samchain/econo-pairs-v1 huggingface dataset:
However, both large and smaller banks tightened their credit standards more on loans to large firms than on loans to SMEs. This was especially the case at the beginning of the financial turmoil, but the net tightening was still slightly stronger for large firms in the second quarter of 2009. This may be surprising, given that there is a general perception that access to finance has of late become more difficult in particular for SMEs. The pattern of a stronger net tightening for loans to large firms can also be observed in Italy. This indicates that both large banks and large firms, which rely more on market-based financing, were initially more strongly affected by the financial turmoil than smaller banks and SMEs. Since the second quarter of 2008, however, the differences in lending behaviour between large and smaller banks have diminished. This probably indicates that the economic downturn has played a major role in the general tightening of standards when evaluating the creditworthiness of firms. Let me now turn to the question of how banks have tightened their credit standards. Both large and smaller banks have done so predominantly by increasing loan margins. In Italy, the net tightening of margins on average loans was similar to that for the euro area as a whole. At the euro area level, large banks increased margins on loans to enterprises somewhat more than smaller banks, which is in line with the overall stronger net tightening of credit standards.

A breakdown of banks by size Against this background, it is not surprising that banks’ balance sheet constraints played a greater role during the recent financial turmoil, leading to a tightening of credit standards by banks, as shown in Chart 2. The bank lending survey for the euro area, from which this information is taken, distinguishes between large banks and smaller banks. In particular with respect to the greater relevance of smaller banks for SME financing, it is therefore of interest to distinguish between the lending  2  BIS Review 129/2009  of large banks and that of smaller banks in the euro area. Since mid-2007, and in particular during the initial phase of the financial turmoil, large banks have overall tightened their credit standards for loans to enterprises somewhat more than smaller banks. The outlook for the economy in general and for individual firms contributed most to the tightening, in Italy as well as in the euro area as a whole. The deteriorated access to capital market financing during the financial turmoil contributed significantly to the tightening of credit standards. It played a much more important role for large banks than for smaller banks, which rely less on capital market financing. The difficult liquidity conditions in the market also played a somewhat more important role for large banks, possibly because money market financing represents a greater share of their overall financing. All this may explain why the net tightening of credit standards was greater for large banks than it was for smaller banks.
Naturally, a booming economy, with a widening current account deficit, persistent appreciation and low inflation may need some stabilization if the expansion is deemed to be unsustainable. Fiscal policy could help, but unfortunately it is not always available, especially in countries with a weak fiscal history. Another tool, with weak evidence supporting its  2  For further discussion on the use of monetary policy to affect asset prices, in particular in the context of inflation targeting in open economies, see De Gregorio (2010b). 3  In economies following inflation targets is important that the intervention be coherent with the inflation outlook to avoid undermining credibility. Intervention can also be part of unconventional policies to reach the inflation target when interest rates are close to the zero lower bound. BIS Review 124/2010  3  effectiveness, is capital controls. 4 Regardless of whether they are effective or not, they may hide policy distortions. For example, policymakers thinking that capital controls are effective at insulating the economy from capital inflows, may tighten monetary policy to slowdown the expansion, but instead induce further inflows that look for loopholes to avoid the controls. For this reason I think that a more promising avenue is to look at the impact of capital inflows on financial stability. Indeed, many of the booms in asset prices and activity that come with capital inflows are caused and amplified in the financial system. Capital inflows and financial stability From the macro point of view, I have emphasized currency risks associated to capital inflows.

The MPC’s current view, as expressed in the latest Inflation Report, is that import price inflation will moderate over the coming period, but that it will not prove as much of a downward force on inflation as in the late 1990s and early 2000s. We have, for example, seen signs of costs rising in China and the Far East. Looking further ahead, there must be a risk that this begins to spillover into higher import price inflation. And while globalisation has helped to hold down prices of most goods, the demand for energy and other raw materials coming from the newly emerging economies has contributed to higher prices of energy and some commodities. The direct effect on the CPI of higher petrol prices has been much more limited here than in the US for example because so much of the price of our petrol is accounted for by duty. Nonetheless since the beginning of 2004, petrol prices have gone up by over 25% and gas prices by more still. The prices of petrol, utilities and transport services added about 1 percentage point to CPI inflation in May. And this does not include the effect on other goods and services where oil or gas is a component cost. In the past we have seen wages pick up in response to hikes in the oil price and all central banks have been – and remain – watchful for those “second round effects” now. So far we have seen few signs of them.
I will focus on what is happening in the banking sector in response to the crisis, and also from a broader strategic perspective. The banks entered the current crisis well-prepared thanks to what has been done in recent years. I will only mention the unprecedented in their scale and depth asset quality review and stress tests conducted in the banks by the BNB and the European Central Bank. One of their main objectives was to get the banks prepared for the most adverse macroeconomic scenarios which many, at the time, considered to be impossible to materialise. Now that we are going through these ‘impossible’ scenarios, we see that the banks are responding adequately and they continue to be in good shape. This good preparation helped us, at the very beginning of the crisis, to take additional measures and reinforce the banks’ capital position and liquidity. Among the measures were the full capitalisation of all the profits in this sector, strong reduction in foreign exposures, and also cancellation of the planned additional capital requirements associated with cyclical risks. This package of measures ensured an additional resource of BGN 9.3 billion in the banking system. The package of measures has not been launched only and exclusively for banks. It has rather been designed to ensure that banks are able to take steps and cushion the effects of the crisis for businesses and households. The main tool that was used to this purpose and is still in place is the so-called ‘private moratorium’ on loan payments.

