samchain/econo-pairs-v1 huggingface dataset:
10 The preexisting capital buffers available in the banking system, globally and in Switzerland, played a key role in this regard. The continued credit flow, together with extensive public support measures, helped firms and households bridge their income and liquidity shortfalls. Hence, concerns that the economic shock from the pandemic would be amplified by banks scaling back their lending have not materialised. A qualitative survey launched by the SNB in 2020 shows in fact that loan rejection rates did not increase significantly, even in the most acute phase of the pandemic, and virtually no banks reported their own capital situation as a factor limiting credit supply. 11  Macroprudential policy beyond the pandemic We have seen so far that macroprudential policy can help to contain the build-up of vulnerabilities and strengthen banking sector resilience. The pandemic has moreover shown us that a well-capitalised banking sector can dampen the economic impact of shocks, contributing to a faster recovery. So where do we stand today? According to our monetary policy assessment last week, the global economic recovery is expected to continue, although somewhat subdued by the economic consequences of the war in Ukraine. At the same time however, financial system vulnerabilities are increasing. Several national authorities and international institutions have highlighted stretched valuations, in particular in real estate markets, and are pointing to high levels of corporate and sovereign indebtedness. Let me elaborate further, focusing on real estate markets. As we discussed earlier, these markets are mostly credit financed so that 9  Cf.

The SNB continues to monitor the developments on the real estate and mortgage markets very closely. Our focus is to assess if the banking sector’s overall resilience is adequate given the level of risk-taking and the level of vulnerabilities in the macroeconomic environment. The build-up of regulatory and voluntary buffers in response to the GFC has led to a substantial increase in the overall resilience of the banking sector. Going forward, this resilience must be preserved. As evidenced by the recent reactivation of the SCCyB, this implies adjusting capital buffers in response to the development of vulnerabilities in the mortgage and residential real estate markets. Let me conclude by underscoring that ensuring banking sector resilience is not a goal in itself. Rather, it is instrumental in achieving more stable economic growth, and ultimately benefits not only the banking sector, but society as a whole. 14  For a more detailed explanation, cf. Swiss National Bank, Financial Stability Report, June 2021, p. 13. ​Macroprudential policy beyond the pandemic: Taking stock and looking ahead Fritz Zurbrügg Vice Chairman of the Governing Board Swiss National Bank International Center for Monetary and Banking Studies (ICMB) Geneva, 29 March 2022  Slide 1  2  29.03.2022  Slide 2  3  29.03.2022  Slide 3  4  29.03.2022  Slide 4  5  29.03.2022  Thank you for your attention!
Link to the monetary policy strategy  The first cornerstone of the our exit strategy is the link to our primary objective and thus to our monetary policy strategy. Evidently, the crisis has not changed the ECB’s primary objective. Our actions have resolutely been taken with this primary objective in mind: to maintain price stability in the euro area over the medium and longer term. By implication, any non-standard measure whose continuation would pose a threat to the achievement of price stability must be undone promptly and unequivocally. At the same time, if no such risk existed, a non-standard measure could be maintained in case we continue to see significantly abnormal tensions, credit dislocations and impairment of the monetary policy transmission mechanism. But financial institutions ultimately need to stand on their own two feet. Central banks can and have provided support to market functioning. But ultimately market activity relies on the confidence and trust of market participants themselves. 2. The design of the ECB’s measures  The ECB’s non-standard measures were designed with exit considerations in mind. There was a strong consensus to embark on such policies that would prove unproblematic to unwind at a later stage. In this sense, the design of the non-standard measures was chosen to facilitate a smooth exit, representing the second cornerstone to be kept in mind.

