samchain/econo-pairs-v1 huggingface dataset:
The costs of higher capital adequacy requirements are limited and largely private, as opposed to the true economic costs. The advantages in the form of a safer banking system are considerable. A reduced risk of financial crises is good for the real economy, good for taxpayers and also good for the banks’ shareholders. The Riksbank will soon present a report that clearly shows that the benefits of higher capital adequacy requirements exceed the costs. An increased capital adequacy requirement may also need to be matched by a tighter leverage ratio requirement. The European Systemic Risk Board (ESRB) has recently submitted recommendations covering lending in foreign currency. We could see the risks of this type of lending to households at close quarters in the Baltic countries a few years ago. A few of the ESRB’s recommendations are (i) better consumer information and credit reviews of borrowers, (ii) taking exchange rate risk into consideration in the national capital adequacy requirements, and (iii) supervision of the risks in liquidity management. Swedish banks need to limit these risks better in the future. The Swedish banks’ liquidity measures need to take into account that it can be difficult to obtain certain currencies in stressed situations. Basel III’s short-term liquidity requirements also need to be met on a per-currency basis. Furthermore, we are examining whether the Riksbank’s reserve requirement can play a part in this regard. The low Swedish risk weights are a cause for concern.

Support for using macroprudential tools in the United States has also been bolstered by our experience during the financial crisis. The U.S. housing boom and subsequent bust might have been less severe had a set of macroprudential measures been in place at the time to limit the degree of leverage and speculative activity in the housing sector. The housing boom was fueled by optimistic expectations for house price appreciation, combined with lax underwriting standards embodied in such practices as no-doc mortgages and widespread speculative activity by investors. I remember, for example, the website, Condoflip.com, which says it all in terms of the degree of speculative fervor that was evident at the time. If underwriting practices had been held to high standards (e.g., strict mortgage service-toincome ratio limits had been honored) and speculative activity had been constrained (e.g., by lower loan-to-value ceilings for investors with multiple mortgage liens outstanding), this might have limited the size of the boom and subsequent bust. My own view is that while the use of macroprudential tools holds promise, we are a long way from being able to successfully use such tools in the United States. There are two major sets of difficulties. First, unlike monetary policy and microprudential regulation, there is not a welldefined framework for identifying emerging imbalances and applying macroprudential tools in response. A recent tabletop exercise conducted by a number of Federal Reserve Bank presidents, which I will discuss a bit later, indicates some of the difficulties here.
13 A buffer of 5% gives room for systemic banks to absorb losses without being forced to close their doors and cease their service to the economy. It achieves not just greater bank resilience, but greater resilience of service to the macro economy. It’s macroprudential. Stress tests tell us that this capital buffer would be big enough to absorb a deep UK recession with sharply rising interest rates and falls in property prices, or a deep global recession, centred on China and emerging markets, with associated global deflation. But it would be a mistake to think that a 5% capital buffer is always and everywhere the right one. So the third part of our approach is flexibility. Flexibility to raise capital buffers if the threat of future losses grows, and cut them again if those threats materialise or recede. That flexibility avoids what might otherwise be a need to capitalise the system for the very riskiest times, all the time. It avoids taking unnecessary risks of holding the real economy back. There will be times when risks are heightened and so to protect the economy, banks should have bigger capital buffers. Broadly, we are seeking to match the size of those buffers – the strength of defence – to the threat of future losses as they change over time. 14 But how will we know the threat level has changed? 11  The Bank of England has called on the European Commission to revisit such rules in the European Capital Requirements Directive IV.

