samchain/econo-pairs-v1 huggingface dataset:
Likewise, the Committee rejected proposals for supplemental disclosures that would be optional under the New Accord. This has admittedly resulted in disclosure requirements that are more detailed and perhaps less elegant than a simple expression of principles might be. But perhaps supervisors can take some comfort from the physicist who recommended that “if you are out to describe the truth, leave elegance to the tailor.” Consistency of Accounting Standards and the New Basel Accord One cannot discuss transparency and market discipline without considering the mechanics through which financial data are recorded and reported. And this brings me to a final key observation raised in comment letters, namely the industry’s position that if we are to leverage market discipline through better reporting, the Committee should clarify the differences between accounting standards and supervisory objectives. Numerous institutions have called on the Committee to continue to align the regulatory framework more closely with the converging standards in accounting worldwide. Many industry representatives have noted quite correctly that a greater degree of accordance is warranted especially now that the New Basel Accord includes explicit disclosure requirements intended to promote greater insight into a bank’s risk profile. Likewise, the Basel Committee’s treatment of provisions and the valuation of financial instruments must keep pace with changes in the relevant accounting standards.

Jaime Caruana: The importance of transparency and market discipline approaches in the New Capital Accord Keynote speech by Mr Jaime Caruana, Governor of the Bank of Spain and Chairman of the Basel Committee on Banking Supervision, at the Market Discipline Conference, Federal Reserve Bank of Chicago and BIS, Chicago, 1 November 2003. *  *  *  Overview Good morning. I would like to thank President Moskow, Malcolm Knight, and the staff of the Federal Reserve Bank of Chicago and of the Bank for International Settlements for organising and hosting this timely conference. It is a pleasure for me to join your discussion in Chicago today. I can think of few venues better situated to talk about markets and to explore the links between transparency, corporate governance, and the role markets can play to encourage prudent risk taking. Bank regulators in recent years have begun to view markets as an ally to our system of supervision. We have consequently sought to incorporate market discipline directly into the supervisory framework. Markets value well capitalised and well managed institutions as much as supervisors do, and can create rewards for banks that manage their risks appropriately. Yet banks can be very complex institutions and no market discipline is possible without widespread public access to timely, accurate, and comprehensive information on a bank’s exposures, its risk management processes, and its outlook for the future.
Combined with the growth differential the Spanish economy still enjoys, this has allowed Spanish institutions to negotiate the difficulties thrown up last year with a limited impact on their earnings, and this despite the difficulties in Latin American markets. In turn, historically low default levels in the domestic market, despite the strong expansion of credit in recent years, and the strength of own funds mean that, on the financial side, there are no constraints on the process of economic recovery. In this setting, rising to the challenge of a complex international financial situation underscores the importance for institutions of continuing to strive to improve the efficiency and solvency of our system. They must apply greater rigour to the analysis, extension and monitoring of credit transactions and  BIS Review 31/2003  7  make recovery procedures more flexible. The heightened competition in the Spanish banking industry, with the subsequent benefits in terms of efficiency for borrowers and depositors, will - combined with historically low interest rates - require of banks a major drive to cut costs so as to increase efficiency. The challenges posed by the current cyclical juncture should not see us forget other more structural and medium-term challenges affecting financial institutions and, specifically, banks, savings banks and co-operatives. Given the far-reaching consequences for banking, such challenges include most notably the New Capital Accord and the implementation of International Accounting Standards (IAS). It should be clear that these new regulatory aspects go beyond a mere alteration of laws, decrees or Banco de España circulars.

