samchain/econo-pairs-v1 huggingface dataset:
Credit scoring, advanced statistical analysis, and financial modelling are among the ever expanding range of tools that credit officers and others use to lend more rigorous insight into risks that were once thought not readily quantifiable. The businesses of banking and risk management will always be more art than science. Still, the metaphor of the crossroads of subjects related to numbers reminds us that, for our system of supervision to remain relevant in the twenty-first century, it must reflect the industry’s advances in quantifying risk and in developing other tools to measure and manage risk. At the conclusion of this seminar, I hope that all of us will return to our home countries with deeper insight into Basel II and into our own readiness for a new approach to banking supervision. A Spanish proverb reminds us to “drink nothing without seeing it; sign nothing without reading it.” It is in that spirit that I would like to begin the substance of my remarks with my thoughts on why we need Basel II. Do we need Basel II? As you know, Basel II has attracted much more attention, from more segments of society, than probably any other reform of bank supervision. Mainstream newspapers have reported extensively on it. Politicians of all views have addressed it. Even non-financial business owners have discussed it extensively. The level of public debate reminds us that banks are charged with a special public trust and that capital requirements are intended to safeguard their ability to discharge that trust.

At the same time, over these ten years, we have gained insight into the functioning of the Norwegian economy under an inflation targeting regime. Inflation targeting is flexible, i.e. when setting the key policy rate, weight is also given to stabilising developments in output and employment. For monetary policy to contribute to stabilising developments in output and employment, there must be confidence that the inflation target will be reached. Inflation will not be at target at all times, but if there is confidence in monetary policy, expected inflation will be close to the inflation target over time, which in itself contributes to stabilising inflation. Norges Bank’s communication of monetary policy aims to stabilise inflation expectations by giving the reasons for and explaining interest rate setting. By publishing its interest rate forecasts and monetary policy strategy, Norges Bank has made it easier for others to understand and evaluate monetary policy. It is my objective to continue and enhance the Bank’s analysis and communication. Since March of this year our monetary policy reports have included a summary of the Executive Board’s discussion of monetary policy prior to the reports. Chart: Surplus liquidity in the banking system To be effective, the key policy rate must have an impact on market rates. Norges Bank supplies liquidity to banks to bring short-term money market rates down closer to the key policy rate. Surplus liquidity in the banking system is kept as sight deposits at Norges Bank. The redistribution of interbank liquidity does not function adequately.
Concern over how to resolve  BIS Review 6/2004  1  these problems has overshadowed factors that have been pointing to a strengthening of the dollar, mainly the relatively favourable US growth and the investment opportunities that this is likely to bring about. The weaker dollar can be assumed to have implications for the euro area and Japan, where growth has been fuelled in recent years by high net exports. A substantial appreciation in the exchange rate similar to what we have seen now will make it more difficult to increase exports, which means that growth will have to come from domestic demand to an even greater extent than today. At the same time, we must not forget that the depreciation of the dollar has occurred from levels that were generally deemed much too high, and that a change in the dollar exchange rate is likely to be a precondition for resolving the problem of the high US current account deficits in the long term. There has also been some new data on the real economy. As regards the US, the data suggest that economic growth there last year - once again - may have to be revised up. For example, housing construction reached record highs in October and November. In addition, consumption growth was stronger than expected during the same period. One reason for this was that households chose to save a smaller proportion of their income than expected.

