Norwegian oil fund, but Denmark, for example, with funds equal to about 200 per cent of GDP, is not that far behind. Among the euro countries, the Netherlands and, to a lesser degree, Finland stick out as they have substantial funded pension wealth. However, such wealth is negligible in Germany, France, Italy, Spain, Belgium, Austria and Greece. Figure 2. Funded pension wealth in relation to nominal GDP in 2019, per cent. 250 200 150 100 50 0  Pension scheme funds Buffer funds for national pension systems Source: OECD (2019), Table 9.2. 6 An earlier comparison of this kind can be found in Ohlsson et al. (2020), Appendix D.  4 [6]  Mandatory collective pension funds (like the premium pension system) or quasimandatory collective pension funds (like the SAF-LO pension agreement) can be found in just less than half of OECD countries.7 The countries in the figure that have mandatory systems are Denmark, the Netherlands, Australia, Sweden, Finland and Norway. But as far as Norway is concerned, the wealth is negligible compared to the wealth in the oil fund. I do not have access to information showing how funded pension wealth is distributed in those countries that do not have mandatory systems based on labour income.
This includes firms, systems that support the industry, third party vendors, consultants, regulators, and law enforcement. 6. We need to leverage best practices  Leveraging a common set of best practices across the industry will be an important first step in closing the gap on the current vulnerabilities. Unlike the approaches taken by other supervisors to address cybersecurity concerns, our initial focus in this area is on better understanding the vulnerabilities, how firms are addressing them, what progress has been made by firms and assessing where the industry stands as a whole. Yes, we want you to address the weaknesses, but this is a lot bigger than the weaknesses identified at one firm. We will be looking to firms to leverage guidance around best practices to identify their weaknesses, and we want firms to bring forward other issues, concerns or vulnerabilities they encounter in doing so. We need to identify, as an industry, where the risks truly lie and what we are doing about them. There has been a lot of work done in this area by experts, including the NIST, the FBIIC, FINRA, PRA, FFIEC, NCUA, etc. – the list goes on. And, there are a number of sets of best practices already published. We are aware that firms have been looking for guidance on which approach to take or framework to adopt.

If a prospectus is found to be misleading or deficient after it has been registered, MAS can serve a stop order on the prospectus to prevent further issuance or sale of securities to the public. Following a public consultation in August, MAS will issue comprehensive retail hedge fund guidelines by year-end that will include, among other things, a requirement for some specific information to be disclosed in both prospectuses as well as marketing materials. In particular, the material differences between the hedge fund offered and traditional funds. Also the fees and charges. For funds of hedge funds, the method of achieving diversification must be disclosed. Turning to the second pillar – enabling and flexible regulation, the new guidelines aim to align our hedge fund regulations with international best practice, so that well-managed hedge funds from established markets can be offered in Singapore. A key development is to distinguish between single hedge funds, funds of hedge funds and capital protected hedge funds. Recognising that features such as diversification and capital protection would reduce the risk of investing in a hedge fund, MAS will introduce a lower minimum initial subscription of $ for funds of hedge funds. No minimum subscription will be required for capital protected and capital guaranteed hedge funds. Single hedge funds may continue to be offered to retail investors with a minimum initial subscription of $ To maintain professional standards, retail hedge funds must have at least two executives who each have a minimum of five years’ experience in managing hedge funds.
But for growth there is also a strategy, a good one, agreed in Lisbon. I welcome the efforts that have already been made and that are being made to implement this strategy. There has been some progress. I do not need to tell you that there is a lot still to be done. You have said so yourselves many times. These good words must be transformed into actions, and soon, because time is running out. It is no good having the right diagnosis if you don’t apply the medicine and cure the disease. *** The challenges for EMU over the next five years are every bit as great as those already faced. I am fortunate enough not to have to deal with them. I have done my bit, as well as I could. This is where I “pass the buck”. Europe is making history. It now falls to my successor, Jean-Claude Trichet, and to you to do your best to make sure that in the end history judges our new, shared currency to be a success. I wish Jean-Claude well. I wish you well. I raise my glass to your success. 2  BIS Review 47/2003

We will need to give Mr Gambari some time to start the process and make patient progress. Asia’s rising share in world GDP However, Myanmar and the other flashpoints I have mentioned are unlikely to derail Asia’s growth. There is a sense of déjà vu that this is Asia’s century. The statistics speak for themselves. In 1980, Asia accounted for just 19% of global GDP in PPP terms. Today, it is 36%, almost doubled. By 2020, it is expected to reach 45%. For many of you, figures on global wealth held by High Net Worth Individuals in Asia-Pacific may be more interesting. The region now accounts for 23% of global wealth held by these individuals. Merrill Lynch forecasts that Asia-Pacific’s annual growth rate in private wealth will be 8.5%, and that this wealth will reach $ trillion by 2011. The region has learnt well from the devastating experience of the 1997 Asian Financial Crisis. Asian Governments have since built up their foreign reserves, reined in Government debt, strengthened their financial systems, and made their exchange rates more flexible. Lessons from sub-prime crisis Nonetheless, the current sub-prime crisis shows that we cannot afford to be less than vigilant in the financial industry. There are some lessons we can learn here. First, a major reason why Asia has escaped the sub-prime crisis relatively unscathed is because it has not yet moved into sophisticated structured credit financing in a big way.