samchain/econo-pairs-v1 huggingface dataset:
And, finally, a no creditor worse off valuation measures the counterfactual valuation of the firm in an insolvency to ensure that shareholders or creditors are left no worse off than they would have been in an insolvency. The EBA’s technical standards in this area will be a key determinant of our approach to valuation. •  Exchange: A desirable feature of resolution by bail-in, is to be able to transfer to those bond holders subject to bail, any compensation they are due as soon as possible. Compensation would take the form of the firm’s shares or other securities and the resolution would be structured so as to deliver as quickly as possible to the relevant bond holders an interim instrument which is tradeable but also facilitates the change of ownership that follows a bail-in to meet the relevant regulatory requirements. To this end we have been working on Certificates of Entitlement (CEs) which may provide a possible solution. CEs, issued by the resolved bank, represent the contingent right to receive the firm’s shares as compensation. Over the resolution weekend, trading and settlement of the firm’s bonds will be blocked and CEs will be credited to the bondholders’ accounts in the clearing systems (through their custodians). The bondholders, now CE holders, will have a beneficial interest in the ordinary shares of the firm.

I think, in time, the EU BRRD will come to be seen as one of the most significant pieces of banking legislation to emerge from the financial crisis. 6  BIS central bankers’ speeches  But we must finish the job. For effective resolution to be feasible (i.e. technically practicable) and credible (i.e. widely understood and believable), firms need to be resolvable. MREL is central to this. And for the world’s largest banks, for almost all of whom the EU is either home or host, it is crucial that the FSB develops an internationally-agreed standard that establishes a common framework, like MREL, outside Europe and ensures that G-SIBs have sufficient appropriately loss absorbing capacity should they fail in order to be able to implement an orderly, effective resolution of any firm and therefore end “Too Big to Fail”. BIS central bankers’ speeches  7
Although some of the implementation details differ, the SCAP and DFAST/CCAR supervisory stress tests made broadly similar assumptions on these issues. The guiding assumption is that a bank’s balance sheet and the nature of its exposures do not change over the stress test horizon. The supervisory estimates do not embed behavioral responses to the stress scenario, including additional risk mitigation or changes in business strategy. 11 Further, maturing positions are assumed to be replaced on a like-for-like basis, maintaining the overall credit characteristics of the starting-date portfolios.12 Importantly, banks are assumed to maintain credit supply even as economic conditions in the hypothetical scenario deteriorate. This is a policy judgment reflecting the objectives of the supervisory stress test regime.13 The implication of these choices is that the stress test results are conditional not just on the stress scenario but also on the policy choices embedded in the exercise, rather than being an historically unbiased projection of banks’ behavior under stressed economic and financial market conditions. These assumptions have been implemented in different ways in different supervisory stress test exercises: in SCAP, the balance sheet was assumed to be fixed over the stress test horizon; in the recent DFAST and CCAR stress tests, supervisory models have been used (these models actually tend to result in growth in the balance sheet over the stress test horizon)14 ; and in the currently proposed Stress Capital Buffer (SCB) approach, the balance sheet would once again be held fixed. My discussion thus far has focused on what the stress tests measure.

June 22, 2018. www.newyorkfed.org/newsevents/speeches/2018/hir180622 16 European Banking Authority. “2018 EU-Wide Stress Test:  Methodological Note.” November 17, 2017. www.eba.europa.eu/documents/10180/2106643/2018+EU-wide+stress+test+-+Methodological+Note.pdf  17 Til Schuermann. “The Fed’s Stress Tests Add Risk to the Financial System.” Wall Street Journal. March 19,  2013. www.federalreserve.gov/newsevents/files/bcreg20090507a1.pdf  8/8  BIS central bankers' speeches
If there are free resources in the economy in the initial situation, GDP can increase more quickly than the long-term sustainable growth without resources being under so much strain that inflation exceeds the target and vice-versa in a situation where resources are already under strain. This is conditional on inflation expectations being around 2%. However, CPI is also affected by price changes that have other basic causes than the demand situation. Examples of such factors are changes in indirect taxes and subsidies, housing costs and oil price changes caused by supply disturbances. Inflation expectations also take this into account. However, forward-looking assessments include a large measure of uncertainty. In the Riksbank’s inflation report, we describe the scenario thought to be most probable. If we make the assessment that the risks of higher inflation are greater than the risks of lower inflation or vice-versa, this is normally taken into consideration in the conduct of monetary policy. Macroeconomic costs can motivate departures When the credibility of the inflation target has been established, the probability is less that inflation target policy will lead to conflict with the desire to stabilise output and employment. In the long-term, monetary policy cannot affect growth and employment other than by creating stable expectations about future inflation. However, if monetary policy is very strictly focused on always stabilising CPI inflation at 2%, this can cause major fluctuations in output. Among other things, this has to do with the time it takes for monetary policy to have an effect on inflation.

