samchain/econo-pairs-v1 huggingface dataset:
From there, I strongly urge banks to work with your customers to take advantage of the good liquidity in both SOR and SORA markets in the next 6-12 months to proactively transition legacy contracts. 26 If we manage to front load this work early and transition the substantive bulk of legacy books by early 2022, this will leave ample time for us to deal with any residual tough legacy transactions. That would be a good place to be in, when we meet again this time next year. 27  Thank you very much, I wish you all fruitful discussions for the rest of this webinar. ***  [1] The Association of Banks in Singapore (ABS) is a non-profit organisation that represents the interests  of the commercial and investment banking community. The Singapore Foreign Exchange Market Committee (SFEMC) aims to foster the growth and development of Singapore as a leading global financial centre in Asia, with a specific focus on foreign exchange, money markets, fixed income and derivative markets. https://www.mas.gov.sg/news/speeches/2021/pushing-ahead-with-sor-sora-transition-in-2021  6/7  12/02/2021  "Pushing Ahead with SOR-SORA Transition in 2021" - Keynote Speech by Mr Leong Sing Chiong, Deputy Managing Director (Markets …  [2] The Steering Committee for SOR & SIBOR Transition to SORA or SC-STS is an industry-led Steering  Committee tasked with overseeing the transition from SOR to SORA. The SC-STS is chaired by Mr Samuel Tsien, Group CEO of OCBC Bank and ABS Chairman. [3] See relevant announcements here .

Third, the euro area had not put in place a resolution mechanism before the beginning of the crisis. I believe that important decisions have been taken on these three points, which should bring significant improvements if they are fully implemented: –  Europe has considerably enhanced its fiscal discipline framework. The legislative package (the so-called “Six Pack”) entered into force in December and considerably reinforces the Stability and Growth Pact: the surveillance powers of the European Commission over national budgets have been enhanced, sanctions have become quasi-automatic, the criteria for public debt and public spending are being more closely scrutinised and a new framework for the surveillance of macroeconomic and competitiveness imbalances has been put in place. In addition, 25 European Heads of State or government signed the Treaty on Stability, Coordination and Governance which establishes a comprehensive new “fiscal compact” including a requirement for national structural deficit not to exceed 0.5% of GDP. These new rules must now be fully implemented by each country. –  Besides, Europe has equipped itself with an instrument to combat crises. At the last European Council meetings, it was decided to bring forward the creation of the permanent European Stability Mechanism (ESM) to July 2012, and to make it more powerful, increasing the lending capacity of the ESM to USD 1 trillion. It is absolutely necessary that this strong tool becomes fully operational as soon as possible.
If risks of a new financial crisis were to mount up in some distant future, a central bank could not stand idly by. The type of monetary policy regime with an explicit inflation target that applies in Sweden and other countries does, however, provide ways of coming to terms with problems from fluctuating asset prices. For one thing, the regime means that in the event of asset market instability, the monetary stance is adjusted automatically in a stabilising direction. As asset prices affect aggregate demand and this is an important mechanism for inflation, interest rates will be raised when asset prices move up and vice versa. This can be expected to exert some stabilising effect on asset markets. For another thing, macroeconomic stability as such should have a stabilising influence on financial markets. Focus on the provision of credit While a credible macroeconomic policy is needed to prevent financial crises, it is probably not sufficient by itself. It is also necessary to oversee and supervise the financial system, which includes having appropriate rules for the operations of banks and other credit institutions. In the final analysis, it was the provision of credit that lay at the heart of the events in the 1990s to which I have referred. Extensive credit risks constituted the problem and it seems that banks made similar mistakes time and again.

