samchain/econo-pairs-v1 huggingface dataset:
After an assessment has been thoroughly debated in the Committee, the final assessment becomes public.7 The assessments, and the publication of the results, have proved to be a powerful tool. To date, more than 200 adjustments have been made by member jurisdictions in response to findings raised by the assessment teams. In addition, the process has also generated a positive feedback loop, meaning that the lessons learnt from assessments are used to improve and clarify the standards. So far, the assessments have concentrated on the capital framework, but from 2015 onwards the scope of this work will widen further to include the implementation of the liquidity coverage ratio and the SIB-requirements. However, for the new, stricter requirements to bring the benefits we are aiming for, it is important that they be properly reflected, not only in national legislation, but also at the level of individual banks. To use an analogy of car safety, if we are now providing banks with air bags, in the form of higher capital requirements, it is important that those air bags are actually activated in case of an accident. For this to happen, the sensors need to be functioning and well-calibrated. For banks, this means that risk weights need to signal appropriately the risks that individual banks actually face. This aspect is captured in the Committee’s thematic assessments. To put it simply, in these assessments we examined whether the banks’ risk-weighted assets could be trusted.

And indeed – the financial crisis has led to a comprehensive response from regulators and policymakers across the world. Compared to the pre-crisis era, international banks will face: –  substantially higher capital requirements,  –  higher demands on the quality of capital,  –  a leverage ratio,  –  an international liquidity framework, with both short-term and structural liquidity requirements (I am proud to note that the Basel Committee, less than a week ago, published the final standard for the net stable funding ratio, NSFR), and  –  a regulatory framework for global systemically important banks (GSIBs). When you add to this work related to reducing RWA variability and disclosure, you end up with a pretty impressive list – a list that represents an unprecedented leap forward in terms of global banking regulation. So then, how do I see this? Do I claim to know how all these new rules will play out together? Am I confident that there will be no inconsistencies and contradictions? No, definitely not. We have every reason to be humble in this respect. Monitoring and assessing the effects of reforms will therefore be imperative. Will the reforms be costly for banks in the short term? Yes, they will. Will banks have to adjust their activities? Yes, a return to pre-crisis banking behaviour is neither appropriate nor viable. Do I therefore think that regulation has gone too far and that parts should be undone? No, not at all.
Joseph S Tracy: What the Fed did and why Remarks by Mr Joseph S Tracy, Executive Vice President of the Federal Reserve Bank of New York, at the Westchester County Bankers Association, Tarrytown, New York, 25 June 2010. *  *  *  In my remarks this morning, I would like to look back over the events of the past several years and offer my perspective on what were the essential drivers of the financial crisis and the Federal Reserve’s interventions. 1 I will review the changes that have been taking place in the U.S. financial system and how these changes created the conditions conducive to the crisis. I will then discuss the developments in residential real estate financing that provided the catalyst for the crisis. With this background, I will outline the interventions that were carried out to mitigate the crisis, focusing on those conducted by the Federal Reserve. I will direct my remarks to the facilities that were created rather than to the actions taken for individual institutions since these have been discussed extensively elsewhere. The lessons learned from the crisis are important for the design of the policy response aimed at reducing the likelihood that the U.S. economy ever again experiences this degree of trauma. I begin with the simple exercise of what name we should assign to this past crisis. At first blush, this may not seem like a useful exercise. But, as Shakespeare reminded us, names are important as they convey a sense of our understanding of the event.

“Reflections on the TALF and the Federal Reserve’s Role as Liquidity Provider”. Remarks at the New York Association for Business Economists, June 6. 15  David Wessel. 2009. In Fed We Trust. New York: Crown Business. 8  BIS Review 92/2010  market, Treasury pledged to provide the capital. The SCAP program was successful in restoring a degree of confidence in financial markets and in enabling these financial firms to raise capital on their own. By the second half of 2009, the financial fever from the Panic of 2007 had finally broken with the 3-month LIBOR/OIS spread narrowing back to pre-crisis levels. 16 The economy began to grow again. Having served their purpose, the Fed’s special liquidity facilities have been wound down. The policy focus has shifted to regulatory reforms and how to prevent a future financial crisis. To be successful, these reforms must deal with the run dynamics in the shadow banking system, as well as devise ways to limit the leverage cycle that is an integral part of asset booms and busts that can trigger a panic. If the lessons from the panics of 1907 and 2007 are incorporated into the reforms, we may well avoid the Panic of 2107. 16  Recently the spread has widened with the onset of concerns over Greece. BIS Review 92/2010  9
Public authorities have a clear role in this respect, and the Basel Committee on Banking Supervision is a major player in this field at the global level. I fully endorse the work done by the Basel Committee to review banks’ risk management practices, as well as the Guidance on Sound Liquidity Risk Management and Supervision, which was recently published and constitutes a benchmark for the practices of financial institutions. The European Central Bank, as the ultimate provider of liquidity in the euro area, has a particular interest in issues relating to liquidity risk management. Against this background, our work on liquidity stress testing and contingency funding plans has highlighted the importance of both banking supervisors and central banks having access to the results of liquidity stress tests carried out by banks so that they can better assess the potential  4  BIS Review 123/2008  systemic impact of a liquidity shock. The ECB supports the idea of organising common liquidity stress tests, for which participating banks would use their own stress tests based on a joint scenario. Furthermore, the contingency funding plans of large banks should be shared not only with banking supervisors but also with central banks, as also recommended by the FSF. Having said that, I would like to stress that financial institutions are ultimately responsible for ensuring that all relevant risks, including liquidity risk, are properly integrated into their overall risk management.

