samchain/econo-pairs-v1 huggingface dataset:
But with the aim of avoiding international fragmentation, we have to pay special attention and dedicate sufficient efforts then to cross-border interoperability, and hence to wholesale CBDC as a way to ensure it. The second paramount course of action is to reposition the IMF as a pivotal stakeholder, at the very heart of the global financial safety net (GFSN). Today,  Page 9 sur 10 IMF resources account for a smaller share of GFSN resources, but there has already been significant progress: the last general allocation that was carried out in August 2021 amounted to USD 650 billion and was, to quote Kristalina Georgieva, “a shot in the arm for the global economy at a time of unprecedented crisis.” However, developing economies are the primary users of SDRs and yet they have benefited much less from the general allocation: about two-thirds were directed at developed economies, as a result of existing rules. Reallocating SDRs is crucial in these current tense circumstances. The G7 commitment, taken up by the G20, to bring reallocations to USD 100 billion must be kept and implemented efficiently. We are not yet there. Part of these allocations have been allocated to the PRGT Fund to finance low-income countries, including an eventual Food Shock Window. Still, we have to find additional resources to finance the subsidy account of the PRGT.

In the speech we have already quoted, Mario Draghi also insisted upon the need to foster the cooperation of public and private institutions and keep trade open and fair in order to reap the benefits from private innovation: “International cooperation should not be limited to the official sector. Global trade is just as important and much has been said about this. The pandemic has shown us how collaboration between companies is paramount to foster innovation and boost production of essential medical goods.” In a nutshell, the changes required by transition are not only changes in policies within the existing institutional or societal framework. They require us to transform the frameworks themselves. This is very challenging. So is the need to rethink our perception of what abundance is. III. WITHIN BOUNDARIES Some scientists, in particular Johan Rockström and his colleagues,15 have developed the concept of planetary boundaries to refer to nine Earth system processes (including climate‐ and biodiversity‐related processes) that are vital to life on Earth. Human activity is contributing to crossing the boundaries within which these systems can maintain a safe operating space for humanity, and this could have disastrous consequences. This means that the task of our generation is to invent a new model to live (and live well) within these planetary boundaries, or within ecological limits. To be clear, living and thriving within limits is, as such, an immense challenge. 15  Rockström, J. et al. (2009). Planetary Boundaries: Exploring the Safe Operating Space for Humanity. Ecology and Society 14 (2): 32.
Our workshops this afternoon will consider how to plan our transitions to Basel II, to prepare for the adoption of advanced approaches to risk management and the implementation of Pillar 2, and to strengthen cooperation between home and host supervisors. With regard to this last topic of cooperation, I believe that our safety and soundness goals can be achieved more easily when supervisors adopt more consistent approaches. In particular, Basel II will have the greatest impact if supervisors work in concert rather than in a vacuum. This makes it critical for the Basel Committee to build its ties and to encourage cooperation with other supervisors. Indeed, as I suggested earlier, many of the improvements to the Basel II proposals resulted from discussions with other supervisors and central banks. The quality of our dialogue illustrates the very good state of relations between all banking supervisors today. This event, for example, represents one  4  BIS Review 52/2004  of the most important opportunities for an exchange of views among Committee members and other supervisors. But what begins here must translate into other avenues for communication on both multilateral and bilateral levels. In this regard, the Core Principles Liaison Group, or CPLG, serves as the main forum for exchanges between Basel Committee members and other supervisors. This working group includes representatives from Committee member countries, 16 non-G10 supervisors, the International Monetary Fund, and the World Bank. Earlier this year, I chaired a very productive special session with this group.

