samchain/econo-pairs-v1 huggingface dataset:
According to this source, the households that have the larger debts are those less likely to lose their income. Meanwhile, after the global crisis of 2008–2009, estimates suggest that the fraction of households in a situation of financial risk is around 4 percent, close to where it was in 2007. 1 Information made public point to severe problems in the corporate governance of this company, with irresponsible lending policies and major abusive deficiencies in the information on their credit portfolio that was delivered to investors and supervising organizations. It is also likely that the law has been broken with respect to the delivery of information and the operation of the lending activities. This has triggered a discussion over the role that different organisms should have played, including management, the board of directors, auditors and risk-rating agencies. Certainly there have been grave irregularities that need clarification. It is also necessary to establish any potential flaws of our regulatory and supervisory framework. I would like to say, however, that at this time we must let the mechanisms of supervision and sanction provided for in the laws governing the securities and stock markets do their work. Also, those responsible for the damages caused must be investigated and punished with all the rigor of the law for their wrongdoing. Episodes like this one should never occur again. This case brought to light two important flaws from which we must draw lessons in legislation, regulations and control. What we have now is obviously insufficient.

José De Gregorio: The Monetary Policy Report and the Financial Stability Report Presentation by Mr José De Gregorio, Governor of the Central Bank of Chile, before the Finance Commission of the Honorable Senate of the Republic, Santiago de Chile, 20 June 2011. *  *  *  The Monetary Policy Report of June 2011 and the Financial Stability Report of the first half of 2011 are available at http://www.bcentral.cl. Introduction Mr. President of the Finance Committee of the Senate, Senator Eduardo Frei, senators. I am grateful for the invitation of this Committee to the Board of the Central Bank of Chile to share our views on the recent macroeconomic and financial developments, their prospects and implications for monetary and financial policy making. These are contained in detail in the Monetary Policy Report (IPoM) of June 2011 and in the Financial Stability Report (IEF) of the first half of 2011. The March IPoM stated that our economy was facing important challenges. In particular, it configured a scenario where inflation could post significant increases in the following months. We then said that the duty of monetary policy was to withdraw the monetary stimulus in a timely manner, in order to ensure that the inflationary pressures we were seeing and, especially, the risks we faced, would not alter the convergence of inflation to the threepercent target. Consistently, the Board acted preventively and raised the monetary policy interest rate (MPR) by 150 basis points between March and May this year, taking it above levels forecast by the market.
Zeti Akhtar Aziz: Cross-border challenges in implementing Basel II in emerging economies Keynote address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the PublicPrivate Dialogue Session of the 7th SEACEN Conference of Directors of Supervision of Asia Pacific Economies, Kuala Lumpur, 4 August 2005. *  *  *  Dr. Subarjo, Executive Director of the SEACEN Centre, Mr. Karl Cordewener, Deputy Secretary General of the Secretariat of the Basel Committee on Banking Supervision, Distinguished Guests, Thank you for the invitation to speak at this 7th SEACEN Conference of Directors of Supervision of Asia Pacific Economies organised by the SEACEN Centre in collaboration with the APEC Business Advisory Council, the Asian Bankers' Association and the Pacific Economic Cooperation Council. This event is of particular significance as it brings together the regulators and practitioners from the banking industry, to exchange ideas and share experiences on the operational and policy issues involved in cross-border banking, in particular, with respect to the implementation of Basel II. The participation of regulators and industry players from Latin America will, I believe further enrich the discussions. It is in our common interest to resolve these issues expeditiously, as the implementation date of 2007 for G10 countries approaches. Ladies and Gentlemen, In most emerging markets, the banking sector forms the key component of the financial system that drives the economy.

