samchain/econo-pairs-v1 huggingface dataset:
The high degree of interconnectedness across the financial system has a number of implications. First, supervision must not just be vertical – firm by firm, or region by region, but also horizontal – looking broadly across banks, securities firms, markets and geographies. Second, this means that supervisory practices need to be revamped. They need to be coordinated and multi-disciplinary. I think the U.S. Treasury is right in proposing a systemic risk regulator as part of their regulatory reform plan. But, we shouldn’t kid ourselves about how difficult this will be to execute. You will need a flexible and dynamic governance process to be able to identify the important elements of systemic risk, to elevate those concerns to the appropriate level and then to act on those concerns in a timely manner. It will take the right people, with the right skill sets, operating in a system with the right culture and legal framework. I don’t believe creating this oversight process will be an easy task. Consider, for example, subprime lending. There were obvious excesses in terms of underwriting standards, product design and risk management. But addressing those issues during the boom would have required the supervisor to absorb attacks that reining in some of these practices would make it more difficult for some low- and moderate-income households to become homeowners for the first time. System dynamics In thinking about interconnectedness, we also need to focus on system dynamics. By system dynamics, I mean how the different parts of the system interact.

William C Dudley: Lessons learned from the financial crisis Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Eighth Annual BIS Conference, Basel, 3 July 2009. *  *  *  In assessing the lessons of the past two years, I will focus on five broad themes that are interrelated: •  Interconnectedness of the financial system  •  System dynamics – How does the system respond to shocks? •  Incentives – Can we improve outcomes by changing incentives? •  Transparency  •  How should central banks respond to asset bubbles? As always, my views are my own and may not necessarily reflect those of the FOMC or the Federal Reserve System. Interconnectedness This financial crisis has exposed how important the interconnections are among the banking system, capital markets, and payment and settlement systems. Focus on only one part of the financial system can obscure vulnerabilities that may prove very important. For example, the disruption of the securitization markets caused by the poor performance of highly-rated debt securities, led to significant problems for major financial institutions. Banks had to take assets back on their books; backstop lines of credit were triggered; and banks could no longer securitize loans, increasing the pressure on their balance sheets. This reduced credit availability, which increased the downward pressure on economic activity, which caused asset values to decline further, increasing the degree of stress in the financial system.
16 Sep 2022  Keynote speech at the Treasury Markets Summit 2022 Eddie Yue, Chief Executive, Hong Kong Monetary Authority “New Impetus for Hong Kong” Distinguished guests, members, and friends of the Treasury Markets Association (TMA), ladies and gentlemen. Opening 1. It is an honour and a pleasure to be asked to give the keynote speech at this year’s Treasury Markets Summit. 2. As much as I wanted to be with you all in-person, I have to join this event virtually while travelling to international meetings. Travel has been rather difficult for the past two-anda-half years but now that most cities and countries have achieved high vaccination rates and COVID-related symptoms have generally become less severe, I am taking every opportunity to physically represent Hong Kong at key international meetings. There is really no substitute for face-to-face connection, and I do hope such gatherings are back to stay. This is a great time and a perfect opportunity for us to show the world that Hong Kong is back, stronger and better than ever. 3. In my remarks today, I wish to talk about Hong Kong’s progress as an international financial centre, and to highlight the rapid growth of Mainland China and the RMB. No appreciation of Hong Kong’s growth can be complete without acknowledging the rest of the nation’s progress: Looking at one without the other would be like admiring a sunrise without seeing the sky behind it. 4.

Do you think your depositors are going to have the same confidence in you, even if it is somebody else that has failed? Do you think they are going to say, “it’s okay. Only one finance company has failed. The company that we have deposited our money in is okay. Therefore, we can go on without any problem”. Do you remember the finance company crisis in the late 1980s and early 1990s? When one finance company failed, what happened? Why is it that Northern Rock had to be supported so strongly by the Bank of England, even though it is not a clearing bank? Isn’t it simply because the Bank of England realized that if one major bank fails, the domino effect, or the contagion effect will take place? So, my dear friends, it must be now clear to you, that as directors, you are not only responsible to your shareholders; you are not only responsible to your own depositors; you are also indirectly responsible to all depositors. Don't forget that if one fails, the resulting effect on the industry and the markets is going to be very very serious. Nobody is going to be spared. That's why we want you all to understand your responsibilities. That's why we take the necessary steps to regulate the industry so diligently. We have a responsibility, to preserve the financial system stability of this country. We take that responsibility seriously.
Central bankers frequently meet in international policy fora, such as those organized under the auspices of the BIS, IMF or G20, etc. Yet I hope today’s Symposium will be a special occasion to stimulate this exchange of views and build on it with academics, financial institutions and the public at large, since it is broadcast live on the internet. Therefore, I would like to hand the floor without further ado to Haruhiko Kuroda. BIS central bankers’ speeches  3

