samchain/econo-pairs-v1 huggingface dataset:
It is unlikely that in future decades the West will account for such a large share of the world’s unequivocally systemic firms. In both Asia and Latin America, a number of jurisdictions have made progress with putting the KA regime on to a statutory footing. But it is probably fair to say that not a few emerging-market countries are watching progress in the EU. Indeed, it is not an exaggeration to say that the EU’s Directive is the keystone to breaking the back of the TBTF problem. How? The toolkit for Resolution Authorities established by the KAs obviously includes the workhorse techniques for resolving standard commercial banks. Either: liquidation with prompt payout to insured depositors by the Deposit Guarantee Scheme (DGS), commonly known as Liquidation and Payout (L&P). Or: what the US call Purchase & Assumption (P&A) – selling to a third party the distressed bank’s deposit book together with some cash injected by the DGS and perhaps some other good assets. At its simplest, P&A involves splitting the distressed bank into ‘good’ and, let’s say, ‘not so good’ bits. The deposit book and cash might for a while be held in a Bridge Bank controlled by the Resolution Authority (RA), pending sale to a purchaser. But whether or not a Bridge Bank is employed as a holding position, the services to insured depositors are sustained. Meanwhile, the rump goes into administration, with the administrators selling what they can and winding down the rest.

I think that will need to include in particular: •  groups having enough loss-absorbing capacity, and at the right locations in their corporate structure;  •  resolution authorities being able to enforce a write-down or conversion of bonds issued in foreign jurisdictions;  •  as much clarity as possible about the relative treatment of different categories of creditor;  •  regulatory measures to guard against contagion in a world where bank creditors take losses;  •  legal, operational and financial structures that are aligned with the preferred resolution strategy for a group and with sustaining its most essential financial services;  •  effective co-ordination between home and host authorities;  •  fall back plans, and frameworks for escalating preparations for resolution as a group’s condition deteriorates. Enabling effective resolution: removing barriers and structuring financial groups for resolution For most if not all SIFIs, steps will need to be taken in order to ensure that the preferred resolution strategy can be implemented. Sufficient loss-absorbing capacity, and its terms Perhaps the most obvious prerequisite is that SIFIs should have sufficient bonded debt in issue for losses exceeding their equity base to be absorbed through the process of resolution. This is gone-concern loss-absorbing capacity (LAC).
The banks are less willing to lend to associates without independently assessing their risks and charging the appropriate risk premiums. And both banks and non-banks within the group are no longer willing to maintain shareholdings in each other which yield low returns. The changes will enhance transparency and corporate accountability. They are essential to Japan’s economic recovery, but will have far-reaching social and cultural implications. Existing structures of Singapore banks In Singapore, the local banks (other than DBS) started as family-owned banks and built up a successful financial business on that basis. Over time they have merged and consolidated. Today the founding families remain the principal shareholders, and are in several instances also involved in the management of the bank. Besides banking, the principal shareholders have also built up diverse non-banking businesses, especially in property. The local banks participate in these non-financial activities of the group, both by lending and through equity ownership. The banks and non-banks in the same group have developed significant cross-shareholdings. A mixed conglomerate structure has evolved. The commingling of financial and non-financial activities will potentially expose Singapore banks to the same problems that banks elsewhere have experienced. We have not run into serious problems, so far. This is because the principal shareholders have run the banks prudently and properly. The MAS has also been stringent in monitoring related party transactions.

Zeti Akhtar Aziz: Enhancing SMEs’ awareness on access to financing Keynote address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the Banking Industry Seminar “Enhancing SMEs' Awareness on Access to Financing”, Kuala Lumpur, 9 July 2008. *  *  *  Introduction It is my pleasure to be here this morning to speak at this seminar, to enhance greater SME awareness on access to financing organised by the Association of Banks in Malaysia. The development of a strong and dynamic SME sector is a priority on the national agenda. It is part of the efforts towards creating sustainable and balanced economic growth. The reasons for this are clear. SMEs account for 99% of the total business establishments in Malaysia and for 56% of total employment and contribute about 32% to gross domestic product and 19% of total exports of the nation. Over the recent five years, SMEs have also increased their contribution to growth. In several developed countries, SMEs contribute at least half of the gross domestic product. Taking SMEs in these economies as a benchmark, there is clearly significant potential for SMEs in Malaysia to increase their contribution to the economy. My remarks today will focus on three areas. Firstly, the implications of global economic and financial developments on the Malaysian economy, and in particular on businesses and SMEs. Secondly, on the strategy adopted by the Government and Bank Negara Malaysia to develop the potential of the SME sector as a source of economic growth.
This activity is the first in its kind, and I express my highest considerations for the trust that the Bank of England has put to the Bank of Albania. The Centre of Central Banking Studies is internationally recognised as a centre of intellectual excellence in the area of central banking studies. Considering the goal that this centre has set to itself, as an opportunity provider to central banking employees to be endowed with ampler perspectives in the respective areas of expertise, I call for your attention to listen to what the distinguished experts shall say. Their professional achievements and the central banks they represent guarantee this. Thank you and good proceedings! 2/2

