samchain/econo-pairs-v1 huggingface dataset:
After absorbing this substantial balance sheet clean-up into results or reserves, banks have managed to increase their own funds by more than € billion over the same period. This massive effort is unprecedented in Spanish financial history. iv)  Regulatory reform  As regards the fourth and final ingredient of the reform process undertaken, I should like to highlight the initiatives aimed at improving the regulatory framework for credit institutions. These include most notably the reform of the savings bank sector in Law 26/2013. I believe that, irrespective of the sound trajectory of some savings banks, it is currently an indisputable fact that their particular legal form often hindered the rigorous professional management of banking business, in a setting in which savings banks had become more complex and bigger, increasingly moving away from their foundational goals. Above all, the nature of savings banks frequently prevented a reaction to adverse developments that seriously impaired their solvency. To a greater or lesser degree, these factors contributed to the crisis at various savings banks, which appreciably damaged the stability of the banking system as a whole, and whose rectification, as earlier stated, entailed sizeable costs for the public at large. The reform firstly seeks to confine the application of the traditional status of savings banks to those that retain a limited size and scope, thereby ensuring the link between the institution’s welfare function and its operating region.

With the social need to ensure general access by the population to financial services having largely been met, an area in which the savings banks have undoubtedly made a historical contribution, the endowment and management of the welfare project fund – which should be maintained given its great public usefulness as the distinguishing mark of the foundations – can be perfectly fulfilled, and indeed strengthened, on the basis of the return on diversified assets that do not necessarily comprise a controlling position in a specific bank. 4. What results have been achieved? I consider that the effort made has essentially enabled the objectives set to be achieved. This has been corroborated by the assessments made both domestically and by international organisations. In particular, the ECB’s comprehensive assessment of banks at the end of last year, as part of the groundwork for the start-up of the Single Supervisory Mechanism, was illustrative in this respect. As you will recall, the comprehensive assessment exercise comprised two legs: an asset quality review and a stress test. The asset quality review revealed that Spanish bank balance sheets broadly reflected the risks derived from their investment with greater rigour than that observed in other jurisdictions, with fewer shortcomings having been detected in respect of valuation or provisioning for the exposures analysed. Hence, the incidents encountered in this review subtracted, on average, 14 bp from Spanish banks’ common equity tier 1 (CET1) ratio, compared with an average impact three times greater at the participating European banks.
This is just an example to illustrate how the railways played a major part in Sweden’s industrial upswing in the late 19th century. Productivity and growth rose. For the information technology, this phase of the process probably lies ahead. The new technology has not yet seriously altered either production and distribution processes or consumer behaviour. Progress is still a little hesitant as more and more people use the new technique for surfing and learn the new technology. The potential will also be limited as long as the technique is not entirely user-friendly. IT generates pressure for change When the new information technology really catches on, it will probably lead to a rapid expansion and transformation of capital stocks. The entire economy will then be involved in intensive investment and high productivity growth. Old technology will be replaced by new and each unit of capital equipment will then require a smaller input of labour. Unprofitable units or firms will be closed down, accompanied by new establishments. Structural changes generate developments that are often referred to at present as a new “economy”. The marked improvement in productivity maintains profits and keeps prices down. During the transformation, a good circle is created but it is difficult to tell how long it will last. It can be described, if you like, as a period of extensive rationalisation and heightened efficiency. The growth trend is raised for an indefinite period, enabling the economy to expand more rapidly without inflation taking off.

2  BIS central bankers’ speeches  considerable losses for other financial institutions, including the central bank itself.5 In this environment, a bank’s private choice of liquidity buffers will not reflect what is socially optimal.6 In the presence of such externalities, there is indeed a need for explicit regulation. This leaves the choice open between regulating liquidity through prices (i.e. through interest rates) and through quantities (i.e. liquidity buffers), hence the intimate interaction between monetary policy and prudential regulation of liquidity.7 Similarly, an expectation of public sector intervention and support for banks in crisis can create moral hazard and distort the incentives faced by financial institutions.8 As a consequence, the liquidity buffers chosen by banks could be insufficient. Such considerations call again for regulators to set and enforce prudential rules, and for central banks to act in a way that jointly is socially optimal. The new liquidity regulation: Basel III liquidity standards Let me now discuss in some detail the Basel III liquidity standards agreed upon in December 2010. The international community, through the Basel Committee on Banking Supervision (BCBS), drew up a proposal for liquidity risk regulation. The proposal includes two ratios, the Liquidity Coverage Ratio (LCR) and the Net Stable Funding Ratio (NSFR). Under the LCR, banks are required to hold a minimum level of unencumbered high-quality liquid assets (HQLA), the numerator of LCR, to withstand total net cash outflows over an acute stress scenario lasting 30 days, the denominator of LCR.
Per cent 12  12  9  9 China  6  Central Europe  6 3  3  0  0 1991  1993  1995  1997  1999  2001  2003  Sources: Statistics Norway and Norges Bank  A steadily larger share of Norway’s consumer goods imports come from China and Central European countries. Growth in imports from China was provided with an additional impetus after China became a member of the World Trade Organization in 2001. Imports from Eastern Europe have also continued to grow. There are many economic agents in Norway that are benefiting from globalisation. Consumers are enjoying lower prices for goods and services. Input prices have fallen and companies can sell their products in new markets. But there are also costs. Norwegian businesses and jobs may lose in the competition. The challenge lies in moving idle resources to new business activities. This requires adaptability and a sound cost policy. Monetary policy The operational target of monetary policy, as defined by the Government, is inflation of 2½ per cent over time. The target is symmetrical - it is just as important to avoid an inflation rate that is too low as an inflation rate that is too high. The inflation target provides economic agents with an anchor for inflation expectations. BIS Review 11/2004  5  Chart 7. Consumer prices and mainland GDP Percentage growth.

