samchain/econo-pairs-v1 huggingface dataset:
2  For a review of the current research situation with regard to financial frictions, see for instance Brunnermeier, Eisenbach and Sannikov (2012). BIS central bankers’ speeches  3  With regard to the Riksbank, one usually says that it became formally independent when the law was amended in 1999, but one can probably say that it was able to conduct monetary policy without any tangible political influence for some years prior to that. Threat to independence from various sides There has recently been much debate on whether the independence of the central banks is under threat. The debate has not focussed on any individual explanation as to why this is the case; slightly different arguments have been put forward. Generally, it is reasonable to say that what might threaten the central banks’ independence is if those who have delegated monetary policy – governments and parliaments – do not consider that the central banks are “delivering” as intended, or alternatively that there have been such major changes in the economy that the system of independent central banks is no longer perceived to function well enough. Something that has been delegated can always be taken back, although this cannot be done from one day to the next – which is the point of the independence. It is no surprise that it is the financial crisis that has been the main catalyst for the debate on central bank independence.

These are the two “key battle fields”. Regarding climate-related risks, there are two essential levers to win the battle: (i) disclosure of present data and their standardisation; and (ii)  forward looking assessments – the stress tests. The “snapshot” of the risks, and their “video”. Disclosure will help markets to appropriately price climate-related risks and ensure efficient allocation of capital. That is why disclosure should become mandatory, at least as a first step for financial institutions, as it is already in France, and for large corporates. The EU, here too, leads by example, having decided standardised mandatory disclosure from next year on. Because of data gaps and still a lack of clear transition policies, assessing individual or sectoral exposure to climate risks remains nevertheless a thorny issue, as highlighted in the latest NGFS report published last weekiii on bridging data gaps. Hence, setting up an ambitious international reporting framework for climate-related financial disclosure is another key priority. This means achieving a common framework – basic but already significant – for all jurisdictions with the possibility to be more ambitious for those who want to. In addition, we should bring on board the “double materiality” promoted by the European Commission: consider both the risks that affect the reporting entity itself and the impact it has on the environment through its activity, and also encourage a broad coverage of ESG topics, not limited to climate change.
A credit slowdown stemming from the weakening of the cycle, due to its obvious effects both on the solvent demand for credit and on the riskadjusted supply by institutions, would be another matter entirely. For their part, institutions need to assume fully the new reality in which they will have to operate in the coming years and address it intelligently and decisively. This will require an adjustment of their balance sheets, so that credit flows to the real economy while attention is paid to the greater risk of default which will have to be correctly managed. At the same time, on the liabilities side, it will be necessary to continue strengthening the deposit base as far as possible, since the capacity to finance banking activity through the wholesale markets will be more limited. This adjustment of bank balance sheets must be accompanied by strict cost controls, which are the main mechanism for limiting the impact of the new environment on bank income statements. The economies of scale offered by bank consolidation (widely aired in the media) is one way to tackle this rationalisation of cost structures. In any event, irrespective of the strategy that each institution may decide to adopt, the result should be one of greater efficiency. Finally, if we have to face a period of slower growth in banking activity, with greater uncertainty and lower profits, banks should also endeavour to strengthen their capital base.

In short, the banking sector will have to live with a structure of higher financial costs, which will squeeze the net interest margin and, therefore, the capacity to generate revenues. This situation, common to all financial institutions at the international level, may be partly relieved in Spain, insofar as a high percentage of the financing of Spanish institutions is granted at a variable rate, which allows them to adjust interest rates more rapidly to the general market risk premium, helping to keep their interest rate spreads more stable. The second challenge is lower demand for credit both from households and businesses. The lower demand for credit is a natural response to a weaker economic climate than in previous years. However, this response will be larger in the case of those economic agents who, after years of very notable growth in their indebtedness, have begun a process of financial deleverage. For banks, this will mean a smaller volume of activity, that is to say, slower growth or even contraction of their business. In the past, banks responded to narrowing margins (income less financial costs) by increasing their volume of lending. However, this lever will not be available in the coming years, or at least not with the same strength, since lending can be expected to continue to decelerate, and to grow at below the economy’s nominal growth rate. Also, a smaller volume of activity puts further pressure on results, since overheads cannot be spread across a larger volume of activity.
But there is a tension with this strategy where banks want to count nonequity capital instruments issued out of subsidiaries as TLAC or MREL. The instruments may meet the other requirements to qualify – minimum maturity, subordination etc – but if the only way that they can bear loss is by putting the subsidiary into resolution there is a question of compatibility with the resolution strategy. As part of BRRD we have in the EU a statutory power at the point of nonviability (PONV) to write-down regulatory capital instruments. But the same is not true outside Europe. As part of the resolution planning process we will need to identify these cases and how to address them. Incidentally one advantage of this PONV write-down power is that in resolution we can ensure the order of depletion of liabilities follows the creditor hierarchy. That is, losses are first absorbed by regulatory capital instruments in the operating company where they occur. If the losses are sufficient to wipe out the capital, then the operating company is recapped by write-down or conversion of any other internal TLAC. This pushes losses up into the parent company or holdco where they are absorbed following the creditor hierarchy, capital first and then debt. •  My third example of issues that will be addressed through resolution planning is foreign law debt. We cannot count as MREL or TLAC instruments where the statutory powers of the resolution authority to bail them in are uncertain.

