samchain/econo-pairs-v1 huggingface dataset:
As always, my remarks today reflect my own views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System. We live in a globalized economy in which the flows of products, capital, and ideas across borders have led to significant economic gains for literally hundreds of millions of people around the world. Thus, there is a strong public interest in ensuring that this global economic integration is supported by a coherent set of coordinated national macroeconomic policies and a harmonized international regulatory regime. This applies to the policy actions we undertake to reduce economic imbalances as well as to the regulations we develop to address the vulnerabilities in our financial system that were exposed by the crisis. The better we are able to develop cooperative global solutions to these types of issues, the more successful we will be in creating a sounder and more sustainable global economy and financial system. It is clear that there were important imbalances in both economic and financial activity in the years preceding the financial crisis. For example, in the U.S., too much of economic activity was based on an unsustainable housing boom. The turmoil in financial markets that was unleashed when the boom collapsed subsequently forced the U.S. and other countries to undergo significant adjustments. These adjustments were often sudden. They transmitted large shocks across the global economy. These shocks, in turn, necessitated other adjustments in trade, investment, and in financial markets elsewhere.

So I don’t find the argument convincing that we have to keep up the pressure. It is also not our task. It would not be democratic for a central bank to dictate to elected governments what they have to do. BILD: Mr Draghi, in your first interview with BILD four years ago, we spoke a lot about Greece. The country has still not got back on its feet, even though it has received hundreds of billions in emergency loans. When will the madness end? Draghi: Clearly, last year was an economic setback for Greece. Now everyone is aware that there can be no growth without reforms. And what the country and its people need above all is growth. Greece has implemented many reforms in the past few months and is committed to the path of reform. BILD: Is the euro a part of the solution for Greece, or a part of the problem? Draghi: Greece’s challenges have little to do with the euro. It would have to implement reforms in any case. In the euro area, Greece can do that with the support of its partners. But one thing must be clear: who belongs in the euro area and who does not is not for the ECB to decide. That is a matter for the Member States. BILD: They are now more fractious than ever. Is that the biggest danger for Europe? 2  BIS central bankers’ speeches  Draghi: We are experiencing several crises which are all interconnected and reinforce each other.
There are also reasons for closer study of the potential threats to the stability of the financial system arising from such developments. Finansinspektionen and the Riksbank play important roles here. If the infrastructure is instead mainly owned and run by the users, the problems may not primarily concern pricing, but rather how the conditions for changing established structures are affected. Here I am thinking of the incentives for new developments and the possibilities for new participants to become established in the market. This is extremely important to avoid rigid structures in the financial markets. The conclusion is that it must be possible to adapt the rules and supervision governing the companies working in the financial infrastructure to the organisational form chosen by the companies. In a changing world, our task is to ensure we employ the best methods for carrying out our supervision and oversight work. The picture is further complicated by the fact that the authorities in different countries become involved when consolidation work crosses national boundaries. EU regulations Another important driving force for change is the new regulations being produced within the EU, arising from the Financial Services Action Plan of 1999. One of the purposes of these plans was to harmonise regulations for securities trading between the different European countries. The EU has decided to introduce what is known as the Lamfalussy Process to achieve the target of implementing all parts of the plan prior to 2005.