The SNB takes stock at the end of each year and distributes part of these profits to the Confederation and the cantons. If the SNB had to pay out money ‘debt-free’, as called for by the initiative, it would be giving money away without receiving an equivalent amount in return. However, the SNB would not be able to earn income on the money it gives away. In a system with ‘debt-free’ payments, we would therefore be unable to make an annual distribution to the Confederation and the cantons. It is important to recognise that economically speaking, the two approaches are ultimately equivalent. We can distribute the profits on our investments every year, or we can give newly created money away, but then no longer pay out any profits. In other words: Under established practice today we distribute the interest on our capital, while under a sovereign money system we would be selling off the family silver, as it were. ‘Debt-free’ payments would not make our country any richer. The initiative’s authors also suggest that, with the introduction of sovereign money, the SNB would be able to redirect the profits that banks currently earn from money creation to taxpayers. This idea is based on the assumption that, by creating money, banks are filling their own coffers. But, in reality it is all the banks’ customers – private individuals as well as companies, savers and borrowers – who benefit from the creation of money by banks.
Market Power and Monetary Policy Speech given by  Andrew G Haldane Chief Economist Bank of England  Co-authors: Tommaso Aquilante, Shiv Chowla, Nikola Dacic, Riccardo Masolo, Patrick Schneider, Martin Seneca and Srdan Tatomir. Federal Reserve Bank of Kansas City Economic Policy Symposium Jackson Hole, Wyoming 24 August 2018  The views expressed here are not necessarily those of the Bank of England or the Monetary Policy Committee. I would like to thank Federico Di Pace, Laure Fauchet, Rebecca Freeman, Jeremy Leake, Clare Macallan, Colm Manning, Roland Meeks, Kate Reinold, Natalja Sekhan, Silvana Tenreyro, Jan Vlieghe and Robert Zymek for their comments and contributions. This work contains statistical data from ONS which is Crown Copyright. The use of the ONS statistical data in this work does not imply the endorsement of the ONS in relation to the interpretation or analysis of the statistical data. This work uses research datasets which may not exactly reproduce National Statistics aggregates. 1  All speeches are available online at www.bankofengland.co.uk/speeches  The topic for this panel is the link between developments in product markets and monetary policy. It is a great one. A lot of attention has been paid by central bankers over recent years to the relationship between labour markets and monetary policy (for example, Yellen (2014) and Constâncio (2017)). And rightly so. The relationship between monetary policy and product markets has, by comparison, been the road less travelled.

Transparency may be reduced if it is unclear why supervisors set certain requirements for one bank, and a different requirement for another. Allowing a discretionary approach in the absence of the other pillars also makes it difficult to ensure a level playing field, since banks would not necessarily be held to the same standards. That would certainly harm competitiveness across jurisdictions, and possibly even within the same jurisdiction. So the third pillar, market discipline, adds greater transparency. When a bank discloses information that offers meaningful insight into its risk positions and exposures, marketplace participants can better assess the financial health of the institution. They can then provide economic incentives for banks to strengthen their management of risk and hold realistic levels of capital against their risks. One might say that Basel II seeks an “efficient frontier” of policy objectives through the three pillars. Each pillar provides something that the other two cannot, and each is essential to achieving our overall objective of financial stability. I realise that this analogy of the three pillars as a portfolio of policy options is an oversimplification. But it helps us visualise why we think that the most “efficient frontier” involves a mixture of minimum rules, tempered by supervisory discretion, and supplemented by market-based incentives. IV. Consistency of accounting standards and Basel II  Of course, it would be impossible to improve transparency and promote stability without examining the mechanics that define how financial data are recorded and reported.
With greater awareness and adoption in more financial centres, Islamic finance is poised to play a bigger and more central role in global finance. We look forward to WIBC Asia as a key platform that will buttress the development of Islamic finance as it takes root in the region. The industry, which is open to all participants, can only reach greater heights with your commitment and support. I therefore wish you a productive conference as you seek exciting new horizons for Islamic finance. 4  BIS Review 84/2010

Profitability will be depressed both by increased competition and by rising wage costs. Investment will be held back and the transformation will proceed too slowly or not at all. There will then be no quick renewal of capital stocks. Firms will not make good use of the new information technology. I have cited wage formation as a conceivable factor that may hamper a transformation, but of course there are other factors as well, for example the tax system, the educational system, etc. It is not a function of the Riksbank to point out specific factors that can affect the pace of structural change. But perhaps we can contribute to a broader discussion of the new economy. Various factors that hamper or check an adjustment could thus result in the Swedish economy following a lower, not a higher, path for long-term growth, with a stronger, not a weaker, inflation propensity and a continuation of high unemployment instead of a reduction to the low level that most people want. These risks seldom feature in the general discussion about the new economy. The changes that many people refer to as the new economy unquestionably present a number of challenges to the Swedish economy in the present situation. My comments have indicated, moreover, that the notion of a new economy is not correct; that is not what it is all about.
A second issue I would like to touch upon is the need for an in-depth analysis of the framework for smaller retail institutions, particularly those typically funded by deposits. By now, there is a common understanding that we need to rethink the way to treat those in crisis. I am sure we are all aware of initiatives to develop special administrative liquidation procedures, and of alternative proposals on the need to extend the scope of resolution by reassessing the concept of public interest. My personal feeling right now is that both ways could be workable, and the argument I would like to present is that we should first try to agree on an optimal way to absorb losses and facilitate eventual restructuring costs. In non-systemic crises, bailing-in depositors or bailing-out institutions are socially costly options. At the same time, high MREL levels could be very expensive to achieve for many of these institutions. Therefore, I would suggest striking the right balance between, on the one hand, the internalisation of losses above capital requirements and, on the other, collective industry funding to facilitate the transfer tools. Connected to the previous topic is the issue of the level playing field. Failing banks that do not satisfy the public interest test are subject to insolvency procedures in accordance with national regulations that vary substantially across jurisdictions. At the end of the day, this results in an unlevelled playing field as some have upgraded their insolvency proceedings to quasi-resolution frameworks.

