samchain/econo-pairs-v1 huggingface dataset:
That would be in line with international evidence showing the general slowness of these adjustment processes and highlights the need for such a process to be complemented by banks’ active management by means of sale agreements in respect of their portfolios of problem assets. Indeed, in 2017 and this year there have been successive announcements by banks of agreements with asset management companies to reduce the volume of non-productive assets on their balance sheets. This will result in an improvement in the quality of Spanish bank balance sheets and, consequently, in their supply of credit to the economy as a whole. In fact, the evidence available shows that there is a negative correlation between the non-performing loan ratio and credit growth. From another perspective, the swift progress in correcting the high levels of bad debts in Spain and in other euro area countries is crucial for easing the way to finalising the Banking Union project in respect of its remaining pillar, which is none other than the definitive creation of a pan-European, pooled and sufficiently backed deposit guarantee scheme. All the foregoing justifies the special interest we have as economic and supervisory authorities in credit institutions taking the appropriate measures to expedite the ongoing reduction in the volume of impaired assets. One of the most significant initiatives here is the package disclosed by the European Commission in March.

This is particularly relevant in the current setting of low demand for financing in Spain, in which this trend could contribute to further eroding the net interest margins in some market segments. To conclude, let me sum up the key messages I would like to convey. In recent years, Spanish credit institutions have made sterling efforts to overcome the problems stemming from the crisis and to adapt to the new and stricter regulatory requirements. This has been reflected in the significant improvements in their solvency, profitability and asset quality. However, despite these improvements, Spanish banks continue to face major challenges, largely shared with other euro area banking systems. These include, most notably: (i) stepping up sales of non-productive assets (ii) the need to strengthen capital, (iii) addressing profitability challenges without unduly easing credit standards and, lastly (iv) harnessing new technologies in a competitive environment of potential new competitors. In an economy as highly banked as Spain’s, overcoming these challenges is key to the banking industry gaining a sufficient position of strength from which to contribute to economic growth and job creation. Thank you for your attention. 8/8
Let me comment on some of these four aspects and touch on how we intend to fulfil our mandate to support the ESRB. Conceptual issues of systemic risk Systemic risk analysis is nothing new to the central banking community, including the ECB. One reflection of this fact is the series of triennial central bank conferences held under the G10 Committee on the Global Financial System between the mid-1990s and early 2000s. Even the European Monetary Institute, which was the forerunner of the ECB, contributed to systemic risk work in this context, alongside the US Federal Reserve, the Bank of England, the Bank of Japan and many other central banks. 4 For instance, from the outset, the ECB drew up a research agenda on financial stability and systemic risk. 5 In addition, in 2004 we started to publish a Financial Stability Report (FSR) twice a year. The main objective of this Report is to help identify, at an early stage, potential vulnerabilities and to raise awareness among market participants with a view to promoting preventive and remedial policies. Each issue also contains several special features offering a wealth of further insight into financial stability and systemic risk. This background suggests that the ECB is a logical choice as a provider of analytical support to the ESRB, but it should not obscure two major challenges we are facing. First, the phenomenon of systemic risk is extraordinarily complex.

Following the default on its debt by the Russian government, the imposition of capital controls by Malaysia, and the near collapse of the hedge fund Long Term Capital Management, financial markets world-wide have exhibited extraordinary volatility, driven by a fear of risk, a flight to quality and liquidity, and the beginning of a significant reduction in leverage by financial institutions. What does this turbulence mean for the British economy? Before answering that question, I want to say a few words about the Monetary Policy Committee. Just under two weeks ago, the Monetary Policy Committee, for the first time in its short history, cut interest rates. When I accepted your invitation to speak today, I did not know that I would be able to explain to you the reasons behind our latest decision. For, until today, the minutes of our meetings were published with a lag of some five to six weeks. But, as the Bank announced earlier this month, the minutes will now be published only two weeks after the monthly meetings. And the minutes from our meeting on 7-8 October were published at 9.30 a.m. this morning. This increase in transparency should help commentators and financial markets alike to assess the actions of the MPC and to predict its future decisions. As I have said on other occasions, the aim of the MPC is to pursue economic stability, not to spring surprises on an unsuspecting world. Surprises may be good for newspapers, but not for most other businesses.
I therefore do not intend to discuss this specific issue today, but refer to the comprehensive academic literature. 2 Many analysts would argue that both of these changes, at least partly, share a basis, namely higher global saving, which, in turn, is a result of the world having become richer. 3 But I would like to separate them, as the discussion has primarily come to focus on the lower level of interest rates. The fact that the financial sector has also changed in several respects is something that needs to be given more attention, considering that the conditions on the financial markets steer how monetary policy is designed and acts. Allow me, therefore, to make a brief digression on the subject. In the 1970s and 1980s, the world's capital markets were gradually deregulated. This, combined with good global growth, which is to say a richer world, and the development of information technology, led to strong development on the global financial markets in terms of outstanding volumes, turnover and new instruments. The development had major advantages. With less regulation, the financial sector’s basic functions – executing payments, allocating savings to investments and managing risk – could be better managed, at the same time as the strong growth on the financial markets contributed to the strong growth in the global economy. But a larger financial sector has also led to greater potential risks, as exemplified by the financial crisis twelve years ago.