This applies to the generosity of domestic banks in financing asset investments of private players, as well as to the propensity of international banks to place foreign currency at the disposal of domestic counterparties. Lending to financial institutions tends to be highly concentrated and this exacerbates the situation in times of financial turbulence. It may also be asked whether credit assessments were as thorough as they should have been. What are the reasons for this? One is probably the difficulties for both banks and supervisors in judging the risks in credit commitments. Credit risks are not simple to handle, neither is it easy to obtain a clear picture of different players’ loan portfolios. So genuine difficulties in making assessments are one explanation. Another is that in certain cases, instead of attempting to assess risks independently, banks appear to have simply followed the herd. A recurrent theme in the decade’s crises accordingly seems to be the underestimation of credit risks. It is therefore up to the banks to establish a better credit policy in their institutions. This credit policy must pervade the whole establishment, from individual credit managers up to the more comprehensive strategies of executives and boardrooms. But that is not sufficient, or rather it probably will not happen unless measures are also taken by the regulatory and supervisory authorities. This is because in their lending and general behaviour, banks are influenced by their expectations of how authorities will act in the event of a crisis.
If there is a more rapid downswing than expected, the problems in the mortgage market may be more profound and spread to other sectors of the credit market. And of course the unrest in the financial markets can in turn contribute to a broader slowdown in the US economy. The situation remains uncertain and there is considerable sensitivity to new negative information and to other shocks. And there will probably be more bad news from the United States and Europe. We were all taken by surprise This autumn has seen a number of unpleasant surprises and, as I have said, there is reason to believe that the unrest will continue. The Riksbank, like most other central banks, had previously warned that there were difficulties in the credit market, particularly the low risk premiums. The situation we have seen was therefore not entirely unexpected. However, something that was underestimated was how quickly and by how much the price of risk rose, as well as how quickly problems in a distant part of the US credit market could spread throughout the world and have such a strong impact on the interbank market, which is the actual core of the international financial system. BIS Review 136/2007  5  To those wishing to learn more about the market turbulence, I can warmly recommend the Riksbank's Financial Stability Report, which will be published soon.

Some of these problems are dealt with by the new capital adequacy rules in Basel II. Nevertheless, it is essential that the authorities play an active role to ensure better insight. And this is also very much in the market’s own interests. The uncertainty remains The outcome of the current information will depend on how subprime loans are valued in the long term. If interest rate payments from the underlying loans are received as calculated, there is no need to write down the value for this reason. However, it looks as though there will be more defaults on payments than originally feared. In addition, it takes several months from the time that a household defaults on payment of a loan until it reaches the minus side of a balance sheet. Although a number of banks have already made major losses when forced to write down the value of their assets, it will be a long time before all the cards are on the table. There are also considerable problems with valuations. Banks and other investors are to write down the value of their assets, but there are rarely any market prices for the structured products containing mortgages. The valuation problems may force the banks to take bigger write downs than what is motivated by the underlying credit quality. An important factor in all of this is US economic activity.
Therefore investors may still prefer to avoid being heavily weighted in a country with structural rigidities, or high public debt levels, and will on the contrary overweight their asset allocation in countries with well-designed fiscal and structural policies. In the same vein, this should suggest that the level of connection between stock exchanges in Europe and the US could be time varying, considering that the underlying factors are also driven by policies that are implemented independently. As a matter of fact, and not surprinsingly, correlations of yields between European stock indexes appear to be higher than those between European and US indexes, and these correlations have increased since 1999. These results seem valid even taking into account the increase in correlations due to the increase in absolute 9 volatility levels . 6  RAJAN and ZINGALES – 2002 – Second ECB international banking conference . 7  MORANA, BELTRATTI – 2002 – The effects of the introduction of the euro on the volatility of European stock markets – Journal of Banking and Finance. 8  Source: FEFSI – Fédération Européenne des Fonds et Sociétés d’Investissement – in THE EURO EQUITY MARKET – ECB 2001. 9  Banque de France Research department calculations – . Correlations calculated as monthly averages. The impact of market shocks is neutralized by taking into account changes in long term interest rates.

