samchain/econo-pairs-v1 huggingface dataset:
Experiences during the pandemic with historically low defaults will also not be representative for the present downturn because of the unprecedented role that monetary and fiscal policy support played during the pandemic. Indeed, the health and resilience of banks has increased significantly as they have built on the regulatory reforms and supervisory efforts that followed the great financial crisis. This has enabled them to support households and firms through the economic hardships stemming from the pandemic. We need banks to be able to do the same in the context of the current macroeconomic and climate challenges. We want banks to thrive. And we need them to play their role in the economy, now and in the future. This is why we continue to push them to assess whether their risk management tools and practices are still fit for purpose, and to improve them where necessary. And it's why we insist that banks should remain prudent and not take favourable developments in net interest income for granted. Let me conclude. As banking supervisors, much of what we have to do echoes the mindset of monetary policymakers. We have to remain on our guard. We are committed to delivering on our mandate of keeping the banking system safe and sound. We will make sure that the banks under our supervision remain mindful of and resilient to the risks that may emerge. And we will use all the instruments at our disposal. This goes beyond our formal supervisory measures.

We need banks to manage these risks, in line with the expectations for sound risk management practices that we have published in a supervisory guide in 2020.4 Two weeks ago, we published the results of a thematic review of how banks manage climate-related and environmental risks.5 This is the first time that our core banking supervision teams – the Joint Supervisory Teams – have thoroughly assessed banks' risk management practices in this area. Their findings show that, even though banks are starting to manage these risks by putting the basic infrastructure in place, they still have a long way to go to be truly resilient to the climate and environmental crises. For example, they lack granular information on these risks, and their methodologies for assessing their risk exposures remain relatively unsophisticated. And as supervisors we are concerned about banks' ability to successfully execute their plans, as most of their implementation practices are not sufficiently effective. Against this backdrop, we will continue to scale up our supervisory activities on climaterelated and environmental risks. We expect banks not just to be able to manage these risks in full by the end of 2024 at the latest, but to actually be doing so. This means that by then they will need to be in full compliance with all the supervisory expectations we set out in 2020. We have also set intermediate deadlines for them to reach specific milestones, and we have shared the good practices among banks derived from our thematic review.
The German mark – the euro since January 1999 – has depreciated by about the same between 1995 and autumn 2000. The Japanese yen has been particularly volatile. 4  BIS Review 20/2002  Smaller countries have also experienced fairly wide exchange rate fluctuations. The Swedish krona has depreciated by more than 10 per cent since summer 2000. The Australian dollar has weakened by over 30 per cent since spring 1997. The UK, Canada and New Zealand have also experienced wide exchange rate fluctuations. The Norwegian krone exchange rate, on the other hand, has been relatively stable. Countries whose exports include a large component of raw materials tend to experience considerable volatility in their exchange rate. Australia is one example. Fluctuations in commodity prices entail changes in countries’ terms of trade, which measures the ratio of export to import prices. Changes in the terms of trade have an impact on the exchange rate, which in turn curbs the effects of changes in commodity prices on profitability in the business sector. Hence, the exchange rate serves as a buffer against changes in the terms of trade. Norway’s terms of trade also fluctuate considerably, primarily reflecting changes in oil prices. However, a substantial portion of petroleum revenues is invested in foreign equities and bonds through the Government Petroleum Fund. Changes in oil prices influence the size of the Fund, but  BIS Review 20/2002  5  have little effect on the use of petroleum revenues at home.

That is designed to underpin incentives for banks to manage liquidity risk prudently, in the long-run interests not only of the banking system but of the wider economy. We have published a schedule for DWF pricing with those properties, structured around four broad classes of collateral, grouped according to their liquidity/risk characteristics. 17 We plan, after consultation, to introduce an auction structure for the wider-collateral long-term repo OMOs that delivers the same broad result of counterparties having to pay up to borrow against less liquid collateral. 18  16  The Bank published its general approach to collateral valuations when it disclosed use of the Special Liquidity Scheme. It stated: “Securities are valued by the Bank using observed market prices that are independent and routinely available publicly. The Bank reserves the right to use its own calculated prices, including where such independent market prices are unavailable. Those calculated prices are designed to deliver valuations taking account of securities’ contracted cash flows and yields of comparable securities, but not individual loan-byloan analysis of portfolios. To account for the risk that a calculated price is an over-estimate of what a market price would have been had it existed, an additional haircut is added. The Bank’s valuation of all securities is binding.” For more details, see the Market Notice for the Special Liquidity Scheme released on 21 April 2008. www.bankofengland.co.uk/markets/sls/index.htm.
Skepticism sets in about the truthfulness of routine financial disclosures. Companies find it more expensive to raise funds because once trust is broken, fewer investors are willing to participate, and those who remain demand a premium for the increased risk of being misled. A lack of reliable information also leads investors to make poor investment decisions, so capital is misallocated. In short, financial markets operate less efficiently, with fewer rewards for everybody. Avoiding a widespread loss of trust requires a systematic and co-ordinated effort to fix the flaws and weaknesses that can undermine investor confidence. It is important that there is a set of reasonable rules - so that chief executives, boards, and their auditors truly and fairly disclose the financial position of their companies and that investing public can rely on the truth, fairness, and completeness of that disclosure. Now, in spite of the specific flaws that several well-known firms have revealed, it has become clear that much of the public’s confidence in the efficient operation of financial markets remains intact. The recent events involving accounting fraud and abuse of management power remind us that we cannot be complacent even once it is felt that the current problems are behind us. Memories can fade quickly. Even if the worst is behind us, the responsibility lies in the market participants to apply the lessons of this particular period to stop its recurrence in the future. We must continue to be vigilant.