In this connection, the European Convention plans in the coming weeks to announce its proposed draft of the future European Constitutional Treaty, which shall be agreed at the Inter-Governmental Conference to be convened in 2004. As regards monetary policy, the ECB Governing Council has, with a view to adapting the operating arrangements of the euro area to the possible entry of new members, recently recommended changes in its voting procedures, in accordance with the provisions of the Treaty of Nice. The proposed Recommendation was approved by the European Council of 21 March 2003 and introduces a rotation system whereunder the number of governors entitled to vote at any one time is restricted to 15, divided into three groups on the basis of their voting frequency. Without delving into the details of the approved formula, I should like to stress that the criteria of representativeness used in determining the voting rights of each member of the Council will place the Governor of the Banco de España within the first group of Governors, who are authorised to vote in the ECB governing council most frequently, on an equal footing with Germany, France and Italy. The Spanish economy In an adverse external setting, the key characteristic of the period analysed in the Annual Report was the capacity shown by the Spanish economy to sustain a comparatively high growth rate of 2%, and to continue generating employment, which increased by 1.3%.
François Villeroy de Galhau: The role of banking in a sustainable global economy Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the World Conference of Banking Institutes, London, 17 September 2019. * * * Ladies and Gentlemen, I am delighted to be with you today. The topic that you have asked me to address – “The Role of Banking in a Sustainable Global Economy” – prompts us to think about the future. However, let me first say a few words about the present. The current context is one of increased uncertainty, which is already weighing on growth at the international level. Two threats are contributing to this: above all, trade tensions coming from the US, and second – of course – Brexit. Needless to say, this situation is not sustainable. It is the responsibility of politicians more than central bankers, to restore confidence. The latest example of this uncertainty is the spike in oil prices after the attack last Saturday on Saudi Arabia’s oil infrastructure. It is too early to rush to hasty conclusions; we should closely monitor the consequences on the oil market, which is characterised by a rather flexible supply and a subdued demand. Oil price has significantly decreased since June, by about 20%. If it lasts, this latest oil shock could increase inflation and hamper growth. In my remarks today, I will briefly start with Brexit before addressing two of our shared challenges for the future: digital transformation and green finance. I.

It was a clear priority of the G7 French Presidency this year. Second, regarding data protection, financial supervisors and authorities in charge of privacy have to invent new ways of cooperation to address data issues that have become central to financial services. Third, regarding competition and anti-trust policies, situations where “the winner takes most” while staying outside the scope of financial regulation should be adequately anticipated and addressed. And fourth, fair taxation, thanks hopefully to OECD work. “Stable coin” projects, including Facebook’s Libra, are a case in point. “Stable coins” are quite different from speculative assets like Bitcoins. However, regulators will have to keep a very close eye at the global level, and believe me, we will do it. At their meeting in Chantilly in July, G7 members have expressed a clear position: stable coin projects raise a sovereignty challenge, and “serious regulatory and systemic concerns, as well as wider policy issues, which both need to be addressed before such projects can be implemented.”1 France, as Chair of the G7 this year, has created a dedicated task force – as soon as the project was announced by Facebook. The task-force, chaired by Benoît Coeuré, will make its conclusions public and make recommendations in October. Our aim is to formulate a response that is common across all jurisdictions, and holistic, covering all the issues. And to quote only two of many requirements: it is imperative that such projects comply with anti-money laundering regulations; the anonymity of the users creates heightened risks.
The intention is that it should encompass not only the best, internationally agreed, principles of payment system design but also state-of-the-art technology. Leveraging on the technology used for the existing Hong Kong dollar RTGS system, this US Dollar Clearing System will offer a range of advanced and sophisticated clearing functions. These will include linkage with the Hong Kong dollar payment system to provide real time PvP settlement for US dollar-Hong Kong dollar transactions, as well as linkages with the stock and debt securities clearing houses to provide DvP settlement. For the general public, the System will enable banks to offer US dollar cheque deposit accounts, which means that US dollar payments can be discharged through the writing of a cheque in US dollars drawn upon a bank in Hong Kong. The various features of the system will be introduced in phases. All being well, we hope to see real-time interbank payments and PvP for US dollar-Hong Kong dollar foreign exchange transactions introduced by the third quarter of this year and US dollar paper cheque clearing and a linkage with the HKMA’s Central Moneymarkets Unit completed by the end of the year. People have asked whether we propose to introduce clearing in other foreign currencies once the US dollar system is established. In principle this would be possible. In practice there needs to be a business case. The HKMA is certainly ready to respond if there appears to be market demand for similar clearing systems for other major currencies.

