samchain/econo-pairs-v1 huggingface dataset:
Combined with higher interest rates, this may reduce profitability in the commercial property market, increasing banks’ losses. Losses on loans to the property industry accounted for a large share of banks’ loan losses during the banking crisis. Outlook for the banking industry Banks in Norway have experienced extremely favourable developments over the past few years: strong lending growth, minimal loan losses, high returns in securities markets and firm cost control. Despite lower interest margins, banks’ net interest income in NOK is rising as a result of strong lending growth. Measured in relation to total assets, however, net interest income is  6  BIS Review 100/2007  falling. In recent years, this has been offset by a reduction in costs. Today’s high debt growth is not sustainable over time, and it is unlikely that the pressure on interest margins will abate. Given these developments, banks must reduce costs or increase income from other sources if they are to maintain their current profitability. To illustrate the effect of lower lending growth on banks’ income, we have carried out a simple calculation where the interest margin is held constant. If lending growth among banks had only been 3 per cent in 2006, banks’ net interest income and pre-tax results would both have been approximately 6 per cent lower this year. The composition of banks’ income has been fairly stable in the past ten years, even though net interest income has become less important since 2002.

Towards midyear it was even possible to raise the interest rate substantially to tackle a surprise rise in inflation that was much deviated from the target. This was so thanks to the fact that the purchase of dollars was being carried out mechanically, despite a significantly depreciated exchange rate after the intervention. The purchase of foreign currency was concluded prematurely due to global tensions in global liquidity in dollars in September of last year. The capacity of the Chilean economy to subsequently deal with a significant exchange rate depreciation, with monetary easing prospects and reduced inflationary pressures, is proof that there was no inconsistency between the decision to intervene and the conduct of monetary policy (Figure 2). It also shows that the flexible exchange rate regime adopted early this decade has the economy well prepared to absorb exchange rate fluctuations without the turmoil that used to come with them in the past. 4. Bubbles, exchange rates and capital inflows in emerging economies  Latin America went through a period of large capital inflows in the first part of the 1990s (Calvo et al., 1996). We cannot disregard the possibility that after the current crisis is over, there will be a reemergence of inflows to emerging economies. Therefore, there could be strong pressures for a sharp increase in the valuation of domestic assets, with a potential bubble in their prices, and this bubble could take the form of an exchange rate appreciation.
I have already mentioned on another occasion that, with the prudence due, I consider that the set of measures to support lending, in the form of guarantees and moratoria, along with the regulatory and supervisory actions I have referred to, have achieved the objective of cushioning the enormous initial impact of the crisis, preventing the situation of business illiquidity from leading necessarily to a solvency crisis. In fact, according to preliminary data gathered by the SSM, following the expiry of moratoria in various euro area countries, most borrowers resume payments and only a small fraction were unable to do so. The situation is evolving and thus the response required of the sector is also evolving. Unfortunately, the disease remains with us, and this justifies maintaining many of the exceptional measures to support the economy, in particular for certain sectors. Accordingly, the Government’s decision to extend the grace period by a year and the maturity of financing with an ICO guarantee by up to three years seems appropriate to us. In any case, although the consequences of the pandemic have yet to appear on bank balance sheets, the crisis will inevitably lead to structural changes. Not all economic activity will return to its previous levels. Banks need to be preparing now for this impact. More resources need to be allocated to risk analysis and management, including the active management of rollovers and renegotiations with those customers that will almost certainly not be able to comply with their original contractual conditions.

