samchain/econo-pairs-v1 huggingface dataset:
On the one hand we can choose a path towards fully-integrated international regulatory and supervisory structures, in order to achieve a better match with the global format of the financial system. On the other hand, we can choose a path towards shrinking the financial system back inside national borders, within the perimeters of current regulatory and supervisory arrangements. Obviously, reality will not be as black and white as to make a simple choice between these two paths possible. Future regulatory reform will probably take some kind of middle road. But if someone asked me for directions my answer would be clear. The benefits of financial globalisation are too great for us to afford to close national borders and to roll back financial integration. A new European supervisory structure – the de Larosière proposals As you all know, the European Union chose its path already some time ago. Based on the belief that integrated markets contribute to economic growth (and also to other important policy objectives) the European Union has established a legal and institutional framework for the supervision and regulation of financial markets. However, even though we have come a long way towards establishing a single European market, the regulatory and supervisory structures are still very much fragmented along national lines – a fact that we have been painfully re-minded of during the current crisis. The problems experienced with the Icelandic banks and the Benelux-based conglomerate Fortis are just a couple of examples.

It naturally adapts to the different economic development stages the country and the state go through. I do believe there cannot be a developed and well-integrated economy without open, integrated, efficient, transparent and well-regulated markets. Therefore, it comes out clearly that the development of the interbank market is in all stakeholders’ interests: the banking system itself, the Bank of Albania and the economy on the whole. Being fully aware of this, the Bank of Albania has built a clear strategy in terms of: 1. Deepening and broadening the money market in Albania further;  2. Creating relevant market instruments;  3. Establishing a close and rational cooperation with the banking system and the financial market in general;  4. Ensuring a clear and constant communication with the market operators and the public at large;  5. Providing modern technological solution. As a result of these initiatives, our monetary policy is now entirely based on indirect instruments of monetary management, which operate in line with the open market logic. Our operational framework allows the banking system to manage the liquidity effectively, being a counterparty of the last resort to meet the system’s aggregate needs for liquidity or invest it. Via the required reserve, the Bank of Albania has provided you with enough room to cover your unexpected liquidity needs, at a remuneration rate close to the market interest rates that  BIS Review 97/2010  1  avoid the distortions the required reserve may yield to your banking business.
I had the privilege of chairing the Group of Central Bank  Page 3 sur 11 Governors and Heads of Supervision (GHOS) up to the start of this year, and I would like to reiterate here its call for a “full and consistent implementation”. For Europe, this means adopting as quickly as possible, in trilogue with the Council and the European Parliament, a position as close as possible to the Commission's proposal: the proposed transitional measures – particularly regarding housing loans – must not turn into permanent exceptions; capital requirements must be applied at the consolidated group level, with no new internal barriers to the Banking Union. And all jurisdictions – including by the way the United Kingdom, where regulators rightly argue against the temptation of a race to the bottom – must effectively implement these accords by 1 January 2025 – just over two years from now. b. Financial stability Financial regulation is not an end in itself; it is “only” a means to achieve the overarching goal of financial stability. The regulation put in place over the past 15 years has proven quite effective so far: we have successfully overcome the “stress test” of the Covid crisis; it is no coincidence that it has not escalated into a financial crisis. Capital requirements have considerably bolstered the resilience of the banking sector: the CET1 ratio of the six main French banking group increased continuously from 5.8% in 2008 to 15.7% in 2021 [with the first slight decrease in June 2022 at 14.8%].

