samchain/econo-pairs-v1 huggingface dataset:
As a result of this elastic provision of a riskfree investment opportunity, overnight secured and unsecured rates were only modestly affected by these large flows, and overnight markets continued to move as intended following changes in the FOMC’s target for the federal funds rate. That said, the runoff in prime fund assets did leave an imprint on term unsecured rates, although some of this has retraced recently as markets have adapted. I will return to this later. Third, for some time now we have been keenly focused on the impact on the structure of money markets that ensues from higher balance sheet costs for financial institutions.15 When I refer to balance sheet costs, I mean costs that are primarily related to the size, but not the composition, of a financial institution’s balance sheets. One example of such a cost is the leverage ratio, which is a requirement that a bank has, at minimum, capital of certain percentage of its overall assets.16  4 / 13  BIS central bankers' speeches  The leverage ratio was introduced as a simple non-risk-based backstop to the risk-based capital requirements and sets an amount of required capital that depends exclusively on the size of the balance sheet, plus off-balance sheet exposures for the largest U.S. banks, and does not depend on the composition of the balance sheet or the risk of those exposures.

In addition, the effect of the leverage ratio is further magnified by dealers’ inability to “net” across similar transactions on a bilateral basis with different counterparties for accounting and capital purposes. Netting is generally allowed so long as the transactions have the same counterparty and settlement date.22 The “same counterparty” requirement could in theory be met via the implementation of a central counterparty (CCP). However, for several money markets that are important to the transmission of monetary policy, no CCP has been implemented to date. For example, there is still no CCP in the United States for the repo market, and there is also no CCP for foreign exchange swaps. The regulatory capital benefit from the implementation of a CCP for the repo market might be reduced by regulatory requirements for some arrangements, such as those associated with the provision of committed liquidity to the CCP. The implementation of a CCP raises other important policy issues that would need to be carefully considered. The fourth and final development: money markets have been impacted by increasingly large shifts in the Treasury’s cash management practices, as well as the cash management of a number of foreign official holders of dollar reserves.
The public authorities must compensate for these weaknesses by implementing additional rules. For instance, the supervisors may need to require stricter rules for provisioning against loan losses, or to set a higher minimum level for bank capital. An important function of the banking system is to facilitate payments between various agents in society. This is based on the fact that bank accounts provide the basis for all payments except cash payments. Most payments are executed through the payments system infrastructure, such as the systems for large value payments, cheque clearing, securities settlement systems, stock markets, other exchanges and so on. These systems must be efficient and they must also be secure. If not, there is a risk that problems in one part of the financial system will spread to other parts, including to the banks. Many countries have neglected the need for an adequate financial safety net. The safety net includes limited but explicit depositor protection which has to be supported by the necessary legislation, institutions and procedures to conduct an orderly management, resolution or winding-up of problem banks. When bank weaknesses are identified in a country lacking a proper safety net, various problems may occur. The authorities will be reluctant to take adequate and timely remedial action since there are no clear guidelines and since they are afraid of the consequences from non-protected depositors and from other counterparts to the banks.

To be realistic, a simple recommendation is all that is in order: those who buy equities bear the price risk themselves. People who, out of greed and carelessness, buy and sell in such a way that they cannot survive a brutal crash have only themselves to blame. They must bear the consequences alone, even if it means their economic ruin. Second, there is also an argument that price stability as the relevant goal of monetary policy should be defined more broadly and measured in such a way as to include the development of important asset  7  BIS Review 35/2000  prices.4 The demand that monetary policy, in its use of the concept of monetary conditions, should not only take account of interest rates and foreign exchange rates but also of equity prices does not go quite as far. On a technical level, such an expansion of the price index would not be a trivial undertaking, but certainly doable. There are some serious economic concerns, however, which are mainly due to the ambivalent nature of equity price fluctuations. Equity prices may rise in anticipation of a pick-up in total demand, which - if anything - would indicate some restrictive monetary policy correction. If the stock market expects business activity to pick up, the central bank will, in assessing the situation, hopefully realise this as well. It is for that purpose not necessary to expand the price index or the monetary conditions index as has been suggested.
26 Ellis, D. (2013), “Deposit Insurance Funding: Assuring Confidence”, FDIC Staff Paper. 27 For a review of the interactions between public and private risk-sharing, see Ioannou, D. and Schäfer, D. (2017), 8/9  BIS central bankers' speeches  “Risk sharing in EMU: key insights from a literature review”, SUERF Policy Note, Issue No 21. 28 For example, cross-border banking mergers and acquisitions in the euro area have been on a declining trend  since 2007. 29 See Draghi, M. (2017), “Structural reforms in the euro area”, introductory remarks at the ECB conference  “Structural reforms in the euro area”, 18 October 2017. 30 Eurobarometer 88. 31 Parlemeter 2016, Special Eurobarometer of the European Parliament, November 2016. 9/9  BIS central bankers' speeches