The FSI provides technical assistance to supervisory agencies worldwide in enhancing the quality of their supervisory systems and the skills of their staff. The Basel Committee and its member agencies remain committed to the activities of the FSI and to working together with fellow supervisors in an efficient and transparent manner. It is one of my highest priorities as chairman of the Committee to strengthen our outreach and communication with fellow supervisors. 4. Accounting  Our overarching goal in these discussions is to help ensure that our supervisory framework keeps pace with evolution in the industry and remains relevant to banking in the twenty-first century. This is, of course, a constant challenge for supervisors in an industry as innovative as the banking sector. Yet we must furthermore look beyond the immediate issues to consider more broadly the many changes in our markets and practices that are relevant to banks’ safety and soundness. In recent years, one of the most important reforms that affects not just banking, but in fact nearly all businesses, is the drive toward harmonised accounting standards globally. It is impossible for us to improve transparency and promote stability without examining the changes underway to the mechanics that define how financial data are recorded and reported. I’d like to conclude my remarks this morning with some preliminary thoughts on accounting and supervision and on our responsibilities in this field as supervisors.
Relative unit labour costs in the manufacturing industry: Sweden compared to TCW-weighted countries Index, 1970-01-01=100 120  120  110  110  100  100  90  90  80  80  70  70  60  60  50  50  40  40 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08  Source: OECD  Note: Converted to SEK. Figure 4. Real hourly wages Annual percentage change 6  6  4  4  2  2  0  0  -2  -2  -4  -4  -6  -6 60  63  66  69  72  75  78  81  84  87  90  93  96  99  02  05  08  Source: National Mediation Office  10  BIS Review 154/2008  Figure 5. Unit labour costs in entire economy Annual percentage change, seasonally-adjusted data 8  8 Unit labour costs Productivity Labour costs per hour  7  7  6  6  5  5  4  4  3  3  2  2  1  1  0  0 -1  -1 94  96  98  00  02  04  Note: Broken lines and columns are the Riksbank’s forecasts. 06  08  10  Sources: Statistics Sweden and the Riksbank  Figure 6.

Turalay Kenç: Stocktaking of international financial architecture Remarks by Mr Turalay Kenç, Deputy Governor of the Central Bank of the Republic of Turkey, at the “Stocktaking of International Financial Architecture” Conference, organized by the Reinventing Bretton Woods Committee (RBWC), Shanghai Development Research Foundation (SDRF), Research Institute for Banking and Finance, China (PBOC) and Korea Institute for International Economic Policy (KIEP), Shanghai, 26 February 2016. *  *  *  Over the last two decades the world has witnessed substantial increases in the trade volume to global GDP ratio, sharply grown international investment positions and significantly deepened production supply chains in the most part of the globe. As a result, monetary and financial policies across countries have become much more correlated. The conference organizers rightly asked the most crucial question whether the international monetary system (IMS) is still sufficiently stable in this current environment with a growing interconnectedness. In addition to this heightened interconnectedness, the global economy and financial markets face the challenges of the unconventional and unusual monetary policies in the advanced economies as well as diverging monetary policies of these countries, uncertainty in commodity prices, the risk of China’s economic hard-landing and the unintended market liquidity consequences of the recent financial sector reforms across the world. Large asset purchasing programs of the major central banks have depressed global bond markets with decreasing long-term yields as well as short-term yields and their negative nominal policy rates further destabilized bond markets and in general financial markets.
While this has become a common practice, ideally more competitive retakaful operators who provide reinsurance in accordance with Shariah principles need to be established so that the takaful industry would not be dependent indefinitely on conventional reinsurance as the conduit to which they can mitigate risk. More importantly, retakaful operators ultimately serve to strengthen and enhance the financial capacity of the takaful industry, and the synergistic by-products emanating from the interactive business alliances would contribute towards the overall betterment and robustness of the Islamic financial system. Indeed, there is much to be gained by the takaful operators in particular, and the Islamic financial industry in general, by having access to an adequate and competitive market of the retakaful facility. It is therefore important to increase the collaborative efforts and examine plausible ways to address this gap in the takaful industry. Our quest to create a dynamic Islamic financial system is to achieve the ultimate objectives of developing an Islamic financial system that will be able to contribute significantly to the overall development of our economy through the intermediation process. Thus, Islamic banking and finance industry needs to extend its agenda towards the development of a comprehensive Islamic financial system. The Islamic banking and finance should strive to add value towards enhancing greater integration to the economy and the financial system.