Such efforts would therefore need to be implemented within the agenda of the overall financial sector development programme in the individual countries. It is within this context that Malaysia has chosen to adopt a flexible timeframe, underpinned by four key implementation principles: •  First, for capacity building measures to be implemented;  •  Second, within these capacity building efforts, the emphasis on the enhancement of the risk management framework for all banking institutions;  •  Third, to emphasise on strong business justification instead of regulatory mandate in the adoption of the more advanced approaches; and  •  Finally, to enhance the supervisory methodology to assess the internal models and the advanced risk management systems. The rigorousness of the analytical process under Basel II will certainly be demanding for banking institutions. It is equally demanding from the supervisory perspective to develop an appropriate response and assessment framework on these processes. Instead of over focus on validating the detailed quantitative and statistical procedures, supervisory attention would need to ensure that the analytical processes are undertaken to support decision making, and not merely to meet regulatory  expectations. Supervisors also need to undergo early training to identify the relevant issues when undertaking the supervisory assessment. This underscores, the importance of efforts to accelerate supervisory capacity building efforts, particularly in the development of specialised supervisory skills to conduct model validation.
In the UK, the Investment Association is also finalising with its members a guide intended to assist firms navigate their own assessment of the Code’s requirements against existing requirements, for public release in early 2019. All of these should help firms looking for assistance in signing up. 9  https://www.fca.org.uk/about/recognised‐industry‐codes 8  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  8  But it is worth remembering too the cost of not supporting the Code: the heightened risk of returning to the doubt, uncertainty and collapse in trust in the operation of the FX and other core wholesale markets that we saw a decade ago, and the more restrictive regulation that would inevitably follow. The Code offers the opportunity for the market collectively to recognise its responsibilities in a fair, balanced and cost effective way in the interests of the users of the capital markets: your customers. Conclusions If there was one lesson of the Financial Crisis ten years ago, it was the importance of the market taking collective responsibility for raising and maintaining standards in financial markets, of which foreign exchange forms a vital part. Buy-side firms, as huge and growing players in those markets, have a vital role to play in that. By signing up to the Global Code, you signal a commitment not just to uphold those standards yourselves, but also to hold others to them – and in so doing help ensure the markets remain deep, liquid, safe and fair to everyone.

GFXC signup data from the GFXC global index of public registers, https://www.globalfxc.org/global_index.htm. 5  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  5  Why not sign up to the Global Code? Four explanations and responses  In this section, I want to respond to four stylised explanations sometimes heard from buy-side firms still uncertain about signing up to the Code. Explanation (1): Lack of awareness – “What is the Global Code? I’ve never heard of it, and don’t know what signing up involves.” Given the breadth of engagement during the drafting of the Code, and the raft of publicity since its launch, it is hard to believe that asset managers of the size listed in Table 2 are unaware of its existence. A wealth of materials on the Code is available on the GFXC2 and national FX Committee3 websites. The UK’s Investment Association has produced a public summary of the Code4 and a guide to signing up,5 explaining the process of making a public commitment for buy-side firms. Similar material is available from the Association of Corporate Treasurers6. And a raft of conferences and training courses have covered the main themes of the Code. Nevertheless, the global buy-side is a diverse community, so a key priority for the GFXC outreach work is to consider what more can be done to ‘push’ targeted material to a wider range of firms, using the contacts of national FX committees and trade associations to help organise a dedicated event in the New Year.
It is now possible to trade globally over the telephone or over the net from anywhere in this world – and no doubt, with the right equipment, from out of this world as well. But those who trade have to come down to earth to effect settlement and, very simply, Hong Kong is where we would like them to be when they land. To serve as a financial centre in a world connected in this way means primarily having the capability and infrastructure to capture these deals and provide safe, efficient and inexpensive settlement and clearing services. This is why we in the HKMA have, since our establishment in 1993, been paying particular attention to building financial infrastructure as the foundation of our strategy in developing Hong Kong as the financial hub of Asia. 25. We built over ten years ago a fully computerised and paperless debt clearing system as part of our efforts to develop the domestic debt market. We have since linked that system with similar debt clearing systems in a number of other jurisdictions to facilitate cross border and cross currency investments in debt markets. We are about to develop our debt clearing system further into what we call an ICSD or an international central securities depository in an attempt to pull debt issues in the region into our system.

