samchain/econo-pairs-v1 huggingface dataset:
Slide 9  Financial crises in emerging countries 25 Worst Financial Crises in History Ranking 1 3 4 6 8 10 14 12 15 17 18 21 23 24 25  Year  Country 1926 Chile 1983 Peru 1931 Uruguay 1929 Mexico 1890 Brazil 1890 Uruguay 1929/1933 US 1980/1985 Argentina 1994 Venezuela 2008 Greece 1931/1934 Argentina 1981 Mexico 2001 Argentina 1980 Chile 2002 Uruguay  % change Peak to trough -46.6 -32.0 -36.1 -31.1 -21.7 -21.0 -28.6 -21.8 5.3 -24.0 -19.4 -14.1 -20.9 -18.9 -18.9  Number of years Peak to Peak to Severity trough recovery index 3 16 62.6 11 25 57.0 3 17 53.1 6 16 47.1 4 21 42.7 2 19 40.0 4 10 38.6 11 18 39.8 11 14 8.7 6 12 36.0 3 15 34.4 7 17 31.1 4 8 28.9 2 8 26.9 4 8 26.9  Sources: Reinhart, C. and K. Rogoff (2014), “Recovery from Financial Crises: Evidence from 100 Episodes,” Working Paper 19823, NBER.

Looking ahead, the transition to a greener economy will entail a sharp reduction in aggregate energy dependence, from around 60% today to 10% in 2050 in a zero-emissions scenario. However, this same policy, as well as the digitalisation of the economy, will increase the EU's need to import so-called “critical raw materials”. These materials (such as rare earths, palladium or cobalt) are considered critical by the European Commission due to their economic importance, the difficulty in replacing them with other materials, the high import concentration and other supply-related risks. 5 For example, China controls about half of global rare earths mining capacity and 85% of the refining capacity. Russia is the EU’s main supplier of these raw materials (accounting for 18% of the total value of such imports in 2019). According to the European Commission, the demand for some of these critical raw materials could increase more than fivefold by 2030, which will cause the EU's external dependencies in this field to increase dramatically in the near future. A second vulnerability concerns export concentration. This is a key aspect for the European economy, which has historically maintained a strong trade surplus, and whose exports have compensated some of the recent large terms of trade loss stemming from high energy prices. In this regard, EU exports of various pharmaceutical and chemical products and some high-tech manufacturing goods are highly concentrated in the US and the UK, and are also characterised by relatively low domestic demand.
During the upturn that preceded the crisis, when risks were low, banks were able to expand their balance sheets and present good capital adequacy figures, despite the fact that they held relatively little capital. When the downturn then began and the risks increased, more capital was required to reach the stipulated minimum level of capital. With the increase in risks and the loss of confidence between the banks, the markets’ capital adequacy requirements also increased. In order to meet these requirements, banks in many countries were forced to reduce their balance sheets. This led to a fall in lending to companies and private individuals. This in turn triggered a downward spiral with a fall in demand and in investment capacity, which reinforced the downturn in global economic activity. When you list the problems in this way it becomes pretty clear that we need to revise the existing regulations. The Basel Committee has done a lot of hard work to correct these shortcomings and I welcome their proposals on a new international regulatory framework for banks. Basel III – what is new? Basel III comprises global minimum regulations and aims to strengthen the banks’ ability to manage losses and reduce the probability of new financial crises. To achieve this, the banks will be required to hold more and better-quality capital. An important task for the decisionmakers involved has thus been to increase the international capital adequacy requirements But Basel III is not just about capital.

