samchain/econo-pairs-v1 huggingface dataset:
The operators of these systems are supervised as banks by the Swiss Federal Banking Commission (SFBC). Cooperation between the SFBC and the SNB is facilitated as the provisions in the Banking Act and the requirements stipulated by the National Bank Ordinance are partly similar, and both authorities wish to minimise the regulatory burden. This is also in the interest of the systems that are subject to oversight. I should add that not only the SFBC, but all of the evaluated systems have the opportunity to comment on our classification. The classification will be finalised at the beginning of next year. Basel II: a never-ending story? The National Bank is involved in the implementation of the recommendations on the international convergence of capital measurement and capital standards, known as Basel II. The National Bank does not only provide a member to serve on the Basel Committee on Banking Supervision. As an authority committed to system stability, it also shares the responsibility of adequately implementing the Committee’s recommendations. The SFBC’s fundamental hypotheses are undisputed, namely that the current provisions are in need of reform and that the recommendations of the Basel Committee are to be implemented with  1/2  moderation, while at the same time any dilution of the capital adequacy requirements aimed at reducing the insolvency risks has to be avoided. We are confident that the parties directly involved, ie the SFBC and the banks, will again succeed in agreeing, within the given time frame, on pragmatic and acceptable solutions.

Niklaus Blattner: A look behind the scenes of system oversight Introductory remarks by Mr Niklaus Blattner, Vice-Chairman of the Governing Board of the Swiss National Bank, at the end-of-year media news conference, Zurich, 16 December 2004. *  *  *  It is the task of the Swiss National Bank (SNB) to contribute to the stability of the financial system. Implementation rests on three pillars: macroprudential oversight of the banking sector (Financial Stability Report), oversight of systemically important payment and securities settlement systems (system oversight) and crisis management measures. This is what I talked about at the last press conference. Today, I would like to give you a look behind the scenes of system oversight. Then I will turn to the regulatory environment, which we are also obliged to critically monitor and shape. System oversight: a look behind the scenes In the last few months, we had to define which payment and securities settlement systems are systemically important. Only these systems have to comply with the minimum requirements stipulated in the National Bank Ordinance. To be classed as systemically important, it is not sufficient that a system is significant to the national economy, ie we do not merely consider the number and volume of transactions settled through a system. Rather, we focus on whether the failure of a system jeopardises the economy’s supply of liquidity. This is the case particularly if participants in a flawed payment or securities settlement system have no other alternatives.
In addition, we calculated on unit labour costs increasing by an average of almost 3 per cent a year in 20072010, to be compared with largely 0 per cent a year in 2002-2006. The high inflation rate could affect wages through demand for compensation for the price increases. However, this does not seem very likely at present. The slowdown in growth and the expected weakening of the labour market are factors that weigh against such a scenario. In addition, we now have three-year agreements in most areas of the labour market which regulate the agreed wage increases. Nor are there, as there were in the 1970s and 1980s and are in some other countries, price guarantees in the agreements that provide automatic  4  BIS Review 100/2008  compensation for price rises. These were abolished in connection with the so-called Rehnberg agreement at the beginning of the 1990s. It is, on the other hand, important that inflation and inflation expectations fall to around 2 per cent ahead of the next round of collective bargaining in 2010. With the current inflation forecasts, average inflation over the three preceding years will then have been over 3 per cent, which may be a problem. However, this would nevertheless mean that real wages prior to tax increase by around 1 per cent a year during the current three-year agreement period. After tax the increase is larger, perhaps 2-3 per cent a year. 3.

