samchain/econo-pairs-v1 huggingface dataset:
So far, banks have managed to adapt effectively to the situation and financial markets have carried on working properly. But further contingency plans are needed ahead of any potentially extreme operational events that this crisis may cause. 15  It should in any event be stressed that the Spanish non-financial private sector is facing this situation in a more favourable financial position than it was in before the global financial crisis. The financial situation of the household sector as a whole has improved significantly in the wake of the global financial crisis. Specifically, its debt ratio has fallen by almost 30 pp of GDP since 2010. In the case of non-financial corporations, the sector’s net debt level has fallen by more than 45 pp of GDP since 2010 and, in fact, it stands below the euro area average. Moreover, the sector now has a bigger volume of liquid assets. 16  In parallel, the Spanish banking sector has also significantly enhanced the quality of its balance sheet over the past decade, which leaves it better placed to absorb this crisis and to continue providing the financing the economy needs. With regard to balance sheet quality, the NPL ratio has fallen by more than 9 pp to 4.8% in 2020 Q1 since peaking in 2013. Over this same period, moreover, the weight of refinanced exposures on the asset side has fallen by 9 pp.

Koh Yong Guan: Risk management development in Singapore Opening address by Mr Koh Yong Guan, Managing Director of the Monetary Authority of Singapore, at the first MAS Risk Conference, Singapore, 31 January 2002. *  *  *  Ladies and Gentlemen  Introduction It is my pleasure to address the first MAS Risk Conference. I will cover two areas : •  First, the changing financial landscape and the challenges they pose for risk management; and  •  Second, the introduction of three risk management initiatives. Changing Financial Landscape and Challenges Over the last few years, there has been a fundamental change in the volatility of financial markets. The frequency and the contagion effects of crises affecting financial markets have also risen. The volatility of financial markets has increased. The lowering of regulatory barriers to capital flows has integrated global financial markets. This has increased the correlation and the transmission of volatility from one financial market to the next. As a result, the diversification benefits derived from investing in several markets have dissipated, leaving market participants exposed to greater financial risks than before. The emergence of complex derivative instruments has increased market liquidity, but also financial risk for those who are not well acquainted with the use of these instruments. While these new instruments have allowed market participants to transfer their credit risks and enhanced the efficient pricing of such risks, the use of derivatives for speculative purposes can result in large losses.
12 The extraordinary interventions that were undertaken using our emergency powers under Section 13(3) of the Federal Reserve Act were warranted and within our authority. However, I suspect that the scale and scope of these interventions went considerably further than envisioned by the public and Congress prior to the crisis. In response, Congress narrowed the scope of Section 13(3) with the Dodd-Frank Act. In particular, Dodd-Frank limits the Federal Reserve’s authority to extend credit through facilities with broad-based eligibility, and constrains the Federal Reserve’s authority to extend credit to a single company. The Dodd-Frank Act also modified the governance that would apply to any future intervention in an effort to increase public accountability. In addition, the Dodd-Frank Act addressed the broader issue exposed by the crisis – that some large financial institutions had become “too-big-to-fail” (TBTF). To end TBTF, Title II of the Dodd-Frank Act established a process to ensure that any financial firm could be resolved without threatening the viability of the financial system and without putting taxpayer funds at risk. 13 In addition, financial intermediaries designated as systemically important by the Financial Stability Oversight Council are subject to tougher prudential standards and enhanced supervision by the Federal Reserve. The intent behind these measures is to reduce the likelihood of a failure of a large financial firm, and the consequence of such a failure for the financial system, should one occur.

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Past a certain stage, the potential cost and instability stemming from these imbalances far outweigh the short-term benefits for the economy. There is, indeed, a difficult trade-off. The very purpose of non-conventional policies is to induce some risk-taking, encourage portfolio rebalancing and stimulate lending by the private sector. The danger, of course, is that “wrong” risks are being taken with no credit to the productive economy and low interest rates causing a search for yield in speculative assets. The situation, therefore, requires a very subtle calibration of our overall stance. It seems crucial today that we carefully consider the joint effects of monetary and prudential policies – both on capital and liquidity requirements – to make sure that they do not produce unintended effects on capital allocation. 5. Central banks’ actions are not limited to fighting the crisis and stabilising the financial system. In the euro area, under the impulsion of the European Council, we are working on building a more robust and efficient financial system. One major weakness revealed by the crisis is the strong link between banks and sovereigns. As a result, any negative fiscal shock or bad news has an immediate adverse effect on the overall financing conditions for the private sector. And, at the same time, difficulties experienced by banks give rise to expectations of a public bail-out and lead to a deterioration in the perceived creditworthiness  BIS central bankers’ speeches  3  of the sovereign.