David Rule: Simple, transparent and comparable securitisation Speech by Mr David Rule, Executive Director for Prudential Policy of the Bank of England, at Global ABS, Barcelona, 17 June 2015. *  *  *  Thank you for inviting me to speak at Global ABS 2015. For the past couple of years the Bank of England has been working with the ECB to consider what can be done to foster the development of robust and well-functioning securitisation markets in the EU. Last year we published a joint discussion paper 1 and received helpful feedback from a wide range of commentators. One theme was support for defining the characteristics of simple, transparent and comparable securitisation – more on that in a moment. More recently, we published a joint response 2 in support of the European Commission’s consultation on securitisation and look forward to the Commission’s forthcoming legislative proposals. A key objective of the Capital Markets Union in Europe is a financial system in which stable market-based funding complements bank lending as a source of finance for the economy. Securitisation can be an important part of that stable, market-based funding, alongside other markets such as equities, bonds and private placements. Banks can use securitisation to diversify their funding and transfer risk on underlying loans. Importantly, non-banks can also finance lending through securitisation. Banks and non-banks can use securitisation to help match the maturity of their liabilities to their assets. This is particularly important in the context of housing finance.
This would translate into an acceleration of wage and price inflation and unstable conditions in the foreign exchange market. The Petroleum Fund is designed to channel the revenues resulting from an increase in the oil price to the Fund for investment abroad, in order to prevent an increase in oil prices from influencing the budget. The increased revenues would thus not have an impact on the domestic economy, but be invested abroad through the Petroleum Fund. The current account balance and government budget surplus show that Norwegian consumption has adjusted to petroleum wealth by increasing net imports and by maintaining a budget deficit excluding petroleum revenues. At the same time some of the wealth is saved abroad to redistribute income between generations. This means that there has already been a gradual resource reallocation from the exposed to the sheltered sector. As long as consumption is fairly well adjusted to the expected level of the petroleum wealth, there may not be a need for substantial exchange rate movements in the near future to achieve further adjustment. 5. Stability of the Norwegian krone  Let us turn to the stability of the krone. People in the banking industry often suggest that the krone is a petro currency fluctuating widely with the price of oil. Is this the case, or has stabilisation policy been successful in Norway so far? Looking at the data, we note that the krone exchange rate has been fairly stable over time. Since 1986 the authorities have focused on stability of the krone exchange rate.

But we were all then hit by new shocks to the world economy. Russian default, followed by the near collapse of a highly-geared US hedge fund, led to a flight of investment into only the most secure and highly liquid assets, threatening not only a new round of financial crises in the emerging markets of Asia, Latin America and elsewhere, but also, for the first time, a credit crunch in major industrial economies, most notably in the US. Meanwhile the Japanese economy remained independently mired in recession. BIS Review 56/1999  2  By the time of the annual IMF meetings in Washington last October the public atmosphere was close to panic and the media noise was of impending world recession. Business confidence slumped pretty well everywhere, and so too in this country did consumer confidence. We were faced in the Monetary Policy Committee with a situation in which the overall economic slowdown which we had been seeking to engineer, in order to prevent accelerating inflation, threatened to become an unnecessary economic downturn likely to produce an unwanted fall in the rate of inflation to significantly below the Government’s 2½% inflation target.
In theory, the market should respond to a breakdown in monetary or fiscal discipline by demanding higher risk premium for the sovereign debt issued by those countries that are not behaving in a prudent manner. However, market discipline also seems to have broken down in many instances. For example, right after Greece joined the Euro Zone, the market was somehow attracted by the so called convergence play and for 8 years from 2001–2008 it ignored the fundamentals of Greece and its Single A rating and traded Greek sovereign debts as a Triple A credit, with a spread of as low as 8 basis points above German Bunds in February 2005. Looking back, the rationale for this kind of convergence play defies common sense and any analysis of fundamentals. However, the breakdown of the market discipline had played a key role in encouraging and facilitating continued erosion of fiscal discipline of the national authorities by conveying the wrong signals about the market tolerance, and appetite for their sovereign debts. As an illustration, the sharp fall of interest cost (10-year government bond yield) from over 10% in the mid 1990s to a low of 3% in the mid-2000s had also helped lower the cost of Greek Government borrowings and created the illusion of the affordability and sustainability of the rising pile of government debts. There are many reasons why market forces are failing to impose discipline when national authorities or firms fail to behave prudently.