Regulatory response In addition to the actions of the macroprudential authorities, there is no doubt that the public sector response has been, overall, countercyclical and expansionary, helping to cushion the impact of the crisis on the economy. This response has been very different from the one to the financial crisis. The unconventional measures taken by central banks and governments have been particularly noteworthy. But regulators and supervisors have also acted decisively in response to the environment of extreme uncertainty besetting us. Unlike in the case of the global financial crisis, international regulators have tried to act as coordinated as possible. This has been essential in order to foster financial stability and maintain a level playing field in an increasingly interconnected world. A large part of this response has focused on enabling the financial sector to supply the liquidity necessary for the business fabric to be able to survive in the short term. In Europe, a range of measures have been taken, including notably the “quick fix” package of banking rule amendments.
As central clearing involves risk concentration in what we may see as “super systemically relevant” institutions, it is crucial that such institutions can recover from severe shocks or be resolved if necessary. Now there are several questions that are typically raised in this context:  2  BIS central bankers’ speeches  •  At what point in time does a CCP need to be resolved because it cannot recover? •  Given that CCPs provide critical services and are required to cover any losses or liquidity shortfalls that may arise, is resolution of a CCP a realistic concept at all? Is it ever needed or appropriate? •  What makes CCPs different from other financial institutions? Do these differences require different rules for their recovery and resolution? [slide 7] The CPSS-IOSCO Principles for financial market infrastructures (PFMIs) require CCPs to have a plan for allocating any losses and liquidity shortfalls that the regular “waterfall” – that is, a sequence of prefunded financial resources – does not cover. Alternatively, the respective CCP might have to be resolved. The CPSS-IOSCO and the Financial Stability Board (FSB) will provide guidance on the recovery and resolution of CCPs by mid-2014. 1 The question is: should resolution only be performed if and when recovery has failed? Or could there be circumstances in which the resolution of a CCP is preferable to its recovery, even if recovery was still feasible?

We have just witnessed the signing of MOUs between the SICC and the Riyadh and Abu Dhabi Chambers’ of Commerce and Industry. I also encourage SICC to collaborate with IE Singapore and the Singapore Business Federation to organise more networking platforms to forge partnerships between foreign and local companies. For instance, given our knowledge and connections, Singapore can serve as a bridge for Middle Eastern investors interested in going into China. Finally, let me once again congratulate the SICC on your 170th Anniversary and wish the SICC and its members continued success. Thank you. BIS Review 55/2007  3
Inclusive communications  Diversity also means engaging with all our stakeholders, internal and external, and being aware of the many ways in which the economic situation affects different people. Active engagement between Bank officials and a range of expert and non-expert stakeholders across the UK has always been important, but it is taking on new prominence in the information age. Our agents and Bank officials meet thousands of business contacts across the UK each year to take the temperature of the UK economy. Our new Open Forum and Future Forum events do this on a large scale by bringing together thousands of people from the community to discuss the economy, the financial system and the Bank’s role in promoting the good of the people of the United Kingdom. We listen to the views and concerns of local business leaders, technology developers, representatives from the voluntary and education sectors, unions and the wider public and explore how the Bank can maintain stability and reduce uncertainty. The 2015 Open Forum event attracted 10,000 webpage views, 11,000 playbacks of our YouTube content and 3,000 tweets, while our 2016 Future Forum event saw almost 140,000 twitter impressions. In reality, we can’t always be there face to face. And this requires more tailored content. Deploying social media, including Facebook and YouTube, delivers our messages directly to a broader audience. New digital products, such as KnowledgeBank, use accessible language and engaging visuals to help us tell a story about what the Bank does.

See Bayer, A. and Rouse, C. E. (2016), “Diversity in the Economics Profession: A New Attack on an Old Problem”, Journal of Economic Perspectives, 30, p.221-242. See also Royal Economic Society (2015), “The 10th Royal Economic Society Women’s Committee Survey: The Gender Balance of Academic Economics in the UK 2014”. xxi See also Haldane, A. (2016), “The Dappled World”, November; and Fourcade, M., Ollion, E. and Algan, Y. (2014), “The Superiority of Economists”, Max Planck discussion paper 14/3. xxii Bank Viewpoint survey 2016 xxiii Ibid xxiv See e.g. PWC (2014), “The Future of Work. A Journey to 2022”. See also CIPD (2014), “HR: Getting smart about agile working”, November. 10  All speeches are available online at www.bankofengland.co.uk/speeches  10  References Ball, L (2012), “Ben Bernanke and the Zero Bound”, NBER working paper 17836, February. Bayer, A and Rouse, C E (2016), “Diversity in the Economics Profession: A New Attack on an Old Problem”, Journal of Economic Perspectives, 30, pages 221-242. Blinder, A S and Morgan, J (2000), Are Two Heads Better than One? An experimental analysis of group versus individual decision making, NBER working paper 7909. Cabinet Office (2016), Socio-Economic Diversity in the Fast Stream, February. CIPD (2014), HR: Getting Smart about Agile Working, November. Deloitte (2015), “The Radical Transformation of Diversity and Inclusion. The Millennial Influence”. Farmer, H, McKay, R, and Tsakiris, M (2013), “Trust in Me: Trustworthy Others Are Seen as More Physically Similar to the Self”, Psychological Science.
In December 2009, the Bank issued an opinion concluding that the underlying net external position could be around 90% of GDP. The most recent surveys indicate figures closer to 80%, including the most recent estimate of the Treasury’s net obligations due to minimum deposit insurance for British and Dutch online branches of Landsbanki; however, because no contractual agreements have been finalised, this is still subject to uncertainty. This is lower net debt than Iceland has had since late 2005, and is certainly manageable. But this figure is still subject to uncertainty. Central Bank staff members will therefore continue to clarify the picture and are currently at work on a report on the Icelandic economy’s foreign assets and liabilities. Net debt is important in the assessment of an economy’s debt sustainability and in comparisons with other countries’ indebtedness. On the other hand, gross debt is important as well, especially as regards re-financing needs and potential pressure on the exchange rate of the króna. In this context, it is important to consider whether the debt is generated by the private sector or the Treasury, or by firms with a Treasury guarantee. Significant private  BIS Review 39/2010  5  sector re-financing needs that cannot be funded with new loans can exert pressure on the exchange rate, which in turn can have a negative effect on other debtors with foreigndenominated debt, but they will not cause national insolvency.

