samchain/econo-pairs-v1 huggingface dataset:
On the downside, Spanish banks have higher expenses from asset impairment and provisions than euro area banks. The profitability of the Spanish banking system has a significant cyclical component. In the past economic crisis profitability contracted more sharply than in other jurisdictions: in 2012 it entered negative territory, standing at –21% in terms of equity and at -1.2% in terms of assets according to the consolidated financial statements, which include not only business in Spain but also international exposures. The main reason for this was the higher losses on the loan portfolio associated with a significant rise in defaults, particularly in the Spanish construction and real estate activity sectors, where banks had an excessive concentration. 5/29  Subsequently, the profitability of the Spanish banking system has tended to recover in recent years, basically because impairment losses have decreased as loan quality has improved. A fundamental factor has been the decrease in non-performing assets, including both non-performing loans (NPLs) and foreclosed assets. Turning to the more recent information, in the first three quarters of 2019 the net profit of Spanish credit institutions attributable to the controlling company decreased by 18%. The decline in profits is due to a significant fall in gains on financial assets and liabilities (-23%), accompanied by an increase of nearly 4% in operating expenses. Thus, the fall in net operating income amounted to 1.1%. The increase in operating expenses in the past year was largely due to staff reduction agreements at some banks.

William C Dudley: Comments on "A Skeptical View of the Impact of the Fed's Balance Sheet" Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the 2018 US Monetary Policy Forum, New York City, 23 February 2018. * * * It is a pleasure to be able to comment on this year’s U.S. Monetary Policy Forum paper. As always, what I have to say here today reflects my own views and not necessarily those of the Federal Open Market Committee (FOMC) or the Federal Reserve System.1 To say that I was interested in this year’s topic is an understatement. The use of the Federal Reserve’s balance sheet has been an important element of U.S. monetary policy over the past decade. The start of the reversal of that expansion—the so-called process of balance sheet normalization—has been a key focus of the FOMC’s monetary policy deliberations over the past year. I am pleased that the start of this process—in contrast to the bond market taper tantrum of 2013—has been non-disruptive. The normalization process is now running in the background, essentially on autopilot, with short-term interest rates serving as the primary tool for adjusting the stance of monetary policy. Let me start with my main point: Although I agree with many of the authors’ findings in this year’s paper, I would take a much less skeptical view of the Federal Reserve’s balance sheet as a tool of monetary policy.
As Chair of the Committee on Payments and Settlement Systems and someone deeply involved in the CPSS-IOSCO work, I believe that adoption of an agreed-upon global set of minimum standards for FMIs is essential if we are to have a safe global financial system. Recently, CPSS-IOSCO issued a revised set of such principles for consultation. Responses to the proposed principles are due back by late July. The CPSS-IOSCO plans to publish a final set of standards early next year. I hope and anticipate that countries will adopt these principles as the minimum regulatory standards for the systemically important FMIs that operate in their jurisdictions. In summary, considerable effort is underway to enhance financial stability. That said, I think it is important to recognize some of the important challenges in designing and implementing effective reform. Four broad challenges immediately come to mind. First, the resolution of large financial firms that operate in multiple jurisdictions remains largely out of reach – at least in the near- to medium-term. This is due to the fact that legal rules are not harmonized across the different regulatory regimes with respect to bankruptcy and liquidation. For example, although the Dodd-Frank Act establishes a resolution regime for the U.S. operations of a large global financial firm domiciled in the United States, this resolution framework stops at the nation’s borders.

