samchain/econo-pairs-v1 huggingface dataset:
So the economics of banking do not suggest that bigger need be better. Indeed, if largescale processing of loans risks economising on the collection of information, there might even be diseconomies of scale in banking. The present crisis provides a case study. The desire to make loans a tradable commodity led to a loss of information, as transactions replaced relationships and quantity trumped quality. Within the space of a decade, banks went from monogamy to speed-dating. Evidence from a range of countries paints a revealing picture. There is not a scrap of evidence of economies of scale or scope in banking – of bigger or broader being better – beyond a low size threshold.12 At least during this crisis, big banks have if anything been found to be less stable than their smaller counterparts, requiring on average larger-scale support.13 It could be argued that big business needs big banks to supply their needs. But this is not an argument that big businesses themselves endorse, at least according to a recent survey by the Association of Corporate Treasurers.14 Take Grameen Bank – not a household name in the UK, I realise. This grew out of a microfinance project in Bangladesh which began in 1976.15 Grameen operates as a set of local credit cooperatives, often comprising as few as five members. The bank’s relationship with its borrowers is bound not by legal contract but by trust.

For those aspiring to senior roles in technology, such postings may even be necessary, as the competition for such jobs is at a global level. Next, what can financial institutions do to help grow the pipeline of Singaporean technology professionals? One, they can collaborate with polytechnics and universities on apprenticeships to prepare students for technology jobs. JP Morgan is looking to hire more than 30 polytechnic graduates in their 1-year Apprenticeship programme for the Tech and Ops function this year. Apprentices will receive on-the-job training in product knowledge, personal development and professional skills, as well as exposure to top professionals across diﬀerent businesses within the bank. Two, financial institutions can hire individuals from a broader range of backgrounds and upskill them into technology roles. DBS Bank has a skills development programme to train individuals with STEM backgrounds or have taken some STEM modules in specialised technology skills. Individuals will be trained to take on roles in areas such as product development, platform infrastructure, or information security. Three, financial institutions can set up specialised facilities to build up technology capabilities in their workforce. Standard Chartered Bank launched its global learning hub diSCover Lab in Singapore, in December last year. The aXess Academy, one of nine academies within the Lab, aims to train over 2,100 of its Singapore-based technology talents in areas such as cloud transformation, open banking solutions, cybersecurity, and client digital journeys. Finally, how is the government helping to grow the tech talent pool?
Philipp Hildebrand: Current state of the financial system in Switzerland Introductory remarks by Mr Philipp Hildebrand, Vice-Chairman of the Governing Board of the Swiss National Bank, at the half-yearly media news conference, Berne, 14 June 2007. *  *  *  I would like to use today’s publication of our Financial Stability Report as an opportunity to share some thoughts with you on the current situation of the financial system. I will start with the most important message – the Swiss banking sector and the financial system in general are in very good shape at the moment. Based on our analysis, the outlook for the future is also essentially positive. As stated in our report, the favourable situation in the Swiss banking sector comes as no real surprise. Developments in the economy and the financial markets in recent years have been very positive, both in Switzerland and abroad. Although economic growth has been strong, it has had practically no impact on inflation to date. The credit standing of borrowers remained high. In addition, despite repeated, significant short-term price corrections – as was the case last week – the stock markets rose sharply overall in an environment of low volatility. How can these positive developments be explained? And are there any risks involved – in particular for the stability of the Swiss financial sector? The good performance is not solely attributable to the favourable economic situation. Structural aspects have also played a role.

