samchain/econo-pairs-v1 huggingface dataset:
In principle, these triggers could be tied to deterioration in the condition of the specific banking institution and/or to the banking system as a whole. There are many issues that would need to be worked out regarding how best to design such instruments, including how to determine their share of total capital as well as how to configure and publicly disclose the conversion terms and trigger. But, in my view, allowing firms to issue contingent capital instruments that could be used to augment their common equity capital during a downturn may be a more straightforward and efficient way to achieve a countercyclical regulatory capital regime compared to trying to structure minimum  6  BIS Review 125/2009  regulatory capital requirements (or capital buffers above those requirements) that decline as conditions in the financial sector worsen. So what might such a contingent capital instrument look like? One possibility is a debt instrument that is convertible into common shares if and only if the performance of the bank deteriorates sharply. While, in principal, this could be tied solely to regulatory measures of capital, it might work better tied to market-based measures because market-based measures tend to lead regulatory-based measures. Also, if tied to market-based measures, there would be greater scope for adjustment of the conversion terms in a way to make the instruments more attractive to investors and, hence, lower cost capital instruments to the issuer. The conversion terms could be generous to the holder of the contingent capital instrument.

14 The evidence for this is discussed in more detail in Section 2 of the Discussion Paper. 13  6  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  6  Chart 6: Shadow carbon price in scenarios shown in Chart 2  Source: IIASA [NGFS Climate Scenarios Database, using marker models]  The question is not whether the shadow carbon price has to rise – the question is when. To the extent that markets are assuming an unrealistically low or distant pickup – and it seems increasingly clear that they are – financial assets today may be mispriced. An ‘adjusted market neutrality’ principle that took this mispricing into account could suggest a very different asset allocation in investment portfolios, including the CBPS. Until recently, the Bank of England lacked the mandate to make such adjustments. In March, however, the Chancellor updated the MPC’s ‘remit letter’ to confirm that the economic strategy of the Government – which the MPC is required to support as a ‘secondary objective’ – includes supporting the transition to a net zero emissions economy.15  Portfolio decarbonisation is not enough: look forward, work together to drive change  Now comes the tricky bit: translating these conceptual insights into practice. At first sight it might seem the answer is simple: just sell all our high-emission bonds, and use the proceeds to buy low-emission ones. The carbon footprint of the CBPS would fall sharply.
BNP Paribas excluded due to lack of H1 interim data. BIS Review 2/2007  13

Some of the conventional, static metrics that we now use - such as those to judge asset quality and to assess the adequacy of credit loss reserves - are likely to be supplanted by more quantitative and more sophisticated measures. Supervisors will increasingly have to assess the bank’s ability to properly rate all exposures across the spectrum of its internal rating grades - not just its classified or problem assets. In addition to ensuring the integrity of banks' internal rating assignments, supervisors will also need to understand how these ratings feed into the models and tools used by banks to manage credit risk. They will also need to understand the implications of using these new tools. I also see a significant shift on the horizon in our examination approach to operational risk, as we bring together operational risk management assessments with operational risk capital analyses. Examiners will have to understand, and be able to evaluate critically - much more so than today - how banks combine qualitative and quantitative techniques. Here I am thinking of the need to consider selfassessments banks may make of their control environments, as well as their processes for data collection and statistical analyses. It clearly will be important to devote the necessary supervisory resources - in terms of skilled personnel, technical training, and a targeted strategy - to these new supervisory efforts. As we prepare to traverse this uncharted regulatory landscape, there is an opportunity for supervisors to take a fresh look at how they do their work.
They don’t, however, reduce the size of the participating bank’s balance sheet, as they substitute reserve balances with a less liquid instrument. Reverse repos are a type of open market operation in which eligible counterparties place cash at the Federal Reserve in return for securities from the Fed’s portfolio. Technically structured as a sale and repurchase agreement, a reverse repo is economically equivalent to a collateralized investment with the Fed (with the opposite flow of cash from a repo, the traditional liquidity-adding open market operation described earlier). These transactions are arranged as auctions between the New York Fed and the Desk’s traditional primary dealer counterparties, as well as with an expanded set of counterparty types, including money market funds and GSEs, that typically provide large amounts of short-term funding to the financial markets.13 Reverse repos were initially envisioned to be used as a term, fixedquantity tool. However, with the necessary operational infrastructure to support reverse repo  11  Permanent operations such as asset sales would also remain in the Desk’s toolkit and would result in a reduction in the size of the Fed’s securities portfolio and balance sheet. 12  Operational exercises for both mortgage-backed security purchase and sale operations using the Desk’s proprietary trading system, FedTrade, were started on November 21, 2013. 13  The expanded set of counterparties is intended to enhance the capacity of the Desk’s reverse repo operations beyond that provided solely by the primary dealers.