Should the situation change, nothing has been done that would impair our ability to fulfil our primary mandate and preserve price stability. Many tools are available to absorb liquidity, if it proves necessary. Concerns are also expressed in the euro area about purchases of government debt as a form of “monetary financing” of the government. As you know, such purchases are explicitly allowed for in the Treaty. There is no legal issue, here. What about the economics? This question can be broken down into two. First, the market impact. True, these purchases may lead to lower interest rates. This is their purpose. OMTs will only take place if and when the Governing Council has determined that bond markets are no longer functioning properly, hence interest rates are distorted. A last, serious, concern is moral hazard. Lower interest rates triggered by secondary purchases could give rise to bad incentives, impede market discipline and delay necessary fiscal adjustment efforts. This is the very reason why strict and explicit conditionality is attached to OMTs. 4. Central banks have been active; they have been audacious; but they do not have unlimited power. This may be a good time to reflect upon what monetary policy can and cannot do. I will concentrate on one specific question: the so-called “decreasing returns” of non-conventional monetary policy. The argument goes as follows: balance sheet expansion and low interest rates create potential imbalances in the financial sector.
After making the turn, they have reaped large payoffs. I will not comment on the negotiations that are currently taking place in Athens. They have to be concluded by a courageous, comprehensive and convincing multi-year programme. And I am confident as regards the results of these discussions between the Greek government, the European Commission, the ECB and the International Monetary Fund. Let me add a word about Germany and the current public debate here. I very much appreciated the invitation by Finance Minister Schäuble yesterday to speak with the floor leaders of all political parties represented in the Bundestag. I said yesterday in Berlin that I had found this meeting – in which Jürgen Stark and I could respond to all questions of our  4  BIS Review 59/2010  interlocutors – extremely important. My main message was that a fast parliamentary procedure was highly recommended in the present circumstances. What we need most at this time is a strong sense of direction. We need a sense of direction that can guide us on how we can emerge from these turbulent events and how we can return to the path of economic stability. In my view, this sense of direction can be provided in three steps: first, in the case of Greece, a strong and credible programme, negotiated between the Commission, the ECB, IMF and the Greek government. Second, the support I have mentioned that will avoid the materialisation of financial risks for the euro area as a whole.

And third, a giant step forward in our own framework of surveillance, peer pressure and policy adjustment within the monetary union. Speaking in the presence of Federal President Köhler, who played such a decisive role in creating monetary union and in the presence of the former Finance Minister Theo Waigel, the father of the Stability and Growth Pact, I must say that I count on the contribution of Germany with regard to the third step – the leap forward in policy surveillance and policy adjustment. Fiscal adjustment alone will not be sufficient to ensure sustainability. Structural reforms that will lead to more balanced growth are also vital to rebuild the resilience of our economies. The result must therefore be a renewal of the Stability and Growth Pact and the incorporation of a framework of surveillance for national policies of competitiveness. I hope that considerable energy will be devoted to this area in this country, so that a central outcome of the present demanding episode will be to strengthen the foundations of our monetary union. Conclusion Ladies and gentlemen, Europe has reacted with speed, energy and determination in the financial crisis. We have to stay on this path. We continue to need wise and sound, rapid and determined action by all countries. We need to resolutely improve the effectiveness of the peers’ surveillance of fiscal and economic policies. The weak points of past multilateral surveillance will be corrected, and the Stability and Growth Pact will be reinforced and rigorously applied in its letter and in its spirit.
2/3  BIS - Central bankers' speeches  In recent weeks, the ringgit has come under renewed pressure – underscoring the need for more than short-term solutions. We need structural reforms that will strengthen our growth prospects and encourage more investment opportunities. This will increase demand for the ringgit and secure a more enduring appreciation in its value over time. Ultimately, to secure our future, the country must stay the course in implementing vital reforms. The issues we need to address are not new. But history and the passage of time should inform how we move forward. We must fortify our defences against crises. We must critically examine our priorities to increase our growth potential and meet sustainable goals. We must rebuild the buffers we have drawn down on to strengthen our resilience to future shocks. And we must enhance our capacity to adapt and change in order to manage risks and exploit opportunities that we may not yet see today. Ladies and gentlemen, For many of the challenges Malaysia faces, the solutions require a whole-of-nation approach. Hence the theme of this Symposium – "Structural Reforms for a Stronger Malaysia". Today will see in-depth discussions on various issues that my team has been working on in recent years. There will be seven sessions delving into topics such as digitalisation in the payments sector, financial sector policies, and broader economic and monetary concerns. Speakers will explore the opportunities that Malaysia has to grow in these areas and the obstacles in our way.

