samchain/econo-pairs-v1 huggingface dataset:
The package aims to reduce both the likelihood of crisis occurring at a systemically important bank and the costs to the economy in the event of such a crisis. 10  Group of experts on the further development of the financial market strategy (2014). The proposed supplementary measures include a quantitative and qualitative recalibration of the capital requirements, a review of the method for calculating risk-weighted assets (RWA), a timetable for the implementation of workable recovery and resolution plans, and the introduction of binding Total Loss Absorbency Capacity (TLAC) requirements. BIS central bankers’ speeches  7  Uncertainties regarding optimal regulation are likely more important here than in the case of the real estate and mortgage markets, as the probability of a big bank failing and the macroeconomic cost of such a tail-risk event may be less clear or not “objectively” measurable ex ante. Such fundamental uncertainties imply more substantial tensions with respect to the choice and design – size and scope – of further measures to contain the TBTF issue. Going too far could theoretically entail a cost to society that may not be warranted from a cost-benefit perspective. Not going far enough, however, creates the risk of ending up in a very costly crisis. Let me conclude: Sustainably improving the stability of the financial system is a difficult task. But it’s not an impossible dream. It is a fact that improving the regulatory framework entails a delicate trade-off between knowledge and prudence.

However, a positive signal was sent thanks to the agreement reached between the EU Council, the European Parliament and the European Commission at the end of December on the terms of reference of the impact study on long-term guarantees. This study will give impetus to the discussions and I count on the contribution of the institutions chosen by the ACP. Insurance companies must take advantage of the extra time before Solvency II comes into force: in coordination with EIOPA at the European level, we consider that it is already possible and necessary to make use of certain definitive elements in the Solvency II directive, in particular concerning governance and the ORSA (Pillar 2), and reporting to the supervisory authority (Pillar 3). 2  BIS central bankers’ speeches  2.2  In the banking sector, credit institutions must continue strengthening their solvency – a process that is already well underway – and they must intensify their initiatives to adapt to future regulations concerning liquidity. The Prudential Supervisory Authority has organised a series of meetings designed to familiarise the French financial sector with the changes resulting from the implementation of the Basel 3 reforms. In terms of liquidity, the coverage ratio (LCR) is now stabilised. In my New Year address of January 2011, I said that the work on liquidity ratios was unsatisfactory and that it clearly needed to be reviewed. This has now been done.
In other  BIS Review 50/2004  1  words, what starts off as a crisis in an individual institution could easily develop into a balance of payments and currency crisis, which may, in turn, trigger off secondary effects throughout the rest of the financial sector, disrupting other sectors of the economy in the process and thus resulting in a fullblown financial crisis. In the case of the Central Bank of Malta, these considerations assume even greater importance given the Maltese economy’s small size, openness and lack of natural resources, which make it highly dependent on foreign markets. The small size of the domestic market, moreover, also has implications for savings and investment. Thus a limited pool of savings is in turn reflected in a low volume of internally generated resources for investment purposes, making the country highly dependent on external financing. This dependence is evidenced by the private savings ratio, which is not only low by international standards, at around 22% of GDP, but has also been falling in recent years as public sector imbalances have widened to unsustainable proportions. The Central Bank of Malta’s approach to financial stability Against this economic background, therefore, price and exchange rate stability assume particular importance and the need for a stable financial environment becomes all the more crucial.

The new macroprudential toolkit is being accompanied by higher permanent capital requirements and new regulations on banks’ capital structure. The aim is to make the financial sector more resilient to shocks and to prevent or mitigate the build-up of systemic risk. As the new regulatory regime has been introduced, another dimension has been added to the discussion. The question being asked is the following: do reformed banking regulation and the new macroprudential instruments relieve monetary policy of any responsibility for financial stability? A good starting point for the discussion is Tinbergen’s basic principles, which state that a wider set of policy instruments makes it possible to achieve a wider set of objectives and that each instrument should be assigned to the objective it can achieve most effectively. 1 The comparative advantage of monetary policy is to control inflation and smooth fluctuations in output and employment. The first line of defence against shocks in the financial system is, on the other hand, regulation and monitoring of financial institutions. Macroprudential policy is part of this defence. We should also bear in mind that experience of the new regulatory regime and the macroprudential toolkit is still limited. It is too early to assess the effectiveness of the new instruments. On the other hand, we do know that interest rates affect house prices and debt. This suggests that monetary policy should take into account the risk of financial imbalances.
At the monetary policy meetings in July and September 2009, we also decided to lend money to the banks for one year at a fixed interest rate. The Riksbank's current monetary policy has to be characterised as highly expansionary. Such a policy may lead to fears of a too high level of inflation in the future. Personally, I do not think that such fears are justified. The inflation target is, as usual, the focal point of our repo rate decisions. However, as long as the target is not threatened we should do what we can to contribute to the stable development of production and employment. This is why we believe there is a need to keep the repo rate at an exceptionally low level for an unusually long period of time. It does not appear that inflation will be a major problem, while various measures of resource utilisation indicate that it will remain very low over the year ahead. Monetary policy and financial stability The financial crisis has led to a discussion about whether monetary policy should also take into account signs of the development of financial bubbles and aim to counteract such tendencies. This is an important discussion that I and others in the world of central banking will have reason to return to. One of the explicit tasks of the Riksbank is to promote stability and an efficient payment system. The Riksbank will therefore, whatever the circumstances, take measures if the stability of the system is threatened.