The new international division of labour thus affects every stage of the production process; it influences the localisation of added value and raises the question of the financing of the external imbalances of economies that focus on the design and marketing of products rather than their manufacture. The second session will deal with the impact of trends in productivity and competitiveness on international capital allocation and global imbalances. These trends may have contributed to the increase in global imbalances reflected in current account balances, and highlight several paradoxes. The first paradox is that of the US economy, which combines the structural surge in its productivity with a possible loss in competitiveness illustrated by the increase in its external deficit. This paradox is perhaps only apparent if we consider that the improvement in the US’ relative productivity performance is mainly in the non-tradable sector and as compared to the industrialised rather than the emerging economies. In addition, while this pick-up in productivity does boost the profitability of investments, logically, it goes hand in hand with an excess of investment over national savings that calls for increasing foreign capital inflows. However, the predominant nature of capital inflows to the United States changed at the start of the 2000s, switching from mainly purchases of equities and foreign direct investment by the private sector to purchases of government securities by central banks, which are not motivated by the search for increased profitability. This leads us to the second paradox, a twin to the first, i.e.
As Figure 1 indicates, it was shall we say an interesting time for researchers from Japan to ask such a question. However, when I inquired about the rapid increase in real estate prices in their country, I always received the same answer – Japan is an island nation and had limited buildable lots, and that prevented real estate prices from declining. This view was very widely held. However, as you can see in Figure 2, that widely held financial myth was soon shattered. Unfortunately, the result of this belief was eventually the crippling of some of the world’s largest financial institutions, a long period of subpar economic growth in Japan, and eventually a problematic deflation that Japan struggles with to this day. A second example is provided by the growth of the Internet, and in particular the growth in “dot-com” stock valuations, in the late 1990s. As Figure 3 shows, there was a substantial run-up in stock valuations during this period. At the time I had conversations with a variety of financial professionals in Boston who made the argument that traditional valuation measures no longer applied. The view assumed by many was that valuation of firms should be based on clicks of a computer mouse rather than earnings, either current or expected in the future. As Figure 4 shows, such enthusiasm for a new way of valuing companies was short-lived. But importantly, the substantial decline in Internet-related stocks did not create a financial crisis.

Not only have we worked hand-in-hand for many years on various matters; we also share a similar mission and vocation, as well as similar concerns in many respects. The world has changed in the past 60 years, and the transformations both institutions have undergone bear witness to this. We have moved from a system of fixed but adjustable exchange rate parities to one where floating is the norm. Economic integration has made enormous headway during these years, both multilaterally and through regional agreements, the European Union being perhaps the most advanced. From a world of widespread capital controls and multiple exchange rates, we have moved to a very different one in which enormous cross-border flows take place daily in the form of a wide array of financial instruments, among which derivatives, which were virtually non-existent at the end of the Second World War. Undoubtedly, free capital movements have contributed to a significant improvement in the allocation of global saving to more profitable uses, although they have also entailed a swifter transmission of financial shocks across highly integrated markets, a phenomenon behind some of the recent crises. Economic policies - fiscal, monetary and structural - have been increasingly geared to providing a framework of stability and appropriate incentives for decision-making by agents. In addition to contributing to smoothing cyclical fluctuations, these policies help set in place the right conditions to achieve sustained economic growth based on flexible, competitive and efficient markets where comparative advantages are tailored to the changing circumstances of international markets.
•  BIS Review 26/2004  Estonia's GDP per capita currently amounts to about 42% of the respective EU figure; Estonia´s price level is about 56% of the EU level. 3  •  Meanwhile, according to different studies, Estonia´s potential GDP growth is 5-6% per year - in a situation where the pace in the EU would be 2-2.5% per year. •  If the current growth rate differences are maintained, the level of income in Estonia should reach the current EU average in some 20 years. Hence - the average price level will be reached in the course of the following decades, not in months. •  However, as many as every fourth Estonian believes that on account of the changeover to the euro the prices will rise fast, which will have a significant impact on their welfare. These people are worried about their primary subsistence - above all, growth in food and housing costs is feared. I can assure you - based on the experience of other countries - that the adoption of the euro in itself will not bring about any price rises. It is a different matter that people sometimes perceive rises in prices to be steeper than they actually are, e.g. if a cup of coffee at one's favourite corner cafe becomes more expensive. Namely such rises contributed to the price growth after the changeover to the euro. According to studies, adopting the euro cash boosted the inflation rate ACTUALLY only by 0.1-0.2 percentage points.

