samchain/econo-pairs-v1 huggingface dataset:
100 and 500 billion, accounting for a share of 23 per cent. The balance 23 banks individually hold assets less than Rs. 100 billion and account for only 11 per cent. 4  BIS central bankers’ speeches  The non-banking sector is highly fragmented and constitutes 58 NBFIs, of which 48 are Licensed Finance Companies while the balance 10 are Specialised Leasing Companies. The total assets of the NBFI sector amount to Rs. 750 billion. Similar to the structure of the banking sector, 13 large NBFIs, each holding assets over Rs. 20 billion, account for 74 per cent of the NBFIs market share. Meanwhile 13 per cent of the market share is accounted for by 8 NBFIs holding assets between Rs. 8 and 20 billion. The remaining 37 small companies, each holding assets less than Rs. 8 billion, account for only 13 per cent of the NBFI sector. Since the fragmented financial system is highly vulnerable to external shocks, consolidation would help to build a strong and stable financial system. Reason 5: Repositioning the financial sector for delivering a cost-effective service Ladies and gentlemen, as Sri Lanka is moving towards a higher growth trajectory, we will need a more focused financial sector with a higher contribution, particularly from the banking and non-banking sectors. Intermediation by the financial sector in a more productive manner is crucial for achieving a balanced and inclusive growth in the country. Recently, there was an interesting article in The Economist Magazine of 12 April 2014, captioned “The Slumps that Shaped Modern Finance”.

Singapore: Singapore consolidated its banks, leading to bigger and stronger banks whose interests were aligned to the long term interests of the economy. In early 2000, Singapore launched its bank consolidation process, together with the liberalisation of the banking industry. A major move in the local banking sector was the consolidation of the 6 local banking groups into the present 3 main local banking groups, thereby strengthening banks’ capabilities, building efficient management teams and enhancing operational effectiveness. This move strengthened the economic viability of all banks, and provided Singapore with better services and a competitive edge not only in the region but also in the global context. Thailand: In Thailand too, financial sector consolidation was initiated after the Asian financial crisis with the objective of improving the efficiency and transparency while reducing the number of smaller financial institutions. A restructuring package was introduced to consolidate the commercial banks and finance companies that were unable to recover by themselves. Further, competition and cost cutting have also been reasons that promoted consolidation. As the final outcome, the number of participants in Thailand’s banking sector is projected to shrink. Similar financial sector consolidation has been observed in several other Asian countries such as South Korea, Indonesia and the Philippines after the Asian financial crisis. This initiative has helped them to protect themselves from the recent global financial crisis that affected most of the Western world.
Her findings provide some support for a decrease in volatility around monetary policy meetings, but no strong evidence to suggest that financial market volatility around the publication of new data has changed after Norges Bank began to publish interest rate forecasts. Another study that might provide useful input is Ehrmann and Fratzscher’s (2007) analysis of developments in US market rates in the period between monetary policy meetings under two different communication regimes. I will close by concurring with Blinder and colleagues (2008) when they write that: “… the publication of projected paths for the central bank’s policy rate appears to be the “new frontier” in central bank communication. But it has been practised in so few countries for so few years that we have little empirical knowledge of its effects as yet. As more data accumulates, this should be a high-priority area for future research.” It is reassuring to know that the economist that has begun this important work is Lars Svensson. References Blinder, Alan S., Michael Ehrman, Marcel Fratzscher, Jacob De Haan and David-Jan Jansen (2008): “Central Bank Communication and Monetary Policy: A Survey of Theory and Evidence”, Journal of Economic Literature 46, 910-945. Ehrmann, Michael and Marcel Fratzscher (2007): “Social Value of Public Information – Testing the Limits to Transparency”, European Central Bank Working Paper 821. Holmsen, Amund, Jan F. Qvigstad, Øistein Røisland and Kristin Solberg-Johansen (2008): “Communicating monetary policy intentions: The case of Norges Bank”, Norges Bank Working Paper 2008/20.

