samchain/econo-pairs-v1 huggingface dataset:
The terms and the form of deferred compensation are an important tool that could be further developed to generate a better set of incentives consistent with our financial stability objectives. We must also ensure that firms can respond to financial or operational weakness of any type by having robust recovery plans that get triggered long before resolution becomes necessary. They should develop and track metrics that not only identify when they are on the verge of insolvency or default, but that trigger appropriate remediation actions whenever the firm begins to become stressed. These plans should identify actionable options that the firm can take in response to financial weakness that will restore the confidence of the firm’s counterparties without the need for extraordinary official sector support. They must also have disciplined processes that analyze the root causes of their problems and identify longer-term strategies that will need to be employed as other recovery options to restore capital and liquidity are being executed. And firms must support the viability of their contingency and recovery plans by implementing the internal governance necessary to develop, test, update and implement them credibly. Some argue that what I have proposed – higher capital requirements and better incentives that reduce the probability of failure combined with a resolution regime that makes the prospect of failure fully credible – are insufficient. Perhaps, this is correct.

Subsidiaries would continue to operate, which should limit the incentives for customers to run. By assigning losses to shareholders and unsecured creditors of the holding company and transferring sound operating subsidiaries to a new solvent entity, such a “top-down” resolution strategy should ensure continuity with respect to any critical services performed by the firm’s subsidiaries and this should help limit the magnitude of any negative externalities. I very much endorse the FDIC’s single point of entry framework for resolution. I think it is the best plan for implementing Title II given the complexity and scope of large, global financial institutions, and I also think it is well suited to the U.S. bank holding company framework. For this regime to work properly there needs to be a sufficient amount of debt outstanding at the parent company that can be converted by the FDIC into equity to ensure that the new bridge company will be demonstrably well-capitalized. We don’t yet have a long-term debt requirement – this is an area where we are still working out the details. My own view is that a holding company needs a substantial amount of long-term debt to ensure that the newly created bridge company will be considered fully viable by its counterparties. While the Title II single-point-of-entry strategy holds tremendous promise, there are important implementation issues that still need to be worked out. Implementing the resolution regime on a cross-border basis remains one of the most significant challenges.
As I just said, the basic considerations in monetary policy are inflation in a medium-term perspective and a reasonable degree of stability in the real economy. In recent years a common topic in the discussion of inflation and monetary policy has been the concept of transitory effects. A sudden and unforeseen increase (or decrease) in the general price level on account of some type of shock leads to inflation being temporarily higher (or lower) in the following twelve months. That shocks of this type should influence monetary policy is not self-evident. On the one hand, reacting to transitory shocks that do no mirror changes in resource utilisation or inflation expectations would be liable to result in demand being affected by instrumental rate adjustments in ways that contribute to future, more permanent deviations from the inflation target. On  6  BIS Review 24/2002  the other hand, future deviations from the inflation target can also occur if one disregards the fact that supply shocks may mirror more or less transitory changes in productivity or that temporary price effects may have consequences for other prices and influence inflation expectations. Determining whether or not monetary policy ought to respond to a change in the rate of price increases calls for detailed analyses of the underlying causes. This is another circumstance that illustrates the disadvantages of a strategy that only considers current price tendencies and is likely to lead to appreciable fluctuations in the development of prices as well as demand.

Joseph Yam: International financial system – challenging issues Welcome address by Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, at the SIBOS 2009, Hong Kong, 14 September 2009. *  *  *  SIBOS was last held here in Hong Kong in 1991. So it has taken you 18 years to come back to Hong Kong. I wonder what took you so long. A lot has happened here in this free and open international financial centre in the past 18 years that ought to have interested you enough to bring you back here earlier. I can think of, for example, the establishment of the Hong Kong Monetary Authority in 1993! Seriously, financial globalisation and innovation have made life here, where there is a high degree of market freedom and ample liquidity, rather challenging, perhaps a little too challenging for the financial authorities. And on a couple of occasions we had to take controversial, remedial action to safeguard monetary and financial stability.
Markets for Treasury securities and agency mortgage-backed securities, which are normally highly liquid and form the bedrock of our financial system, nearly buckled under the strain of massive flows of funds in response to the pandemic.3 It’s easy to think of financial markets as somewhat divorced from the real economy—most people will never need to worry about a spike in the repo rate or liquidity in the Treasury market. But the reality is that like the events of 1907—and more recently 2008—turmoil in financial markets can have a devastating impact on the wider economy. If credit isn’t flowing, people can’t finance the purchase of a home, businesses can’t invest, and nonprofit organizations and municipalities can’t keep essential services going. This is why safeguarding the functioning of financial markets is essential for the health of the broader economy. In response to the extraordinary volatility caused by the pandemic, the Fed greatly expanded its repo operations and began purchasing sizable quantities of U.S. Treasury securities and agency mortgage-backed securities. These actions to provide massive liquidity have proven successful. They restored market functioning and averted what could have been a much more severe pullback from markets and the flow of credit to households and businesses.4  Deploying Our Tools In addition to the repo operations and asset purchases, we have established a number of programs to support the flow of credit to households, businesses, and state and local governments.5 I won’t go into detail about all of the facilities, but I will emphasize two important points.

