samchain/econo-pairs-v1 huggingface dataset:
Traditionally, transparency rules have focused on ensuring that customers receive all due information and that, at least formally, they declare to have understood it and accept the conditions to be applied to them. However, the financial crisis has given rise to more demanding legislation. Regulations now require that banks not only inform but that they act more honestly, impartially, transparently and professionally than before, bearing in mind the greater status, rights, interests and needs of their customers. This phenomenon, extensively aired in the media in recent years, is apparent also in the figures on claims lodged with the Banco de España. Most claims have concerned mortgage loan contracts. They span both those relating to the application of the so-called “floor clauses” to variable-rate mortgages (in 2013-2014) and those relating to the payment of mortgage loan arrangement costs, which peaked in 2017, with 23,040 claims. As you all know, the most paradigmatic case in terms of media coverage and social and economic impact has been that of the floor clauses. The number of claims for this reason and the scale of the figures meant extra-judicial avenues had to be used, so as to pave the way for the refund of the amounts unduly paid, in keeping with Supreme Court jurisprudence. Specifically, Royal Decree-Law 1/2017 obliged banks to set in place a pre-claim system. On the latest figures released (September 2020), more than 1,220,000 individuals had submitted claims, with almost € billion refunded.

This naturally served to temper the degree of exuberant risk-taking. Partners or managers in a bank were in for the long haul, with their investments and family wealth tied into the firm until retirement. So it was not just their next year’s bonus that was at risk. This evident “alignment of interest” between the bank owners or managers and the bank’s customers and creditors clearly helped promote trust. 8. That said, although some US investment banks only moved from the partnership to public ownership model in the past 25 years, it is the case that other commercial banks have been structured as public joint stock banks with limited liability since the 19th century. So if limited liability has existed for two hundred years, in at least commercial banking, with the attendant potential “agency” risks (i.e. shareholders with limited skin in the game and managers with relatively little capital invested), what else has been at work to create the problems which so vividly surfaced in the Global Financial Crisis? What has changed: bank management 9. First, bank employees’ time horizons have shifted. By this I mean that in the past employees, for a variety of reasons, tended to be much more “stable” in the sense of their ties to a given employer. An employee might join a bank, work their way steadily up through its ranks and then, on retirement after 30 or 40 years of service, receive a pension from the bank.
For Thailand to prosper in the future, we can no longer rely on the old way of doing business or, for policymakers, the old way of running the economy. We need a different and more effective paradigm that will not only sustain the current growth momentum but also helped the country meets future challenges. Putting the crisis under microscope reveals critical flaws that beg for new approaches and strategies in all of the four major areas: (1) the real sector, (2) the financial sector, (3) the issue of governance, and (4) the macroeconomic framework. In many respects, these lessons are neither limited to Thailand nor unique to the recent crisis. The challenge is perhaps how to put them into the context of rapidly evolving global and regional economies. Let me start with the real sector. For a brief period in the early 1990s, it seemed that everything was going well. Everywhere one turned, businesses were booming. Demand seemed to always outpace supply. And on top of all that, Thailand was just named Asia’s fifth economic tiger. Little did everyone know, however, that the spectacular economic performance masked certain structural weaknesses in some part of the real sector. As it now becomes all too clear, parts of Thailand’s real sector prior to the crisis were characterized by low productivity and high leverage. With the benefits of hindsight, Thailand’s past rapid growth could be attributed primarily to quantity, that is, the mobilization of capital, labor, and natural resources, rather than quality.