Lim Hng Kiang: Trade links and business opportunities for Singapore Congratulatory remarks by Mr Lim Hng Kiang, Deputy Chairman of the Monetary Authority of Singapore and Minister for Trade and Industry, at the Daiwa Securities Group 35th Anniversary, Singapore, 25 June 2007. *  *  *  Your Excellency Mr Takaaki Kojima, Ambassador of Japan to Singapore, Mr. Shigehara Suzuki, President & CEO Daiwa Securities Group Inc., Mr. Shin Yoshidome, President Daiwa Securities SMBC, Distinguished Guests, Ladies and Gentlemen. Good Evening, I am delighted to be here this evening for the joyous occasion of Daiwa Securities Group’s 35th anniversary in Singapore. This marks yet another important milestone for Daiwa, and your continued commitment to Singapore. Daiwa’s growth story in Singapore Set up in 1972, Daiwa has grown from strength to strength over the years. From the early collaboration in 1971 with Development Bank of Singapore to issue the first Asian Dollar Bond, Daiwa has over the years expanded to provide a full spectrum of financial services. Today, all of Daiwa’s major business units are represented in Singapore, covering securities brokerage, investment banking, asset management and more recently, wealth management as well. Singapore has also grown to become a key node in Daiwa’s overseas network, managing your business operations in South Asia & Oceania. I am encouraged to hear that on the occasion of Daiwa’s 35th anniversary celebrations, you have also announced plans to boost activities in Singapore and the region. I understand these new activities include M&A and private equity investments.
12  See James, H. (2012): “Making European Monetary Union”, The Belknap Press of Harvard University Press. BIS central bankers’ speeches  3  Some will remember the IMF Annual Meetings in 1997 in Hong Kong, when calls to create an “Asian Monetary Fund” were judged incompatible with the IMF’s universal mandate.13 Contrary to Asia in the late 1990s, Europe had the political infrastructure in place to sustain the sharing of sovereignty that makes mutual insurance mechanisms possible. This is not to say that all the discussions were easy, far from it, as might be expected in times of crisis. Europe’s sense of commonality was, and still is, under severe strain. But the political framework was there to produce decisions, and most importantly, a legal framework was also there to implement them. The lesson from this is that regional integration, regional rule of law, and the sense of a common project are sources of stability.14 In East Asia, things have moved on since the late 1990s, with the Chiang Mai Initiative multilateralisation. The G20 has taken stock of the Asian and European experiences and acknowledged the relevance of regional financial arrangements. The road ahead for the euro area Based on the lessons learnt from the Asian crisis, what are the main challenges we face in the euro area? Let me consider them one by one. Restructuring Europe’s financial sector To begin with, we need to reform Europe’s financial sector. We have, so to speak, come to a crossroads in Europe.