The global financial crisis has tested both the ECB and the organization that I am privileged to serve, the Federal Reserve. The Federal Reserve’s financial stability role, my topic for today, was at the center of the response to the crisis in the United States. Because this was the worst financial crisis in the United States since our Great Depression, conditions within our national economy produced instability, which naturally provoked a reaction from the Federal Reserve. From my personal perspective, one of the most inspiring moments was when Chairman Bernanke spoke in February of 2009 at the National Press Club. There, he said “the Federal Reserve has done, and will continue to do, everything possible within the limits of its authority to assist in restoring our nation to financial stability and economic prosperity . . . .”1 No statement encapsulated the financial stability objective as succinctly and as clearly. In speaking here at the ECB, I would be remiss if I did not mention a substantially similar statement by ECB President Mario Draghi in July of 2012. President Draghi said that “[w]ithin our mandate, the ECB is ready to do whatever it takes to preserve the euro”.2 Whenever I have referenced President Draghi’s “whatever it takes” statement, Antonio is quick to note that President Draghi, unlike Chairman Bernanke, appended a forecast to his version of “whatever it takes”. He assured everyone that “it will be enough”.
The thrust of this initiative was to promote competition by opening up the licensing process and removing administrative controls on lending, while stressing the importance of maintaining adequate capital and managing risk appropriately. At the same time, the Malta Financial Services Centre was established as the regulator for financial services other than banking, which remained the responsibility of the Central Bank of Malta. Also in 1994, responsibility for monetary policy was moved to the Central Bank of Malta. The introduction of reserve requirements and the Bank’s engagement in open market operations  BIS Review 65/2009  1  paved the way for the establishment of a market-driven interest rate structure, which is of paramount importance for the transmission of monetary policy. To promote activity in the money market and bolster its own ability to steer interest rates, the Bank initiated weekly auctions to influence the size of the monetary base, while gaining control over the excess liquidity of the banking system. Further steps were subsequently taken to create an independent regulatory framework in line with international standards. In 2002 the renamed Malta Financial Services Authority took over from the Central Bank of Malta the responsibility for supervising the banks and the stock exchange, becoming the single regulator. At the same time, the Bank was given formal independence in the conduct of monetary policy, in the oversight of payment systems and in safeguarding the stability of the financial system.

Key information about the specific mortgages was lost in the process of securitizing mortgages in the first place, and then later repackaging these mortgage securities into collateralized debt obligations (CDOs) and CDOs-squared. 5 In addition, the complexity of the securities meant that it would be difficult to understand the risks even if an investor had access to all of the relevant mortgage-level information. Investors in AAA rated mortgage-backed securities were initially sanguine about these information problems since these securities were thought to have a very low loss probability as determined by the credit rating agencies. Once that assumption was no longer true, it was very difficult to acquire and process that information. How did house prices manage to depart so significantly from their fundamental value in some housing markets? Asset booms and busts have been a feature of financial markets for centuries as documented by Reinhart and Rogoff in their recent book This Time is Different. 6 During a boom, a strong motivation for purchasing an asset is the expected price appreciation on the asset. In the case of housing, rising prices however should ration demand through two constraints. The first is the downpayment constraint. For a given required downpayment percentage, as house prices increase a borrower must come up with more cash for the downpayment. The second is the cash flow constraint. For a given interest rate and downpayment percentage, as house prices increase, the mortgage payment relative to the borrower’s income increases making the mortgage less affordable.
The share of the population that have received two doses of vaccines in Thailand currently stands at about seven percent, which lags behind other countries in the region including Malaysia, Indonesia, and the Philippines. Therefore, given that Thailand has been hit severely by the third wave of the outbreak with subsequent lockdown and the likelihood in achieving a larger share of vaccinated population that will take some time, this indicates that the recovery is likely to be slow going forward. Second, Thailand’s economic recovery is likely to be highly uneven or so-called “K-shaped recovery”. Our export sectors have recovered back to where they were prior to the crisis and are producing and exporting at levels higher than the pre-crisis levels. However, other sectors, notably the services and tourism-related sectors, have been recovering more slowly. In particular, hotels and restaurants are lagging significantly and experience a great Page 1 of 9  degree of hardship. The reason why this has hit the economy particularly hard is that tourism, aside from accounting a large share of GDP, also accounts an even larger share of employment. Tourism, both directly and indirectly, accounts around 20 percent of total employment in Thailand. Hence, employment and income were severely hit as a result of COVID-19, which will be another factor that will characterize both the slower and the uneven nature of the recovery going forward. While we have been hit hard, the economy has proven to be resilient.

