samchain/econo-pairs-v1 huggingface dataset:
The Riksbank cut its repo rate by 0.5 percentage points, to 3.75 per cent. Now, just over six months later, we can conclude that the impact of the attacks on the global economy was less than feared, although certain sectors were hard hit. In addition, there are more and more signs of an imminent improvement in activity in both the USA and Europe. The stocks that had been built up during the downturn in activity appear to have been largely phased out and according to a number of indicators, production has begun to increase. A cautious optimism has begun to spread. There is also the additional impetus that comes from the expansionary economic policy in many countries and strengthens confidence in an impending upturn. However, for the global recovery to really take off and become stronger, it is necessary that it is accompanied by a broad and sustained increase in demand. If production increases because stocks are too small and need to be refilled, there is a risk that the upturn will be short-lived. We have been receiving both positive and negative signals regarding the situation in the US economy. The positive signals come from an unusually strong growth in productivity during the slowdown in activity, which indicates that the US industry has managed to adapt its production structure in an impressive manner. Private consumption, which is important in all countries, but particularly in the USA, has also remained strong during the whole of 2001 and early 2002.

Norman T L Chan: Removal of RMB conversion limit for Hong Kong residents Speech by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, Hong Kong, 12 November 2014. *  *  *  I am glad to announce that the RMB conversion limit for Hong Kong residents of RMB20,000 per day will no longer be applicable with effect from 17 November 2014. Under the new arrangement, banks will square their positions arising from RMB conversions conducted with Hong Kong residents in the offshore market instead of the onshore market. As a result, the prevailing conversion and other relevant restrictions for onshore conversion will hence be no longer applicable. The HKMA has just issued a circular to banks setting out the detailed arrangements. The HKMA has had many rounds of discussions with the banking industry and Mainland authorities on relaxing the restrictions on RMB currency conversions by Hong Kong residents. We consider that the best option is for RMB conversions by Hong Kong residents to be done in the offshore market instead of the onshore market. With the size of the offshore RMB liquidity pool in Hong Kong exceeding RMB 1 trillion, and considering the scale and depth of the RMB foreign exchange market, we do not foresee any problem for banks to square their positions for Hong Kong residents’ RMB conversions in the offshore market.
Otherwise, a large part of the framework is already in place. We will probably never entirely solve time inconsistency. There may still be creditors who count on being bailed out. Owners with little at stake may take on excessive risk. One of the most important things we do, therefore, is to ensure that banks are solid. This has two important effects. First, the obvious one: Higher capital ratios reduce the probability that banks will experience a crisis. Banks will be able to absorb larger losses before encountering problems. But as I touched on earlier, higher capital ratios also have long-term effects on owners and bank behaviour: The more equity a bank has, the more capital owners stand to lose. They will have a stronger motivation to ensure that the bank operates prudently. Capital ratios at Norwegian banks are generally somewhat higher than at banks in other European countries, which is a good thing. The plan to gradually increase Norwegian banks’  BIS central bankers’ speeches  7  capital requirements as laid down in 2013 will continue until July 2016. The minimum riskweighted equity ratio for systemically important banks in Norway will then be 13 percent. What should be done? So what are the lessons we have drawn? Banks should not be bailed out, but banks’ functions must be bailed out. If not, all economic activity will be affected. We will bail out the small depositors – that is both profitable and fair. We should not bail out all creditors.