If, at failure, there is no obstacle to putting the firm into insolvency and paying out covered deposits using the relevant deposit guarantee scheme (DGS) then no MREL is required beyond capital requirements as a going concern. This goes too to the location of TLAC or MREL in groups. There needs to be externally issued MREL wherever, under the preferred resolution strategy, bail-in of external liabilities is likely to occur or where other resolution tools are to be applied. The plan under a single point of entry (SPE) strategy is that only the entity at the top of group is put into resolution on the basis that the interdependencies within a group are so extensive that resolving the different operating companies within a group separately is either impossible or not credible. By contrast where a group is organised in a more modular fashion with limited or no interlinkages between the parts, then the resolution can have multiple points of entry (MPE). It has been convenient for exposition to set up this dichotomy between SPE and MPE. But in practice, many SPE firms will have around the periphery subsidiaries that could be resolved separately or allowed to enter an insolvency without adverse consequences for the resolution of the firm. And many MPE banks are, in practice, collections of SPE strategies. They may be set up to be resolved jurisdiction by jurisdiction. But within jurisdictions the resolution is likely to involve keeping together in resolution the legal entities within that jurisdiction.
The Bank of Albania, through its Supervision Department, has prudently and constantly monitored the developments’ dynamics in the banking sector, part of which are also the  2  BIS Review 120/2008  recent developments related to interest rates on market products. We consider these interest rates as aggressive, providing their impact on the profit margin and representing a potential risk to the structure of balance sheet. As you are aware, we have required from you information related to the strategy and procedures followed by your bank with respect to the application of these terms and interest rates, the purpose and grounding basis for the decision-making process and the structures involved. It is essential for the Bank of Albania that any decision made is a product of deep and comprehensive analyses from the most junior expert to the decision-making structures, placing in addition special emphasis on the impact on the financial result. The entire process should be transparent, understandable and absorbing by the public at large. Otherwise, it will provide opposite effects. This summer provided evidence for the fact that competition in terms of gaining market shares is a determinant element of the Albanian banking system’s behaviour. It also holds true that we are dealing with one of the core principles in the functioning of free market economy: COMPETITION. However, given the fact that the other market principles, namely profit maximization, are not on the same wavelength, the balances between them may be distorted and consequently, different risk elements may be present.

In addition, as a result of the financial crisis in the international markets, the trading of some securities, which were previously considered as favourite to the investors, has become challenging Second, the differences in the size of the banking sector’s institutions, the collateral’s quantity and quality, and the restrictions for the direct exposure among institutions hamper the circulation of liquid funds in the interbank market in the duly time and extent. Third, given the enhanced competition, there is a risk that significant disproportions arise between assets and liabilities in the balance sheet, with regard to type of currency and maturity term; Fourth, some institutions have also turned to borrowing from parent banks in order to maintain the lending promptness and size; Fifth, owing to objective factors that have conditioned the lack of efficiency, the banking sector at home has been characterized by very high liquidity levels. Given the enhanced competition and improved efficiency, it is objectively expected that liquidity indicators being to shift downward. These factors hamper the setting of the optimum liquidity level, in which the enhanced efficiency in fund use does not shackle the institution’s capacity to cope with the business risks. All these elements provide evidence for the need that the banks’ governing structures follow practices that allow the institution itself to meet the expected liquidity needs independently, however, having options which improve their capacity to generate liquidity in urgent cases.
Although it is not yet possible to know whether the measures will succeed in full, my assessment is that they have been sufficient to counteract the most acute problems. The measures create a basis for restoring confidence among the general public and between participants in the financial markets. If one tries, one can see some signs of normalisation in the form of falling interbank rates and improved liquidity in the form of higher turnover on some markets. But progress is slow. I consider it rather surprising that market functioning has not normalised to a greater degree, despite the extensive and forceful measures taken by central banks and governments. It is possible that the authorities have not succeeded in communicating the fundamental message that all who lend money to a bank will get their money back. A remaining problem is that, as a result of the crisis, the market is requiring that the banks reduce their risks in relation to equity capital. The banks are therefore selling financial assets, which squeezes the price in the entire world market. This is why the banks want to reduce their balance sheets by cutting back on lending. The process will continue until the banks have reduced their balance sheets sufficiently or acquired new risk capital. The Riksbank will contribute liquidity as long as is necessary The Swedish interbank market functioned satisfactorily up to mid-September, although the cost of the banks’ international borrowing rose, of course.

