samchain/econo-pairs-v1 huggingface dataset:
Under this rule, capital adequacy for the four main banks in Sweden is a function of the banks’ long-run capital adequacy ratio, the credit gap and the output gap. Figure 5: Countercyclical capital buffer using capital adequacy rule  Source: Riksbank  Again, this exercise is purely illustrative, but the results are encouraging, as the rule would have raised the banks’ capital in the run-up to the recent crisis and lowered it after the crisis hit. And the results broadly match those from a similar exercise conducted by Claudio Borio, in which a measure of the credit-to-GDP was used to guide the size of countercyclical capital buffers in Sweden since 1980 (Figure 6). 13  13  Claudio Borio, “Credit in monetary and (macro-)prudential policy”, Sveriges Riksbank workshop on housing markets, monetary policy and financial stability, November 2010. BIS central bankers’ speeches  11  Figure 6: Countercyclical buffers in Sweden using credit-to-GDP gap-rule  Vertical shaded areas indicate the starting years of system-wide banking crises. The countercyclical buffer is 0 when the value of the credit/GDP gap is below 2, and 2.5 when it is above 10%; for gaps between 2 and 10% the buffer is calculated as 2.5/8 times the value of the credit/GDP gap exceeding 2%. Source: BIS calculations. However, much more work is required, for example to allow the approach to include other regulations, to determine how best to calculate the sustainable level of credit in the long-run, and to overcome the econometric problems when estimating the rule.

The development of the venture capital industry, a better framework for SME financing and the provision of micro financing continue to be important priorities to ensure that credit is made available to all segments of the economy, as well as to support the growth of new areas and industries. Increased focus on developing these financing modes has been supported with higher public sector budget allocations for the venture capital industry and for specific development financial institutions to channel micro-credit to small micro-enterprises. Priority has also been accorded to investment in information and communications technology by the banking sector. With the completion of the consolidation exercise, domestic banking institutions have actively embarked on upgrading their systems, including in product delivery, risk management and information systems. The adoption of technology in the Malaysian banking system has predominantly been to automate business processes. However, more recently technology has been used as a tool to assess and drive business performance. With competition in the market becoming increasingly intense, the ability to understand the drivers of performance and the ability to make prompt response is vital to remain competitive. Business delivery channels and business processes have also been reviewed to enhance efficiency levels and service quality to the customers. Many have formed strategic alliances with partners to enrich their value proposition to their customers through cross-selling of products and services. Indeed, the Malaysian banking industry has now become more consumer-centric.
Implications of the new environment for financial stability oversight  It will be clear from the litany of issues I have just mentioned - new players, new products, new risk transfer techniques and interconnections - that the changes in today’s financial world are indeed quite profound in relation to financial stability oversight. But are they net benign or net negative? The world here is sometimes portrayed as being in two designated camps. This may be a bit of a parody, but I am sure the two protagonists would forgive my little sketch. The bullish view is led by Governor Greenspan. This holds that, in the new financial world, banks now possess the enhanced ability to disperse risk - to offload risk to others, be they investors, insurance companies or whatever. The banks have thereby been able to weather a variety of shocks, which in an earlier age might well have engendered financial instability. The Asian crisis, Russia, 9/11, Enron: I could go on. In each case the banks came through and the financial system has demonstrated greater resilience as derivatives and sophisticated risk transfer processes have dispersed risk to a wider audience. The bearish camp is led by Warren Buffett. This points out the opacity of today’s world: the difficulty of spotting risk concentrations; or judging the behavioural expectations in the face of given types of shock. My view would be that both schools of thought are right! I think in reality it depends on your vantage point. There has been improved capital formation.

However, the broad trend is to combine investor protection and consumer protection for banking securities and insurance, and split these away from the systemic aspect. The precise architecture in different countries depends on historical, political and institutional factors. Personally I feel we have been quite enlightened in the UK. As a former Chairman of the old Securities and Investment Board - a forerunner of the FSA - I could certainly see the limitations of the earlier situation. And despite the inevitable challenge - being well addressed in my view - of managing a supervisory authority with the size, scope, and powers of FSA, it reflects the realities of today’s environment. And as for financial sector oversight in the UK, this is carried on under the auspices of a Standing Committee of the three authorities involved: HMT, FSA and the Bank of England. The roles of each party have been carefully thought out in relation to which party is best placed to do what, and laid out in a published MoU. The FSA is responsible for the supervision of firms, markets and clearing systems, and for the conduct of regulatory operations in response to problem cases affecting these players. The valuable intelligence it gains can help in understanding concentrations and threats. The Bank has responsibility for the overall stability of the financial system as a whole.
Williams B. (2002), “The Defensive Expansion Approach to Multinational: Evidence to date”, Financial Markets, Institutions and Instruments, Vol. 11, pp. 127–203. 24  BIS Review 82/2010