This has raised other issues of rotation of auditors to prevent cozy relationships undermining the integrity of the audit. A periodic change of the firm might have led to more serious questioning of the accounts. Further, some US firms have announced plans to include, as an expense, the cost of executive stock options. The changes aim to more accurately describe the revenues and costs associated with companies’ primary business. And Standard and Poor’s has introduced new benchmarks for reporting corporate earnings. These are all positive examples of participants working together to enforce the spirit of the rules under which financial markets operate. What has been done recently in Switzerland to improve the transparency of Swiss financial markets? Some efforts have already started some time ago. Most notably, the Swiss Exchange and the Swiss Business Federation “economiesuisse” co-ordinated their efforts to develop two sets of rules which became effective on July 1, 2002: The “Swiss Code of Best Practice” and the “Directive Concerning Information on Corporate Governance”. This will hopefully lift the standards for corporate governance and improve the level of transparency for the publicly traded firms in Switzerland. We have also seen political initiatives aiming at more transparency in remunerations. Business uncertainty It would be shortsighted to believe that the recent stock market reaction has only been the result of misconduct and the lack of corporate governance. The world economy is still digesting the consequences from the deep retrenchment in capital spending, which started in 2000 in the high-tech and the telecommunications sectors.
The reasons this has not been more effective in calming the crisis are complex, but communication stands out among them: In “selling” their reforms, euro area authorities are forced to walk a tightrope between the expectations of national electorates and financial markets, and risk satisfying neither. The only solution to this democracy-market dialectic is, again, much closer economic and financial union. Third, and contrary to a strand of current thinking, the Treaty prohibition on monetary financing is supporting rather than threatening euro area integration. In the euro area, the central bank is “doubly removed” from the political systems of individual countries: it is not only constitutionally independent, but also elevated to the supranational level. Euro area  BIS central bankers’ speeches  1  governments cannot expect the ECB to finance public deficits. As a result, they must be commensurately more ambitious in their economic policies and more disciplined in their management of public finances to support their debt levels. Moreover, given the prohibition on monetary financing, having a banking sector which can support growth and provide adequate financing to the real economy in Europe requires a stronger regulatory and governance framework, so as to prevent negative feedback loops between banks and sovereigns. By forcing policymakers to focus their reform efforts on the right priorities the monetary financing prohibition offers an incentive to closer economic and financial union.

Recognizing its great potential to alleviate poverty in the Pacific, the UNCDF has joined forces with the UNDP, the European Union, AUSAID and other Donor Agencies together with Governments and central banks in the region, to drive and spread the benefits of financial inclusion throughout the Pacific Island Countries. For today’s Workshop, the focus will be on Mobile Money and Banking, an important Financial Inclusion strategy already launched in many developing countries. And, I don’t want to pretend that I am an expert on mobile money or mobile banking. Suffice it to say, that these Initiatives have presented great opportunities for the previously unbanked communities in large, developing countries such as Kenya, the Philippines, Mexico, and Brazil to name a few. Here at the Central Bank of Samoa, we believe that the introduction of mobile money and mobile banking in the domestic economy will be hugely beneficial. It will allow better financial access to our low-income community in the rural and isolated areas as well as to improve and speed up our payments system. In launching an Automatic Teller Machine (or ATM) for one of the commercial banks yesterday, I acknowledged the benefits of having and maintaining bank branches out in the rural areas, as these will help increase access to financial services. It is expected that some of these rural branches will not be financially viable in the short term.
Through its actions, it will continue to uphold the trust which has been placed in it thus far. 4  BIS Review 71/2007

