samchain/econo-pairs-v1 huggingface dataset:
And major UK banks are on track to complete by January next year the separation of their domestic high street businesses into ‘Ring Fenced Banks’. *********** Ambition. Purpose. Clarity. And Humility. Not all of these qualities are ever visible in any leader, certainly never at the same time. But if you keep them in mind, they will be seeds that the exercise of leadership will germinate. And their growth will benefit both you as the leader and those you lead. IV. Conclusion: Leadership in a Disruptive Age Your opportunity is enormous. You will assume the mantle of leadership at a time of unprecedented globalisation of trade, capital and ideas; and at the dawn of the Fourth Industrial Revolution. The deepening of the symbiotic relationship between global markets and technological progress has already lifted more than a billion people out of poverty, while a series of technological advances have fundamentally enriched our lives. Globally, since 1960, real per capita GDP has risen more than two-and-a-half times, average incomes have begun to converge, and life expectancy has increased by nearly two decades. 24  Despite such immense progress, many citizens in advanced economies are lamenting a loss of control and losing trust in the system. To them, measures of aggregate progress bear little relation to their own experience. Rather than a new golden era, globalisation is associated with low wages, insecure employment, stateless corporations and striking inequalities.

At the Bank, we not only recruit widely but also encourage colleagues to collaborate across the organisation and spend time in different areas to develop the varied skills required of a modern central banker. 4  In large organisations, developing future leaders requires discipline. For example, Vittorio Colao, the CEO of Vodafone, reviews the company’s top 200 executives annually to assess performance, set development actions and manage those who are having difficulties. The Executive Committee at Vodafone then discusses the progress of a different subset of their leaders at each Executive Meeting, making the process transparent and rigorous. The Bank of England has adopted a similar approach. Developing the right people also requires a culture of inclusion that values diverse ideas, encourages open debate, and empowers people at all levels to take initiative. In a moment, I will come onto the steps the Bank of England is taking in these regards. Finally, for leaders, having the right people also means being able to draw on trusted outside perspectives such as an external advisory board or informal contacts with other leaders. I’m fortunate that in my role I can regularly share experiences with a wide range of leaders in diverse fields. Of these, the most important sounding boards are my fellow central bankers. In this circle of trust, we can have regular, frank discussions of issues we either don’t understand or that are particularly sensitive. The second critical thing that leaders do is to set the priorities for their organisation.
It is vital that this work continues with real vigour if we are to avoid either the Scylla of costly public backstops becoming increasingly frequently used as frontstops, or – worse – the Charybdis of households and firms having to bear the risks of systemic instability directly. Page 7  3) Ensuring we have central bank tools that are effective To provide a credible backstop, central banks need: first, a well-defined framework for deciding when systemic stability is sufficiently threatened for intervention to be necessary; and, second, a tool that is able to target the underlying market vulnerability. In the LDI case, the decision to intervene was made on the basis of a recommendation from our Financial Policy Committee that UK financial stability was at risk from the development of a selfreinforcing price spiral affecting long-dated UK government debt. That judgment was informed by a dashboard of quantitative measures, starting with the sharp rise in long gilt yields, a blowout in bid/ask spreads and a material reduction in traded market depth. But these measures were not enough to trigger action. A sharp rise in yields for example might simply reflect economic developments. And they could not by themselves elucidate the underlying dynamics driving market pricing. It was only through direct contact with the LDI funds themselves, and broader market participants on both the buy- and sell- sides, that we could understand both the scale of the fire sales underway, and the prospective size, timing and composition of future transactions if yields continued to rise.

The construction of ERM II, with a broad band for exchange rate fluctuations, would then make it possible for the interest rate to deviate somewhat from the level in the euro area. The problems that may arise in such a situation depend on how economic policy in general works. Provided Sweden is more or less in phase with the cyclical pattern in the euro area, there need not be any serious conflicts. The monetary policy objectives are broadly the same. There are therefore grounds for supposing that monetary policy can be much the same as at present. The starting point here is a credible central rate that market players expect will be the rate at which the 3  BIS Review 96/1999  krona is ultimately converted into euro – two assumptions that are both very reasonable. A case in point is what happened in Finland. Monetary policy there continued to target inflation even after the markka had been included in ERM II; following its entry, the markka stabilised and was close to its central rate. This brings me to the recent discussion in Swedish media. Briefly, it has been argued that Sweden is in the process of moving out of phase with activity in the euro area, mainly because fiscal policy is unduly expansionary. At present we can handle such a situation because Sweden is in a position to implement an independent monetary policy focused on price stability; the Riksbank can quite simply raise interest rates and thereby counter any tendencies to overheating.
This has presented greater investor demand, paving the way for the growth of Asia’s capital markets and asset management sectors. These developments will help drive a new chapter in Asian finance. We will continue to ensure that we have adequate supply of premium infrastructure to support the sustained growth of the business financial centre here. Our office rental rates in Singapore remain competitive. Based on CBRE’s Q1 2012 Singapore Market View, the average monthly rental for Grade A office space dipped by 4.7% quarter-on-quarter to $ per square feet (compared to the 3.6 % fall in Q1 2012). (This is well priced compared to premium office space in Hong Kong and Tokyo, at about 50% and 70% of their costs, respectively. Occupancy rates for Core CBD in Singapore remain healthy at about 92% (in Q2 2012). The increase in premium office space at competitive rental rates bodes well for Singapore, and will strengthen our role as a competitive business hub in Asia and globally. Conclusion I congratulate all those who have played a role in making this new development possible. I am optimistic that the two towers of One Raffles Place will remain as one of the most recognised business addresses in the historic Raffles Place and will continue to contribute to Singapore’s success story. 2  BIS central bankers’ speeches