With that I mean first and foremost the increased level of efficiency that has been achieved in the financial system in the past few years. This rise in efficiency can be ascribed to the innovativeness of financial markets. New financial instruments, such as credit derivatives, enable banks to separate their credit risk and transfer it either completely or partially. This facilitates a better distribution of credit risk in the financial system and means that the risk is borne by those who want to and are able to bear it. The improved efficiency has resulted in a reduction in the financing costs of companies and households. Lower financing costs help the economy and stock markets to achieve greater growth. The increased efficiency also appears to have improved the ability of global financial markets to absorb shocks. The downgrading of General Motors’ credit rating in 2005, for instance, or the major losses suffered by the hedge fund Amaranth last year had no lasting impact on stock and credit markets. All in all, global financial markets are currently better able to absorb shocks, at least small to mediumsized ones. Accordingly, serious turbulence in the financial system seems less likely today. From a financial stability perspective, this is a positive development indeed. However, the greater the stability of the financial markets, the greater the risk appetite of market participants tends to be. This in turn can increase the likelihood of a crisis and, in the event of one occurring, the extent of the damage.
BIS Review 159/2010  7  Recent data suggest that the recovery in domestic demand is slightly stronger than expected and that a more moderate growth process was assumed in the second half of the year. Indicators pertaining to private sector demand indicate that private sector consumption and investments continued to rise rapidly in the third quarter in annual terms (Figure 21). Consumption and investment expenditures are likely to accelerate in the final quarter of the year with the support of the counter-cyclical stance of monetary and fiscal policies as well as strengthening capital inflows. The steady rise in credits confirms continuing recovery in economic activity (Figure 22). Another noteworthy point about this period is that credit expansion continues to extend across a greater part of our economy in terms of both sectors and scale. Low interest rates and easing credit risk indicators suggest that credit growth will be strong, and therefore, the credit channel should continue to underpin domestic demand over the forthcoming period. 8  BIS Review 159/2010  As supply-side constraints have widely subsided, we believe that credit realizations rather reflect the dynamics pertaining to credit demand. The Loans Tendency Survey suggests that the borrowing motivation of firms tends to change in the post-crisis period. Firms used to demand credits to facilitate debt rollover or to finance their working capital during the crisis. However, as the effects of the crisis tapered off, loans for rolling over debts decreased while loans for investment purposes increased (Figure 23).

Finally, in order to be more flexible against the variability of capital flows, a new method for foreign exchange purchase auctions was designed and put into effect on 4 October 2010. To this end, a total of USD 1.76 billion was purchased in the first three weeks, USD 1.2 billion of which was additional purchase. Within the framework of these developments, while the yield curve has shifted down across all maturities during the third quarter, the decline was more significant for longer-term interest. Although surging capital inflows towards emerging markets have been effective, factors specific to Turkey have also contributed to the downward shift in the yield curve, as I  BIS Review 159/2010  5  mentioned at the beginning of my speech. Lower-than-expected core inflation has contributed to the downside movement in the short term, while the drop in longer-term interest rates mostly reflects perceptions that the improvement in the relative creditworthiness of Turkey would become permanent (Figure 15). Dear Guests, Along with decreasing nominal interest rates, real interest rates have continued to hover at historically low levels during the third quarter. Moreover, Turkey’s real interest rates do not differ significantly from those of other emerging markets (Figure 16). 6  BIS Review 159/2010  Meanwhile, with the removal of extra tightness in financial conditions that emerged during the crisis, the effectiveness of the monetary policy on credit market enhanced; thus, the low level of real market rates were better reflected in credit interest rates (Figure 17).
A number of foreign banks have already given up their banking licences but this has been largely due to problems in their home market or mergers with other institutions. The Asian crisis is likely to result in further rationalisation among the banks from the region as they are merged and restructured in their home countries. The reduction in business activities such as syndicated lending and trading in regional debt securities may cause other marginal players to leave Hong Kong, simply because they can no longer make money. However, I am sure that the bulk of foreign banks remain committed to Hong Kong and will want to retain a substantial presence here. This is not wishful thinking, but rather founded on hard logic. First, it simply does not make sense to suggest that within the space of a few months Asia, as a whole, has become less relevant to banks with global aspirations. Second, within Asia, Hong Kong retains its unique attractions as the main centre for banks to do business with China. Leaving aside short-term cyclical fluctuations, the economy of the Mainland is clearly on an upward path. Foreign, and indeed local, banks will want to share in the financing and advisory opportunities which this brings, and Hong Kong will remain the best location from which to launch these activities. The costs of doing business in Hong Kong must however be reasonable; and that it is why the current adjustment process is necessary as well as painful.