Benoît Cœuré: Lessons from East Asia for the euro area Speech by Mr Benoît Cœuré, Member of the Executive Board of the European Central Bank, at the Asia Europe Economic Forum on “Challenges and prospects for Asian and European economies”, Beijing, 28 October 2013. *  *  *  I would like to thank Ine Van Robays for her contribution. I remain solely responsible for the opinions contained herein. Ladies and Gentlemen, The global economic and financial crisis confronted the world economy not only with financial turbulence, loss in output and social distress on a scale not seen since the Great Depression. It also created a series of challenges for policy-makers. Across the euro area, it exposed structural and institutional weaknesses that had remained hidden during the preceding era, the “Great Moderation”. Times of crisis are times of hardship – but they are also times of change and opportunity. This seems particularly true for Europe, where progress has often come in this way. The Second World War was the impetus for the European Coal and Steel Community, which was established to prevent another war between France and Germany. It formed the nucleus of today’s European Union. The demise of the Bretton Woods system in the 1970s was the catalyst for a European single currency, which was eventually introduced in 1999. I’ll be talking today about the effects of the present crisis and the various challenges it has presented for the euro area. I’ll compare it with the East Asian crisis of 1997.
Finally, one principle – that has gained much attention during the current crisis – is to keep the determination of the monetary policy stance distinguished from the management of liquidity in money markets. All these principles are captured in the ECB’s monetary policy strategy. And globalisation does not fundamentally alter these principles – which give guidance, in particular, in critical times. To weaken or even abandon these principles would undermine our commitment and credibility. And, in the end, we would risk losing orientation. Our strategy has provided a consistent and coherent framework not only for internal analysis and policy decision-making but also for external communication. Using the same framework for internal and external purposes has helped the ECB to ensure that its monetary policy remains consistent, credible and effective. One key element here is that the ECB, from the outset, has been transparent about its mandate, strategy, and decisions, as well as about what monetary policy can do and, even more importantly, what it cannot do. In this sense, expectations about transparency requirements should be in line with the actual strategy followed by the central bank. Without compromising on its mandate, the ECB has demonstrated a willingness and capacity to react rapidly to exceptional circumstances. It has taken a large number of extraordinary measures to support the functioning of the money market and interbank intermediation.

And we should remember that banks, owing to MREL requirements, will have to issue a lot of these instruments in the coming years, a task that has been made easier in recent months by the ECB’s monetary policy. In addition, there is evidence that banks with higher solvency levels are those best adapted to uphold their profitability against a background of negative interest rates. One way of evaluating the suitability of banks’ solvency levels involves subjecting them to stress tests. The Banco de España performs such exercises annually on all Spanish institutions. To do so it takes as a starting point highly granular data from the balance sheets of banks at the close of the previous year and defines a baseline macroeconomic scenario which coincides with the forecasts of the Banco de España available at the time the exercises are performed. It then takes another, stressed scenario, which seeks to reflect the effect of the risks identified previously materialising. The difference between both scenarios reflects the degree of stress of the exercise which, in the test this year, is slightly higher than that of the previous year owing to the intensification of the risks mentioned in the first part of my address. While the results of these tests will be published in greater detail in the forthcoming Financial Stability Report, allow me to offer you in advance some of the main conclusions. The results obtained in relation to the resilience of Spanish banks as a whole are, in general, positive.
It is scarcely surprising that a central bank in the Riksbank's situation needs to at least investigate whether the arguments that have historically been so important – that the central bank shall provide the general public with assets and means of payment free of credit risk – no longer have such great significance. Is it the case that the general public no longer wants central bank money? Or is it rather the case that it is only money made of pieces of paper (or cotton) that they no longer wish to hold in an increasingly digitalised world? If it is the latter, then it is the Riksbank's duty to investigate the scope for issuing a digital alternative – an ekrona that the general public can hold. The questions that led to the Riksbank's monopoly on issuing banknotes in 1904 arise again. But there are also other reasons for investigating a digital alternative Payment in cash presuppose a chain of action that involves issuing, transporting, storage and distribution of banknotes and coins. It requires a relatively expensive physical infrastructure to make it work. However, the actual transactions in cash do not require any further infrastructure. Once the banknotes have changed owner, the payment is complete. Payments that are based on individuals having accounts in the bank, what are now electronic payments, on the other hand require a centralised infrastructure and processes to identify counterparts, to verify account numbers and to check whether there are sufficient funds in the accounts.

This infrastructure is often housed with the supplier of the payment service or with some other intermediary. After these checks, the actual payment is implemented, that is, the money is moved from the payer to the recipient. This is called clearing and settlement and it requires a further infrastructure. The systems that manage the entire process are characterised by both network effects and economies of scale. Both aspects mean that the payment infrastructure must of necessity be very concentrated and standardised. Although this is necessary, it entails a number of other problems. One such problem is greater vulnerability in society as a result of what is usually called the “single point of failure”. If the infrastructure is affected by serious shocks, there are no alternatives available, especially if cash has been phased out. Let us assume that the card system stops functioning for some reason, at the  5 [6]  same time as cash payments are no longer possible in practice. This situation would cause serious disruptions to society. A further aspect to take into account is that when the infrastructure is concentrated to the hands of a few, it is easy that problems arise with regard to lack of competition and entry barriers for new agents. Ultimately, this can in turn entail efficiency losses for society as a whole and low incentives for innovation. A potential e-krona could alleviate both of these problems. An e-krona could be based on a separate infrastructure that could be used if the alternative systems fail.
BIS Review 113/2009  11  Figure 4 Inflation indicators (annual change, percentage)  (monthly change, percentage)  10  10  2.0  2.0  8  8  1.5  1.5  6  6  1.0  1.0  4  4  0.5  0.5  0.0  0.0  2  2  -0.5  -0.5  0  0  -1.0  -1.0  -2  -2  -1.5  -1.5  07  08  09  07  08  CPI CPI exc. foodstuffs and energy  09  CPI  Sources: Central Bank of Chile and National Statistics Institute. Figure 5 Monetary policy interest rate (percentage) 9  9  8  8  7  7  6  6  5  5  4  4  3  3  2  2  1  1  0  04  Jul. 05  Jul. 06  Jul. 07  Jul. 08  Jul. 09  Jul. 0  Source: Central Bank of Chile. 12  BIS Review 113/2009  Figure 6 GDP, Domestic demand and Output gap (percentage) 16  16  12  12  8  8  4  4  0  0  -4  -4  -8  -8  -12  -12  04.I  05.I  06.I  07.I  GDP (annual change) Domestic demand (annual change)  08.I  09.I  Output gap  Source: Central Bank of Chile.