The purpose is thus to make it easier for companies to borrow in that the banks are given better scope for financing. It is primarily large companies that issue commercial paper, but smaller companies should also benefit as the banks’ increased scope for borrowing from the Riksbank means their total lending capacity will be less strained. So far, however, the banks have chosen to use only a small part of the credit facilities offered by the Riksbank. It remains to be seen whether this is because the companies have  2  BIS Review 149/2008  nevertheless succeeded in borrowing elsewhere or whether they consider the bank loans to be too expensive. Despite the fact that some companies are experiencing problems with borrowing, bank lending in Sweden is continuing to rise. However, this should not automatically be interpreted to mean that the supply of credit is functioning well in every aspect. The international credit markets are still largely closed to Swedish companies and they cannot borrow from foreign banks to the same extent as before. The Riksbank has also granted special liquidity assistance during the autumn to Kaupthing Bank Sverige AB and Carnegie Investment Bank AB. The liquidity assistance was offered in the form of loans against collateral and at a higher interest rate than on normal loans. The market turbulence and the great uncertainty that prevailed were reasons for granting liquidity assistance to safeguard financial stability, even though these institutions were relatively minor participants in the Swedish financial market.
But the current stage of development of economic capital modeling - the differences in model construction, assumptions and coverage - limit our ability to make comparisons of the results across institutions. More generally, economic capital models clearly remain in an early evolutionary stage, most particularly regarding operational risk. Their early stage of development can also be seen in the relative paucity of disclosed economic capital estimates by banking firms. Only very recently have we begun to see that some bankers have sufficient confidence in the quality of their economic capital estimates, even of credit risk, to disclose them publicly. Basel II: Effects on comparability This brings me to Basel II. The new Accord links risk taking to capital adequacy in a meaningful and consistent way. Its systematic quantification of risk will give market participants new tools for viewing banks’ capital positions - providing a strong basis for making comparisons across institutions and over time. While relying to a considerable extent on a firm’s internal systems for generating credit risk and operational risk capital charges under the more advanced approaches, the new Accord establishes strong preconditions for firms to meet in using those methodologies. In doing so, it also puts a strong measure of responsibility on the supervisors to ensure that each firm is in fact adhering to those requirements - we cannot simply accept the legitimacy of such an important element of financial condition as capital adequacy without extensive and critical reviews of the processes that generate the numbers.

The HKMA has now decided that Participating AIs can include two more types of RMB assets, namely “RMB sovereign bonds issued in Hong Kong by the Ministry of Finance of China” and “RMB bond investment through the Mainland interbank bond market”, in the calculation of this limit. The above two relaxations take effect today. I believe they will help expand the scope of development for offshore RMB business in Hong Kong and provide banks with a greater flexibility in RMB asset management, which will be conducive to further development of the market. Third, the HKMA has imposed some restrictive arrangements on the inclusion of RMB assets as liquid assets in calculating the statutory liquidity ratio of AIs. As the offshore RMB market in Hong Kong becomes more mature, I believe there is room for suitably relaxing these restrictions. Since the adjustments to be made in the calculation are more complicated and technical, we shall announce the details later. BIS central bankers’ speeches  1
The UK Government has already introduced a range of measures to underpin the banking system, including requiring the injection of additional capital, guaranteeing bank debt and providing insurance against losses on some of the risky assets on banks’ balance sheets. That has served to stabilise the banking system. But we are still some way from having banks that feel sufficiently secure that they can lend normally, and investors that have enough confidence in the banks to provide them with sufficient funds. The Bank will continue to work alongside the Government and the FSA in trying to ensure an adequate flow of funds to business. Unfortunately, past experience in other countries suggests that it often takes time for the banking system to mend after a crisis, and it is possible that the supply of credit will remain impaired for some while. There are two reasons for optimism about the strength of the recovery. First, we have the advantage of a substantial depreciation in sterling, whose trade-weighted value is about a quarter down on its value before the crisis broke. That should encourage buyers to switch to goods and services made in this country and make it more profitable to produce them. As a result, it should facilitate the necessary re-balancing of the economy. Second, an unprecedented policy stimulus is working its way through. In particular, the Monetary Policy Committee has lowered Bank Rate to 0.5%, a level unmatched in the Bank's 315-year history and only marginally above its floor of zero.