In general, Czechs despise inflation, and the central bank needs to explain repeatedly why it uses the worldwide standard of a 2% inflation target instead of targeting literal stability of the CPI level, or 0% inflation. Already many decades before the era of independent monetary policy, in the early 1920s, Czechoslovakia pursued a strategy of deliberately strengthening the national currency. This policy resulted in deep deflation, in strong contrast to the hyperinflations seen at that time in neighboring countries (Austria, Germany, Hungary, and Poland; see Sargent, 1982). So, it comes as no surprise that the Czech National Bank is rarely applauded for cutting interest 1/2  BIS central bankers' speeches  rates, while hikes are often welcomed by a majority of the population. An important publicrelations test arose for the Bank in 2013, when interest rate cuts proved insufficient to return inflation to the target. Inspired partly by one distinguished member of today’s panel, the Czech National Bank adopted an exchange rate commitment to keep the currency from appreciating. The commitment was terminated a year ago. Since then, studies by the IMF and academics alike have pointed to large benefits of the policy in terms of reducing unemployment, lifting GDP growth, and preventing deflation. Within two years after the commitment’s enactment, the Czech Republic – at least in part thanks to the commitment – turned from a de facto sick man of Europe to one of the fastest-growing economies with the lowest unemployment rate in the entire EU.
As for the current account, we expect the surplus to amount to about 4-7 billion US dollar for the whole year, up from the surplus of 2.1 billion US dollar for the first two months of 2008. Distinguished Guests, I now move to the second part of my talk, on the issue of risks to the Thai economy in 2008. I believe that there are two important risks stemming from external sources, namely 1) the US recession and high oil and commodity prices, and 2) the potentially more volatile international financial markets. On the prospects of global growth and global inflation, there is no doubt that the risks for both have increased in the near term. Despite the US Fed’s sharp and substantial interest rate cuts and liquidity support measures to forestall the rise in mortgage interest rates and ease the liquidity and credit crunch, the world now expects the US economy to weaken substantially. In the meantime, global price pressure has not yet peaked as the prices of crude oil and commodities continue to rise as world demand for them strengthens in the face of tight demand-supply situation. Moreover, price pressure could come from potentially adverse geopolitical events, unfavorable weather condition, and further dollar slide in the future. At this point, we cannot be certain that when the oil price finally adjusts downward, such a correction will be substantial enough to bring the global inflation risk down. 2  BIS Review 54/2008  What do these risks mean for the macroeconomic management in Thailand?

The establishment of the Deposit Protection Agency should reduce banks’ moral hazard and  4  BIS Review 54/2008  introduce more market discipline to the banking sector by putting pressure on banks to improve financial strengths if they want to attract and retain depositors. I now turn to the Bank of Thailand’s financial sector master plan (FSMP). You may recall that the implementation of the first master plan started in 2004 and was completed in March 2007, when the last commercial bank licensed under the plan started its operation. Key initiatives under the first plan involved 1) improving financial access, 2) increasing efficiency of the banking sector through removal of regulatory obstacles to market development and through consolidation of smaller financial institutions, and 3) strengthening market discipline through more stringent information disclosure and enhanced consumer protection mechanism. Through licensing reform and the so-called one-presence policy, there has been a significant consolidation and reduction in the number of financial institutions under the supervision of the Bank of Thailand. While evaluation of FSMP Phase I is currently being undertaken, there is evidence to suggest that the banking sector has shown improvement in both operating efficiency and resiliency. Turning to the second-phased financial sector master plan, the overarching objective is to improve efficiency, competitiveness, and resiliency of the financial sector. The goal is that financial institutions can more effectively perform their intermediary functions and meet the challenges of a rapidly changing environment.
Chart 7: G20 currency movements since July 2007 Percentage change vs. Dollar 50 40  Appreciation  30 20 10 0 -10 Depreciation  -20 -30  UK  Korea  Argentina  Turkey  Russia  Mexico  India  South Africa  Euro  Indonesia  Saudi Arabia  Canada  Australia  Brazil  China  Japan  Note: Spot exchange rate on 9th July 2007 compared to 9th July 2010 Source: Bank of England and Thomson Datastream  8  BIS Review 99/2010  There are structural explanations of why the pound has fallen so far, including the potentially high exposure of our economy to the financial crisis and its associated effects. But another contributory factor could be the stance of monetary policy, as changes in the exchange rate are an important channel for the transmission of monetary policy. So we need to recognise that the weakness of the pound – and its upward impact on inflation – may also have been affected by UK monetary policy and perceptions about its future stance. Implications for UK monetary policy In four important respects, therefore, I believe the economic world has changed significantly since we put in place the current set of monetary policy settings last year. The world economy has bounced back, demand is recovering in the UK, there is less spare capacity than we feared and inflation has been higher.