This has mainly been achieved by establishing the sovereign wealth fund and a fiscal rule imposing a constraint on oil revenue spending. The Norwegian parliament passed the Act relating to the fund in 1990. Under the Act, the net budget surplus, including oil revenues, is transferred to the fund, and invested in international markets. The policy guidelines were clarified in 2001 through the introduction of the fiscal rule. Under these guidelines, government spending of oil revenues – measured by the non-oil budget  BIS central bankers’ speeches  1  deficit – is limited to the expected real return on the fund – estimated at 4 percent annually. The idea is to leave the capital in the fund untouched, saving it for future generations. The fiscal rule provided for a gradual phasing in of oil revenues. Over time, we would have to expect the real krone exchange rate to appreciate as a result. However, due to the fund mechanism and the fiscal rule, actual spending is decoupled from current petroleum revenues. This has curbed the appreciation of the krone and thus reduced fluctuations in the exchange rate. Compared to other resource-based economies, the real krone exchange rate has remained relatively stable, especially during the period of substantial increases in oil prices (cf. diagram). Let me elaborate on the transactions that actually take place. All revenues from the sale of oil and gas are originally in foreign currency.
Birgir Ísleifur Gunnarsson: Iceland in a global setting Keynote speech by Mr Birgir Ísleifur Gunnarsson, Chairman of the Board of Governors of the Central Bank of Iceland, at the Euromoney conference on the Nordic Financial Markets and Investment Opportunities, Stockholm, 13 September 2002. *  *  *  Mr. Chairman, ladies and gentlemen. It is a pleasure to participate in this ambitious conference on the Nordic Financial Markets and Investment Opportunities. I will in my remarks today mainly focus on aspects relating to Iceland. Size separates Iceland from the other Nordic Countries, Denmark, Finland, Norway and Sweden. Other factors separate the Nordic Countries as well. Finland is a member of the European Union and the Economic and Monetary Union, EMU, as well. Denmark and Sweden are members of the European Union but are outside the EMU. Norway and Iceland are outside the European Union but maintain very close ties to it, particularly through the European Economic Area Agreement. That agreement makes Norway and Iceland a part of the single market of the European Union, which entails among other things that they are obliged to maintain financial market legislation, which fully conforms to that of the European Union. The Nordic Countries have different monetary regimes. Finland is a member of the EMU, Denmark is linked to the EMU through an ERM II agreement entailing that the Danish krona is very closely tied to the euro. Sweden, Norway and Iceland have chosen an inflation-targeting regime as their monetary framework (Iceland in March 2001).

The market is a strict master and serves painful punishment for mistakes or ill-thought initiatives. BIS Review 55/2002  3
Because my view is that there are a number of trade-offs at play here, which need to be taken into account. For instance, if we don’t implement the necessary changes and succeed in properly restoring the credibility of risk-weighted capital ratios, a more important role will have to be played by other parts of the regulatory system, such as the leverage ratio. For now, our working hypothesis is a regulatory level for the leverage ratio of 3%, but to me this is more of a placeholder. What the final outcome should be will depend on the calibration of the whole system, in which the risk weights and leverage ratio are important pieces. 7  By end-2014 it is expected that all jurisdictions with GSIBs will have been assessed, in addition to some others (total 17 countries). By 2016, all Basel Committee member jurisdictions are expected to have gone through the assessment of their capital framework. BIS central bankers’ speeches  5  An important element in this calibration will be transparency – the more trans- parent banks are with methods and models to calculate risk weights, the better it will be for the credibility of the system as such. If we widen the perspective further, I think there is also an interesting issue of calibration linked to the concept of going-concern capital requirements on the one hand, and goneconcern capital requirements on the other.

The results showed that banks’ risk-weighted assets differ to an extent that goes well beyond what can be explained by business models and historical experiences. If we just take the banking-book results, two banks with exactly the same assets could report capital ratios that differ by as much as 4 percentage points. The potential for differences this wide, particularly as they are derived from only a part of a bank’s business, weakens confidence in the measurement of bank capital. Of course, this was not a total surprise. It was a reflection of what I mentioned earlier; that internallymodelled risk weights lead to capital not keeping pace with asset expansion. This has undermined the confidence in banks and in the credibility of the whole concept of banks’ internally-modelled risk weights. Ensuring consistency in the implementation of risk-based capital standards will therefore be a key factor in restoring confidence in banks. The Committee is thus assessing bank capital ratios with a view to ensuring that they appropriately reflect the risks that banks face. There should be “truth in advertising” for the regulatory ratios that banks present. To achieve this, the regulatory framework needs to deliver readily comprehensible and comparable outcomes. In my view, these assessments, both the jurisdictional and the thematic that compares risk-weighted assets, are absolutely vital for achieving our goals. This will be an important focus for the Committee in the coming years. I would now like to take a step further and focus on the link between implementation and how the system should be calibrated.
The Central Bank followed an effective liquidity management strategy and started to hold New Turkish lira deposit purchase auctions with the aim of withdrawing the TL-denominated excess liquidity gradually. At this point, the excess liquidity has been brought down to such an extent that it does not require daily auctions. As a result of these measures, the fluctuation in the markets was restrained. From end-June onwards, the Turkish lira appreciated by 16.7 percent while the indicative GS (government securities) interest rates and the average interest rate that is formed in CBRT deposit purchase auctions dropped by 3 points and 3.1 points, respectively. The volatility in both exchange rates and interest rates decreased significantly. In this regard, I should say that frankly the impacts of such shocks would have been much more severe under a fixed exchange rate regime. At present, the floating exchange rate regime is performing its shock-absorbing function. This process has shown once more how important it is for economic agents to manage the risks on their balance sheets under the floating exchange rate regime. As similar volatilities may be observed in the future under the floating exchange rate regime, all economic agents should protect themselves in the framework of modern risk management principles, against interest rate or exchange rate risk on their balance sheets. The Izmir Derivatives Exchange provides an important opportunity in this respect.

