samchain/econo-pairs-v1 huggingface dataset:
Another institution set up during the crisis, in which the FROB has a stake, the Sociedad de Gestión de Activos Procedentes de la Reestructuración Bancaria (Sareb), also played a significant role in this process. Between December 2012 and March 2013, Sareb assumed property development loans with a gross value of approximately € billion and foreclosures of € billion. Thus, against a background of notable declines in their activity levels, banks have managed to reduce the weight of troubled assets on their balance sheets very significantly. Specifically, the non-performing loans ratio has decreased by more than eight percentage points and currently stands at 5.7% of total credit. Foreclosures, meanwhile, are at half the level recorded in 2014. Over this period there was also a significant improvement in the solvency ratios of Spanish credit institutions, which increased their tier 1 capital ratio from 7.5% in 2007 to 13.5% at the end of 2018. Despite these improvements, the Spanish financial sector clearly continues to face significant challenges. Among other factors, these arise from a non-performing loans ratio that is still higher than before the crisis, a rate of return below the cost of capital, and capital levels that, despite exceeding the minimum regulatory requirements, are on average below those of other European countries and below those needed to restore its reputation. 1  Consolidated groups and institutions not belonging to a group that are Spanish owned.

In  3/7  addition, the number of bank branches has declined by 43%, while the number of Spanish banks1 has fallen from 122 at the start of the crisis to 61 in 2018. Also, all the former savings banks, apart from two, have been transformed into commercial banks, and most of the mergers and takeovers that have taken place have given rise to healthier institutions and have resulted in significant cost savings. The FROB, for its part, has played a prominent role in promoting some of these consolidation processes. These efforts to correct the excessive size of the sector were also accompanied by a significant balance sheet clean-up. As we all know, the financial crisis caused the quality of Spanish bank assets to deteriorate significantly. Indeed, in just five years the nonperforming loan ratio reached unprecedented levels (of around 14% at the end of 2013) and foreclosures rose to over € billion in 2014. The decline in the return on assets and the increase in net provisions for bad debts caused the banking industry as a whole to post a loss in 2012. This weakened bank solvency and, moreover, led to significant capital requirements for some banks, to the extent that public support was necessary to cover the capital shortfalls identified and to guarantee financial stability and, ultimately, the deposits of the general public. The FROB was once again fundamental in this area since, along with the deposit guarantee scheme, it injected around € billion of capital into the system.
Along with measures that penalize characteristics associated with the negative externalities from failure, these changes work against the incentive to be too big to fail. 4  BIS central bankers’ speeches  Policy measures that alter incentives and reduce the probability of distress A number of steps have already been taken that reduce the probability of failure. For example, there has already been considerable progress in forcing firms to bolster their capital and liquidity resources. On the capital side, consistent with the Dodd-Frank Act, Basel III significantly raises the quantity and quality of capital required of internationally active bank holding companies. This ensures that the firm’s shareholders will bear all the firm’s losses across a much wider range of scenarios than before. This should strengthen market discipline. Meanwhile, to the extent that some of the specific activities that generate significant externalities are now subject to higher capital charges, this should cause banks to alter their business activities in ways that reduce both the likelihood and social cost of their failure. Moreover, the new Basel regime explicitly adjusts capital requirements upward based on size, complexity, interconnectedness, global exposure and substitutability – attributes that are proxies for the negative externalities generated by failure. If a bank is deemed a global systemic financial institution or G-SIFI, then it will have to hold a greater amount of capital relative to its risk-weighted assets compared to a less systemic institution.4 The notion behind the SIFI surcharge is a simple one.