As for the financial tensions that have shaken the Spanish economy in recent weeks, holding resolutely on a course towards fiscal consolidation is a pre-requisite for dispelling the mistrust stifling the economy. Therefore, the potential short-term costs will be amply offset once it becomes apparent that the efforts made are yielding results. The State and Social Security budgets for 2012 are pivotal to this strategy. Fortunately, while they have not yet been approved, many of the measures they envisage have already been implemented, thereby preventing precious time from being lost in adjusting the fiscal imbalance. In this respect, it should be stressed that cutting the budget deficit requires an unprecedented structural effort. The measures that have to be adopted must reduce debt in an environment in which the interest burden will be growing and where the double-dip in economic activity will affect tax revenue and some cyclical expenditure. In light of these conditioning factors, the consolidation strategy must obviously use all the instruments available, on both the expenditure and revenue sides. As regards revenue, various measures have been adopted affecting, above all, the direct taxes households and firms pay. A reduced rate has also been introduced to bring undeclared assets out into the open. Here, although the macroeconomic forecast for 2012 may be realistic, there are risks of slippage in projected revenue.
The benefits for monetary policy clearly outweighed the costs of  Page 3/4  Zurich, 22 September 2022 Thomas Jordan  News conference  the side-effects. Without negative interest, price stability could not have been ensured and economic developments would have been significantly less favourable. Negative interest will remain an important monetary policy instrument, which we will use if needed. Ladies and gentlemen, thank you for your attention. I now hand over to Martin Schlegel, who will speak about the mortgage and real estate markets. Page 4/4

Suffice it to say, it is conceivable that the Federal Reserve’s net-interest margin could be pinched in certain environments – say if the economic recovery turned out to be very robust. But our analysis shows that it is extremely unlikely that the Fed’s net-interest margin will turn negative. In part, that is due to the fact that the balance-sheet risk associated with the interest-rate mismatch is offset to a large degree by the fact that the cost of much of the Fed’s liabilities – the amount of currency outstanding – is zero. So when short-term rates rise, the cost of a significant portion of the Fed’s liabilities is unaffected. Making policy during a crisis involves making tough choices. Perfect solutions are not always achievable or even legally feasible. I can assure you that our decisions have been made carefully, always with an eye toward finding the right balance between the risks and rewards of alternative options. Most critical is our commitment never to take actions that might compromise our ability to retain our control of monetary policy and that might undermine our ability to achieve our dual mandate of full employment and price stability. Thank you for your kind attention. I would be very happy to take a few questions. BIS Review 94/2009  7
Reducing the risk of disorderly spillovers A strengthened global financial safety net alone does not address the tension between the need to recognise when one sovereign’s debt has become unsustainable and the need to avoid contagion across countries via a disorderly restructuring. To do that, we need to put in place mechanisms analogous to those we have put in place for banks to ensure that they can be resolved in an orderly fashion. This would have the added benefit of increasing the credibility of the IMF’s commitment not to lend to insolvent sovereigns, just as improved resolution regimes for banks has strengthened the credibility of the Bank of England’s commitment not to lend to insolvent institutions. Usefully, the IMF has launched important work on drawing lessons from recent experiences with sovereign debt restructurings 14. Here I offer three preliminary ideas which could reduce the systemic spillovers of sovereign debt crises: (i)  Managing the risk of sovereign crises  Sovereign balance sheets could be made safer by using state-contingent bonds to increase risk-sharing with private sector creditors. For example, GDP-linked bonds advocated in a Bank of England paper in 2013, 15 are debt instruments that directly link principal and interest payments to the level of a country’s nominal GDP and so provide a form of ‘recession insurance’. Economies with higher GDP growth volatility or countries where monetary policy is constrained in its ability to respond to growth shocks (such as those in a monetary union) are likely to benefit most.

BIS central bankers’ speeches  3  Costly and inefficient Self-insurance remains the most popular tool. Individual countries’ reserves remain the largest component of the global financial safety net – reserves have risen from $ trillion in 1995 to over $ trillion now. To be sure, self-insurance is prudent to a point – indeed it is something we have encouraged banks to do. But there are several problems with excessive reserve accumulation: (i)  First, reserves are distributed very unevenly across and within some regions. Emerging markets with adequate reserves (largely in Asia and the Middle East) are over-insured by about $ trillion in total. By contrast the Central and Eastern European region and Latin America are underinsured by around $ billion [Chart 3]. This suggests the distribution of reserves does not correspond well to the distribution of risks. (ii)  Second, even when they are in abundance, there are doubts about countries’ willingness to run down their reserves. In the last financial crisis, nine of the largest emerging market economies refrained entirely from using reserves. There is some evidence that markets judge countries according to their relative rather than absolute level of reserves. So no one wants to blink first by running them down. (iii)  Third, issuing high yielding local currency debt to purchase reserves is costly to emerging markets, resulting in an annual cost of around 0.5% of GDP 8. (iv)  Finally, reserve accumulation causes distortions to domestic economies with potential spillovers to the global system.
27.11.2020  Opening address of the 19th Conference – Club de Gestión de Riesgos de España Margarita Delgado Deputy Governor  Introduction Many thanks to the Risk Management Club for their kind invitation to open this annual conference. We are now into its nineteenth edition that, inevitably, will focus on the new challenges in the aftermath of COVID-19. The title of this conference refers to the “new world” that will be awaiting us after overcoming the crisis caused by the pandemic. Needless to say, we all wish that this happens as soon as possible. It may seem a little excessive to talk of a “new world” after the pandemic, but I believe to some extent it will be. We should remember that crises are periods of change, in which what is established is called into question. Each crisis is certainly different from previous ones. Or rather it should be different, at least if we supervisors, regulators and banks learn from the past and avoid making the same mistakes. In any event, it seems we have now been hearing the word “crisis” more than ever for over a decade. Until relatively recently, when we referred to “the crisis” we had the global financial crisis in mind. Now, sadly, we must clarify which crisis we are talking about. It could be said that the society we live in may be the result of how we have tackled and resolved each of the crises we have faced.

