samchain/econo-pairs-v1 huggingface dataset:
So, for example, the holding companies of Goldman Sachs, Morgan Stanley and Merrill Lynch, which is now a subsidiary  2  See, for example, Senior Supervisors Group, “Risk Management Lessons from the Global Banking Crisis of 2008,” October 21, 2009, and “Observations on Risk Management Practices during the Recent Market Turbulence,” March 6, 2008. BIS Review 161/2009  3  of Bank of America, are now under our direct supervision. We are making sure that they have appropriate liquidity buffers and capital. Second, the Federal Reserve is working with a broad range of private sector participants, including dealers, clearing banks, and tri-party repo investors to dramatically reduce the structural instability of the financial system utilities, such as the tri party repo system. Third, the Basel Committee is working on establishing international standards for liquidity requirements. There are two parts to this. The first is a requirement for a short-term liquidity buffer of sufficient size so that an institution that was shut out of the market for several weeks would still have sufficient liquidity to continue its operations unimpaired. The second is a liquidity standard that limits the degree of permissible maturity transformation – that is, the amount of short-term borrowing allowed to be used in the funding of long-term illiquid assets. Under these standards, a firm’s holdings of illiquid long-term assets would need to be funded mainly by equity or long-term debt.

Once the private sector backed away from AIG, the Fed, with the full support of the Treasury, was called upon to do something extraordinary and lend to AIG. The Federal Reserve had no oversight authority over this institution whatsoever, but it stepped into the breach and lent to AIG to prevent a catastrophic collapse of the financial system and to protect the public from the fallout that would have resulted. There has also been a lot of criticism – in the recent SIGTARP report and elsewhere – that the Federal Reserve should have forced AIG’s major counterparties to take haircuts in conjunction with setting up Maiden Lane III. The reasons for the Fed’s actions in this situation are straightforward. From the moment the U.S. government made it clear that its goal was to prevent AIG’s bankruptcy in order to stem a broader collapse of the financial system, this undercut the ability to obtain concessions from AIG’s counterparties. To put it starkly, power in a negotiation comes either from being able to issue a credible threat or from coercion. Bankruptcy at that point for AIG was simply not credible in the context of the actions taken to rescue the firm in the first place, and threatening bankruptcy would have been at cross purposes to the broader goal of stabilizing the financial system. Using our supervisory power in a coercive manner would have been an abuse of that supervisory power.
In addition to the shift in economic policy and the globalisation process, other factors, of course, have played a part, including the Riksbank’s rate cuts, which lower mortgage interest costs. The effects of sharp but temporary rises in energy prices have also contributed, e.g. in 2001 and 2003. But even when excluding these transitory effects, inflation has been very low. The consumer price index, CPI, is the inflation measure on which the Riksbank’s target is focused. The CPI measures the price of a basket of goods and services for household consumption. By breaking down the CPI into prices of goods and services, excluding electricity, oil and mortgage interest rates, it becomes evident that falling goods prices have been the main contributor to the low price pressures (Chart 2). But services prices, too, are currently rising somewhat less than motivated by the generally lower productivity growth in the services sector. Developments in goods prices are firstly influenced in part by price developments for the goods that we produce ourselves in Sweden, and in part by the price level and the price developments in the countries from which we import. Finally, movements in the exchange rate are important. The rate of increase in producer prices of domestic goods has been low in recent years. When we have investigated this in more detail we have concluded that it is a combination of low price increases for intermediate goods, subdued wage inflation and robust productivity growth in manufacturing that has caused lower domestic producer prices.

