samchain/econo-pairs-v1 huggingface dataset:
Parliament has enacted legislation to ensure there will be no doubt about the separation of retail activity in the major UK banking groups at the point of failure. The PRA now has the task of implementing that legislation to complete the work of making ring-fenced banks separable ex ante. Similar developments in the restructuring space are underway in other jurisdictions. The splitting off of domestic retail banks in Swiss G-SIBs and the requirement for large foreign banks in the United States to form Intermediary Holding Companies (IHCs) are examples. Another aspect being explored in resolution plans is the scope for orderly, solvent wind-down of trading books in investment banks in recovery or resolution. This goes to the general principle that it is important for us as resolution authorities to understand the options  7  6  Financial Stability Board (2015) ‘Guiding principles on the temporary funding needed to support the orderly resolution of a global systemically important bank (“G-SIB”)’. BIS central bankers’ speeches  we have to restructure critical functions if we need to in resolution. I can imagine that in time via planning in CMGs we will see more convergence in approaches in this area across jurisdictions. In conclusion, much has been done to achieve what is necessary to make G-SIB resolution work. TLAC is symptomatic of the distance travelled and represents a true game-changer.

Stefan Ingves: The need for a strengthened insolvency and resolution framework for banks – a central banker’s perspective Speech by Mr Stefan Ingves, Governor of the Sveriges Riksbank, at the International Bar Association’s 14th Annual Global Insolvency and Restructuring Conference, Stockholm, 19 May 2008. *  *  *  As a central banker, the tasks assigned to me are to maintain price stability and to promote a sound and efficient payment system. In short, I deal with economics and finance. So what does this have to do with your business, insolvency law? What is a central banker doing opening this conference on insolvency and restructuring? Actually, there are more links between the fields than you might think. As I said, one of my tasks is to oversee the payment system. Without a functioning payment system, no modern economy is able to function for very long. But what we call the payment system is really not much more than a system where money is transferred electronically from one bank account to another, in a longer or shorter chain of intermediaries with the central bank as a hub. If there is a problem in one of those intermediaries, there is a problem in the payment system. And if the problem is not technical but financial in nature, this may lead you right into the area of insolvency law and bank restructuring regimes. But in fact, there is also a link of a more general nature.
MAS already expects all banks, insurers, and asset managers to make climate-related disclosures from June 2022, in accordance with well-regarded international reporting 3/9  BIS central bankers' speeches  frameworks, such as the TCFD recommendations. Our consultation will focus on how to transition these expectations into legally binding requirements, against a single, internationally aligned standard. A VIBRANT GREEN FINANCE ECOSYSTEM Let me now touch on efforts to develop a vibrant green finance ecosystem that can support Asia’s transition to a low-carbon future. As a promoter of the financial sector, MAS has been working on four areas: shaping the development of green taxonomies; promoting green finance solutions and markets; harnessing technology to enable trusted sustainable finance flows; and building knowledge and capabilities in sustainable finance. MAS is actively involved in international forums that are developing green taxonomies. Consistent definitions of what constitutes green activities are key to facilitating cross-border capital flows towards sustainable outcomes. MAS is a member of the International Platform for Sustainable Finance (IPSF) which is developing a common reference point for definitions of green activities across major existing taxonomies. This will help market participants interpret and use the various taxonomies that exist today. MAS is working with fellow ASEAN regulators to develop an ASEAN taxonomy aligned with international benchmarks while taking account of the regional context. Developing a clear taxonomy for transition activities is especially relevant for Asia. Asia needs to sustain economic and social development while shifting to a lower carbon future.