Jean-Pierre Roth: Swiss outlook and global developments Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at the Icon Roadshow Euro 2008, Frankfurt am Main, 17 March 2008. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  The Swiss economy looks back on a number of successful years during which it was a very active participant in the growth of the world economy. The export sector rapidly expanded its presence in the new markets, thereby making an important contribution to this development. What was remarkable was that the increased foreign activities were not detrimental to Switzerland as a production location. On the contrary, the Swiss location benefited overall. Reforms aimed at strengthening and opening up Switzerland as a business location have also made a substantial contribution to economic prosperity in recent years. The turbulence on the financial markets that erupted in mid-2007 is unlikely to leave the Swiss economy unscathed. The export sector, including the banks, will be affected by the slowdown in the international economy. An additional factor is the substantial rise in the value of the Swiss franc over the past few months against the euro and the US dollar. However, we are already in a position to learn quite a bit from the financial market turmoil.
7  With the leaders of the industry here, we hope that today’s discussions will identify emerging risks and challenges, and explore how we can all work together to address potential vulnerabilities as we continue to build real markets for the good the people of the UK and beyond. In this spirit, before concluding, I want to briefly touch on one of the biggest challenges facing us right now – the transition to Risk Free Rates. The move to new Risk Free Rates Libor is a prime example of critical hard (market) infrastructure that has not kept up with market developments. Libor is meant to measure the short-term unsecured funding costs of banks. But the reality is that, since the financial crisis, Libor really has become the rate at which banks don’t lend to each other. Bank funding markets have changed enormously. Banks no longer take sufficient short-term wholesale deposits to form the basis for a robust transaction-based Libor benchmark. As a result Libor is overly reliant on expert judgement rather than actual transactions. And global markets remain overly reliant on Libor, a benchmark that may not exist beyond 2021. That reliance is neither desirable nor sustainable. That’s why authorities internationally have worked with market participants to identify alternative benchmarks based on actual transactions. These are overnight rates – a relatively pure read on risk-free rates in each economy. In sterling, the market has chosen SONIA, a benchmark now administered by the Bank of England.

The HKMA’s subsidiary, the Hong Kong Mortgage Corporation (HKMC), which was set up with an objective of buying mortgage loans from banks to supply the markets with additional liquidity, could hardly find any seller in recent years. 4. And our banks are also highly capitalised. Their average Capital Adequacy Ratio is over 20% whereas the average classified loan ratio stays at low levels under 1%. Therefore, they also do not have a strong motivation to issue capital efficient products like synthetic securitisation. 5. However, that does not mean that this will always remain the case, and there is no place for structured credit products here. There are a few factors that can spur the further development of these products in the coming years. 6. First of all, Hong Kong has always excelled as an international financial centre that serves not just the local economy, but also the whole region in the Asian time zone, especially the Mainland of China. Everyone knows the success of the Hong Kong equities market. It is disproportionately large compared to our GDP, but it is still growing at a rapid pace with a strong pipeline of IPOs of companies from the Mainland and elsewhere. 7. In the bond space, there is a fairly common misconception that we do not have a bond market to speak of.
This reflects trends that point to smaller household sizes; the young moving out from family homes earlier, including to take jobs in urban cities; and an ageing population preferring to remain in their homes than move in with their adult children. Such demand pressures have been further compounded by income levels that have not increased in tandem with the increase in house prices. All told, the shortage in affordable housing based on 2014 data is estimated at 960,000 units. This could rise to one million units by 2020 if further measures are not taken to increase supply of affordable houses and improve affordability. Financing measures implemented by the Bank along with fiscal measures by the Government between 2010 and 2013 did in fact achieve this to a certain degree. House price growth has 1/4  BIS central bankers' speeches  since moderated to 5.5%, closer to income growth, following measures taken to dampen speculative activities in the housing market and manage high household debt levels. Lending standards that are more aligned with the level of income have also encouraged private developers to shift their focus to the more affordable segments which should help improve supply conditions. Approval rates for housing loans by the banking sector remain high at 74%, with more than 60% of the new housing loans extended for house purchases below RM500,000. Loan rejection rates for houses in the affordable segment have actually been on a declining trend, falling by 18% since 2012.