We can see that deviations from the normal level of payments vary by industry, fluctuating from week to week, but the overall trend towards normalisation is undeniable. 1/7  BIS central bankers' speeches  For example, in the last week, the total deviation of incoming payments down from the normal level was −7.1% compared to −7.3% the week before. But excluding mining, the production of petroleum products, and government activities, the deviation also decreased to total −1% after −4.4% a week earlier. The Bank of Russia transitioned to a loose monetary policy, cutting its key rate to 4.25% — a historic low. This is necessary to keep inflation on target against the backdrop of disinflationary risks linked with a significant drop in aggregate demand. But this monetary policy focus will also help the economy return to potential more quickly. That said, it is important to take into account that the structural changes in both the Russian and global economy, generated by the pandemic, have most likely affected the potential of the economy. How extensively — it remains to be seen and evaluated. The banking sector is supporting recovery processes: corporate loans have grown by 5.5% since the beginning of the year (growth was only 5.8% last year). Of course, this is also because companies that experienced a sharp drop in revenue experienced a need for debt financing. But the banking sector overall has continued to lend, and we estimate that lending growth will be up to 9% this year.
Both internal and external monitoring and oversight play an important role in ensuring behavioral norms are maintained, sound processes and procedures are being followed, and there is open communications across reporting lines. Limited contact with managers and leaders within the organization has the potential to leave employees lacking clear guidance, feeling isolated, and willing to take on more risk. In large complex organizations, this is also likely to vary across business lines, heightening the need for clear and consistent leadership and guidance from multiple levels within the organization. In response to these dynamics, we have seen financial firms take a number of steps over the past few months focused on mitigating behavioral risk associated with the pandemic and working remotely. For example, some firms have leveraged prominent instances of misconduct and customer abuses of coronavirus relief programs to reiterate clear expectations and standards around integrity and personal accountability for employee actions. Others have intentionally placed cultural leaders over businesses in need of a stronger control environment. This indicates that the pandemic may be leading to opportunities to grow cultural capital, or at least ensure practices are in place to ensure it is not eroded. Finally, perhaps the experience of shared uncertainty could have a positive impact on culture, particularly with respect to fostering greater empathy. I’ve certainly seen examples within my own organization of people stepping up when colleagues that are under greater personal pressure need more time to manage their external commitments.

There is a solution to these three elements, and this consists in: first, ensuring sound fiscal policies in each and every member state; second, setting responsible macroeconomic policies; and, third, designing and adhering to a far more effective system of surveillance. The ECB stands alongside the citizens of Europe. We understand their concerns about the governance of the euro area because, just like them, we are focused on the medium term. That is why we call for a very ambitious reform of euro area governance – a reform that will address the root causes of the current situation and make it simply impossible to happen again. I also have good news. This good news is that all the efforts to strengthen the economic attribute of our union will be supported by a monetary policy that will ensure price stability or, as you say in German, Geldwertstabilität. As I mentioned, the “Monetary” attribute of EMU refers to the ECB, its mandate and its independence. By now, after almost 12 years, we also have a track record. As you know, the most important issue for a currency is to keep its value. There is one single measure for this, which is the average inflation rate over a medium or long-term horizon. This is how we measure price stability. I will be very precise. The average annual inflation rate in the euro area since the inception of the euro almost 12 years ago has been 1.97%.
But this will above all be a question of afterwards clarifying and explaining personal deliberations made in connection with the monetary policy meetings. Differences of opinion within the Executive Board will also be clear from the minutes, possibly even more so than before. These changes will in my opinion help us to better live up to the requirements for making decisions in the correct manner as required of us as a public authority. The purpose is also to attain more efficient communication with the financial markets and the general public. 6  BIS Review 62/2007  Conclusion When the inflation target was introduced, after the Riksbank had been forced to abandon the fixed exchange rate at the beginning of the 1990s, under great drama, many people probably doubted that the policy would succeed. But confidence in the Riksbank’s ability to maintain low and stable inflation in the long-term gradually increased. And there are several factors that have been decisive so that we could achieve the credibility of monetary policy that we currently enjoy. The change of regime implemented after the severe economic crisis at the beginning of the 1990s – with an explicit inflation target for monetary policy and clear regulations for fiscal policy – has given economic policy as a whole a more long-term character and greater stability. Closely linked to this is our independent position as written into the law in 1999 and the shaping of our role as public authority.

