samchain/econo-pairs-v1 huggingface dataset:
At the same time, it will enable Hong Kong to give full play to its status as an international financial centre, and enable it to play a role in the promotion of reform and liberalisation, and the development of economic infrastructure on the Mainland. BIS Review 39/1999  2  9. Prior to the transfer of sovereignty, there were many doubts and myths surrounding this subject. The popular myths were: that the Hong Kong dollar would be replaced by the Renminbi; that Hong Kong’s foreign reserves would be absorbed by the Mainland; that the PBOC would replace the HKMA or would interfere in the operation of the HKMA; or that Hong Kong’s regulatory standards would deteriorate as a result of the need to grant special privileges to influential interests from the Mainland. Of course, those who believed these myths would have done well to have familiarized themselves with the Basic Law. But even those who were familiar with the Basic Law had other concerns to raise. For example, under the “one country, two systems” arrangement, there are two monetary systems within one country. Which monetary system should be more important from the nation’s perspective? Since this is not answered in the Basic Law, should we apply the relationship between the Central Government and the local government, that is, a local government subordinate to the Central Government, when we study the two monetary systems? Obviously, Hong Kong and its status as an international financial centre would be adversely affected were this the case.

–  From the beginning of January 1999, cross-border money market transactions increased sharply, to reach almost two-thirds of total activity on all money market segments. The unsecured deposit interbank market —which is mainly concentrated on the shortest maturities— is highly integrated. The integration of interest rate markets within the euro area is a key achievement which deserves to be underscored. EONIA and EURIBOR have provided the market with uniform benchmarks that are fully accepted by all market participants. This is reflected, for instance, in the amount of daily transactions and the huge development of the euro interest-rate swap market. These structural changes in the euro area money market have prompted market participants to concentrate their euro cash management activity in order to take advantage of the higher liquidity levels on the secondary market. Needless to say, such integration has to be brought to fruition in the other segments of the money market, i.e. the repo market and the short-term securities market. Further integration will enhance the efficiency of the euro area financial markets and will be beneficial to both borrowers and investors. –  As regards stock markets and bond markets, major progress has been made in terms of integration. According to recent statistics, the euro, together with the dollar, appears to have been a major bond issuance currency in the first semester of 2001, with the euro accounting for close to 40% of total issuance.
This is an important factor explaining why, contrary to many other experiences with international crises, the financial systems of emerging market economies were extremely resilient during the global financial crisis, and expansionary monetary policies have been very effective because of well functioning financial systems. I will illustrate these points with the case of Chile. Even though capital requirements in the Chilean banking industry still follow Basel I (only credit risk-weighted assets), it is possible to infer that the new BIS capital requirements do not appear restrictive. In fact, considering estimated capital charges due to market and operational risk, Tier 1 and Total Capital indicators are considerably above the BIS minima for 2019 (Table 1). This capital looseness allows for coverage of the conservation buffer and also the countercyclical buffer. As for common equity, more precision is needed. In its most acid definition, common equity corresponds to “paid-in capital”, which represents approximately 65% of Tier 1 capital. In somewhat looser definitions, retained earnings may be accounted for as common equity, which in that case may capture as much as 70% of Tier 1 capital. Either way, implementing a limit on the common equity to risk-weighted assets (RWA) ratio should not represent severe restrictions. Additionally, the Tier 1 leverage ratio for the Chilean banking system is  BIS Review 124/2010  5  approximately 7%, more than twice the BIS preliminary suggestion. The healthy capital condition of the industry average is reflected at the individual bank level (Figure 5).