MAS regulations for the financial sector are benchmarked to global standards. Over the years, we have updated our requirements to keep them current and relevant. 14. But regulations are defined sets of rules and requirements. They cannot possibly cover all situations and every manner of activity or behaviour; to try to do so would require ominous amounts of prescriptive and narrow rules that are neither feasible nor practical. So regulators worldwide including ourselves have to consider carefully how to put in place workable rules: having the appropriate regulations that cover the requirements under the FATF standards while taking into account any practical challenges of implementation, operational inefficiencies and unintended consequences. 15. This leads me to the second element of our framework – Supervision. It is one thing to have a set of workable rules and regulations. It is another thing to have the requirements clearly understood and complied with. No amount of regulations will be effective if the quality of implementation is poor or if financial institutions (FIs) are not vigilant. 16. The MAS has in recent years stepped up our AML offsite reviews and onsite supervision of financial institutions. Our supervisory intensity is necessarily risk-based given that both regulators and the regulated entities work within finite constraints of resources and time. Therefore, we have adopted various risk bucketing metrics so that we can be targeted on more vulnerable areas.
Deficient payment and securities settlement systems might potentially trigger a crisis in the system. An operational or technical system failure can delay transaction settlement so severely - or even prevent it for such a long period - that widespread credit or liquidity problems among financial institutions result. In particularly serious cases, the financial institutions concerned, and perhaps even the financial markets, are no longer able to perform their role in the economy or can do so to only a limited extent. Yet on the other hand, payment and securities settlement systems also play a major part in preventing the transfer of payment or delivery problems from one participant to the others. Such difficulties might also trigger a chain reaction which could jeopardise the entire system. This makes the architecture of payment and securities settlement systems all the more important, because it determines their capacity to limit the transfer of weaknesses. Secure and efficient financial market infrastructures are especially important to the Swiss economy, which has a large financial sector and generates significant payment flows. Their significance is illustrated by the relevant figures: every day, sums amounting to around 180 billion Swiss francs pass between financial institutions via Swiss Interbank Clearing System (SIC), Switzerland’s most important payment system. With a system of this scale it is easy to imagine that problems with the clearing or settlement of transactions might jeopardise the stability of the financial system as a whole.

Mugur Isărescu: Establishment of a new 15-county IMF-WB Constituency that already includes Romania Speech by Mr Mugur Isărescu, Governor of the National Bank of Romania, at the establishment of a new IMF-WB Constituency that includes Romania, at the Annual Meeting of the International Monetary Fund and the World Bank Group, Tokyo, 12 October 2012. *  *  *  Your Excellences, Ministers, Governors, Ladies and Gentlemen, I am honored to have the opportunity to address you all on this special occasion and to welcome our new partners from Belgium and Luxembourg. This moment, when the establishment of a new, 15-country constituency, is formally announced, has several historical meanings, already presented by Minister de Jager. Let me add something from the experience of my country. Romania joined the International Monetary Fund and the World Bank in 1972 and has been a member of the Dutch Constituency ever since. It is worth mentioning that this Constituency had only five members in those days: The Netherlands, Israel, Cyprus, Yugoslavia and Romania. After 1990, I saw how, in a few years, the memberships grew to 13 countries. Despite this rapid enlargement with such diverse configuration and the huge transformation happening in all the countries in the last two decades, our Constituency has remained remarkably stable and has operated well. This is why I share the views of Minister de Jager that we have been able to find strength in our diversity.
In this response, the completion of Banking Union with the launch of a fully mutualized European 7  García-Posada, M. and R. Vegas Sánchez (2018): “Bankruptcy reforms in the midst of the Great Recession: The Spanish experience”, International Review of Law and Economics, 55, pp. 71–95. 14  deposit insurance scheme would make a decisive contribution to ensuring financial stability in the euro area, in the coming months and in the medium term. It is also crucial to analyse how appropriate the European regulations for resolution and winding-up of credit institutions are for a hypothetical systemic crisis, or the possible role that asset management companies may play in the event of severe impairment of European financial institutions’ balance sheets. The EU Member States should also make swift progress towards an agreement to create a common European procedure for administrative winding up of credit institutions. This procedure would benefit from the instruments developed for resolution of credit institutions, aiming to maximise the realisable value of the financial assets that make up the bulk of banks’ balance sheets. Finally, with a more medium-term perspective, other structural policies may facilitate the change in the composition of firms’ liabilities towards a higher share of equity, such as the reform of the corporate tax treatment of liabilities and progress in the Capital Markets Union project. I will focus on these two issues in the last part of my speech.