Measured in these terms, the deficit was three times larger than that of Italy and Spain last year. Policy had to be reversed and tightened. Many Norwegians saw a decline in real incomes. 1  David Landes (1998): The Wealth and Poverty of Nations, W.W. Norton & Company, Inc., N.Y  BIS central bankers’ speeches  1  Slide 4: Output gap: A boom-bust economy In the early 1980s, the Norwegian economy experienced a new boom, this time fuelled by debt. When oil prices fell in 1986, the Norwegian economy was hit again. We experienced a collapse in house prices, a severe banking crisis, a currency crisis, a fiscal crisis and high inflation. Unemployment soared. Large parts of the banking system were eventually nationalised. In the two years period after summer 1987, GDP fell by almost 5 percent. During the 1980s, Norwegian GDP per capita grew by a mere 1.2 percent annually, less than half of the growth recorded in both the preceding and following decades. By the early 1990s, the Norwegian authorities realised that the old policy framework was unsuitable for a modernised economy, with deregulated credit and capital markets. The low growth performance and volatility of the recent past was to be replaced by stability, predictability and renewed growth.
In addition, a Japanese consumer credit company based in Malaysia marked another significant milestone by issuing an Islamic commercial papers early this year. The changes that have occurred in the economic and financial environment in our region and the global environment have presented us with wide ranging new opportunities. The partnership between Malaysia and Japan thus not only needs to evolve not only in the trade in goods and direct investment but also needs to encompass growing financial ties. Islamic finance represents a vehicle that could further deepen our financial relationship and the regional integration process. In enhancing these new linkages and greater integration, it would contribute towards unlocking the new potential opportunities for our mutual prosperity. Thank you. 4  BIS Review 94/2007

Abdul Rasheed Ghaffour: Bankers without borders Opening remarks by Mr Abdul Rasheed Ghaffour, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Report Launch for East Asia and Pacific Region - Global Financial Development Report 2017/2018: Bankers without Borders, Kuala Lumpur, 12 April 2018. * * * Thank you for inviting me to speak at the launch of this very important report. The issue of globalisation has featured very prominently in the headlines, especially in recent times. In fact, it has been very trendy over the past decade to herald the end of financial globalisation and international banking. However, the fact that this topic keeps recurring, to me, is a testament that various issues remain unresolved. As such, I am pleased that we are able to have an informed discussion on this issue today. For my brief remarks, I will focus on the theme of the report “bankers without borders”. Finance and globalisation have been an important part of the ASEAN story The title of the report, lends to a very specific definition of the word borders, the conception of finance unrestricted by national boundaries. Conventional economic theory posits that capital will flow from capital rich to capital poor countries to fulfil the productive needs of the economy. This implies that any form of boundary is not only undesirable but may hinder growth.
For issuers, green bonds are a way to tap the huge $ trillion pool of patient private capital managed by global institutional fixed-income investors. The shift to the capital markets from banks will also free up limited bank balance sheet capacity for early-stage project financing and infrastructure lending. Over the last two years, the City of London has been glowing green with sixteen renewable infrastructure funds with a value of $ listed on the LSE. The City has been the centre of a series of landmark global green bond issuances, from China’s first Green Covered Bond – the country’s first ever international issuance of a green bond – to the first green Masala Bond worth INR 20bn. In our view, such local currency green bonds will be particularly important to the climate transition in emerging market economies (EMEs). However, while they are important catalysts, green bonds will not be sufficient to finance the transition to a low carbon future. They accounted for only 3% of global bond issuance in 2018. Achieving the transition will require mobilising mainstream finance. Advances in reporting and risk analysis are paving the way for investors to realise the opportunities in climate-friendly investment by re-orienting their focus to broader, more sustainable long-term value creation. Such investment approaches are becoming increasingly common.

Existing official reform proposals are a step in the right direction but do not fully address the problems revealed by the Icelandic experience. BIS central bankers’ speeches  5
Islamic banks today continue to be confronted with limitations in the availability of a sufficiently deep and diverse pool of Shariah compliant instruments – in both domestic and international currencies – in which they can invest. Under the strengthened international capital and liquidity standards, this can result in higher costs of compliance, inefficiencies in funding structures and increased risks of funding mismatches. Strengthening prudential standards alone would therefore be an incomplete response to building a strong foundation for the future of Islamic finance. Beyond the more stringent capital and liquidity standards, a further response to strengthen the global Islamic financial system should therefore also include measures to strengthen the infrastructural underpinnings and building blocks of the industry. It is equally important that initiatives such  BIS central bankers’ speeches  5  as the establishment of the International Islamic Liquidity Management Corporation (IILM) to support cross-border liquidity management by Islamic financial institutions, continue to be pursued. The recent sukuk issuance by IILM represents a major breakthrough in global cooperation on Islamic finance which has made available short-term USD Shariah compliant instruments in the global market to Islamic financial institutions to facilitate more efficient management of their cross-border liquidity requirements. As Islamic finance further evolves and advances, more fundamental questions on the framework for financial stability in the context of Islamic finance will need to be addressed.