In the context of economic recessions and rising government expenditure, such as the sovereign debt crisis or the current COVID-19 crisis, higher risk premia in some euro area countries could tighten the overall financial conditions in those jurisdictions and threaten price stability in the euro area. This warrants permanently equipping ourselves with sufficiently flexible tools, so as to avoid the re-emergence of fragmentation dynamics that jeopardise the correct transmission of monetary policy throughout the euro area. In other words, the new strategic framework's tools should inherit, in my opinion, the flexibility that has characterised the PEPP. Regardless of the final outcome, I am sure that this review will boost the effectiveness of monetary policy in the euro area and its ability to achieve its targets in the macroeconomic environment of the coming decade. 11  The introduction of a digital euro  Monetary policy and the tools available to enhance its effective implementation are not the only matters currently to the fore of central banks’ agendas. At a time of such deep-seated transformation like the present, there is no shortage of topics vying for our attention. One I find particularly relevant at present is the growing speed of the ongoing digitalisation of the financial system. The pandemic, on one hand, and the European Commission’s announcement of its digital finance strategy, on the other, have placed this matter at the heart of the European debate.
The degree of employment fell considerably in connection with the crisis years and has only partially recovered since then. Moreover, since the 1990s crisis, many of those who lost their jobs have not returned to the labour market at all. This is ominous, given that economic growth in the past decade has nevertheless been relatively high in a historical perspective. To some extent, the drop in the labour force percentage can be explained by education factors. In connection with the 1990s crisis there was a significant decline in labour force participation among younger age groups, which was connected to tougher competition for jobs and many young people choosing to improve their qualifications instead of entering the labour market. Since then, there have been changes aimed at raising the level of education in society in general, for instance by lengthening upper-secondary school programmes and expanding university colleges. These education initiatives are highly justifiable in themselves, but they also entail a lower participation in the labour force and thereby an increased dependency burden for the active part of the population. Although some of the decline in labour force participation can be attributed to education factors, this is not the full explanation. Calculations for 2003 show that close to 30 per cent of the group remaining outside the labour force were studying. The others remained outside the labour force for other reasons, with early retirement for health reasons, now known as sickness benefit, as one of the most common causes.

The Long-term Planning Commission has made calculations that indicate that the economic driving forces for returning to work are generally low with regard to unemployment and usually even lower with regard to sick leave. These calculations show that almost four out of ten wage-earners retain 90 per cent or more of their income when they go on sick leave. Approximately one out of ten retains less than 70 per cent. The survey also shows that the driving forces for working slightly more have increased since the 1990s, but also that they are relatively low among the lower income groups.5 While a high level of compensation means increased security for the individual in the case of loss of income, if the negative effects on labour supply are large, they will also entail substantial costs to society as a whole. It is important to remember that what I have taken up here is the effects on the labour market’s supply side. But the total effect on the labour market is determined by the interaction between the supply side and the demand side. If one wishes to affect the functioning of the labour market more radically, it is probably necessary to implement structural policy measures that will influence both sides. Economic driving forces are certainly not the only method of influencing the labour supply. Nor is it useful to focus solely on the size of the compensation levels.
Second, even if this scenario were to occur and the pace of purchases were reduced, it would still be the case that as long as the FOMC continues its asset purchases it is adding monetary policy accommodation, not tightening monetary policy. As the FOMC adds to its stock of securities, this should continue to put downward pressure on longer-term interest rates, making monetary policy more accommodative. Third, the Federal Reserve is likely to keep most of these assets on its balance sheet for a long time. As Chairman Bernanke noted in his press conference last week, a strong majority of FOMC participants no longer favor selling agency MBS securities during the monetary policy normalization process. This implies a bigger balance sheet for longer, which provides additional accommodation today and continuing support for mortgage markets going forward. Fourth, even under this scenario, a rise in short-term rates is very likely to be a long way off. Not only will it likely take considerable time to reach the FOMC’s 6.5 percent unemployment rate threshold, but also the FOMC could wait considerably longer before raising short-term rates. The fact that inflation is coming in well below the FOMC’s 2 percent objective is relevant here. Most FOMC participants currently do not expect short-term rates to begin to rise until 2015. Some commentators have interpreted the recent shift in the market-implied path of shortterm interest rates as indicating that market participants now expect the first increases in the federal funds rate target to come much earlier than previously thought.