6  Firms have taken advantage of the improvement in financing conditions in both bank lending markets and fixed-income markets and have resorted to debt to cover part of their higher liquidity needs. The year-on-year growth rate of debt increased from 1.3% in February to 6.2% in May. Since then, there has been some deceleration and the latest figure, for August, shows a year-on-year rate of 4.2%. The breakdown by instrument shows that the bulk of new debt has been in the form of bank lending extended by domestic banks. The public loan guarantee programme seems to have played an important role in improving firms’ access to bank loans. Up to end-September, the programme was used to extend loans to 541,000 firms and self-employed workers to the tune of more than EUR 102 billion. 62% of this amount has been granted to SMEs, 31% to large firms and the remaining 7% to the self-employed. More granular data, available until June, show that 46% of new lending to firms between March and June was extended under the public loan guarantee programme. As expected, 7  the use of public guarantees was particularly high among firms facing potentially more difficult access to external funding at the current juncture, such as SMEs, riskier firms and firms belonging to sectors more exposed to the shock, with a share of guaranteed loans relative to total loans of 64%, 65% and 60 %, respectively.
Specific codes for professionals in markets will complement broader efforts to raise standards in banking by the new Banking Standards Review Council. For those in markets we need a simple approach that recognises a fundamental principle of the City: namely that true markets are the source of dynamism, prosperity and progress. Seeking to manipulate, game or profit from unfair access transgresses that principle. It weakens the effectiveness of markets for all. It holds back prosperity. It should thus have clear consequences, including professional ostracism. We must work together to ensure that everyone on every trading floor understands that dealing in a market means serving the needs of clients, investors and customers fairly and effectively. I am delighted that one of the City’s most experienced professionals and proven leaders, Elizabeth Corley, has agreed to chair a panel of market practitioners that will inform the Review. Now, recognising the centrality of markets doesn’t mean the Bank has a naïve faith that all markets always function smoothly. The City’s markets are not those of a textbook. We all know that real markets can seize up in crises of confidence, threatening financial stability and the wider economy. Just as there will be times when central banks must backstop the banking system, there are also times when they should backstop core markets in a way that supports their contribution to the real economy but doesn’t encourage excessive risk taking.

Rather than appeal to the stately Duchess of York on which my predecessor sailed, I will look to the trusty canoe – a craft that can navigate the most rapid and treacherous waters…provided its paddlers work in sync. Those economic currents are flowing swiftly, with the economy expanding at an annualised rate of 4% and jobs growing at a record pace.2 But there are rapids ahead, with old imbalances persisting and new ones emerging. The economy is still over-levered. The housing market is showing the potential to overheat. And the current account deficit is now at a record level. Navigating these hazards requires close coordination between all those in the boat; that is, between fiscal, monetary and prudential authorities. Tonight I want to explain the Bank’s contribution to delivering a durable expansion characterised by balance in the macroeconomy, the housing market, and the financial sector. Before doing so, I would like to join the Chancellor in paying tribute to two individuals. The first is Sir David Lees, who as Chairman of Court has overseen the transformation of the governance and responsibilities of the Bank. David, I am extremely grateful for your support during my first year as Governor. I’m also enormously grateful for the wise counsel of Charlie Bean during the past year. Always working, Charlie is tonight discharging his duties as President of the Royal Economic Society. Throughout his career, at the Treasury, in academia and at the Bank, Charlie has been a leading thinker and practitioner in the pursuit of macroeconomic balance.
The survey design and sampling means these households are broadly representative of the UK population as a whole. 20  It is well-known, however, that household surveys tend to under-sample the tails of the income  and wealth distribution, in particular the upper tail. th  21  In the analysis, we focus on the Gini coefficient and the  th  ratio of the 90 to the 10 percentile of the distribution (“90/10 ratio”) as measures of inequality. Charts 2 and 3 plot the distribution of income and net wealth across UK households just prior to the crisis. 22  This is the starting date for the exercise, after which UK monetary policy was loosened materially. As is well-known, these distributions are extremely uneven. For example, in 2007 the richest 10% of households accounted for around a quarter of total income and over 40% of wealth. At the other end of the distribution, the whole bottom half of households by income accounted for only around a quarter of income in the economy and only around 10% of net wealth. Around 50% of households earned less than £ in income each year and around 40% had fewer than £ in net wealth. Age is an important factor shaping these distributions, as life-cycle theory would suggest. Chart 4 plots the net wealth distribution by age. Those over 50 account for around 80% of aggregate net wealth and those over 70 for around a quarter. By contrast, those under 30 account for less than 5% of wealth.