We should get well prepared or would lose the momentum quickly. 3. Exit by the U.S. Fed from its unconventional monetary policies is one of the most important external challenges that the region will face in the next year or two. A timely and orderly normalisation of monetary policy in the US should help to slow credit growth and contain asset price inflation in the region. However, a disorderly normalisation process could lead to significant outflows of capital, abrupt tightening of financial conditions and a severe re-pricing of assets. This can result in financial instability and even a sharp slowdown of economic growth in the region, particularly in those economies with weaker fundamentals and higher reliance on external financing. Yet, there is a lively debate about the size of the labour market slack in the US, which could complicate the judgment about inflation risks and the conduct of monetary policy. Indeed, the path of exit is not necessarily smooth, and interest rate volatility could be higher than currently anticipated. 4. While monetary policy normalisation may reflect a pick-up in the growth momentum in the US which should help support Asia’s exports, the strength of this support is subject to some uncertainty. We also need to be aware that economic integration has increased within the region. As identified by the IMF in the REO, the increase in trade and financial integration have strengthened the propagation of growth shocks between regional partners. 5. So, what are our major policy challenges?
If the world is to meet the goals of the Paris Agreement, carbon emissions must be reduced, which means the combustion of fossil fuels, including oil and gas, must also be reduced. But the world will still need energy. How much and what share will have to be covered by oil and gas are uncertain. That will depend on a number of factors, including climate policy and technological developments. Much remains on the technological front. There is still far to go before carbon capture is truly profitable. Alternative energy sources are not being developed fast enough, even if they are becoming more cost-efficient. At the same time, long-term investments lock in emissions for a long time to come. 3 Source: Norwegian Petroleum Directorate (2019) The Shelf 2019. 10  A stricter climate policy is needed, with expanded carbon pricing measures so that it will be profitable to put into use new solutions. In the EU, there are signs of a more ambitious climate policy. Permit prices have increased, and much is being done to promote investment in alternative energy. NORGES BANK ECONOMIC PERSPECTIVES 13 FEBRUARY 2020  The European Commission also recently launched a plan to introduce a tax on imports based on a product’s carbon footprint.4 The ambition is an equal carbon price for all products whether produced in or outside the EU. Even though the EU accounts for a diminishing share of global CO2 emissions, this could also affect emissions in other parts of the world, including emerging economies.

Though we are recording some early signals of a price acceleration – such as the services component of the HICP estimated at 1.6%6 in January –, we observe a weakening in the pass-through from wages to prices: here also, is this weakening temporary – due to an increased time lag – or attributable to more structural factors? We have to consider this issue carefully, which is also currently at stake in the United States. In this context, I still believe that the gradual normalisation of our monetary policy is desirable. Our chained guidance of last December has been less noticed than the successful end to our net asset purchases. But it is efficient in combining clarity about the sequencing – full reinvestments will last for an extended period after a first rate-hike – and flexibility about the timing of each step. Consequently, financial markets tend to adapt their calendar expectations – and hence financial conditions – to the perceived outlook: our chained guidance already provides some stabilisation function, without prejudice to our future decisions. Beside flexibility in the calendar, let me stress another capacity of our monetary policy: pragmatism in its intensity, thanks to the powerful “trio” of instruments at our disposal: the reinvestments of assets, interest rates and liquidity. Concerning this third instrument (provision of liquidity), everybody is aware of the forthcoming expiry of the TLTRO-2 programme, starting in June 2020. The Governing Council will decide about this in due time, with two prerequisites.
[3] Moreover, studies have uncovered a significant lag in discerning the benefits of mitigation measures,[4] which makes it much harder to impose costs on society today if measurable results are available much later. By making the costs of a major, truly global crisis more tangible, the pandemic may help to remove the “tragedy” from Mark Carney’s horizon: after COVID-19, the dramatic consequences of a global climate crisis may be much easier to imagine. And given the need for fundamental structural change after this crisis, the willingness to use this chance to take precautions against the even bigger risk of a climate crisis may have increased. In order to achieve the European Union’s target of net-zero greenhouse gas emissions by 2050, our response to the growing risks of climate change has to start with the way we rebuild our economies after the pandemic. In my remarks this morning, I will argue that three complementary pillars are needed to accelerate the transition towards a low-carbon economy: an effective carbon price, a strong investment programme and a greener financial market. I will also argue that central banks have a role to play in mitigating climate-related risks, even within their traditional mandates, because global warming poses severe risks to price stability. Carbon pricing as the central tool So let me start with the first pillar, the introduction of global carbon pricing. Europe is already spearheading global efforts, which is essential at times when a global solution is not in sight.