Third condition: determination in transmitting to the market the idea of a single and consolidated project, of a concentration arrangement equivalent to a merger, of an entity prepared to harness in practice all the synergies and all the management improvements made possible by an IPS structure. To do this a proactive strategy should be adopted, geared to securing the economies of scale characteristic of a merger and to reducing overheads, including unit wage costs, which is imperative in the current economic circumstances. Any sign of wavering should be avoided, since this would be seen as an excuse to question the group’s cohesiveness, which is an unacceptable risk at present. I stated in the introduction that any new product has to be prepared to overcome a fourth and final trial and evaluation step: it must prove its capacity for future development. This is a particularly pertinent demand for the financial system, since what is involved is a nimble and dynamic sector. IPSs are a structure that must prove to be of use in providing lasting banking services. But it is also true that legislation, specifically Royal Decree-Law 11/2010 of 9 July 2010, has opened up new means for savings banks to pursue their activity, offering a range of possibilities. In particular, it is provided for that savings banks participating in an IPS can convert in the future, de facto or de jure, into savings banks with “indirect activity”, or into foundations, which focus on attending to and developing their welfare fund assets.
Following the impetus of the G20 and the Financial Stability Board, there is a current trend in accounting reform for reducing the scope for mark-to-market and for moving from an incurred loss model to a forward looking model of provisioning. In particular, both the IFRS and the US GAAP will include an amortized cost category for financial assets such as loans. In my view, these types of changes in the accounting rules constitute the first, and to my mind the most powerful line of defense to limit the procyclicality brought forward by the crisis. I also want to point that even we if are witnessing some significant progress between the two sets of accounting standards, I am convinced that further convergence is needed. II. Indeed, when it comes to the sources of differences and discrepancies between US and European regulation frameworks, I’d like to bring to your attention the following issues: –  Regarding OTC derivatives, further consistency at technical and implementation level is key in order to avoid regulatory arbitrage;  –  The convergence between IFRS and US GAAP is particularly needed to allow for a level-playing field implementation of some regulatory requirements, such as a leverage ratio, over different jurisdictions. 2  BIS central bankers’ speeches  2.1 Regarding the OTC derivatives reform, there is a great degree of parallelism in the EU and US approaches, but issues arise as the details are worked out.

At the end of 2010, the institution presented total assets of EUR 1,900 bn. But, according to the bank, on an adjusted basis, which reflected netting of derivatives and certain other balance sheet items, total assets were EUR 1,200 bn. In addition, according to some analysts, the grossing-up of derivatives assets alone would create a rise in total assets comprised between 42% and of 129% for the largest US banks. The discrepancies in the offsetting of transactions have been outlined by the Financial Stability Board. As a result, the two leading accounting Boards have swiftly reacted in putting this topic on their convergence agenda. I welcome this joint project and wish that the two Boards, after the consultation period with their respective constituents, will be able to publish a common standard that will facilitate the implementation of a global leverage ratio. 2.3 More generally, the differences in accounting standards between IFRS and US GAAPs have been a matter of concern from the beginning of the crisis. Since April 2009, the G20 has continuously asked the two Boards to converge towards a single set of high quality global accounting standards and to complete their convergence project by 2011 with the aim of remedying the major weaknesses identified during the crisis. The standard setting Boards have made progress, but standards have still to be finalised and this is not an easy path.
Certainly, in various euro area countries, these measures need to be complemented by efforts to correct past excesses in both the public and private sectors. And these reforms need to be undertaken against the backdrop of a weak and fragile economic recovery, making the whole process more challenging. BIS central bankers’ speeches  1  The first signs of recovery The first signs of recovery are now visible. Chart 1 shows the level of systemic risk across the euro area, as gauged by the Composite Indicator of Systemic Stress. This index has reached the lowest levels since the euro area sovereign debt crisis started. From the macroeconomic perspective, following a contraction that spanned over six quarters, the euro area’s real GDP rose marginally in the second and third quarters of 2013. Although projections still see real GDP shrinking marginally in 2013 as a whole, a modest but positive growth rate of around 1% is expected for 2014. Despite these positive developments, the risks around the outlook for the euro area remain tilted to the downside. Moreover, unemployment in the euro area remains excessively high, especially in the stressed countries. Heterogeneity in the euro area is evident both in terms of economic performance… An underlying characteristic that is observed in the euro area is the uneven performance across countries and the emergence of increased heterogeneity.

Data is an integral part of researching economic issues and the labor and financial markets. Data is also central to our jobs of forecasting and identifying trends. Our understanding of interest rates, reserves, and balance sheets is built on data. In our efforts to promote financial stability, data is fundamental to stress testing. In our financial services efforts, payment information and data flows figure critically in our payment systems. The scope of our data consumption and creation spans a wide range. It encompasses local, regional, national, and global coverage and extends from the micro to the most broadly aggregated levels. Consequently, as an organization we are increasingly dealing with a growing number of data challenges. They include the multitude of legal topics associated with contractual terms and conditions of data use, data sharing, and privacy restrictions. We are constantly challenged to develop and maintain clear and comprehensive data dictionaries that enable us to repurpose data appropriately. Moreover, as we continue to create more data, we are focusing on data governance. This entails oversight and measures to ensure that our own data are accurately posted (with updated revisions and associated documentation) by commercial aggregators. All of this growth requires investments in both technology and personnel to support our ever-expanding data requirements. Challenges in the use of data I’ll focus my remarks on two important challenges that we face in using data effectively, as well as some models we may draw from to overcome those challenges.
Banks need to develop a laser like focus on wrong-way risk, where the value of collateral held as security falls in the very situation where the counterparty defaults. And to consider if attempts to realise collateral might further add to negative price dynamics. Stress testing is also needed across sectors to understand how correlations in risk exposure can lead to correlated behaviours in stress. And stress tests need to account for institutional structures, governance and processes for liquidity management, to capture examples like the LDI event above, where DB schemes had assets available but were simply unable to get them to where they needed to be quickly enough. Bank supervisors can play a role in limiting the risks from leverage in the non-bank system to the core financial system through strengthening of risk management practices of dealer banks and prime brokers. My supervisory colleagues are indeed taking steps to ensure this. [13]  Let me turn finally to the steps financial stability authorities are taking. And where, unfortunately for the policy community, the challenges we face are complex, reflecting the large number and variety of institutions involved, and as the system of marketbased finance is global, meaning effective reform needs to be co-ordinated across jurisdictions. The FPC has put vulnerabilities in the non-bank financial system at the core of its work in recent years.

