samchain/econo-pairs-v1 huggingface dataset:
It is hard to see how this fixed buffer, supposed to be on top of the minimum requirement, would not be perceived as a new regulatory minimum. Also, it is very hard to see how this mechanism may not have adverse impact on banks’ share ownership. Another avenue to address procyclicality through prudential rules is by putting in place a countercyclical capital buffer. The logic is simple and, in principle, appealing: the mechanism, indexed on a macroeconomic variable, would force banks to build capital reserves when they can do so and allow them to consume such reserves in a downturn. This would be expected to ensure that banks accumulate and use self-insurance in synchronization with the financial cycle. In practice, we still need to clarify the conditions and the set up for triggering the release of surplus capital accumulated through the mechanism. Such a mechanism may not necessarily be cumulative with others and we may have to choose. Systemic risk and moral hazard As techniques for managing and allocating risk became more sophisticated, the network of counterparties expanded in scale and in complexity. This was, truly, a systemic change that was properly understood but not fully captured by regulators at the time. Credit and market risk was supposedly more broadly spread. But counterparty risk increased. Overall, the overall impact on financial stability may well have been negative. There might be a temptation to assess systemic risk through a crude “size” criterion. “Too big to fail” certainly warrants special treatment.

Anita Angelovska Bezoska: Let's get digital Speech by Ms Anita Angelovska Bezhoska, Governor of the National Bank of the Republic of Macedonia, at the NBRM’s 11th Conference on Payments and Market Infrastructures “Let's Get Digital”, Ohrid, 6-8 June 2018. * * * Distinguished guests, Ladies and gentlemen, It is my great pleasure to welcome you to the 11th edition of the Conference on Payments and Market Infrastructures hosted by the National Bank of the Republic of Macedonia. The organization of this Conference has been traditionally supported by De Nederlandsche Bank for which we are very thankful and over time, this initial bilateral cooperation attracted involvement of other central banks and IFIs. In this context, I would like to extend our appreciation to Banco de Portugal for its contribution in the past editions, as well as to the Bank of Italy, the National Bank of Belgium and the National Bank of Serbia for their contribution to this Conference. Also, particularly valuable is the continued participation of the European Central Bank, the Bank for International Settlement and the European Commission given the prominent role these institutions play in the payments area. This year’s conference focuses on digital transformation, a process that is heavily penetrating across all segments of our business and private lives and will take even greater significance in the years to come. The digital transformation in finance has been rapidly evolving with the emergence of Fintech sector.
All in all, as of today, Codes of Best Practice on Corporate Governance set out principles within which values and governance rules should be set by the management of the institution, and in the final analysis, good Corporate Governance is looked to as being a key tool to be used in the overall risk management of institutions, irrespective of the nature of the business carried out by the institution. Why is good governance in the banking and financial system more important than any other sector? The Banking and financial sector is easily distinguishable from the others. A few distinguishing features stand out: •  Unlike normal business entities which are funded mainly through shareholders’ funds, banks’ business involves funds raised mainly through deposits. The business of raising public deposits places greater fiduciary responsibilities on the institution and its managers, since depositors’ funds need to be safeguarded in a special way. 2  BIS Review 24/2007  •  Banks perform as financial intermediaries by lending and investing the funds mobilized and funding economic activities of others. •  Banks are the agents of the payments system where they facilitate payments domestically and internationally, through various instruments such as bank accounts, fund transfers, credit cards, etc. •  Banks are able to undertake all such business operations as a result of public trust and faith in the stability and soundness of the banks in particular and the system in general.