Eddie Yue: New and important frontiers of financial development reached in 2017 Welcome remarks by Mr Eddie Yue, Deputy Chief Executive of the Hong Kong Monetary Authority, at the Hong Kong-London Financial Services Forum 2017, Hong Kong, 18 December 2017. * * *  Opening Richard, distinguished guests, ladies and gentlemen, good afternoon. I would like to welcome you all to the Hong Kong-London Financial Services Forum 2017, especially our guests travelling from London. This is already the seventh Forum since the first Hong Kong-London RMB Forum convened back in 2012. The Forum has proved to be an effective platform for the private sectors in the two places to collaborate and promote the use of RMB in the international markets as well as to grasp the associated business opportunities. Last year, London and Hong Kong decided to broaden the scope of the Forum to cover not only RMB business but also other new and important frontiers of financial development including infrastructure financing, the Belt and Road (B&R) Initiative, green finance, as well as Fintech. Looking back, it was a good move. As 2017 is drawing to a close, I think most of you would agree that B&R and fintech are the two hottest buzzwords in the financial services sector this year. RMB Internationalisation But that is not saying offshore RMB business has been all quiet in the past year. On the contrary, 2017 witnesses important milestones in Mainland China’s capital account liberalisation.
The large Ormen Lange and Snøhvit projects have contributed to the growth in investment. High oil prices led to buoyant activity even at fields that have been in production for a long period. Investment activity is also expected to remain high after the large development projects are phased out. Information from the regional network suggests that petroleum investment is generating considerable impulses to activity in Norway’s coastal regions. According to the network, suppliers to the petroleum industry are expecting sustained strong growth over the next few months. Activity in the housing market appears to be buoyant again in 2006. In the past two years, housing investment has risen to a very high level. In 2005, the number of housing starts was the highest since the beginning of the 1980s. Over the past six months, signs of labour market tightening have come into increasing evidence. Employment has accelerated and unemployment is falling rapidly. It appears that wage growth will be somewhat higher in 2006 than in 2005, as expected. Output has increased more rapidly than capacity over the past two to three years. The margin of idle capacity prevailing at the beginning of the upturn has been utilised. At the same time, consumer price inflation adjusted for tax changes and excluding energy products (CPI-ATE) remains low and is lower than the inflation target. Other indicators of underlying inflation also show low inflation, albeit not as low as the CPI-ATE. In Norway, price impulses from imported consumer goods have been negative virtually every year since the mid-1990s.

This is partly due to increased trade and a shift in imports towards low-cost countries. The rise in prices for domestically produced goods and services pushed up CPI-ATE inflation until this year. Since the beginning of the year, domestic inflation has edged down, hovering around 1.3 per cent. The rise in prices has been lower than expected for both goods and services. There may be several factors behind the low inflation rate. Strong competition between various producers within the food industry and the construction industry may have had a dampening impact on inflation. In addition, productivity growth in retail trade has been high in the past few years. Intensified competition may also have contributed to curbing the rise in prices for banking and insurance services. Global growth has been high in recent years. In the US and in China, growth has been high for a long period. Growth picked up in Japan last year, and this year conditions are conducive to increased  BIS Review 90/2006  1  growth in the euro area. Growth in China is expected to remain strong and contribute to pushing up growth in the global economy. Growth in the US is expected to be somewhat lower. Against this background, it appears that GDP growth among Norway’s trading partners will be high again this year and remain firm over the next few years. However, the housing market in the US has weakened more than expected in recent months, and the uncertainty associated with economic developments in the US ahead has increased.
2  BIS Review 49/2005  Pre-requisites of the Islamic banking system The development of a vibrant and dynamic Islamic banking system that has a meaningful role in a nation's future economic and social development requires well-defined strategies that focus on two main areas, building institutional capacity and the development of the supporting financial infrastructure. Allow me to highlight the key areas of the strategies. The first task is to identify the nature of Islamic banking system that is appropriate for the country - whether to ultimately adopt a dual banking system where Islamic banks and conventional banks offering Islamic banking products operate in parallel with the conventional banking system, or alternatively to adopt a single banking system that fully accords the Shariah injunctions where all the banks are Islamic. Second, measures need to be in place to ensure that the Islamic banks are well-capitalised and resilient. For Islamic banks that are already in existence, clear criteria need to be specified on the minimum capital size that would enable them to be significant players in the market, be able to gain from economies of scale, have a diversified earnings base and stronger market presence. Such minimum size can either be achieved through organic growth or merger with a partner bank which would bring about the desired outcome in a shorter period of time. Incentives can be provided to induce the banks to consolidate while guidelines on minimum capital size can be imposed to ensure that the banks either merge or undergo a recapitalisation exercise.