Each of the concepts poses a serious threat to the reputation and credibility of the Facility. a. Excessive leverage is now regarded as one of the causes of the financial crisis. b. The proposals for protection and a first loss tranche of 20% of the nominal debt are also laden with problems. The example of Greece demonstrates that the losses may run to 60%. There is great uncertainty about who would pay for the difference between the insured loss and the actual loss if the Greek  BIS central bankers’ speeches  1  scenario was to be repeated in other countries. Likewise, it is not clear how freely tradable protection certificates would be traded, priced, settled and, in the event of default, enforced if they were to be introduced. Such certificates would de facto be quasi CDS instruments underwritten by the official institution of a community of countries that are simultaneously waging a campaign against credit derivatives because they regard them as one of the causes of the crisis. c.  The signs of a gradual shift towards short-term funding of the EFSF are a worrying signal. The risk arising from financing assets that are by definition long-term and illiquid (primarily rescue loans) through a programme of shortterm debt instruments (liability rollover risk) is more than clear. This ALM model proved to be extremely risky during the financial crisis when the commercial paper market dried up. 4. Another uncertainty is related to the project of purchasing bonds in the secondary market.
Our policy was guided by monetary targets until the end of the 1990s, and only recently, like most central banks, have we shifted our focus to price stability more directly. I would like to share with you some of the lessons we have learned from that period with flexible exchange rates and, in particular, review our recent experience of living on the edge of the euro area. Living on the edge of the euro area As you can imagine, the introduction of the euro in January 1999 constituted a sort of revolution in our monetary environment. For the first time in our history, we are now surrounded by a single currency area, which also happens to be the destination of 60% of our exports. In fact, our situation, in terms of economic power, can be compared to that of the State of Massachusetts in the United States. Can you imagine the State of Massachusetts having its own currency? The natural question is: How do we come to the conclusion that monetary independence is still desirable? Indeed, given our geographical position, we, Swiss, frequently have to explain why we decided not to adopt the euro or not to peg our currency to the euro, as Denmark has done. The first question I would like to address today is therefore: What are the advantages for Switzerland of retaining its national currency, as opposed to adopting the euro? I will then look at the conditions that are necessary for successful monetary autonomy.

Another natural reason for the presence of low interest rates is our history of low and stable inflation rates, at least in comparison with other countries. As a result, international investors view Switzerland as a kind of safe haven, which gives rise to an interest rate advantage in nominal as well as in real terms. If Switzerland were to give up its monetary independence by pegging the franc to the euro or by joining the euro area, it would lose its privileged status and, consequently, Swiss interest rates would increase to European levels. Since higher interest rates mean lower asset prices and lower levels of investment, and also higher mortgage rates, the Swiss are understandably not keen on giving up their national currency. Since any major decision in Switzerland has to be approved in a public referendum, the prospect of euro membership in the near future is thus highly unlikely. The final point I would like to make is that going for a currency peg instead of adopting the euro outright is not an option for Switzerland either. It could even be a dangerous solution. Currency peg not an option It is no secret that the majority of Swiss are against EU membership, at least at the moment. But you may ask: Even if Switzerland isn't an EU member, couldn't it peg the Swiss franc unilaterally to the single currency? Wouldn't this help eliminate the exchange rate risk, without giving up monetary flexibility entirely? There is no such thing as a free lunch in monetary affairs!
The sector composition of the three Scandinavian stock exchanges provides an illustration. The Oslo Stock Exchange is heavily dominated by the energy sector, which is practically absent in Stockholm, Copenhagen and the two other Nordic exchanges. Norway has small traditional industries, but the IT and telecom sector is comparable to the other countries’ in relative size. The different sector composition of the stock exchanges also illustrates the potential for diversification by investing across the Nordic countries. The differences in industrial structure imply that international economic developments will affect the Nordic countries differently. Most notably, an oil price shock will have the opposite effect in Norway than in the other Nordic economies. In 2001, the petroleum sector in Norway accounted for around 20 per cent of total investments, 45 per cent of exports, 24 per cent of GDP and 35 per cent of central government revenues. The government net cash flow from the petroleum sector has increased in recent years. Since 1995, the fiscal surplus has been invested in the Government Petroleum Fund. The size of the Fund has increased rapidly in the last few years, and will reach close to 100 per cent of GDP towards the end of this decade, according to estimates from the Ministry of Finance. By investing a substantial part of petroleum revenues abroad, the Government Petroleum Fund limits the effect of the current account surplus on the exchange rate. GDP growth in Norway has been relatively high since 1990, also when excluding the petroleum sector.