Lim Hng Kiang: Towards a new era of growing connectivity between Asia and the Middle East Opening address by Mr Lim Hng Kiang, Minister for Trade and Industry and Deputy Chairman of the Monetary Authority of Singapore, at the 2nd World Islamic Banking Conference: Asia Summit 2011, Singapore, 8 June 2011. *  *  *  Your Excellencies, distinguished guests, ladies and gentlemen, Introduction 1. I am honoured to be invited to deliver the opening address at the 2nd World Islamic Banking Conference: Asia Summit (WIBC Asia). I would like to extend a warm welcome to our overseas guests, especially our distinguished speakers who will be sharing their insights during this conference. Growing connectivity between Asia and the Middle East 2. Despite the recent spate of shocks, the world economy has been resilient with growth projected to moderate slightly to 4.5%1, compared to 5.8% last year. Downside risks such as high energy and commodity prices, the European debt crises, geopolitical tensions in the Middle East and North Africa (MENA) and the Japan tragedy have not substantially derailed the economic momentum. 3. Asia is expected to remain the main locomotive driving economic growth. The International Monetary Fund (IMF) projects Asia’s growth to reach almost 7% this year, led mainly by China at 9.6% and India at 8.2%. Asia has been, and will still be the key engine for global trade. In 2009, the region accounted for 35% of world exports, up sharply from 25% a decade earlier2.
Many consider the lack of cross-border mergers as proof that much remains to be done in terms of market integration and diversification. In any event, scant cross-border consolidation, particularly in a setting of clear overcapacity of the European banking sector, is symptomatic. On this matter, the ECB, in its latest stability report7, published a study on the degree of overcapacity of the sector in Europe and the potential implications for bank business. In keeping with the conclusions of the study, excess capacity may lead to operating below margin in the face of heightened competition. That would preclude making the necessary investments for the future of banks and their adaptation to new technologies and new operators (e.g. in systems), creating “zombie”-like banks that weigh down even further on the sector’s profitability. The study details those banks with a return on equity (RoE) that is lower than the median of 6% over three years, but the most worrying group would be that of banks with an RoE of less than 3%, no less than around 25% of the total. The study concludes with the need to address restructuring and mergers, showing a clear preference for cross-border as opposed to national mergers. On the ever-controversial matter of mergers, I have stated on several occasions that our role as supervisors is not to decide which mergers are desirable and which not.

Allow me now to address the degree of integration of the European banking sector. I have already indicated that the Banking Union has met one of its key objectives: to contribute to  5  See FT https://www.ft.com/content/82624c98-ff14-11e9-a530-16c6c29e70ca  6/10  weakening the link between bank risk and sovereign risk. But, additionally, when it was launched it was assumed that the Union could lead to a more integrated banking system. Today, however, the greater degree of institutional integration has not been accompanied by an increase in cross-border activity in the sector. The share of domestically owned banks in national banking systems remains high, at approximately 83%, the same level as in 2014, before the launch of the SSM.6 We should thus acknowledge that banking consolidation across jurisdictions remains minimal, and most firms and individuals in the euro area continue to depend on their national financial systems. Economic agents can appreciate daily the benefits from the single market and the euro. Yet regrettably, no tangible benefits can currently be discerned to stem from the Banking Union in terms of greater competition in prices and financial services. The truth is that European citizens and companies continue to face obstacles to investing in European markets. National pensioners and investors have access to different investment products and their rights differ as a result of different local insolvency laws. Lastly, I pointed out earlier that the banking sector continues to be mainly national, and it remains closely linked to the country’s sovereign risk.
And here, let me circle back to one of the three themes that I deployed in my speech three years ago: the importance of information sharing. I think we need to push this line of effort further. I think this is the time for us to push to realise the full potential of information sharing in our AML efforts. 30. With the development in the past two to three years, public-private partnerships and similar information-sharing arrangements are now firmly at the centre of the global response to financial crime, having changed the way we work collaboratively to analyse and disrupt shared threats to deliver better and more solid results. We now see them as a key part of the response to the proliferation of online scams, including investment fraud. But I would also note that the global role of partnerships is still comparatively small relative to the scale of the threat from global financial crimes. 31. There is therefore a collective need globally to increase the tempo in these partnerships. Let me explain how we are doing that here in Hong Kong. First, we are increasing the number of banks which are members of the FMLIT from 10 to 15, which will increase the flow of data going into the system and help to reduce displacement risk. Secondly, we are taking steps through thematic work to improve the industry’s analytics capability.