However, the implication is that the home supervisor, as the consolidating supervisor, has the overall picture, while the host country has the responsibility. In a crisis, decisions must be taken fast and, typically, based on insufficient and uncertain information. Access to information is thus crucial for effective crisis management. In the present crisis, host countries have had difficulties in obtaining timely information from home country authorities. Considering the importance of information, the frustration of host countries is understandable. However, let me emphasise that the problem of insufficient information flows also goes the other way. Home country authorities have also experienced difficulties in getting accurate information from host authorities. A result of the lack of cooperation has been suboptimal solutions, the breaking up of banks and a move towards nationalistic objectives. Experiences from the crisis prove that it is easy to sign an MoU in good times, but much more difficult to live up to the spirit of that MoU in bad times. Financial integration will continue. The question, then, is how do we improve cross-border crisis management? Part of the problem today is a lack of mutual trust. In bad times, trust is essential for sharing information. Reaching a joint assessment and making efficient decisions often require frank and open-hearted discussions. Such discussions will not take place if the parties do not trust each other. I believe that we must put effort into building trust among authorities. In this respect, the trust shared among the Governors of the Nordic Central Banks can provide inspiration.
4  See Francis Breedon, Thórarinn G. Pétursson, and Andrew Rose: Exchange Rate Policy in Small Rich Economies, Central Bank of Iceland, Working Paper no. 53. 2  BIS central bankers’ speeches  2. The tendency of currencies to fluctuate beyond what can be justified by fundamentals has much wider implications in small currency areas than in large ones, as small currency areas are more dependent on foreign markets. When the exchange rate falls, the price level rises, relative prices change, and ultimately, wage levels are affected. Asymmetrical wage and price formation reduces the likelihood that the currency will recover in nominal terms; that is, nominal wage and price increases tend to reverse only partially as the currency recovers, making it less likely that the preceding depreciation will reverse in full. The result is high and unstable inflation, and inflation expectations that fail to be anchored to a low inflation target. Shallow markets and a limited number of participants make it difficult for firms to hedge against foreign exchange risk except for a very short period. 3. A private sector that is highly leveraged – largely in terms of foreign currency loans or CPI-indexed loans – exacerbates the problem associated with exchange rate instability. It exaggerates the procyclical tendency of the exchange rate; that is, it stimulates demand during upswings, when currency appreciation eases the debt burden, and deepens the contraction of demand during the downward cycle, as is evidenced by the contraction in the wake of the recent financial crisis.