Its main elements now include: The Financial Stability Advisory Council (FSAC): a consultative body comprising the minister of finance, the governor of the Central Bank, and the chairman of the Financial Supervision Commission; The Central Bank as the designated resolution authority for banks; the resolution function of the BNB is outlined in the Law on Recovery and Resolution of Credit Institutions and Investment Firms, adopted in mid-2015, which transposed the BRRD in the Bulgarian legislation; A mechanism to fund resolution measures by the newly established Bank Resolution Fund (BRF) which is funded by contributions from the banks; the target level of the resources collected in the BRF is 2% of the amount of covered deposits of all banks licensed in Bulgaria and must be achieved by end-2024; A comprehensive resolution toolkit directly transposed from the BRRD comprising: (1) the resolution tools (sale of business; bridge institution, asset separation, and bail-in), and (2) the government stabilization tools (public equity support and temporary public ownership). Progress has been already made in operationalizing the crisis management framework in Bulgaria.
This is largely due to the scarcity of the instruments in the market. In Malaysia, the growing ringgit sukuk market has resulted in an active secondary market. This is largely due to the regular and varied issuances throughout the year. This is supported by the investment in research and development and in talent development to ensure the availability of expertise in the structuring of sukuk instruments and in sukuk documentation. Having the potential to innovate new instruments will depend on having the necessary talent. This is an area of focus in Malaysia to develop the skills, expertise and capability. The Islamic financial system in Malaysia now offers a wide range of financial products and services that are competitive and able to meet the changing requirements of the domestic and global economy. Way forward for the global Islamic financial system As we advance forward, we need to recognise the forces of change and the transformation taking place in the international financial system and global economy. Relentless efforts have been initiated to reform the international financial system by the international community to address the weaknesses that have contributed to the recent crisis. In this environment, Islamic finance needs to continue to evolve to remain effective and competitive. The Islamic financial system does not exist in isolation and will continue to develop as an integral part of the global financial system.

Zeti Akhtar Aziz: The global Islamic financial market today – challenges and way forward Luncheon address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the annual “The Asset Triple A Awards for Islamic Finance”, Kuala Lumpur, 6 July 2010. *  *  *  It is my great pleasure to be here this afternoon on this occasion of the Annual “The Asset Triple A Awards for Islamic Finance” by the Asset Publishing and Research, to deliver some remarks on the key challenges and way forward for Islamic finance in the international financial system. Islamic finance has experienced its most rapid pace of development in this decade demonstrating its competitiveness and resilience as a form of financial intermediation. While the Islamic assets are now more than $ trillion, it is estimated that the global Islamic finance industry will reach the $ trillion mark in the next three to five years. The sukuk market has become the most significant and vibrant segment in the international Islamic financial system. Issuers are seeing the sukuk instrument as an attractive alternative means for raising capital, whilst investors are increasingly seeing it as a new asset class in their investment universe. This has generated significant cross-border flows as funds are raised from beyond domestic financial markets and as investors diversify their portfolios into assets from other jurisdictions. The sukuk market currently stands at almost $ billion, with a growth rate of about 40 percent annually.
4) Calibrating tools to minimise risks to monetary policy, public funds & incentives A successful market dysfunction tool must be effective at restoring financial stability, but that success cannot come at any cost. In particular, care must be taken to minimise risks to the stance of monetary policy, to public funds and to market incentives: all factors considered in the BIS work. During the LDI crisis, once we had identified that a buy/sell tool was going to have to form the core of our approach, ensuring there was no contagion with the stance of monetary policy became a dominant design criterion. And that was because – unlike in 2020 when asset purchases were underway for monetary policy purposes and hence monetary and financial stability operations were pointing in the same direction – by September 2022, the Bank’s Monetary Policy Committee (MPC) was tightening monetary policy sharply, supported by a reduction in Quantitative Easing (QE) holdings – also known as “Quantitative Tightening” (QT). That rundown had begun in February, with the cessation of reinvestment operations; and the Bank was on the point of commencing active gilt sales to accelerate that process when the LDI crisis began. Successfully removing market dysfunction should support, not undermine, the stance of monetary policy. [15] But, coming so soon after the start of QT, there was clearly scope for confusion unless the intervention was carefully designed. We tackled that problem by binding every aspect of the operations to the resolution of the LDI vulnerability.