Svein Gjedrem: A central banker’s comparison of the Nordic countries Introduction by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), at the panel discussion of the ACI Nordic Congress, Göteborg, 24 August 2002. Please note that the text below may differ slightly from the actual presentation. *  *  *  For outsiders, it may be convenient to see the Nordic region as consisting of countries with very similar characteristics. However, the countries are different in several ways. First, they differ in their relations to the EU and with respect to their monetary policy regimes. Sweden, Denmark and Finland are members of the EU. Finland is also a member of EMU. The euro has replaced the markka as legal tender, and Finland and the other 11 member countries of EMU have a common monetary policy. Denmark is in ERM II while Sweden, Iceland and Norway have inflation targets. In Norway the inflation target of 2½ per cent was adopted on 29 March 2001 and now functions as the nominal anchor for the Norwegian economy. The introduction of the inflation target did not imply a significant shift in the way monetary policy was conducted. However, the introduction of the inflation target brought monetary policy in Norway more in line with common practice internationally, and facilitated communication. Although the approaches differ, inflation has been relatively low and stable in the Nordic countries in recent years. Second, the Nordic countries are different in terms of industrial structure.
ahap Kavcolu: Recent economic and financial developments in Turkey Speech by Mr ahap Kavcolu, Governor of the Central Bank of the Republic of Turkey, at the Istanbul Chamber of Industry Meeting, Istanbul, 29 July 2022. *** Distinguished Members of the Istanbul Chamber of Industry, I would like to thank you for your invitation to the regular July meeting of your Assembly, which is among the leading representative councils of our country's industrial sector with its history of 70 years and more than twenty thousand members. I am pleased to meet with you here today. I will start my speech by giving a brief account of the developments regarding the macroeconomic outlook. Then, I will talk about the structural transformation that our country is going through. After sharing with you the Central Bank's contributions to this important transformation, I will leave the floor to you. Esteemed Participants, Geopolitical risks that increased in the first half of the year, and energy problems, supply constraints, and supply chain disruptions due to the lingering effects of the pandemic have led to negative consequences on a global scale. However, recently, there has been a partial improvement in energy and commodity prices as well as in supply conditions and lead times. In this context, lead times in emerging economies have improved considerably in recent months, and significantly converged to their normal levels. Meanwhile, lead times in advanced economies have remained elevated despite some decline.

That is supplemented by three operational objectives, including “protecting and enhancing the integrity of the UK financial system” which is in turn defined in the legislation to include “its soundness, stability and resilience”. This is in line with Principle 6 of IOSCO’s objectives and principles for securities regulation: “the Regulator should have or contribute to a process to monitor, mitigate and manage systemic risk, appropriate to its mandate”. 10 See Tucker (2011), “Building resilient financial systems: macroprudential regimes and securities market regulation”, International Council of Securities Associations. 11 This was highlighted by the Bank of England in 2006 Financial Stability Review p. 8: “Many may have believed that the price of certain assets had become too high and the premium for taking risk too low. But there are business risks associated with acting on that view when others are not; it may not only reduce profitability in the short run, but may also risk losing market share or failing to establish a foothold in a rapidly expanding market. These concerns often seem to have outweighed the risks to balance sheets associated with potentially overpriced assets. As a result, in the early part of this year, there appears to have been an extension of risk-taking activities by financial institutions, including some UK banks. “  BIS central bankers’ speeches  7  the system safe and sound has made real progress in recent years, but it is not complete and absolutely must continue with energy.
Yet the level of European wholesale gas prices has fallen substantially further towards its prepandemic level in recent weeks, perhaps suggesting that the intensity of attempts to avoid the costs implied by a terms of trade deterioration are likely to abate, with the strength of intrinsic inflation persistence set to fall in parallel. Judgements along these dimensions will shape my assessment of how persistent the current elevated level of inflation will prove, and thus what the appropriate monetary policy choices will be. This discussion can be placed into a bargaining framework. Imperfect market competition leads to the creation of some ‘economic surplus’ that has to be distributed across various competing actors. [25] Given the deterioration in the terms of trade, more of that surplus has to be given to foreign suppliers of energy. That leaves less to be shared among domestic residents. A bargaining process will determine how the remaining smaller economic surplus is distributed, as each group or actor seeks to preserve their own real spending power. There is a tendency to view this bargaining process as a confrontation between ‘workers’ and ‘firms’, and some of the media coverage likes to interpret central bank statements in that light. But any economic transaction involves distribution of some ‘economic surplus’ between a buyer and a seller. In a market transaction, the more effective the seller is in extracting that economic surplus, the higher the resulting market price will be.