This would directly conflict with our monetary policy, since any hedging would be equivalent to a purchase of Swiss francs against foreign currencies, which would intensify the upward pressure on the Swiss franc. Therefore the broadest possible diversification of our foreign currency investments is our sole means of reducing exchange rate risk. At the end of September, 48% of foreign currency holdings were invested in euros, compared with 60% at mid-year, with 28% invested in US dollars, and 24% in other currencies. We are continuously evaluating new asset classes and currencies in both advanced and emerging economies; this year, the SNB began investing in the South Korean won. Our goal is to further diversify our foreign currency investments and thereby reduce risk concentration. To avoid undesirable third-market effects, our entire investment activity is invariably undertaken with a high degree of prudence and caution in respect of potentially adverse effects on markets. This applies equally to inflows and reallocations of investments, as well as to the establishment of new positions. If, for example, we see ourselves confronted with very high foreign currency inflows, we might place these in sight deposit accounts at other central banks, before investing them in securities. The SNB has absolutely no interest in causing market distortions or influencing currency movements in other countries. Issues surrounding the Libor and reference interest rates I would like to conclude by exploring some of the issues in connection with the Libor rate, and the global discussion on reference interest rates in money markets generally.
Just let me give you an example: security is not something that people can actually address only at national level. Unfortunately, we have seen this very frequently through various terrorist actions. Everything in economics now is basically global. So it’s even beyond being only European. It’s actually all over the place. The more we integrate, the better we’ll be placed to address economic issues of this nature. Think about defence. Does it make sense today saying that countries are able to defend themselves against global challenges? Well, less and less. Think about another challenge: migration. Migration is not a problem of one country. It’s a problem, a challenge and an opportunity for a group of countries. In this case, the European and eurozone countries are certainly called to respond to this challenge. All this means that having a European perspective has become essential to understand today’s problems and the possible solutions. The key 1/2  BIS central bankers' speeches  question that you will be asked more and more in the future is “What can we achieve together?” We count on you to embark on this long journey: we invite you to be our ambassadors, to continue the conversation on Europe in your schools and cities, with your relatives and friends. You will have an important role to play in tomorrow’s Europe, but that role, that responsibility, starts today. You give us not only hope for a better future, but you also inspire us to continue our work.

I trust that in taking part in the competition you have been able to find out more about what we do at the ECB, why we do it, and how our monetary policy works. It seems obvious that you should know what we do at the ECB or what people do in their national central banks. But as a matter of fact, if you do polls, you would be surprised by the amount of confusion that people have. For example, lots of people, about one-third, think that central banks are like other banks, that they are by and large not very different from what other banks do. Now, you will be the selected category that will know that the ECB is a central bank and that central banks are different from banks. And even more importantly, through this exercise, you actually got to have, at a very young age, a European perspective. You understood what is still really missing from lots of people, who still think in terms of national borders. It is very important, of course, but it is not the only reality that we are living through. In fact, the European perspective becomes much more important as time passes. Why is that? Well, because there are many challenges that are in fact supranational by their very nature. That is to say, you can’t really respond to these challenges, and you can’t really address the problems at national level if they are supranational.
The existence of “social partnerships” in several EMU countries, for instance, the Netherlands and Ireland, where the social partners and sometimes even the government have worked out guidelines for wage formation, could indicate a development towards more co-ordinated wage formation in Europe. It would be interesting to hear your views on this issue whether the experiences of the social partnerships have been positive or not. However, a potential Swedish membership of the Eurosystem could also weaken the incentives for restraint in wage formation, which could lead to deterioration in competitiveness and eventually higher 4 levels of unemployment. Wage formation can be seen as a “game” between the social partners and the central bank. If the wage negotiations are relatively centralised, negotiators must take into account how the agreements will affect monetary policy. It is clear that excessively high wage increases can have negative effects on growth and employment. If a central bank outside of the EMU has an inflation target, the social partners may also estimate that excessively high wage increases will entail interest rate rises, which will reinforce the negative effects. This might not be the case in the event of membership of the single currency. Particularly if the individual Member State is small, it is not likely, that the ECB will react to high wage increases in this country alone. The negative consequences of excessively high wage increases may thus appear much greater to the social partners in an individual country outside of the EMU than to a member country.