19  All speeches are available online at www.bankofengland.co.uk/speeches  19  ANNEX  Table A1: Weighted average bilateral tariffs Tariffs imposed by:  US  China  US  EU  On imports from:  China  the US  the EU  the US  Prior to recent escalation  2.6  9.1  3.3  3.0  Current measures(a)  8.4  17.8  3.7  3.3  With contemplated measures(b)  13.7  22.4  6.7  7.7  (a) US tariffs on steel and aluminium, the reciprocated tariffs of 25% on $ of US imports from China, and 10% tariffs on an additional $ of US imports from China, matched by 10% tariffs on $ US exports to China. (b) The contemplated hike in the tariff on $ of US imports from China from 10% to 25%, reciprocation by China on US exports of $ and the potential US tariffs on EU motor vehicles and parts. Notes: Bank calculations. 20  All speeches are available online at www.bankofengland.co.uk/speeches  20
See John M. Hartwick (1977): “Intergenerational Equity and the Investment of Rents from Exhaustible Resources”, American Economic Review, 67, December, pp. 972–974. 8  NOU (Official Norwegian Report) 1983:27 “Petroleumsvirksomhetens framtid” [The future of petroleum activity], p. 90. 9  See Ministry of Finance calculations (Norwegian only): http://www.regjeringen.no/nb/dep/fin/tema/norsk_ okonomi/bruk-av-oljepenger-/hvor-mye-oljepenger-har-vi-brukt-sa-lang.html?id=450461  10  Torstein Bye, Ådne Cappelen, Torbjørn Eika, Eystein Gjelsvik and Øystein Olsen (1994): “Noen konsekvenser av petroleumsvirksomheten for norsk økonomi” [Some of the consequences of petroleum activity for the Norwegian economy], Statistics Norway Rapporter 94/1, p.36 (Norwegian only). BIS central bankers’ speeches  3  It may be that the oil fund has exceeded a critical value so that the ambition of a perpetual fund will be achieved. But history remains to be written. The story of John Collett might also have been written with a different pen when his wealth was at its peak. Within a few years, as much as 15–20 per cent of the welfare state could be financed by the return on the oil fund. But if we squander the capital in the fund, we will either have to match the shortfall with tax increases or make substantial cuts in government welfare. The gains – not only the costs – of building up an oil fund have thus been made visible. This also attracts its defenders. Large fortunes nevertheless give rise to concerns. As a minimum requirement, the management of oil wealth must not impair the productivity of labour and real capital.

Moreover, it would transpire that the actual pace of oil extraction – and oil-revenue spending – increased much faster than the committee had recommended. In the first 25 years, Skånland’s prediction was right on the mark. All the oil revenues were spent. But in the past 15 years, petroleum revenues have risen at such a fast pace that a portion has been set aside. If we look at the period of oil revenues in its entirety, close to half of the oil-based revenues have been spent. 9 In 1994, the economists Bye, Cappelen, Eika, Gjelsvik and Øystein Olsen of Statistics Norway estimated that government petroleum revenue spending came to about 10 per cent of overall public expenditure at that time. Tax income from the petroleum sector and petroleum sales revenue – current petroleum revenues – were spent over the government budget. The economists at Statistics Norway expressed concern regarding Norway’s oil dependence. 10 These economists can now rest assured knowing that around 10 per cent of public expenditure is still financed by oil money, but with one important difference from 1994: The source of these revenues is now the return earned on the oil fund – not current petroleum revenues. We have thus succeeded in replacing oil revenues with a permanent flow of income. We can draw on a perpetual source rather than from a well that is being depleted. 7  In 1977 the Canadian economist John Hartwick described the principles for the management of a natural resource in order to produce permanent income.