The increased openness in the economy that has resulted from among other things the NAFTA and GATT agreements, has meant that foreign trade has functioned as a “shock absorber” for fluctuations in domestic demand. Finally, fortunate circumstances seem to have played a part. With the end of the Cold War at the beginning of the 1990s, resources were freed up, principally in the military sector, which could be put to more productive use in the private sector. Further, both the Mexican crisis and the Asian crisis have been shocks that have checked certain tendencies towards overheating and thus also inflation, yet without leading the economy into recession. During the crises, a “flight to quality” appears to have led to falling long interest rates, which has benefited stock exchange prices and strengthened the dollar. Foreign investors have been willing to finance the deficit in America’s current account, which at present comes to about 4% of GNP. To sum up, it seems likely that a certain rise in the growth potential has taken place in the USA during the 1990s and that inflationary tendencies have declined. Just how much nevertheless remains an open question. The OECD, for example, has raised its estimate of the potential growth rate to just over 3%. However, in the past three years growth has amounted to more than 4% on average, which means that the OECD regards some of the factors discussed above as temporary in nature and expects growth to slacken as these factors die away.
Because market participants will not know for certain which path U.S. authorities will ultimately take – allowing resolution under ordinary insolvency law, as contemplated under Title I, or instead initiating a Title II resolution – this uncertainty in and of itself could cause investors in short-term obligations that are likely to be protected under Title II to run. Several other issues are also worthy of note. First, for the Title II single point of entry strategy to work properly, there needs to be a sufficient amount of debt outstanding at the parent  2  BIS central bankers’ speeches  company that can be converted by the FDIC into equity to ensure that the bridge company will be demonstrably well-capitalized. We don’t yet have a long term debt requirement – this is an area where we are still working out the details. My own view is that a holding company needs a substantial amount of long term-debt to ensure that the newly created bridge company is viewed as fully viable by its counterparties. We also need to ensure that the holding company is structured so that the bridge bank formed upon resolution can easily downstream capital to its operating subsidiaries. The ability to do this will help reduce the risks of preemptive ring-fencing by foreign regulators and runs by counterparties of the foreign operations of U.S. firms.

Let me conclude by emphasizing that these two paths – reducing the financial stability costs associated with the failure of a systemically important financial firm versus applying tougher capital and liquidity standards for such firms that reduce the probability of failure – are complements not substitutes. We need to keep pushing forward with both approaches in order to make the financial system more resilient and robust. Thank you for your kind attention. I would be happy to take a few questions. 4  BIS central bankers’ speeches
If prices have already fallen below the price level target, a credible price level target will lead to short-term expectations of inflation rising above the long-term average. With an unchanged nominal rate the real interest rate will then fall and the real economy will be stimulated. A credible price level target will thus entail an inherent automatic stabilisation in a situation with a zero interest rate. 7 A price-level target can be seen as an average inflation target for a longer period of time, for instance five years. 8 In a case where there is a risk that inflation will be too low, or even negative, for a couple of years it may be appropriate, in order to avoid the disadvantage with a standard inflation target that I mentioned above, to tighten the inflation target and temporarily interpret it as a target of 2 per cent for average inflation over the next five years, for example. This would mean that the central bank would then compensate for low inflation during the first years with higher inflation in the subsequent years so that the five-year average is on target. The Australian central bank, the Reserve Bank of Australia, actually formulates its target in this  7  For a few years beginning in 1931 the Riksbank had a price level target, after leaving the gold standard. To date, the Riksbank is the only central bank in the world to have had an explicit price level target.

The unemployment rate has decreased close to its record lows, while the number of vacant jobs has approached its record high. To fill the new jobs, we need either an inflow of labour migrants, or a redistribution of the current labour force among regions, industries, and enterprises. This process is objectively slower than the return of the available labour force to work during the period of the recovery growth. A higher competition for specialists between employers is promoting the conditions for an increase in wages. It is essential that a rise in wages is consistent with the growth of labour productivity in the relevant sectors. Otherwise, it will entail higher costs which enterprises will pass on to consumers, and the rise in nominal wages will be ultimately absorbed by inflation. We keep our GDP forecast unchanged for the next year and further on. An additional tightening of monetary policy aimed at returning inflation to the target is coherent with the positive contribution of external demand and investments from the National Wealth Fund made to aggregate demand. GDP will increase by 4–4.5% this year and by 2–3% further on, which is in line with the sustainable growth path. Monetary conditions have changed only slightly after the September meeting. An increase in market rates following the rise in the key rate currently has only a limited effect on them. This is largely associated with the impact of higher inflation expectations.
In light of these risks, the responsible public policy objective was to get together those with a direct financial interest in an orderly rescue of Long-Term Capital, to discuss its problems openly and objectively, to provide a sounding board for solutions, and if necessary, a calming influence. In my view, we achieved this objective. What did the New York Fed do? BIS Review 78/1998  -4-  Because events were moving swiftly, and with my approval and support, my colleague Mr. Fisher invited representatives of the three firms, which we felt had the greatest knowledge of the situation at Long-Term Capital and a strong interest in seeking a solution, to an early morning meeting on September 22nd. The three firms were Goldman Sachs, Merrill Lynch, and J.P. Morgan. Continuing discussions which commenced the day before, Mr. Fisher explained our interest in being aware of developments and in reducing the risk of an abrupt and chaotic close-out of Long-Term Capital. The firms present stated that they were not aware of any other initiatives then being actively pursued, to resolve Long-Term Capital’s problems. They voiced their own concerns about the risks to the markets of a close-out scenario. They discussed various approaches to stabilizing Long-Term Capital including the concept of a “collective industry” or consortium approach.