I would like to recall again that, in the euro area, banks are the main channel for mobilizing domestic savings and financing investment. This explains why ECB’s non-standard measures have primarily aimed at enhancing access of the banking sector to liquidity and at facilitating the functioning of the euro-area money market. Given the topic of the current conference, I would like to take the opportunity to elaborate on one of these non-standard measures, namely the Securities Market Programme, or SMP. Sovereign yields are central in the transmission of monetary policy, in particular because government bonds provide a floor to the private-sector funding costs. This is the reason why we launched the SMP. 2  BIS central bankers’ speeches  I insist that, through the implementation of all its non-conventional measures – including the SMP – the Eurosystem has fully played its expected role as a lender of last resort (LLR), by which I mean that we have and we will intervene to stem liquidity crises that threaten the stability of the banking system. Having said that, it is clear that engaging in large-scale asset purchases of sovereign bonds is well beyond what should be expected of a central bank’s role as a LLR. Moreover, largescale asset purchases are not without risks. While they may help to alleviate upward pressures on long-term interest rates in the short run, they could also affect price and financial stability in the medium-run, by endangering the value of the central-bank money.
But I do say that it would be unwise - as some have implied - to set monetary policy on the basis of the worst possible outcome, even if one knew what that would actually mean in policy terms. At the time of our last Inflation Report published in November the MPC's collective view of the most likely outcome for the UK, looking over the next two years, was for growth at around trend with inflation close to target. But we were - and we remain - acutely conscious of the uncertainties and risks around that prospect. And we review the position intensively both at our regular monthly policy meetings and in the context of our quarterly forecasting round. And in that context, I give you my assurance that, despite the fact that we have not changed interest rates now for over a year, we stand ready to do so at any time if and when we see the risks to our central expectation beginning to crystallise in either direction. Mr President, let me conclude by suggesting once again this year that yes, we can keep the UK economy moving forward, but I don't pretend that it will be easy. Sadly I am attending this dinner for the last time as Governor this evening, so I will not be accountable to you for how we get on.

And the real pessimists argue that the longer the fall is delayed the more dramatic it will be. Now it is certainly true that if these risks were to materialise then we would indeed be hard pressed to keep the economy moving forward. But such risks need to be kept in proper perspective. The question is - are these possible developments a necessary - or even the most likely - outcome? I don't think that they are. It's entirely understandable - in the light of the global industrial slowdown and generally weak export markets, and after a third year in a row of sharply falling equity prices, that business and financial market confidence should remain subdued. And people seem sometimes surprised to be told that, on the macro-economic data, we passed the trough a year or more ago. The US economy, in particular, on which so much of the rest of the world depends actually expanded by just over 3% in the year to the third quarter of last year - which is well above its long-term annual average rate until the surge in the later 1990s. The Eurozone also grew - though only by around 1% over the same period, and there was even positive growth in Japan. Now that's not exactly a strong recovery after the slowdown, but it follows only a relatively mild recession. More recent data certainly have been somewhat mixed - perhaps reflecting Alan Greenspan's predicted "soft-patch" through the winter; and we're in the shadow of uncertainty over Iraq.
Assessment of Risks to the Outlook The forecast that I have just described is my best assessment of how the U.S. economy will evolve over 2016. But there is uncertainty and risk relative to this baseline forecast, which also needs to be taken into consideration in assessing the implications of the outlook for monetary policy. There are two key considerations to this risk assessment. First, are the perceived uncertainties about the forecast higher, lower or about average as compared to the past? Second, are the risks symmetric around the baseline forecast or skewed upward or downward? The level of uncertainty is important in that it relates to the expected magnitude of forecast errors. The balance of risks is important in that it relates to the expected sign of those forecast errors. At the New York Fed, we use surveys, internal models and judgment in forming our risk assessment. Some surveys, such as the U.S. Survey of Professional Forecasters (SPF), ask respondents for both point and density forecasts. The density forecasts take the form of respondents filling out a histogram of their probability assessments that the forecasted outcome will fall into given intervals. These histograms can be aggregated and the resulting aggregate distribution can be used to assess both the level of uncertainty as well as the balance of risks. Recent U.S. SPF surveys have not indicated any significant changes in the overall degree of uncertainty around growth or inflation. The balance of risks have been roughly symmetric for inflation and tilted to the downside for growth.