A necessary condition for this is openness and clarity! But there are also other important reasons why most central banks, and not least the Riksbank, have moved towards greater transparency. One reason is that the effectiveness of monetary policy depends on how well we succeed in communicating our intentions to the financial markets and the general public. By being open and clear, the possibility to influence interest rate-setting in the way we desire increases, both in the short term and the slightly longer term. This gives better conditions for achieving the price stability objective which the Swedish people, via the Riksdag, have allocated to us. The Riksbank’s ambition is of course to live up to, in the best manner possible, the requirements of openness and clarity made of us, both in our role as public authority and in our dealings with the financial markets and the general public. But the fact that the world around us is constantly changing leads to new demands. In practice, it means that we must be constantly developing and improving our ways of working. One expression of this is, for example, that we have begun to publish our own forecasts for the development of the policy rate. And it is probably difficult for a central bank to be clearer than this with regard to its monetary policy intentions – we actually say what we consider to be a well-balanced monetary policy in the coming period.
In the fiscal area, the post-crisis recovery has not been accompanied in a significant number of countries, advanced and emerging alike, by a sufficient reduction of structural deficits in public accounts and the halting of the process of rising public debt. More generally, in many cases it may be necessary to move forward with fiscal reforms that seek to reduce the distortions to growth while allowing the most vulnerable sectors of society to be supported more decisively. The limited fiscal space available is exacerbated in the longer run in many economies, principally but not exclusively the advanced countries, owing to the adverse demographic prospects. Ageing populations pose significant challenges for public finances, as they bear on both the revenue and the expenditure sides. On the expenditure side, ageing will considerably affect pension and healthcare spending which, in many cases, will require rethinking pension systems to guarantee their sustainability. On the revenue side ageing leads to changes in the composition of tax bases as it does to lower labour income shares, to capital deepening and to changes in the composition of consumption. In the area of monetary policy, many advanced economies are still in a situation of zero lower bound. More generally, in most countries the room currently available to face a hypothetical recession is less than that existing at previous similar cyclical junctures. Monetary policy also needs re-thinking, on the basis of more long-term challenges for the economy. The natural interest rate has been falling since at least the 1980s.

16.11.2018  Remarks - First panel: “Central banks, macroeconomic stability and economic growth” Banco de España and European Institute of the Mediterranean with the support of the Central Bank of Tunisia Pablo Hernández de Cos Governor  In this first session of the conference we will focus on the role of central banks on both shores of the Mediterranean in contributing to the achievement of sustainable growth in the long term. Before giving the floor to our distinguished speakers, let me say a few words about the current global outlook and their implications for economic policymaking. At present, the global economy seems to be approaching its cyclical peak while the process of monetary policy normalization in the advanced economies continues, particularly in the United States. This process should normally precede the tightening of global financial conditions. At the same time, tensions in international trade remain, with the risk that disputes in this area will be solved with a greater use of protectionism to the detriment of a multilateral approach to the resolution of these conflicts; and, elsewhere, the markets of some emerging economies that had significant macroeconomic imbalances have undergone episodes of severe turbulence. We are therefore facing a phase of growth moderation with limited scope for economic policies. It would seem necessary to harness the current moment in which growth records are still satisfactory in order to generate margins that allow a certain countercyclical gearing of economic policies in the future.
The tide will turn  An orderly reversal of the euro’s exchange rate will take place as a result of a triple narrowing. •  Narrowing of the growth differential between the United States and the euro area. This is because the current extraordinary growth rate of the United States is probably not sustainable in view of the widening of the external deficit. Euro area growth is well balanced, while the US economy is affected by imbalances. This will be progressively taken into account by the markets. •  A narrowing of the interest-rate differential as a consequence of the narrowing of the growth differential. •  Narrowing of the “restructuring differential” between the United States and the euro area economies. It seems to us that although corporate restructuring in Europe was lagging behind the United States a few years ago, we are now observing a catching-up process. This leads me to my last point: the undertaking (and speeding up) of structural reforms is a major condition for the euro to be a complete success. 4. The conditions for the complete success of the euro: sound macroeconomic policies and structural reforms  In this regard, the Lisbon European Council meeting last month can be viewed as a further important step towards the necessary medium-term strategy for structural reforms in the Union. The labour market has become much more flexible in the past few years in Europe.

To this regard, in 2021, we authorized the use of the Chilean Peso for cross-border transactions, including derivatives settled through the delivery of CLP, opening, and holding of bank accounts by non-residents, and credits to non-residents or persons without a domicile in Chile and deposits or investment abroad by Chilean residents. The Central Bank has also promoted the opening of correspondent accounts in Peso. Clear rules regarding tax reporting of the foreign and local banks on the new correspondent accounts in Pesos, as proposed by the Government through an amendment to the Tax Code, will also play a relevant role in this regard and will allow to operationalize the internationalization of our currency. b) Financial Market Infrastructure. In relation to the second point, a more integrated financial system also requires a consistent and efficient payment and financial market infrastructure environment. Either for local payments in foreign currency or for cross-border payments, it is important to make available to the market the necessary infrastructure for a safer exchange. In recent years, important progress has been made in this regard: (i) new regulation for Large-Value Clearing Houses for transactions denominated in US Dollars (FX transactions); settlement for those transactions in the Real Time Gross Settlement (RTGS) system and for 9  operations in US Dollars of local Central Counterparties; and (ii) the operation of the OTC Derivatives Trade Repository.
2  BIS Review 79/2005  3. How have firms reacted to these changes? The banking industry has, not surprisingly, responded to these changes by paying greater attention to liquidity risk management. And, as well as day-to-day management, banks have given more consideration to how they would cope with extreme or ‘tail’ events. Banks have developed, or are at least in the process of developing, sophisticated scenario analyses, and are assessing the contingency arrangements that would be required to respond to these scenarios. It is certainly encouraging to observe the determination with which many banks are addressing liquidity risk, and it is at the same time noteworthy how efficiency drivers have led many banking groups to take a more centralised approach to liquidity management. But, despite the progress that banks are making in addressing liquidity risk, the framework that underpins their contingency plans makes a number of assumptions, particularly regarding access to funding markets. There seems, for example, to be a widespread view that, whatever has happened to a firm’s access to wholesale unsecured funding, it will be able to borrow secured against good collateral. Lying behind this is probably an expectation that national authorities, and in particular central banks, will be ready to provide liquidity against good collateral in the event of the failure of one or more of the markets for secured borrowing.