This is around a tenth more than we estimated in our Monetary Policy Report. Compared with the  6  BIS Review 100/2008  forecast in the Report, it is primarily electricity prices that have been higher than calculated. Food prices increased by 8 per cent, which is more than in almost all of the countries in the euro area and could indicate that what started out as price increases in the world market have begun to spread to other goods. On the other hand, oil and other commodity prices have fallen, which may dampen inflation in the future. However, the krona has weakened, which makes imports more expensive. To sum up: the picture presented in July largely remains unchanged – with lower growth and high inflation. But GDP growth has so far this year been weaker than anticipated. Inflation is at its highest level since the mid-1990s. However, oil and other commodity prices have fallen. At the same time, productivity has been lower and resulted in increased wage costs. At the Riksbank we are now working hard on producing new forecasts for the coming years. At the beginning of September my colleagues and I will take a new monetary policy decision. We will then once more take a stance on economic developments and on how the interest rate should be set to attain our inflation rate of 2 per cent. The economic situation  GDP growth will slow down this year and  next year.  Employment will stagnate and unemployment begin to increase.
Miguel Fernández Ordóñez: Facing the crisis in Europe Opening address by Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, at the Conference in memory of Luis Ángel Rojo, Madrid, 21 February 2012. *  *  *  Good morning, and many thanks for having accepted our invitation to participate in this Conference in memory of Ángel Rojo. Presiding over this tribute by the Banco de España, to which Ángel Rojo devoted much of his peerless personal and professional calibre, and in which he developed many of his analytical and intellectual contributions, is frankly a privilege I would have preferred never to have taken up. It was in the Bank where he was able to successfully transform macroeconomic thought into economic policy design and implementation, heightening the reputation of the Bank itself and no doubt contributing to enhancing the well-being of Spaniards. The Bank wanted this tribute to be as solemn an occasion as the key role Ángel Rojo played within it merits, and that it should be worthy of the deep impression he made and the valuable legacy he bestowed upon us, which all his followers have sought to preserve. Fortunately for future generations, the guiding principles of his thinking as Governor can be found in numerous written texts taken from conferences and speeches that greatly impacted Spanish society and the economic policy debate in a singularly important phase for the modernisation of our economy.

Germany, the main economy in the area, was then in the throes of digesting the structural changes caused by reunification and by the wage-deflation policy underpinning its competitive adjustment. Along with some uncertainty over the sustainability of its welfare state, this prompted a loss of confidence that translated into notably sluggish expenditure. By contrast, in other economies in the area the reduction in funding costs and the favourable growth expectations generated in the wake of the euro fired euphoria, providing for a strong and lengthy expansion of demand and spending. Swept along by the boom climate, much of the complacency that detracted from the importance of these trends gained ground. High levels of foreign debt were seen as a natural counterpart to the convergence process triggered following euro area entry. Attempts were made to prove that this benign interpretation was the correct one, drawing support from the fact that spending decisions were extremely easy to finance amid the exuberance prevailing not only on European but also global financial markets. Against this background, the enhanced financing possibilities provided by monetary union membership, owing to the disappearance of exchange-rate risk, allowed external imbalances to be financed without difficulty. Regrettably, we now know that capital inflows to these economies, far from funding investment projects likely to generate the returns in the future that would have enabled the loans to be comfortably repaid, were largely geared to financing spending components that have not sufficiently increased the recipient economies’ productive potential.
We also remember the series of bold and decisive steps of the then policymakers towards macroeconomic stabilization, further supported by international financial institutions, especially through the first arrangements with the IMF and the World Bank back in 1993. The results were gradual inflation drop to single digits, enhanced foreign reserves, control of monetary aggregates, and consolidation of the fiscal sector. Crucially, in 1995, the monetary strategy of stable exchange rate of the denar was furnished - a strategy that is an anchor of stability of the Macedonian economy today. The same year, soon after the adoption of the bank regulation and supervision, the banking system was rehabilitated, and later on transformed on a market basis. Six years later, the payment system reform was introduced, along with the building of other central bank capacities, including in the field of statistics, financial market operations, treasury operations and, of course, research as a significant support for the monetary decision-making. All this created preconditions for the 25-year long monetary chapter of our story to be engraved with macroeconomic stability and compliance with international and European standards. For many years now, the European Commission, in its annual progress reports on monetary policy, has noted a high level of compliance with the European legislation. However, in recent years, besides the constant improvement, we have also confronted and responded to a series of challenges, both domestic and global.