As we would expect, the potency of these channels varies across households depending on their characteristics. For example, the strength of the cash flow effect depends on individuals’ stock of interest-bearing assets and liabilities. The labour income channel depends on the skills and age of the household. And the wealth channel depends on the size and composition of their wealth portfolio. Step Three: Final Distributions With these mappings, we can calculate the impact of the MPC’s monetary loosening on different household cohorts. Charts 10 and 11 plot this effect on household income, looking across the income distribution. This impact is shown on both a “money amount” and “percentage of income” basis. 26  These effects are also split  between the “cash flow” and “labour income” channels. The average household has gained in income terms by around £ each year, or close to £ cumulatively, from the MPC’s monetary loosening. Put differently, the average household would have been around 5% worse off each year had monetary policy not been loosened in response to the financial crisis. The lion’s share of this boost resulted from the positive impact of looser policy on jobs and wages. This is a slower-moving, harder to observe, channel by which monetary policy benefits households, but clearly a quantitatively important one. Looking at the distribution of these income gains across deciles, these are reasonably evenly spread as a percentage of income. The percentage gains are slightly lower among lower income households and are slightly negative for the lowest income decile.
4  BIS central bankers’ speeches  Management of the fund Besides making monetary policy decisions, one of Norges Bank’s main tasks is to manage Norway’s oil fund. Chart: Governance structure The Ministry of Finance holds the political responsibility for the fund. The overall management principles and strategy are anchored in parliament and the Ministry reports to parliament at regular intervals. The management of the fund is fully delegated to the central bank – to Norges Bank. Our task as manager of the fund is strictly commercial: to maximise returns within the guidelines defined by the government. All investment decisions are made by Norges Bank Investment Management, a separate division within the central bank. Neither Norges Bank’s Executive Board nor the Ministry of Finance is involved in any individual investment decisions. This governance structure was set up to ensure that the fund was not used as an instrument of foreign policy. The purpose of the fund is to ensure that future generations receive their fair share of Norway’s petroleum wealth. To achieve this, the fund was designed to be invested for the long term. Size and a long investment horizon are the fund’s two key characteristics. Together, they form the backbone of the fund’s investment strategy: •  First, the fund’s long investment horizon implies substantial risk-taking capacity. We are able to act as a countercyclical investor. •  Second, the fund’s size makes it possible to take advantage of investment opportunities worldwide, in a number of asset classes.

The bad debt charge for our locally incorporated banks in respect of their Hong Kong business more than tripled in 1998, albeit from a low base. Non-performing loans (measured by those that have been classified as substandard, doubtful and loss) rose from around 2% at end-1997 to 7.3% at the end of last year. This is a sharp increase but it is important to put it into regional perspective. The equivalent figure for non-performing loans in Thailand at present is around 46%. The picture in Indonesia is even worse. Hong Kong has therefore fared better in respect of credit risk than its neighbours. It has no doubt been helped in this by the solid regulatory framework in Hong Kong and the infrastructure of business laws that makes it relatively easy to take and realize collateral and to put defaulting borrowers into liquidation. Banks are also free to carry on their business without political interference. I believe that Hong Kong has also benefited from its openness as a financial centre, though this can also have its drawbacks. Major international banks are allowed to play a full role in our banking system, including in many cases participating as full retail banks. This has allowed cross-fertilization of talent, systems and products between the local and foreign banks. Finally, another point in Hong Kong’s favour is that it had already gone through a banking crisis in the early 1980s, in which abuses such as connected lending had played a part.