6 For example, the SBIF may require that the effective net worth of the bank or banks involved be more than 8% and up to 14% of their risk-weighted assets; or demand that the limit of the loans granted by a bank to another financial institution be reduced to 20% of the effective net worth (section 35, banking law). Concluding remarks The challenges facing emerging market economies are different from those of industrial countries. While the latter struggle with ensuring a sustained recovery from the Great Recession, the former have to manage a healthy and vigorous process of growth, which is not exempt from tensions. The need of the world to rebalance saving-investment across countries will have as counterpart capital flows adjustments. Exchange rate flexibility, avoiding serious misalignments, should help to smooth this process. It is tempting to think that emerging economies did not suffer the financial crisis for having better regulatory framework than industrial ones. However, the issue is somewhat more complicated. In some way, emerging markets enjoyed also less complexities and smaller sized financial systems. For the current level of development and the size of the financial system, regulations appear to have worked fine. But, the challenge is how to allow continued financial development in the context of a solid financial system. For this reason it is very important to learn from mistakes in more mature markets, and to participate and analyze coming changes in the global financial landscape.
BIS central bankers’ speeches  Chart 5:  Chart 6:  Net migration(a) from Ireland overwhelmingly to economies outside the euro area since the crisis  Risk-sharing in EMU substantially lower than in Canadian, US and German federal systems  (a) Cumulative net migration between 2009–14 from Ireland by destination. Source: Central Statistics Office of Ireland. Source: IMF – Toward a fiscal union for the euro area, technical background notes (September 2013). Based on Hepp and von Hagen (2012) for Germany; Asdrubali, Sorensen and Yosha (1998) for the US; Balli, Basher and Rosmy (2011) for Canada; and Afonso and Furceri (2008) for the EMU and EU. Chart 7: Rest of the world now borrowing from the euro area as a whole  Source: Eurostat (ESA 95 definitions).

Since the financial crisis all major advanced economies have been in a debt trap where low growth deepens the burden of debt, prompting the private sector to cut spending further. Persistent economic weakness damages the extent to which economies can recover. Skills and capital atrophy. Workers become discouraged and leave the labour force. Prospects decline and the noose tightens. 1  At market prices. In PPP terms it is third largest after China and the US. BIS central bankers’ speeches  1  As difficult as it has been, some countries, including the US and the UK, are now escaping this trap. Others in the euro area are sinking deeper. This relative performance underscores the importance of policy and institutions, particularly those that share and transfer risks. Building institutions at a time of reform fatigue may not be easy, but it is essential. Before I draw out this crucial point, I would like to quickly review how we got here. 2. Setting the debt trap  Building the debt that now weighs on our economies was the work of a generation. In the decade before the crisis, private financial balances became unsustainable. UK households borrowed 4% of GDP year after year; Irish households at more than twice that rate. Household debt peaked close to 100% of GDP in the UK, and 120% in Ireland. 2 This borrowing was largely for consumption and real estate investment rather than businesses and projects that would generate the earnings necessary to service those obligations.
Ardian Fullani: Recent economic and monetary developments in Albania Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the press conference on the Monetary Policy Decision of the Bank of Albania Supervisory Council, Tirana, 30 November 2011. *  *  *  Today, on 30 November 2011, the Supervisory Council of the Bank of Albania reviewed and approved the monthly Monetary Policy Report. Based on the analysis of Albania’s latest economic and financial developments and following discussions on the performance outlook, the Supervisory Council of the Bank of Albania decided to cut the key interest rate by 0.25 percentage points. Following this decision, the interest rate for one week repurchase agreements fell to 4.75%. This key interest rate cut was triggered by contained inflationary pressures along the monetary policy time span and expectations for a more prudent fiscal policy over the period ahead. The Supervisory Council judged that this decision would provide appropriate monetary conditions to meet the inflation target over the medium run. It would also increase monetary stimulus and promote economic activity in Albania. (Let me now proceed with an overview of economic developments and main issues discussed at today’s meeting.) *** Annual inflation rate was 3% in October, slightly up compared with the previous month’s figure. Annual consumer price rise continues to be influenced substantially by high food, oil, and primary commodity prices in global markets. These prices have been reflected in a higher contribution of imported inflation to domestic inflation throughout 2011.