6 The effects of the Federal Reserve’s actions in establishing these facilities on credit markets are discussed in  Nina Boyarchenko, Richard Crump, and Anna Kovner, The Commercial Paper Funding Facility, Federal Reserve Bank of New York Liberty Street Economics, May 15, 2020 ; Antoine Martin and Susan McLaughlin, The Primary Dealer Credit Facility, Federal Reserve Bank of New York Liberty Street Economics, May 19, 2020; Nina Boyarchenko, Richard Crump, Anna Kovner, Or Shachar, and Peter Van Tassel, The Primary and Secondary Market Corporate Credit Facilities, Federal Reserve Bank of New York Liberty Street Economics, May 26, 2020; and Marco Cipriani, Andrew Haughwout, Ben Hyman, Anna Kovner, Gabriele La Spada, Matthew Lieber, and Shawn Nee, Municipal Debt Markets and the COVID-19 Pandemic, Federal Reserve Bank of New York Liberty 3/4  BIS central bankers' speeches  Street Economics, June 29, 2020. 7  Jerome H. Powell, Current Economic Issues, Speech at the Peterson Institute for International Economics, Washington, D.C. (via webcast) (May 13, 2020). 4/4  BIS central bankers' speeches
Deposit insurance Let me move to an area that has received relatively scarce attention in relation to financial integration, which is the design of deposit insurance schemes. Although I look at it today primarily from an integration perspective, we should keep in mind that deposit insurance plays also an important role in crisis prevention and resolution. Deposit insurance serves two different but interrelated purposes. Its consumer protection purpose is to protect small and unsophisticated bank depositors against loosing a potentially important part of their wealth. Its financial stability purpose is to avoid bank depositor runs. While it is nowadays hardly challenged any more that deposit insurance is a necessary element of the regulatory set-up, there is also awareness that an ill-designed deposit insurance scheme can have important adverse effects. On the one hand, a too generous coverage – protecting also large sophisticated depositors – could reduce market discipline for banks and therefore create distortions in the allocation of risks, including potential incentives for excessive risk taking by banks. This, in turn, could contribute to instability and related costs. On the other hand, unclear arrangements or only partial coverage for retail depositors could open the way again for bank runs. In order to illustrate the relevance of deposit insurance schemes for financial integration, let me recall the definition of financial integration we are using for our work.