By 1914, while the U.S. was already the world’s largest economy and trading nation, its banking system remained curiously parochial and the dollar was not a major international currency. 8 In fact, American firms continued to finance their trade almost entirely with credits from foreign banks, a source of resentment, with Paul Warburg, the first Federal Reserve vice chairman, referring to the annual acceptance fees paid to London banks as a form of “tribute.”9 With the passage of the Federal Reserve Act in 1913, some of the constraints on the emergence of a robust dollar trade financing market were removed and the newly established U.S. central bank could take a more active role in nurturing and backstopping a nascent dollar acceptance market, which it did. These efforts included buying dollar acceptances for foreign central bank accounts at competitive discount rates and providing guarantees, for a small fee, on payments at maturity of acceptances bought for these accounts.10 These actions helped to spur the dollar’s emergence as an important international currency, with dollar acceptances viewed as an attractive reserve asset by the 1920s. The early accounts also represented tangible links of cooperation among major central banks, with much of this cooperation centered on efforts to maintain or restore the international gold standard in the aftermath of the First World War. 11 The reciprocal relationships enabled central banks to buy and sell foreign exchange to influence credit conditions in each other’s markets with the aim of regulating cross-border gold movements.
Bank estimates based on the impact of historical financial crises in a sample of advanced economies, reported in Brooke et al (2015), suggest that the average cost of a financial crisis has been 73% of GDP, which translates to a cost of roughly £ per capita if a financial crisis had taken place in 2016. 3 The Bank of England’s Financial Policy Committee identifies, monitors and takes action to remove or reduce systemic risks with a view to protecting and enhancing the resilience of the UK financial system. The FPC is not authorised to take action that is “likely to have a significant adverse effect on the capacity of the financial sector to contribute to the growth of the UK economy in the medium or long term”. 4 See Figure 1 of my article ‘An evolving financial system: Don’t leave it too late, simulate’. 5 Peak amount of cash support in the form of loans and purchase of share capital. Source: National Audit Office. 2  2  All speeches are available online at www.bankofengland.co.uk/news/speeches  2  Losses that would have wiped out the entire British banking system in 2007 can now be absorbed in buffers of capital.

Anne Le Lorier: Regulating non-banks – ways forward and challenges ahead Speech by Ms Anne Le Lorier, First Deputy Governor of the Bank of France, at the ACPRBank of France Conference “Financial regulation-stability versus uniformity, a focus on nonbanks actors”, Paris, 28 September 2015. *  *  *  Dear Ladies and Gentlemen, Dear Colleagues and Friends, On behalf of the Banque de France and of the ACPR, I would first like to thank very much the speakers and the participants in today’s conference for the quality of their presentations. Indeed, they helped us to have insightful debates on the ongoing efforts made to prevent systemic crisis as much as possible, strengthen the global financial system and its resilience i.e. its capacity to withstand systemic shocks. As illustrated today, this is not an easy task and the global regulators are facing many challenges in shooting at a moving target: the financial system not only adapts, but also transforms itself and anticipates regulatory changes, sometimes constructively, sometimes less, thereby continuously modifying the sources, the channels and the shape of systemic risks. Regulation itself can be ill-designed, too narrowly focused or can generate unintended consequences.
While the relatively high level of these countries’ foreign liabilities makes an excessive depreciation undesirable, considering the threat this would pose to financial stability, in other economies the authorities welcome the depreciation given its favourable impact on external competitiveness. In 2009, the latter countries have been facing capital inflows generating appreciation pressures and many of them have chosen to intervene in order to counter these pressures. In this respect, it is worth mentioning the massive interventions of the Swiss National Bank and the devaluation of the Singapore dollar in the spring of 2009, the frequent interventions of the Bank of Israel and the joint interventions of the central banks in Thailand, South Korea, Singapore and the Philippines. BIS Review 5/2010  13  As for Romania’s economy, some adjustments would have been very painful for want of external financial support. For instance, if the risk of a financing gap had materialised at the highest level expected for 2009, then the depreciation pressures on the leu would most likely have generated a currency crisis with a negative impact on inflation and, implicitly, on leudenominated financial assets of households. Other adjustments, such as the cut in public spending, wage cuts included, given that government expenditures had reached unsustainable levels during the massive capital inflow cycle, would have borne the hallmark of lesser credibility. In such an environment, the arrangement concluded with the IMF and the EU brought about two major advantages to Romania’s economy: coverage of the external financing deficit and credibility.

