samchain/econo-pairs-v1 huggingface dataset:
Happily, the government has now appointed a financial crisis commission with the task of looking more closely into these issues. This is good news, and the sooner we can reach a satisfactory solution regarding how best to allocate responsibility, powers of authority and tools, the better. And although I do not wish to anticipate the commission’s inquiry, I see a future role for the Riksbank with regard to macro-prudential supervision. Monitoring and preventing systemic risk is very much in line with our current macro-oriented work on safeguarding price stability. Not least because the cyclical factors affecting price stability may lead to the build-up of systemic risk. Increase the resilience of the banking sector 4 The third type of measure concerns, as I said, strengthening the banking sector’s resilience in general. This is important not just because of the current developments in the housing market. The financial crisis showed very clearly that the current regulatory framework for the banking sector is inadequate. Although Swedish banks escaped relatively lightly this time, we could see how banks in other countries suffered acute liquidity and capital shortages. And this is why we now have an international agreement on the new regulatory framework for the banking sector – Basel III – which establishes new minimum requirements that the banks must meet with regard to both capital and liquidity. This is, of course, welcome. But the fact is that some weaknesses still remain. For example, the implementation period for the Basel III rules is very long.

Further regulation in specific areas where Swedish banks are particularly vulnerable may also be necessary. Here I am mainly referring to the Swedish banks’ extensive market funding, particularly from abroad, which I discussed earlier. And which has in many ways enabled the expansion in the banks’ mortgage stocks. There is international work on producing new regulations in this area, too. When the work regarding the technical details for liquidity regulation is complete, we must also decide how and when the regulations should be introduced in Sweden, taking into account the structure of our financial sector. Don’t forget the supply side In talking about the housing market I have mostly talked about the demand side and how we can ensure a balanced development there. This is what much of the general debate has concerned. But I would like to conclude with some words on the supply side, or housing construction, and what role this plays and has played earlier. While this is something that is fairly often discussed in this context, I nevertheless feel it deserves a little more attention. One of the explanations usually put forward for the high housing prices is that relatively little new housing has been built in the past fifteen years or so (Figure 4). The low level of construction is what is usually termed a “fundamental explanation” of the upswing in house prices. And this is probably true.
Nigel Jenkinson: Strengthening regimes for controlling liquidity risk – some lessons from the recent turmoil Speech by Mr Nigel Jenkinson, Executive Director, Financial Stability, Bank of England, at the Euromoney Conference on Liquidity and Funding Risk Management, London, 24 April 2008. I am very grateful to Emily Beau for her collaboration on this speech, and to Adrian Chiu, Andrew Bailey, John Gieve, Laurie Roberts and Forrest Capie for help and comments. *  *  *  Section I: Introduction Commercial banks play a pivotal role in the economy. They facilitate payments and the smooth transfer of goods and services, and they match savers who may lack detailed knowledge of borrowers and who (generally) want to be able to withdraw their money at short notice, with borrowers who often wish to repay their loans over a longer term horizon. This “maturity transformation” performed by banks is essential to allow capital to be invested in a productive way to support economic growth. But by offering such maturity transformation, banks are inherently exposed to liquidity risk – the risk that a bank is unable to meet its commitments should depositors attempt to withdraw their funds ahead of the bank’s capacity to repay them. As many bankers through the ages have found to their cost, the key objective for the management of liquidity risk is the retention of confidence.

