samchain/econo-pairs-v1 huggingface dataset:
Asset quality continued to improve, as non-performing loans, especially to the non-financial corporate sector declined by almost 12%, mostly reflecting improved creditworthiness and an increased commitment by borrowers to honour their loan commitments. As a result the Non-performing Loan ratio declined to 6.5% by mid-year and is expected to decline further to below 6% later on this year. While banks have continued to adopt a prudent stance by increasing provisions, and while such loans are generally covered to a significant extent by collateral, nevertheless they need to build further coverage and exercise restraint in dividend distribution to shareholders to preserve further the soundness of the banking system. In this regard, the authorities, namely the Central Bank and the Malta Financial Services Authority through the Joint Financial Stability Board, have taken policy measures to ensure that by preserving its soundness, the overall banking system remains supportive of economic growth. During 2016, the authorities introduced the Other Systemically Important Institutions capital buffer, to preserve capital in those banks that are the most systemically important for the domestic economy. We have also launched the Countercyclical Capital Buffer, although this has been currently set at 0% as credit growth has not been excessive relative to economic growth or contributing to asset price inflation. Page 4 of 8  Other decisions to maintain the soundness of the banking system relate to addressing the stock of NPLs, which is incidentally also high on the agenda of the Single Supervisory Mechanism.

This time mismatch between the costs and benefits of reform is a prime reason why they are hard to sell. And where the costs and benefits accrue to different segments of the economy, the difficulty of instilling reforms is exacerbated since it is hard to create satisfactory compensation schemes while those who lose out tend to be concentrated and thus more effective in organizing opposition to the reform. Next, even if the obstacles to selling the reforms have been overcome, one of the most important issue that follows is the proper pace and sequencing of structural reform. In the context of financial sector reforms, for example, the underlying challenge is the proper mitigation of the additional risks that are injected into the financial system as markets develop and become more sophisticated. These risks consist of both financial risks borne by market participants as well as macroeconomic risks that may be associated with greater financial market volatility. Hence, the consensus on the importance of structural reform efforts does not carry over with the same strength to the issue of the appropriate pace and sequencing of policy changes. And finally, in the context of emerging market, the main stumbling block for structural reforms is the high degree of political fragmentation. The need to accommodate many, and sometimes conflicting, interests not only slows the reform process but often leads to compromised solutions that fail to address the original underlying goal of the reform.
The report emphasises a number of advantages: •  Electronic trading systems make it possible to manage large amounts of trading-related information. This enables all trading-related processes in the financial companies to be integrated, which in turn provides opportunities for linking together the entire transaction chain (business contracts, confirmation, clearing and settlement). This is known as straightthrough-processing (STP). •  Electronic trading also enables a greater insight into the market. This can in turn make it possible to reduce any information symmetries between different players. That is, of course, a disadvantage for those who have previously profited from the imbalances, but normally benefits the system as a whole. 1  Bank for International Settlements:, [2001], "The implications of electronic trading in financial markets". Report by a working group established by the Committee on the Global Financial System of the central banks of the Group of Ten countries. BIS Review 37/2001  1  •  Another important aspect is that electronic trading enables anonymity during trading. This often has a positive effect on the markets' method of functioning and thus their efficiency. For instance, it can facilitate settlements of large positions. •  The opportunities for access to the market can also be improved, if desired. This applies both from a geographical perspective and for different types of players. An opportunity is thereby given to influence the structure of the market in that more players with different needs can be active in many different markets. This can lead to improved liquidity and greater competition.