In the line of this logic, the raising of confidence would bring about its positive effects even on increasing their banking activity, which will be in compliance with their objective to be in the market with as much dignity as possible. In this discussion I will not focus on the technical aspect of cause explanation and process implementation, which I consider as exhausted by discussions made between respective technical staff, but I will focus on what we intend to reach and on the shortest and safest way to complete this process successfully. Also, I would like to clarify that the individuals will continue to participate in the primary market of securities and this market will continue to be organized by the Bank of Albania. What we intend to reach through this process is: 1. The realization of a smooth transition process, at the smallest cost possible, in terms of maintaining the participation of individuals in the primary market. 2. The reduction of the time which is needed for the realization of treasury bill primary market auction. 3. The increasing possibilities to apply into practice the principle “Delivery versus payment” for operations that will be performed in the secondary and retail Treasury bill market. Here I take into account either the facilitating of procedures or the increased safety for using these securities as collateral and for encouraging the interbank and lending market. 4.
To the contrary, by providing an explicit capital incentive to pursue internal models, the Basel framework effectively provided a subsidy to complexity. Conceptually, that is difficult to justify. Complexity has externality-type properties, making risk more difficult to monitor and manage, not less. Rather than subsidising it, there is a conceptually coherent case for taxing complexity within the regulatory framework. A degree of progress has already been made on this front. For example, the capital surcharge to be levied on the world’s most systemically important institutions has been calibrated with half an eye on the complexity and connectivity of banks’ balance sheets. 25 And the recovery and resolution plans being drawn up for these same firms may, as a by-product, simplify corporate structures in banking. But there is a case for tackling complexity directly and at source. Recent events have re-demonstrated the problems that arise in risk-managing large, complex financial firms with multiple models and management information systems. They make the world’s largest banks, arguably, too big to manage. At present, no explicit regulatory charge is levied on  24  Financial Services Authority (2010). 25  Basel Committee on Banking Supervision (2011). BIS central bankers’ speeches  17  those complexity externalities. Doing so would help protect the system against failure, while providing explicit incentives to simplify balance sheets. What is true within firms is also true across them. Cross-system complexity has exploded over recent decades due to the growth in opaque, intra-financial system chains of exposure.

By design, Basel II served as an incentive device for banks to upgrade their risk management technology. As a by-product, there was a step change in the granularity of the Basel framework. Risk exposures were no longer captured at a broad asset class level. And risk weights on these exposures were no longer confined to five buckets. That meant greater detail and complexity. Reflecting these changes, Basel II came in at 347 pages – an order of magnitude longer than its predecessor. 10 The ink was barely dry on Basel II when the financial crisis struck. This exposed gaping holes in the agreement. In the period since, the response has been to fill the largest of these gaps, with large upwards revisions to the calibration of the Basel framework. Agreement on this revised framework, Basel III, was reached in 2010. In line with historical trends the documents making up Basel III added up to 616 pages, almost double Basel II. 11 The length of the Basel rulebook, if anything, understates its complexity. The move to internal models, and from broad asset classes to individual loan exposures, has resulted in a ballooning in the number of estimated risk weights. For a large, complex bank, this has meant a rise in the number of calculations required from single figures a generation ago to several million today (Haldane (2011)). That increases opacity. It also raises questions about regulatory robustness since it places reliance on a large number of estimated parameters.
If there is one message that a wider public audience takes away from my remarks this morning, I hope it is that. Returning inflation to its 2% target is at the heart of the MPC’s actions over the past 10 months. Ceasing asset purchases; starting to raise Bank Rate; beginning to shrink the asset portfolio; considering starting to sell gilts acquired via QE: all these actions serve to tighten monetary conditions and weigh against inflationary pressures. Of course, there is always the question of whether these actions should have come earlier or been more aggressive. In assessing these claims, we need to be wary of hindsight bias, and recognise the benefits of adopting a measured, determined and purposeful approach to the transition from the very accommodative policies introduced during the global financial crisis and maintained more or less ever since. But now that the initial stage of that transition have been successfully navigated, an immediate issue for monetary policy makers is whether the pace of policy tightening now needs to change. In May, inflation reached 9.1%. [4] The MPC forecasts a further rise to around 11% later in the year, once rises in international commodity prices stemming from Russia’s invasion of Ukraine pass through to UK utility and food prices. For an MPC member charged with achieving the inflation target of 2% – someone in ‘the price stability business’, if you like – this is obviously a very unsatisfactory situation.

13/15  Testifying to this is the letter sent last week by the US authorities to Facebook. In its first paragraph, a request – or rather a demand – is made for the implementation of the project to be delayed while its potential consequences are evaluated. The same paragraph indicates that the libra project “is intended to rival US monetary policy and the dollar”. I do not think this is an exaggerated reaction, since the irruption of big tech has potentially systemic implications. Customer relations I think it is also important to talk about customer relations as another key factor of any future business model. I shall not dwell on this point, the ground for which has been previously covered. But I would like to point out that this change is the only means of responding to the challenge the sector faces to restore its image and reputation. Society has changed in terms of its demands of the financial sector. The rules governing customer-bank relations have likewise changed. A good example of this is the recent law on real estate lending. Banks should, therefore, change to respond to the new social and regulatory reality. Evidently, legal cases from the past continue to weigh on and hamper the restoration of image. But if banks change their behaviour today they will be laying the foundations on which to build the industry’s future reputation. In this respect, last year we saw a decline in claims lodged against banks.