I would like to highlight four emerging lessons from the current crisis that should help prevent future problems. First, we need to understand better the various sources of liquidity risk, particularly under stressed conditions. Second, banks need to develop more effective contingency funding plans. Third, banks should support improved market functioning and stricter market discipline through better disclosure. And finally, supervision should ensure that banks’ liquidity risk management is undertaken to a more robust standard, in order to internalise some of the costs of a bank failure on the wider financial system. I shall cover these briefly in turn. Banks and public authorities alike need to develop a more in-depth and more complete understanding of the various forms in which liquidity risk can arise. That requires both a careful analysis of the various potential sources of liquidity risk, and of how such risks may crystallise under stressed market conditions. As outlined earlier, in today’s financial environment, it is not just the simple maturity transformation between deposits and loans that generates liquidity risk for banks. To this must be added contingent risks, such as the potential activation of liquidity lines to off-balance sheet vehicles, or the drawing of committed facilities extended to corporate customers. Contingent risks may also arise, in a variety of forms, from complex trading instruments, as detailed well by the Institute for International Finance (IIF) last year.
25.02.2020  Economic and financial policy geared to climate goals Club Español de la Energía Pablo Hernández de Cos Governor  Ladies and gentlemen, good morning. I should like to thank the organisers and, in particular, the President of the Club Español de la Energía, Miguel Antoñanzas, for the invitation to participate in this seminar on such an important subject as sustainable financing for climate goals. Climate change and the transition to a more sustainable economy are undoubtedly becoming one of society’s main concerns. One of the reasons for this is that the impact of this transition will affect virtually every social and economic agent. The financial sector is no exception to this. Nor obviously is the energy sector. In my address today I wish to focus on three specific questions related to this issue. First, I will propose some basic principles which, in my opinion, should inform the economic policy deployed to guide the process of structural change entailed by the transition to a more sustainable economy. Second, I will describe the challenges that climate change and this transition pose for supervision and financial regulation. Finally, I will discuss what central banks can do to encourage the transition to a more sustainable economy. In particular, I should like to dedicate a few words to the role that monetary policy can play in achieving this objective.

For this purpose, we interacted with the IMF, which had already begun reflecting on the issue, and had ended setting up, in collaboration with the World Bank, the Bali Fintech Agenda, presented during the last annual meetings held in October, in Indonesia. 2  It was then an opportunity to converse with the staff of the department headed by Mr. Tobias, with whom I agreed to organize a regional meeting to follow up implementation of this agenda, which the Fund had initiated in Vienna early this year. Today, this agenda has become a reference used to address the problem in a structured and standardized way. I will not go through the details of this agenda, first because I think that Mr. Tobias is better placed than me for this, and second because the issue will be discussed thoroughly in the different sessions of this conference. Rather, my aim is to focus on the technological revolution, particularly its impact on the financial sector, then to discuss the challenges it poses for public authorities in general and for central banks in particular. Ladies and Gentlemen, In the aftermath of the 2008 crisis, while public authorities and international institutions, including the IMF, were concerned about the repercussions of the crisis, a different evolution was taking place and began to gradually transform the economic, financial and social landscape.
Despite the difficulties ahead, it is also important to recall that we are a country full of potential and that we have important opportunities to grow, and thus improve the well-being of all. We have faced a very significant and unusual set of shocks in recent years, and we have been weathering them with effort and high capacity for technological and productive adaptation. We must use these potentials and capacities to strengthen our productivity and our capacity for growth, the only sure and sustainable way to satisfy the needs of our fellow Chileans. This path is built by each one of us doing our bit. It is up to us, as the Central Bank, to contribute by achieving price stability. This helps to reduce an additional source of uncertainty and thus provides better conditions for everyone's capabilities to flourish. On stability and growth we can build and address the major challenges ahead. Thank you.

Figure 8 Monetary policy rates (percent) Eurozone Brazil Mexico  15 12  Canada Chile Colombia  U.K. EE.UU. Peru  9 6 3 0 18  19  20  Source: Bloomberg. 14  21  22  Figure 9 Financial conditions (1) (2) (3) Currencies  Stock markets  (index, 3.Jan.22=100)  (index, 3.Jan.22=100)  U.S.  Eurozone  Nominal 10-year bond interest rates (difference with respect to 3.Jan.22, basis points)  Chile  200  130  120 115  LatAm  120 150  110 110  105  100  100  100 95  90 50  90 80  85 80 Jan.22  Mar.22  May.22  70 Jan.22  0 Jan.22  Mar.22 May.22  Mar.22  May.22  (1) Dashed vertical lines mark the March 2022 Report statistical close. (2) Moving 7-day average of each index. (3) For LatAm, it considers simple average between Brazil, Mexico, Colombia, and Peru. Source: Bloomberg. Figure 10  Inflation forecast (*) (annual change, percent) Headline inflation 14  Core inflation (without volatiles) 14  CPI  12  Jun.22 Report  10  Core CPI  12  Mar.22 Report  Mar.22 Report Jun.22 Report  10  8  8  6  6  4  4  2  2 0  0 19  20  21  22  23  19  24  (*) Gray area, as from the second quarter of 2022, shows forecast.
In order to detect financial tensions as early as possible, we have sought to make our dialogue with member countries more continuous and probing and put more emphasis on the continuous and timely provision of accurate data. We are also concentrating more on policies decided at a regional level, on the regional implications of national economic policies, on banking and financial sector soundness, and on the policies and institutions that sound financial systems require. BIS Review 111/1997  Second, we are doing what we can to help markets function more smoothly. Considerable progress has been made in liberalising current account transactions worldwide so that countries can take advantage of the opportunities offered by the expansion of world trade. Now, we must turn our attention to fostering an orderly liberalization of capital account transactions, so that countries can also reap the benefits of global capital markets, while minimizing their risks. To this end, IMF members have agreed that the Fund’s charter should be amended to make the liberalization of capital movements one of the purposes of the Fund and to extend the Fund’s jurisdiction to capital movements, with appropriate safeguards, including transitional arrangements, to ensure that liberalization is neither premature nor unduly delayed. At the same time, the IMF is actively encouraging all countries to be transparent about their economic performance by improving the dissemination of economic and financial data to the public. Greater transparency will help strengthen market discipline and avoid market surprises that can lead to disruptive market reactions.