Mugur Isărescu: Integrated supervision Opening speech by Mr Mugur Isărescu, Governor of the National Bank of Romania, at the Seminar “Integrated Supervision”, jointly organised by the Romanian Financial Supervisory Authority and the National Bank of Romania, Sinaia, 22 January 2014. *  *  *  Distinguished guests, Ladies and gentlemen, It is a pleasure for me to warmly welcome you to this seminar on Integrated Supervision. The newly established Romanian Financial Supervisory Authority and the National Bank of Romania decided to jointly organize the conference on this challenging topic that has recently come into the spotlight. I particularly want to thank our guests from the national supervisory authorities of Austria, the Czech Republic, Germany, Poland, United Kingdom and Ireland. I also welcome the experts from the World Bank, the International Monetary Fund and the European Commission who will generously impart their knowledge to all of us. I do wish all of you a pleasant stay here in Sinaia. This three days long seminar is an excellent occasion to learn, to exchange views and to generate professional ties. Allow me to say a few words about where you are. This is a premise of the National Bank of Romania’s training center, situated in Cumpatu district, in this lovely resort, Sinaia. The name Sinaia is an eponym of Mount Sinai. By the end of the 17th century, a group of Wallachian monks, led by Mihail Cantacuzino, a landlord of those times, went on a pilgrimage to Palestine and the Sinai Peninsula.
Per cent 10  10  8  8  6  6  4  Actual interest rate  4 Market expectations  2  2  0 1998  0 2002  2006  2010  2014  Source: Norges Bank  Norwegian households generally finance their mortgages at an interest rate that follows the short-term money market rate. Floating interest rates tend to vary widely over time. The interest rate level is very low at present, and long-term investments cannot rely on this interest rate spanning the life of a housing loan. According to money market expectations, the interest rate will eventually stabilise around 5½ per cent. This is consistent with an inflation target of 2½ per cent and a long-term real interest rate in line with the level abroad. This interest rate, with a mark-up for banks’ margins, provides a more realistic expression of the interest rate level that will apply over the loan’s life than the floating interest rate prevailing today. It may prove to be particularly challenging for borrowers to assess their debt-servicing capacity over time at a time when the interest rate is abnormally low. Such a low interest rate also places particular demands on banks in assessing the creditworthiness of borrowers. But experience has shown that the underlying cause of loans defaults can be overly optimistic assessments on the part of both the lender and borrower. House prices and developments in household credit influence consumption and housing investment.

Mobile banking will lead to increased outreach, increased efficiency and productivity as well as increased returns for businesses. Let me once again assure you, Mr. Chairman that, the Bank of Zambia is committed to providing an enabling environment through appropriate regulation for banks and financial businesses that wish to promote financial inclusion. We appreciate the Mobile Banking initiative by Celpay Zambia Limited and look forward to greater investment in financial inclusion in our beloved country. I thank you. BIS Review 111/2009  3
I might add here that the currency of Macau, the pataca, has been linked to the Hong Kong dollar since as long ago as 1977. But not all economies are in a position to meet the preconditions necessary for linked exchange rates to endure. In the aftermath of financial crisis in Asia and elsewhere, many economies are searching for new approaches to exchange rate management. The recent trend is clearly towards more flexible exchange rate mechanisms. We cannot ignore a smaller camp, though, that is opting for greater fixity of exchange rates, supported by more robust institutional structures than have sometimes been in place in the past. The integration of European monetary systems in the form of EMU is an obvious example. Similarly, a handful of economies have successfully adopted currency board systems similar to our own. We must recognise, however, that many economies do not currently have the preconditions to make such a regime work successfully. It seems inevitable that they will have to live for the time being with some sort of managed float. The disadvantages of this system are that the lack of a transparent anchor and of a clear commitment to some well-defined policy objective make credibility difficult to establish. These conditions invite over-shooting in financial markets, as speculators attempt to test the limits to which the authorities are willing to let the exchange rate move. How can the authorities anchor policies and expectations in such an environment?

