samchain/econo-pairs-v1 huggingface dataset:
  Banks become dependent on optimal market functioning at all times and on the confidence of market participants. BIS central bankers’ speeches  1  If this process goes too far, an external shock could turn a situation of vulnerability into a crisis. This is what is referred to as systemic risk – the risk that shocks will weaken the functioning of the financial system, rendering it unable to provide funding, execute payments or redistribute risk effectively. Systemic risk can build up over time through a rapid rise in asset prices and debt and in the form of increasing interdependence among institutions. Or systemic risk can build up when many institutions are exposed to the same risk factor, for example on the funding side. Vulnerability also in Norway A financial crisis can be triggered by domestic conditions or it can be triggered by external factors. This time, the crisis came to Norway through external channels. International funding channels dried up, creating a liquidity crisis in the Norwegian banking sector. We can never fully insulate the financial system from shocks. But we can increase our resilience. One of the ways we can do this is by keeping our own house in order – by preventing major imbalances from building up in the economy or in the financial system, and by ensuring that the financial system in general is robust. We will then also be capable of withstanding disturbances generated by external conditions.

In some countries the authorities already have the option of splitting up a bank and subsequently selling it in parts, or the option of transferring vital parts to a bridge bank for continued operation. A newer instrument in the international debate is what is called internal recapitalisation – or bail-in. Internal recapitalisation means in principle that debt is converted into equity capital. This can provide a basis for the bank to continue operating. Creditors have to take the losses and the authorities do not have to provide capital. With such a crisis management system, lenders will have a stronger financial incentive to monitor banks’ risk-taking. They can price funding so that it reflects to a further extent the risk taken by banks. This will reduce the risk of excess debt growth and lessen the likelihood of crisis. Conclusion As I mentioned by way of introduction, our most important task in the work on financial stability is to contribute to containing imbalances and secure a robust financial system. Prevention is thus a key component of the work: that is to say prevention by means of a sound, general framework that does not stimulate risk-taking among financial market participants; prevention through surveillance of financial imbalances and through active use of instruments when we see clear signs of a build-up of serious imbalances. It is unlikely that we will be fully immune to financial instability. But with solid work in the area of prevention we will be better poised, also in turbulent times. Thank you for your attention.
And this was not just an English peculiarity: across the channel, a foot length in Strasbourg was 295 mm, a foot in Paris was 325 mm, but a foot in Bordeaux was a relative whopper at 344 mm1. Of course people came to understand the great benefits of enforcing universal, common standards. In part for maintaining the cathedrals themselves, so that new, replacement stones could be sourced that would fit snugly between their neighbours. But the benefits of universal measurement standards could be applied a long way beyond the niche discipline of cathedral building. Now some of you may think that today’s financial system is not perfectly comparable to the glorious gothic cathedrals of the Middle Ages. But like those cathedrals, many of the data systems underpinning today’s financial firms and markets were built with narrow reference to their own needs, by their own master masons – their CIOs and systems architects. They too were closed systems. Each needed to be able to record, track and manipulate its data. Its data points needed to fit snugly alongside each other. But the design of each system often paid little attention – understandably – to any broader public good. In this speech, I want to talk about whether there are wider public benefits that might flow from standardising these data labels, and set out a way forward to reap those benefits collectively. So let me turn from mediaeval architecture to data. At a central bank like the Bank of England, data is our life blood.

Only then will globalization not change the existing traditional social values. Ladies and Gentleman The last item I would like to touch upon today is another related issue befitting today’s theme of Changing Value of Thai Society, and that is the measure of economic development and prosperity. Today’s measure focuses almost exclusively on GDP growth figures. Actually, there are MANY measurement of economic development, such as employment, per capita income, and income distribution, but it appears that the government focuses almost exclusively on GDP growth figures. Quantitative-oriented national leaders focus on this measure - so much so that any activities that will help boost GDP growth are given priority over all other concerns. Importance and priority are also  BIS Review 43/2006  3  being placed on large economic and investment projects, overlooking social development and preservation. Their scope becomes myopic, focusing on short-term investments with immediate results and effect on GDP growth figures in the next quarter, rather than on longer-term projects which foster education and preservation of cultural heritage. It is an undisputable fact that in the case of Thailand, we have focused our energy in promoting growth in industrial production to achieve economic growth and development. One effect has been a rapid depletion of our natural resources. Deforestation resulting from logging and other industries for shortterm economic gain is a stark example (on this may I add that we are lucky that some visionaries in previous governments realized these dangers and declared a forest closed-door policy which helped stop deforestation).
As a result, we continue to expect real GDP to grow at a moderate but steady pace and euro area inflation to rise gradually over the coming months, in line with the path already implied in our June 2016 staff projections. The Governing Council will continue to monitor economic and financial market developments very closely. We will preserve the very substantial amount of monetary support that is embedded in our staff projections and that is necessary to secure a return of inflation to levels below, but close to, 2% over the medium term. If warranted, we will act by using all the instruments available within our mandate. Meanwhile, the Governing Council tasked the relevant committees to evaluate the options that ensure a smooth implementation of our purchase programme. Let me now explain our assessment in greater detail, starting with the economic analysis. Euro area real GDP increased by 0.3%, quarter on quarter, in the second quarter of 2016, after 0.5% in the first quarter. Incoming data point to ongoing growth in the third quarter of 2016, at around the same rate as in the second quarter. Looking ahead, we continue to expect the economic recovery to proceed at a moderate but steady pace. Domestic demand remains supported by the pass-through of our monetary policy measures to the real economy. Favourable financing conditions and improvements in the demand outlook and in corporate profitability continue to promote a recovery in investment.