Working together, the UK authorities’ challenge was to remind financial markets that its sole purpose was as a temporary, short term cash management tool to smooth cashflows, and not in any way intended as a more lasting replacement for gilt issuance as the Government’s primary financing source: something that could 11  All speeches are available online at www.bankofengland.co.uk/news/speeches  11  complicate the execution of monetary policy. Those principles were embodied in a public announcement released on 9 April. In the event, the rapid normalisation of market conditions allowed the Government to announce, and so far meet, sharply higher near-term gilt issuance plans (Chart 14) without any need for recourse to the Ways & Means account. The account remains available for use, if unexpected future cash needs cannot be met by any other market-based means, e.g. because of a renewed period of dysfunction. But in such circumstances, the usage would be short term; and, as soon as possible before the end of the year, the DMO would scale up its market operations to repay the W&M balance. Chart 13: Usage of the Ways & Means account £ bn 25  Chart 14: DMO funding plans compared 2009 2016-2019 average 2020 2020 (DMO announced)  £ bn 350  20  300 250  15  200 10  150 100  5  50  0 2006  2008  2010  2012  2014  2016  2018  2020  Source: Bank of England.
So even though the trade deal focuses on trading goods and services, we also have an agenda to make sure we can work together post-Brexit in terms of supervising the euro area financial system and the UK financial system. Final question, just on a personal level: how are you finding the new job? Are you enjoying it? Is it everything you thought it would be? What’s Frankfurt like? Let me say two things. One is that of course I very much miss working at the Central Bank of Ireland, which is a great institution. But as an economist, leading the economics work of the ECB is a tremendous personal challenge and tremendously fulfilling. I can tell you that residentially, Frankfurt as a city is fantastic to spend time in. They may have historically a reputation of being a bit quiet, but I think anyone who spends time there is pleased with it. It is a really nice city to visit. 4/4  BIS central bankers' speeches

The notable decline in nonperforming loans in the balance sheet of the banking system is the most prominent achievement 1/4  BIS central bankers' speeches  in this aspect. The measures taken in mid-2016 have produced a substantial effect, materialised in the reduction of non-performing loans by around 10 percentage points, below the maximum level registered in 2015. It is always a pleasure to note that credit growth has been positive. In particular, the lek credit has grown rapidly, compared to the foreign currency credit, which makes the banking system and the private sector healthier, and enhances the effectiveness of Bank of Albania’s monetary policy. Positive developments in the banking sector and the economy have supported the further improvement of capitalisation, liquidity and profitability indicators. Two months from the end of the year, in our assessment, the banking industry in Albania enjoys full financial soundness, against the backdrop of an optimal liquidity and capitalisation situation, a key prerequisite for financially supporting the economic developments of the country. We have also paid particular attention to legal, institutional, regulatory and supervisory developments, notably the drafting and implementation of the resolution law. Dear participants, This year marked 25 years from the establishment of a two-tier system in Albania, which stipulates the banking system as the provider of financial and banking services in the economy, and the central bank as the administrator of the monetary policy and regulator and supervisor of the banking system.
Given the significant potential of PPP, we have identified it as one of the APG Co-Chairs’ Priorities and we have also successfully conducted the first part of the PPP Technical Seminar in July this year. For the upcoming PPP sessions in this Workshop, I believe speakers will explore more advanced topics including the operational and technical challenges of diverse PPP arrangements as well as the future of PPP, especially in relation to possible regional collaborative efforts. I trust that this would bring the conversation to the next level and encourage similar set-ups by other APG members. The third observation is on changes in the international AML/CFT/CPF standards . The FATF is continuously enhancing its Standards through various workstreams to ensure the availability of up-to-date policy responses and to facilitate better incorporation of the Standards into domestic laws and regulations. As you are aware, a recent change to the FATF Standards was the introduction of a requirement to identify and assess the risks of potential breaches, nonimplementation or evasion of the targeted financial sanctions related to PF and to take action to mitigate these risks. As authorities and the private sector are expected to promptly take necessary steps to implement this new requirement, it is timely for our Workshop to have further discussions on this matter. Compared to ML and TF, proliferation financing is usually considered a relatively new area and less understood.