Jaime Caruana: Concluding remarks - conference on “Central Banks in the 21st Century” Speech by Mr Jaime Caruana, Governor of the Bank of Spain and Chairman of the Basel Committee on Banking Supervision, at the conference on “Central Banks in the 21st Century”, hosted by the Bank of Spain, Madrid, 9 June 2006. *  *  *  It is my pleasure to participate in this concluding session of the conference and to be accompanied at this table by Pedro Solbes. I hope you found the presentations and discussions inspiring and motivating. I certainly did. We are now witnessing some profound changes in the way our societies organise their economic relationships, and these naturally pose new challenges to central banks, regarding both their role of monetary policymakers and their responsibility to preserve and foster safer and more efficient financial systems. Over the last two days we have discussed some of the underlying forces of change and their implications for the design of sound monetary policy and financial architecture, including the question of how best to arrange payment and security settlement systems. Let me briefly elaborate on some of the issues raised at the conference which I found particularly interesting. I will first reflect on the difficult question of how monetary and financial stability relate to each other and then move to some particular issues of special interest for a currency area, such as Economic and Monetary Union (EMU).
The void that Microsoft could have filled was soon captured by the Android operating system. Bill Gates termed it as his “greatest mistake ever” which cost Microsoft $ billion. So, by focusing on the five key battles – customer loyalty, value, efficiency, resilience and talent – the banking industry can transform itself for the future and avoid the fate of Kodak. 3-The Role of Enabling Stakeholders We have seen the importance of customers, technology and data for the future of banking. But it is important to recognize that this is not a journey that banks can take alone. Rather, they need the support of key stakeholders; otherwise they will only succeed in making minor, superficial changes rather than achieving a genuine transformation. The role of two key stakeholders is worth highlighting; educational institutions and regulators. i. Educational Institutions  Central Bank of Kuwait - Public ‫ عام‬- ‫بنك الكويت المركزي‬  - 15 -  Let us consider first the critical role of educational institutions. They need to ensure that they are preparing graduates for future jobs in the banking industry, jobs that not only require traditional studies of finance, economics and business, but also encompass new skills around financial and technological innovation. It is increasingly evident that jobs in the future will be fundamentally different from jobs today.

According to the Accenture study, 48% of customers said they wanted relevant advice and product information from their banks as they go about their daily lives. They also want banks to play a supporting role in the purchasing process for products such as a house or new car, and even related services such as insurance. Banks need to focus on providing long-term value for customers, rather than viewing them as a short-term opportunity for sales. We have already seen the harmful impact of this ‘short-term’ outlook that led to the subprime-mortgage crisis, as banks sold mortgages to customers who couldn’t afford them. Banks’ profits surged in the short term, but everyone suffered in the end; not only customers and the broader economy but also the banks. Banks therefore need to revisit their value propositions towards their customers in order to ensure that they are truly providing the products and services their customers need while keeping the interest of their customers and the society in Central Bank of Kuwait - Public ‫ عام‬- ‫بنك الكويت المركزي‬  - 11 -  mind. It will be helpful for the industry to reflect upon its ultimate objectives – to ensure inclusive prosperity and put the welfare of society on a sustainable footing. iii. Battle for Efficiency To win over customers and provide value, banks must operate in an efficient and intelligent manner, with their limited resources optimally deployed. The battle for efficiency is the third of the battles that banks need to win.
3 This has further been enshrined in Article 107 of the Basic Law which specifies that “the Hong Kong Special Administrative Region shall follow the principle of keeping expenditure within the limits of revenues in drawing up its budget, and strive to achieve a fiscal balance, avoid deficits and keep the budget commensurate with the growth rate of its gross domestic product.” 4 The amount of foreign reserves as at end-1997 at $ billion was equivalent to 7.8 times the amount of currency notes  and coins in circulation, 7.1 times the monetary base, 3.8 times Hong Kong dollar M1, 54% of GDP or 15 months of retained imports. 5 Public expenditure, which comprises total government expenditure and expenditure by public sector organizations, currently  accounts for only around 18% of GDP. 6 Employment in the services sector rose from 1.1 million workers in 1986 to almost 1.8 million in September 1997,  absorbing more workers than the job losses incurred by the contraction of the manufacturing sector during the period. BIS Review 19/1998  -38. Hong Kong’s robust financial system has also provided an important foundation for exchange rate stability. We have seen many examples in which the maintenance of a stable exchange rate has been undermined by a fragile financial system. Examples include the Mexican peso crisis in 1994 and the recent currency turmoil in Asia. In Hong Kong, however, we have a robust monetary management mechanism, a modern system of prudential supervision and a sophisticated financial infrastructure.