Financial System Conference – Dublin, 2 November 2022 Financial Regulation: A French Perspective  Speech by François Villeroy de Galhau, Governor of the Banque de France  Press contact: Mark Deen (mark.deen@banque-france.fr), Déborah Guedj (deborah.guedj@banquefrance.fr)  Page 1 sur 11 Ladies and Gentlemen, I am delighted to be here in Dublin, and I would like to thank warmly Governor Gabriel Makhlouf for the invitation to speak today at this Financial System conference. I have already had the pleasure of coming here four years ago, to talk about Financial Globalisation and more specifically about current account imbalances and the resulting financial vulnerabilities. These topics have faded into the background for some time as a result of the unprecedented succession of shocks and crises. But financial stability is obviously returning to the front stage in these turbulent times, putting to the test the reforms undertaken over the last decade, but also pointing to new pockets of financial stress. Against this backdrop, I will reflect on the possible end of a favourable decade for financial regulation and financial stability (I). I will then focus on the real estate sector – so sensitive here in Ireland – as a practical study case of the progress enabled by our regulatory and macroprudential toolkit (II). I. The end of a favourable decade for financial regulation and financial stability? a. Financial regulation It has now been fifteen years since the onset of the Great financial crisis – no need to recall the social, economic and financial damage incurred. But lessons were learned.
But apart from this progress on the international and European levels, the crisis has also required national governments to come up with energetic responses at home. This is because not all economies faced the onset of this crisis with the same macroeconomic imbalances or the same weaknesses in their banking systems or supervisory arrangements. From the start of the crisis, governments in some of the biggest economies were, in addition to compensating for the effects of the tightening – and even closing down – of certain funding markets, obliged to support some of their major banks with public funds. Fortunately, the more strictly regulated and supervised Spanish banking system withstood reasonably well this first wave of the crisis. But that does not mean we were immune to it. The crisis entailed an abrupt decline in world growth and gave rise to major problems on international funding markets which significantly affected the Spanish economy in general, and its banking system in particular. BIS central bankers’ speeches  1  In the long upturn prior to the crisis, the Spanish economy had built up significant imbalances, such as the external deficit, the increase in private debt and the excessive expansion of the real estate sector. In parallel, weaknesses had been incubating in the banking industry, especially in parts of the savings bank sector.

It has been a pleasure and a privilege for me to cooperate with him as a member of the ECB Governing Council over the past five years, during times of great complexity for monetary policy and financial stability in the euro area. In this period I have seen at first hand Jean-Claude’s personal and professional qualities. He has shown he has the right blend of firmness and pragmatism required to take difficult decisions at the worst junctures of the crisis. And he also possesses the leadership and communication skills needed to convey a long-term vision of the European project and the central role that the ECB plays here. During Jean-Claude Trichet’s presidency, the ECB Governing Council has displayed the resolve needed to deploy all the instruments available to the common monetary policy and to take timely decisions that help ensure the goal of price stability in the medium term is achieved. Since the creation of the ECB, average inflation has stood just below 2% and inflation expectations have held stable. The extraordinary scale of the financial crisis has put to the test the responsiveness of the Eurosystem in general, and of Jean-Claude Trichet in particular. Since the start of the crisis a series of bold and well-directed decisions have been adopted. And these have contributed notably to restoring the monetary policy transmission mechanism, which had been seriously damaged, and to preventing an unprecedented collapse of the financial system with incalculable consequences.
But withdrawing from internationally-agreed minimum requirements which apply to globally-active entities – such as the FRTB or the NSFR standards, I want to insist on the Trading Book – would be completely different and a source of great concern for all. Any temptation of competitive deregulation would be a lose-lose game which would increase the risks of a new financial crisis and therefore weigh on economic growth. International cooperation on financial sector regulation is our common good, and, fortunately, the Hamburg G20 Summit reaffirmed it. The second requirement is to carefully assess the impact of these new financial regulations. The Banque de France has supported the work of the FSB from its inception, notably to build the “policy evaluation framework” to assess the effects of G20 reforms. This was endorsed by the Leaders of the G20 at the Hamburg Summit. This is a key part of the credibility of global financial reforms. Ex-post evaluations will make it possible to assess whether G20 financial regulatory reforms have actually achieved their intended outcomes. Going forward, these evaluations are meant to provide a basis for the possible fine-tuning of post-crisis regulatory reforms, where relevant. What matters now is to make sure that this framework is used in a timely manner. To this end, a tight schedule should be defined by the end of the year, so that the first evaluations can be carried out in 2018. ** Ladies and Gentlemen, let me conclude by a word on the Paris ecosystem in a post-Brexit Europe.