Reforms in the conduct of the monetary policy have granted greater flexibility to banks to determine both the volume and terms of lending and deposits. The Bank of Albania has provided all necessary conditions to ensure sustainable economic growth and stable prices; however it alone can not guarantee that the objectives will be fulfilled. All these positive developments have taken place in the presence of a well contained fiscal expansion, as element of sound fiscal policy and bold structural reforms. Banking system has become an important provider of domestic financing for the government. Commercial banks have played a major role in it, while direct financing from the Bank of Albania was limited to address issues of independence and deficit monetization. Recently Government introduced to market papers of five years maturity. In addition, with the consent of the IMF, government will shortly issue euro denominated government securities. Bank of Albania welcomes such development as a certification of cautious and responsible fiscal policy. At the same time we call for more prudence and proper addressing additional risks. It is undeniable however, that these latest developments have been achieved under the watchful eye of International Monetary Fund. IMF has been an important element of the reforms in Albania. Its presence and the memorandum of understanding signed under the framework of ESAF and current blend of PRGF and EEF Programs, enhanced credibility of our economic reforms and served as external anchors.
An important area in which central banks will have obligations towards the ECB is that of statistics. This is because the formulation of monetary policy in the euro area rests on the timely availability of standardised economic, monetary and financial data from participating national central banks. In recognition of this future obligation, the Central Bank of Malta established a Technical Committee on Financial Statistics in 2000 to identify the changes required to the way statistics are classified and reported by the Central Bank and other financial sector reporting agents in order to comply with ECB and Eurostat requirements. This committee, which includes representatives of all the interested institutions, has already agreed on the necessary changes to the reporting forms through which credit and financial institutions submit data to the Central Bank and the Malta Financial Services Authority. Monetary and financial data are in fact already being reported to the ECB and Eurostat. In the meantime, significant progress has also been made with respect to the establishment of a common direct reporting database between the Central Bank and the National Statistics Office for the dissemination to the ECB and Eurostat of balance of payments data and data relating to Malta’s investment position. In the area of payments, a new settlement system has been established for the handling of large inter-bank payments in line with EU and other international standards.

Lim Hng Kiang: Brief review of recent financial and economic developments in Singapore Congratulatory remarks by Mr Lim Hng Kiang, Deputy Chairman of the Monetary Authority of Singapore and Minister for Trade and Industry, at Deutsche Bank's 35th Anniversary, Singapore, 13 Feb 2007. *  *  *  Distinguished Guests, Ladies and Gentlemen, Good Evening, I am delighted to be with you this evening to celebrate Deutsche Bank's 35th Anniversary in Singapore. I am very glad to note as well that today's celebrations is also marked by Deutsche Bank's move to One Raffles Quay, the newest address in our financial district. It is testimony of Deutsche Bank's continued commitment to Singapore. Set up in 1972, we have seen Deutsche Bank Singapore grow in size over the years. It has also witnessed and participated in the economic transformation of Singapore, from a trading hub in the 1970s, to a major metropolis today. We are indeed heartened that, 35 years on Deutsche Bank continues to see opportunities to deepen its roots here. Just last week, Deutsche Bank announced its group performance for 2006 and I must congratulate Dr Ackermann and your team, for registering yet another record year for Deutsche Bank. Today Deutsche Bank is represented in many of Asia's financial markets. We are indeed pleased that Deutsche Bank had made Singapore the hub for your regional operations. We noted that some 1600 people are involved in a broad scope of activities including trading, treasury and investment banking here.
Put differently, our work is motivated by protecting banks from climate change, and not by changing the climate itself, where other measures outside the toolkit of regulators and supervisors are needed. Although, of course, achieving our goal will in turn contribute towards meeting broader objectives related to climate change, such as the COP 21 Paris Agreement. And the mechanism is well known, as banks adequately manage, mitigate and disclose climate related-financial risks as part of their day-to-day business operations, we should expect a natural evolution in the composition of their balance sheets that, in turn, will reflect our path towards a low-carbon world. 1/6  In other words, if we succeed in incorporating these risks into the decisions of the financial sector, this will translate into a change in relative prices of financial instruments. And, in turn, that will help to internalise those consequences originating from both transition and physical risks. And this will be a powerful and much-needed complement to the use of the fiscal and environmental instruments that are needed to fight against climate change. Within this approach, it´s very important to recognise that there are several crucial limitations in our current capacity to measure these risks. In particular, there are few sufficiently deep and harmonised databases to analyse and understand transition and physical risks. Data granularity is particularly important given the high heterogeneity of the potential impacts. And we lack as well sufficient historical depth.