Although we are still in the infant stages of development, we have accumulated some experience, which I would like to share with you today. First, since it is now such a hot topic to talk about change, I trust that you will agree with me that Islamic finance, at least for jurisdictions like Hong Kong, means change – a change in perception, a change in skills, a change in structures and techniques, in contracts, standards, and so on. Change, in all its many forms, is happening within the global Islamic finance arena, even as we speak. In the past year or so, we have seen the inception of several standardisation initiatives for Islamic financial documentation, spearheaded by international institutions like the Islamic Financial Services Board (IFSB) and the International Islamic Financial Market (IIFM). This form of change is significant towards facilitating harmonious practices, providing greater clarity for the Islamic financial services industry and thus acting as a boost to the development of global Islamic financial markets. There have also been many exciting developments in the new markets for Islamic finance in Asia, where there is a growing tendency for sukuk issuance, such as the sovereign issues from Indonesia and Singapore to support the development of Islamic finance. At the same time, we have also seen enhanced co-operation and increased linkages, both internally within the region and externally with other Islamic financial centres in the Middle East.
In the long run, even savers would be better off in a world in which aggressive monetary policy generates a strengthening recovery that eventually permits the normalization of interest rates, than they would be compared to a circumstance in which the United States allowed itself to fall into a Japan-style trap of low growth and low rates for decades. So I do not view the effect of low rates on savers as a reason to be less accommodative. Rather, in my view, the potential for the monetary policy impulse to be attenuated over time, is an additional reason to be aggressive in terms of the policy response. A more front-loaded program would avoid greater attenuation compared with a policy that started out less aggressive but added stimulus gradually over time. This has two benefits. First, it would likely be more successful in generating the desired recovery more quickly. Second, relative to a more back-loaded program, less would ultimately need to be done to achieve the desired set of outcomes. The fact that there are asymmetric payoffs from an economy that is weaker than expected versus one that is stronger than expected, given that we are at the zero lower bound reinforces this conclusion. In particular, if the economy were to continue to underperform, and experienced a severe shock, there would be some risk of getting stuck in a deflationary situation in which monetary policy would be even less effective.

Back office operations, important as they are, can prove distracting in managing a financial institution, where the focus should firmly be on the heart of the institution's business. Outsourcing arrangements can lighten the load of such a burden and these operations can often be performed more effectively and efficiently by skilled outsourcing providers than if performed in-house. Ladies and gentlemen, The essence of a successful outsourcing arrangement rests on the institution's overall strategy. In executing a successful outsourcing strategy, the various risks involved have to be recognised and mitigated. Controls and effective oversight on the external parties have to be put in place to ensure that there is no over-reliance or loss of an institution's control. Clarity on roles and responsibilities is paramount. Outsourcing strategies which maximise rewards and minimise risks can prove invaluable to an institution in enhancing its competitiveness. Therefore, a key to this is to conceptualise the outsourcing approach and early identification of the gains and pains that may arise. Bank Negara Malaysia , in our efforts towards facilitating the development of stronger and more focussed institutions in the financial sector, will endeavour to reconsider any regulatory barriers deemed to be impeding the outsourcing arrangements of banking institutions and insurance companies in the future. Our only wish is that the outsourcing arrangements should not in any way affect stability in the financial system. On that note, I wish you a productive and successful forum. Thank you. 2  BIS Review 133/2007
Mugur Isărescu: Corporate liquidity and solvency in the Covid-19 pandemic - the role of policies Introductory remarks by Mr Mugur Isărescu, Governor of the National Bank of Romania, at the Virtual Conference of the National Bank of Romania and the International Monetary Fund, 12 February 2021. * * * As prepared for delivery Good morning Director Kammer and to everyone in Washington and good afternoon to our guests and speakers in Europe. Whether you are joining us from Bulgaria, Poland, Croatia or Romania, we are very happy to welcome you to this virtual discussion. The fact that you can be with us from different parts of the world is one of the very few benefits compensating the many challenges this pandemic has forced us to face. Throughout the years, back in the normal days, we had the honor to host, here, at the National Bank of Romania, various presentations of the IMF’s flagship reports that fostered lively discussions among participants. The IMF high-quality research has always provided a strong conceptual and empirical basis for policy-making in our region. This time, we will have the opportunity to discuss the role of policies in corporate liquidity and solvency during the Covid-19 pandemic – one of the most important topics of the Regional Economic Outlook (REO) for Europe published last autumn. The analysis in this edition is aimed at quantifying the potential impact of the COVID-19 crisis on corporate liquidity and solvency risks and assessing the extent to which policy support could help mitigate these risks.

