samchain/econo-pairs-v1 huggingface dataset:
You are all familiar with the solution that was ultimately found, namely the takeover of Credit Suisse by UBS. The SNB's central role in managing this crisis initially involved using liquidity assistance loans to create a time window within which a solution could even be worked out. Since then, we have been supporting the successful implementation of the takeover with additional liquidity assistance, which we are granting in both Swiss francs and foreign currencies. I would now like to explain our crisis response to you in more detail. We have provided emergency liquidity in various forms. The established access to liquidity assistance loans for banks experiencing financing problems is provided against collateral in the form of securities and mortgages. These loans are subject to interest, including a risk premium. This is classic last-resort lending. The facilities used in such cases are known as the liquidity-shortage financing facility, or LSFF, and emergency liquidity assistance, or ELA. The Federal Council's emergency ordinance of 16 March 2023 paved the way for two further types of liquidity assistance loan specifically for the Credit Suisse case, namely ELA+ and the public liquidity backstop (PLB). This legislation enables us to lend a further CHF 200 billion. ELA+ has a volume of CHF 100 billion and is secured by means of preferential rights in bankruptcy proceedings. This ensures that our loans would be repaid with high priority in the event of bankruptcy. We can allocate the second CHF 100 billion within the framework of the PLB.

Our task is to ensure price stability and, in so doing, to take due account of economic developments. Stable prices benefit society across the board. Inflation unsettles households and businesses, which can lead to costly mistakes when it comes to purchasing and investment decisions. But above all, price stability protects lower-income households, which are most exposed to the inflation-induced erosion of purchasing power. We equate price stability with a rise in consumer prices of between 0% and 2% per year. However, for over a year now, inflation in Switzerland has exceeded this range; it was 3.2% in the first quarter of 2023. Inflation has risen even more sharply abroad. It reached a high of 9.1% last year in the US, and as much as 10.6% in the euro area. There are a number of reasons why inflation has risen globally in recent quarters. Higher energy prices and supply bottlenecks caused by the pandemic and the war in Ukraine were major drivers. But the strong increase in demand due to catch-up effects and expansionary monetary and fiscal policy in many countries also contributed. When increased price pressure became apparent in other countries during 2021, we allowed the Swiss franc to appreciate in order to minimise the amount of inflation being imported into Switzerland. Thanks in part to this, inflation rose less strongly in this  1/4  BIS - Central bankers' speeches  country. But despite the appreciation, prices went up more than we would have liked here, too.
Thus, in the year to date, the 12-month EURIBOR has increased by around 290 bp, while the 10-year OIS rate, which acts as the euro area long-term risk-free interest rate, has risen by almost 250 bp. The cost of corporate debt issuance has also risen significantly, in line with risk-free interest rates. The increase in market interest rates has also started to pass-through to the average rates applied on new loans to households and firms. In the coming months, this passthrough is expected to continue. The rise in market interest rates is also gradually increasing the average cost of outstanding debt for both households and firms. The speed of this process depends on the maturity of the instrument (short vs long-term) and the type of contract (fixed vs floating rates). For the euro area as a whole, the share of short-term and floating-rate loans in the stock of loans is much higher for firms than for households. This means that outstanding debt is repriced faster for firms than for households. Besides the tightening in financing conditions in terms of cost, the credit standards for new loans to the nonfinancial private sector also tightened across the board during the first half of 2022, according to the July Bank Lending Survey (BLS).6 This is attributable to banks’ heightened risk perception and lower risk tolerance. In July banks expected a further contraction in credit supply for the third quarter. So what can we expect for the financial system in 2023?