Putting forward concrete proposals The topic of climate risk has been on the agenda of the Basel Committee for several years now; in fact, we were one of the first global standard setting bodies to initiate work on this topic and set up a dedicated high-level Task Force on Climate-related Financial Risks, which is being led by Frank Elderson of the ECB and Kevin Stiroh of the Fed, who are of course no strangers to us thanks to their extensive experience in this area. It´s important to emphise that as the primary global standard setter for banks, the Committee always pursues its work with a view to ensuring a common minimum baseline across member jurisdictions. We achieve this by pursuing an evidence-based approach to our work, and by forming consensus that reflects the different and evolving perspectives of our members. Indeed, as with all the policy and supervisory initiatives undertaken by the Committee, we approach any initiative by first conducting a range of rigorous analyses to better understand the risk features of the topic at hand as well as the potential implications that they might bring to the individual banks and the broader banking system. And this is also the approach we are following when dealing with this matter. To that end, we have focused our initial efforts on analytical research on the climate topic over the past few year, and published two important analytical reports in April.
The total of banking assets measured as percentage of GDP shows that our region lags behind when compared to developed economies. Meanwhile prudential measures indicate problems with the credit portfolio quality, and the speed of growth could be beyond what is generally accepted sound. The risks that usually accompany fast credit growth could soon exerting pressures on monetary policy and financial stability. In my opinion the low financial and real economic integration among countries in the region constitutes as well as international financial markets constitutes another major problem in the region. The problem could become more severe if you were to keep in mind the very integrated ownership structure of banking system in the region. Cross-border lending and borrowing, or other forms of international financial flows are still relatively insignificant. With the stabilization of the economy and the rescheduling of debts, the countries together with their financial sectors have started to be gradually integrated in the international markets. Sovereign ratings given for these countries have accompanied and accelerated in some cases these developments. While the financial sectors, and particularly commercial banks, have strengthened their international ties and have been gradually integrated in the international financial markets, the competitiveness from cross-border banking activities remains still restricted. Cross-border lending activity increased slowly in the countries of the region. However, even in this field there is room to move more quickly.

Bowing out gracefully: LIBOR’s retirement draws near Speech given by Andrew Hauser, Executive Director, Markets  Risk.net LIBOR telethon 8 December 2020  I am grateful to Tom Horn for his help in writing these remarks, and to Andrew Bailey, Sarah Breeden, Sarah Hall, Alastair Hughes, Maggie Illingworth, Alieda Moore, Dave Ramsden and Edwin Schooling Latter for their comments and guidance. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  Introduction I want to start by thanking Risk.net for organising a really fantastic event today. As a child of the 1970s and 80s, I have to confess the word ‘telethon’ conjures up slightly uncomfortable images of Dick Emery, Ed ‘Stewpot’ Stewart and the Krankies. But it’s really worked a treat today – even if Terry Wogan’s strange Blankety Blank microphone is inexplicably absent… Telethons are usually about raising money for good causes – but LIBOR is the exact opposite. A number whose apprenticeship began in the syndicated loan markets of the late 1960s, and worked its way up into every part of the financial system in the decades that followed,1 is now well and truly in need of retirement. The unsecured term interbank lending markets it seeks to measure barely trade, even in calm conditions. And when things get rocky, they don’t trade at all – as we saw in March.2  A rate like that simply can’t provide a robust backbone for the global financial system.
Jean-Pierre Danthine: Swiss monetary policy in the public eye Speech by Mr Jean-Pierre Danthine, Member of the Governing Board of the Swiss National Bank, at the Money Market Event, Zurich, 24 March 2011. *  *  *  I would like to thank Marlene Amstad and Gero Jung for their valuable support in drafting this speech. I also want to thank Rita Kobel Rohr for helpful comments. Introduction: the Great Recession vs the Great Depression The Great Recession is behind us. In the case of Switzerland, we may wonder if the term is justified. With a fall in output of 3.2% from the top of the cycle in 2008 to the trough in 2009, the recession was the most severe since the mid-1970s.1 However, measured on a quarterly basis, consumption, which is a more meaningful indicator of economic well-being, barely fell. In Switzerland, the Great Recession was a (relatively severe) recession. What was it, that transformed what many feared could have been a new Great Depression into the Great Recession? As historical data show, the downturn in global industrial output in the first ten to twelve months of the two crises was similar (Chart 1). Economic historians will be occupied with this question for a long time. Let me venture to say that the policy reactions of fiscal and monetary authorities will occupy a central position in the historians’ final answer. Charts 2 and 3 provide some illustrations of the difference in policy responses between 1929 and 2008.