Sabine Lautenschläger: Banking supervision – what next? Speech by Ms Sabine Lautenschläger, Member of the Executive Board of the European Central Bank and Vice-Chair of the Supervisory Board of the European Central Bank, at the Banking Supervision, Resolution and Risk Management Conference during the 20th Euro Finance Week, Frankfurt am Main, 14 November 2017. * * * “What next in banking supervision and resolution?” is the title of this panel discussion. Well, before we discuss what comes next, let us take a quick look at what has happened in recent years. Since 2014, we have built European banking supervision from scratch. We have hired people, devised methods and set up processes. There are certainly still things that need to be improved, but by and large the system runs smoothly. As that is the case, there will be less construction work to be done in the years ahead. But this doesn’t mean that we will sit idly by, quite the opposite. The banking sector is facing a whole range of challenges, as you well know, and we have our part to play. Let me mention a few points – and it’s not a comprehensive list. There is the banks’ search for profitability and their need to cut costs and adjust their business models. There is Brexit. There is digitalisation and there are cyber risks. There are the Basel III reforms, which need to be finalised and then implemented. And there are efforts to further strengthen proportionality.
Private investment activity is also beginning to pick up after a period of over capacity due to the excesses prior to the Asian financial crisis. There are also plans for massive investment in infrastructure development to sustain the economic competitiveness of the region. The Asian Development Bank estimates that Asia will require about USD 8 trillion of infrastructure investment in the next decade. Most important is that Asia has the internal capacity from its high savings to finance these infrastructure requirements. The stronger domestic demand in Asia is also well supported by the strengthened financial systems following the restructuring of the banking sector, the development of the capital markets and the strengthening of the regulatory and supervisory systems in the post-Asian financial crisis period. The reforms implemented also included the progressive deregulation and the move to greater market orientation and increased liberalisation. Today, Asia’s capital markets are significantly deeper and more liquid. The bond market in emerging East Asia has increased by more than seven-fold since 1996, with a current value of USD 4.2 trillion dollars. Emerging East Asia accounts for 7.2% of the total worldwide bond market at end-2009 compared to 2.5% in 1996. Asian banks have stronger fundamentals with improved risk management and governance practices, with capitalisation well above the regulatory requirements and with non-performing loans maintained at historical lows. Riskbased approaches to supervision have also been widely adopted across Asia.

Should Asia continue to grow by an average annual rate of 7% over the next ten years, it is estimated that Asia’s share of the global GDP will increase to 40%. Let me further elaborate on these two developments, namely the strengthening of domestic demand in Asia and the intensification of regional economic and financial integration, that are mutually reinforcing in sustaining Asia’s economic growth prospects. A more recent phenomenon supporting this trend is the strengthening of regional financial cooperation not only to preserve regional financial stability but also to enhance the prospects of the region. Strengthening domestic demand The strengthening of domestic demand is part of the structural changes taking place in Asia to diversify its sources of growth. Growth in most of the Asian economies was previously export-led. While several measures have been taken to promote domestic demand, the favourable demographic structure, the low levels of unemployment, the relatively low level of household debt and the policy flexibility to implement supporting monetary and fiscal policies have contributed to higher consumption. Other measures initiated are the social safety nets in the form of schemes and programmes for unemployment benefits, healthcare, education and retirement that have been put in place to reduce the need for high savings. The consequent increase in consumption demand has not only resulted in a significant expansion of the retail trade sector but Asia is also increasingly becoming an important consumer in the global economy.
Chart 8 shows  2.5  that, given the constellation of shocks affecting the 2 -2 August , no stimulus -1  Output gap (%)  economy, opting not to provide monetary stimulus  1  would have meant, in all likelihood, inflation around  0 1.5  Preferred trade-off if 𝜆 = 0.1  Preferred trade-off 1 if 𝜆 = 1  Source: Bank calculations. A value of 0.1 gives an approximate lower bound on estimates of lambda over the post inflation targeting period (see text). A value of unity would correspond to a “balanced approach” which weighs inflation stabilisation and output gap stabilisation equally. the target at the two-year point of the forecast, but an output gap of some 1½%, implying around 1/4 million lost jobs. In other words, fully offsetting the persistent effects of sterling’s depreciation on inflation would have required exerting further downward pressure on domestic costs. And that would have meant even more lost output and a total disregard for higher  15  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches  15  unemployment. Given our remit, that would have been undesirable. Moreover, because spare capacity would have persisted in such a scenario, this strategy would have been unlikely to generate a sustainable return of inflation to the target once the effects of higher import prices had become fully reflected in the price level.