We are in the midst of an unusual dynamic in financial markets, in which low realized volatility in macroeconomic outcomes, low realized credit losses, greater confidence in the near term path of monetary policy, low uncertainty about future inflation and interest rates, rapid changes in the nature of financial intermediation (role of hedge funds and the change in how credit risk is bought and managed), and a large increase in the share of global savings that is willing to move across borders, have worked together to bring risk premia down across many asset prices. There is no reliable analytical framework one can use to determine whether we are experiencing an unwelcome or unjustified decline in expected volatility, or whether investors are giving too much weight to the relative stability of the recent past and too little to the uncertainty posed by the challenges ahead. And analysts can point to good fundamental reasons and some plausible theories to support this collective judgment of market participants about low future risk and volatility. But there is much we do not understand about how these transitions ahead will unfold - in fiscal positions, the U.S. external imbalance, and in the exchange rate system and portfolio preferences. The recognition that things that are not sustainable will eventually come to an end does not give us much of a guide to whether the transition will be calm or exciting.
To begin with, the Federal Reserve is among the most transparent of central banks in disclosing the specifics of its market operations, including the data reported under the requirements of the Dodd-Frank Act. Details about foreign exchange transactions and foreign exchange investment operations are reported in the  11  Primary dealers are expected to bid in every auction for, at a minimum, an amount of securities representing their pro rata share of the offered amount. That share, currently 1/22nd, is based on the number of primary dealers at the time of the auction. 12  Stephen V. O. Clarke, Central Bank Cooperation 1924–31 (New York: Federal Reserve Bank of New York, 1967), pp. 162, 175–76, 205, and 209. BIS central bankers’ speeches  5  quarterly foreign exchange reports released to the public by the New York Fed. In addition, summary information about all operations appears on the weekly Federal Reserve balance sheet, which is available on the Board’s website. The Desk posts comprehensive results of all domestic open market operations with primary dealers and expanded counterparties to the New York Fed’s public website within a few minutes of the operations’ completion. Results of Treasury auctions are likewise released to the public within a few minutes of the close of competitive bidding and contain considerable detail regarding participation by primary dealers and both direct and indirect bidders. Such reporting by the Treasury exhibits a high level of transparency relative to foreign treasuries’ reporting.

Despite this long-standing perception among some market participants that primary dealer status represents an endorsement by the New York Fed of a financial institution’s creditworthiness or ability to provide efficient execution of large transactions, we have repeatedly stressed the importance of other market participants’ engaging in their own assessment of potential counterparties’ capabilities. Recent history provides several reminders that the primary dealer designation provides no guarantee against credit risk or other counterparty risks. While the New York Fed certainly performs its own due diligence, we do so in pursuit of our unique business objectives, which may differ from those of private agents. Market participants should therefore be  7  Since July 2013, the Desk has conducted pilot programs with seven smaller firms outside of the primary dealer system in order to explore how to conduct open market operations in Treasury and mortgage markets with firms that are considerably smaller than existing primary dealers. The Treasury Operations Counterparty (TOC) and Mortgage Operations Counterparty (MOC) pilot programs have provided valuable insight into the appropriate size and operational capacity of open market operation counterparties. BIS central bankers’ speeches  3  engaging in the appropriate level of due diligence required by their fiduciary responsibilities in the context of their specific business requirements. Such independent assessments are in our collective interest because they foster market discipline and a safer, more secure financial system.