Just to recall the crisis episodes of 2001, 2008 and 2016, when we as a central bank had to deal with a crisis of confidence, unfortunately prompted by numerous speculations. In all these episodes, we faced pressures on exchange rate and foreign reserves. As an example, during the 2008/2009 Global Financial Crisis we lost as much as a third of them. There were also periods of bank runs. For example, during the 2001 crisis, the deposits dropped by as much as 8% in a very short period of time. Unfortunately, even in the recent period we have not been spared from serious challenges. The pandemic brought about economic losses, again required the use of foreign reserves to maintain stability of the domestic currency, as well as financial policies to support economy and maintain the banking system stability. This pandemic crisis, for various reasons, has made the issue of inflation relevant again, putting it in the focus of central banks. And the still ongoing pandemic was followed by another major shock - the war in Ukraine, which is not only a human tragedy, but also produces economic cost in the form of inflationary pressures and slowdown of economic recovery. All these crisis episodes remind us that the denar stability is a public good?benefit and crucial for the general economic stability. This illustrates how great our responsibility is as an institution that has a mandate to preserve its stability.
Watching the watchers: forward-looking assessment and challenge of a central bank’s own financial risks Speech given by Andrew Hauser, Executive Director, Banking, Payments and Financial Resilience At the GARP 18th Annual Risk Management Convention, New York 7 March 2017  I am grateful to Nathanael Benjamin, David Jacobs and Riccardo Pagnani for their invaluable help in preparing this speech. 1  All speeches are available online at www.bankofengland.co.uk/speeches  Introduction  Thank you very much for the opportunity to speak to you today. The theme of this conference has been how to understand, and respond to, ever more diverse risks: from the rise of populism and geopolitics to the opportunities and threats of new technology; from new forms of financial risk in banks, capital markets and further afield, to the latest trends in stress testing. Central banks of course worry about these things too, in pursuit of monetary and financial stability. Indeed we are so good at worrying, we may be one of the few groups of people that can make Chief Risk Officers look chilled out by comparison! But historically, for the Bank of England at least, much of that anxiety has been outward-facing, focused on the ways in which private sector balance sheets might overheat, rather than on our own financial exposures. And that reflects the fact that for long periods in the past, our market operations were relatively simple and low-risk.

It is important to maintain a high level of confidence that institutions and markets will function in the way that the customers expect them to function. It is quite possible to combine a good general consumer protection with flexibility in the range of products which could make production more efficient. On the other hand, a far-reaching harmonisation of detailed conduct of business rules would probably involve greater costs for consumers than what they would stand to gain from completely harmonised services. The principles that form the basis of the EU’s regulatory framework for the financial sector are to a great extent based on this general orientation. The directives generally establish criteria of minimum harmonisation in order to enable financial operators to be active throughout the entire union. On this basis, authorisation and supervision should in principle be performed by the authorities within one member state, normally the home country of the institution in question. This “licence” to conduct financial operations should thus be recognised by the authorities in the other member states and financial institutions should be able to operate there from their establishments in their respective home country. In the same way, the EC directives on securities markets have led to some minimum harmonisation of the conditions for trade in financial instruments, e.g. what the issue prospectuses should contain and how insider trading could be limited.
The bringing together of financial institutions and market players across continents to participate in this expansion of inter-regional investment flows has fostered financial linkages among the major regions. This will not only provide great synergies and opportunities but will contribute towards facilitating international financial stability. Just as the old Silk Road in the 14th century offered a route that facilitated the spice trade from the East to the West, we can now envisage the new Silk Road which financial flows across borders between the East and West, thereby promoting international financial integration. In this context, the Islamic capital market, in particular, the sukuk market has a major role in strengthening this interlinkage. The essence of the New Silk Road is to provide a route for such flows and promote greater financial integration for the benefit of a wider community. The New Silk Road should not be envisaged as just a link between Asia and the Middle East but that which extend to Europe and the rest of the world. Indeed, we are already seeing the participation of global investors and the international financial community. The participation of a financial centre like London will foster the global growth and international integration of this market. The involvement of regulators and government agencies is also contributing to accelerating this process. Malaysia is one of the key intermediary destinations along this New Silk Road that offers a platform for the origination, distribution and trading of Islamic capital market and treasury instruments, including sukuks.

My remarks today will focus on the vast potential of the Islamic bond market in the economic development process, in its role in ensuring financial stability and its role in promoting greater financial integration in the global financial system. I would also like to take this opportunity to share with you Malaysia's experience in the development of this market. The Malaysian sukuk market has now evolved into one of the world's largest Islamic bond market. Immense role of sukuk market in the economic development The financing requirements for economic development are immense. The bond market is key to meeting these funding needs for both the public and private sectors. This is particularly important for emerging market economies. In the Middle East and in Asia , two of the fastest growing regions in the global economy are taking place following privatisation and implementation of infrastructure projects. Asia alone will be spending an estimated USD1 trillion on infrastructure over the next five years, while infrastructure requirements in the Middle East are estimated to be USD500 billion over the same period. The challenge is to put in place an intermediation system that will channel the surplus savings in both these regions into productive investments. It is in this context that the Islamic capital market, in particular the sukuk market will serve as an important avenue to efficiently mobilise longer term funds to meet these funding requirements.
In two additional steps, on 10 and 17 August this quantitative easing policy was further expanded with an ultimate target of overall sight deposits in excess of CHF 200 billion. This significant increase in the supply of liquidity to the Swiss franc money market was achieved by discontinuing reverse repo operations and repurchasing outstanding SNB Bills, in a first step, and entering into foreign exchange swaps and reinstating liquidity-providing repos afterwards. These operations exerted massive downward pressure on money market rates and expectations of future interest rates. They also caused the Swiss franc to weaken considerably. However, the increasing torrent of bad news about the global economic situation made their impact only temporary in nature. The massive overvaluation of the Swiss franc continued anew, posing an acute threat to the Swiss economy. On 6 September, the SNB hence announced that it would no longer tolerate a EUR/CHF exchange rate below a minimum rate of CHF 1.20. It also indicated that it would enforce this minimum rate with the utmost determination and was prepared to buy foreign currency in unlimited quantities, if necessary. Even at a rate of CHF 1.20 per euro, the Swiss franc remains high. It should continue to weaken over time. If the economic outlook and deflationary risks so require, further measures will be taken. The decision to impose a minimum exchange rate was not taken lightly. It was a major step and has naturally elicited a wide variety of reactions. Today, I would only like to address one of them.