Having observed the behaviour of the economy in the period since the crisis, the Committee was aware of the possibility that these effects could, in combination, mean a period of weaker growth but higher inflation and thus create a trade-off for monetary policy to balance. The Committee made its first full assessment of these effects in August. Over the three-year forecast period, uncertainty was expected to weigh on demand, investment spending by firms in particular, and a period of resource reallocation as the UK’s trading relationships were re-configured was expected to weigh on supply. At the same time, the sharp fall in the sterling exchange rate following the vote to leave would imply higher imported inflation, meaning upward pressure on inflation. The MPC responded to this outlook by reducing Chart 8: No stimulus in August would have been consistent with a weight of zero on stabilising the output gap at the 2-year forecast horizon 4  Bank Rate by 25 basis points, announcing £ billion of asset purchases, and by launching a Term Funding Scheme to ensure banks passed through lower interest rates to end borrowers. A majority of  Inflation (%)  the MPC also indicated that, if the economy evolved 3.5  in line with its forecast, they were prepared to take further action. 3  Suppose the MPC had not responded in this timely,  November August , with stimulus  coherent, and comprehensive way.
Direct tests of Ricardian equivalence have produced conflicting results and do not allow us to draw any clear conclusions regarding its existence or its potential magnitude either for the United States or for the euro area. In the euro area the equivalence seems to have been disproved by a sample test conducted in a select group  26  Debrun, X., J. Pisani-Ferry and A. Sapir (2008), Government Size and Output Volatility: Should We Forsake Automatic Stabilization?, International Monetary Fund Working Paper, No 08/122. 27  Debrun, X., J. Pisani-Ferry and A. Sapir (2008), Government Size and Output Volatility: Should We Forsake Automatic Stabilization?, International Monetary Fund Working Paper, No 08/122. 28  Échevin, D. (2008), Social Polarization vs Income Polarization: An International Comparison, Cahier de recherché/Working Paper del Gruppo di ricerca in economia e sviluppo internazionale dell’Università di Sherbrooke, No 08-02. 10  BIS Review 135/2008  of 15 EU member countries between 1970 and 2000. 29 Yet private consumption would appear to respond better to increasing wealth in “less indebted” countries compared with those countries suffering from higher debt. In this connection, a higher public debt level could entail a more Ricardian form of conduct by European consumers and that, in turn, should discourage fiscal activism. 4.

Islamic finance and global regulatory reforms A second factor that Islamic finance will have to contend with is the ongoing global regulatory reforms. The scale and scope of these reforms are probably unmatched in recent history. Islamic financial institutions will have to devote considerable resources to meet the new international standards. But there are certain inherent characteristics of Islamic finance that will stand it in good stead in the emerging regulatory environment. Take for example, banking, where the emphasis of regulatory reform is on more capital and more liquidity. Islamic banks have consistently held higher levels of capitalisation vis-à-vis conventional banks, by some 2.5 percentage points on aggregate, according to research from the World Bank. Islamic banks also start off with a higher level of liquid assets compared to their conventional counterparts. Islamic finance is also well placed to meet the increased “return-to-basics” investor demand. Following the global financial crisis, investors have become more averse to the unknown risks embedded in complex financial instruments. Islamic finance, with its stronger emphasis on transparency, price certainty and risk-sharing, can benefit from this renewed demand for more basic investments, from Muslim and non-Muslim investors alike. Integrating Islamic finance with global finance The third, and perhaps most important, challenge that Islamic finance must overcome is its present fragmented state. Islamic finance currently suffers from low economies of scale. The overall size of Islamic assets is still less than 1% of the global financial system.
Other residual impacts include the large size of the Federal Reserve’s balance sheet; significantly higher public debt; and substantial damage to public trust in the nation’s government and financial institutions. The second lesson follows from the first. We need to ensure that we have a resilient financial system. To that end, we must ensure that the safeguards put in place in response to the crisis are fully appreciated and respected. But, it also means that we need to finish the job—for example, by building out a fully workable regime for resolving a complex, global firm if one were to become insolvent. We need to ensure that our financial system can continue to provide critical services not just during good times, but also during periods of stress. These objectives are particularly relevant today, when reopening the Dodd-Frank Act and modifying our regulatory framework are under consideration. While it is appropriate to evaluate adjustments that might improve our regulatory regime, it is critical that we do not forget the hardlearned lessons of the crisis and—in the haste to reverse course—undermine the robustness and resiliency of the financial system. The U.S. housing market boom and bust At the heart of the crisis was the U.S. housing boom and bust. Between 1997 and 2006, U.S. home prices nearly doubled in real terms on a national basis.