It is still not wholly clear - to me at least - quite why the storm struck suddenly when it did. Most crises of this sort have their origins in some evident macro-economic policy failure. At least in hindsight there are usually fairly clear tell-tale signs of expanding fiscal deficits and/or lax monetary policies, classically accompanied by evidence of imbalance in the form of accelerating inflation or a rapidly deteriorating balance of payments. There were such signs, perhaps most notably in Thailand; but they were not for the most part particularly pronounced in Asia. Some of you perhaps understand better than I do why the initial infection proved to be so contagious. It was after all your money! In fact through the first half of the 1990’s, and in some cases for much longer, the countries in question had been remarkably successful. They attracted, by their very success, huge inflows of capital from the rest of the world, where yields had fallen, in the hope of achieving higher returns. There is no question that this capital inflow made a very big contribution to the remarkable economic expansion in Asia and hence to the global economy; but with the benefit of hindsight, the accelerating scale of the inflow, and particularly the forms that it took, became an important part of the problem. It was not all in the end productively employed.
In short, the adoption of the advanced Basel II models should be seen from a perspective of realism and the pursuit of excellence. As far as the Banco de España is concerned, quality takes precedence over any consideration of timing in the adoption of the advanced approaches. As I have already mentioned, the implementation of the New Capital Accord will pose serious challenges for the institutions, which will be expected to step up the efforts they have no doubt already begun to make. The need to increase these efforts has become even more pressing since 11 May this year, when the Basel Committee on Banking Supervision approved the text of the Accord, which will be released at the end of June. Also prominent in the area of regulatory reforms, which will involve significant challenges and whose implementation is imminent, is the introduction of the International Accounting Standards (IAS). In accordance with the mandate of the European Union, these standards will affect the preparation of the annual accounts of groups with securities listed on any regulated market of the Union from 1 January 2005. The challenges associated with the introduction of the IAS not only relate to the technical adaptation that will be required to comply with them; some of these standards may affect institutions’ business strategy, since aspects such as provisions and the consolidation and amortisation of goodwill will be changed.

This has improved with the various initiatives that we have undertaken in creating awareness and working with the industry, government and agencies to expand the offerings and the use of Islamic trade finance facilitation with the share growing to 31.4% in 2020. However, we have to acknowledge that we may still have much to do and we look forward to the report which I have been informed also shares a host of ideas and recommendations for us to take forward. Before that, please allow me to share some thoughts on some of the important thrusts that we see for us to take into consideration as we continue our work in this. Firstly, we critically need trade-based solutions to ease liquidity constraints. The pandemic, which led to subdued domestic demand and stringent COVID-19 containment measures, has resulted in a liquidity squeeze among Malaysian businesses, particularly the SMEs. To stay afloat, some companies have had to resort to increased debt to meet their payment obligations. 1/4  BIS central bankers' speeches  While measures have been introduced to lessen the burden of SMEs in the form of wage assistance programmes, support grants and deferment of financing instalments, these are merely a temporary backstop akin to a band-aid. Prolonged assistance of this form may not be sustainable. The over dependence on debt-based instruments also reduces the financial flexibility of businesses in supporting their recovery. Trade-based solutions can offer a viable option where funding is tailored to the lifecycle of production.
Effects of the 2008/09 global financial crisis and Asia’s response The recent crisis had the global financial system badly shaken with widespread effects of an unprecedented scale across the world. The Asian region has however demonstrated remarkable resilience during the crisis as most countries in Asia entered the crisis period with a sound set of economic and financial fundamentals, mainly attributed to the lessons learned from the Asian financial crisis of the late 1990s. It was painful. It was a bitter lesson. We embarked on a bold reform that fundamentally alters the landscape of our financial system. But the payouts have been tremendous. The governments of the Asian economies have now the flexibility to implement large stimulus, given the strong economy and low public debt levels in the region. Credit flows to the private sector remain undisrupted as financial institutions in the Asian countries were strong and well capitalised. The household and corporate sectors in Asia were also not over leveraged. Furthermore, Asia was not confronted by widespread unemployment. The various reform measures had enabled the Asian economies to build more shock absorbers and reduced the number of shock amplifiers in their economies following the 1997/98 financial crisis. What we have learnt is that there are no short cuts in reforming a broken system. We also learnt that we should always have an open mind in looking at probable solutions. Just like what a good doctor would prescribe, some time, administering bitter medicines are the only way to go.