Brexit was and remains bad news, above all for our British friends. But it brings for us an opportunity. The EU post-Brexit financial system will certainly be less concentrated than it is today and more active on the continent, based on Eurozone abundant savings. And, in this new environment, the Paris financial centre has obvious advantages, building on the very welcome measures announced by the Prime Minister to strengthen Paris’ attractiveness. To name a few, France has the most developed capital market in continental Europe, the largest asset management industry and is the leading private equity investor; French universities are renowned worldwide for the excellence of their finance teaching. Paris has everything it needs to be one of the best financial centres in the euro area: it depends on us, on all of us. You can rest assured that Banque de France and ACPR are strongly committed to fully playing their part in supporting the Paris ecosystem. i  G20 Leaders’ Declaration, Hamburg, 7/8 July 2017. Assets of “Other Financial Intermediaries” (OFIs); sample of 21 individual non-euro area jurisdictions and the euro area aggregate. Source: FSB, Global Shadow Banking Monitoring Report 2016, May 2017. iii See U.S. Department of the Treasury, “A Financial System That Creates Economic Opportunities”, June 2017. ii  3
Thus, we see that the Libor cannot remain at 0.25% indefinitely. However, as our forecast also shows, it would not be advisable to increase the Libor now since the very weak inflation rates expected in 2010 (0.4%) and 2011 (0.3%) indicate that the deflation risk has not completely disappeared. We continue to use an inflation forecast to guide our decisions. In this way, we will ensure that the unconventional measures currently in force do not compromise medium and longterm price stability.

This, in essence, is attributable to the prices of imported goods, which are down by comparison to their high levels in 2008. However, inflation for domestic goods and services, despite weakening during the year, will remain above 1%. BIS Review 77/2009  3  The outlook for the following years has been very slightly adjusted upwards. We shall return to this point in a few moments. Monetary policy decision At our monetary policy assessment in March, we identified a number of elements that led us to foresee negative inflation for 2009 and a risk of deflation for 2010 and 2011. In view of this threat, we relaxed monetary conditions by taking supplementary measures. We reduced the three-month Libor target range by 25 basis points to 0–0.75%, aiming for a rate of 0.25%. In order to achieve this, we granted longer-term repo credits and concluded foreign exchange swaps. To prevent the Swiss franc from further appreciating against the euro, we purchased foreign currency on the foreign exchange market; we also purchased bonds issued by private sector issuers to foster a decline in capital market risk premia. All in all, these operations achieved their objective. The situation is gradually normalising, although it remains very vulnerable. The risks are still clearly skewed to the downside and are major. Given these conditions, and in view of the inflation forecast, we consider that the time for a correction has not yet come, but that an additional relaxation of monetary conditions is not necessary either.
At a more structural level, the BOT can also act as a catalyst to help enhance competitiveness and augment economic adaptability. One key avenue is through fostering financial sector development. Here, the main thrust of our policy focus will be to enhance the effectiveness of the financial sector in serving as intermediaries of capital through further liberalization. The aim is to achieve improvements in four key dimensions. They are: (1) greater financial innovation and expansion of available financial instruments; (2) broader choice of services to suit households and firms’ needs; (3) lower costs of such services; and (4) improvement in financial access. Starting with the banking sector, which plays the most prominent role in our financial system, we will be taking steps to enhance competition. In the spirit of progressive liberalization under the ASEAN Economic Community (AEC), Thailand’s formula for the banking sector will be guided by the second Financial Sector Master Plan. This year, we enter the second phase of this plan, which would allow existing foreign bank branches and subsidiaries up to a maximum of 20 branches and 20 off-premise ATMs. New service providers may be allowed under a restricted license to close any remaining gaps in the system. In the final phase in 2014, additional new licenses may also be considered. Complementing this push will be efforts to boost financial market development through a more streamlined capital account and foreign exchange regulatory regime.