Speech  Embargo 19 September 2019, 5.30 pm  Fourth Karl Brunner Distinguished Lecture Introduction of Raghuram Rajan, ETH Zurich  Thomas J. Jordan Chairman of the Governing Board Swiss National Bank Zurich, 19 September 2019 © Swiss National Bank, Zurich, 2019  Page 1/4  Ladies and gentlemen I am very pleased to welcome you all to this year’s Karl Brunner Distinguished Lecture. This occasion marks the 30th anniversary of Karl Brunner’s death. In the Karl Brunner Lecture Series, the Swiss National Bank pays tribute to academics whose research is of particular relevance for central banking. Today we are celebrating the outstanding contribution made by Raghuram Rajan, the Katherine Dusak Miller Distinguished Service Professor of Finance at the Booth School of Business at the University of Chicago. We are honoured that Dr Rajan has accepted our invitation to deliver this lecture. Raghuram Rajan was born on 3 February 1963 in Bhopal, India. He started his career with a bachelor’s degree in electrical engineering from the Indian Institute of Technology Delhi. Following the decision to leave the sphere of electromagnetic fields and waves in favour of the oscillations of the economy and financial markets, Raghu joined the doctoral programme at the Massachusetts Institute of Technology (MIT), where he received a PhD for his thesis ʻEssays on Banking’. Four years later, at the age of just 32, he became a full professor of finance at the University of Chicago. Exceptional academic Raghu is an exceptional academic.
Then, I will discuss the current and possible future roles that the Eurosystem’s central banks can play in that field. 1. Key issues in the field of payment infrastructures today  The three main issues I see as regards payment infrastructures today in Europe could be summarised as follows : (1) which role for payment infrastructures to support the European financial integration? (2) Which place to give to technological progress in the field of payment systems? (3) How to ensure business continuity of payment systems? 1.1. Supporting the European financial integration  The share of payment systems in money transfers between financial intermediaries is nearly 80%, versus 20% for the traditional correspondent banking arrangements. So, payment systems are essential for the financial sector as a whole and, therefore, can be considered as a key enabler in the process of the European financial integration. Such contribution of payment systems to the financial integration is embodied in the TARGET2 and SEPA projects. Both projects aim at the harmonisation and consolidation of the European “network” of payment infrastructures. While large-value payment systems have already attained a high level of integration and will further progress with the launch of TARGET2, retail payment systems are still very fragmented. In the segment of large-value payment systems, the degree of integration has increased very quickly. The rationale for setting up the two European-wide payment systems that currently exist, i.e. TARGET and EURO 1, was clearly to face the challenge of the EMU.