These projects are: •  a review of the standardised (credit and operational risk) approaches to capital adequacy, which need to be re-examined in light of calls for greater simplicity and comparability in the regulatory framework as well as the desire to reduce the reliance on credit rating agencies if possible; and  •  an examination of the need for a capital framework for interest rate risk in the banking book, particularly given the desire to limit arbitrage opportunities between the trading and banking books. These last two projects are still at an embryonic stage, so I cannot say too much about what they might entail at this point in time, but they will be the last pieces in what has essentially been a complete overhaul of the regulatory framework since the financial crisis. Monitoring and reinforcing implementation of Basel regulatory standards As I have already said, the establishment of the implementation monitoring programme has been a high priority for the Committee; it is critical to the successful delivery of the benefits of the agreed reforms. Starting from scratch at the beginning of 2012, a comprehensive assessment framework has been developed that is growing in its acceptance and credibility, and I am pleased to report that the Committee now has dedicated capacity in the area of implementation work. The implementation framework is being continuously strengthened through a lessonslearned process.
These overall statistics mask the severity of the health and economic hardships felt by lowerincome families and communities of color as a result of the pandemic. To cite just a few statistics, the Black unemployment rate is above 12 percent and the Hispanic unemployment rate is over 10 percent, and Black-owned businesses were shuttered at more than twice the rate of white-owned businesses during the early stages of the pandemic.7 In terms of monetary policy, the appropriate focus right now is on getting the country back to work. For that reason, policy is supporting very low interest rates to provide stimulus to the economic recovery and keeping inflation expectations anchored at 2 percent. In thinking about the future path of policy, it is important to recognize that the pandemic engenders a unique and highly uncertain economic outlook. This is not a standard recession and the economic future is inextricably tied to the spread of the virus, people’s behavior in containing that spread, and the development of vaccines and therapeutics. Given this uncertainty, transparency and flexibility in our policy approach will enable us to respond to changes in the outlook as they happen. Indeed, these are key features of the forward 8 2/3  BIS central bankers' speeches  guidance we issued after the FOMC meeting in September.8 September’s FOMC statement clearly linked our policy to the key elements of the new policy framework.

2 See Board of Governors of the Federal Reserve System, Federal Reserve Issues FOMC Statement, September  16, 2020. 3 John C. Williams, A New Chapter for the FOMC Monetary Policy Framework, Remarks at “In Conversation: New  York Fed Presidents on COVID-19” (Bretton Woods Committee Webinar) (September 2, 2020). 4 Thomas M. Mertens and John C. Williams, “Tying Down the Anchor: Monetary Policy Rules and the Lower Bound  on Interest Rates.” In John H. Cochrane and John B. Taylor (eds. ), Strategies for Monetary Policy, Hoover Institution Press, Palo Alto, CA, 2020. 5 Athanasios Orphanides and John C. Williams, Robust Monetary Policy Rules with Unknown Natural Rates,  Brookings Papers on Economic Activity, 2002, No. 2. 6 See Board of Governors of the Federal Reserve System, Statement on Longer-Run Goals and Monetary Policy  Strategy, as amended effective August 27, 2020. 7 Claire Kramer Mills and Jessica Battisto, Double Jeopardy: COVID-19’s Concentrated Health and Wealth Effects  in Black Communities, Federal Reserve Bank of New York, August 2020. 8 Board of Governors of the Federal Reserve System, Federal Reserve Issues FOMC Statement, September 16,  2020; Board of Governors of the Federal Reserve System, Transcript of Chair Powell’s Press Conference, September 16, 2020. 9 Board of Governors of the Federal Reserve System, Federal Reserve Issues FOMC Statement, September 16,  2020. 3/3  BIS central bankers' speeches
It is just as important to avoid a rate of inflation that is too low as it is to avoid a rate that is too high. Changes in labour costs influence the rise in prices for domestically produced goods and services. Labour market tightness is heavily influenced by demand for goods and services. High levels of private and public consumption, investment and exports will sustain the demand for labour. When the supply of labour is limited, competition for labour pushes up wages. Low imported price inflation pushes down consumer price inflation. Price inflation by origin. Per cent 5  5  Goods and services produced in Norway  3  3 CPI-ATE  1  1 -1  -1  Imported consumer goods  -3  -3 1999  2000  2001  2002  Sources: Statistics Norway and Norges Bank SG Kommunalbanken, 30.august 2002  In many countries, low and stable inflation is the goal of monetary policy. It can therefore be assumed that imported inflation will remain subdued. But, the rise in prices will still vary as a result of global economic developments. The krone exchange rate also plays an important role in determining import prices. A strong krone will curb prices for imported goods. When there is a rise in interest rates in Norway and a widening differential between domestic and foreign interest rates, investments in NOK increase, and the krone exchange rate appreciates.