What happens here is important and will be relevant in affecting how successful we respond collectively and globally to the climate challenge. The second trend that is very important and that we have to make sure that we are wellpositioned for is digital. On this front, I am happy to report that we have made better progress than we have made on the green or climate front. The Bank of Thailand, in particular, has been actively engaged throughout and has not been behind the curve. We have demonstrated in terms of outcomes that we have done and have not lagged others in this increasingly important area. Page 7 of 9  We have put in place, the kind of digital infrastructure that we need to allow for digital financial services that are likely to become more and more important in the future. This has been something that is top-of-mind for us and remains one of our key strategic priorities. What have we done in this area? First, on digital payments, we were among the first countries to have introduced the standardized QR code to assist payments. We have seen a very good uptake on that. QR codes in Thailand are now in very broad use. I am happy to see that it really helps to improve access and inclusion. We have seen, for example, vendors using QR codes for payment purposes. I think that has been a welcomed development in trying to address our long-standing issues in trying to improve inclusion on the financial front.
In the June Inflation Report, Norges Bank assumes that money market rates among our trading partners will gradually increase over the next three years. The path for domestic and external interest rates does not imply considerable changes in the krone exchange rate. Growth in disposable income has been high in recent years. Lower interest expenses as a result of the decrease in interest rates and relatively high real wage growth have resulted in an increase in household purchasing power. The rise in house prices may also have fuelled growth in private consumption. With high growth in employment and falling unemployment, consumption growth is expected to be high again this year. Since the publication of the June Inflation Report, electricity prices have increased to a further extent than expected. Forward prices for next winter have also increased. Higher electricity prices may in isolation reduce household purchasing power somewhat. On the other hand, growth in household income is high and there are market expectations of a fall in electricity prices later next year. A continued rise in house prices may contribute to holding up consumption growth. House prices increased further this summer, and the twelve-month rise moved up to 15.8 per cent in July. Residential construction is still high. In 2005, the number of housing starts was the highest since the beginning of the 1980s. As the interest rate level gradually normalises, household interest expenses will increase. Combined with projected lower employment growth and higher inflation, this might reduce growth in household purchasing power in the years ahead.

Households and businesses didn’t have a great deal of choice and opportunity when it came to finance. But look at what’s happened in the past ten years. As banks have been made safer and mechanisms put in place to deal with them if they fail, the too-big-to-fail public subsidy for banks has fallen by 90%.17 It’s therefore no accident that our banking system is now more diverse. In the past year, for example, banks other than the big six have accounted for more than half of new lending to households and all of the net lending by banks to UK businesses. And it’s no accident that our financial system is more diverse. On net, all of the growth of credit to businesses since the crisis has been centred in non-bank forms of debt finance. The lesson: reforms that promote stability can unlock opportunity for the system to serve the economy by levelling the financial playing field. That lesson applies now to our work on climate risks. Our primary aim is to ensure the system is resilient. But by forcing the system to measure, disclose and confront future risks, we could unlock the opportunity for finance to help the economy in its transition to carbon neutrality. See speech by Mark Carney (April 2017): ‘What a Difference a Decade Makes‘.