Ladies and Gentlemen, Provided that the current political deadlock is soon resolved and the new political equilibrium is reached, these fundamentals should provide a solid platform for Thailand’s economic growth going forward. A recent study by the Bank of Thailand’s staff finds Thailand’s potential GDP growth to be in the range of 5.5-6.1% between 2008 and 2015. This may appear a far cry from the 1987-1996 period when the growth of the Thai economy averaged 9.5%. However, everyone now realizes that the Thai economy then was operating beyond its potential and therefore not sustainable. In contrast, our staff’s projection was based on a balanced growth path scenario used to characterize an economy in a steady state. There is however an important catch in the cited projection and that is the implicit assumption that the ratio of real gross investment to real GDP recovers from the current level of 22% to 28-30% by the end of the period. Thus, things like mega-project investments are conceivably already included in the projection. The current political doldrums only make the scenario far reaching. Without the resuscitation of investment, Thailand’s potential growth rate will likely fall to a lower path. The same study also points out the impact of demographic change on Thailand’s future growth. By 2026-2035, the economy’s potential GDP growth rate under the balanced growth path assumption is projected to fall to 4.8-5.4% due to ageing population.
[9] There are currently eight globally important banks in the euro area (in France, Germany, Italy, the Netherlands and Spain) holding additional buffers of between 1% and 2%, and 108 other systemically important institutions with buffers of up to 2%. Systemic risk buffers have been activated in five countries, with a range of between 0.5% and 3%, and the countercyclical capital buffers have been announced in seven countries (Belgium, France, Germany, Ireland, Lithuania, Luxembourg and Slovakia) with rates between 0.25% and 2%. For more information, see “Macroprudential measures in countries subject to ECB Banking Supervision and notified to the ECB” on the ECB website. [10] For a discussion of recent CCyB decisions, see Babić, D. and Fahr, S. (2019) “Shelter from the storm: recent countercyclical capital buffer (CCyB) decisions”, Macroprudential Bulletin No. 7, ECB. [11] See, for example, “  Refining the Stress Capital Buffer”, speech by the Vice-Chair for Supervision, Randal K. Quarles, at the Program on International Financial Systems Conference, Frankfurt, Germany, 5 September 2019. European Central Bank Directorate General Communications Sonnemannstrasse 20, 60314 Frankfurt am Main, Germany Tel. : +49 69 1344 7455, E-mail: media@ecb.europa.eu Website: www.ecb.europa.eu Reproduction is permitted provided that the source is acknowledged. Media contacts  Copyright 2019, European Central Bank

With these words of welcome I now turn the floor over to Mr. Moises Schwartz, the Director of the IEO to set the scene for the discussion of the workshop. 2  BIS central bankers’ speeches
Radoslav Milenkov: Banking supervision priorities Publication of Mr Radoslav Milenkov, Deputy Governor (in charge of the Banking Supervision Department) of the Bulgarian National Bank, in the Quarterly Bulletin of the Association of Banks in Bulgaria, issue 57, April 2019. * * * A main priority of Banking Supervision is the participation in the process of effective accession to the Single Supervisory Mechanism (SSM) within the three working blocks, on which work is done at the Bulgarian National Bank. The first one is the development of the required regulatory framework. Work in this area reached an advanced stage at the end of the last year with the adoption by the National Assembly of the necessary package of legislative amendments, allowing for the synchronisation of supervisory processes between the ECB and the BNB, including by expanding the macro-prudential supervision toolkit. A review and possibly an amendment of the applicable domestic regulatory framework – ordinances, guidelines – is pending with a view to achieving compliance with the ECB internal technical regulations and reflecting the ECB’s discretionally policy in key areas of prudential supervision and risk management. The second is to continue the process associated with the synchronization of the BNB’s supervisory and prudential practices with those of the European Central Bank, of the internal rules and processes and of the information flows between the two institutions.

G20 has set a comprehensive work program to enhance the global financial system, including the establishment of the Financial Stability Board (FSB) in April 2009, attaining significant progress in the regulatory area and capital adequacy standards, liquidity risk management, compensation rules for senior executives in the financial sector, and transparency in registering hedge funds and rating agencies. Hopefully, the application of these standards would enhance significantly the financial positions of global institutions in the coming years. With this background, the Saudi economy has not been affected considerably by the global financial crisis due to conservative and prudent oversight and control policies followed since a long time. For instance, attention is paid to capital adequacy ratios and loan provisions for countercyclicalities. Custodian of the Two Holy Mosques, Under Your ongoing patronage and follow-up, the Supreme Economic Counsel continued achieving many developmental steps aiming at reconstructing and organizing the economy and updating laws and legislation in order to promote the level of the economy’s efficiency and competitiveness, support the optimum utilization of production factors, and provide sophisticated regulatory and administrative frameworks and an attractive environment to domestic and foreign investments. As a result of these efforts, the economic performance has improved greatly over the recent years. This has been highlighted by the growth of the private sector’s real GDP by an annual average of 5.1 percent during the last five years and the increase in non-oil exports by an average of 14.6 percent during the same period.