In addition, the Government owns substantial assets that it could sell in order to speed up the reduction of gross debt, including its stake in the banks.6 How Iceland would stand vis-à-vis the other Maastricht criteria, such as those pertaining to inflation, interest rate differential, and ERM II membership (for two years prior to accession) is also largely in the hands of the authorities. Through fiscal restraint, they could also contribute to the convergence of long-term interest rates. The social partners could promote low inflation by exercising restraint in wage settlements. Finally, the shorter end of the interest rate spectrum is determined by the market’s self-fulfilling expectations concerning membership itself and by the decisions of the Central Bank. Although a number of arguments indicate that currency union membership would suit Iceland well, it is not certain that a majority of the electorate will vote in favour of European Union membership in a national referendum. The fact that a number of EU member countries are in  5  Intervention would normally be sterilised in order to prevent undesirable effects on money supply. Hence the impact on the exchange rate is unlikely to be large or lasting. 6  According to current targets, the authorities aim to reduce gross public sector debt to 70% of GDP by 2015. 4  BIS central bankers’ speeches  financial distress, not least those permitted to join the EMU through rather liberal interpretation of the Maastricht criteria, does not increase the likelihood that the referendum would pass.
In all cases, and to ensure adequate liquidity, instruments designed last year will continue to be in force throughout this year and, if necessary, they will be extended in order to ensure the proper operation of the financial system, so that it may be able to play its role of channeling credit to the non-financial private sector. 6  BIS Review 41/2009  It is important to highlight that, for mechanisms of monetary policy transmission to work correctly, the money market must be aligned with the MPR. There is no gain in reducing the interest rate if such reduction is not transmitted to the rest of the market. Therefore, when the crisis worsened, the first task was to ease liquidity pressures. The unfolding of the crisis and its consequent effects on inflation forecasts brought the possibility for a monetary easing. Said monetary easing has had a significant extent when compared to our past experiences and to what has been done by other central banks. During the first quarter, the MPR was reduced by 600 base points – from 8.25% to 2.25%. It is important to note once again that our economy has not suffered any of the problems undergone by other economies in their financial systems. Therefore, monetary easing in Chile does not seek to re-establish the operation of credit, as it may happen elsewhere; rather, it has been totally consistent with the inflationary outlook.

The World Bank’s investment arm, the IFC, will be setting up in Singapore its first Asset Management Company office outside Washington DC, to co-invest in regional infrastructure projects. •  Last year, Temasek Holdings partnered Singapore-based banks to establish Clifford Capital, which aims to plug financing gaps faced by Singapore-based companies involved in long-tenor, cross-border infrastructure projects. •  MAS is exploring with industry players how capital market solutions can encourage investor interest through project bonds, infrastructure debt funds, and project loan securitisation. Pan-Asian focus A third pillar of Singapore’s value proposition as a financial centre is its pan-Asian focus. With strong links to all the key Asian economies, Singapore is a natural gateway for international firms looking to access Asia, and for Asian businesses to access the world. There are three new areas of opportunity that play to Singapore’s pan-Asian focus: ASEAN connectivity, OTC derivatives infrastructure, and offshore RMB business. BIS central bankers’ speeches  5  ASEAN connectivity First, ASEAN connectivity. Singapore, in partnership with our ASEAN neighbours, is actively pursuing greater harmonisation and integration across the region’s financial markets. •  We are trying to harmonise rules and regulations and develop integrated trading, clearing and settlement infrastructure. •  For example, ASEAN regulators are currently working on a framework to facilitate cross-border offerings of collective investment schemes. This initiative aims to promote greater flow of capital across the region and enhance investor choice.
It improves on the 1988 Accord by aligning risk weights with a borrower’s creditworthiness as indicated by an external credit rating. The IRB approach goes further and is one of the most innovative features of the New Accord. It has been constructed to build upon and further encourage investments banks are already making in their internal risk management systems. As you know, these systems have been developed and further refined to promote a bank’s competitiveness and to protect it against loss - and not just to respond to a regulatory mandate. Banks using the IRB approach will be permitted to quantify key measures of a borrower’s creditworthiness in determining the corresponding capital requirement. This will include estimating the likelihood that the borrower will default. Many banks will also be able to provide internal estimates of other key variables, such as the recovery rate if a borrower were to default and the likelihood of a credit line being drawn upon. While banks adopting the IRB approach will have the flexibility to rely on their own estimates of key risk parameters, those estimates will be subject to a set of minimum operational requirements. The aim of these standards is to ensure that these critical inputs have integrity and are the product of a system the bank relies upon to perform its day-to-day operations. Further, through pillars two and three, the new framework builds in additional checks and balances to ensure that banks’ systems will generate accurate and timely credit assessments.