It is too soon to say yet, but we should be prepared to push harder for further standardization should the desired degree of standardization that we are striving for not materialize. 2  BIS central bankers’ speeches  I also worry that implementation of the Principles for Financial Market Infrastructures could falter over time. This could happen for several reasons. In particular, we should recognize that there is a tension between the profit motive of for-profit CCPs and full compliance with the PFMIs. Put simply, some CCPs will prefer to avoid the full costs of compliance. In other words, there will always be a risk of a race to the bottom, which we must continually push against. In this respect, the effort could also falter if countries were to fail to enact the relevant legislation and policies to put the PFMIs in practice. For the global system to be robust, the requirements for CCPs will need to be enforced across the different geographic regimes. I am also worried about fragmentation. In particular, I worry about the proliferation of TRs and CCPs geographically – in some cases in each of the major asset classes. In the case of CCPs, fragmentation would bring two costs. First, the netting benefits would be reduced and, second, the system would be more complex. In an ideal world, I would prefer very few, very robust CCPs, rather than a proliferation of many, less robust CCPs. But whether that is what we will get is unclear to me at this point.
For example, research looking at the pre-crisis period suggests that where banks face limited competition in their domestic markets, they tend to charge higher margins for lending to SMEs, and that effect increases in financial systems which are more bank-based 3 That would change if small firms had more options to diversify, for instance through efficient private placement markets or further growth in crowdfunding. There are nevertheless good reasons why banks are the primary lender to SMEs in most national markets – they have the client relationships, information database and domestic networks which are necessary for that type of lending – so banks are unlikely to be displaced by non-banks for quite some time. The challenge posed by CMU is therefore not, at least in the medium-term, about surviving. It is rather about thriving. CMU presents banks with an opportunity to recover profitability and to find a niche within the emerging market for new financial products in Europe. Because in the euro area we have a universal banking model, more disintermediated finance will have to involve banks as the primary market makers. With CMU on the horizon, there is now a window for banks to specialise in specific products, become market leaders and bolster their sources on non-interest income. In particular, the development of securitisation markets offers significant possibilities for banks. There is clear demand for a conduit between non-bank investors looking for SME exposure and small firms looking for new sources of financing.

From my viewpoint as a central banker, I hope that banks indeed seize on this opportunity, because I think it would ultimately lead to a more robust banking sector as a whole. For example, European securitisation markets would improve risk-sharing among banks: one can imagine a world where small, local banks originate loans while larger, global banks securitise and market them. And a true CMU would also mean convergence of some parts of insolvency law and deepening of markets for distressed debt, which would help banks work through NPLs more quickly in future and hence increase the resilience of the banking sector to shocks. Moreover, if bank finance declines in importance over the longer-term, that might also encourage some much needed consolidation in the banking sector, which would in my view be beneficial for the real economy. We see at the moment that overcapacity hinders the recovery of bank profitability, as weaker banks distort competition and make it difficult for other banks to re-price loans.4 Whether all this materialises, however, hinges crucially on how far-reaching the CMU project really is. The Commission’s Action Plan for CMU has put forward many areas for further work, but each will take years to implement. What type of CMU will ultimately emerge therefore remains to be seen. I am sure Commissioner Hill will give us more guidance on this tomorrow. 3  Ryan, R., O’Toole, C. and McCann, F. (2014), “Does bank market power affect SME financing constraints?”, Journal of Banking and Finance.