From a financial management point of view, large investors may give priority to companies with a low risk profile, in order to bring back their own asset portfolios to levels of volatility matching their requirements. Therefore listed companies will have an incentive to adjust their risk profile and avoid more hazardous –which may also be more innovative– investment projects. Therefore, “entrepeneurship” may be curbed and the growth potential may be influenced adversely. Another impact of volatility on financial management is related to recourse to hedging, namely derivative products. As I mentioned earlier, derivatives are a driving force behind mature financial markets, and their strong development in the last two decades is merely consequence of the benefits they have generated. More precisely, derivatives and related financial innovations have enabled companies to transfer the impact of interest rate and currency fluctuations to financial institutions or investors that were ready to manage it, whereby facilitating international trade or project financing. Meanwhile, the pricing of derivatives is closely linked to volatility. As volatility is indeed difficult to predict, market practitioners have developed models, which are constantly being refined. Over time, market participants, –especially banks,– have become more competent in managing risk, while being left that residual risks which are more complex and harder to control. These consequences would not be a major concern, if the episodes of excessive volatility were only accidental. Peaks of volatility clearly reflect macroeconomic imbalances, as soon as market participants take into account the relevant information.
A very topical issue is how the accounting and auditing rules should be designed to create the best possible conditions for lenders and investors to form an opinion of a company’s future profits and ability to pay. It is never possible to completely prevent unlawful actions, but is there something that can be done to avoid such scandals as have arisen with the fall of Enron and Worldcom? Transparency must in any case be our guiding star! The present situation Finally, I should like to comment on the present situation. Quite contrary to what many feared, the downturn in economic activity following the unusually strong and prolonged upturn that was driven by the US economy appears to be moderate and short-lived. Growth appears to be on the way up already this year. The heavy fall on the stock markets, terrorist acts, the crisis in Argentina and the Enron affair do not seem to have had excessively negative effects on the global economy. There is still some uncertainty, particularly with regard to the capacity of the US economy to once again take on its role as engine for growth. This uncertainty is partly connected with whether we have really seen the entire downside of the financial bubble, and partly with the consequences of the terrorist attacks. Uncertainty has increased somewhat in recent weeks, but we can still assert that the turbulence in the financial markets does not appear to have had particularly major effects on the real economy. What could be the explanation for this?

New instruments and techniques for spreading risks probably lead to a general reduction in the risk of serious financial crises. All in all, there are many indications that the real economy effects of the severe stock market fall will be limited. However, at the same time, it is not possible to write off the risk of financial imbalances having accumulated that could create problems in the future. It is possible that the asymmetry in monetary policy, which I have earlier mentioned, where the central banks act rapidly in response to a decline in asset prices, but have been more cautious when asset prices have risen, has contributed to this. 6  BIS Review 43/2002
2.1  Prevention  At the international level, the implementation of preventative measures is already well advanced, in that the Basel Committee on Banking Supervision – in coordination with decisions by the G20 and the FSB – has decided on important measures in the fields of capital and liquidity regulation. The consultation package on this matter will be published in early 2010. The measures designed to strengthen capital include stricter calibration of risk weights to determine the regulatory capital, improvement in the quality of this capital buffer and a direct limitation on the level of debt (leverage ratio). The combined effect of all these measures will  BIS Review 167/2009  1  be analysed by the Basel Committee during the course of 2010 in order to calibrate the overall capital requirements. Liquidity regulation measures are aimed at securing financial institutions’ flow of liquidity, particularly during times of crisis. The Basel Committee is proposing a global minimum standard for liquidity regulation. This is to ensure that financial institutions build up a liquidity buffer which allows them to remain liquid in short-term and medium-term stress scenarios. In line with the decisions of the Basel Committee, we have already implemented stricter riskweighted capital requirements in Switzerland, supplemented by a leverage ratio. The capital requirements are designed to be anticyclical, i.e. in good times, banks are required to build up a capital buffer in excess of a given minimum level. By contrast, in bad times, the capital buffer is permitted to fall below that level.

Thus, in markets cleared through a central counterparty, all market participants have just one single counterparty, rather than numerous bilateral business relationships, and the complexity of the financial system is significantly reduced. What is even more important, however, is the fact that, in the event of a bank collapse, a central counterparty guarantees that it will fulfil the commitments it has entered into with respect to the other market participants, thereby eliminating the traditional domino effect. That is why, together with other central banks and supervisory authorities, the SNB is supporting the banks’ ongoing efforts to clear a larger part of the enormous over-the-counter derivatives market through central counterparties. These central counterparties come at a cost, since it goes without saying that they must run a very sound risk management system. For even a central counterparty could be threatened with failure. Since the consequences of such an event would be catastrophic, central counterparties need to command sufficient financial resources to ensure that they can withstand the failure of the largest market participant, even in extreme market conditions. 4. Political responsibility  The SNB is investing substantial resources in actively carrying forward the approaches to solving the “too big to fail” and “too big to rescue” issues that have just been outlined – not just in international bodies like the FSB or the Basel Committee, but also at the national level, in conjunction with FINMA. The reasons for this are obvious.
China One country which will have a major impact on East Asia’s fortunes is China. China’s reforms and opening up contributed to the excitement and optimism of the Asian boom. A stable China will contribute to confidence in Asia, and encourage investments and growth throughout the region. The Chinese economy does face daunting problems. Non-performing loans of the bank sector are huge. The state-owned enterprises urgently need reform, which will put millions out of work and cause difficult social problems. Foreign investments have slowed down, the economy is experiencing deflation, and the Government is resorting to fiscal pump-priming to boost growth. But there are important positive factors. China’s policies of liberalisation will continue. These market reforms have benefited wide segments of the Chinese population, at all levels of society and government. They are far too entrenched to be reversed. The Chinese people are ambitious, and forward looking, and have high aspirations to improve their lives and strengthen their country. Their dynamism will propel and sustain China’s economic development and modernisation. Singapore: tapping new opportunities In Singapore, we are making fundamental changes to keep ourselves competitive, to tap emerging opportunities and attract foreign investments. When the crisis struck, our immediate priority was to reduce business costs and strengthen our competitiveness. Last November the government implemented a major package to do this. We lowered government taxes, rentals and charges. We also cut wage costs by 15%, by cutting variable bonuses, as well as employer contributions to the CPF – the government-run compulsory savings scheme.