On the contrary, they could be used by the owners, who in many cases are part or all of the market collective to begin with, in order to gather exclusive and valuable information on, for instance, market behaviour. Given this, it is hardly surprising that ownership issues are often the most important in this context. A further problem - and I shall return to this in a little more detail later - is that the increased anonymity in trading - which entails certain advantages - can also have the disadvantage that it becomes more difficult for the players involved to check their counterparty risks. The Swedish market today I mentioned at the beginning some of the problems today on the Swedish fixed income market. These are partly connected with the radical fall in the national debt. During the 1990s, the national debt increased by an average of SEK 80 billion on an annual basis. Only a few years ago, namely in 1997, this debt amounted to SEK 1,420 billion, or almost 80 per cent of GDP. This should be compared with today's level of SEK 1,280 billion, or approximately 60 per cent of GDP. According to the Ministry of Finance, the national debt will have been reduced by a further SEK 140 billion in 2004. The successful budget consolidation process has thus cut down on business opportunities in that the volumes have been reduced. However, the main thing is that the market has become more stable with fewer interest rate fluctuations.
According to Kenneth Rogoff and Carmen Reinhart, the Norwegian banking crisis is in the top five list of the most severe banking crises in history, which also includes Spain 1977, Finland 1991, Sweden 1991 and Japan 1992. Three of Norway’s four biggest banks received capital injections from the government, after writing off the entire equity capital. The banks were fully nationalised. Two of them were later sold 100 per cent to private owners, while the government retained a large share (34 per cent) in DnB Nor. The banks had too little capital, as much of it was unable to bear losses. Therefore, the Norwegian definitions of Tier 1 capital were stricter than most countries. Like many resource-rich economies, Norway expanded its welfare state rapidly after the discovery of oil. During the latter half of the 1970s, the government increased its ambitions in many key areas of the economy: the pension age was cut, agricultural subsidies increased, industrial policy widened and the government reduced taxes to bring wages under control. The consequences were galloping inflation, a depreciating currency and worst, meager productivity development in the Norwegian economy. BIS central bankers’ speeches  3  After 1986, steps were taken to get back on track. Interest rates were increased to subdue lending and the fiscal deficit was reduced. By 1990, Norwegian government believed a potentially upcoming crisis had been averted. But Norway, like most European countries, was hit by the high interest rates following the German unification.

The typical response from the other side of the Atlantic to such fears was that in a globalised world these imbalances are physiological and do not cause problems so long as they are financed with capital inflows. Moreover, the status of the dollar as sole international reserve currency used to guarantee such financing. In the end, the theory (which in fact is no more than an accounting identity) was put forward according to which America’s deficit was in reality the other side of the coin of an excess of savings in the developing countries, resulting inter alia from the fixed exchange rate policy vis-à-vis the dollar. The adjustment had therefore to start first of all from a modification of the policy of the other countries, rather than from the recovery of the savings capacity of American households. In synthesis, the prevailing theory up to recently was that the US imbalance was physiological and its correction, if any, would have implied no painful adjustment on the US economy. The second imbalance that has built up in recent years relates to the development of financial products that have loosened the ties between lenders and borrowers. Securitisation, which has enabled lenders to spread risk better, restructuring it and selling it to others, has however reduced the incentive to value it correctly, either by those who originated the product or those who acquired it.
Anyway, the TechLab was started only three months ago and we are also exploring initiatives with other technologies such as APIs. Let us talk a little bit more about the technology that brings us together, blockchain. This technology has several use cases for a central bank: (i) Central bank digital currencies; (ii) Financial Market Infrastructures such as largevalue payment systems and trade repositories, or more generally RegTech or SupTech implementations; (iii) Issuance and lifecycle of financial instruments; and (iv) opportunities of optimization of back office processes, such as settlement of operations and reconciliation. Notwithstanding the potential this technology has, there are some yellow flags that need to be addressed: a. DLT technology is still on an early stage and there might be unidentified drawbacks. Smart contracts that can build on top of this technology make it significantly more powerful, but there is little experience on how this works in practice. b. Borderless technologies raise concerns in regulatory compliance across regions. Coordination and information sharing may be especially relevant. c. Proof of Work (PoW) consensus protocol is slow and needs intensive use of energy. Other consensus protocols have limited use at this point: Proof of Stake or Proof of Authority. Page 3 of 11  Central Bank of Chile September 2019  d. Regulatory gaps may arise: identifying theses gaps is a central point in the exploration of the technology. Therefore, we need to understand this technology in order to embrace its benefits and mitigate the risks that some use cases may involve.