Eddie Yue: The development and future of the offshore Renminbi market Keynote address by Mr Eddie Yue, Deputy Chief Executive of the Hong Kong Monetary Authority, at the Euromoney Global Offshore RMB Funding Forum 2013, Hong Kong, 8 May 2013. *  *  *  Tony (Shale)1 Richard (Morrow),2 Distinguished Guests, Ladies and Gentlemen, Good morning, and thank you all for coming. I’m honoured that Euromoney has invited me to speak at the Global Offshore RMB Funding Forum for the second year in a row. I recognise many familiar faces in the audience today, and I note the presence of a wide range of panellists who will no doubt examine the offshore RMB market from every possible angle and perspective. Here in Hong Kong – the world’s premier offshore RMB business centre – we have had a front row seat to watch the offshore RMB market take shape over the past few years. Since I last addressed this forum in May 2012, this market has continued to expand and evolve at a dizzying pace, which will provide for an interesting and timely dialogue today. However, before we get into what will be a spirited discussion, I want to use my role as the opening keynote speaker to take a step back and gain a broader perspective of developments to date. I also want to look at the macro context, which is likely to play a major role in shaping future developments.
The key policy rate was lowered and has been kept at 0.5 percent since March 2016. Our experience has shown us the crucial importance of flexibility in inflation targeting in enabling us to make the appropriate trade-offs in response to shocks to the economy. The time horizon for achieving the target must be sufficiently long, and the balance of risks, including risks related to financial stability, must be taken into account. The past couple of years have been demanding for the Norwegian economy, and the transition towards being less oil-dependent is ongoing. New sectors must grow to offset the downturn in petroleum-related industries. Monetary policy can facilitate this process, but the necessary adjustments must take place in the business sector. At its September meeting, Norges Bank’s Executive Board decided to keep the key policy rate unchanged at 0.5 percent. The Executive Board’s current assessment of the outlook and balance of risks suggests that the key policy rate will remain at today’s level in the period ahead, followed by a gradual increase to close to 1.5 percent towards the end of 2020. Inflation is expected to remain low in the years ahead. At the end of 2020, inflation is projected to be just below 2 percent. Capacity utilisation for the economy as a whole is projected to rise gradually and to be somewhat above a normal level in 2020. This assessment is based on the outlook for economic developments abroad.

Øystein Olsen: Central bank priorities as the ECB moves towards normalisation Remarks by Mr Øystein Olsen, Governor of Norges Bank (Central Bank of Norway), at the J. P. Morgan Investor Seminar, Oslo, 13 October 2017. * * * Thank you for the invitation to this seminar and the opportunity to share the floor with my Danish and Swedish colleagues. We represent three small economies with many common features, most notably in today’s context our openness to trade and dependence on international developments. However, there are also important differences. As you probably all know – Norway extracts and exports large amounts of oil and gas. As a consequence, Norway experiences considerable terms of trade volatility owing to commodity price fluctuations. This aspect of our economy is vital in understanding recent developments and when discussing the future. A small, open, commodity-producing economy is easily hit by shocks originating in international markets. This was clearly illustrated during the financial crisis and after the fall in the oil price in 2014. The oil price collapse triggered a strong decline in investment activity in the petroleum sector, which in turn affected the wider economy. Last year, growth in mainland GDP was at its lowest since the financial crisis. Unemployment increased through 2015 and to some extent in 2016, particularly in Norway’s oil-dependent regions. We cannot avoid being affected by abrupt changes in terms of trade and other international shocks. But we seem to have learned from previous experiences.
Arthur Yuen: Greening financial institutions Welcome remarks by Mr Arthur Yuen, Deputy Chief Executive of the Hong Kong Monetary Authority, at the HKMA and International Finance Corporation (IFC) Seminar on “Greening Financial Institutions”, Hong Kong, 11 October 2019. * * * 1. Vivek (Pathak), ladies and gentlemen, good morning. 2. It gives me great pleasure to welcome you to today’s seminar on greening financial institutions. 3. The effects of climate change are already visible around the world. In the past four decades, we have witnessed some of the warmest years on record, and the number of natural disasters has more than doubled. In Asia, 50% of our urban population are living in low-lying coastal zones and flood plains. The long-term effects of climate change will likely bring damages to our economies and businesses. 4. Hong Kong sits along the coast and therefore climate change risk is particularly relevant to us. For instance, I believe banks in Hong Kong felt impacted by the Super Typhoon Mangkhut from last year. Whereas properties close to the harbour used to be valued better, banks would now have more considerations on their valuations when granting mortgages. 5. Under this setting, not only are the governments being compelled to act in the face of climate change, most notably under the 2015 Paris Agreement, there is also a growing consensus amongst central banks and financial regulators to take a more proactive stance against these risks. 6.

