samchain/econo-pairs-v1 huggingface dataset:
At the Brisbane summit in 2014, the G20 leaders agreed an ambitious goal to lift the level of G20 GDP by at least two per cent by 2018. But only eighteen months on, the 2 in 5 commitments are starting to look more like the 5/2 diet. Less than half of the measures have been implemented, and only around one third of the promised impact on global GDP has been delivered. Moreover, whilst implementation has lagged, the need to boost growth has increased in size and urgency. The Bank of England projects the level of global GDP in 2018 to be over 3% below what the IMF expected at the time of the Brisbane summit. We need to live up to China’s G20 priorities. Structural reforms with a long-term focus but a short-term implementation horizon. Determined reform of the global architecture for sustainable capital flows. The development of our essential macroprudential frameworks and the implementation of our financial reform commitments to address new vulnerabilities. These will allow monetary policies to fully bridge to a better future. Conclusion That future needs the arms of macro policy to operate in close concert, domestically and internationally. Demand stimulus alone will not sustainably reflate the global economy. Moreover, sustained low rates could strain the capacities of macroprudential policies. At their roots, fiscal, monetary, financial and structural policies are deeply complementary, operating through many of the same channels. A stronger financial system can better channel savings to investment, building demand in the short run and productivity in the long run.

It is expected that the aggregate common equity tier one ratio across all G-SIBs, as calculated on the basis of the fully-loaded Basel III requirements, was more than 11% at end-2015, double the ratio in 2009. In parallel, authorities have tightened both the definition of total capital and the requirements on trading activities. Bank funding profiles have also improved since the crisis. For UK banks, liquid asset holdings have tripled to £ and, for the system as a whole, customer loan books are now entirely funded by customer deposits – up from around 75%. Trading assets are down by a third and inter-bank exposures have shrunk by two thirds. Moreover, in the United Kingdom, banks have already been stress tested to ensure they have enough capital to cover two severe scenarios: a hard landing in emerging markets, and a UK balance of payments shock. BIS central bankers’ speeches  7  Chart 7 Capital ratios up materially CET1 (net of transitionals)  % of RWA 14  Transitional adjustments  12 10 8 6 4 2 2008  2015 H1  € Core  2008  2015 H1  € Periphery  2008  2015 H1 UK  2008  2015 H1  0  US  Source: SNL, EBA and Bank calculations. Policymakers can help banks transition to more sustainable business models by giving the maximum regulatory clarity.
14  BIS central bankers’ speeches  Phase III (from 1 August to 31 December 2014) Action 1: Revisiting and modifying the regulatory framework As we move onto a new platform of maintaining financial system stability with a set of relatively larger financial institutions under the transformation process of the domestic economy as well as the global economy, we feel that existing Directions, and Rules and Regulations that were used to assess the compliance of the banking and non-banking institutions too need to be revisited and modified in accordance with the financial sector consolidation programme. Accordingly, two internal committees have been officiated by the Departments of Supervision of Banks and Non-bank Financial Institutions to study the existing regulatory framework and propose changes in line with international best practices. The recommendations of these committees are expected to be submitted to the management of the Central Bank by end 2014. Action 2: Reviewing consolidation plans and meetings with the Boards of Directors In September 2014, the third round of meetings were held between the Consolidation Unit and the Boards of Directors of a few selected NBFIs to have a closer dialogue about their progress on the merger and acquisition plans. At these meetings, the Unit discussed in detail about the issues hindering their action in progressing with the consolidation programme, and provided them with necessary guidance for resolving the prevailing issues with a view to facilitating the expeditious implementation of their merger plans.

One explanation for the increase may be that Icelandic companies have been undervalued by the markets, for example relative to comparable businesses in other countries, and another that bold and determined investment ventures have driven up their value. But risk and gain often go hand in hand. Sometimes the stakes may be raised too high. It has long been customary to pay a premium for attractive investment options. Such goodwill used to be depreciated in companies’ accounts over a long period and rarely affected their operations. The situation has changed whereby companies now need to make impairment tests of the goodwill they enter on the asset side of their balance sheets. If their original ventures fall flat, the goodwill must be depreciated accordingly. Thus there is a risk, if conditions deteriorate, that this rule could amplify a company’s negative results at the worst possible time. Goodwill totalling more than 500 b.kr. was entered in the financial statements for 2006 of companies listed on Iceland Stock Exchange, and at certain companies, goodwill and other intangibles account for more than half of the total assets on their books. This is a cause for some deliberation. Although the Central Bank’s main function on occasions such as this is to draw particular attention to causes for concern, it should of course take note, like everyone else, of the factors conducive to strengthening the long-term economic outlook. Iceland’s economy is advanced, transparent and vibrant.
Unemployment has increased sharply in countries not far from our own. Given the high levels of available resources, there are prospects of lower than normal interest rates among our main trading partners for some time ahead. There are now signs that the stimulus measures are reviving growth, but production is still lower than it was prior to the crisis. The challenge going forward will be to address the problem of rising unemployment and high government debt in many countries. Why did it happen? When the Queen of England visited the London School of Economics in November last year, she asked her host why no one had foreseen the financial crisis. In July this year, her question was answered by a panel of 33 prominent economists from British universities, government institutions and the business sector. The panel did not cite only a single cause, but a web of causation. An important factor behind the crisis can be found in global macroeconomic developments in the years preceding the crisis. In the 2000s, China made its grand entry into global trade with an attendant surge in production and income. This led to higher demand for inputs, and the prices of oil and other raw materials increased. On the other hand, global consumer price growth was pulled down by exports of cheap goods from China and other countries with low production costs. Interest rates were lowered in many countries to prevent very low inflation or deflation.