BIS central bankers’ speeches  5
This means that action needs to be taken in those policy domains where we do enjoy some freedom of manoeuvre, that is, fiscal policy, macro-prudential policy and structural reforms. Policy recommendations: On the fiscal front, the recent developments I have just highlighted are encouraging. I would stress the importance of meeting our fiscal targets in terms of structural adjustment and reduction in the debt ratio. Apart from compliance with domestic and European fiscal rules, it is important for Malta to build up sufficient fiscal buffers to allow us to counter eventual adverse economic shocks with fiscal policy if needed. In this regard, judicious control of government expenditure is  Page 6 of 8  essential, bearing in mind that some important government revenue streams may be past their peak and need to be replaced through new initiatives. Enhancing labour productivity is critical - forgive me for possibly boring you by repeating myself but I am sure you will agree with me that better bored than sorry. This requires ongoing investment in our labour force, in our people. In terms of the general business environment, it is important to ensure that Malta remains an attractive location for investment, especially foreign direct investment. We need to keep costs competitive, not only labour costs but also the costs of ancillary services including energy, transport and finance, as well as transaction costs generally. Permit me, at this point, to stress the importance of containing the asymmetries of knowledge facing investors, especially foreign direct investors.

Challenges ahead: The Central Bank of Malta’s prime responsibility is to ensure price stability. From this  perspective the challenge is to ensure that the Maltese economy continues to expand at a sustainable pace, without overheating. It is vital that we avoid the formation of asset price bubbles. The recent global financial crisis has shown the huge costs that can arise when asset prices depart from their fundamental values, eventually jeopardising the financial system and the economy as a whole. At the Central Bank we are keeping a very watchful eye on the price developments in the property market. Earlier this year we have published work by our Economic Research  Department exploring property price misalignment with fundamentals based on an index of 5 separate indicators. It shows that at the end of 2015 house prices were still below their equilibrium fundamental value but nevertheless price trends in this regard will continue to be closely monitored. There are, however, other asset classes which need close observation to avoid formation of asset bubbles. In the current low interest rate environment investors’ search for yield may stimulate excessive risk-taking behaviour. More investors’ education is needed to ensure that there is better appreciation of the risks of unrated corporate debt, especially where markets are somewhat thin. At the same time, we have to recognise that, as members of the euro area, the monetary policy tool is no longer available at the national level.
Some of you have been through a few or even several departments in your career. I want to thank all of you for making MAS what it is today. I hope this Gallery is a testament to your work in building up an MAS that has credibility, at home in Singapore and all over the world. BIS central bankers’ speeches  3

However, in the dogmatic pursuit of inter-country convergence, intra-country disparities have become increasingly apparent. As nations across the globe were brought closer together, citizens within each nation were pulled further apart, separated by the rising inequality, the declining share of labour income versus capital, and the displacement of workers. The unfettered market openness by advanced economies had caused unintended consequences that have ignited the rise to populism, inward-looking tendencies and potentially protectionist policies. If left to run its course, this will be a setback to global prosperity. In ASEAN, we are no stranger to this perspective. Our own experience is highly relevant. We learnt from the Asian Financial Crisis, that pushing countries to adopt policies when readiness is suspect is a design for failure. Without the necessary preconditions of sound institutional frameworks, adequate safeguards and capacity and robust domestic financial markets, premature financial liberalisation will expose the economy to waves of destabilising short-term speculative flows. When these flows leave, a trail of destruction is left behind. We also learnt that proper sequencing and readiness of financial liberalisation is key. The criticism that ASEAN’s ‘steam engine’ may not be ‘full speed ahead’ does not capture the full picture. This view fails to consider and understand that quality, not the speed and quantum of integration, is what really matters. The focus of integration should not be on speed, but on building the collective capacity, readiness and resilience of member countries.
The financial crisis highlighted the need to strengthen the current framework. Regulation of the financial sector must secure financial stability, but at the same time protect the public against losses. This is now on the agenda in Norway and in other countries. I would like to highlight three main aspects of the new regulations that are now underway: First, the financial crisis revealed that banks held insufficient capital, excessive short-term market funding and inadequate liquidity buffers. The new Basel III framework sets out stricter requirements. Second, the new framework includes macroprudential tools that can be applied when necessary. Banks may be subject to additional capital requirements if credit growth in the wider economy is excessive. Third, the authorities must acquire tools that enable banks to be wound up in an orderly manner. Owners and creditors – not taxpayers – must bear the losses. The interest rate on banks’ funding will then reflect the risk they take rather than an implicit government subsidy. The outlook Despite some concerns regarding financial stability, the Norwegian economy must be characterised as strong. Productivity fell somewhat through the downturn, but has picked up again. Compared to our neighbouring countries, unemployment in Norway is low, around 3 per cent of the labour force. In 2010 the return on our oil fund was close to 10 per cent, and the capital has passed 150 per cent of mainland GDP. 8  BIS central bankers’ speeches  In the twelve months since January 2010, oil prices have risen to over USD 100.