In this framework, the relationship between the real sector and the financial sector should be reinforced in order to provide the private sector with the financing required for creating employment, the investment environment should be improved, permanent stability should be established in the macroeconomic environment and the capacity of growth to create employment should be enhanced. Furthermore, training policies should be implemented in order to increase the qualified labor force that would meet the labor demand, employment taxes and other burdens on employment should be reduced gradually in order to register the unregistered employment, and regional markets should be formed for the unqualified labor force created by the contraction in the agricultural sector. In this scope, the framework drawn up by the Ninth Development Plan in consistence with the European Union Employment Strategy is a road map for what should be done. In the last part of my speech, I would like to say a few words about the issue of current account deficit, which has frequently been discussed in recent years, and highlight certain points I consider to be significant about Turkey’s current account deficit. As you all follow closely, the current account deficit has widened rapidly in recent years as a consequence of the high growth performance observed since 2001. The current account deficit, which was USD 23.2 billion in 2005, rose to USD 28.7 billion by June 2006 in annual terms.
Many of  3  2  For a more detailed description see the Riksbank’s Financial Stability Report 2007:2. BIS Review 11/2008  these funds belonged to the group of hedge funds with a strategy that is normally called a long/short equity strategy. In principle, with the help of quantitative methods as a basis for investment, their strategy entails both long and short positions in equity. At the same time they are neutral to the stock market as a whole. If we disregard quant methods, this strategy was one of the first to be used by hedge funds, and which, more than 60 years ago, gave them their name. Over a number of days in August several quant funds were however forced to close positions and to realise significant losses. They were forced to do so because of the sudden emergence of large price fluctuations in parts of the stock market. The large fluctuations entailed that the quantitative links, which were based on historical data and statistical probability analyses, no longer worked. But what was it that triggered the initial fluctuations in prices? It was probably the case that other types of hedge funds or investors, in order to meet the banks increasing collateral requirements, were forced to reduce their risk exposure. 4 If trading is thin in the shares concerned, that is, if liquidity is weak, the price fluctuations can be significant. That is the normal pattern.

Rather, the SACs support the courts – by providing predictability and uniformity in the interpretation of Shariah rulings that are applicable to Islamic financial business. Unlike a scientific question, a Shariah question can be answered by reference to at least four different schools of thoughts, all of which provide valid answers from a Shariah perspective. Having the SACs as central authorities for providing finality of Shariah rulings – helps the court apply the rulings to the specific circumstances of a particular case with full certainty. This will then inform the final judgment by the courts. A clear process has been set out to facilitate judges, arbitrators and Islamic financial institutions to refer matters which require the ascertainment of Islamic law to the SACs for their ruling or advice. Matters beyond the ambit of the SACs’ authority will be left for the courts to adjudicate. The composition of the SACs, which includes former judges, ensures it functions well within the boundaries of its purview. To promote procedural legitimacy, efforts have been also directed towards ensuring that the reasoning of the SACs are well-documented and accessible to the public. Other than the courts and the SACs, another important institutional arrangement for our path forward will be the financial regulators. In particular, Bank Negara Malaysia and the Securities Commission will continue to play a proactive role in identifying pertinent Shariah issues that need to be clarified for the domestic market.
And this month marks just one year to go to our first key milestone on this journey: to move to the global standard for financial messaging in payments, ISO 20022 (on a like-for-like basis), in June 2022 for CHAPS. We will transition to enhanced ISO 20022 messaging in February 2023. And in September 2023, introduce a state-of-the-art core settlement engine: the heartbeat of the new RTGS service, and of the UK’s financial system. To achieve our milestones and to realise the benefits of RTGS renewal, we – and I mean all of us here today and the payments industry as a whole – must work together to be ready. We must turn excitement into action, following in the footsteps of our Neolithic predecessors to build an infrastructure for the future. An infrastructure that supports the needs of industry, the needs of their customers, and crucially the needs of the end users. The criticality and evolution of payments Payments sit at the heart of the financial system, and whilst the methods and nature of transactions have progressed considerably since the days of barley bartering, their importance has not faltered. Within the UK, payments are a crucial part of everyday life and the past decade especially has seen a transformation in how people pay for goods and services.