In the words of Alan Greenspan, “what turns otherwise seemingly minor imbalances into a crisis is an actual or anticipated disruption to the liquidity or solvency of the banking system”. When banks are already weak, for example because of a high level of non-performing loans, an external shock such as an attack on the currency will further damage confidence in the banking system. Banks will lose domestic deposits and will find themselves unable to rollover short-term external borrowing. The resultant capital outflows will put further downward pressure on the exchange rate, force up interest rates and drive down asset prices. The customers to whom banks have lent will get into financial difficulties, further weakening the position of the banks. With their capital and liquidity impaired, the banks are in no position to lend, and this leads to the “credit-crunch”, and resultant shrinkage of the real economy that we are seeing in so many countries in the region. The reasons for the banking sector weaknesses are various. Lending excesses drove up asset prices and allowed companies to become over-leveraged. Poor risk management on the part of the banks themselves was compounded by ineffective banking supervision and lack of transparency which provided little scope for market discipline to be exercised until the problems were glaringly obvious. At that point, the market reaction was extreme. Even if supervisors did have the will to tackle banking sector problems in their countries, they were often subject to political interference that stood in the way of prompt corrective action.
While these results are specific to the model and should not to be taken literally, they do suggest that policies should be assigned to the frictions that they have a comparative advantage in addressing. In the model, the limit on leverage always binds. So it is unsurprising that when adjustments to credit supply are called for, an instrument which acts directly on that friction – the macro-prudential instrument – is more effective than one working through several channels, namely monetary policy. So, to the extent that movements in bank capital and leverage are key factors driving risk taking and aggregate lending, the deployment of macro-prudential policy is likely to be more effective than trying to “lean against the wind” using monetary policy. The experiments shown in Chart 8 assume a single policy maker, who is able to commit to future policies. In practice it is probably more plausible to assume an inability to commit, as well as the possibility that decisions on monetary policy and macro-prudential policy are made by different actors. In particular, the latter allows us to investigate the risk of a “pushme, pull-you” outcome, in which the macro-prudential authority tightens the availability of credit and then the monetary authority just offsets that by lowering interest rates in order to stimulate aggregate demand to keep inflation on track. We first consider the case of a single policy maker who controls both instruments, but who is unable to tie his hands over future policy actions (Chart 9, red dashed line).

Adrian and Shin (2008) point out that even small policy rate changes can have a large impact if financial intermediaries are highly leveraged and the changes in the policy rate affect the relevant market interest rates. And there may be times when a mixture of words and modest interest rate action is effective at cooling excessive market exuberance; both the Reserve Bank of Australia and the Riksbank attempted to take some of the steam out of the house price boom in this way. But, generally speaking, monetary policy seems too weak an instrument reliably to moderate a credit/assetprice boom without inflicting unacceptable collateral damage on activity. Instead, with an additional objective of managing credit growth and asset prices in order to avoid financial instability, one really wants another instrument that acts more directly on the source of the problem. That is what “macro-prudential policy” is supposed to achieve. There are multiple dimensions to macro-prudential policy. On the one hand, it encompasses actions to make the banking system more robust to shocks, recognising the interconnectedness of financial institutions. This interconnectedness was somewhat neglected in the run-up to the crisis, when it was assumed that if banks were individually safe, then the system would be too. The presence of network externalities meant this was far from being the case. A key ingredient here is increasing not only the quantity of capital available to absorb losses but also its quality, as some capital instruments have turned out to be ineffective loss absorbers unless the bank is liquidated.
In this regard, of course, this lending was also facilitated by special preferential programs issued by the government. The government adopted large-scale programs to support small- and medium-sized businesses, and we introduced our own mechanism: a special mechanism for preferential loans, which was in high demand. And we can see that banks, within the framework of such special instruments, issued about 18% of all loans to small- and medium-sized businesses. But the remaining increase in loans to small- and medium-sized businesses was carried out under normal market conditions, which is also a good factor. Moreover, in the first quarter of this year, we can see that the portfolio of loans to small- and medium-sized businesses 1/5  BIS central bankers' speeches  has also continued to grow adding another 5%. Mortgages grew at a high rate — as in the segment of small- and medium-sized businesses, there was and still is incentive offered by preferential programs. The mortgage portfolio also grew significantly, by more than 20%. Moreover, it already reached almost half of the total retail portfolio, and in the first quarter, it also continued to grow, also by 5%. As you can see, the figures are quite similar for both mortgages and small- and medium-sized businesses. That is to say that there are positive trends in both. However, when it comes to mortgages (we have talked about this repeatedly), we are worried about the accompanying rise in housing prices in the primary market.