in  ad Abro  Sources : Statistics Norway and the Norwegian Central Securities Deposit SG Kommunalbanken, 30.august 2002  The largest holders of Norwegian bonds are insurance companies, but the government, private companies and foreign investors also account for a large share of bond holdings. The largest issuers are the government and financial institutions. Kommunalbanken is also a fairly large issuer in the Norwegian bond market. At the end of 2001, the Bank’s total bond and commercial paper debt came to about NOK 26 billion. This accounted for a good 6 per cent of total outstanding bond and short-term debt issues in Norway at the end of last year. There are historical reasons for the thin securities market in Norway. From the post-war period and up to the beginning of the 1980s, the Norwegian bond market was subject to direct regulation. It was only in the late 1980s that the market for bonds and short-term debt was liberalised and it is now part of the international market. BIS Review 48/2002  5  Outstanding holdings of domestic debt securities issued by non-financial enterprises.
Jean-Claude Trichet: Euro prospects and international financial reforms  Speech by Mr Jean-Claude Trichet, Governor of the Banque de France, at the 21st Century Forum, sponsored by the National Committee Chinese People’s Consultative Conference, held in Beijing, on 15 June 2000. *  *  *  It is a great privilege to participate in such an extraordinary forum. I want to express all my gratitude to the National Committee Chinese People’s Consultative Conference, and particularly its chairman, for having sponsored this 21st Century Forum, here in Beijing. Let me take this opportunity to present some views on international issues. I would like to focus on two major topics, –  the international financial architecture and its necessary evolution;  –  the economic strengths and scope for further progress in the euro area. Both topics are in fact related: both have a bearing on the future of the International Monetary and Financial System; both illustrate the worldwide efforts to build more stable economic and monetary relationships in an increasingly globalized world. 1. Let’s consider first the international financial architecture  Several complex issues, often inter-related, are currently at stake. On each of them, the Eurosystem (i.e. the European Central Bank - ECB - and the eleven National Central Banks - NCBs - of the euro area) have elaborated a common view.

It is this common view that I will present to you now as I have had occasions of presenting it, as the position of Banque de France, in the last G VII meeting, last April. I see five major points that are of systemic interest: –  the orderly liberalization of capital movements;  –  the question of reserve and debt management;  –  the key issue of transparency;  –  the question of the moral hazard associated with private sector involvement;  –  and finally the choice of the exchange rate regime. 1.1  Orderly liberalization of capital movements  The liberalization of capital movements benefits both individual countries and the world economy: it enhances long-term growth potential and improves savings/investments allocation. However, the two following principles need to be carefully taken into account in order to minimize risks: –  the restructuring of domestic financial systems and the strengthening of domestic regulatory and supervisory frameworks are preconditions of utmost importance: emerging economies should bring their domestic financial systems into line with regulatory and supervisory minimum requirements prevailing in mature economies. In that respect, the international community plays an important role through the Financial Stability Forum, the implementation of standards such as the “Core Principles for Effective Banking Supervision” or the Financial Sector Assessment Programs developed by the IMF in order to identify financial systems’ strengths and vulnerabilities. 1  BIS Review 52/2000  –  The liberalization process should be carefully sequenced, starting from the more stable capital flows (e.g.
Like a commercial bank, collateral bestows post-default recovery value. But unlike commercial banks, we do not use collateral for liquidity management purposes. The Bank does not re-pledge collateral to raise liquidity for example. The emphasis is on the protection that the collateral offers in a default situation. Although the eligibility of collateral depends on a number of factors, in all cases the collateral must be of sufficiently high credit quality so that it presents a low risk to the Bank in the event of a default by a counterparty. The Bank’s operations vary in their policy objectives, and so have different eligible collateral pools which are tailored to match the policy goals. In operations designed solely to implement monetary policy, only a narrow range of collateral is allowed. By design, these operations will normally involve lending at close to Bank Rate. The Bank’s counterparties have a financial incentive to optimise their use of collateral in these operations by selecting the cheapest to deliver. If any relatively illiquid or lower credit securities are allowed in the narrow collateral set, then the commercial banks will have an incentive to exploit that premium. That would mean that the central bank’s monetary policy operation could become a regular source of funding (and profit) for the firm. This can matter if, for example, it creates distortions in demand for those lower quality assets.