Where innovation will flourish, changing customer demand will be supported and exceeded, and ultimately life-dreams enabled. It is up to each of us to help build the foundations that will allow this to take place. This transformation involves many new actors, alongside the traditional banks. There are growing numbers of challenger banks as well as innovative payments services, Payment Service Providers (PSPs), and increased interest from the world of FinTech. Indeed, payment businesses currently make up 17% of the UK’s c2500 FinTech companies. Global household ‘bigtech’ names such as Facebook and Amazon are also breaking into this market. These competitive pressures are pushing existing market participants to invest and think more intensively about what the future world of payments should look like. And due to the pivotal nature of payments, the public sector is actively involved too, seeking both to enhance and strengthen the existing infrastructure but also assessing whether there is a more fundamental approach to complement it. New forms of digital money could contribute to faster, cheaper, and more efficient payments and have financial inclusion as a prominent design consideration. As innovation develops further in this space, it will be important that regulation follows suit. Our Governor Andrew Bailey noted in his recent speech, that it is crucial the regulatory framework adapts to innovation in a way that fulfil the Bank’s core mission to promote the good of the people of the UK.
For example, the median of three-year expectations from the New York Fed’s Survey of Consumer Expectations has declined over the past year to its lowest reading in the survey’s short history, and the longer-running University of Michigan measure is at the bottom of its historical range. Further declines in either measure would be worrisome. To date, these declines have not been sufficiently large for me to conclude that inflation expectations have become unanchored. However, these developments merit close scrutiny, as past experience shows that it is difficult to push inflation back up to the central bank’s objective if inflation expectations fall meaningfully below that objective. Japan’s experience is cautionary in this regard. In sum, I still anticipate that the combination of decreasing resource slack and anchored longerterm inflation expectations will contribute to inflation rising to our 2 percent objective over the medium term. Even so, because of the more persistent effects of energy and commodity price declines and U.S. dollar appreciation, the return of inflation to that goal may be slower than I earlier anticipated. This does not deny the possibility of some upside surprise―such as a sharp upswing in wage growth triggered by low unemployment. But, on balance, I am somewhat less confident than I was before. Partly, this reflects my assessment that uncertainty to the outlook has increased and that downside risks have crept up, a topic to which I now turn.

Conclusion Mr. President, this evening I have argued that while the Maltese economy is headed in the right direction – a fact that has been recently confirmed by its 33rd place in the Human Development Index –, we must look beyond the current upturn to examine structural weaknesses that are preventing the economy from exploiting its full potential, and thus from closing the income gap with our European peers. I have therefore suggested that we need to raise labour force participation, improve the quality of the work force and increase the efficiency of public spending, particularly in education. We also need to invest more, to upgrade the capital stock. Here, monetary policy is playing an important role: interest rates are at historic lows and bank credit continues to flow. The Eurosystem’s commitment to deliver price stability in the medium term is also a key factor in sustaining investor confidence and supporting economic expansion. Market mechanisms, underpinned by appropriate legal frameworks, must be allowed to work better. In general, we need to open up domestic markets to an even greater degree of competition. In addition, fiscal tightening is necessary to correct current imbalances and begin to reverse the trend increase in public debt. This objective acquires added importance in the context of population ageing. Above all, durable consolidation requires a reappraisal of the role of the state and the tightening of fiscal rules. Finally, we need to further improve the economy’s resilience to external shocks.