One can thus imagine that part of the explanation as to why an alternative repo rate scenario may give a smaller mean squared gap than the main scenario could be that it is only a purely model-based adjustment of the main scenario. This raises another question: If one were also to supplement the alternative repo rate paths with personal judgements, would one always conclude that the main scenario would give the lowest loss? The answer to this question should reasonably be “yes, at least most of the time” – there are some reservations, which I will discuss in a moment. We try to conduct the policy we judge to be the best or “best balanced” and if we judged that another repo rate path than that in the main scenario would give a better outcome, we would of course choose that one instead. This should be visible in the mean squared gap analysis, that is, there should not be alternative repo rate paths that give a dot that lies south-west of the main scenario. Consideration to developments beyond the forecast horizon and risks There may also be other reasons why the main scenario does not necessarily provide smaller mean squared deviations than an alternative repo rate scenario. One is that the calculations are based on forecasts that extend no further than three years ahead. But there may sometimes be reason to consider what might happen beyond this time horizon, even if this is difficult to capture in a normal quantitative forecast.
We need neither a grandiose new plan nor another Bretton Woods Conference. But we do need greater clarity and less fudge about how the present system is supposed to operate. BIS Review 71/2001  9

“You are not here to tell us what to do, but to explain why we have done it” is the way Norman rebuked the Bank’s Chief Economist of the day.8  5  Roberts, Reading and Skene (2009). 6  John, Roberts and Weeken (2012). 7  Boyle (1968) p105. 8  Ahamed (2009) p233. 4  BIS central bankers’ speeches  Norman saw the Bank’s role in expansive terms, as provider not just of emergency help but as builder of infrastructure and supporter of industry. The Bank became part of the post-war reconstruction effort. Having spent 200 years tending to its back garden, the Bank began to explore pastures new. To take one example, in 1928 the Lancashire cotton industry was on its knees. These problems risked ricocheting back to the financial system, with at least two of the big five UK banks up to their neck in cotton.9 A plan was conceived involving consolidating the industry into a Lancashire Textile Corporation. This was to be financed with debt and shares issued and supported by – you’ve guessed it – the Bank of England. It was a bold and cunning plan. Unfortunately, it flopped. The share issue by the Corporation in 1931 was a resounding failure, leaving the underwriter with a large chunk of the shares. The Bank ended up having to support the market.10 It, too, found itself up to its neck in cotton. Undaunted, the stage had nonetheless been set for the Bank’s on-going involvement in financial infrastructure.
For example, there is a new, explicit liquidity standard to ensure that payments are made on time and in the right currency, and the cover 2 requirement for complex CCPs is much tougher than what came before it. •  They also provide greater detail and scope, including more detailed guidance with respect to CCPs and trade repositories (TRs). •  They are underpinned by a detailed disclosure framework, an agreed assessment methodology and a rigorous monitoring program to both promote consistency in how authorities have adopted and implemented the PFMI as well as, importantly, to promote consistency in outcomes. •  They provide greater harmonization to avoid regulatory arbitrage and race to the bottom behaviors. •  They include requirements and guidance for FMIs to implement their own viable recovery and orderly wind-down plans. As I see it, great progress has been made, but there is more work to do in a number of areas: •  Greater harmonization and better cross-border mutual recognition practices;  •  CCP recovery and resilience as well as coordination with other authorities to ensure incentives are aligned;  •  Appropriate incentives for CCPs so that the profit motive does not conflict with having a safe system that can absorb large shocks without destabilizing the financial system; and  •  Availability of data in TRs on a cross-border basis to facilitate the development of a more complete picture of market activities and emerging risks.