There has been no conflict between low inflation and high economic growth, as previously claimed by economists. 4  BIS central bankers’ speeches  The guidelines and the financial crisis The financial crisis in 2008 put our economic policy guidelines to a severe test. The interest rate cuts that followed from the inflation target led to a reduction in households’ annual interest expenses of around NOK 40 billion, or around 4 per cent of their disposable income. The krone depreciated and acted as a buffer. The burden on leveraged companies was eased and investment projects became profitable in an environment of lower interest rates. Altogether, monetary policy made a substantial contribution to Norway’s resilience to the crisis. BIS central bankers’ speeches  5  Well anchored inflation expectations made monetary policy effective – the reduction in Norges Bank’s key policy rate was perceived as a decline in the real interest rate. Other central banks experienced that there was little scope for reducing the real interest rate to a sufficiently low level. This downturn contrasts sharply with the downturn in the 1980s when the interest rate had to be maintained at a high level to defend the krone exchange rate. At that time, there was a lack of confidence in both monetary policy and fiscal policy. The costs were substantial. Unemployment increased, in line with that experienced in some European countries today. When the financial crisis reached Norway in 2008, we were in a much better position.
The Basel Committee’s September paper outlines several elements that are critical to a sound corporate governance process. These elements include the installation of qualified boards of directors with clearly defined responsibilities, the importance of oversight by directors and senior management, the need for clear lines of management responsibility and accountability, and the effective use of internal and external auditors. Both the July and September reports provide a flavor of the Basel Committee’s efforts to promote stronger risk management practices within the global banking community. Although these efforts sometimes receive less public attention than our work on capital adequacy, I believe that they play significant roles in helping to set standards for prudent risk-taking that can be used by banks and their supervisors worldwide. Lastly, I would like to update you on the Basel Committee’s major effort to revise the 1988 Capital Accord. In June, the Committee released a Consultative Paper laying out our vision for a new capital adequacy framework. Our proposed timetable is to seek comments from both supervisors and industry participants through 31 March 2000 and then to publish, hopefully by late next year, a comprehensive set of proposals which are responsive to the comments and industry input we have received. During the comment period, the Committee and its subgroups are working hard to refine and further develop a number of the proposals put forth in the consultative document.

Of course, to add value over and above the minimum capital standards, improved disclosure must go beyond the simple reporting of minimum capital ratios. When banks disclose timely and accurate information about their capital structure and risk exposures, market participants can better evaluate risks and act accordingly. The disclosure of timely and accurate information, in turn, is an incentive for banks to ensure that the market perceives them not only as effectively managing their risks, but also as being adequately capitalized. Market reactions to the public disclosures of banks can also play an important signaling role for supervisors in assessing the adequacy of a bank’s capital. A further reason to encourage disclosure beyond the reporting of regulatory capital ratios is that these ratios have become the primary focal point for investors and industry analysts. The result has been that bank managements have had an incentive to focus solely on improvements in these ratios, even when the ratios are not fully reflective of risks. More comprehensive disclosure could lessen this incentive. With these considerations in mind, the Basel Committee is seeking to design an expanded set of disclosure guidelines, taking into account the proprietary information needs of banks. I believe that fuller disclosure for all banks can take us a long way towards effective market discipline. We also encourage banks to include in their fuller disclosures information specific to their risk profile. The timeliness and the quality of disclosure are important. The frequency of disclosure should reflect the nature of the risks involved.