Financial education can play a key role in getting to these outcomes. The financial education supports not only the individual well-being, but also the financial stability in one economy. Referring to the recent financial crisis, consumers that can make informed and sound decisions about financial products and services are helping to promote sounder  BIS central bankers’ speeches  1  economic stability. Not only the consumers will gain knowledge through financial education, but more important is that they are assured of fair treatment. Consumers need to apply the economic way of thinking while making their important financial decisions. In order to develop important skills, we need to provide them good quality education that will enrich their behavior with critical thinking and decision making skills as well. To provide contextual and conceptual effective financial education, we need to include financial education in the schools curriculums. Financially literate consumers can assess risks and make informed decisions about the suitability of financial products to their specific situation. The individual responsibility for financial planning takes on greater importance. Consumers need to clearly understand how the system works and what the new products really offer. At the institutional level, in 2011, the National Bank of the Republic of Macedonia launched its own Financial Education Project that has been growing and developing year after year, embracing many different activities mainly focusing on financial education for children and youth.
•  A growth of 27.5% in the accumulated surplus of the Exchange Fund during the year, or 15% if the gains from the equity portfolio acquired in August are excluded. •  Continuing currency stability, within the framework of the linked exchange rate system, against unprecedented speculative attacks, and during a year of currency instability in much of the rest of the region. •  Substantial improvements to the currency board system, which have made it more resilient, more transparent, and less vulnerable to manipulation than it was before. •  Increased involvement in regional and global initiatives to promote Hong Kong as an international financial centre and to seek action to repair defects in the international financial architecture. Progress in this field has been slow, but not for lack of any advocacy on Hong Kong’s part. The three broad mandates of the Hong Kong Monetary Authority are to maintain currency stability, to promote the safety and stability of the banking system, and to enhance the efficiency, integrity and development of the financial system. I think that the HKMA can justifiably claim that it has successfully delivered on all of these mandates during 1998, and in the face of considerable difficulties. Accountability and transparency Monetary and banking stability is, of course, the result of efforts by the whole of the financial sector, and not just the work of the HKMA. It also depends on international faith in the integrity of our system, and, equally important, on the confidence of the community of Hong Kong.

More generally, the sound  3  BIS Review 48/1999  position of our financial system as we exit the crisis is virtually unique in the region, and will be a key pillar in ensuring a return to sustained growth. A number of continuing issues, and new ones on the horizon, will provide the HKMA with a heavy workload in the remainder of this year. These include: •  The possibility of further attacks on the currency, despite the improved stability in local and world markets: we need to be constantly on our guard for signs of trouble. •  Further work to improve the currency board system, with the help of the EFAC Sub-Committee on Currency Board Operations: much progress has been made in the past nine months or so, but this is an on-going process, and a number of ideas for refining the system are in the pipeline. •  The rest of this year will continue to be somewhat difficult for the banking sector - but it remains as a whole in excellent shape to cope with the pressures ahead. •  One of these pressures is the Year 2000 problem. As this Panel heard a few weeks ago, Hong Kong’s banks are internationally recognised as being among the best prepared in the region, if not the world, and work continues on contingency planning and other issues. This has been, and will continue to be in the months ahead, a priority task in the HKMA’s supervisory programme.
The aim is to  BIS central bankers’ speeches  3  provide financial institutions operating in ASEAN better access to the entire ASEAN customer base, and facilitate regional expansion. 26. In addition to facilitating internal integration, ASEAN has been active in linking up with other Asian economies through its strategy of open regionalism. ASEAN has a number of Free Trade Agreements with key Asian economies, including China, Japan, India and Korea. These pan-Asian linkages enable ASEAN to serve as a springboard for investors seeking access to key markets in Asia. 27. Indeed, measured by the degree of intra-regional trade, Asia is already the second most integrated region in the world, after the European Union. And ASEAN is at the nucleus of this expanding network of trade and transport connections spanning Asia. Opportunity: investment in infrastructure 28. A resilient and integrated ASEAN offers considerable investment opportunities, especially in infrastructure. 29. The demand for infrastructure investment in the region is significant. A report released by the Asian Development Bank Institute (“ADBI”) estimates that the total investment needs for national infrastructure development in Asia, from 2010 to 2020, will total about $ trillion, or an average of $ billion per year. 30. But supply – in terms of actual public and private infrastructure investment – has not matched demand. The World Bank has estimated that private sector investment into Asian infrastructure from 1990 to 2008 totaled just $ billion or an average of $ billion per year.