Many market participants have considered CTCs useful for a number of reasons:  BIS central bankers’ speeches  3  •  one, through centralising treasury activities, CTCs help effectively translate management’s vision into firm-wide policies, such as preferences on operating currencies, hedging and day-to-day transactions;  •  two, CTCs help lower funding costs through the optimal use of intra-group funding and netting, as well as external financing; make more co-ordinated use of corporate balance sheets, and; enable corporates to more effectively tap capital markets for longer term funding;  •  three, they help optimise working capital positions and facilitate daily sales through customised transactional arrangements. And by concentrating excess liquidity in CTCs, senior management can achieve better visibility and control over their cash and reduce frauds; and  •  four, they act as corporate centres to consolidate various foreign exchange and interest rate exposures and allow centralised hedging on net positions. Therefore, corporates can eliminate redundant procedures to reduce associated costs and enhance efficiencies. 17. In addition, more and more corporates are adopting technologies, such as the “Enterprise Resource Planning” System and the “Treasury Management System”, which enable them to improve control over local subsidiaries’ activities and standardise treasury operations. All in all, CTCs can play the critical role of an inhouse bank within a multinational corporation and a function that multinationals should develop in tandem with their global expansion plans. Hong Kong as a preferred CTC location 18.
3  In part, that is because shocks are not measured directly, only their consequences; so what appears to be ‘good luck’, may reflect the beneficial influence of structural changes or better policy in ameliorating their impact; see Bernanke (2004). Other contributions to this literature include: Cogley and Sargent (2005), Sims and Zha (2006), and Stock and Watson (2003), who ascribe a sizeable portion of the improved performance to good luck; and Clarida, Gali and Gertler (2000) and Lubik and Schorfheide (2004), who put more weight on better policies. 4  BIS Review 101/2009  ability of policy makers to maintain steady growth in the real economy. The Fed’s reluctance to use interest rates to lean against asset price booms coupled with a willingness to relax monetary policy aggressively in the wake of sharp asset price falls (Greenspan, 2002) may also have helped place a floor under expected asset prices (the “Greenspan Put”; see Miller, Weller and Zhang, 2002). A tendency of people to underestimate future risks during periods of good economic performance seems to be a recurring theme in the history of financial markets. In part this seems to be a mixture of a willingness or desire to believe that the world has changed for the better, and moreover to find ways to rationalise that belief – in other words, “this time it’s different”. To that must be coupled a limited imagination – shared in this instance with regulators and central bankers – to see quite how badly things could go wrong.

Reinhart, C. M. and Rogoff, K. S. (2009), “The aftermath of financial crises”, American Economic Review, Schumpeter, J. A. (1939), Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process. New York: McGraw-Hill. Sims, C. and Zha, T. (2006), “Were there regime switches in US monetary policy?”, American Economic Review, vol. 96(1), pages 54-81. BIS Review 101/2009  19  Stock, J. and Watson, M. (2003), “Has the business cycle changed? Evidence and explanations”, in Monetary Policy and Uncertainty, pp. Federal Reserve Board of Kansas City: Kansas City. Taylor, J. B. (2007), “Housing and monetary policy” in Housing, Housing Finance and Monetary Policy, pp. 463-476. Federal Reserve Bank of Kansas City: Kansas City. Taylor, J. B. (2009), “The financial crises and the policy responses: An empirical analysis of what went wrong”, NBER working paper 14631, January. Tobin, J. (1969), “A general equilibrium approach to monetary theory”, Journal of Money, Credit and Banking, vol. 1(1), pp15-29. Uhlig, H (2009), “A model of a systemic bank run”, NBER working paper 15072. Van den Heuvel, S.J. (2008), “The welfare cost of bank capital requirements”, Journal of Monetary Economics, vol. 55, pp. 298-320. White, W. R. (2006), “Is price stability enough?”, Bank for International Settlements working paper 205, April. Woodford, M. (2003), Interest and Prices: Foundations of a Theory of Monetary Policy. Princeton University Press: Princeton.