3  See, for example, Joseph Gagnon, Matthew Raskin, Julie Remache, and Brian Sack, “Large-Scale Asset Purchases by the Federal Reserve: Did They Work?” Federal Reserve Bank of New York Staff Report no. 441, March 2010. Several private-sector firms have estimated yield effects of similar magnitude. In addition, a working paper by James Hamilton and Jing Wu, “The Effectiveness of Alternative Monetary Policy Tools in a Zero Lower Bound Environment,” finds that changes in the Federal Reserve’s asset holdings produce considerable yield effects. 2  BIS Review 128/2010  Under this view, the FOMC’s influence on financial conditions is associated with the size and composition of its securities portfolio. This perspective provides a clear rationale for the reinvestment decision made at the August FOMC meeting. The decline in the size of the Federal Reserve’s portfolio that would have occurred in the absence of the reinvestment program would have amounted to a passive tightening in the stance of monetary policy, as the portfolio balance effect would have gradually reversed. Moreover, the extent of this tightening was increasing in response to the weakening of the economy, as lower longerterm yields were leading to more rapid repayment of MBS. This perverse effect was seen by the FOMC as working against its efforts to reach its dual mandate. In effect, the policy approach that was implemented before the August meeting acted to mute the amplitude of movements in longer-term interest rates.
Creating the right conditions for this is a difficult but important task. It involves the work on both financial stability and monetary policy. It involves extensive reforms and cooperation between central banks and other authorities around the world. We must tackle this task not only at a national level, but also from a global perspective. The work has already begun, and we are in a phase of the crisis where there are good prospects for achieving change. It is now that we have the chance to really create something that will last and will work better. We must not miss this opportunity! 12  BIS Review 138/2009

Among the foreign institutions, I would like to highlight the successful cooperation with the Bank for International Settlement, the International Monetary Fund, the World Bank, EUROSTAT, etc. in the area of exchange of statistical information. I would particularly like to note that this year, the National Bank officially became a member of the Irving Fisher Committee on central bank statistics that operates within the International Statistical Institute, and represents a forum of central bank economists and statisticians. This is a good opportunity to improve the statistics of the National Bank, since the primary objective of the Committee is to promote an exchange of viewpoints between the economists, statisticians and central bank policy makers, on all relevant statistical issues of interest for the central banks. The State Statistical Office, as an institution responsible for the official state statistics, that produces data covering various sectors in the economy, is an indispensable source of data for the needs of our analyses. So far, we have a successful cooperation with the State Statistical Office, underpinned by the Agreement on Mutual Cooperation and Exchange of Data. Our macroeconomic analysis mainly make use of the data covering the real sector of the economy, such as data on prices, economic activity, employment, wages, etc., as well as data on the foreign trade sector.
The way we at the Riksbank conduct our monetary policy is described in the brochure “Monetary policy in Sweden”, which was published in May this year and is available on our website. I shall here reproduce the main features of the brochure and provide some comments of my own. The target for monetary policy is to maintain a low and stable level of inflation. The assignment we have been given by Parliament is to “maintain price stability”. The Riksbank has specified an inflation target whereby the annual change in the consumer price index (CPI) is to be 2 per cent with a tolerance interval of plus/minus 1 percentage point. The target for monetary policy is thus formulated in terms of CPI. However, when we analyse the development of inflation, we look at several different measures. Underlying inflation measured as UND1X is one such measure. This excludes household mortgage interest expenditure and the direct effects of taxes and subsidies. The former is particularly important, as an increase in the policy rate pushes up the CPI. It then looks as though inflation increases when we raise the policy rate, despite the fact that this measure will in the long-term dampen inflation. There is no such problem with UND1X. However, we also look at other measures. For the purpose of more clearly explaining the analysis, it may sometimes be necessary to disregard energy prices, or to divide inflation up into price developments on imported and domestically-produced goods. The effect of monetary policy on inflation has a considerable time lag.

Corporate governance regulations and best practices We have seen considerable reform in the regulations and codes of corporate governance, as well as the actual practice of corporate governance in the Asian Roundtable economies. For instance, Pakistan, Chinese Taipei and Thailand all adopted new codes in 2002, while new or updated codes have been adopted in Bangladesh, Hong Kong, Indonesia and Korea since 2003. This has yielded visible benefits. There is greater clarity in many Asian economies regarding the fiduciary duties of the directors of listed companies. There has also been progress made in terms of more independent directors being introduced to the boards of listed companies in the Asian region . Accounting rules have also been beefed up across the region. Some of the Asian Roundtable countries have made significant moves towards convergence with international standards and best practices on accounting. China, India, Indonesia and Philippines, have for example revised their accounting standards to bring them more in line with international standards. Corporate governance in Singapore Corporate governance in Singapore has similarly undergone evolution. I shall leave it to the speakers from the Singapore Institute of Directors and the Singapore Exchange to share on these more fully. I will talk briefly instead about our overall approach to corporate governance. Regulatory framework – balance of mandatory rules and best practices First, let me touch on the regulatory framework for corporate governance. In recent years, we have moved away from a merit-based approach towards a disclosure-based approach.