While the US is more advanced in the de-leveraging process, the debt-overhang will be a drag on growth in both regions well into 2012. Dealing with such deep-rooted problems require tough, unpopular, actions at the fundamental level. A critical challenge is in justifying these actions to an increasingly skeptical public. Thus the implementation of the required policies is just as hard, if not harder, than coming up with the solution. The political risks involved in all this is a key source of uncertainty that we must be mindful of. While global financial markets in recent months appear to be coping better with this nagging uncertainty, we are definitely not out of the woods. And the risks are much compounded  BIS central bankers’ speeches  1  given the limited room for additional monetary and fiscal stimulus remaining in the advanced economies. Looking closer to home, the rising contribution of Asia to the global economy is reassuring. Despite the slowdown in exports on the back of a softer global economy, domestic demand in many Asian economies remains robust. The expanding role of China and ASEAN’s commitment towards economic integration will offer vast economic opportunities for the region. However, as will be discussed later, taking advantage of such opportunities will neither be automatic nor easy. The key challenge for Thailand is to make sure that we harness the opportunities and incentives generated by this process to achieve fundamental restructuring of our economy and raise our potential growth. On that note, let me turn to the domestic challenges.
Example: SGX’s Marketnode seeks to enhance the efficiency of fund raising through international debt capital markets, shifting from a largely analogue process today, to a digital, automated environment supported by distributed ledgers and smart contracts. We anticipate that in the near future, the ability of real-time validation through a distributed ledger will shorten settlement cycles, which in turn allows for more cost-effective margin requirements. Third, a growing bond market that serves the needs of global and regional issuers. The size of Singapore’s bond market has expanded by 50% over the last 5 years, reaching almost half a trillion Singapore dollars as at the end of 2020. SGX is the largest bond listing exchange in Asia with over 3000 bonds from 45 countries in 19 currencies. More than two-thirds of the bonds issued in Singapore are in foreign currencies including the G-3 and Asian currencies. Over 60 international and regional banks have debt origination teams and capabilities here to support international bond issuance out of Singapore. More than half of the bonds issued in Singapore come from foreign issuers. Example: China’s Three Gorges issued a dual-tranche jumbo issue of $ billion in 2/4  BIS central bankers' speeches  2020, and the Philippines’ Jollibee issued two tranches totalling $ billion. Singapore also has a vibrant green and sustainable bond market to support the region’s transition to a low carbon future. The green bond market started only in 2017 but issuances are expected to cross $ billion by the end of this year.

It reserves the right to reject or limit the use of an asset on the basis of any information on its credit quality that it may consider relevant. The Eurosystem has applied such discretion to temporarily suspend the application of the minimum rating requirement to debt instruments issued or guaranteed by some euro area governments following EU/IMF adjustment programmes. Thank you for your attention. 4  BIS central bankers’ speeches
This is done both because we recognize the lags with which monetary policy operates, and because of our concern about the costs in terms of output loss and employment of adjusting inflation to the target. If we do not do this, the adjustment would take much less time to complete. All this is common knowledge. But I feel it needs to be stressed in order to clear, yet one more time, the mistaken argument that the CBC does not consider the level of economic activity when making its decisions. Additionally it serves to insist on the issue that the current global financial crisis was not caused – as some argue – by monetary policy’s orientation to price stability, but by a tremendous failure in the financial systems of the developed world. Neither the private sector nor policymakers were able to foresee the danger of the imbalances that were accumulating during this decade. Today, the monetary and fiscal stimulus packages are precisely what have allowed the world economy, which suffered an initial shock similar to that of the Great Depression, to show a substantially better performance. This is particularly true in the case of Chile. The evolution of the economy and monetary policy from 2007 onwards In just three years, the Chilean economy has gone through two radically different episodes, although related to one another.

On the trade side, Chile has seen a drop in export prices, whose greatest effect can be observed in disposable income, which affects the demand, although the effects of the lower copper price are offset by the fiscal rule. Nonetheless, because the Chilean economy is primarily an exporter of commodity-related products, the effects of the drop in world activity were smaller than on exporters of manufactured goods. This is because the demand for manufactures has been the hardest hit by the global recession. In our case, prices have fallen, but it has been always possible to sell our products. On the other hand, in manufactures exporting countries, purchase orders came to a sudden halt, giving way to inventory build-up and a severe drop in production. This explains the magnitude of the initial fall in many Asian and industrialized economies. Overall, it is interesting to note that an essentially healthy economy like Chile was hit surprisingly fast by the international crisis. Here we must underscore that the effects of the global crisis had an unprecedented degree of synchrony. Roughly 90% of the world’s countries posted a contraction of output the fourth quarter of last year. The culprit of the deteriorated economic activity, in my opinion, was the confidence crisis that took over the whole world, Chile included. Uncertainty multiplied. There was genuine concern that the financial systems of developed economies might paralyze completely and that the economic meltdown would trigger a much deeper recession than the one we see today.