The global economy has displayed a mild recovery since the second half of 2009. Yet, European economies have recently shown signals of deceleration. Although problems in the credit markets of advanced economies have attenuated, they have not been completely eliminated yet. As a matter of fact, credit developments in the USA and the Euro area suggest no significant increase in credit volume. The unresolved issue of troubled assets in  BIS Review 104/2010  1  the banking sector of advanced economies impedes proper functioning of the credit mechanism. Meanwhile, soaring and persisting high unemployment rates in many countries reduce household expenditures and negatively affect the aggregate demand. Soaring budget deficits and public debt stocks stemming from loose fiscal policies implemented in developed countries are an important risk factor that may adversely affect private demand by increasing long-term interest rates in the years ahead. The risks that I have mentioned above also have the potential to affect the Turkish economy in a negative way. Considering that our largest exports market is the European Union, problems prevailing in European economies pose an important risk for our economy, too. As a matter of fact, external demand indicators have recently indicated a partial slowdown. Global turbulence also has the potential to affect the Turkish economy negatively through the channel of expectations. Problems in the global financial markets are likely to restrain the accessibility of external financing.
But, in recent years, there appears to have been an increase in the number of operators of dubious financial background who move from country to country taking advantage of gullible governments and private individuals and entities. Their intention is to defraud governments and people by convincing them to accept and/or invest in get-rich-quick projects that are later proven to be just pure scams. I should mention that we have come across a wide range of scams in the past, some of which have been repeated in several countries by different or most probably, the same operators. In the event, sharing of information about such experiences would benefit us all in our efforts to protect our financial system, not to mention our people, from such abuses. The features of scams touted around the Pacific are mostly similar, except a few cosmetic variations in some cases. Usually, substantial benefits are promised by the get-rich-quick operators in return for payments made by the victims or some contingent liabilities accepted by Governments and private individuals up front. Let me state some examples for your reference: i. Letters of Guarantee  ii. A loan for Indigenous Development  iii. A loan to a private company  iv. Sale of Passports  v.  The Nigerian Scam  vi. Lottery winnings  (The last two on the list have come up quite often through the internet and email messages. ) Capacity building Let me end with a word on capacity building.

Unfortunately, not only has the contribution of women not been highlighted or fully appreciated, but there has also been no focused attention to enhance access to finance by women or to increase financial inclusion of women. Of the approximately 20mn population in Sri Lanka, 50% are females. The same ratio is found in all provinces according to latest data. For 3 consecutive years, the country has achieved a growth over 6% and a growth rate of 6.8% has been recorded for 2007. However, women’s contribution in this 6.8% is hidden. As at the end of 2007, we have exceeded a per capita income of US $ 1,600. The system of National Accounts or other systems that set standards in the compilation of National Income have recognized the need for separating women’s contribution to GDP but, so far, there is no acceptable formula for achieving this. Similarly, the gender budgeting that started in Australia and South Africa has not been followed or continued by many countries. Sri Lanka too recognized that there is a need to separately account for gender contribution in the budget. In that regard, some of us managed to include a couple of paragraphs announcing the gender budgeting policy in the 1999 Budget, but there has been no follow up since then. Drawbacks in financial inclusion and uneven ground situation The banking and financial sector in the country must be strong for financial inclusion to take place. Our banking sector has been showing advancement and growth. The financial system is stable and resilient.
The seller will be obliged to make the investor — the so-called investor who is just an individual — acquainted with these documents. No less important is the law the Speaker has spoken about, setting forth the rules for selling investment financial products. This is where the Federal Antimonopoly Service could step in and make the difference. Misselling should be punishable. We are working on this draft law jointly with the Finance Ministry, and hopefully the Federation Council will in turn assist in passing it as soon as possible. A number of regulations may even need tightening there. Apart from this future law, it is our responsibility to protect investors from product offerings or financial instruments whose risks they are unable to evaluate, from products they may buy at banks on the assumption that they are buying a sort of bank deposit. That is, it turns out that people do not realise that they become retail investors when they buy these products and assume some risks. As I see it, urgent action is needed to rectify this situation. This is what we propose. The decision we are bringing up for discussion today has taken us quite some time to formulate given all the compromise solutions 3/4  BIS central bankers' speeches  we had to consider. We propose that direct restrictions be imposed on the sale to non-qualified investors of structured financial products, that is, products with leverage and those with a forex component in an asset base.