These operations, as set out below, are carried out for the benefit of promoting general market stability, having regard to the level of sophistication of present day financial arrangements: (a)  when Initial Public Offerings of shares and other large scale Hong Kong dollar transactions risk creating extreme conditions in the interbank market and affecting the stability of the exchange rate, the HKMA may lend to or borrow Hong Kong dollars from the interbank market temporarily to dampen such extreme conditions; and  (b)  the HKMA may enter into intraday repurchase arrangements (Repos) of Exchange Fund Bills and Notes and other eligible paper and overnight Repos through the Liquidity Adjustment Facility (LAF) to facilitate the smooth settlement of interbank transactions. It does not, however, encourage “repeated borrowings” from LAF, a term which has been clearly defined in the HKMA circular dated 12 November 1997. Other HKMA activities 7. In all other activities conducted by the HKMA which may have the effect of varying the clearing balance of the banking system, the HKMA ensures that such effect is neutralized as the case may be, by recycling or sterilizing Hong Kong dollar liquidity. For example: (a)  a transfer of fiscal surpluses from the Government held temporarily in commercial bank accounts to the HKMA for the account of the Exchange Fund will be recycled to ensure that there is no effect on the clearing balance of the banking system.
Macroprudential policy – car loans and property loans While monetary policy is focused on overall price stability, macroprudential policies target specific areas to promote economic and financial stability. The two key macroprudential measures taken in recent years relate to the property market and car market. In the property market, MAS has implemented prudential limits on loan-to-value, loan tenure, and debt service ratios while the Ministry of Finance has implemented stamp duties on buyers and sellers. This collection of measures is the so-called property cooling measures. In the car market, MAS has implemented limits on loan-to-value and loan tenure. MAS eased the limits on car financing in May this year. But it is not time yet to ease the property cooling measures. The considerations and circumstances in the two markets are quite different. The restrictions on car financing were imposed in 2013 – at a stringent level – primarily to restrain the strong demand for cars and COEs, and consequential pressures on inflation. The objective of curbing inflationary pressures has been achieved. The contribution of private road transport (excluding petrol) to headline inflation has eased from +1.3% points in 2011– 2012 to –0.5% point in the first quarter of this year 2016. MAS therefore reset the car loan restrictions in May this year at a level that would continue to promote financial prudence and support the move towards a car-lite society over the long term.

Ravi Menon: MAS’ Annual Report 2015/16 Remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at MAS’ Annual Report 2015/16 Media Conference, Singapore, 25 July 2016. *  *  *  Good morning. Welcome to MAS’ annual report media conference. Economic growth The global economy is headed for another year of lacklustre growth. Recovery in the advanced economies is hesitant and uneven. Economic activity is slowing in the emerging market economies. The IMF has just released its latest projection for global GDP growth in 2016 – at 3.1%. This is the same as last year. MAS is closely watching these developments, especially three factors that are key to the growth outcomes this year: one, Brexit and its implications; two, the shape of the recovery in the US economy; and three, slowdown in the Chinese economy. The UK referendum vote to exit the EU will have an impact along several dimensions: first, on financial markets and possible consequences for financial stability; two, on investment and GDP growth in the UK, with potential spill-overs to the EU and beyond; and three, on political and social developments, and what they mean for globalisation. Brexit’s impact has been most keenly felt so far in the financial markets. This is to be expected as prices need to adjust to reflect the new reality of a UK that is outside the EU. So, exchange rates, bond yields, and equity prices have all seen sharp movements as markets search for a new equilibrium.
The Rt Hon Sir Edward George GBE: Central bank independence  Speech by The Rt Hon Sir Edward George GBE, Governor of the Bank of England, to the SEANZA Governors’ Symposium in Colombo, Sri Lanka, on 26 August 2000. *  *  *  Governor Jayawardena, fellow central bankers, I am honoured, personally and on behalf of the Bank of England to participate in your celebrations. On behalf of the Bank of England, and, I am sure, of all your guests here this morning, I congratulate you, Mr Governor, on the great contribution that the Central Bank of Sri Lanka has made to the development of your beautiful country in your first fifty years and I wish you continuing success in your task in the years to come. You invite me to speak about Central Bank Independence, which of course I am happy to do - although I should perhaps make clear at the outset that it is a concept which I find somewhat elusive. Like so many other debates, the debate about central bank independence often seems to become unduly polarised. At one extreme it seems that some of those who resist central bank independence as undemocratic - or even some central bankers who favour it - assume that it involves an elite body of individuals, who, once appointed are, by virtue of statute, beyond political influence, with extensive but only generally-defined powers to affect the financial environment - and hence the lives of individuals and businesses throughout their currency area.