Losses on subprime mortgages in the US shattered confidence in the entire financial system. Financial institutions started to doubt their counterparties and interbank lending came to a halt. Experience shows the need for tighter regulation of systemically important banks. This can for example be achieved by introducing higher bank capital and liquidity requirements for such banks. The capital requirement for mortgage lending should to a larger extent reflect the overall risk of such loans. 1  See Carmen M. Reinhart and Kenneth S. Rogoff (2009): “This Time Is Different. Eight Centuries of Financial Folly”, Princeton University Press. BIS Review 69/2010  9  Justified criticism has been levelled at international banks. The focus is now shifting to government fiscal management in many countries. Fiscal slippage seems to have been considerable in some European countries in particular. EU budget policy guidelines have been diluted and have not been adhered to. Countries have experimented with budget frameworks and have debt-financed public investments, which require operating and maintenance costs but yield little income. With already large deficits, the crisis has destroyed state finances in many countries. Economic developments over the next 5–10 years will be marked by the tightening measures that will now have to be implemented in these countries. However, there are exceptions. State finances in Nordic countries are in order, which provides a better starting point. With ample state coffers, the Norwegian economy was to a considerable extent insulated from the effects of the financial crisis in 2008 and 2009.
To provide ease of reconciliation, banks will facilitate payment references to be keyed in by the sender for IBG payments by April 2014 to enable reconciliation of payments by the beneficiary. In addition, banks have also committed to increase the daily limit for IBG and Instant Bank Fund Transfer (IBFT) transactions to RM10,000 with the necessary security and safety features. In addition, ongoing initiatives to build awareness, educate and instill confidence in electronic payments are also carried out nationwide through a series of roadshows and media appearances. Timely for businesses to migrate to electronic payments Our country is at a turning point in the migration to electronic payments. Under the 2014 budget, RM1.8 billion has been allocated for the implementation of the second phase HighSpeed Broadband (HSBB) project. This initiative will provide additional internet coverage which will benefit 2.8 million households nationwide. With this initiative, the household broadband penetration rate is expected to increase to its optimum level6. In addition, Bank Negara Malaysia has also called on the banks to widen the access points for the public to conduct electronic payments, including via the ATM network. While Malaysia’s population stands at 29.7 million, there are 41 million ATM cards which have a debit application that can be used to make purchases at merchant outlets.

Hence the spectacular failure of models during the crisis: most, if not all, were constructed on the assumption that stable and predictable (usually normal) distribution probabilities could be used to describe the different states of the financial system and the economy. They collapsed when extreme events occurred with a frequency that no one ever thought would be possible. -  Uncertainty itself has huge consequences. As shown by Caballero and Krishnamurthy episodes of flight to quality and liquidity hoarding can be best explained by a regime shift, from an environment where risk can be measured and probabilities attached to different states of nature to a world of total uncertainty. Such regime changes are "tipping points" for the system as a whole, whose behavior is suddenly transformed. When they occur, agents respond by making decisions using “worst-case” scenarios and covering themselves against the possibility of their own demise. Doing so, they faced and created a collective action problem since the general rush for protection only aggravates the stress . This is the best way to rationalize and understand the liquidity and market freezes which occurred in August 2007 and, again, in September 2008. Facing such unprecedented reactions, policy makers may have wondered, "does the market know something that we don't". Actually, markets participants knew that they could not know. Because they were directly involved, they were aware it was impossible for them to fully master the complexity they had themselves created. And they acted accordingly.
Growth in the US economy has slackened. The US housing market has weakened and employment is rising at a slower pace than earlier this year. There are also signs of somewhat slower growth in western Europe. Economic growth in emerging economies remains strong, particularly in China. Developments in these countries are of growing importance for the world economy and for our own economy. China, India and Russia have accounted for close to half of overall global growth over the past year. In spite of weaker prospects for the US and western Europe, oil prices have increased since the October Monetary Policy Report and prices for other commodities remain high, partly owing to continued strong growth in demand from Asia. Uncertainty surrounding developments in the world economy has heightened as a result of the turbulence in financial markets this autumn. The turbulence was triggered by problems in some segments of the US housing market. Many borrowers were granted mortgages they cannot service now that the interest rate has risen. There were losses, particularly on loans in the bond market and in complex loan products owned by separate companies that had relied on very short-term financing. These companies are linked to the large international banks, and the banks have had to transfer loans onto their own balance sheets. Combined with higher losses, this limits banks’ capacity to extend new loans to the housing market and other sectors, and will thereby have a dampening impact on economic growth.