In trade-weighted terms, the Swiss franc is currently almost unchanged from January. Structural changes in the foreign exchange and money markets As you will know, the Swiss National Bank (SNB) implements its monetary policy via the money and foreign exchange markets. Consequently, structural changes in these markets are particularly important to us. I would now like to talk briefly about the major changes and their significance for our work. On the foreign exchange market, we are seeing a substantial decline in turnover in the primary interbank market. Meanwhile, the size of the market as a whole has decreased only slightly. This means that the interbank market has lost market share. The primary interbank market covers trading via the electronic communication networks. Between 2010 and 2013, turnover through these networks fell by almost 40% overall. In chart 3 you can see an example of this decline in turnover for the EURCHF and USDCHF currency pairs. In 2013, this was already below the previous levels, and a further decline in turnover is becoming evident for the current year. This development is attributable, in essence, to three factors. First, there is an increasing tendency for large merchant banks to use internal clearing for customer transactions. This means that the need for hedging transactions on the interbank market has declined. Second, to an increasing extent, merchant banks are offering liquidity via other electronic distribution channels such as their own trading platforms or multibank platforms. This enables them to attract more business and to benefit from the additional internalisation.
Luis M Linde: An outlook on the Spanish economy Speech by Mr Luis M Linde, Governor of the Bank of Spain, at the Official Monetary and Financial Institutions Forum (OMFIF), London, 9 February 2016. *  *  *  I would like to thank OMFIF and Mr. David Marsh for the invitation to participate in this Forum, an initiative that favours public and private sector interactions and the exchange of views on topics of common interest. According to the title of my intervention, I will comment on the current situation of the Spanish economy, with a special focus on developments in employment, the external sector and fiscal adjustment. I shall continue with a brief review of some of the reforms undertaken that have laid the foundations underpinning the recovery. I will continue with some references to the situation of the banking sector and the challenges it is confronted with; and I will conclude with some comments on the growth perspectives of the Spanish economy. Current performance of the Spanish economy The current performance of the Spanish economy shows robust growth, employment creation and a surplus in the external balance. The simultaneous occurrence of these three positive developments has not been very usual in recent decades in the Spanish economy. We should also mention the ongoing deleveraging process, which should be considered necessary and positive. The recovery of the Spanish economy started in the second half of 2013, following the severe contraction that took place in the preceding years.

According to the estimates of GDP growth for the fourth quarter, the economic expansion extended into the final part of 2015, setting the rate of growth at 3.2% for the whole year. Spain thus recorded the strongest economic growth amongst the main economies in the euro area. Certainly, these developments were supported by some tailwinds, whose impact on growth rates is expected to decay over time. I refer here to the fall in oil prices, the depreciation of the euro and the easing in financing conditions. But, quite obviously, these factors were also present in other economies which posted significantly lower growth rates. This underlines the fact that elements of a more permanent nature lie behind the recent performance of the Spanish economy, these elements being linked to the correction of the previous imbalances and the reforms that have been undertaken. Concerning prices, the latest estimate for the harmonized price index in Spain was moderately negative in January (minus 0.4%), due to a decline in energy prices, and it is expected to remain in negative territory for the coming months. The indicator that excludes energy prices went up moderately in the course of last year, in line with the reduction in the degree of slack of the economy. In the euro area, overall prices showed an increase of 0.4% in January, that is, 0.8 pp above the rate recorded in Spain. Thus, the Spanish economy continues to gain competitiveness vis à vis the euro area.
Just how difficult that would be – and how far sovereign money would complicate our work – can be illustrated by taking the example of our monetary policy during the last financial crisis. Over a very short space of time, we created a vast amount of money; initially to ensure liquidity in the banking system, and thereafter to counter the massive upward pressure on the Swiss franc. This led to a significant expansion of our balance sheet. How would we have proceeded in a sovereign money system? We would probably not have reacted so decisively given the difficulty of reducing liquidity once it has been created in a sovereign money system, which can therefore lead to higher inflation further down the line. A weaker monetary policy reaction would have exacerbated the negative consequences of the crisis for the real economy. Quite apart from that, it is doubtful whether we would even have been able, in a sovereign money system, to react as we did because the initiative limits the number of tools we would 2  As regards the SNB’s shift from monetary targeting to interest rate targeting, cf. Meyer, Hans, On monetary policy in the new year, speech held at the University of St. Gallen, St. Gallen, 20 January 2000. Page 6/8  have available. Interventions in the foreign exchange market, which have played a central role in combating the overvaluation of the Swiss franc, would not actually be allowed under a sovereign money system.