However, the Riksbank makes the assessment that an annual rate of increase of 2-2.5% is reasonable. In the short term, output can continue to increase more rapidly as long as there are free resources. An important issue is the extent to which unemployment can fall before the situation in the labour market becomes so strained that wages and prices start to increase so much as to threaten the inflation target. The most recent demands in pay bargaining indicate that the new contracts will be somewhat higher than their predecessors, which probably reflects the fact that we are now in a period of increasing resource use. However, developments during the recent period show that large groups who have previously been unemployed have been able to return to the labour market. The increased use of resources has not led to a rise in nominal wage increases, which indicates that flexibility in the labour market is higher than we previously believed. The labour market policy carried out by the government may have made it easier in various ways for people to move from unemployment to work although the importance of labour market policy is difficult to measure. However, it is reasonable to assume that re-entry into the labour market is facilitated by unemployed people being given the opportunity via various measures of maintaining normal routines. Employability may also have increased due to the labour market training offered. Stable inflation expectations and new arrangements for collective agreements have probably also reduced wage inflation.
I repeat from the previous forum that it is necessary for you to consider the macroeconomic consequences of your behaviour at an industrial or institutional level, since they are important factors which ensure the long-term stability of your institutions and the system in general. The difference between large and small-size banks, when public confidence in the system in general is in question, is relative. Each bank has its role and share in the system and the difference between the concept “a small bank” or “a large bank” in the context of systemic risks, is ever-increasingly reducing. In addition, the U.S. financial crisis was caused by the imprudence of financial institutions to assess the stability of private debt and accurately weigh the effect of macroeconomic developments on the U.S. household budget. Its consequences remind us of the expression “there's no such thing as a free lunch”. With regard to the issues explored in the forum held in April, I would like to bring to your attention two other issues that I believe remain indisputable priorities for our work in the future. As promised in the first forum, the Law “On repurchase agreements” has become effective upon its entry into force on August 19th 2008. Although this project was pre-announced by the Bank of Albania, according to the information made available by the operational staff of the central bank and the respective commercial banks, we notice that the entry into force of this law has found you unprepared.

The Riksbank does not consider the present level of house prices and household debt to be an immediate threat to financial stability, but their current growth rates are unsustainable, so future problems cannot be ruled out. BIS central bankers’ speeches  3  Figure 4: Real residential property prices in Sweden and other countries  Index 1995 q1 = 100. Source: Reuters Ecowin and Statistics Sweden. (The Riksbank’s Financial stability report 2010:2)  If the current growth rates of house prices and household debt are considered to be a potential threat to future financial stability, it may be necessary to act soon, because it will take time for any measures to take effect. So the Riksbank is investigating instruments (existing or potential) to prevent or mitigate this threat by smoothing the house price cycle, controlling household indebtedness or improving the resilience of banks. There are a range of prohibitive instruments that could be used to restrict the choices of households and financial institutions. These could include, for example, the introduction of a binding maximum loan-to-value ratio on household borrowing 5 or a maximum debt-to-income ratio, or requiring mortgage interest payments to be fixed for a certain time period. There is also a range of taxation instruments that could act on the price of the activities of households and financial institutions. This includes changes to financial institutions’ capital requirements or changes to the reserve requirements (SEK or foreign currency that financial institutions are required to hold at the central bank).
Nonetheless, higher prices are temporarily weighing on household purchasing power and we must remain vigilant. Sud Ouest: Might the speculative attacks on the some countries’ sovereign debt and concerns over the euro’s future dampen consumption and investment? Christian Noyer: No, there are no grounds for concern. Europe has shown over the past few months that it is capable of rallying together and providing effective and innovative solutions for countries that fall prey to speculative forces. Sud Ouest: But it is evident that this is not enough to deter investors from attacking the sovereign debts of some countries… Christian Noyer: At present, these attacks are centred on the countries of Southern Europe. Markets tend to tar with the same brush all the countries perceived as the most fragile in the euro area, whereas their situations differ considerably. The sovereign debt dynamics of some non-European G7 countries are more worrying that those of many euro area countries. Sud Ouest: Aren’t speculators betting on a break-up of the euro area? Christian Noyer: By definition, this scenario is totally ruled out: no country is willing to consider this option since it would have an astronomic cost for all euro area countries, the strong and the weak alike. Sud Ouest: Won’t the fiscal austerity measures imposed on euro area countries that have benefited from EU-IMF loans have exorbitant social costs? Christian Noyer: They may be hard to bear. But it would be unrealistic to think that growth and purchasing power can be lastingly sustained if public deficits continue to rise.