We therefore designed and implemented a regulatory programme that combined rule-making and enforcement with active education and advisory support to help firms understand our expectations and meet them. We also worked to build stronger cooperation arrangements with authorities in other countries with remittance links to MSBs in Malaysia. As a direct result of this programme, the share of MSB companies presenting higher risks continues to reduce dramatically. Earlier this year, we completed a year-long project within Bank Negara to further strengthen the Bank’s surveillance of ML/TF risks in the MSB industry and improve our ability to identify illegal or unreported MSB activities, through the use of data analytics. The industry itself, through the Malaysian Association of Money Services Business, has been instrumental in leading innovative approaches to public outreach and engagement aimed at capturing a larger share of informal remittances. In the coming quarter, the industry will introduce its own MSB App, providing consumers with convenient access to price comparisons, locations of service providers, customer reviews and the ability to lodge complaints and report illegal MSB activities. Regulatory changes to facilitate innovation It remains extremely important to the Bank that we continue to provide an environment that encourages innovation in the financial industry, including in the MSB sector.
It is important to reiterate that we continue to project that the convergence requires the economy to have negative gaps for a few quarters, as this is necessary for the effects of the macroeconomic imbalances of previous years to dissipate. We must keep in mind that this is no simple process, nor is it risk-free. The road to inflation reaching 3% is still long and we must walk it while carefully analyzing each piece of information we receive. We all have witnessed the cost that high inflation means for families. Of the effort that every citizen of our country has had to make in order to make their income accommodate price increases beyond 6  what we were accustomed to. That is why, although this is not a cost-free process, the benefits of low and stable inflation are substantially higher, especially for the most vulnerable households. Although conditions are moving in a favorable direction, we cannot declare victory prematurely. Quite to the contrary, we must redouble our efforts and be very attentive to how the economy unfolds and its implications for inflation. True enough, this also means that we must take on many other challenges that these difficult years have left us with as a legacy. One such challenge is the need to rebuild the capacity of our economy to withstand adverse conditions. As we learned during the pandemic, the shocks that can affect us come not only from economic variables.

Projections The central scenario projections contain limited changes with respect to the March Report. Inflation is expected to continue to fall and will converge to the target within the second half of 2024. For December of this year, the annual variation of total CPI is foreseen at 4.2%, compared with the March estimate of 4.6%. Core inflation will end 2023 at 6.5%, which compares with the 6.9% projected in March. Both indicators will converge to 3% during 2024 and will remain in the neighborhood until the end of the policy horizon, that is, the second quarter of 2025 (figure 16). Core inflation will decline more noticeably towards the end of 2023 and the beginning of 2024, as anticipated in the March Report. The projections reiterate that, in the short term, the monthly variation of services inflation will continue to exceed its historical averages. This incorporates the greater rigidities that these prices normally present and the impact of the still-high inflation on the usual repricing mechanisms. Goods inflation, meanwhile, will benefit from a lower than expected trajectory of the real exchange rate (RER) in March. This is consistent with the nominal appreciation of the peso in recent months, in a context where, as I mentioned, local uncertainty has diminished. Looking ahead, the effect of tight external financial conditions continues to be considered. Compared to March, activity projections show minor changes, mainly associated with the mining industry. This year, the annual variation of GDP will be between a 0.5% fall and a 0.25% rise.
Mr George takes a look at recent developments in the UK economy against the background of global influences in the international financial environment  Speech given by The Rt Hon Eddie George, Governor of the Bank of England, at the City Council Dinner hosted by the Glasgow Chamber of Commerce on 18 January 2000. *  *  *  Mr Chairman, my Lord Provost, Ladies and Gentlemen, I always enjoy my visits to Scotland. And I’ve been particularly looking forward to this visit since I read a Business Comment headline, in one of your newspapers on Friday, referring to the warm welcome I could expect on this occasion - following last week’s decision by the Monetary Policy Committee to put up interest rates! It has to be said that some of the rest of the article, and some other press comment on Friday was less welcoming! We - the MPC - were variously accused of “ignoring the pain suffered by firms north of the Border”, of “being willing to sacrifice Scotland’s economy just to cool the overheated London property market”; and of causing the Scottish economy once again to suffer because South-East England is overheating. Well I’m a great believer in free speech, but let me give you some relevant facts. The MPC sets interest rates to achieve the Government’s target for retail price inflation in the UK economy as a whole consistently over time. Those are our marching orders.