Speech  Embargo 3 May 2018, 6 pm  Why sovereign money would hurt Switzerland Swiss Institute of Banking and Finance at the University of St. Gallen (s/bf-HSG)  Thomas J. Jordan Chairman of the Governing Board ∗ Swiss National Bank Zurich, 3 May 2018 © Swiss National Bank, Zurich, 2018 (speech given in German)  ∗ The speaker would like to thank Petra Gerlach for her support in preparing this speech. He also thanks Claudia Aebersold Szalay, Simone Auer, Peter Kuster, Carlos Lenz and Alexander Perruchoud as well as SNB Language Services. Page 1/8  Ladies and gentlemen Today, the Swiss Institute of Banking and Finance at the University of St. Gallen celebrates its 50th anniversary. Let me extend my sincere congratulations on reaching this milestone. Our financial system has evolved steadily over the past five decades. In the early years of the institute, the world was still dominated by Bretton Woods, the post-war monetary system with its fixed exchange rates and the US dollar as anchor currency. Thereafter, flexible exchange rates were the order of the day, and more recently, banks have had to face the challenges of the financial crisis. I would like to take this opportunity today to address a topic which has also arisen from the challenges of the financial crisis – the Swiss sovereign money initiative. This initiative raises unrealistic expectations, and adoption by the people and the cantons on 10 June 2018 would have serious consequences for Switzerland.
In other words, it stems from an increased acceptance of paying a certain price over the short term in order to reduce the risk of a particularly unfavourable outcome later on. However, the question remains of what this “something” that can dampen the build-up of imbalances could be. Should we deploy the weapons of the policy rate, of regulations or of a combination of the two? The answer to this question largely depends upon the view taken of the efficiency of the policy rate and regulations respectively as regards dampening excessive credit growth. It also depends upon the consequences arising for inflation and the real economy in various time perspectives if the policy rate or regulation, respectively, are used. Both the policy rate and regulations have their advantages and disadvantages. The policy rate is a blunt instrument in so far as it impacts all lending in the economy, which can be seen in the two interest rate equations for companies and households, respectively. It can require decisionmakers to make difficult choices and is a tough challenge to communicate. It is probably quite difficult to explain that the policy rate is being increased to safeguard stability in inflation and the real economy further ahead, even though everything looks good in a more short-term perspective. This task is not made any easier when policy rate increases impact sectors in which credit growth is not deemed to pose any problem. At the same time, the very bluntness of the policy rate is one of its strengths compared with regulations.

Changing the regulation too late will contribute more towards making the fall greater than braking the build-up of the imbalance. Neither do we have much practical experience of using regulations to prevent bubbles – even if it should be mentioned that we actually do not have particularly much experience of using policy rate increases for that  BIS Review 68/2010  17  purpose either. Consequently, it may be difficult to determine the appropriate “dosage”. One potentially fairly serious problem with regulations is that experience has shown us that it is relatively easy to circumvent them. Possibilities for regulatory arbitrage can be particularly great when the regulatory framework is applied in a more differentiated manner. The role played by the “shadow banking system” in this crisis is an example of the consequences of circumventing regulations. Is a combination of policy rate and regulation needed? I mentioned earlier that it seems as though more and more are advocating that something may need to be done when it seems as though a credit-driven imbalance is building up. I do not believe that the increasing popularity of this view has so much to do with the fact that the identification of an excessive credit expansion is now considered to be easier. Neither is it because we have identified tools that can effectively and accurately brake an unsustainable credit growth. Rather, I believe that it is due to society’s increased unwillingness to live with the real economic risks entailed by such imbalances.
In this connection, the Governing Council of the Banco de España currently comprises, aside from the Deputy Governor and myself, six elected members and two ex officio members. The latter sit on the council by virtue of their position, namely: the Vice-Chair of the CNMV and the General Secretary of the Treasury and International Financing.11 It has traditionally been argued that the ex officio members allow for enhanced coordination across the country’s various economic and financial authorities. However, such coordination was boosted recently via the creation in 2019 of AMCESFI, the new macroprudential authority, in which the three sectoral supervisors and the Ministry of Economic Affairs and Digital Transformation participate. Against this background, and in the interest of increasing the institution’s independence, it might be desirable for the ex officio members to attend the meetings of the Governing Council of the Banco de España in a non-voting capacity, and for the Banco de España representative at the CNMV to do likewise. 5 Financial supervision arrangements in Spain I would also like to underscore that, precisely after redressing a significant shortcoming detected in the Spanish financial supervisory system by creating a Spanish macroprudential authority, I believe that it is now time to start reflecting deeply on the financial supervisory model existing in Spain.12 This would serve to align it with international best practices and adapt it to the challenges we currently face.

