samchain/econo-pairs-v1 huggingface dataset:
The same applies to net foreign debt, where Iceland will be even more of a middle-of-theroad country when the dust has settled and the failed banks have been wound up, as can be seen from Graph 7. BIS Review 139/2010  7  When the economy has stabilised and sovereign debt concerns have subsided, what are the key economic challenges facing Iceland? At the most fundamental level, they could be captured in one sentence: create the conditions for robust growth and reintegrate Iceland into international capital markets. But there are many elements that must fall into place if this is to happen. The Central Bank has been predicting that recovery will take hold in the second half of this year, which means that recovery should have started by now. There are actually signs, but not hard data, to support this. But it is not a strong or a robust recovery. If it is to turn into a robust recovery, we need much more progress on internal private sector debt restructuring and we must increase business investment from its present historically low level. This, in turn, requires a lower level of uncertainty about future demand and businesses’ operating conditions, and more foreign direct investment would be very helpful as well. If successfully carried out, the removal of the comprehensive controls on capital outflows and the reintegration into international capital markets should also support growth going forward. The Central Bank has stated that there are three prerequisites for taking the next steps in lifting capital controls.

Graph 1 shows the progress that has been made so far with fiscal consolidation and the plans embedded in the fiscal budget for 2011. Provided the plans are carried out, the consolidation involved will be impressive in both historical and international comparison, with a roughly 9 percentage point improvement in the non-cyclically adjusted fiscal balance from 2009 to 2012, even though there will be a significant slack in the economy for most of the period. Although it has been delayed and has faced obstacles on the way, the reconstruction of the domestic financial sector is far advanced. The three major commercial banks have been recapitalised, with foreign creditors taking a majority stake in two of them and the State  BIS Review 139/2010  3  holding a majority in the third. At the end of June, all three had capital ratios above 16%, most of it common equity. As a result, Iceland’s banks meet Basel III requirements more than two times over. The recapitalisation of the savings banks is in its final stages. In June of this year, however, question marks were raised about the capital position of the banking system when the Supreme Court of Iceland ruled that linking ISK loans to exchange rates was illegal. The banking system had a large number of such contracts on its books. The precise scope of the problem was uncertain, but more importantly, it was not clear what interest rates these loans should carry when they were no longer exchange rate-linked.
This has been associated with the expansion of asset management: as at the end of 2015, the total assets under management of the top 100 asset managers exceeded $ At the same time, there has been a shift of capital flows away from advanced economies to emerging markets. Whereas these economies received less than 10% of cross border flows before the crisis, they have received 25% of those flows since 2009. The growth of market-based finance and asset management is creating new sources of funding, adding welcome diversity to the financial system, particularly for emerging markets. And in some ways these flows are less risky – for example the average maturity of international securities issued by emerging markets is 10 years, reducing rollover risk and exposure to a sudden flight of capital. But market-based flows have risks nonetheless. As Chart 6 shows, portfolio flows to emerging markets have been just as volatile as bank flows once their relative sizes have been taken into account. 14  And Hoggarth et  al (forthcoming) find that portfolio debt flows to emerging markets in particular are pro-cyclical, in that they rise when global volatility is low and reverse when global volatility increases, especially when denominated in foreign currencies. So as these gain in importance relative to bank flows emerging markets could have greater volatility inflicted on them by global factors. As well as the type of instrument, risk also depends on who is purchasing those instruments.