Experience shows that market confidence in failing or likely-to-fail banks can only be restored on the basis of the external support it can receive, be it from an eventual acquirer (as was the case with Banco Santander in respect of Popular) or elsewhere. And so far the question remains: what happens if there is no acquirer? How could other resolution tools be workable? 1  If the resolution is carried out by means of a bail-in or bridge institution, arrangements should be in place to tackle the possibility of closed markets and deposit runs. If we do not equip Resolution Authorities with the proper mechanisms to provide the institution with liquidity, such tools will be rendered useless. In this field, the discussion is quite open. The Single Resolution Fund could assume that role and, in that respect, the backstop the European Stability Mechanism (ESM) will provide is a very welcome improvement. However, as Ms. König has repeatedly remarked, the SRF’s resources may be insufficient to provide the significant amounts of liquidity that a systemic entity may need and, therefore, “the SRF would never be the sole answer to make sure a firm in resolution can continue to run with enough liquidity to meet its obligations”. In this sense, proposals such as the ECB’s Eurosystem Resolution Liquidity, which involves a fiscally neutral guarantee provided by the ESM in favor of the SRF, could be of paramount importance.
And many market participants were also expecting a correction at some point; but they generally felt they were well placed to handle it. In fact the severity and breadth of the downswing has surprised markets, commentators, and policymakers alike. In the light of subsequent developments, a number of commentators have concluded that the problem was simply a lack of attention and short memories. I don’t think it was quite as simple as that. I am with Mark Twain who said "History doesn't repeat itself, but it does rhyme." While the current crisis has some similarities to previous downswings – in the early 90s or of the 70s for example – there are some significant differences too. For example the last three recessions in the UK (in the 70s, 80s and early 90s) were preceded by sharp rises in consumption and activity and earnings to well above sustainable rates. As Chart 2 shows that was not true of the last few years when consumption, output and earnings all seemed unusually stable. Again in previous recessions, stress in the banking sector has tended to follow on from defaults and losses on domestic loans as interest rates rise and the economy slows down. But this time the downturn started in the banking sector – last summer when losses in the US property market not only led to losses in UK banks trading and treasury books but closed important sources of finance to them. The downturn in the housing market and then the wider economy followed.

The recent dollar swaps and further extensions of the SLS and eligible collateral are further steps in that direction. And we recently announced a more permanent structure of money market operations including the introduction of a discount window. The second track has been to work closely with the FSA and Treasury to limit the repercussions from the failure of banks which do not have an independent future whether through arranging mergers or managing closure. Northern Rock was the first in line and led to a lot of criticism of the tripartite. I think we have learned a great deal over the year and have shown more skill and speed with subsequent cases including Bradford and Bingley recently. But in the last 6 weeks it became clear that this case by case approach was not enough either at home or internationally. Despite the provision of additional liquidity to the system, market conditions got worse over the summer as worries grew about the downturn in the broader economy and its consequences for bank losses. Once again the triggers for a further downward lurch came in the US. First Fannie Mae and Freddie Mac were taken into conservatorship and then, the following weekend, Lehman Brothers proved unable to find a buyer and filed for bankruptcy. That shook markets which had expected it to be saved by the State, if necessary, as had been the case with Bear Stearns earlier in the year.
Thomas Jordan: The Swiss National Bank’s monetary policy decision and assessment of the economic situation Introductory remarks by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the Media News Conference of the Swiss National Bank, Zurich, 19 March 2015. *  *  *  Ladies and gentlemen It gives me great pleasure to welcome you to this news conference. Following the discontinuation of the minimum exchange rate, we have decided to hold an extraordinary news conference at our quarterly assessment in March, in addition to the traditional six-monthly news conferences which will take place in June and December. In my presentation, I will explain the Governing Board’s monetary policy decision and outline our assessment of the economic situation. Afterwards, my colleagues and I will be at your disposal to answer questions. Monetary policy decision I will begin with our monetary policy decision. The SNB has decided to leave the target range for the three-month Libor unchanged at between –1.25% and –0.25%. Interest on sight deposits at the SNB remains at –0.75% and the exemption thresholds remain unchanged. Negative interest helps to make it less attractive to hold investments in Swiss francs. Overall, the Swiss franc is significantly overvalued and should continue to weaken over time. The SNB will continue to take account of the exchange rate situation, and its impact on inflation and economic developments, in formulating its monetary policy. It will therefore remain active in the foreign exchange market, as necessary, in order to influence monetary conditions.