It is now widely accepted that these are determined by factors that are not directly affected by monetary policy, such as the rate of technological advances and the efficient functioning of various markets. In general terms, one can say that the policy conducted by the Riksbank is aimed partly at limiting the inevitable deviations from the inflation target and partly at ensuring that the real economy does not fluctuate excessively. The objective of monetary policy is price stability, but the Riksbank also considers real economy considerations to be important. This is characteristic of what is known as flexible inflation targeting, which as far as I know, is conducted by all central banks that have inflation targets. Monetary policy affects the economy with a certain time lag. Monetary policy decisions must therefore be based on forecasts of future inflation. Normally, monetary policy is aimed at achieving the inflation target within two years to avoid the deviations from target from being too large and too protracted. This two-year horizon can be regarded as a restriction that the Riksbank has placed upon itself as a means of upholding confidence in the inflation target. At the same time, it provides an opportunity to show consideration for the real economy.
This will provide a clear division of responsibility. Could the discussion about new banking sector regulation be a case of the pendulum swinging back towards the regulatory optimism that I described earlier? The picture is probably more nuanced. The banks have shown a striking ability to adapt, a skill which they hardly intend to relinquish. It must be acknowledged that no regulation can prevent financial institutions from encountering difficulties. A new regulatory framework must therefore ensure that banks have the ultimate responsibility for the risk undertaken. Regulatory compliance will then also be in their own interest. Conclusion In my address this evening, I have sought to gather together some historical threads relating to the design of economic policy through our recent history and at the same time provide some glimpses of developments in the field of economics. Views on macroeconomic management have changed in this period – influenced by economic developments and events. Perhaps the policy response during the financial crisis also reflected a swing of the pendulum towards increased regulatory optimism. On the other hand, the financial crisis required full deployment of instruments. Measures were far-going and some were unconventional. In some countries, the bill to be paid is substantial. In their prize-winning work, Kydland and Prescott raised the question of discretion versus policy rules. Today, we have perhaps opted for “both, please”. An economic policy that is conducted blindly according to a rule, or only oriented towards solving day-to-day problems, can have adverse effects.

Someone has to pay the bill. The rapid growth in government debt in Europe and the US is consistent with a well known historical pattern. Fiscal policy was used actively in most countries to curb rising unemployment. The mistakes of the 1930s were not to be repeated. The intention was good and the policy was most likely appropriate, but weak public balances became even weaker. On top of this, some countries provided substantial government funding to banks. The situation came to a head in several euro area countries, initially in Greece, which had allowed deficits to creep up during the growth period. In the next round, Ireland, Portugal and Spain came under pressure and had to payer higher interest rates on new loans. The UK also ran a government budget deficit in the favourable pre-crisis years and when tax revenues rapidly declined and social security spending rose, the deficit increased to more than 10 per cent of GDP and government debt doubled. The authorities in many countries must now tread a difficult balance. Controlling debt requires an economy with a back strong enough to carry it. It is not certain that low interest rates are sufficient to sustain the nascent recovery if fiscal policy is tightened. Credible  2  BIS central bankers’ speeches  reforms that limit public spending in the long run, combined with moderate tightening in the short run, could be an appropriate strategy. Governments that saved during the expansion may have the scope for pursuing that approach. Greece did not save.