Elvira Nabiullina: Speech at congress of Association of Banks of Russia Speech by Ms Elvira Nabiullina, Governor of the Bank of Russia, at congress of Association of Banks of Russia, 28 May 2021. * * * Good afternoon, dear congress attendees, The pandemic is slowly but abating, there are signs that life is returning to normal, and in-person conferences are gradually coming back. All the same, we are lacking in real-life communication, so I am very glad to welcome you here today. Of course, there are changes taking place not just in how we communicate. We can see that the actions taken as part of our anti-crisis agenda are gradually being replaced by those on a development trajectory, as before. With account for the fact that the pandemic has had a serious impact on society, on the economy as a whole, and on the financial sector, we must think about the future, and about how the financial sector will help the development of the economy. Last year, the banking sector made a positive contribution amid pandemic conditions. It supported the economy, its clients, and, I am sure, will be able to further support the development of the economy. I would like to take this opportunity to thank the entire banking community for their wholly responsible behaviour during the pandemic. It is thanks to you, really, that we managed to greatly mitigate the negative effects of the pandemic.
All of these factors reflect the design and intent of the new framework as well as the process that we followed to develop it. The third and final topic that I would like to address this morning concerns what supervisors are doing right now to prepare for Basel II’s implementation - and what banks can do as well. 4. What are we doing to prepare for Basel II’s implementation? Now that the framework has been published, the Basel II project has entered a new phase focusing on implementation. Over the coming months and years, reality checks will continue to play a role for both bankers and supervisors in ensuring Basel II’s validity and feasibility as we implement the new framework. For our part, I believe that we can divide supervisors’ preparations into three main areas of  BIS Review 66/2004  3  focus. These include reviewing the calibration of the new framework; adjustments to the framework to reflect advances in risk management practices; and fostering a more consistent application of Basel II across jurisdictions. I’ll take a few moments to outline our work in each area. a)  Evaluate calibration of Basel II  First, the Committee has long expressed its commitment to ensuring that the framework performs as intended before it is implemented. This includes reviewing whether the framework delivers the amount of capital that we believe is necessary to protect the safety and soundness of individual banks on the one hand, and the broader banking system on the other.

We might view the entire three-pillar structure of Basel II as a series of built-in reality checks for management’s decision-making. In this regard, the three pillars of Basel II are intended to make sure that management assesses and controls its risks carefully and that it takes the steps necessary to allocate the appropriate capital. As you know, in the first pillar, the minimum capital requirements focus management’s attention on identifying, assessing and quantifying risk within a specified framework. This puts the onus of analysis and decision-making on the right set of shoulders: bank managers are in the best position to evaluate their risks and are ultimately responsible for responding to them. When banks consider their risks more comprehensively and work to evaluate rigorously the magnitude of losses that they may face, they are improving the quality of the information at their disposal. That, in turn, should improve their ability to arrive at sound decisions regarding the amount of capital that they may need to weather potential losses in the future. Considerable attention has been paid to some of the formulas and techniques that we have adopted in Pillar 1 to help quantify the potential for losses related to credit and operational risk exposures. We  BIS Review 66/2004  1  must remember that these formulas are not revolutionary.
the government on organic  In line with the international appetite to  agriculture, mainly due to the  promote green financing, the Central  multiple benefits that accrue from it,  Bank has also joined the Sustainable  the Central Bank expects to promote  Banking Network (SBN) of the  commercial scale organic agriculture  International Finance Corporation (IFC),  and dairy entrepreneurs through the  which is a knowledge and capacity  establishment of formal agribusiness societies and multi-stakeholder enterprises. building platform for financial regulators and banking associations of emerging markets on sustainable finance. As a   A Loan Scheme for Promoting Rooftop  member of the SBN, we would focus on  Solar Power Generation: A new loan  sustainable banking practices to help  scheme, funded by ADB, will be  banks to effectively manage  Central Bank of Sri Lanka – ROAD MAP 2017  31  environmental and social risks in the  finance, with the support of IFC, we  projects they finance and support  intend to conduct a workshop for the  businesses that are greener, climate  senior staff of banking institutions in Sri  friendly and socially inclusive. As an  Lanka during the first quarter of 2017.  important step towards sustainable  Central Bank of Sri Lanka – ROAD MAP 2017  32  6.

There was a similar experience in 2015 when the currency depreciated by 6.5 per cent after spending US dollars 2.1 billion of our reserves. Wasting large amounts of  5  3 August, Thursday  the country’s external reserves, much of  6  26 September, Tuesday  it borrowed, in a vain effort to defend  7  7 November, Tuesday  8  28 December, Thursday  the currency, which has to be ultimately depreciated anyway, is clearly unsustainable. It is time to stop this pattern and commence building up of external reserves through sustainable  Volatile global market conditions and Sri  foreign exchange inflows. Lanka’s vulnerability as a twin deficit country underscore the vital importance  The impact of global developments,  of having a flexible exchange rate policy  such as Brexit, recent Presidential  to adjust to external pressures. Recent  elections in the United States (US) as  experience has clearly demonstrated  well as interest rate hikes by the US  that it is unsustainable to maintain an  Federal Reserve, the forthcoming  overvalued exchange rate at the  elections in France and Germany in  expense of external reserves.