The FSB’s recommendation to develop alternative reference rates alongside LIBOR recognises that there are, broadly speaking, two main applications for benchmark interest rates: (i) as reference rates in credit products, including bank loans, thereby helping banks to hedge their unsecured funding costs; and (ii) as reference rates in derivatives contracts, whose users are likely to be seeking to hedge exposure to the general level of interest rates, or to hedge secured funding costs. LIBOR originated as a reference rate for bank loans, and became the dominant reference rate in interest rate swap contracts because it was already the major established reference rate at the time the swap market developed. However market participants’ input to the FSB report suggested that many users of derivatives would prefer not to have exposure to banks’ term funding costs through LIBOR swaps, and would instead prefer those contracts to reference a near risk-free rate. This change will not happen spontaneously – liquidity in long-dated swaps is firmly concentrated in contracts referencing LIBOR and no individual player can change that situation. What is required is a collective effort to change market practice. That is why we have initiated the Working Group on Sterling Risk-Free Reference Rates. It will be tasked with identifying a suitable near risk-free reference rate for sterling markets, and formulating a transition plan to catalyse a change in market practice so that a significant portion of derivatives contracts reference the new RFR rather than LIBOR.
The International Monetary Fund, IMF, has also expressed increasing concern over this  7 Swap agreements between central banks can be described as rental agreements, where one obtains access  during a predetermined period to a foreign currency in exchange for remuneration in the form of one's own currency. 7 [14]  development. In the report, the IMF calls on countries with limited currency reserves and a lack of swap lines, like Sweden, to consider measures aimed at strengthening their protection. 8 With 70 years of experience of problems in many countries, the IMF's advice is worth taking seriously. Many factors contribute to Sweden’s access to potential swap lines being uncertain. The fact that Sweden is in global terms a small economy is of course one such factor. One cannot assume that it is always in the interests of an individual country to help another country, particularly not in cases that concern a largely domestic crisis. The tendencies towards a more introvert policy that can be discerned in some economies do not exactly give hope for greater helpfulness in the future. Perhaps the conditions would be better in a global financial crisis, when it may be in one's own best interests to help others. But the hopes of bringing about a swap agreement could be dashed if the borrowing country’s own buffer, the foreign currency reserve, has been weakened. On the contrary, there may be doubts that the country is capable of managing its own risks.

However, before the agreement was signed and ready to be put into use, the Riksbank was forced to use its own foreign currency reserve. With the aid of this, and gradually with the new swap facility, the Riksbank lent dollars equivalent to around SEK 200 billion for four weeks. In total during 2008 and 2009, the Riksbank was able to offer its counterparties, with the aid of the swap line from the United States, dollar loans corresponding to more than SEK 1,000 billion. Central banks’ balance sheet – grown to manage financial crisis  Note. Per cent of GDP. Source: Macrobond  It is difficult to say what would have happened if the Riksbank had not received access to the swap with the Federal Reserve, and if the Riksbank had not been able to offer the banks this dollar facility. Probably, some of the banks would have experienced severe difficulties. After the global financial crisis, the Federal Reserve has announced that it no longer offers swap lines to other than a small group of central banks, a group to which the Riksbank does not belong. It is also highly uncertain whether we will have access to similar arrangements with the Fed or other central banks the next time problems arise.