Some of this deficit was covered by direct foreign investment, but the greater part of it was financed by borrowing, as a result of which by the end of 1994 the net external debt had reached 46% of GDP and the exceptionally high level of more than 160% of exports of goods and services and unrequited transfers. 2. I have not yet seen the full 1996 figures, but estimates based on the first eleven months suggest a current account deficit of around (or even less than) $ billion. This looks much more reasonable, not only because it was more than covered by foreign direct investment but also because of what lies behind this improvement. The $ billion drop in the current BIS Review 16/1997  -2-  account deficit between 1994 and 1996 was made possible (a) by a 35% increase in exports, accompanied by a modest increase in imports of about 14%, and (b) by the steady and rapid increase in services income, mainly (but not exclusively) derived from tourism. 3. Since there was also a sizable inflow of foreign direct investment in 1995 and 1996, the country’s net external debt dropped from $ billion at end-1994 to about $ billion at end-1996. Net external debt declined to 31.2 expressed as a percentage of GDP, and to 71.6 as a percentage of exports of goods, services and unrequited transfers.
This should also be one of the aspects of Pillar 2, which I have mentioned several times and which I will come back to a bit later, given its importance. Regarding market risk, it is important:  –  to ensure that banks only book their transactions in the trading book if they are carried out on sufficiently liquid markets;  –  and to better capture all of the risks within the trading book, especially default risk the weight of which has increased over the past few years, notably due to growing trade in structured credit products and products including stakes in hedge funds. The publication by the Basel Committee on 12 October of guidelines for computing the capital charge for incremental default risk in the trading book constitutes an important step forward in this regard. Regarding liquidity risk, the recent financial turmoil has highlighted the need  –  for banks, to reassess the way in which refinancing risk can materialise and analyse its impact on other risks such as credit risk and concentration risk, in the event of liquidity facilities extended to securitisation vehicles being drawn on;  –  for supervisors, to ensure that banks have set in place, within the framework of their business continuity and “back-to-normal” plans, robust mechanisms and procedures for liquidity management, taking account both of their own refinancing risk, the risk of markets drying up and the potential interaction between these two risks.

Lastly, it introduces a requirement for regulatory capital to be tailored for certain off-balance sheet exposures, particularly liquidity facilities associated with these transactions, which under Basel I were generally exempted of any capital charge. Second, by reinforcing the link between the capital base and the risks actually incurred, Basel II encourages banks to improve their systems for managing these risks as well as their due diligence procedures. Beyond reminding banks of the basic caution required when extending credit, this encouragement is all the more useful in that banks now often play a role in securitisation transactions for which the underlying assets, for example housing loans, may be initiated by unregulated entities, that are not always  BIS Review 11/2008  3  accountable for their risk analysis and pricing. In other words, the weaker the discipline surrounding the granting of a loan the stronger banks’ diligence procedures needs to be. Thirdly, Basel II gives banks and supervisors a vital tool, Pillar 2, with which to assess the risk profile of institutions and in particular to take account of certain risks that are sometimes difficult to quantify but whose impact can be great. By way of example, I shall merely mention refinancing risk and reputational risk. Pillar 2 thus enables banks, through the determination of the level of economic capital and supervisors, via for example an increase in capital requirements, to ensure that all of the risks incurred are appropriately covered.
In particular, for the moment it is unclear – as, I must say, it is bound to be at this stage – whether the financial system can generate the expansion of credit that will most likely be necessary to support recovery. The reopening of high-grade bond markets has definitely been encouraging. But in most countries, including the UK, bank lending remains subdued. It is hard to disentangle how much of that is down to weak demand, and how much to tighter supply conditions from the banks. I would just say this. I truly believe that it is in the interests of the banks themselves to ensure that businesses get the working-capital finance they need. While one can imagine, I suppose, individual banks being tempted to sit it out in order to deleverage their balance sheets in an environment that is obviously tougher for them, there cannot sensibly be free riders. If all banks were to adopt such a strategy, recovery might end up being anaemic at best, which would feed back into the banking system itself – increasing defaults and depleting banks’ capital. Not lending would be a counterproductive business and financial strategy. I’m reasonably confident that senior bankers can be persuaded to see that themselves, if indeed they don’t already. But it will, in my view, take until the autumn at least to gauge whether tolerable progress is being made on this front. Without it, confidence could ebb away. But with it, recovery will have a fair chance of becoming rooted.