The public debt to GDP ratio currently at 43 percent is projected to stand well below the sustainability ceiling under the ongoing fiscal reform. In coordination with the expansionary fiscal policy, monetary policy remains accommodative to reinforce the economic recovery. The Monetary Policy Committee (MPC) has decided to keep the policy interest rate on hold at a low level since April 2015. Yet the MPC deems that monetary conditions should remain conducive until the economic recovery becomes more broad-based and more robust. For the future, the MPC’s decision on monetary policy will be carefully balanced between accommodating economic recovery and avoiding financial stability risks that could result from an extended period of low interest rates. Ladies and gentlemen, To wrap things up before I move to the second part of my talk, the Thai economic recovery has become more broad-based with a firmer momentum compared with last year while our economy has relatively strong buffers compared to emerging-market peers in the region. Now let me turn to the way forward for the Thai economy. With the short-term trajectory of the Thai economy holding up well thanks to the first two ‘arrows’ as in the Abenomics terms, namely fiscal stimulus and monetary easing, Thailand’s long-term future depends critically on the success of the third arrow of ‘structural reforms’. This brings me to the second part of my talk tonight on the way forward for the Thai economy, and how we and our partners like Japanese businesses may work together towards sustainable economic prosperity.
And firms are strongly encouraged to maintain contingency plans to wind themselves down – as I have already said today, the Bank would like there to be consideration of whether that could be a requirement for operating in the UK. And, as I also made clear earlier, we do realise that all of that will be formidable, best approached with an international consensus. Similarly demanding is the requirement in the Principles that countries “strive” to find internationally co-ordinated solutions, sharing information as freely as practicable. That is not something which one could say has always been apparent over the past two years, although it worked well on market operations. As the Principles recognise, the drive for greater openness between authorities should not be permitted to jeopardise effective resolution through leaks or pre-emptive action to ring-fence local interests. I am reporting this because the FSB Principles have not got as much coverage as they warrant. Yet it is very important that the banking world appreciates that, alongside other issues and initiatives I have outlined this morning, they have the potential – indeed, are intended – to bring about material changes in the way you structure your businesses, in how you interact with the authorities, and in the wider environment in which you operate.

2  “The Repertoire of Official Sector Inventions in the Financial System: Last Resort Lending, Market-Making, and Capital”, speech by Paul Tucker given at the Bank of Japan’s 2009 International Conference in Tokyo on 28 May 2009. Also see, “The Development of the Bank of England’s Market Operations”, a consultative paper by the Bank of England, October 2008. 2  BIS Review 83/2009  their savings. It turned out to be naïve on two fronts. First, it proved unrealistic to expect households generally to take such care. And second, it brought politics into bank rescues, because of the hardship that could still be suffered by regular depositors when their bank failed. Nearly a decade ago I became convinced of the need for 100% insurance of a meaningful amount in order, as I put it in internal exchanges, “to take politics out of crisis management”. In the wake of Northern Rock and Bradford and Bingley, the FSA moved to 100% insurance of £ That means that nearly all regular households in this country are completely protected; and when today I refer, rather approximately, to “100% insurance”, that is what I mean. 3 The Bank’s view has been that in such a system, the banking system’s contribution to the insurance scheme should be risk-based and pre-funded. The industry has been more doubtful about the idea of pre-funding and so I want to explain our thinking. A system of 100% insurance of a meaningful amount changes the landscape. First, it alters the purposes of bank regulation.