We commend the extensive IMF exercise, using data from millions of European companies and agree with its main conclusions. Job retention schemes, moratoriums on payment obligations, grants and credit guarantees can be effective in improving companies’ liquidity needs, even more so in advanced than in emerging economies. However, moving forward, the increase in indebtedness does raise concerns for solvency risks and investment prospects. It is true that, from the central banks’ perspective, all chapters of the report are extremely relevant. Personally, I always look towards the IMF’s research findings for confirmations of our own scenarios, different perspectives on certain topics, or even red flags. More broadly, the 2020 Regional Economic Outlook (REO) for Europe provides a much-needed analysis, from the IMF’s point of view of the opportunities and challenges that our region can expect following a very difficult year of restrictions, as well as social and economic difficulties. For 2020, the IMF forecasted a contraction of real GDP in Europe of 7 percent, the biggest contraction after World War II. Thanks to the extraordinary policy response, even more dramatic consequences have been avoided. I understand that the full extent of the pandemic’s impact on companies in 2020 is yet to be revealed as time passes and more data becomes available. I agree that long-lasting changes in the structure of the economy will occur, even though they are hard to predict at this moment.
Although financial stability has long been a key concern for policymakers, particularly in emerging countries where financial vulnerabilities are, or were, more evident and where risks to stability often come from abroad, nowadays the key concern is how to act in a preemptive way with actions that are costly, to ensure financial stability into the future. How should macroeconomic policy pursue the goal of financial stability in normal times, when the benefits are uncertain but the costs are noticeable? As many of you well know, this concern came with the observation that the buildup of risks in the United States before the crisis occurred during a period of stable prices and output, the so called “Great Moderation” period, where low nominal interest rates that were consistent with the Central Bank’s commitment with CPI inflation stability may have led to excessive risk-taking by financial intermediaries, and to a rise in asset prices, while good economic conditions masked the developing of financial imbalances. In the aftermath of the crisis, policy rates were drastically reduced and diverse policy measures were implemented as the zero-lower bound became an active constraint. But the increasing concern about financial conditions and the consequent reassessment of the macroeconomic policy framework was most evident with the adoption of macroprudential 1  policies. But the question remains about the role of monetary policy. Should monetary policy frameworks explicitly incorporate risks to financial stability?