In June, the Council concluded that the conditions for raising interest rates set out in the forward guidance had been met, and therefore announced its intention to raise rates in July and again in September. In July, it decided to raise the three official ECB interest rates by 50 basis points, a larger increase than had been signalled in June, based on its updated assessment of inflation risks, bringing the deposit facility rate to 0%, thus abandoning negative territory for the first time since 2014. It was also decided to reinforce the support for the effective transmission of monetary policy across the euro area by approving the Transmission Protection Instrument (TPI). Under the TPI and subject to the eligibility criteria, the Eurosystem will be able to make secondary market purchases of securities issued in jurisdictions experiencing a deterioration in financing conditions not warranted by country-specific fundamentals, to counter risks to the transmission mechanism to the extent necessary. The scale of TPI purchases will depend on the severity of the risks facing monetary policy transmission. In September, the Governing Council decided to increase the ECB's official interest rates by an unprecedented 75 bps, the largest increase in the history of the euro, with the intention to continue raising interest rates at subsequent meetings in order to moderate demand and counter the risk of a persistent increase in inflation expectations. 5  https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Unemployment_statistics  4  In the financial markets, the process of monetary policy normalisation has been reflected in a significant increase in market interest rates.
And, therefore, without further ado, let me go into the substance for today: first, I will share with you our assessment of the economic outlook for the euro area. Second, I will explain the package of policy measures we adopted at the beginning of June. Finally, I will briefly touch upon the challenges that await us in the next five years. Economic outlook Let me start with the economic outlook: in the first quarter of 2014, euro area GDP grew by 0.2%. Growth was thus positive for the fourth quarter in a row. In line with earlier expectations, domestic demand has increasingly become the main source of growth. For the second quarter, monthly indicators have been more mixed, however partly reflecting technical factors. Overall, looking through the usual volatility in monthly indicators, the ongoing moderate recovery is expected to continue. Looking further ahead, domestic demand can be expected to continue to support growth – together with both the further monetary policy accommodation that was introduced in June and the on-going improvement in financing conditions. The progress made in fiscal consolidation and structural reforms, as well as gains in real disposable income, is expected to provide positive impetus to growth over the next two years. Furthermore, demand for exports should benefit from the on-going global recovery, and should thereby reinforce the growth momentum in the euro area. Although labour markets have shown some signs of improvement, unemployment remains high in the euro area. Unutilised capacity continues to be sizeable.

The main credit needs among people in low growth areas and with low incomes, in particular, women are: •  access to small, unsecured, fixed term loans in cash;  •  quick access to credit without lengthy or intrusive application procedures;  •  affordable weekly payments with no hidden or extra charges;  •  automatic repayment arrangements, such as deduction from benefit or home visits by a collector; and  •  opportunities for making late payments or rescheduling loans without incurring charges when temporary financial problems occur. If anyone of these or a combination of these factors tend to deny access to financial institutions or to products, that is known as financial exclusion, which is often reflected as a symptom of poverty as well as a cause. As much as we are interested in financial inclusion, it is also necessary to reduce financial exclusion to a minimum, which is also a policy challenge. These are two sides of the same coin.
As for global economic activity, the figures for the last quarter of 2016 show higher-thanexpected GDP growth in advanced economies, except in the United States; in emerging economies there were clear differences with robust growth in Asia, that prompted a moderate rise in international trade, and a further slowdown in Latin America. Similarly, indicators published in the first quarter have been somewhat more favourable than expected. In the euro area, despite the presence of the above-mentioned factors of uncertainty, the most recent economic developments show a firming of the recovery, although its strength across countries is uneven. The ECB's most recent projections in March indicate that the current phase of recovery will persist and that GDP growth in the euro area will continue to be underpinned essentially by domestic demand, with forecast growth rates of 1.8% and 1.7% for 2017 and 2018, respectively, similar to that observed in 2016. Euro area inflation climbed to 2% in February, mainly reflecting temporary factors linked in particular to energy prices, which will unwind over the year. In fact, headline inflation in the euro area slowed to 1.5% in March and core inflation (excluding energy and unprocessed food) stood at 0.7%. From a medium-term perspective, the ECB projection exercise points to inflation moving on a very gradual upward path, with the result that, towards the end of 2019, it would still stand below 2%.