Coordinated application of these tools will clearly pose a challenge to the new Spanish macroprudential authority (AMCESFI), which published its first annual report on 31 July. I think it may be inferred from what I have said that the definition of macroprudential policy is currently evolving. In the present decade, we are moving from the drawing board to implementation, that is to say from the theoretical framework to practical application, while attempting to learn from experience in other jurisdictions. 4  One of the issues currently under debate is the usability of these buffers and the possible constraints that may limit it. As I have already mentioned, the amendments to the Basel III microprudential framework also include specific capital buffers, for example, to cover the systemic dimension of some institutions or to conserve capital. Clearly these liquidity and capital buffers are helping in the present situation, but banks are reluctant to use them, given the implications that a reduction in the capital ratio would have on the markets and the fact that it could potentially affect the coupon payments on certain issuances. In this respect, the macro and microprudential authorities need to collaborate to coordinate the measures to be adopted in this context. Evidently, many of the actions taken in response to the crisis have implications for both types of supervision. Some examples would include the recommendations on the use of liquidity and capital buffers, supervisory expectations regarding the timeline and conditions for replenishing buffers and, more recently, recommendations on dividend distributions and variable remuneration payments.
5  Central Bank of Malta, Financial Stability Report Update – June 2011, 17 October 2011. BIS central bankers’ speeches  5  It also noted a slight deterioration in the corporate non-performing loan ratio as an increase in the ratio for certain sectors, particularly construction and real estate activities, was offset by an improved ratio in other sectors. The Update noted that credit risk is being partly mitigated by tight credit standards and cautious lending behaviour on the part of the banks. However, it also expressed concern that credit and concentration risks remain elevated while provisioning levels remain inadequate. In that light, the Central Bank continues to urge the banks to make higher loan loss provisioning – especially for loans related to construction activity – and to strengthen their capital base. These measures would not only enable the banks to meet potential shocks but would also allow them to prepare themselves better for compliance with stricter Basel III regulatory requirements. On the funding side, the resilience displayed by the banking system in the face of adverse international conditions is attributable to the prudent traditional business model that has been a historic characteristic of domestic banks, one that places a strong reliance on retail deposits. This business model has served Malta well as the traditional sources of funding have proven to be very stable, including at a time of international tension.

Replenishing their inventories, companies substantially increased their demand for commodities worldwide. Russia is a major producer of key commodities. High demand for Russian exports spurs economic growth this year. As companies complete their inventories, the effect of this factor will be tapering off gradually. The growth of oil export quantities will also be supported by the easing of the OPEC+ oil production cuts in response to the recovery of demand. Taking this into consideration, we have raised the oil price path in our forecast by 5 US dollars per barrel in the next three years. According to our preliminary estimates, the expansion of oil output under the new OPEC+ agreements will add about 0.1 pp to GDP growth this year and 0.2–0.3 pp next year. Another important growth driver is domestic demand, including both consumer and investment demand. Considering these trends, we have revised our economic growth forecast for this year upwards from 3–4% to 4–4.5%. After the recovery, the economy will expand at a pace close to its potential. We forecast that GDP will equal 2–3% in the next two years. The possibility to achieve higher economic growth rates will depend both on the expansion of production and logistics capacities and on labour resources, their expertise and performance. T hird. Monetary conditions have been progressively adjusting to the earlier increases in the key rate, but are still accommodative.