·  Second, the New Accord will recognise that some banks treat their smallest business credits as retail exposures. In these cases, banks group and administer their small business loans on a “pooled basis,” similar to the way they manage most small personal loans. The New Accord will permit aggregate exposures to a single business borrower of up to € million to be treated as retail exposures. Because retail exposures enjoy a preferential treatment under both the standardised (reduction of risk weights by 25 percentage points, from 100% to 75%) and IRB (a different risk-weight curve) approaches to credit risk, banks making such loans may face lower capital requirements than are currently applicable. Moreover, for those who have monitored our work closely, the Committee recently eliminated a controversial requirement governing the “granularity” of such loans. In plain language, the rules will no longer require that retail portfolios contain exposures to a minimum number of unrelated parties. Instead, national supervisors will determine whether such portfolios qualify for retail treatment. Although the media has not reported on this change widely, it is quite important because it will help more banks to enjoy the preferential retail treatment for their smallest business credits. 2  BIS Review 32/2003  ·  Finally, the New Accord will recognise a far wider range of collateral and guarantees than the current rules do.
Part 2: The Eurosystem’s vision for 2020 •  To deal with the technological and strategic challenges to its market infrastructure, the Eurosystem has developed three key action points it will work on in the run up to 2020;  •  The first is to explore synergies between TARGET2 and T2S, potentially even merging them into a single platform in the future, with the goal of achieving a consolidated market infrastructure for large-value payments and securities settlement;  •  The enhancements envisaged for Europe’s financial market infrastructure will benefit users by providing access to all available services via a single gateway;  •  Moreover, these enhancements will provide an opportunity to further increase the resilience of the system, which is also beneficial from a financial stability perspective;  •  The second action point is to consider new service opportunities that the closer integration of TARGET2 and T2S would bring;  •  in particular, the Eurosystem is considering enhancing the TARGET2 services with instant payments, at least in the settlement layer;  •  Third, there are plans to review the harmonisation of Eurosystem arrangements and procedures for collateralisation;  •  The three action points are currently in the design phase, and it is expected that decisions on the actual implementation of the projects will be taken over the summer;  •  For all three action points, the Eurosystem will continue to work closely with the market in order to benefit from its knowledge and experience as well as to ensure that Europe’s future financial market infrastructure fully meets the needs of its users.

C)  new (non-bank) market entrants  •  the digitalisation of financial services opened the doors for a wave of new market entrants;  •  there are two categories of new market entrants;  •  first, there are start-ups making use of new information technology applied to financial services (“FinTech” companies);  •  second, there are established internet companies (large US social media or ecommerce platforms);  •  In most cases, they do not offer banking services other than the initiation of payments or access to account information;  •  these new product and service providers might present a challenge to the traditional market incumbents’ revenue streams;  •  their impact on the underlying financial market infrastructure will be more limited as the clearing and settlement of payments and securities transactions still take place between the account-holding entities.
With only one tool, the repo rate, we are trying to attain the inflation target and at the same time attain a balanced development in economic activity. In practice, the repo rate is often adequate as a tool to  BIS central bankers’ speeches  3  give both inflation and economic activity a push in the right direction.1 But in recent years, we have also needed to manage the problem of economic activity being at different levels in different parts of the economy. We cannot use the repo rate to stimulate the corporate sector and limit the build-up of household debt all at the same time. In this situation, it is not evident how monetary policy should manage the balance between inflation, economic activity and the risk of an overly rapid increase in housing prices and household credit. Let me elaborate on my thoughts a little further here. Monetary policy must take financial risks into account The concern over lending to households increasing too rapidly has led to a majority of the members of the Riksbank’s Executive Board voting to hold the repo rate at a higher level than would otherwise have been justified. I have entered reservations against these decisions and advocated a lower repo rate, for reasons I will return to later. Despite my reservations, I share the majority’s concern over the rapid increase in household debt.

Øystein Olsen: Management of the Government Pension Fund Global Introductory statement by Mr Øystein Olsen, Governor of Norges Bank (Central Bank of Norway), before the Standing Committee on Finance and Economic Affairs of the Storting, Oslo, 2 May 2017. * * * In 2016, it was 20 years since the Ministry of Finance made the first capital transfer to the Government Petroleum Fund, as the Government Pension Fund Global (GPFG) was aptly named at the time. This transfer marked the start of a transformation of petroleum wealth in the form of oil and gas in the ground into financial assets invested outside Norway. Since the first capital transfer was made, the GPFG has grown considerably, to more than 2.5 times the size of GDP. The year 2016 also saw the first net withdrawal from the GPFG. Ahead, the value of the GPFG will therefore, to a greater extent than previously, depend on the return on the fund’s investments. The period of steady growth in the GPFG as a share of the economy is now probably over. The key variables determining the GPFG’s long-term performance have been specified by the Ministry of Finance and approved by the Storting. For its part, Norges Bank has developed its management assignment in accordance with the fund’s growth and in line with the owner’s mandate. At the same time, Norges Bank has focused on its role as advisor in the further development of the fund’s investment strategy.