The objective of the central bank’s control is to stabilise CCM, to avoid a liquidity collapse and to manage the institution for as short a time as possible with a view to finding an orderly solution. Ultimately, the viability of CCM’s future business may be achieved in different ways (for example, through a merger with other credit institutions), with the Banco de España currently not ruling out any options. The response to these options will be swift, but not immediate, and will require the collaboration of authorities, financial institutions, employees and creditors. I would not like to forgo the opportunity of appearing before this Committee without highlighting some of the messages recently conveyed by the Banco de España. Firstly, I would like to reiterate that involving savings banks in the political debate makes it immensely difficult to find flexible and effective solutions. Opinions become distorted, suspicions, demands and expectations of the parties involved grow and solutions become increasingly complicated. We should not forget that past experience in Spain and abroad shows that prudence and discretion are prerequisites for reducing the costs of possible solutions for troubled institutions. Otherwise, we will make the authorities work more difficult and, ultimately, taxpayers will pay a higher price. In finding a solution to the difficulties encountered by CCM, the Banco de España has adhered to its tradition of adopting decisions based solely on the objectives of preserving the stability of our financial system, minimising the cost in terms of public funds and maintaining the availability of sufficient financial services.
Second, the “storm broke out”: after the default of Lehman Brothers, it became evident that such standard measures were no longer sufficient to achieve price stability in the euro area. We therefore provided enhanced credit support and, later on, non-standard credit operations in the light of the increased liquidity demands from the banking system. To avoid potential collateral shortages when satisfying this increased demand, we expanded the range of assets against 2/4  BIS central bankers' speeches  which banks can draw liquidity from the Eurosystem. But at the same time, we followed the principle of risk equivalence with the assets accepted under the pre-crisis rules. Let me give you a concrete example: since 2012, several national central banks of the euro area, including the one hosting this conference, have accepted additional bank loans as collateral. To ensure risk equivalence, haircuts on these assets were higher than those used in regular operations. This brings me to the third phase of the crisis, the “crosswinds”: in recent years the continued decline in inflation rates in the euro area called for additional non-standard measures – I am referring, of course, to the asset purchase programmes. This type of liquidity provision was a novelty for the Eurosystem, although the instrument of outright purchases has been envisaged as one of the legal and operational tools of the Eurosystem since its inception. Accordingly, additional risk control frameworks needed to be developed to keep the financial risks in check given the significant rise in exposures.