The SNB’s interventions in foreign exchange markets  Let me now move on to my second main point, the interventions in foreign exchange markets carried out by the SNB during 2009 and 2010. The SNB acted on foreign exchange markets in this period for one reason and one reason only: the zero interest rate lower bound had been reached and the economic situation unequivocally called for looser, not tighter, monetary conditions. The goal was to maintain price stability, which meant, in these circumstances, avoiding deflation. One should always have in mind that there are no clear recipes for avoiding a deflationary trend in such a situation. The most famous illustration of this statement is the US experience in the late 1920s and early 1930s. At the time the US policymakers underestimated the consequences of a bout of deflation and failed to take aggressive action. The consumer price index (and the GDP deflator) declined by 24% from August 1929 to March 1933, after having been virtually flat from 1921 to 1929. This decline was accompanied by a fall in real GDP of almost 30 percent.9 A more recent example is Japan’s “lost decade”. There the situation was not underestimated to the same degree. However, public actions culminating in a doubling of Japanese public debt proved to be insufficient to avoid a protracted deflationary episode. Let me review the history of our interventions in more detail.
Public savings will remain around 2% of GDP over the projection horizon, in line with compliance with the structural balance target. It is estimated that the current-account deficit will close this year at 3.7% of GDP, to stand at around 4% in 2024 and 2025. In the central scenario, Gross Fixed Capital Formation will maintain a low profile. This projection continues to incorporate a complex external scenario, with high uncertainty and still restrictive financial conditions. Survey information also shows low levels of investment for the coming quarters, and entrepreneurial expectations continue to be pessimistic, mostly so in the construction sector (table 1). The external impulse relevant to Chile will remain moderate. Although first-quarter figures exceeded expectations in some economies, such as China, several factors suggest that this will be transitory. In fact, bank credit to companies has tightened in the U.S. and the Eurozone, pointing to a weak performance of activity and investment ahead. In Latin America, the outlook remains unfavorable, as it combines deteriorating financial conditions with stress factors in several economies. In this context, fiscal spending is not expected to be a major source of external momentum, given the fiscal consolidation process and the weak global scenario. Thus, and heavily influenced by China's improved performance earlier in the year, our trading partners' projected growth for 2023 rises to 3%, up from the 2.4% estimated in March. For 2024 and 2025, there is no change, with projected increases of 2.3% and 3.0%, respectively (figure 18).

***  This action programme is ambitious: in the fight against global warming, the Eurosystem would thus target the direct effects - better conducting its monetary policy and reducing its own risks - as well as the indirect effects - steering the behaviour of companies and financial institutions, through its disclosure policy, as well as its asset purchase and collateral policies. And this programme is demanding: it requires in-depth work on our macroeconomic models as well as on the climate assessment of assets. But we can make this decision quickly by the end of this year - and then implement it in three to five years. Then the Eurosystem, together with the European Central Bank, under the impetus created by Christine Lagarde, and the Banque de France, will be the pioneers in this global fight. We must do so, in the very name of our mandate. Page 8 sur 8 However, the central banks alone will not be able to do enough. Let us transform this fight into an opportunity, that of a combination of fiscal, monetary and structural policies within the framework of a genuine green policy-mix combining carbon prices, public investment, sector-specific rules and monetary action. “The future is not what will happen to us, but what we are going to do. It calls us, or rather it pulls us to it," said Bergson. There is still time to prove him right.