Prior to the crisis, internal trade imbalances in the euro area had been primarily financed via transactions between country banking sectors. Following the onset of the crisis, the interbank market became fragmented, with a marked reduction in cross-border transactions. It became increasingly clear to the ECB that this impairment in the interbank market interrupted the even transmission of monetary policy across the euro area. The ECB responded by introducing full allotment – we provided as much liquidity as the market required at our main refinancing rate. By statute we only lend against good collateral and so more lending by us means more demand for collateral. The other important monetary policy measure with regards the functioning of the repo markets is the asset purchase programme (APP), and in particular the public sector purchase programme 3/5  BIS central bankers' speeches  (PSPP). It is worth recognising firstly that although the APP has led to a shrinking pool of liquid securities, it has also resulted in a net increase in liquid assets through bank reserves in exchange of inter alia non-HQLA marketable securities. But the APP has clearly reduced the available pool of L1 securities for other investors. To the extent that non-banks seek to maintain their holdings of government securities, this is likely to cause additional pressure on the repo market.
There may be a conflict between the role as supervisor and the role of being a lender of last resort. If a bank would fail, being supervised by the central bank, the central bank may feel more inclined to provide liquidity support than is economically defendable. Bankers may know this and the case for moral hazard may therefore be stronger than with a separate supervisor. Rules for public administration of troubled banks outside the central bank may give some help in this respect. There may also be a conflict of interest relating to monetary policy. If a bank fails while being supervised by the central bank, this may affect the central bank’s reputation and credibility. In my view, these are important arguments, because credibility of the central bank is basic not only to systemic stability but also to the conduct of monetary policy. What is the role of the central bank in relation to financial stability when there is an independent supervisory authority? There are still remaining the increasingly important questions concerning the macroeconomic “oversight” or macro prudential supervision of the financial system. As a matter of fact, these questions often tend to be neglected when the ordinary supervision remains within the central bank, because they are in many ways different in character from the day to day supervision. To effectuate its responsibilities of conducting monetary policy and ensuring a stable payment system, a central bank must monitor the risks in the financial sector.

When the Swedish currency depreciated, the borrowers could not repay the higher loan values because their revenue stream was in local currency. The banks believed themselves to be hedged against the foreign exchange risk since they were funded in the currency of the loans given, but they failed to see the corresponding increased credit risk. Other risks were less prominent in the Swedish crisis but, in my opinion, will be of increasing importance to banks all over the world. Among those are operational risks. Several recent financial debacles, such as the Baring crisis, were due to operational risk. Even though the Y2K problem was successfully managed, the huge computer systems of banks could cause large losses if technical or other failures occur. Another risk, which in my mind will become increasingly important, may be called “strategic risk”. The financial market in most countries is highly competitive. In order to survive and prosper, banks must take bold decisions on new activities, new establishments, mergers, technological investments and so on. Decisions like these have to be taken, but should they go wrong, banks may suffer large losses and may even go bankrupt. To handle these and other risks, internal controls and internal audit systems are becoming increasingly important. The huge mass of information in modern banking makes it impossible for supervisors to monitor individual transactions.
The remaining banks have also made appreciable improvements to their levels of own funds through various means such as the issuance of capital instruments, asset disposals or retained earnings, in line with the recommendations on dividend pay-outs made by the Banco de España over the past two years. 3. Cost of the reform of the banking sector  At this stage we might ask what the necessary total cost has been to ensure the stability of the banking system and how it has been distributed among the various parties involved. And, specifically, we can ask what the taxpayer has contributed in this process. An accurate reply to these questions is no easy task, as two factors combine to complicate the estimations required. First, not all aid has already been disbursed; rather, it consists of guarantees covering against future losses that only have a certain likelihood of occurring. Second, not all aid disbursed will entail a loss for the public coffers, insofar as it may be partly or fully recouped through its return by the recipient banks themselves or from the proceeds of the sale of State stakes in these banks. That said, a good starting point to disentangle the matter is the note published last week by the Banco de España,1 which included an update of the different types of public financial assistance provided to the banking sector in the period 2009–2013.

Fernando Restoy: Europe in the aftermath of the crisis Closing address by Mr Fernando Restoy, Deputy Governor of the Bank of Spain, at the seminar “Europe in the aftermath of the crisis”, organised by the Association of Economic Information Journalists (APIE), at the Menéndez Pelayo International University (UIMP), Santander, 20 June 2014. *  *  *  Introduction Thank you very much, Miguel Ángel, for your introduction. And thanks again for inviting me to close the course organised by APIE at the UIMP. As in previous years, it is a real pleasure to be among you. I will take the opportunity to offer some thoughts on the situation of the Spanish banking system and the challenges it has ahead, two years after the approval of the financial assistance programme for Spain, and five months after the conclusion of this programme once its objectives were met. In particular, after discussing the macroeconomic environment and reviewing the transformation of the banking sector over the past two years, I shall focus on the public cost the process has entailed and highlight the main challenges facing both the financial industry and the financial authorities. 1.