Elvira Nabiullina: Speech - Federation Council’s Financial Market Development Board meeting Speech by Ms Elvira Nabiullina, Governor of the Bank of Russia, at the Federation Council’s Financial Market Development Board meeting, Moscow, 8 December 2020. * * * Good afternoon, dear Speaker and fellow colleagues, There is no denying the fact that the financial sector plays a critical part in the context of our efforts to deliver on the national development agenda. Financial intermediaries and the stock market work to ensure that savings transform into investment, businesses obtain the resources they need for development, and consumers gain the tools to grow their wealth. It is within our regulator’s mandate to oil the gears of all these mechanisms and make sure the financial sector provides excellent performance. This means that the costs of businesses and consumers related to their financial objectives should go down. And this means, as the Speaker has mentioned, that we should secure the emergence of long-term money. My deputy, Sergey Shvetsov, is here today to tell you more on our financial market agenda. In my opening remarks, I would like to expand on a number of key points in our operations as a regulator, which have, in my view, major implications. It would be fair to say that this year has spurred transformation in the financial sector. Among key developments are accelerated digitalisation, the Bank of Russia’s switch to soft monetary policy, falling interest rates in the economy, pandemic-induced borrowers’ problems and a large volume of restructured loans.
Considering those characteristics, adopting any currency other than the euro would have serious drawbacks.8 Therefore, reforming the current regime appears preferable to a radical change should EMU membership be unattainable, at least for the next decade. The fact that the vast majority of small countries either use another country’s currency or pursue some type of rigid fixed exchange rate policy could indicate, however, that a floating currency may face difficulties over the long haul (Chart 3). Ladies and gentlemen: No monetary framework or choice of currency will solve Iceland’s economic problems once and for all. The set of solutions labelled “cure-for-all-ills” is an empty set. Protracted discussions of the contents of an empty set are not only empty in themselves; they are absolutely pointless. Irrespective of the framework, economic policy must be pursued with greater discipline than has been the case to date. However, imposing a framework that forces the authorities to adopt more long-term oriented policies could improve performance. One way to do this is to join a currency union. The experience of Greece and other countries on the periphery of the EMU shows, however, that if economic policies remain short-sighted and solving imminent fiscal problems is delayed for too long, the imposed discipline is anything but palatable. I think Iceland’s experience of its collaboration with the IMF indicates, however, that it would flourish under such discipline. But if EMU membership is not an option, that discipline must come from within.

In addition, the Government owns substantial assets that it could sell in order to speed up the reduction of gross debt, including its stake in the banks.6 How Iceland would stand vis-à-vis the other Maastricht criteria, such as those pertaining to inflation, interest rate differential, and ERM II membership (for two years prior to accession) is also largely in the hands of the authorities. Through fiscal restraint, they could also contribute to the convergence of long-term interest rates. The social partners could promote low inflation by exercising restraint in wage settlements. Finally, the shorter end of the interest rate spectrum is determined by the market’s self-fulfilling expectations concerning membership itself and by the decisions of the Central Bank. Although a number of arguments indicate that currency union membership would suit Iceland well, it is not certain that a majority of the electorate will vote in favour of European Union membership in a national referendum. The fact that a number of EU member countries are in  5  Intervention would normally be sterilised in order to prevent undesirable effects on money supply. Hence the impact on the exchange rate is unlikely to be large or lasting. 6  According to current targets, the authorities aim to reduce gross public sector debt to 70% of GDP by 2015. 4  BIS central bankers’ speeches  financial distress, not least those permitted to join the EMU through rather liberal interpretation of the Maastricht criteria, does not increase the likelihood that the referendum would pass.
When it comes to cooperation with the home countries, we have very much appreciated their measures to enhance the safety of their banks, as this provides a sense of financial infrastructure security in our host-countries as well. We believe that these measures will be adjusted to a developing environment, and will be instrumental to also target some of the concerns of the host countries related with: a) the importance of maintaining reasonable flow of funds in euro from the headquarters of the banking groups toward their foreign subsidiaries, both for liquidity and lending support; b) the importance of gradually steering the lending portfolio of their foreign subsidiaries toward local currency of the host countries. Events of the second half of 2008 have shown us the importance of having a balanced economy and a solid financial and banking sector. Despite the increasing effects of the international crisis, the economy showed a solid growth, in an environment of declining inflationary pressure. Impact of the international crisis started to materialize in the last quarter of the year, as shown in developments of the balance of payments and in the banking sector balance sheet. Indeed, a fall in external demand and a rise in unemployment rates in some of the EU neighbor countries caused a decline in the remittances and in exports. In addition, public sensitivity to (sometimes unbalanced) news on international crisis developments, increased the uncertainty about the safety of their savings in the banking sector, and caused some deposits withdraw.

There will be a waiver of three months’ guarantee fee for loans with tenor of one to three years and a waiver of six months’ guarantee fee for loans with tenor of more than three years. Lastly, let me thank once again the senior representatives of the 21 banks for participating in today’s Signing Ceremony. We stand ready to work with the banking industry to jointly promote this project which is so meaningful for the SMEs and the local economy. Thank you! BIS Review 170/2010  1