Mark Carney: The New Fiver Opening remarks by Mr Mark Carney, Governor of the Bank of England and Chairman of the Financial Stability Board, at the £ note launch, Blenheim Palace, Oxfordshire, 2 June 2016. *  *  *  I would like to express my gratitude to his grace, the Duke of Marlborough, for his generosity in hosting this historic event at one of the nation’s greatest architectural treasures. On September 3rd 1939, with The Gathering Storm about to break, a new First Lord of the Admiralty was appointed. He was so familiar to the Navy that the signal to the Fleet said simply: “Winston is Back.” In the years that followed, Britain’s resolve, tenacity and spirit would all be tested. The nation proved more than equal to the task. Britain stood steadfast through its Finest Hour. In North Africa, Asia and the Balkans, the United Kingdom helped turn the Hinge of Fate. It would forge The Grand Alliance to liberate Europe from tyranny, and then with victory, set the vision for the reconstruction of the postwar era. The “bulldog spirit” of those years was embodied and emboldened by Winston Churchill. This spirit is just one of his many contributions that the Bank commemorates with The New Fiver. Churchill was not just a martial leader – though he was an exceptional one – he was also one of the greatest statesmen of all time. Blenheim Great statesmen know their history, and Churchill knew more than most.
The resumption of net purchases, without a defined time 1  See the Governor of the Banco de España’s closing address of the La Granda Courses on 31 August 2019, “The European economic policy response to a scenario of lower growth and inflation”. 5/13  limit, also has an important signalling effect with respect to the Governing Council’s commitment to meet its inflation aim, which is particularly relevant in the current context of inflation expectations at risk of becoming de-anchored. In addition, the period of time over which the net asset purchases and the reinvestment of existing assets will continue is anchored to the normalisation of interest rates, thus enhancing the consistency and complementarity of the different measures and their dynamic adjustment to inflation. In a setting of heightened uncertainty, this automatic adjustment of the expectations about the future path of monetary policy in the face of potential changes in the macroeconomic environment is particularly desirable. Lastly, the improved conditions of the new TLTRO-III programme seek to further ease the conditions of bank lending to the real economy. Economic research, including that produced by the Banco de España in recent years, shows that these measures have been effective in the recent past, in terms of easing financial conditions and encouraging lending. Bearing this in mind, the new package of measures will boost economic activity in the euro area against a background of high uncertainty and will help to bring about the convergence of inflation to levels in line with the ECB's mandate.

In any event, in order to assess the overall effect of interest rates on the profitability of banks, it is necessary to take into account that interest rates not only impact the net interest margin but they also impact other items in the income statement. In particular, lower interest rate levels help to lessen losses in the credit portfolio due to their favourable effect on borrowers’ repayment capacity associated with both the lower cost of credit, and higher income and lower unemployment tied to the macroeconomic impact of lower interest rates. These effects may be particularly important in countries like Spain where the banking system started out with a high level of non-performing loans and where short-term or variable rate lending was prevalent, since this results in movements in market returns passing through rapidly to the costs of outstanding debt2. Thus, part of the fall in the non-performing loans ratio in recent years can be explained by this effect. Furthermore, declines in interest rates contribute to increasing the prices of financial and real assets. This effect is immediate for fixed-income securities, particularly long-term ones since prices are more sensitive to changes in yields. Valuations of equities and real assets, such as housing, are also boosted by the fall in interest rates due to the effect on the discount factor, although the price of these other assets is influenced by other conditioning factors such as macroeconomic expectations.