Stefan Ingves: Norges Bank 200 years Speech by Mr Stefan Ingves, Governor of the Sveriges Riksbank and Chairman of the Basel Committee on Banking Supervision, at the celebrations to mark Norges Bank’s (Central Bank of Norway) 200th anniversary, Oslo, 16 June 2016. *  *  *  Sweden and Norway have a lot in common. We understand one another’s languages. We have a common labour market, though it is nowadays mainly Swedes who travel to Norway to work. And we get a little irritated when our ski champions lose to our neighbours. But above all, we have in many respects a common history. Today we are celebrating the 200th anniversary of Norges Bank. However, the monetary history of Norway starts even further back in time, 1000 years earlier, when the Vikings spread fear throughout Europe. Coins first arrived in Nor-way with Vikings returning from raids in England. In 995 AD the first Christian king, Olav Trygvason, came to power in Norway. He is also important in numismatic history since the first known Norwegian coin is a penny attributed to him. Around the same time, the first Swedish coin was minted by Sweden’s first Christian king, Olof Skötkonung. There have been many links between Sweden and Norway throughout the centuries, from the Kalmar Union of Norway, Denmark and Sweden in the late Middle Ages to the union between Sweden and Norway in the 19th century.
A more recent story that comes to mind involves two factory workers who earn approximately 6,000 baht per month. Both were invited to apply for a credit card but only one signed up for the offer. This worker first used his credit card to purchase a TV set, which he could easily finance with his salary. Nevertheless, the TV was followed by a washing machine and a motorcycle, which eventually pushed his monthly debt payment to exceed his income. As he exhausted all of his savings, and could no longer borrow from family and friends, his belongings were repossessed by the creditors, and finally he had to quit his job in hopes of running away from his remaining creditors. The story highlights a dangerous combination in the fabric of Thai society and that is low-income earners who lack financial literacy, or the ability to effectively manage their finances, but yet have very high marginal propensity consume. They in turn are more susceptible to unknowingly consume beyond their means, and like my previous story, become a burden an society. That burden is further intensified by the difficulty in finding and obtaining new employment. This probable risk demands that stakeholders take a more cautious approach to ensure quality growth in Thailand’s consumer finance market. Ladies and Gentleman, In reality there are more than one type of savings behavior in the world, but most importantly the savings behavior should be appropriate for the developmental needs of each country.

M R Pridiyathorn Devakula: Consumer finance Opening address by Mr M R Pridiyathorn Devakula, Governor of the Bank of Thailand, at the “FITCH Rating’s Annual Conference 2004 an Consumer Finance”, Bangkok, 16 September 2004. *  *  *  Distinguished Guests, Ladies and Gentleman I would like to welcome all of you to this highly relevant conference an consumer finance and securitization appropriately organized by FITCH Ratings Thailand. I would also like to show my appreciation to FITCH for inviting me to give today’s opening remarks. Ladies and Gentleman Although consumer finance has long been a staple of banking in the west and developed economies, it is still a relatively new and open frontier for Thailand. As I thought of my opening remarks, I am reminded of two stories that can capture the reality and the impact of this new world in the context of Thailand’s dual economy. It is not all from my memory since as you may agree I am still too young for historical anecdotes. As a university student some 30 ycars ago, I met two fellow classmates that came from completely opposite family backgrounds. The first came from a well-off family that supplied him with cars, expensive clothes and a lot of disposable income. Tbe second one was from a poor family and had just enough money for food and public transportation.