There is research underway at the Bank of England which studies the effect of credit growth abroad on 4  financial stability at home, in particular, on the probability of experiencing a banking crisis . It finds that even when domestic credit growth is moderate, elevated credit growth abroad could result in financial instability at home for example by boosting cross-border lending, through spillovers into domestic asset prices or by creating the potential for contagion in the event of a banking crisis abroad. 5  In terms of magnitudes, a one standard deviation in foreign credit growth over five years increases the 6  probability of a domestic banking crisis by around 2 percentage points - a relatively large number given the  3  IMF (2016). Cesa-Bianchi et al. (forthcoming). 5 In this research, domestic credit growth is defined as credit extended by domestic banks to the private non-financial sector in a given country. Foreign credit growth is defined as the average of the growth in credit extended by domestic banks to the domestic private nonfinancial sector in all other countries. 6 On the basis of modelling and assumptions set out in Technical Appendix 1: Foreign credit growth and domestic financial stability. 4  3  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  3  7  overall frequency of these crises is about 3% .
11  Carhart M. (2003), “Global Tactical Asset Allocation” in Litterman R. (ed) “Modern Investment Management”, Goldman Sachs Asset Management, John Wiley and Sons, New Jersey, 2003. 12  Solnik B. (1974), “Why Not Diversify Internationally Rather Than Domestically?” Financial Analysts Journal. 30, 4 (July/August 1974). Reprinted in Financial Analysts Journal. 51, 1 (January/February 1995). 13  Stewart F., Pension Fund Investment in Hedge Funds, OECD Working Papers on Insurance and Private Pensions, No. 13. OECD September 2007. 14  Survey on investment regulations of pension funds, OECD, July 2007. 4  BIS Review 134/2007  4.  payment systems, which process the cash settlement of a transaction,  Beyond doubt, this model is simplified a bit and serves only as a starting point for further analysis. I would like to confine it to two elements: securities settlement systems and payment systems. Securities settlement systems and payment systems currently comprise a couple of large systems of international, pan-European or even global character (e.g. CLS) operated either by private institutions (Euroclear, Clearstream, EURO1 and STEP2) or by central banks (TARGET) as well as by many domestic and local systems, including central depositories of securities and depositories maintained by central banks, clearing houses and other systems, e.g. card systems. On account of the adopted diverse legal and market solutions, the present system of capital market infrastructure cannot be deemed optimal.

Christian Noyer: Spheres of influence in the international monetary system Speech by Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, at the Round-table 1 “Fragmentation Risk in Financial Services: A Retreat From Globalization?”, 21st Conference of Montreal, Montreal, 8 June 2015. *  *  *  For many casual observers, there is a close link between money and geopolitics. Historically, money is an attribute of the Sovereign. It can easily be seen as an instrument to project power and influence. There are numerous instances over the last two millennia where monetary power has been used to finance military expansion or, more simply, to assert and exercise government authority. I would not go as far as Michael Bordo and Angela Redish who state, in a recent paper, that “the chronology of monetary history is driven by warfare”; but there is some historical truth in their assertion. Today, however, we live in a regime of fiat money with independent Central Banks in most advanced and emerging economies. Money is not supposed to serve any other purpose than help the economy to function and stabilize through its three main – technical – attributes: as a medium of exchange, a unit of account and a store of value. Yet, the language of geopolitics still permeates the discussion on the international monetary system. Eminent authorities, for instance, casually talk about “currency wars”.
Moving forward, the ASEAN Strategic Action Plan for SME Development 2016–2025 will also focus on promoting productivity, technology and innovation, access to financing, enhancing market access and internationalisation, while also enhancing the policy and regulatory environment, and promoting entrepreneurship and human capital development. 2  BIS central bankers’ speeches  Fifth and finally, SMEs in the region will also benefit from ASEAN’s strategic economic linkages with the greater Asia and with other parts of the world, including the advanced economies and other emerging regions. Several countries have entered into bilateral agreements, including trade agreements with ASEAN to enhance economic cooperation. These multilateral and bilateral engagements have the potential to create many new business opportunities for ASEAN SMEs. Greater financial integration as a catalyst of growth for SMEs Let me now turn to the prospects for greater regional financial integration and its potential to support growth for the ASEAN SMEs. Given the region’s high savings rate of approximately 30% of GDP, there is immense scope for greater financial integration in the region. An intensification of financial integration in ASEAN will serve to enhance the more effective intermediation of funds and thus the efficient allocation of resources in the region, thereby acting as a catalyst to achieve a growth that is mutually reinforcing for the economies in the region. This will allow for excess savings in one country to be channelled into productive investments in another country within the region.