Solberg Johansen, Kristin (2008): “Publishing interest rate forecasts – how does the market react?”, mimeo Stockholm School of Economics. Woodford, Michael (2005): “Central-Bank Communication and Policy Effectiveness”, NBER Working Paper Series 11898. BIS Review 110/2009  3  4  BIS Review 110/2009  BIS Review 110/2009  5  6  BIS Review 110/2009  BIS Review 110/2009  7
SPEECH DATE:  9 December 2022  SPEAKER:  Deputy Governor Per Jansson  VENUE:  Swedbank  Monetary policy when inflation is too high – prerequisites and challenges* “There are decades when nothing happens; and there are weeks when decades happen.” The words are said to be Vladimir Lenin's, but it is disputed whether that really is the case. Nevertheless, the quotation is very well suited to what I intend to talk about today. Once a year, I usually make a longer speech, which is also published on the Riksbank’s website. The most recent was in December 2021.1 My speech then was about the division of roles in macroeconomic policy, and my main message was that in the future fiscal policy needs to be more active than has been the case in recent decades.2 I emphasised in my speech that the inflation target needs to be symmetrical, that is, it is as important to counteract too low inflation as it is to counteract too high inflation. But at that time, too high inflation was not regarded as a particularly pressing threat, nor was it something I specifically mentioned in the speech. The situation has changed rapidly To recall how the situation looked at the end of January this year, one can look up the inflation forecasts of Swedish forecasters at that time. As energy prices had begun to rise, all forecasters believed that inflation in 2022 would be higher than the target of 2 per cent.

Economic distress may give way to political and social turmoil in Greece, with an unpredictable interplay with the broader dynamic of geopolitical tensions. Any setback in confidence could hurt a still tentative economic recovery in Europe, which will have spill-over effects on the rest of the world economy. 6. We should therefore not be alarmed, notwithstanding the drama of recent days, but we should stay alert and vigilant. Although the risk of a sudden brake in global growth remains low, we are closely monitoring developments and their potential impact on Singapore. 50 Years of Singapore’s Financial Centre 7. This year’s ABS annual dinner also comes as we mark our 50th year of nationhood in Singapore. Our financial centre has been both beneficiary and driver of the nation’s progress over the five decades. 8. We can take quiet pride in how it has evolved, from its beginnings in the financing of merchant trade with our neighbours, into a well-diversified, vibrant and widely respected centre of Asian and global finance. 9. It was never a given that Singapore would be a major financial centre. We started at a time when Hong Kong had a major head start, as the Asian outpost of the City of London. There was no natural reason why a broad range of global financial institutions and services had to be located in Singapore, a small island state separated from its Malayan hinterland. 10.
Our current assessment is that the forecasts described in the Inflation Report indicate low inflationary pressure and that the repo rate could perhaps be raised at a slightly slower rate in future than the interest rate path on which the forecasts are based. Market expectations of future interest rate increases have also been adjusted downwards in recent days, which thus appears reasonable – given the information we have at present. Prior to the next interest rate decision in April, we will of course need to make a new assessment and take into account the information available then. The future stance of monetary policy will thus depend as usual on new information received and on the Riksbank’s assessment of the inflation outlook. The principles for the Riksbank’s monetary policy The economic debate has recently focussed on monetary policy objectives. Some people have suggested that we should supplement our inflation target with other targets. Others have interpreted our most recent interest rate decision as meaning that we already have targets for other quantities and that we are trying to achieve too many targets. It is unfortunate that there appears to be a certain amount of confusion in this matter, so let me repeat my earlier comment: there is one objective for monetary policy and that is to maintain price stability. This is the objective set by law for the Riksbank’s monetary policy. In addition, we have been given the task of promoting a safe and efficient payment system.