In the ASEAN-5 economies, food accounts for about a third of the consumption basket, much higher than advanced economies. Given this high weight of food, food price increases have a strong direct impact on headline inflation. 11. Second, strong inflows of capital adding to asset price and domestic demand pressures. Low interest rates in the advanced economies have prompted global investors to seek higher returns in emerging economies, especially in Asia. 12. Third, Asia’s strong recovery from the crisis has led to high rates of capacity utilisation and tightening of labour markets. This has prompted a gradual build-up in wageprice pressures. 13. I do not want to minimise the inflation risks in Asia – no central banker would take a light attitude towards inflation risks – but I do want to put the issue in perspective. 14. Some of the price pressures facing Asia are no doubt structural. We can expect the relative price of food – and commodities in general – to increase over the medium to long term on the back of growing global demand especially in the emerging economies. Likewise, capital will continue to flow from advanced economies to emerging economies, reflecting growth differentials and a shift in global portfolios towards higher yielding Asian assets. These two factors will be a source of inflation bias in emerging Asia over the medium term. 15. But a good part of the inflation in Asia is also temporary.
Hong Kong, as an international financial centre with a highly externally-oriented economy, does face high ML/TF risks. Our competitive advantages here – namely, free flows of capital, people, goods and information; well-established legal system; sophisticated market infrastructure; and advanced professional services – also make our market attractive for criminals seeking to hide or move funds or evade financial sanctions. With such a risk profile, Hong Kong has a key role in that fight against attempts to abuse our systems, along with our regional partners who share many of these characteristics and fund flows. So this Conference – focusing on the regional response - is timely and very relevant. 11. Over the years, the regulatory landscape has changed. Since we started this line of work in the 90’s, we have seen a steady increase in the regulatory requirements and expectations we place on our financial institutions to combat ML/TF. More recently, the number of sectors and institutions which come within the regulatory remit also continues to grow. These are far from simple requirements however you look at them, particularly given the risk-based approach, a view which is supported by the experience of many financial institutions who have struggled getting it right. 12. The world of banking and finance has also changed significantly in the same period we have been applying these requirements. For example, technology has created new and significant opportunities for the development of the global economy, which has been good news for financial centres such as Hong Kong.

And, I would like to invite all of you to tomorrow’s dinner to commemorate its achievements in the past quarter of a century together. Ladies and Gentlemen, May I take this opportunity to wish all of you a successful and fruitful deliberation, and an enjoyable stay in Thailand. Thank you. 2  BIS Review 88/2007
Moreover, the size of the balance sheet is no longer limited by the scale of opportunities to lend to companies or individuals in the real economy. So-called “financial engineering” allows banks to manufacture additional assets without limit. And in the run-up to the crisis, they were aided and abetted in this endeavour by a host of vehicles and funds in the so-called shadow banking system, which in the US grew in gross terms to be larger than the traditional banking sector. This shadow banking system, as well as holding securitised debt and a host of manufactured – or “synthetic” – exposures was also a significant source of funding for the conventional banking system. Money market funds and other similar entities had call liabilities totalling over $ trillion. And they on lent very significant amounts to banks, both directly and indirectly via chains of transactions. This has had two consequences. First, the financial system has become enormously more interconnected. This means that promoting stability of the system as a whole using a regime of regulation of individual institutions is much less likely to be successful than hitherto. Maturity mismatch can grow through chains of transactions – without any significant amount being located in any one institution – a risk described many years ago by Martin Hellwig (Hellwig, 1995).

As a consequence, the minimum bid rate on the main refinancing operations of the ECB - the most important among our key interest rates - reached 3.25% in November 2001. The key ECB interest rates have remained unchanged since November and short and long-term real interest rates have been, in a historical perspective, very low. The average annual inflation rate in 2001, as measured by the HICP, was 2.5%. Inflation in 2001 was affected by the lagged effects of the increases in import prices in 2000, and by the new impact of livestock diseases on unprocessed food prices. We are not satisfied with such an outcome, which is not in line with price stability. However, it has to be recognised that the factors which contributed to shaping this outcome could not be controlled by the ECB. In fact, monetary policy only affects inflation with a lag and cannot control it in the short term. We are satisfied that our policy in 2001 was very well understood by our observers and by the markets. In fact, the level of bond yields, as well as various other indicators of inflation expectations of economic agents, pointed to continued confidence throughout 2001 in the ECB maintaining price stability in the medium term. There were some concerns about the possible impact of the cash changeover on euro area inflation, which have also been echoed in the draft resolution on the ECB Annual Report prepared by your Committee on Economic and Monetary Affairs.