As always, what I have to say represents my own views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System.1 The first trend has been the development of a global financial system. This has increased financial system interdependencies and, hence, the importance of harmonizing standards across national regulatory regimes. It also has made it more important to avoid regulatory arbitrage and race to the bottom types of behavior that could weaken the resiliency and robustness of the global financial market infrastructure. The second trend is the increasing importance of FMIs within the financial system. As trading across a more complex array of instruments and products proliferates, and as more trades are centrally cleared, well-managed FMIs play an increasingly important role within the financial system. The third trend stems directly from the first two. With the global financial system becoming more prominent and FMIs playing a bigger role within this global financial system, it has become ever more essential that major FMIs operate safely. When run well, they mitigate risk. But, run poorly, they could be a source of contagion and risk propagation throughout the global financial system. This means that the CPMI’s work has become much more critical in ensuring a safe and sound global financial system. The growing influence of the CPMI can be seen in its success in staying ahead of these trends.
Indeed, there are some estimates that currently modelled losses could be undervalued by as much as 50% if recent weather trends were to prove representative of the new normal. 18 In addition, climate change could prompt increased morbidity and mortality from disease or pandemics. Such developments have the potential to shift the balance between premiums and claims significantly, and render currently lucrative business non-viable. Absent actions to mitigate climate change, policyholders will also feel the impact as pricing adjusts and cover is withdrawn. 19 Insurers’ rational responses to physical risks can have very real consequences and pose acute public policy problems. In some extreme cases, householders in the Caribbean have found storm patterns render them unable to get private cover, prompting mortgage lending to dry up, values to collapse and neighbourhoods to become abandoned. Thankfully these cases are rare. But the recognition of the potential impact of such risks has prompted a publicly-backed scheme in the UK – Flood Re – to ensure access to affordable flood insurance for half a million homes now considered to be at the highest risk of devastating flooding. This example underlines a wider point. While the insurance industry is well placed to adapt to a changing climate in the short-term, their response could pose wider issues for society, including whether to nationalise risk. The passage of time may also reveal risks that even the most advanced models are not able to predict, such as third party liability risks.

This is again to be expected as one of the main objectives of the RBC2 review is to improve risk sensitivity of the capital framework so as to more accurately reflect the different risk profiles of insurers. 25. MAS will continue to review and study the QIS results and take on board many of your feedback and suggestions. 26. As examples, we are going through comments from some industry participants relating to widening the eligibility criteria for the matching adjustment feature of RBC2, the possibility of giving some credit to the illiquid nature of some other liabilities that do not qualify for the matching adjustment, the calibration of risk charges for equities and long-dated corporate bonds, and the calibration of the operational risk charge, which has also been discussed with the industry. 27. Let me emphasize that we will implement RBC2 only after we have done a thorough calibration and assessment. We want the new capital framework to be more risk-sensitive and robust, but it should also be fit-for-purpose and not hamper well managed insurance businesses unduly. At individual firm level, the new framework does not seek to make it  BIS central bankers’ speeches  3  better or worse for you compared to the current RBC, but only that how much capital that you will hold in future be more sensitive to your risk profile. 28. The MAS will embark on another stage of consultation and we are also targeting an additional QIS in Q2 2015.
This despite the fact that the nominal wage increases remained at 3% this year while being as much as 8% during the comparison period. Neither should we forget the deterioration in living standards that Swedish wage earners and the Swedish people experienced compared with other European countries during these years. Sustainable improvements in productivity due to a “new economy”? Developments in IT and biotechnology have taken place very quickly in Sweden. Telecommunications and pharmaceuticals are hi-tech products, which are growing quickly in Swedish exports. Exports of telecommunications products have more than doubled since 1995 and pharmaceuticals have risen by 80%. The economy is undergoing a restructuring towards these areas which releases us to some extent from the cyclical dependence on pulp, paper, steel and engineering products which are our traditional export goods. However, most important perhaps are not developments in these industries per se. Although they are growing rapidly, they are still of rather small size. The computing consultancy industry has doubled during the 1990s but still only accounts for 80,000 employees, or around 2% of employment. The BIS Review 126/1999  2  sector “radio, TV and telecommunications products” is approximately the same size. Industry as a whole has recovered from under 18% of GDP in 1993 to 22% in 1998. No, the really important effects of the new technology will probably take place outside the hi-tech and knowledge-intensive industries. Personal computers, mobile telephones, the Internet, and other IT can increase productivity within broad segments of the Swedish economy.