This is critical to ensure the benefits of regional integration are experienced by all in the region. Conclusion While the future for ASEAN looks promising, ASEAN businesses, including SMEs, need to consider and explore an ASEAN strategy and to view ASEAN as an increasingly integrated market. Having such regional or international perspectives may prove to be a game changer for SMEs, paving a path towards sustained growth, increased job creation, and higher innovation capacity. A crucial element in the ASEAN economic agenda is the development of the SME sector which will contribute to stronger and more equitable growth in the region. The next frontier for SMEs is to emerge as regional players that are not constrained by the domestic consumer base. SMEs possess the potential to participate in global production networks by riding on ASEAN’s intrinsic strengths and prospects, multiple SME-focused policy initiatives as well as the continued wave of regional financial integration. This will allow for the transition for SMEs to benefit immensely from the ongoing regional economic and financial integration and thus contribute towards a balanced and sustainable growth of our region. 4  BIS central bankers’ speeches
On the upside, there were price rises associated with the early supply- side disruptions and frictional costs of adjusting supply chains, that fortunately proved mostly transitory and “second order” in terms of contributions to overall inflation. But these cost-push factors could well rise again and thus bear close monitoring. 8. In the labour market, it is noteworthy that wages did not fall in several major economies. Wage growth was 4.8% in the US last year, 2.7% in the Eurozone, 4.3% in China, and 1.4% in Singapore. Part of this reflected some degree of nominal wage rigidity, induced by the roll-out of substantive wage subsidies meant to reduce the incidence of job separation in the initial stages of the crisis. Another statistical issue may have led to mismeasurement here. As a disproportionate number of lower wage workers became unemployed during the crisis, more so than during earlier downturns, compositional changes in employment would have led to overestimates of wage growth. The usual aggregate average wage series are typically not based on a fixed set of jobs or workers in continuous full-time employment. [1] 9. Second, at this stage, the risk of disinflation has receded as prices are oﬀ their local minima and underlying cost and consumer price pressures are picking up, though only gradually alongside the growth rebound. The IMF generally expects contained inflation pressures in most countries [2] . Higher commodity prices will mechanically raise consumer price indices in the short term.

BIS Review 27/2004  1
This lowers the aggregate pool of capital that might be needed by the banking system. If this pool of capital is large enough to accommodate future crisis needs, private sector capital insurance may offer a better cost/risk trade-off than self-insurance. As history shows, however, this is a not inconsiderable “if”. Further work would be needed to establish what size insurance scheme would genuinely augment the capital pool. 5. Conclusion  Over the course of the past 800 years, the terms of trade between the state and the banks have first swung decisively one way and then the other. For the majority of this period, the state was reliant on the deep pockets of the banks to finance periodic fiscal crises. But for at least the past century the pendulum has swung back, with the state often needing to dig deep to keep crisis-prone banks afloat. Events of the past two years have tested even the deep pockets of many states. In so doing, they have added momentum to the century-long pendulum swing. Reversing direction will not be easy. It is likely to require a financial sector reform effort every bit as radical as followed the Great Depression. It is an open question whether reform efforts to date, while slowing the swing, can bring about that change of direction. References Bagehot, W (1873), Lombard Street, a Description of the Money Market, Henry S. King and Co. Publishers.

Stripping out the effects of the two World Wars, this ratio has declined fairly steadily, from around 15% in 1830 to around 5% at the start of this century. Financial panics over this period did little to interrupt the downward trend. Events of the past two years have dramatically altered that picture. In relation to GDP, base money in the UK has risen by a factor of four – easily the highest financial crisis multiplier ever. 8 It has reached a peak last witnessed almost two centuries ago. Past liquidity crises are foothills by comparison with recent Himalayan heights. Measures of central bank balance sheet expansion under-estimate the scale of liquidity support provided during this crisis. As in Harman’s time, there has been a widening of the collateral taken by most central banks in their operations. 9 The taking of imaginative forms of collateral has a history which predates central banking: in the 12th century, King Baldwin II of Jerusalem secured a loan using his beard as collateral. Nonetheless, recent efforts are probably unprecedented in scope. Collateral swaps, typically not involving beards but often requiring haircuts, have also played a significant role during this crisis. They too do not expand base money, but do liquefy banks’ balance sheets. And guarantees of wholesale liabilities have similarly served as an important liquidity insurance device for a number of countries. Together, these two instruments have totalled between 10% and 40% of GDP across the UK, US and euro-area.
Here we seek to make the financial system more resilient. This is the world of risk management, prudential standards, liquidity standards, resilience of payment  6  BIS Review 36/2005  systems etc. It can involve the promotion of codes and standards over a wide field ranging from accounting to improving legal certainty, and management of countries’ external balance sheets. Decision making about priorities is particularly challenging because we cannot be clear ex-ante how well the mitigation techniques will work, and we often need to rely on others to implement them. In addition we need to ask whether we are the right party to act. We also need to think about the relevance of our activities to our mandate – or “must dos”. In some areas, for example payment systems – one of our “must dos” – it is clear that we have a responsibility to reduce risks. In this case the questions we need to answer relate to the degree, methods and resource implications. But in other areas whether we should act is less clear cut. What particular contributions can we make and are there any areas where we can sensibly act alone? We need to ascertain areas where we can achieve results both domestically with HMT and FSA, and internationally with organisations such as the Basel Committee, the Committee on Payment and Settlement Systems and the Financial Stability Forum. Perhaps I can mention one area to which the challenge process suggests we should devote considerable resources – global institutional liquidity.