While conditions in the world economy have improved, the growth prospects going forward is expected to remain modest for an extended period of time. Several important lessons have emerged from this recent global financial crisis. The first relates to the exponential expansion of the financial system which did not commensurate with the expansion in economic activity. This resulted in a significant disconnect between the financial sector and its role in serving the economy. A number of factors contributed to the weakening of the link between financial intermediation and productive economic activity. Deregulation had opened up new opportunities for financial institutions to expand the scope of their activities. Increased competition, reinforced by advances in technology intensified the pace of innovation. And, the extended period of low interest rates in an environment of low inflation also prompted greater risk taking which in turn contributed to the significant build up of financial imbalances. The role of leverage in the global financial crisis, both in the public and private sectors, was also a particularly important contributing factor. It has also become a factor that is now holding back growth. At the height of the global financial crisis, the total leverage in the major industrial economies increased significantly. In the US, private sector leverage alone had reached over 200 percent of GDP in 2008. Other reports place the average debt level to GDP of major advanced economies at over 300 percent in 2010.
Yet we can assume that some households and companies would make use of the central bank’s offer and hold part or all of their deposits there. The resulting withdrawals of customer deposits at commercial banks associated with broader access to digital central bank money would impair the ability of the banking system to engage in liquidity and maturity transformation. Consequently, commercial banks would scale back liquidity and maturity transformation and thus the volume of their lending, rather like under the sovereign money scenario. In an extreme case, if customers were to transfer all of the sight deposits held at commercial banks to SNB sight deposit accounts, this would be tantamount to introducing sovereign money. Furthermore, granting broader access to sight deposit accounts at the central bank carries risks for financial stability. In periods of heightened uncertainty, the public would likely convert large amounts of their sight deposits at commercial banks into digital central bank money. Sight deposits with commercial banks can already be converted into central bank money today, namely into cash. However, holding cash is comparatively expensive and inconvenient. In a scenario where the public is granted access to digital central bank money, the SNB would probably have to provide the banks with liquidity (‘lender of last resort’) more frequently and on a larger scale than is the case today. In return, it would have to take assets of the banks and the associated risks onto its own balance sheet.

Madis Müller: New models in Northern Europe? Speech by Mr Madis Müller, Deputy Governor of the Bank of Estonia (Eesti Pank), at a symposium organised by the Konrad-Adenauer-Stiftung, Berlin, 28 November 2012. *  *  *  Ladies and gentlemen, Thank you for this excellent opportunity to discuss together with colleagues from Latvia and Lithuania the experience of the three Baltic countries during the financial crisis. While the situation of each country is undoubtedly different, we can still consider if there are any lessons one could learn from the Baltic cases. In my opening comments, I would like to address specifically the question of what is the best pace for economic adjustments once a country has been hit by a crisis. We hear today many suggestions that austerity requirements have gone too far and that we should allow more time for implementing difficult reforms. First, let me start by saying that in more open economies, the crisis was felt almost instantly. In small and open countries such as the Baltic countries, there was no domestic demand to substitute for the lost export income. The economic reality had changed very suddenly. The EU countries could be divided into two groups. The countries that had a higher export dependence had to react fast to the changed economic environment. This applies especially to smaller countries, including the Baltic States, although Germany’s economy is also heavily reliant on exports.
In particular, consumption and housing activity continue to expand at a moderate pace. Consumer spending has been supported by solid real disposable income growth, which has been underpinned, in turn, by sturdy job gains and falling energy prices. Residential investment has been slowly increasing for several years and that trend seems likely to continue in 2016. Housing starts are still well below the rate consistent with the nation’s population growth rate, and the fundamentals of housing demand remain positive. Rising employment is likely to boost the household formation rate and low mortgage interest rates should keep housing relatively affordable, despite the ongoing recovery in home prices. Last month’s passage of a fiscal 2016 budget package should also provide support to economic activity. Not only does this budget package reduce uncertainty about the budgetary outlook, but its extension of a number of tax breaks and easing of the caps on domestic and military spending means that fiscal policy in 2016 will likely turn somewhat stimulative. On the weaker side, the collapse in energy prices continues to pull down domestic investment in oil and gas drilling projects. Although this adjustment is now well-advanced, I suspect that there remains a further leg down given the sector’s diminished cash flows and the reduced access to credit. In addition, manufacturing remains very soft – hurt by the drop in energyrelated investment, an ongoing inventory adjustment and the loss of competitiveness caused by the persistent strength of the U.S. dollar.