The end result was a sharp tightening in the availability of credit that served to exacerbate the downward pressure on economic activity. 2  Some dealers were further weakened by having provided significant amounts of funding to failed investment funds, which reduced the amount of funding that was available to meet other needs. 2  BIS Review 143/2009  In the case of the tri-party repo market, the stress on repo borrowers was exacerbated by the design of the underlying market infrastructure. In this market, investors provide cash each afternoon to dealers in the form of an overnight loan backed by securities collateral. Each morning, under normal circumstances, the two clearing banks that operate tri-party repo systems permit dealers to return the cash to their investors and to retake possession of their securities portfolios by overdrawing their accounts at the clearing banks. During the day, the clearing banks finance the dealers’ securities inventories. Usually, this arrangement works well. However, when a securities dealer becomes troubled or is perceived to be troubled, the tri-party repo market can become unstable. In particular, if there is a material risk that a dealer could default during the day, the clearing bank may not want to return the cash to the tri-party investors in the morning because the bank does not want to risk being stuck with a very large collateralized exposure that could run into the hundreds of billions of dollars. Overnight investors, in turn, don’t want to be stuck with the collateral.
Such perspectives and occasionally voiced doubts about the reliability of pension promises adversely affect consumption and investors' willingness to take risks. Last but not least, the bearish stock markets directly affect the value added by our financial sector, which contributes over 10 percent to GDP. Risk management In Switzerland and abroad, banks have adopted a more cautious attitude. International institutions, in particular, manage their credit risks much more actively than they used to. They sell some of these risks to other financial intermediaries, including insurance companies and institutional asset managers. The available data do not allow any reliable conclusions to be drawn as to the risk distribution after the credit risk transfers. It can be concluded, though, that credit risks are borne by a larger number of market players than previously and that diversification possibilities are probably better utilised nowadays. In interbank business, too, more attention is being paid worldwide to default risks. A growing share of interbank business is hedged; this is also the case in Switzerland, where repo business has developed steadily. Unhedged transactions still clearly account for the bulk of interbank business, but with an average volume of approximately Sfr 20 billion, interbank repos, which were neglected for a long time,  BIS Review 73/2002  3  have grown to a respectable size. With respect to system stability, this development is favourable and should be further promoted. Continuous Linked Settlement (CLS) As regards credit risks in foreign exchange business, the launch of the CLS system this autumn is a milestone achievement.

To meet their delivery obligations in Swiss francs, the five banks draw on intraday liquidity, which the SNB offers through interest-free repo transactions. Since November, direct system participants have been able not only to use CLS services for their own purposes but also to offer these services to other banks. With this so-called third party business expanding and further direct participants and currencies joining the system next year, more and more payments will be settled through CLS. Currently, about 35,000 transactions in the amount of approximately USD 400 billion are settled in CLS every day. All parties involved are very satisfied with the system's mode of operation. By eliminating the settlement risk, CLS has made a significant contribution to the stability of the international financial infrastructure. 4  BIS Review 73/2002
And, in aggregate, their lending has, for the moment, come back into line with the major banks’ deposit bases, implying a substantially reduced wholesale funding requirement. But we need to be sure that lenders have the resilience to withstand a major housing shock, particularly if, as has often proved to be the case in the UK, it is accompanied by a substantial fall in spending as many households pull in their horns. On Tuesday, the Bank announced the details of the stress test of the major banks that will be carried this year in the UK, as part of the EU wide exercise. Its central feature will be a test of banks’ resilience to a severe drop in house prices in the context of pressure on borrowers’ ability to service their debts. 4  BIS central bankers’ speeches  To be clear, this is a severe stress test, not what we expect to happen. We will test resilience against a so called “tail risk” series of events; a series of events that are very unlikely but could plausibly happen with housing at their center. The aim will be to assess whether the major banks could withstand and recover from such a stress without terminal damage to the critical functions they perform for the UK economy. The self-reinforcing link between property prices, the financial system and the broader economy that operate within the stress test have been key to dynamics in previous UK downturns.

For the Bank of England and the Financial Policy Committee, we have to decide whether to address the momentum in the housing market and to rates of growth in prices and transactions which, in the past, have tended to lead to rapid growth in mortgage debt. What has been driving this momentum in the housing market and is it a risk to financial stability? And if it is, is it a faint yellow light blinking on the Financial Stability dashboard that requires watching but may well go away by itself? Or a brighter one that needs some proportionate action? The sudden awakening of the housing market after the spring last year was probably due to economic confidence beginning to return to the UK and to mortgage credit beginning to become more available. These factors, in turn, have likely released pent-up demand. Over the period 1997–2007, homeowners were moving on average every 10 years and housing transactions were running at around 1.5 million a year. In the years following the crisis, that slowed by over 50%. Homeowners moved on average every 17 years and transactions fell to around 900,000 per year. Compared to pre-crisis rates of housing transactions, over 3 million housing transactions have been “lost” between 2008 and 12. Many of those, of course, have almost certainly been truly “lost”. But housing transactions for most are strongly linked to life cycle changes and many have probably only been delayed until economic and credit conditions and confidence about the future improved.