Swiss economic outlook The slower pace of global economic growth was also felt in Switzerland, with the first official GDP estimate indicating stagnation in the third quarter. Economic performance thus came in below expectations. This was mainly due to a slump in value added in trade and the financial sector. Growth in manufacturing was positive, but varied greatly from one sector to another. Aside from the strong Swiss franc, sluggish global manufacturing activity was also undoubtedly a factor. Demand for Swiss intermediate goods and equipment was particularly lacklustre. On closer examination, however, the economic situation appears somewhat more favourable. There are three reasons for this. First, growth was materially inhibited by an unusually sharp dip in energy output over the summer months, which had nothing to do with the economic cycle. The second reason concerns final demand, namely, that both private and public consumption as well as exports were up on the half of the year. And third, a range of other indicators leads to a somewhat more positive assessment of the economy. Nevertheless, capacity utilisation remains unsatisfactory, and demand for labour muted, with the seasonally adjusted unemployment rate having edged up from 3.3% to 3.4% since the last monetary policy assessment. As many companies have had to reduce prices considerably, margins remain a major source of concern. Recent months have seen numerous measures aimed at cutting production costs and increasing efficiency. According to the latest survey conducted by the SNB delegates for regional economic relations, these measures are now beginning to take effect.
Given the cross-cutting nature of climate change and the wide range of risks that it poses to the banking system, I would be hesitant to rely on any single measure or tool as a “silver bullet”. Instead, I think it is crucial that we remain open-minded and consider the full spectrum of tools available when it comes to mitigating climate risks for banks. Indeed, this philosophy underpins the design and rationale of the Basel III framework, which is based on a “multiple metrics” approach. This approach is based on the fact that each regulatory measure has strengths and weakness and therefore the multiple metrics framework is considered more robust to arbitrage and erosion over time, as each measure offsets the shortcomings and adverse incentives of the others. And this applies equally when it comes to climate-related financial risks and stress testing. Of course, we have to acknowledge that stress tests are a powerful and important measure in our toolkit, as they allow authorities to assess the resilience of banks to future adverse scenarios. And also because, given the time horizon of climate-related financial risks, we cannot rely on historical data to gauge the risks to banks. So stress tests can complement the backward-looking nature of our Pillar 1 risk-weighted framework, which is calibrated based on empirical data, and explore different scenarios. 5/6  But, at the same time, we have to acknowledge that stress tests can handle “traditional” financial risks by drawing on the experience from previous financial crises.

Ardian Fullani: Imagine the future – for a better economic cooperation. Economic chamber’s and bank’s responsibilities Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the 10th Vienna Economic Forum, Vienna, 7 May 2014. *  *  *  Dear Ladies and Gentlemen, Dear colleagues and participants of the Vienna Economic Forum, I am honoured and delighted to return and speak to such a constructive and important economic forum, discussing with you the economic development topics, which affect the present and the future of our economies. The topic of this forum is very important for the economies of the South East Europe. It creates the proper environment, which enables the examination of the problems faced by our economies during the crises. We can certainly draw few lessons from what we have learned during the recent years, following the global economic and financial crises. These discussions and the harmonization of economic policies will help us to project a strong coordinated economic structure for the long term future of our economies. It is particularly important to converge here in Vienna and discus the cooperation issue because one of the obvious outcomes (lessons) of the developments during the recent years is that the economic developments in particular for small open economies of the South East European region, are not local or regional anymore. Just like the flu, it is rather unexceptional and highly transmittable from one economy to the other, from one sector of the economy to the other.