In the current liquid conditions, therefore, the large banks have been able to cut their standard savings rate. They are therefore seen by some analysts as the winners from deregulation since they now have another lever to adjust their net interest margin. The unanswered question is whether they will be able to get away without a significant erosion of deposits in savings and current accounts. A certain amount of switching of accounts has gone on. But there is not enough evidence at this stage to conclude whether deregulation has resulted in any significant redistribution of deposits among banks. So we cannot tell how interest elastic the demand for savings accounts may prove to be, particularly in today's somewhat artificial conditions of high liquidity. However, what can be said is that deregulation does offer the smaller banks an enhanced ability to compete for savings accounts and for those customers which the large banks may be less eager to retain. While the smaller banks may have to pay a higher rate for their savings deposits, they will still benefit if they can substitute such funds for even higher cost, and less stable, time deposits. Consumers will also benefit from deregulation through greater choice of savings products and, for those with larger balances at least, from higher interest rates. However, we have to face the fact that not all depositors will be better off in the deregulated world.
Leverage and financial stability The fundamental problem in the financial crisis was that the ability of many highly-geared financial institutions to withstand substantial – but by no means unprecedented – falls in the  4  BIS Review 133/2010  value of their assets was rightly perceived to be low. Much of the debt of the highly leveraged institutions was wholesale funding – some of which proved footloose when there was increased concern about asset values. It was reasonable to have concerns over the strength of banks because leverage was so high. Between 2005 and 2007 major UK banks – which were by no means the most highly geared – had leverage ratios that averaged slightly above 30. The highest ratios – and this was for major banks – were close to 60 (Chart 5–6). By leverage I mean total bank assets (netted for derivatives and minus cash at the central banks and goodwill) relative to shareholder equity (also net of goodwill and excluding minority interest). So true equity capital was often barely 2% of total assets. The vulnerability that high gearing brought to financial institutions meant that even relatively modest falls in asset values triggered concerns about solvency that in turn led to funding problems that threatened to be – and in some cases became – self-fulfilling as sources of funding dried up and some assets needed to be sold because they could no longer be financed.

Bear Stearns With this important context, let me return to the actions taken by the Federal Reserve in response to the situation that arose at Bear Stearns. That response was shaped in roughly four stages: (1) the decision on the morning of March 14 to extend a non-recourse loan through the discount window to JPMorgan Chase so that JPMorgan Chase could in turn lend that money to Bear Stearns; (2) the decision on March 16 by JPMorgan Chase and Bear Stearns for JPMorgan Chase to acquire Bear and guarantee certain of its liabilities, along with an agreement in principle that the Federal Reserve Bank of New York would provide certain financing in the context of that acquisition; (3) the launching of the Primary Dealer Credit Facility; and (4) the events of the following week, culminating in the March 24 announcement of revised merger agreement and guaranty terms between JPMorgan Chase and Bear, and the finalizing of the terms and structure of the associated loan from the Federal Reserve Bank of New York. Let me begin with the market situation in which Bear was operating in the days leading up to March 13. Fixed-income traders had begun hearing rumors that European financial institutions had stopped doing fixed income trades with Bear. Fearing that their funds might be frozen if Bear wound up in bankruptcy, a number of U.S.-based fixed-income and stock traders that had been actively involved with Bear had reportedly decided to halt such involvement. Many firms started pulling back from doing business with Bear.