Unlike many other countries dealing with a banking crisis, Norway did not set up a separate asset management company - or “bad bank” - to handle problem loans. There were several reasons why we chose not to do this: •  In none of the problem banks in Norway was the ratio of non-performing loans considered to be of such magnitude that it would require so much attention from the management of the bank that it would distract them from their main goal - to bring the bank back to profitability. •  The banks themselves knew their borrowers best and had experience in working out defaulted loans. Handling such loans will always be part of a large bank’s business, and transferring employees with this expertise to a separate company might have left the banks more vulnerable when they encountered new problem loans. •  Setting up an asset management company and transferring bad loans from the banks would have required complicated accounting and legal work. In particular it would have been very difficult to find a fair price at which the loans should be transferred. •  The responsibility of handling the problem loans should remain with those who had the most to gain from a successful handling - the banks. •  Last but not the least; such an asset management company would have had to be financed by government money. Thus, more taxpayers’ money would have been put at risk.
In addition, although the EU has not yet reached all the objectives of the 1999 Financial Services Action Plan, there is evidence that they will be met on schedule, not least because the euro will provide the market with the necessary impetus to identify the remaining obstacles to the completion of the single market. A clear example of this is provided by the regulation on cross-border payments in euro which seeks to eliminate unjustifiable differences between charges on cross-border transfers and  24  On the same reasoning Malta should withdraw from international financial institutions such as the World Bank and the European Bank for Reconstruction and Development since it is no longer entitled to financing from these institutions. This, however, has not occurred because it is recognised that membership in these institutions yields more than monetary benefits. BIS Review 69/2002  7  those on transfers within Member States. Another consists of the initiatives underway to extend the single passport beyond the banking sector to investment services, insurance intermediaries and securities markets. This will have at least two implications. First, a financial product licensed in one Member State would automatically be recognised in all others without the need for the service provider to go through licensing and listing procedures afresh. For financial service providers this is an opportunity to by-pass the regulatory and other barriers that would otherwise render them uncompetitive.

For the individual Member State, this is an opportunity to attract financial service providers from third countries who want to take advantage of the opportunity to establish themselves and market their products anywhere in the EU. Second, the single passport will also reduce the cost of doing business. It is in fact estimated that the Action Plan would reduce the cost of capital for 18 million businesses in the EU and drive down the cost of financial services for consumers. Conclusion Against this background it is not surprising that studies on the effects of enlargement show that growth rates would be higher under EU membership than under any other scenario. A European Commission study shows, for example, that during the first five years following accession, growth rates in the acceding countries would be between 1.7% and 3.2% above those that would be achieved if these 25 countries were to proceed with current reforms without joining the EU. A comparable finding also emerges for Malta: the annual growth rate would be between 1.7% and 1.9% higher in the short-run than it would be under the non-membership scenario. The difference would be even larger in subsequent years – Malta’s growth rates could then be between 4.4% and 6.1% higher under EU membership. Such findings and related considerations have led governments, political parties, trade unions and academics from twelve European countries, large and small, islands and continental ones, to conclude that membership of the EU is on balance the best available response to the challenges posed by globalization.
It was for the first time when such a complete vision of the Danube was unveiled. All these facts constitute reasons that lead the European Commission to recognize the importance of Danube as being “the single most important non-oceanic body of water in Europe” and “a future central axis for the European Union”. But there still remains a major issue regarding this subject –the Danube basin is still not used to its full potential. Its remarkable business prospective is yet to be taken advantage of in terms of agriculture,  BIS central bankers’ speeches  1  energy sources, wastewater disposal, industrial or even recreational purposes. This massive potential alone is not enough to implement a business plan; it certainly needs vision and funding. And financing is exactly the main issue upon which the today conference focuses. For instance, one could take inspiration in the Rhine basin management project which turned the Rhine into Europe’s most densely navigated shipping route. It connects world’s largest seaport, Rotterdam, with world’s largest inland port, Duisburg, although the Rhine’s length is less than a half of Danube’s. And while large sections of the Upper Danube in Germany and Austria have been regulated, the areas of the lower and middle Danube were not. I strongly believe that middle and lower Danube and the Danube Delta offer a great business potential for investment projects.