Should such barriers actually be introduced, there would be a negative impact on world trade that could affect an economy, like Spain's, whose recovery has been largely export-led. In the same vein, uncertainty about the implications of the United Kingdom leaving the EU remains high, in a setting in which the Spanish economy has significant exposure to this country in terms of services exports and financial ties. This uncertainty is also affected by the context of low returns in Europe's financial system and of the fragility of certain institutions. On the domestic front, several factors of vulnerability persist. One of them arises from the level of public indebtedness (which I will refer to later) and that of certain segments of the household and corporate sectors, which entails high reliance on foreign saving and represents a source of weakness in the face of possible increases in the cost of borrowing. Also, despite efficiency improvements, our economy remains highly sensitive to potential increases in commodities prices, particularly, oil prices. From a medium-term perspective, the high structural component of the unemployment rate, an ageing population and low productivity are the main factors limiting the sustained growth of our economy. I shall now review the main features of the budget. Budgetary policy in 2017 The macroeconomic forecasts accompanying the draft State and Social Security Budgets for 2017 involve the prolongation of the current expansionary phase. Specifically, they estimate real GDP growth of 2.5%, accompanied by a recovery in prices, so that nominal GDP growth is slightly above 4%.
Concerning capital stock, data reveals that the capital stock in the region constitutes only one third (35%) of the capital stock in the countries of the European Union. This calls for raising investment ratio and closing investment gaps. These gaps are particularly wide in infrastructure, looking at the average rank of 70.5 for the region compared to 16.7 for EU152. However, there is also a great scope for improvements in ICT infrastructure, as a cornerstone of the new economy, in order to accelerate digital transformation of the economies. As for productivity, it remains low, about 1/3 of the EU average. In the last five years before pandemics, the average GDP growth of the region was 3%, with TFP  2/3  BIS - Central bankers' speeches  contribution of merely 0.3 p.p. To increase productivity, the region must tackle structural and institutional obstacles that inhibit efficient allocation of resources. The evidence suggests that institutional reforms in emerging economies are associated with about 1 p. p. a year higher total factor productivity growth compared to "normal" years3. So far, FDIs in the tradable sectors are one of the traditional venues that increase productivity that implies not only tapping additional external sources for growth financing, amidst low domestic savings, but also transfer of know-how and technologies. However, pandemics led to significant deceleration of FDIs and trade flows, flagging up many vulnerabilities of international trade and production that caused dilemmas about future globalization trends that are of key importance for small WB economies.

Ravi Menon: Powering the next stage of Singapore FinTech Speech by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the Singapore FinTech Festival “The Green Shoots Series – Leading Through a Crisis: Up Close and Personal with Mr Ravi Menon”, Singapore, 13 August 2020. * * *  Five years ago, we had a vision – to make Singapore a Smart Financial Centre. A financial centre where innovation is pervasive and technology is used widely – to increase efficiency; to create new opportunities; to manage risks better; and most importantly to improve people’s lives. A new buzzword was emerging on the scene – “FinTech”. We set our goal to become a leading global FinTech hub. At the core of our drive was a conviction that technology will fundamentally transform financial services … … that if our financial sector stood still, we would be swept away by the tides of technological changes. And the tides were coming in fast: digital and mobile payments; block chains; cloud computing; big data and analytics; AI and learning machines. Together with the industry, MAS set about creating a FinTech ecosystem that embraced both incumbents and insurgents. We wanted to facilitate the digital transformation of established financial institutions so that they can innovate and compete with the best. We also wanted to support FinTech firms outside the financial sector who were innovating new ways to provide financial services.
Benoît Cœuré: Interview in Rheinische Post Interview with Mr Benoît Cœuré, Member of the Executive Board of the European Central Bank, in Rheinische Post, conducted by Ms Birgit Marschall and Mr Georg Winters and published on 13 February 2016. *  *  *  Share prices are sharply down on the world’s stock markets. Why? There are several compounding factors, each calling for different answers. First, it’s a global phenomenon. Investors are generally anxious about a slowdown in growth worldwide, especially in the emerging markets, and above all in China. Second, there’s great uncertainty about the global effects of the low oil price. Initially, it was thought the low price would be good for global growth, but now some negative effects can be seen, particularly in emerging markets. Third, market participants are questioning how profitable banks are and whether they have successful business models for the future. How affected are Europe’s banks? They are in a much better position today than they were at the height of the debt crisis in 2011 and 2012. Thanks to the banking union they are now much more resilient. They have very significantly built up their capital and liquidity. One challenge they face is their low profitability, which is also related to the current level of economic growth. Also, some banks have a high level of non-performing loans on their books, as a legacy of the crisis.