News conference  Berne, 15 June 2017 Andréa M. Maechler  Introductory remarks by Andréa M. Maechler  I will begin by reviewing the situation on the international financial markets. I will then address some developments on the Swiss money and foreign exchange markets – specifically the establishment of SARON as the leading reference rate for interest rate derivatives and the adoption of a global code of conduct for foreign exchange market transactions. Situation on the financial markets  Let me start with developments on the international financial markets. Overall, positive sentiment has continued to prevail since the beginning of the year. Economic conditions have provided favourable momentum, with data pointing to ongoing recovery in both Europe and the US. Furthermore, companies on both sides of the Atlantic reported solid profits in the first quarter. The principal beneficiaries of these developments have been the equity markets, both in the advanced and the emerging economies (cf. chart 1). Various major equity indices have repeatedly recorded historical highs in the year-to-date period. While the SMI has not yet hit its historical high, it too made substantial gains and recently closed up 8% on the beginning of the year. Heightened political uncertainty has had no lasting effects on the equity markets. This assertion is borne out in risk perception metrics. Volatility derived from option prices (implied volatility) once again fell substantially. On the US equity market, volatility approached historical lows at times in May and June (cf. chart 2).
Another problem encountered in 2000 was the lack of a front-loaded Supplemental Reserve Facility, which would support foreign exchange reserves when needed in the course of the program. The adverse developments in November 2000 and in February 2001 compelled the Central Bank to pursue policies aimed at stabilizing the financial markets. Priority was given to make the payments system function again by providing liquidity to the market, after having been switched to the floating exchange rate system. In this context, the Central Bank lowered its bid and offer rates in the interbank money market starting from 26 February 2001. Liquidity was given mostly to the state-owned banks, and to the banks that had been transferred to the Saving Deposits Insurance Fund through overnight quotations under open market operations. Besides overnight funding via open market operations, the  2  BIS Review 35/2001  Central Bank has also started providing the markets with liquidity through forward transactions since the mid-March. At the same time, the Central Bank withdrew the excess liquidity by way of repurchase and reverse repurchase transactions at the Istanbul Stock Exchange and by way of the CBRT interbank money market, when needed. The Central Bank has also provided banks with cash via foreign exchange deposits and limited foreign exchange interventions to help them fulfill their external obligations.

It will be consisted of Governor, Vice Governors, one member to be elected from among the Board members and one member to be designated by Council of Ministers upon the proposal of the Governor. This Committee will play an important role in setting the targets and regulations, upon which the Central Bank will act jointly with the Government. However, the Central Bank will support the governments’ policies on economic growth and employment, on condition that they do not conflict with the aim of achieving price stability. The Draft-Law is removing a number of constraints of the present Law on the monetary policy actions and is bringing new facilities. The concepts of Transparency and Accountability are underlined in the Draft-Law. For example, the Governor of the Central Bank will report to the Council of Ministers and will brief the Planning and Budget Commission in Parliament twice a year on the Bank’s activities. Moreover, the Bank will disclose its monetary policy implementation to the public by means of reports and announcements. In addition to this, if by any chance inflation targets are missed or should there be a probability of failing to hit the targets, then the Bank will explain the reasons thereof to the Government and to the public. The balance sheet, profit and loss account of the Bank will be audited by independent agencies, which is another element increasing the Bank’s transparency.
They seem to me to have quite a lot in common in terms of immediate priorities, although there are important differences in terms of where we may ultimately end up. I welcome in particular their shared emphasis on involving practitioners in consultation on the way forward at every stage - indeed we might have made more progress if that procedure had been more generally adopted hitherto. I welcome also the emphasis in the Eurofi paper on evolution - which is implicit too in Wicks - but I am less sure about the Eurofi presumption at this point of necessary and inevitable progression towards eventual centralisation. But, whatever one's views about the particular suggestions and proposals in the two papers the really important thing is that the issues they raise should be debated and discussed - by market participants as well as by the relevant authorities. And that's why I think that conferences of this kind are important, Chairman. I very much hope that following on from your Convention the important issues that have been raised will continue to be explored in the various trade associations and professional organisations that have been represented here, and that they will make their voice heard in the councils of Europe on the way forward, as indeed they traditionally have in the context of developing our own markets here in the UK. I will have every confidence that they will.

But for those that fall within the mandate of the Basel Committee, we believe that the ideas produced by Basel Committee thinking – translated into the Basel III reforms, and subsequently endorsed by the G20 and Financial Stability Board – provide a substantial foundation on which the banking system can be rebuilt to be much more robust and resilient in the future. Basel III capital requirements are probably well known to all of you, so I do not propose to say much more about them today. What I would instead like to focus on is our thinking in relation to liquidity, and particularly the LCR. As an idea, it is simple: a bank should have enough liquid assets to survive a 30-day period of stress. And perhaps to some, it might seem underwhelming. If you tell your spouse that we have implemented a reform that requires banks to have enough cash to last 30 days, more than likely you will get the same response I did when I tried to explain it to my wife: “what do you mean, only 30 days?” Yet this idea has been one of the most fundamental reforms of the crisis. It also is a classic example of an idea that had been toyed with for a long time, but took a crisis to bring to fruition. A study of Basel Committee history shows liquidity to have been on the agenda almost for the entire existence of the Committee, but we have never come close to an international standard.