Adnan Zaylani Mohamad Zahid: Keynote address - Bank Negara Malaysia and the Malaysian Bar Joint National AML/CFT Conference 2019 Keynote address by Mr Adnan Zaylani Mohamad Zahid, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Bank Negara Malaysia and the Malaysian Bar Joint National AML/CFT Conference 2019, Kuala Lumpur, 29 August 2019. * * * It is a great pleasure and honour to welcome you this morning to the Joint National Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) Conference 2019. I understand that this conference, jointly organised by Bank Negara Malaysia and the Malaysian Bar, forms part of the initiatives under the capacity development programme to elevate the understanding and level of AML/CFT compliance outside of the financial sector, the designated non-financial businesses and professions and other non-bank financial sectors or in brief known as the DNFBP sectors and the legal fraternity, in particular. On this note, I would like to express Bank Negara Malaysia’s appreciation to the Malaysian Bar for their continuous support to Bank Negara Malaysia as the competent authority under the AntiMoney Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA), particularly in advancing AML/CFT capacity development initiatives. Apart from today’s conference, the Malaysian Bar has also since mid-2018, incorporated AML/CFT requirements as part of its Continuing Professional Development (CPD) module, in addition to the on-going engagements and discussions to instil compliance culture among the legal fraternity.
Jörg Asmussen: Interview in Börsen-Zeitung Interview with Mr Jörg Asmussen, Member of the Executive Board of the European Central Bank, in Börsen-Zeitung, published on 12 September 2013. *  *  *  The summer in the euro area was rather quiet this time – compared with previous years. After the ECB’s summer break, do you feel properly relaxed and fit for the next all-night crisis talks in Brussels? I’ve been back at work since the second week of August. It’s almost a tradition at the ECB for German Members of the Executive Board to take an early summer vacation and then hold the fort in August. So my vacation is already just a memory. But on a serious note: how hot will it get in the much forecasted “hot autumn”, with new discussions about Greece, Ireland, Portugal and Co.? “Hot autumn” is an interesting term, but I think it’s overestimated. Even if many people, for widely diverging reasons, think that the world will look different on 23 September – following the parliamentary elections – it is not true. The introduction of the eurobonds and the end of consolidation, etc. will not come about on 23 September either. Instead, in this autumn too, we will have to gradually confront the existing difficulties. What is the most pressing topic? Greece will certainly be at the top of the agenda again, with two urgent issues that will need to be resolved this autumn under the ongoing programme.

It seems likely that any country in a similar debt situation to Puerto Rico would have faced difficulty in continuing to raise money in the bond market and would have faced questions about the sustainability of its debt level. Debt sustainability is generally defined as a condition where government debt is at a reasonable level – one with acceptable risks to market confidence and long-term economic growth – and is not on a path to increase indefinitely relative to some measure of national income. Stabilizing Puerto Rico’s debt as a share of the Island’s income and then reducing its debt to more sustainable levels should be a key goal of the Island’s fiscal and economic policy. While the precise path toward lower debt burden is uncertain, the trend is largely determined by the interaction of three factors: the government’s fiscal policy, the growth rate of the economy and the interest rate on the public debt. Regarding the buildup of new public debt, the Commonwealth government has stated its intention that the general fund budget will be balanced in fiscal year 2015. This intention, together with the stance of not using deficit financing to support public corporations, should greatly limit the issuance of new debt. The measures put in place during this year have already had some success in cutting the projected budget gap for the current fiscal year. But what other steps can be taken to move the Island toward fiscal health?