But there are also costs: a loss of seignorage; constraints on liquidity management, including the provision of lenderof-last-resort support; and substantial costs associated with the transition process. In the case of Hong Kong, we would also face important legal issues regarding the provisions of the Basic Law, as well as how to provide an efficient US dollar clearing and settlement system in Hong Kong. We will continue to study these issues because, at the very least, research into all possible options helps us to clarify and refine our existing policies. I am, however, confident that the measures taken last autumn to strengthen the currency board arrangements, and the additional credibility gained from weathering the storm of 1997-98, have put the existing system on an even more solid — and sustainable — footing. Conclusion To recap the main arguments in this presentation, let me reiterate that exchange rate policies must meet the needs of the economy they serve if they are to be more than mere empty promises. They must also be compatible with broader policy choices and capable of sustaining the external shocks that arise in an increasingly globalised financial environment. In particular, as the Asian financial crisis has demonstrated, the exchange rate regimes devised for small and open economies must be able to deal with ‘hot’ capital flows, which are not only the conductors of external shocks, but increasingly the main agents of volatility and instability. This is no easy matter, as the collapse of one exchange rate policy after another has shown.
After the introduction of inflation targeting in 2001, the Central Bank has no specific objective as far as the exchange rate is concerned. This is in accordance with its policy of targeting inflation and a floating exchange rate. This has been interpreted to mean that the Bank is completely disinterested in developments in the exchange rate. This is not true. The exchange rate for the króna is very important, the events of the past year or two are more than sufficient indication of that. As the Bank has previously pointed out, the real exchange rate at present is not far from average over the past 20 years, nor much above the average of the past 10 years. The nominal exchange rate since the beginning of this year is in fact slightly lower than it was during the same months two years ago. The exchange rate for the króna is determined by the situation and strength of the national economy, external equilibrium and market expectations. The present exchange rate thus reflects to a considerable extent factors which the Central Bank can do little to influence. The large exchange rate fluctuation from 2000 to 2002 can be attributed to specific circumstances, and the exchange rate is unlikely to fluctuate as substantially in the immediate future as it did during this period. It should be borne in mind, however, that the nature of the Icelandic economy and its small size does mean that currency fluctuations as a rule will be greater than between the currencies of larger economies.

This is in line with international developments in recent years, resulting in Central Banks being entrusted with a single main objective, i.e. to promote price stability. Price stability was set as the primary objective of monetary policy because inflation is above all a monetary phenomenon. There is little point in setting objectives for monetary policy which it cannot achieve. Applying monetary policy to achieve price stability also contributes to economic stability. This, in turn, is a prerequisite for future growth in the economy and making the most efficient use of its scarce resources. Other public authorities, industry and interest groups also need to adapt their decisions to accord with this inflation targeting.
In concrete terms, membership of the euro should bring more stability and prosperity. In this respect, the Monetary Union has already taken considerable steps towards integration. But a common internal market and a single monetary policy alone is not enough to achieve this in the long run. With stricter budgetary rules for euro area countries, a stability mechanism and banking union, the Monetary Union is in a considerably better position today that it was at the start of the crisis. But despite these steps towards integration we still can’t speak of a completed Monetary Union. To sit back now, given what has been achieved, would therefore be wrong. Developing the Monetary Union further is a permanent undertaking. As a matter of principle, the prosperity of each individual country in a monetary union always depends on the financial and economic policies of the other Member States. Member States find themselves, as it were, in a community with a shared destiny. All governments are therefore well advised if they take the other Member States into account and coordinate their policies where appropriate. Member States thus not only need a common monetary policy, they also profit when they share more sovereignty in other policy areas. When I talk about “sharing sovereignty”, this in no way means that Member States lose their independent decision-making authority, let alone their national identity. On the contrary, the more sovereignty Member States share, the more influence they can sometimes gain. Let me illustrate this with an example.

Managing a crisis also requires laws and regulations that enable a problem institution to be closed down quickly or managed in some other way. Sometimes it is necessary to take measures very quickly, perhaps even the same day. It is not possible to wait for the usual court process to be completed. To avoid this leading to any form of malpractice, the injured party should have the opportunity to obtain redress and damages afterwards. We had this kind of a law in Sweden during our financial crisis. Another question is when a court should be allowed to stop important authority decisions intended to deal with acute bank problems, such as closing a problem bank. When a bank needs to be closed, a difficult balance arises, between the owners' interests and the savers' interest, which are both safeguarded in law. One very current example of this dilemma in Sweden is the case of Custodia. Both the country administrative court and Finansinspektionen (the Swedish financial supervisory  2  BIS Review 83/2006  authority) have made their assessments on the basis of what they should take into account, that is to say the customers' interests and the company and owners' interests respectively. However, I feel that it is very unsatisfactory that we in Sweden do not have a clear legal framework that can manage this type of situation and I assume that these difficulties will quickly be repaired. Crisis prevention also includes creating sufficiently strong public authorities.