Throughout 2011, the ACP actively participated in the preparation of the transposition of the “Basel III” agreements into European law which is due to be adopted in mid-2012 and in the negotiations preparing the entry into force of “Solvency II”. At national level, the preparation of banks for the new “Basel 2.5” and “Basel III” regulations was one of the priorities of the on-site inspections and of the teams responsible for preparing authorisations for the use of internal models notably for market risk. In 2012, the ACP will continue with its work helping the market to adjust to the new regulatory frameworks, notably by putting in place, in coordination with the supervised institutions, the new procedures for prudential reporting. With regard to banks, I also see a number of areas where decisive progress is expected in 2012.
See, for example, Lewrick, U. and Schanz, J.F. (2017), “  Is the price right? Swing pricing and investor redemptions”, BIS Working Papers, No 664, October; and Jin, D. et al. (2019), “  Swing Pricing and Fragility in Open-end Mutual Funds”, IMF Working Papers, No 19/227, International Monetary Fund, November. [20] D’Avernas, A., Vandeweyer, Q. and Darracq Pariès, M. (2020), “  Unconventional monetary policy and funding liquidity risk”, Working Paper Series, No 2350, ECB, January. [21] Even before the launch of the PEPP, purchases under the corporate sector purchase programme (CSPP) likely provided an important backstop to investors in less liquid markets and thereby contributed to the outperformance of CSPP-eligible bonds. Changes to the concentration limits for unsecured bank bonds have also helped alleviate market stress. See de Guindos, L. and Schnabel, I. (2020), “Improving funding conditions for the real economy during the COVID-19 crisis: the ECB’s collateral easing measures”, The ECB Blog, 22 April. [22] ECB (2020), Financial Stability Review, Chapter 4, November, forthcoming. [23] Garicano, L., Saa-Requejo, J. and Santos, T. (2020), “  Tackling inflation if it reappears”, VoxEU, 6 October; Diessner, S. and Lisi, G. (2020), “Masters of the ‘masters of the universe’? Monetary, fiscal and financial dominance in the Eurozone”, Socio-Economic Review, Vol. 18, No 2, April, pp. 315-335. For the related discussion about fiscal dominance, see Schnabel, I.

Conversely, inflation is a form of confiscation, which primarily affects the least privileged households. In a modern economy, the social contract is based on the confidence that citizens have in their currency. With the euro, French citizens now possess one of the world’s two foremost currencies, whose legitimacy is based on the stability that it bestows on their savings and purchasing power. The French economy In spring 2007, the picture of the French economy is mixed. At first glance, France’s performance is strong. Growth is above 2%, inflation is under control, investment is dynamic and 256,000 jobs have been created over the past year (of which 155,000 in the market economy). In 2006, the fiscal deficit decreased sharply and government debt was cut by 2 GDP percentage points. This assessment is, however, significantly tempered by the two following observations. First, and for the first time for a long time, growth in France is below the euro area average. France is following and benefiting from a European movement that it is not contributing to fuel. This is illustrated in particular by the (negative) growth differential with Germany, which is without precedent over the past 20 years. Second, France records a substantial current account deficit, which deserves particular attention. Thanks to the euro, the French economy is shielded from financial turbulence which would, in the past under such circumstances, have jeopardised the stability of its currency.
The NCBs also collaborate on the preparation of the appropriate decisions to be adopted by the decision-making bodies of the Eurosystem through participation in various committees of NCB experts, which meet regularly to advise them and supply them with expert views on various matters. Around 300 Banco de España experts collaborate through their participation in such committees and in their subgroups. The Eurosystem is run by the ECB’s decision-making bodies,2 principally the Executive Board and the Governing Council. In addition, the General Council is the ECB’s third  1  The Treaty on the Functioning of the European Union refers to the European System of Central Banks (ESCB) and not to the Eurosystem because when it was drafted it was assumed that all the EU Member States would adopt the euro. The ESCB is made up of the ECB and the NCBs of all the EU Member States, whether or not they have adopted the euro. The Eurosystem and the ESCB will continue to coexist as long as there are EU Members States that do not belong to the euro area. 2  Their nature and functioning is governed by the TFEU, the Statute of the ESCB and the internal regulations (of the ECB, Executive Board, General Council and Supervisory Board). 1  decision-making body, of which the governors, presidents or chairmen of all the EU central banks are members with advisory and coordination competences in relation to the ESCB.

6  Authorising credit institutions; authorising the acquisition of qualifying holdings; ensuring compliance with EU legislation on prudential and governance requirements; conducting supervision on a consolidated basis over credit institutions; conducting supervisory reviews and stress tests; participating in supplementary supervision of financial conglomerates; performing supervisory tasks in relation to credit institutions’ recovery plans and the adoption of early intervention measures. 7  The criteria for determining whether a credit institution is considered significant are the following:  — Size and economic importance: total consolidated assets exceed € billion or 20% of the GDP of the country where the institution is established, or it is one of the three largest institutions of a Member State. — Cross-border activity: it has subsidiaries in more than one participating country, whose cross-border assets or liabilities represent more than 20% of its total assets or liabilities. — Public financial assistance: it has received or requested direct financial assistance from the European Financial Stability Facility (EFSF) or the European Stability Mechanism (ESM). 4  The SSM Regulation also provides for the task of adopting measures in pursuance of macroprudential stability to be conferred on the ECB.8 To ensure full coordination with the national designated authorities in this area, the latter must give advance notice of their intention to activate macroprudential tools to the ECB, which may object to it.