Erdem Başçi: Global finance in transition Keynote speech by Mr Erdem Başçi, Governor of the Central Bank of the Republic of Turkey, at the conference on “Global finance in transition”, Istanbul, 7 May 2013. *  *  *  Esteemed participants, distinguished guests, Welcome to the conference on “Global Finance in Transition”, held under the Russian G20 presidency and hosted jointly by the Reinventing Bretton Woods Committee (RBC) and the Central Bank of the Republic of Turkey (CBRT). In this conference, we will be analysing and discussing with experts, the structural changes in global finance experienced as of 2008. In these opening remarks, I would like to briefly point out the impact of these changes on emerging market economies. Three fields have undergone significant changes in the aftermath of the 2008 crisis: fiscal policies, monetary policies and financial sector policies. These changes have had significant subsequent impacts on global finance. As for the fiscal policies; those of the emerging market economies differ considerably from the fiscal policies of the advanced economies. Automatic stabilizers did cause emerging market economies to have wider budget deficits temporarily in 2009. Yet, EME’s sovereign debt has been very low compared to that of advanced economies, and still on a downward trend since 2010. Emerging market and advanced economies diverge in terms of monetary policies as well.
6  BIS Review 68/2006  Another important factor affecting employment in Turkey is the country’s demographical structure. In Turkey, population growth is fast and the ratio of young population to total population is high, which together lead to a high unemployment rate in young population. In February 2006, unemployment among the young population in Turkey was recorded as 21.9 percent. The low labor force participation rate of women is another structural problem of the Turkish economy. This constitutes a serious loss in the labor force, leads to a dependence relationship between men and women, and increases the disturbance created by unemployment. Meanwhile, the high rates of employment taxes coupled with very common informal economic activity prevents a permanent rise in employment and increases volatility. The low rate of employment among those who have received vocational training points to the fact that there is a lack of qualified labor force to support the structural change. These structural problems call for the implementation of medium and long-term supply-side policies in order to reduce unemployment rates. Within this scope, the framework drawn in the Ninth Development Plan Strategy, which was prepared in line with the European Union’s employment strategy and aimed at increasing employment, is kind of a road map for the solution. The Ninth Development Plan Strategy contains strategies for developing the labor market and increasing the responsiveness of education to the demand for labor with the final aim of increasing employment.

This Construction Sector Group has found that approximately one-third of unemployed construction workers lack occupational experience and around 6 per cent also lack formal training. In that the average age of construction workers is rising and young people do not find construction work attractive, the bottleneck  5  BIS Review 18/1999  problems may become even greater in the future. In order to prevent this from leading to sizeable problems, proposals have been put forward for increased mobility, improved competence and marketing of construction courses, for example. Construction costs are measured by the factor price index (FPI); the largest item is wage costs. The price of completed dwellings, on the other hand, is measured by the building price index (BPI), which also includes the construction companies’ productivity and profit margins. These indexes do show relatively large price increases but there are no actual signs of any direct risks of an inflationary development in Sweden in the coming years, provided that the bottleneck problems do not increase. The rising costs associated with earlier upswings in activity have been connected with the contemporary subsidy systems as well as the high degree of concentration in the construction market. The revised system for financing residential construction has appreciably reduced one of these problems: construction companies as well as consumers are exposed more directly to production costs. But the problem of concentration in the construction market still remains and may be a future cause for concern.
We should ensure that we look at behaviors and outcomes from multiple perspectives, so we can gain a more robust understanding of the operating environment as a whole. No single perspective is likely to provide all of the insights. Experimentation and iteration, use of narrative and story-telling, and innovative methods for harnessing diversity of perspective are thought to be effective ways of tackling complex problems and we all need to innovate, adapt and seek new approaches.12 I think this focus on conduct and culture is entirely consistent with a traditional supervisory focus on resilience, both for individual firms and the financial system as whole. This can be resilience of a firm’s balance sheet in response to financial risk or an unexpected loss that depletes a firm’s equity capital or resilience of a firm’s culture in response to conduct risk or an unexpected fraud that depletes its cultural capital.13 In all of these cases, a resilient firm will be better able to adapt and evolve in order to continue to function and provide the critical financial services necessary to support a growing and stable economy. Thank you. 1 I thank Stephanie Chaly, Robert Fitchette, Jim Hennessy, Jackie McCormack, and Tom Noone for helpful  discussions and feedback on earlier drafts. 2 David J. Snowden and Mary E. Boone, “A Leader’s Framework for Decision Making,” Harvard Business Review,  November 2007 3 The Boston Consulting Group, Staying the Course in Banking, March 2, 2017. 4 William C. Dudley, Ending Too Big to Fail, November 7, 2013.