Consequently, Switzerland – unlike other countries – was able to avoid introducing state-guaranteed bonds. With the drastic reduction in key rates and the subsequent decline in mortgage rates, the burden on households and companies was eased. In this way, the severity of the recession was somewhat alleviated and the risks of deflation reduced. However, the interest rate is now at a historic low and this means medium-term risks for the Swiss real estate market and financial stability. Experience shows that periods of low interest rates provide scope for excesses on the mortgage and real estate market. Consequently, in the current environment in particular, attention should be given to ensuring that past mistakes are not repeated. Caution must remain the watchword when granting loans. BIS Review 140/2009  1
In the fight against money laundering and the financing of terrorism (AML-CFT), how can we respond effectively to the challenge posed by crypto-assets, many of which were designed on the principle of anonymity and the bypassing of the rule of law? Finally, a question addressed more directly to me, as central banker and supervisor: how can we consider exercising our regulatory missions in a financial sector whose contours and functioning are undergoing change? In my opinion, appropriate responses to these questions must be based on three pillars: (i) a clear assessment, (ii) a sufficiently open mind to propose frameworks adapted to new paradigms and (iii) the collective boldness to innovate. And I would like to share with you some thoughts on these three topics. (i) Assessment The digital revolution now enables some companies to rely on a potential customer base 1/4  BIS central bankers' speeches  equivalent to the combined population of Europe, the United States and China, in order to make significant incursions, and potentially systemic ones, currently mainly in the field of payments and fund transfers. The magnitude of these network effects and the speed at which they can be exploited are likely to radically alter the scope and intensity of competition in the markets in which they are present. They can also contribute to exacerbating not only the size of the benefits but also the risks that they create for the stability of the financial system and monetary stability. Should this prospect lead us to seek to preserve the status quo?

Moreover, will the enlarged EU capital market suck in capital from Asia to Europe? In the first four months of this year, for example, BIS Review 95/1998  -3-  Japanese net purchases of European securities totalled $ billion, while net sales of bonds and stocks in Asia totalled $ billion. Extended diversion of capital to Europe would undermine Asia’s growth prospects as well as Hong Kong’s position as an international financial centre. This could also happen if the European banks are tempted to consolidate their business in Asia to focus their efforts on their enlarged home market. This is not the occasion to be pessimistic. Overall, I believe that the euro will be a good thing for Europe and for the world economy. But as with any major change in the world financial architecture, Hong Kong will need to monitor developments closely and respond quickly to emerging threats as well as opportunities. Let me now turn to the HKMA’s regulatory response to the euro in Hong Kong. First, banks in Hong Kong need to be prepared to handle and account for the euro, particularly during the awkward transitional period before the legacy currencies disappear entirely. If they are not ready, many of the potential benefits of the euro for Hong Kong will simply not materialize.
The most common form of collateral is mortgage deeds, but other types of collateral do exist. In addition to these internal assessments, the banks may supplement their analysis with external credit assessments. There are some independent external credit assessment  BIS Review 2/2002  3  companies in the market. These use various means to estimate, for instance, the likelihood of bankruptcy in almost all Swedish companies. The risk involved in a loan can also be affected by the terms of the loan agreement signed by the bank and the customer. This is because the loan agreement can contain certain clauses entailing specific measures to be triggered in the event of various credit events. Examples of such events could be that the company’s solvency falls below a particular predetermined level or that the owner conditions change. If one of these events occurs, it may comprise grounds for renegotiating the loan agreement. The starting point for the banks’ pricing is an overall assessment of the customer. This means that pricing is not solely dependent on the bank’s risk classification of the loan, but also on the other income the customer may be expected to provide. What the banks lose on the swings, they may regain on the roundabouts. The banks’ pricing can take into account risk classes and collateral, but there is not always a direct connection between prices and risk classes. However, developments in regulations and on the capital market favour a stronger connection between interest rates on loans and risk classification of the borrower.

The proposed changes in the capital adequacy rules will apply with effect from 2005, but developments in the capital market could very well lead to the banks’ credit granting being adapted gradually to the new rules in advance of their introduction. It is therefore important for capital-intensive operations to prepare now for a more individualised credit assessment in future. The opportunities for finding competitive financing on the loan market at a low interest rate will be available to those who can convince lenders that their operations will generate stable future income. Higher risks, e.g. in the form of varying income flows will cost more. Looking towards the future I can see two important issues for the industry to consider for the future. The first is the financing of the new construction that is needed, where the effects of the modern credit granting process and the new capital adequacy rules will affect SABO’s operations. It will be a sensitive issue for housing companies in municipalities with high vacancy rates and declining populations, particularly in the light of your own report issued just before Christmas. Previously, municipalities and municipal operations with municipal guarantees have been able to obtain loans on improved terms. In addition to the property as collateral, a municipal housing company has been able to use the municipality’s guarantee as collateral. In future, it is not so certain that this will lead to improved loan terms to the same extent as now.
For such shareholders, the payoffs are likely to be significant given the untapped growth potential of the industry in Malaysia. However, on more than several occasions, opportunistic shareholding transactions have destabilised the market, and set back broader efforts to build a strong domestic sector. There are a number of domestic shareholders who after being given a license and the opportunity to participate in the insurance sector decided to sell off their shareholding and make quick profits. These types of shareholders are a cause of instability to the insurers’ operations. These are not the kind of shareholders that would be viewed favourably for future participation in the financial industry. The way forward: invest now to make insurance accessible to all Given this state of affairs, I would like to pose this question, borrowing from the theme of this summit: “Are we on the right path?” I believe that the industry can be on the right path if it takes a 2/5  BIS central bankers' speeches  long term view and starts taking meaningful steps to address the gaps in our market. Let me lay out some of these steps. Firstly, products and delivery channels need to be diversified and redesigned to be better suited to the whole population. This must entail a renewed focus on protection needs especially for firsttime buyers. The Bank is partnering with the industry to roll out Perlindungan Tenang, a national branding and communication platform in the near future.