To better understand how that happened and what it portends, it is useful to think of inflation in terms of three distinct layers of an onion. In this analogy, the onion's outer layer consists of prices of globally traded commoditiessuch as lumber, steel, grains, and oil. They have experienced a surge in demand as the global economy has rebounded from the pandemic downturn. In addition, Russia's war on Ukraine and the resulting actions have caused energy prices to soar. These higher costs get passed on as higher prices for consumers. I am sure everyone in this room has been forced to manage skyrocketing costs on important supplies over the past two years. The middle layer of the inflation onion is made up of products-especially durable goods like appliances, furniture, and autos-that have been affected by severe supply-chain disruptions. Many of you have also had first-hand experience with the impact of shutdowns and supply-chain bottlenecks. There haven't been enough inputs to produce products, and not enough products to sell-all at a time when demand has been skyhigh. Many of you have also had customers lining up at your doors-but not enough products in stock. This imbalance between supply and demand has contributed to large price increases. To give some examples, prices for furniture rose over 13 percent last year, new cars were up nearly 12 percent, and used vehicles skyrocketed an astounding 50 percent. The innermost layer of the onion consists of underlying inflation, which reflects the overall balance between supply and demand in the economy.
It resulted in additional strengthening of the currency component in the banks' balance sheets. On June 30, 2009, the share of the liabilities with currency component in the total liabilities of the banking system equaled 54.7% and in comparison  4  BIS Review 127/2009  with December 31, 2008, registered an increase of 5.7 percentage points, while the assets with currency component participated with 56.5% in the banks' total assets, which is an increase of 4.2 percentage points compared to the end of 2008. Second, the reduced volume of banks' activities, followed by higher significance of the credit risk in the risks spectrum the banks face with, reflected also on their profitability. The profit the banks realized during the six months of the year, in the amount of Denar 646 million, is lower almost by four times compared to that registered in the same period of the preceding year. Third, despite the intensified carefulness of the banks in the banking activities conduct, in the first half of 2009 the trend of deterioration of the indicators for their credit portfolio quality continued. On June 30,2009, the credit exposure with higher risk degree (classified in the risk categories "C", "D" and "E") participated with 7.6% in the total credit exposure of the banks. These movements in the banks' credit portfolio primarily reflect the hampered working conditions of the domestic credit users as a result of the economic crisis.

A: It is true that there is currently an enormous amount of liquidity at the global level in general and in the euro area in particular. And there are very low risk premia across all asset classes, not just for public debt. This necessitates great vigilance on the part of investors and authorities in order to avoid encouraging excessive risk-taking. And it will also be very important to exercise macroeconomic vigilance, because there is going to be abundant  2  BIS central bankers’ speeches  liquidity in the next few years. To achieve this, macro prudential instruments should be used to their full extend. Q: Spain is issuing bonds at historically low interest rates, but its debt is standing at around 100% of GDP and within ten years it will be faced with enormous payouts upon maturity. What is going to happen then? A: It is no mystery: debt sustainability depends on a sound fiscal policy, and Spain is on the way to achieving this. It is taking time, but Spain has already made good progress on reducing the deficit. This work is not yet done and should continue until equilibrium is reached. Debt sustainability requires a significant increase in nominal GDP growth. The ECB’s contribution is to bring inflation back to levels below and close to 2% for the euro area as a whole, as set out in our mandate. However, in the long term the most important thing is real growth and this can only be achieved by increasing productivity.
Part 3 At this point, allow me to offer some reflections on the changing economic and financial landscape for internationally active financial institutions. Asia is host to a diverse group of foreign financial institutions, many of which have a long history and entrenched presence in the region, with strong roots in our local economies. For the most part, these institutions have made important contributions to the development of domestic financial systems and economies. This includes meeting the demands for financial services in areas not being extensively served by the domestic financial system. While the international policy response to the global financial crisis has been extensive and on an unprecedented scale, an area that has not been as extensive is the cross-border dimension of policy making. More specifically, the global financial crisis has highlighted the gaps in the international framework for the regulation and supervision of the cross-border activities of financial institutions. This has generated renewed concerns on the extent to which external shocks might be transmitted to the domestic economies as a result of the presence of such international foreign financial institutions. As part of the international regulatory reforms, significant progress has been made to ensure that systemically important financial institutions have a higher degree of resilience and stronger incentives to reduce their systemic risks over time. This includes through the holding of higher capital, and requirements for all global SIFIs (systemically important financial institutions) to develop recovery and resolution plans.

Rates are considerably lower in Sweden (4.25), Denmark (3.50) and Finland (3.25). Wage developments over the last few years can contribute to explaining the differences. In Norway wage growth has been high over the last five years, reflecting a tight labour market. Looking at data for wage growth from the OECD, the ranking of interest rate levels in the Nordic region corresponds to the ranking of average wage growth since 1998. The Norwegian krone has appreciated by around 15 per cent since mid-2000. Seen over a longer period, the krone has been rather stable. The present level is only around 6 per cent stronger than in 1990. Over this longer period, other Nordic currencies have shown larger fluctuations. Over the last two years, the appreciation of the Norwegian krone has been driven by the wide and increased interest rate differential between Norway and other countries. The interest rate differential reflects high growth in wages and aggregate demand in Norway. There is thus a clear link between cost pressures in the Norwegian economy and the exchange rate. The link works through interest rate expectations driving the krone upwards. The appreciation of the krone has a dampening effect on inflation. At the same time, profitability in the internationally exposed sector is under pressure both due to higher wage costs and the appreciation of the krone. But the krone can move in both directions. It will not appreciate indefinitely. If the krone follows the path of the forward rate, it will depreciate in the years ahead.