William C Dudley: The US economic outlook and implications for monetary policy Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Economic Leadership Forum, Somerset, New Jersey, 15 January 2016. *  *  *  It is a pleasure to have the opportunity to join you again at the Economic Leadership Forum. I would like to thank John McWeeney of the New Jersey Bankers Association and Rutgers University for the invitation to be here today. Northern New Jersey is a vital part of the New York Fed’s district, and I don’t just say that because I live here. My staff and I actively maintain ties with local community, business and banking leaders, and we always benefit from opportunities to hear about what is on your mind. I am particularly delighted to see that community banks are well represented here today. The Federal Reserve understands the importance of a vibrant community banking sector and the crucial role community banks play in supporting the activities of local businesses and households. While protecting the safety and soundness of the financial system is an important part of the Federal Reserve’s mandate, I believe that the regulation of community banks should be appropriately calibrated to reflect the lower degree of risk they pose to the financial system relative to larger banks. In other words, community banks should not be subject to the same set of regulations that are applied to the most systemically important banking organizations.
13  See, for example, Alessi and Detken (2009), “‘Real-time’ early warning indicators for costly asset price boom/bust cycles: a role for global liquidity”, ECB WP Series No 1039, March; Borio and Drehmann (2009), “Assessing the risk of banking crises – revisited“, BIS Quarterly Review, March; ECB Financial Stability Review, June 2009, Special Feature D “Estimating probabilities of hedge fund liquidation”. BIS Review 115/2009  5  Risk assessment Risk assessment relates to the evaluation of the relevance and potential severity of each risk identified as material in the surveillance phase. It should therefore include a quantitative evaluation of the likelihood that the potential risk scenarios could actually materialise, as well as an evaluation of the ability of the financial system to absorb the shocks (for example, through existing capital buffers or through the potential to increase buffers in the future through profit retention). It should also include cost estimates in terms of the failure of institutions, costs deriving from the malfunctioning of financial markets or impairment of the real economy. The product of these factors forms the basis for the ranking of risks. Quantitative methods and analytical tools (for example, macro-stress testing models) should support, together with expert judgement, the prioritising or ranking of these risks. The models will help in the conduct of quantitative impact assessments on the financial sector as well as in the assessment of the potential costs for the real economy, and thereby offer information about the relevance and severity of the risks detected in the surveillance phase.

One example of when this happened was during the banking crisis at the start of the 1990s. During the years 1992-93, fully 40 per cent of the banks’ loan losses stemmed from the commercial property market. Let me begin by discussing how I view the developments in the commercial property market and then move on to the analysis of the housing market. Because the two markets have shown completely different developments in recent years. The commercial property market The equity market decline in 2000 was accompanied by a weakening in demand for office premises, and rents and prices for commercial property began to fall as the number of vacancies rose. In recent years, turnover of properties has risen again. Presently, the drop in prices seems to have decreased and in some regions prices have even risen. Even though it is difficult to determine whether there has been a definite turnaround yet in the price developments for commercial property, such a turnaround can be expected to come when demand for labour recovers more clearly. Vacancy levels are still high, though, which means that rents have not yet risen more generally. In the long run, a rise in property prices should be accompanied by an increase in rental income, since rental income is the underlying return on property investment. The situation today differs considerably from the conditions seen at the time of the property crisis in the early 1990s, when property prices had risen rapidly over a long period without any corresponding upswing in rental income.