And we shall rigorously measure insurers’ performance. Failure to register favourable achievements will have its own consequences. Conclusion Change is not an option. It is a constant. While global insurance growth is expected to remain healthy and will continue to be driven by emerging economies over the next few years, the quality of growth is equally important. We want growth that is sustainable and balanced where benefits are enjoyed by society at large via higher levels of meaningful protection for households and businesses. We must be responsive to the changes that are taking place in our society and economy. We need to take urgent action or risk becoming irrelevant. The rising awareness of insurance in our population is a golden opportunity for us to make an impact and change the way insurance is perceived and experienced. The heightened consumer expectations and disruptive forces of the new economy will mean that accomplishing this will require a steadfast commitment to the 4/5  BIS central bankers' speeches  values that are fundamental to the social mission of insurance. We must always act in the public interest for the long term benefit of our society. 5/5  BIS central bankers' speeches
Global liquidity has increased significantly as central banks of developed countries, which eased policy rates rapidly, adopted quantitative easing policies. Recently, capital flows to developing countries such as Turkey have been accelerating owing to expectations that short-term interest rates in developed countries would remain low for an extended period, the decoupling in growth performances of countries and increased risk appetite. In the face of growing capital flows, some developing countries are introducing measures to prevent capital inflows. However, past experiences of countries show that restricting capital inflows is not really effective in terms of the volume of capital inflows while it is only partially effective in terms of the type of incoming capital. In other words, due to reasons such as financial innovation and the integration of markets, it is not possible to effectively prevent capital flows, unless they are fully controlled. The current conjuncture is conducive to benefiting wisely from capital flows and implementing policies that would reinforce financial stability and enhance financial depth. In this respect, the Financial Stability Report, which was prepared by the Central Bank of the Republic of Turkey and made public yesterday, is an important policy text delineating the strategy to be implemented in the upcoming period to maintain and reinforce financial stability in Turkey. Therefore, I suggest that the report be examined in detail. The policy framework, which the Report outlines in detail, has four pillars.

To this end, the Undersecretariat of Treasury is oriented towards borrowing in TL; the FX-denominated domestic debt stock was pushed down gradually and Central Bank accelerated reserve accumulation at times of elevated capital inflows, through the flexible foreign exchange buying auctions. Reasons such as implementation of the floating exchange rate regime, the progress made in terms of attaining price stability and the decrease in TL interest rates have facilitated a wider use of Turkish lira in the economy as opposed to foreign currency. Moreover, measures like setting higher required reserve ratios for foreign exchange than those for Turkish lira and not permitting households to use FX-denominated or FX-indexed loans encourage the private sector to borrow in Turkish lira. The foreign exchange net general position arrangement for the banking sector and allowing the issuance of TL bonds by banks in a controlled manner can also be considered in this context. The fourth and last pillar of the policy framework is to promote the risk management concept. In this respect, steps to be taken regarding financial training assume importance for the smooth functioning of the system. We welcome the efforts towards increased recognition of Turkish Derivatives Exchange, more diversified products and more widespread use of forward transactions. In addition, we believe that the floating exchange rate regime that has been in implementation since 2001 has significantly contributed to the embedding of awareness of exchange rate risk.