Fourth, the Governing Council will have to decide whether we ought to rely more on our own judgement about the quality of assets and counterparties and to further expand Eurosysteminternal credit assessment systems, steps which would require additional resources. It means further enhancing the due diligence on external credit ratings, for which sufficient transparency on the judgement underlying these ratings is essential. And it means using supervisory information to ensure an efficient implementation of monetary policy operations – the introduction of the European single supervisory mechanism has brought about fundamental improvements here, as it allows for the sharing of relevant information within the legal limits of the separation principle. To conclude, I believe the Eurosystem’s risk management framework has successfully weathered the financial storms of the past few years. The reason is that we followed stable principles when the size of our operations, the assets accepted as collateral or the types of operations changed. Looking ahead, we can already start thinking about a financial risk management framework that will be appropriate for a central bank that has returned to a more conventional environment for the conduct of monetary policy, while still following these principles. I now look forward to the panel discussions, which will pick up on some of those issues in more detail, and to hearing your views. 1 Treaty on the Functioning of the European Union. 4/4  BIS central bankers' speeches
In the market for private sector bonds, interest rates fell as well, but not by as much as government bond yields, reflecting the greater substitution opportunities for corporate bond investors. While the introduction of the negative interest rate caused interest rates on the money and capital markets to decline, mortgage rates did not decrease to the same extent. Indeed, for long-term mortgages, interest rates are slightly higher than they were at the beginning of the year. This is because banks’ refinancing costs have not fallen to the same extent as money market interest rates. As a result, banks’ interest margins have come under pressure. 1 To partially offset this effect, banks have raised their mortgage interest rates. As yet, therefore, fears that the negative interest rate might contribute to stronger growth in mortgage lending have proved unfounded. 1  This affects the banks’ “liability margin”, which is the difference between the interest on maturity-matched alternative funding sources and the interest on deposits. BIS central bankers’ speeches  3  The Swiss economy in a difficult environment So far, I have spoken mainly about exchange rates and interest rates – that is, monetary conditions in the Swiss economy. I would now like to turn to the real economy. Switzerland is a relatively small open economy. 2 In general, this means that international developments matter a lot to Switzerland. However, during the global recession of 2009 and the sluggish recovery that followed, the Swiss economy proved to be surprisingly resilient.

While nominal export turnover fell sharply, real export volumes held up much better. Hence, when the strong appreciation of the Swiss franc raised prices for foreign buyers of Swiss products, Swiss companies responded by cutting export prices, thereby preventing a sharp fall in real export volumes. Further evidence for this ‘margin compression’ comes from our own surveys, which SNB delegates for regional economic relations conduct regularly among Swiss companies. Global demand conditions have deteriorated somewhat in recent months. Emerging market economies in particular – but also some commodity-producing countries – have seen economic momentum fade. By contrast, major advanced economies continue to recover, albeit at a modest pace. On balance, we expect the global economy to grow moderately in the coming years. This should help to partially offset the drag from the overvalued Swiss franc. Thus, following a contraction in the first quarter of 2015, economic activity in Switzerland expanded again in the second quarter. In our estimation, GDP is likely to grow by close to 1% this year. Price stability is not in doubt In the last part of my speech, I would like to present our inflation outlook. Last year, the inflation rate – as measured by the consumer price index – averaged around zero. This year, inflation has fallen well into negative territory.
When a full accounting of the special liquidity facilities is complete, it seems likely that the facilities will have generated substantial incremental earnings that the Federal Reserve will remit to the Treasury. Although these incremental earnings were not the objective of these facilities, they are a pleasant outcome relative to the alternative. As the crisis has abated, our attention has shifted to what we need to do to prevent another crisis in the future. We need to take the necessary steps to build a strong and resilient financial system. In my opinion, three broad sets of actions are needed: •  Effective macroprudential supervision. By this, I mean conducting supervision not just vertically institution by institution, but also horizontally across institutions and markets. We need to better understand how the system operates as a whole and how problems in one area can affect financial stability elsewhere. This means both how the overall system affects individual firms and how the activities of a single firm or market affects the entire financial system. •  Make financial institutions and market infrastructures more robust to withstand shocks and become less prone to failure. •  Change the system so that no financial firm is “too big to fail.”  Macroprudential supervision is essential for two reasons. First, it addresses the problem of gaps in the regulatory regime and the regulatory arbitrage that such gaps can encourage. Second, macroprudential supervision is needed because the financial system is interconnected. Siloed regulatory oversight is not sufficient.

Dimitar Radev: Bulgaria in the eurozone – what is next for the business Speech by Mr Dimitar Radev, Governor of the Bulgarian National Bank, at the conference "Bulgaria in the eurozone – what is next for the business", organised by the American Chamber of Commerce in Bulgaria (AmCham), Sofia, 5 April 2023. *** Ladies and Gentlemen, Thank you for the invitation. It is a real pleasure for me to be here at this Conference. Over the last few months, I have had the opportunity to attend several similar events. My personal impression is that the business is becoming more and more actively involved in Bulgaria's accession to the euro area and this is a very positive trend. I am going to dwell on three issues, trying not to repeat what Mr. Mihailov and Mr. Metodiev have said, which by the way I totally agree with. The three questions associated with the process of Bulgaria's accession to the euro area that I will focus on are: what is the starting position; what comes next; and what are the conditions needed for this process to finish successfully. Starting position Before we go into discussion on the next steps, we have to be very clear about what our starting position is.