Philipp M Hildebrand: Switzerland - the challenges of being and remaining a leading financial centre Speech by Dr Philipp M Hildebrand, Member of the Governing Board of the Swiss National Bank, at the Financial Management Association (FMA), European Conference Zurich, University of Zurich, Zurich, 3 June 2004. *  *  *  I am pleased to be here this evening to reflect on Switzerland: the challenges of being and remaining a leading financial center. Moreover, I am honored to share this platform with Peter Wuffli, Walter Kielholz and Bruno Gehrig. The Financial Management Association should be commended; you have assembled three outstanding leaders and representatives of the Swiss financial industry. I very much look forward to their comments. When I think about the Swiss financial industry, two closely linked thoughts come to mind: first, Switzerland’s status as one of the world’s leading financial centers and second, the important contribution of the financial sector to the overall vigor and resilience of the Swiss economy. Going forward, the key challenge for the Swiss financial industry will be to maintain its leading global status in a world of fierce competition. Because of the financial sector’s critical contribution to the overall economic well-being of the Swiss people, meeting this challenge is important not only to the financial sector but to all Swiss citizens who are concerned about the long-term vitality of their economy. Many of you are familiar with the relevant figures: roughly 10 percent of Switzerland’s real GDP derives from the financial sector.
Similar to IOER for banks, ON RRPs provide a risk-free overnight investment directly to a broad range of bank and non-bank counterparties. By reaching financial institutions that are ineligible to earn IOER, an ON RRP facility widens the universe of counterparties that should generally be unwilling to lend at rates below those available from the Fed. Such a facility could also enhance competition in money markets by offering an alternative safe investment and thus  6  Moreover, competition may be imperfect in some money markets currently, allowing spreads to persist longer than they would if markets were more competitive. For example, much money market activity is over-thecounter, potentially leading to search frictions and bargaining. Anecdotal evidence suggests that lenders typically interact directly with a relatively small number of counterparties, perhaps because a portion of the activity is derived from costly relationship lending. Finally, to limit counterparty credit risk, lenders sometimes seek to diversify their lending and apply concentration limits, which are often binding. 7  As I’ll explain, high-frequency variation in balance sheet costs could induce high-frequency changes in the pull of IOER and, in turn, the spread between the IOER and money market rates. We see this transitory dynamic around financial statement reporting dates. On these dates, balance sheet costs for some banks increase, and the fed funds rate and other money market rates fall relative to the IOER rate.

In light of the more challenging environment going forward, generating the supply pipe line for talent and addressing the short supply of critical talent with new skills need to be given urgent priority. What are these skills? There has been considerable attention to the shortage of new and higher technical competencies – including in the area of risk assessment and management – required by financial institutions in the new operating environment. The growth in Islamic finance has also added important new dimensions to the talent requirements. Beyond these clear gaps however, the promotion of more sustainable business models in finance will require additional new skills which have not traditionally been areas of focus in financial institutions. This includes skills in change and crisis management, business recovery planning, the ability to develop and sustain long-term customer relationships, and skills to direct and manage operations in international and cross-cultural contexts. Also particularly important will be the ability to build, motivate and lead strong teams under significantly more challenging conditions in which institutions may be more constrained by regulation in their ability to recruit and retain talent simply by paying more. Perhaps more than in any other sector, the response to the challenges facing the financial industry in managing talent needs to be much broader, forward looking and more strategic given its central role within the economy.
No banks required financial assistance from the Government during the crisis, in contrast to the situation in some of our Asian neighbours where the cost to the public finances of bank rescues and restructuring could reach as much as $ billion. The rapid recovery in the Hong Kong economy is now helping to improve the banks’ performance and to bring down bad debts. In the first half of this year, the pre-tax operating profits of the local banks BIS Review 65/2000  2  from their Hong Kong operations rose in aggregate by more than 50% over the same period of last year. Admittedly, much of this was due to the reduction of 58% in the bad debt charge, which will be a temporary factor in improving profitability. But even at the pre-provision level, profits grew by about 15% compared with 1999. Surprisingly, after the publicity about declining margins on mortgage lending, the growth in profits was helped by an increase in the overall net interest margin. This reflected the fact that funding costs remained low during the period. The position of the local Hong Kong banks is therefore looking better than at any time since the Asian crisis. However, like the Japanese banks, the banks here are also faced by a number of important challenges, albeit on a smaller scale than those in Japan. Foremost amongst these is increasing competition.

This is because our local currencies are generally correlated with each other. Also, there will be less reliance on currencies of advanced countries which last year account for over 85 percent of Thailand’s trade with Indonesia and Malaysia. 2  You may recall that earlier this year, Bank Negara Malaysia and the Bank of Thailand implemented a ringgitbaht arrangement in March as a pilot project. Since then, we have seen a noticeably narrower spread between the ringgit and the baht. Moreover, we have noted an increasing number of businesses applying this local currency scheme in their day-to-day business conduct. Today, I am very delighted that Bank Indonesia is carrying on this initiative by signing the MoUs with both Bank Negara Malaysia and the Bank of Thailand. I really hope that this scheme will continue to expand to other countries in the region. Ultimately, this would be one important step closer to having greater regional financial integration in ASEAN. On this note, may I invite Governor Agus to say a few words, and followed by Governor Muhammad Ibrahim. Thank you. 3