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At the same time, in parallel with the primary objective, this policy should factorise the need for supporting the economic rebound and be harmonised with the fiscal consolidation process, in view of the sustained fiscal and financial strengthening of Albania. In particular, I am confident that the prudential harmonisation of monetary and fiscal policies yields better economic results, in terms of both growth and stability. In a longer-term context, the operational framework of monetary policy should be completed with contingent instruments, like 3/5  BIS central bankers' speeches  those adopted by large central banks. The improvement of legal infrastructure and further development of financial markets is the pre-condition to this objective. Nevertheless, the horizon of the next seven years provides for a sufficient timely dimension to meet it. The second priority is related to banking supervision and regulation; with a view to further strengthen the financial stability of Albania. In this view, the objective of my work will be: The establishment of all premises to bolster sound lending to economy. I deem that bank credit supply should not hamper the resilient and long-term growth of the country, but lending should follow all the required parameters of the management, for the preservation of banks soundness and the value of savings deposited din them. Full adoption of Basel II and Basel II relevant practices and standards. Greater convergence with the EU standards and accomplishment of further certifications by the European Central bank in the supervision field.

In this context, I think that the Bank of Albania should continue to maintain the leading role, in its field of responsibility and competence, related to this process, by providing the good example and its experience to the other authorities. Last, allow me to point out that the Bank of Albania has been and will continue to be an open and transparent institution. The strengthening and observance of this principle will become the fifth priority of my tasks. The Bank of Albania is able and should expand further the range of the economic information it publishes, and increase its presence in the tables where economic issues are discussed. Honourable chairman, Honourable members of commission, By presenting and motivating my request for the term renovation as the Governor of the Bank of Albania, allow me to re-affirm, that my 30-year-work in both the public and private sector of financial industry, the experience in executive positions, and results of my work, are a guarantee in fulfilling this duty. The reliance of this distinguished committee, will serve as a further motivation in giving my contribution to developing the Bank of Albania. Thank you! 5/5  BIS central bankers' speeches
This program is gradual in nature and aims to reduce inflation, which had reached 91% by the end of 1997, to single digits over the medium term. All we know is that the disinflation program has three components: counter cyclical fiscal policies, structural reforms, and nominal policies. Let me make some comments firstly on fiscal and nominal policies. Turkey’s inflation has a long history. It originated mainly from budget deficits and the way they have been financed, and for this reason fiscal policies should be the backbone of any Turkish anti-inflation program. Calculations indicate that a primary surplus of 4–5% during the first two years of the program should be enough both to relieve the pressure on domestic demand and on domestic borrowing and demonstrate that the fiscal authorities are serious about reducing inflation. A tight fiscal policy will also lighten the burden of stabilization efforts, making a more flexible monetary policy possible. The monetary program is also consistent with these fiscal policies. At the Central Bank we have focused on net domestic assets since the second half of 1998. Bringing these aggregates under control conveyed two basic messages: first, that public sector deficits would no longer be monetized with the Central Bank resources, and second, that henceforward the Central Bank will increase its Turkish lira liabilities only to finance an increase in its net foreign assets.

In Turkey, total support to agriculture has more than doubled in the last 10 years, while in other western countries it has been reduced. Turkey has a complex system of agricultural supports, which are delivered to the producers through two main channels: output-based market support schemes, and the state-owned Exert Benches (Agricultural Bank) which delivers payments based on the use of inputs. Additional measures cover the cost of general services provided to agriculture, which are financed through the budget. The present agricultural support arrangements cannot be replaced overnight, and the authorities are working with the World Bank on projects aimed at making it possible to shift to a direct income payments system in the future. The move from the present subsidy system to a direct subsidy is supported by everyone in Turkey, but the change will be gradual and will take some time. The new government that was formed after the April election seems serious about completing the above reforms, as shown by their quick action in passing the Banking Act, international arbitration, and the social security reform. With the strengthening of credibility that will come with the completion of these reforms, I believe Turkey’s disinflation program will shift into a new stage starting in 2000. While there has been considerable progress since last year’s Staff Monitored Program, a new and comprehensive effort is now needed to eradicate inflation. A comprehensive program of macroeconomic and fiscal adjustment, aimed at lowering inflation to 10% by the end of 2001.