2 years Directors-General and Associate DirectorsGeneral 6 months (extendable to 12) Senior officers of the Central Government  Spanish Central Government  Law 3/2015 of 30 March regulating the holding of senior offices in the Central Government  Officers in a regulatory or supervisory body (including the National Securities Market Commission (CNMV), the National Commission on Markets and Competition (CNMC) and the Nuclear Safety Board CSN) Members of the Governing Council (Gov C), the Supervisory Board (SB), the Executive Board (ExB), the Steering Committee, the Mediation Panel  2 years  2 years  Private banks that have been subject to their supervision or regulation  1 year (extendable to 2 in the case of direct involvement in supervision)  Significant or less significant credit institutions  6 months  1 year Members of the ExB and the Gov C ECB  Code of Conduct for high-level ECB officials (2019/C 89/03) Gov C and SB alternates  6 months 6 months (extendable to 12 in the case of direct involvement in supervision) 3 months  6 months Gov C alternates 3 months  EC  Code of Conduct for the Members of the European Commission (2018/C 65/06)  Professional activities related to credit institutions, specialised lending institutions and securities markets Private banks affected by decisions in which they have participated with their vote In the case of Governing Council members, the prohibition extends to any private entity subject to regulation or supervision by the Banco de España, including Spanish banks within the remit of the SSM Relative prohibition: banks directly related to the duties of the office held (i.e.
On the other hand, on May 26, the European Commission proposed the Member States to establish national funds, financed from taxes imposed on the financial sector, in order to assist in closing or reorganizing the unsuccessful banks. The macroprudent tools mentioned so far, do not by any means exhaust the list of suggestions. Exploring adequate instruments continues, and we are all waiting to see what will be delivered both in the form of ideas and in the form of operational tools. III. The crisis has proved that the price stability is not sufficient to achieve financial stability. 6  BIS Review 90/2010  Basically, with small exceptions that have no impact on the adoption of political decisions, the dangerous influence of the growing imbalances in the financial system was not conceived. The central banks were happy for registering low inflation rates, so it seemed to sidetrack the rapid credit growth; the lower risk aversion; the increase in asset prices, and consequently, the mounting vulnerability on the financial market. That is why, O. Blanchard and others, (2010) say that: “the crisis has made clear that policymakers have to watch many targets, including the composition of output, the behavior of asset prices, and the leverage of different agents. It has also made clear that they have potentially many more instruments at their disposal than they used before the crisis.

These examples show that the macroprudential tools could have an effect on the vulnerabilities by increasing the financial sector resilience. The Basel Committee has already proposed the following tools: -  countercyclical capital framework. This will require from the financial institutions to build up capital in good times, that can be drawn upon in periods of stress;  -  forward looking provisioning. Banks are encouraged to allocate provisions based on expected losses, as opposed to allocating provisions on the basis of incurred loss. This approach is less procyclical than the so-called “incurred loss” provisioning model. 4  BIS Review 90/2010  -  capital conservation measures. This measure includes activities aimed at restricting oversized payments of dividends, share buy backs and generous compensation payments by financial institutions. Capital requirements are undoubtedly the foundations of the microprudential regulation, but they also have a macroprudent dimension related to the procyclicality of the financial sector. Capital buffers which should confront procyclicality should meet two objectives: first, they should help the banking system handle the risks which could materialize in periods of crisis, and second, they should mitigate the reduction of the economic activity in a situation of downward movement of the economy. Nevertheless, several key issues remain open for discussion. Should the discretionary interventions on the buffers be reduced to the minimum, in order to prevent regulatory capture? On which geographical level should the aggregation be adopted in order to calibrate the buffers?