The anticipated strengthening in the global recovery will have a supportive effect. Negative interest rates I would now like to turn to negative interest rates. Following the interest rate reductions since the last monetary policy assessment, the reference interest rate is now negative for the first time in the history of the SNB. This situation is new, and has therefore been discussed in detail in the public arena. I would like to emphasise that lowering the interest on sight deposits at the SNB into negative territory is a necessary monetary policy measure. Negative interest makes holding investments in Swiss francs less attractive for Swiss and foreign investors. This creates incentives to reduce inflows to the franc, and reinvest Switzerland’s traditional current account surplus abroad. Negative interest thus contributes to a weakening of the Swiss franc. The interest rate reductions had a rapid effect. As expected, the negative interest rate imposed on banks by the SNB was transmitted to the entire spectrum of money and capital market interest rates. However, low or negative interest rates are not limited to Switzerland. Low interest rates are a global phenomenon and some other countries, especially in the euro area, also have negative rates. Switzerland cannot disassociate itself from such developments. With the interest rate reduction in Switzerland, the interest rate differential to the major currency areas, which had declined to virtually zero in recent years, has now increased again.
In fact, the Business Perceptions Survey (EPN) for May reflects a decrease in the fraction of companies that plan to make investments this year, although those that do plan to invest are more certain about their execution (figure 9). The twelve-month cumulative current-account deficit narrowed from 9% of GDP in the latter part of 2022 to 6.9% of GDP in the first quarter of this year. This fall was somewhat bigger than expected. The current-account balance improved significantly at the beginning of the year, consistent with the ongoing adjustment of the economy, which had an impact through the drop in imports of consumer goods, which is consistent with a rebound in household savings. The higher value of exports in some goods categories also contributed to this result (figure 10). On the external front, in the first quarter the Chinese economy grew more than expected and labor markets in developed countries remained dynamic. Even so, the outlook for global growth is still low. The inflationary problem remains, owing mainly to the high levels of the core components in most of the world (figure 11). In the developed economies, although several central banks are close to ending their rate hike cycles, market expectations suggest a more prolonged monetary contraction. This is particularly noticeable in the United States, where the labor and consumer markets have been surprisingly dynamic. In the Eurozone, the most recent data reflect the weakness of the bloc’s economies, but the monetary authorities continue to signal future rate hikes (figure 12).

Public savings will remain around 2% of GDP over the projection horizon, in line with compliance with the structural balance target. It is estimated that the current-account deficit will close this year at 3.7% of GDP, to stand at around 4% in 2024 and 2025. In the central scenario, Gross Fixed Capital Formation will maintain a low profile. This projection continues to incorporate a complex external scenario, with high uncertainty and still restrictive financial conditions. Survey information also shows low levels of investment for the coming quarters, and entrepreneurial expectations continue to be pessimistic, mostly so in the construction sector (table 1). The external impulse relevant to Chile will remain moderate. Although first-quarter figures exceeded expectations in some economies, such as China, several factors suggest that this will be transitory. In fact, bank credit to companies has tightened in the U.S. and the Eurozone, pointing to a weak performance of activity and investment ahead. In Latin America, the outlook remains unfavorable, as it combines deteriorating financial conditions with stress factors in several economies. In this context, fiscal spending is not expected to be a major source of external momentum, given the fiscal consolidation process and the weak global scenario. Thus, and heavily influenced by China's improved performance earlier in the year, our trading partners' projected growth for 2023 rises to 3%, up from the 2.4% estimated in March. For 2024 and 2025, there is no change, with projected increases of 2.3% and 3.0%, respectively (figure 18).