With a humble beginning of establishing the first Islamic bank in 1983, Islamic finance in Malaysia has evolved to become a comprehensive domestic Islamic financial system, comprising the Islamic banking institutions, the takaful industry, the Islamic money and capital markets. Malaysia’s Islamic banking sector grew 20% annually since 2001 in terms of assets and as at the end of June 2010, the share of Islamic banking assets in the total banking sector has expanded to reach 20.9 percent as compared to 6.9 percent a decade ago. Malaysia also remains the world’s largest sukuk market, accounting for more than 60 percent of global sukuk issuances. Islamic finance prospers in Malaysia because it is competitive, innovative and in sync with what the market want. Recent developments of Islamic finance that strengthen its resilience Significant milestones achieved in the recent decade in the area of international financial infrastructure provides further support for sustainable and orderly development and continued growth of Islamic finance. In 2002, the Islamic financial Services Board or IFSB was established with the role as an international prudential standard setting body for Islamic finance. The IFSB has been instrumental in developing and issuing global prudential standards and guiding principles for the industry. Further efforts to ensure sustainability of Islamic finance in this new and more challenging environment include the formation of a Task Force on Islamic Finance and Global Financial Stability by the Islamic Development Bank and IFSB.
The global economic and financial landscape is currently at an important turning point, as we transition to a fundamentally changed future. The challenges facing us in this environment are manifold. We therefore want to have the skills for this future – to be well equipped to effectively manage our future. Sasana Kijang aims to provide such a platform to pursue this human capital development agenda to become a centre of excellence for learning with the state of the art facilities. Sasana Kijang also reflects our commitment for regional and international collaboration and cooperation. It is our intention for Sasana Kijang to provide a platform for the meeting of minds and to harness the wealth of expertise in the field of Central Banking and finance. As a centre for collaboration, Sasana Kijang has wide ranging facilities for regional and international meetings, seminars and conferences. These facilities are also shared with the South East Asian Central Banks (SEACEN) Research and Training Centre and the Islamic Financial Services Board (IFSB) which are now located in Sasana Kijang. For the SEACEN Centre, it is hoped that all the available facilities will support its enhanced role in the region, particularly, as financial and economic integration in Asia intensifies. For the IFSB, an international organisation that was established as a result of the collaborative efforts of regulators from different parts of the world, it is hoped that it will facilitate further collaboration in the development of Islamic finance and in safeguarding its soundness and stability.

I thus consider that it should be the Riksbank that decides the size of the foreign exchange reserves, as well as how they should be funded. In crises and times of unease, the Riksbank must always consider all the  22 [25]  possibilities for performing its remit. If there are no other possibilities for the Riksbank to secure access to foreign exchange other than issuing promissory notes in foreign currency in its own name, then such a measure must, of course, be considered and, indeed, implemented when circumstances demand it. A central bank must be able to use its balance sheet I have returned to the central bank’s balance sheet several times, This is because I consider there is a great probability that this will play an important role in monetary policy in the period ahead, just as it did earlier, at least if we are prepared to look further back in time than the Great Moderation. In addition, if real interest rates continue to remain on the weak levels we have seen over the last ten years, changes in the terms for the monetary policy facilities and securities purchases will become necessary parts of normal monetary policy. It is therefore important that the new Sveriges Riksbank Act does not restrict these possibilities. References Agrawal, R. and M. Kimball (2015), “Breaking Through the Lower Bound”, IMF Working Paper No. 15/2015. Andersson, B., M. Jonsson and H. Lundvall (2020), “The new macroeconomic environment after the global financial crisis”, Sveriges Riksbank Economic Review 2020:1, Sveriges Riksbank.