At the time, there was excitement about the idea that a stable banking system could be a source of liquidity to fund the expansion of the economy. So in addition to being the government’s banker, the Bank also engaged in commercial activities: taking deposits in exchange for which it issued notes – and providing loans by discounting commercial bills. That was 321 years ago. The Bank of England you see today has its roots in a relatively more recent act of Parliament. I refer of course to the 1844 Bank Charter Act, which paved the way for the Bank to become the monopoly supplier of bank notes, and effectively responsible for monetary policy in the UK. The Act also had the effect of limiting the amount of commercial business the Bank could undertake, so it chose to concentrate not on competing with the emerging joint-stock and clearing banks, but instead to focus on its role  BIS central bankers’ speeches  1  as banker to the banks, and supplier of liquidity of last resort. It could be argued that this was the point at which the Bank’s financial stability role was born. In subsequent years, as the Bank sought to define this role, it was helped by the advice of Walter Bagehot, a keen student – and sometime critic – of the Bank of England’s reaction to banking crises over history.
Foreign exchange buying auctions to control volatility might continue in the event of actual or likely excessive volatility in the foreign exchange market induced by the above-mentioned conditions. I would like to draw your attention to another point about the floating exchange rate regime. The exchange rate is determined in the market under supply and demand conditions, which may turn the exchange rate into a risk factor. Undoubtedly, the exchange rate should be accepted as a cost factor and closely monitored by decision-making bodies in open economies. In this framework, foreign trade firms and other agents, which hold short foreign exchange positions, may face significant risks as a result of exchange rate movements. However, it should be noted that the volatility in exchange rate is a risk, not an uncertainty. So, it can be managed and avoided. There are two points which should be clearly understood by those who advocate the view that a floating exchange rate regime harbors high exchange rate risk and can lead to excessive volatility in foreign exchange markets, bringing about negative outcomes in the economy – particularly in foreign trade. First of all, insofar as capital movements are free, exchange rate risk may also emerge under fixed and predictable exchange rate regimes. However, either public banks or, as the authority in currency matters, central banks, take on the exchange rate risk in these regimes, whereas in a floating exchange rate regime, it is taken on by individual economic agents.

The analysis of a total of 52 balance of payments crises experienced in the 1980-2001 period in 19 countries including Turkey show that 51 of these crises erupted under managed floating exchange rate regimes.1 Thus, in almost all countries facing a balance of payments crisis it can be seen that pegged or foreseeable exchange rate regimes were being implemented. In addition, there were problems related to financial stability or the implementation of tight fiscal and incomes policies that were supposed to support the exchange rate regimes in these countries. A second issue I would like to touch upon is that the open positions of the banking sector are so low that they are even comparable to those of the past. Within this framework, the amount of open positions of the banking sector is closely monitored and necessary warnings are given. Meanwhile, the real sector should also be cautious about open positions. Another important issue that needs to be kept in mind in relation to the current account deficit is that the Central Bank does not try to artificially keep the New Turkish Lira overvalued. US dollar 21.7 billion worth of foreign exchange purchase since 2002 is an indicator of this. Besides, short-term capital is not encouraged, and market players are continually reminded that the exchange rate risk lies in the market.
Financial innovation is good and healthy for our economies. Changes that have occurred in the last years strongly contribute to market efficiency and overall increase the resilience of our financial system. By allowing wider spreading of risk through credit derivatives, in particular, hedge funds bring an important contribution to market efficiency and liquidity. At the same time, the implications of those changes for financial market dynamics might be more complex and far reaching than before. New instruments have been developed in a very benign environment. Liquidity in many market segments has not been tested in period of stress. How these instruments would behave in periods of stress is a major question for market participants and authorities alike. In such an uncertain environment, securing the full benefits of the structural shifts in the financial system does put a premium on risk management. Everybody would agree, I think, that the first mitigant against the risks associated with hedge funds is robust internal risk management systems, both in hedge funds themselves and at their prime brokers. These are the basis for an efficient market discipline and a condition for financial stability. Strong and rigorous implementation of sound principles for risk management seem essential. You have noticed the reference, in yesterday's G7 communiqué, to the Paulson's task force (Presidents Working Group).

Christian Noyer: A central banker’s personal perspective on hedge funds Introductory speech by Mr Christian Noyer, Governor of the Bank of France, at Conference on hedge funds, Washington DC, 15 April 2007. *  *  *  Thank you all for coming. It's a pleasure and a privilege to have you all here to day. Special thanks to the IMF and John Lipsky for organizing this event for us and with us. The purpose of our meeting is to present the special issue of our Financial Stability Review on hedge funds. So I want to say a few words on why we embarked on such a project and how we did it. As you noticed, this issue of our Review is mostly based on external contributions. Some authors are with me to day and I also want to thank them. We are very happy that we could assemble such an eminent roster of contributors. Let me say from the outset that we did not intend to reach a conclusion at this stage. The international community is working on this issue, in particular in the framework of the FSF. The main question is: how can we best reconcile keeping the positive inputs of this activity for financial markets functioning and innovation, while keeping the risks that may be generated for financial stability to a minimum. This is why there is a debate on hedge funds, which we think, is legitimate.