We at the ECB don’t want this phase  BIS central bankers’ speeches  1  of low rates to become normality either. But we still have a pressing need for the low rates so as to get inflation firmly back to 2% and to protect the euro area recovery. But we are a long way from 2% inflation because of the low oil price. The ECB will have to lower its inflation forecast. Our next staff inflation projections are due in March. Already in January we said that inflation will only very slowly move back towards 2%. Compared with the situation in December we are seeing new downside risks. The main causes are the falling price of oil and a decline in global growth. In the past few days we have also seen greater volatility on the financial markets. If that continues for too long, it can also increase the risk of a rise in inflation being delayed. The continued low interest rates are unsettling savers, especially in Germany. What’s your advice to savers? We have to get inflation to below, but close to, 2% again; that has been our definition of price stability for a long time. Why are interest rates so low? Because the return on capital has declined in the economy. To keep the low interest phase as short as possible we need more private investment as well as government policies which create the conditions for profitable projects to emerge. Meanwhile we can help savers best by keeping policy interest rates low.
Foreign holdings of the Thai government and Bank of Thailand bond outstanding are less than 9 percent, compared with more than 30 percent in some other emerging markets in the region. External debt of the corporate sector has been relatively low, and mostly belongs to large companies, which manage their exchange rate risk sufficiently well. BIS central bankers’ speeches  1  While Thailand’s financial strength serves as a buffer against external shocks, it is important that the private sector is not complacent and should continue to be prudent in their financial risk management. Global financial volatility can definitely trigger two-way movements of currencies and asset prices. As a small open economy, Thailand cannot escape, but to find effective ways to live with the global volatility. On the Bank of Thailand’s part, under the flexible exchange rate regime, currency movement serves as the first line of defense against unexpected external events. We continue to be prudent in using an appropriate mix of policy tools to help prevent excessive volatility of the currency and asset prices. In addition, to build market resilience in the longer run, we embrace on financial market developments, as deep and liquid markets would better absorb large swings in capital flows. We also plan to further relax capital flow regulations to allow more balanced flows in and out of the country, which would enhance stability against short-term speculative flows.

Although we already have a number of supervisory agreements (MOUs) in place with most supervisory authorities of home supervisors to banks of importance in Brazil, which will help smoothening such issues, a real sense of the problems and the need of effective co-operation will only be truly felt at the moment of validations, that is, after the whole process begins. The legal and regulatory framework will, of course, have to undergo a number of modifications before the implementation of the New Accord. The greatest legal obstacle to the implementation of the New Accord is that, currently, Brazilian supervisors are not allowed to impose differentiated capital requirements for individual banks (at present, 11% must be applied across the board to all institutions). Changes of a smaller scale will also be needed in some regulations in order to allow for more effective supervisory discretion. No significant problems are envisaged with respect to the implementation of Pillar III as far as quantitative disclosure is concerned, given that Brazilian banks already comply with a reasonable amount of quantitative disclosure requirements. However, Brazilian banks will have to improve a lot in terms of qualitative disclosure, which is something they are not particularly accustomed to do. In terms of measuring economic capital, no doubt banks are usually more capable of correctly determining their own needs than the supervisor via regulatory capital. Nevertheless, for this to work properly, banks must develop the culture of using economic capital and employ appropriate internal models.
Put simply, notwithstanding the gloom of global recession, the future of Hong Kong is bright. Bond market development Let me turn quickly now to bond market development. There are a few points that I would like to make immediately. The first point is a basic and obvious one, so obvious that it is often overlooked. This is that the bond market is a channel of financial intermediation for the purpose of mobilising savings into productive investment that promotes economic growth and development. There is a need for those involved in the bond market those responsible for its development and those making a profit or a living from it to be frequently reminded of this basic purpose. This is particularly so when considering the introduction of sophisticated products derivatives and the like. I have nothing against sophisticated financial engineering, or against the engineers being well remunerated, provided that the regulators and the market participants, both at the wholesale and retail levels, are capable of appreciating and coping with the associated risks. This may not often be the case. It is possible that, while these products theoretically make the market more efficient, in terms of spreading and managing risks, in practice the risks may be magnified, to the extent of creating systemic instability and disrupting the crucial flow of funds through that basic and important channel of financial intermediation.

The new collateral management service, with its cross-border, cross-system, cross-time zone and cross-currency capabilities, will provide an efficient repo infrastructure that will help develop the repo market in Hong Kong. The importance of the repo market as a financing channel has assumed added prominence since the outbreak of the global financial crisis in 2008. Due to a combination of the large inflows of funds into Hong Kong in late 2008 and early 2009 and heightened risk aversion, the interbank money market has been less active in recent years and financial institutions have been more careful in lending funds to each other on an uncollateralized basis. The average daily turnover of the uncollateralized interbank market has dropped significantly, by 71% from $ billion in November 2007 to $ billion in March 2012. The higher frequency of flight to quality, and resultant tightness in the global supply of US dollar, has also affected turnover in the currency swap market. The average daily turnover of the Hong Kong dollar swap market also reduced notably by 32% from $ billion to $ billion in the same period. While the Hong Kong banking sector is now faced with ample liquidity, the situation will not be permanent and we will need to find new ways to facilitate efficient interbank borrowing. Development of the repo market will help to activate the money market by addressing the credit risk through the collateralized arrangement. The cross-border funding issue is particularly important to Hong Kong given its role as an international banking centre.