This one is perhaps more straightforward: a lack of suitable talent will be a major obstacle to Regtech adoption. As a start, no doubt a combination of upskilling and sourcing new hires is the key to developing talents with the right combination of local regulatory knowledge, technical skills and business acumen. To take that one step further, if Hong Kong can evolve into a hub for global Regtech talent, we will be uniquely positioned to build and export Regtech solutions to the rest of the world. 46. The White Paper suggests developing a Regtech skills framework. This framework will cover suitable modules and competency standards. And we would seek to identify the skills required for different roles and which would help speed up Regtech adoption, and then we would help train and develop both new entrants and existing practitioners. 47. Finally, on “Momentum Matters”. All our hard work will not bear fruits if the momentum for changes cannot be sustained. It is therefore crucial to keep the industry engaged in the years ahead. One suggestion is that we introduce a benchmark for our progress in increasing Regtech adoption. This benchmark will provide us with a holistic framework that will enable us to visualise the success of our Regtech initiatives. 48. That is a quick snapshot of the key recommendations in the White Paper. In fact, we are already putting some of those recommendations into action. 49. For example, a flagship event is already planned for the first half of 2021.
Started in the previous year, the realisation of this project was finalised in 2016. Now, the Bank of Albania has an Operational Risk Management Policy, which sets out the core principles for the identification, assessment, control, management and follow-up of the operational risk as an integrated process at bank level. We 6/8  BIS central bankers' speeches  have also established a dedicated unit for evaluating and making recommendations for addressing vulnerabilities. The internal audit function acts also as a consultant service for the Supervisory Council. The audit engagements focused on: (i) issuing opinions on the sufficiency of internal audits established by the Management for audited functions/processes, including supportive applications for the activities; (ii) issuing opinions on the accuracy and completeness of financial data in periodic reports; and (iii) other audit and non-audit engagements, ad hoc, upon special request by the Administrators or other institutions outside the Bank. With added prudence on designing work processes by Bank units, at the beginning of 2017, a project started on the implementation of the Programme on the Business Continuity Management at the Bank of Albania. The realisation of this project ranks the Bank of Albania among the banks applying best practices on institutional good governance. 5. Medium-term strategy and strengthening of independence, accountability and transparency The medium-term development strategy of the Bank of Albania for 2016–18 was launched in 2016 to activate the entire potential of the Bank of Albania.

For example, the Central Banks and Supervisors Network for Greening the Financial System, commonly known as the NGFS, in which over 40 central banks and supervisors have already reached a consensus: and I quote, “climate-related risks are a source of financial risk and therefore fall squarely within the mandates of central banks and supervisors to ensure that the financial system is resilient to these risks.” The HKMA is a member of NGFS, and we are fully on board with this 7. The Bank for International Settlements is also committed to supporting green finance and investment practices, and supports the NGFS research on climate-related risks and their implications for financial stability. 8. The HKMA has many roles – as a bank regulator, one of the largest asset owners globally, and a key promoter of market development. Hence, the HKMA is in a very advantageous position to promote green and sustainable finance in Hong Kong. In May this year, we unveiled three sets of measures on green finance: 9. The first measure is a three-phased approach to promote Green and Sustainable Banking in Hong Kong. Initially, to develop a common framework to assess the existing baseline of individual banks to establish how “green” they are, by talking to the industry to identify the parameters to be included in the assessment; secondly, to engage and consult the industry on whether supervisory requirements are needed; and if needed, how the HKMA should develop our supervisory expectation or requirements; and thirdly to focus on implementation, monitoring and evaluation. 10.