Sud Ouest: France has taken over the presidency of the G-20 group of leading nations. And, on this occasion, Nicolas Sarkozy would like to pave the way towards a reform of the international monetary system that would reduce the dollar's role. Do you see this as a possibility? BIS central bankers’ speeches  1  Christian Noyer: The aim is not to reduce the role of the dollar. Even though it has already partially lost its sole reserve currency status, the dollar will continue to play a major role in trade. France is approaching this presidency with an open mind, but there is no doubt that the international monetary system is no longer suited to today's world. Designed in the 1940s and reformed in the 1970s, this system bears the hallmark of an era when international trade played a much smaller role, and when emerging countries such as China, India and Brazil were much less significant players in the global economy. This new configuration must be taken into account. Today, we must hold discussions and debates, measure the magnitude of capital flows that could have very destabilising effects on some countries and strive in a united manner to correct the major imbalances that are dampening world growth. 2  BIS central bankers’ speeches
The banks are still operating under capital controls, and they have limited access to foreign funding. At this point, when the First Review of the economic programme of the Government and the IMF appears imminent, it is timely to begin lifting the capital controls. As the economy and financial system are rebuilt and conditions improve on the global markets, we expect that the Republic of Iceland will have access to foreign credit markets once again, and that the banks will follow in its wake. At that point, it will be more important than it is now to decide to what extent Icelandic financial institutions will be allowed to engage in international banking operations. In a sense, the financial crisis represented a run on such operations. The crisis revealed clearly the contradiction between the internationalisation of finance, on the one hand, and national supervision and safety nets, on the other. The problem was particularly prominent in the case of the EEA regulatory framework, which had gone farther in lifting restrictions on crossborder banking activities than was the case in many other parts of the world. In this context and others, it is important to bear in mind that international or pan-European regulatory provisions represent minimum requirements. Iceland and other nations may need to adapt those provisions to the specific risks that they face. In some areas, this may imply more stringent capital adequacy and liquidity requirements, or special restrictions on financial undertakings’ activities.

This possibility was created on 16 March 2023 based on an emergency ordinance by the Federal  Page 4/6  Zurich, 23 March 2023 Thomas Jordan, Martin Schlegel and Andréa M. Maechler  News conference  Council. The emergency ordinance allows for emergency liquidity assistance of up to CHF 100 billion without collateral being delivered. However, the claim is secured by means of preferential rights in bankruptcy proceedings. Preferential rights in bankruptcy proceedings mean that, in the event of bankruptcy, the SNB’s claim would be repaid with high priority. Only a few other claims take precedence over the SNB loan, such as wages or deposits covered by depositor protection. Third, Credit Suisse can access liquidity assistance of up to CHF 100 billion under a public liquidity backstop (PLB). This possibility was also created on 16 March 2023 based on an emergency ordinance by the Federal Council. This SNB liquidity assistance also has preferential rights in bankruptcy proceedings. The claim is additionally secured by a federal guarantee. I now hand over to Andréa Maechler. Implementation of monetary policy and international cooperation  Ladies and gentlemen, tension on the financial markets has increased markedly following the collapse of Silicon Valley Bank. In times of heightened uncertainty, US dollar liquidity is particularly sought after. In a coordinated action with five other central banks, we therefore announced on Sunday evening that we would enhance the provision of US dollar liquidity via the standing US dollar swap line arrangements.
But we also collect and analyze enormous amounts of other information, both in the form of data and reports from members of the communities we serve, to help us assess the state of the economy and inform our decision-making. The Economic Outlook I’ll start off with the most common measure of the overall economy: gross domestic product, or GDP. I expect inflation-adjusted, or real, GDP to rebound sharply this year. Indeed, with strong 1/4  BIS central bankers' speeches  federal fiscal support and continued progress on vaccination, GDP growth this year could be the strongest we’ve seen in decades. Such a robust rebound would be very welcome after the toughest period for the economy in living memory and a winter where the pandemic has been particularly severe. The resurgence of COVID-19 over the past few months caused consumers to pull back on spending, resulting in significant job losses in some sectors—especially in leisure and hospitality. In past recessions, we have typically seen a decline in manufacturing jobs, while the service sector—establishments like hotels, bars, and restaurants—was not affected to the same extent. But the pandemic has flipped the script in that regard. Indeed, this time, both the manufacturing and housing sectors have rebounded sharply since last spring, while much of the service sector remains depressed. The pandemic has had a truly devastating effect on employment.

I don’t expect our lives to look like they did a year ago—our sense of “normal” may be forever altered—but with vaccinations well underway and a significant decline nationwide in confirmed new cases, I do expect that we can start to look toward a time that will be “more like normal." In my remarks today I’ll set the scene for the economic picture locally, and for the U.S. economy as a whole. I’ll also highlight some of the disparities we are seeing in the labor market. Finally, I’ll share more about the Federal Reserve’s response and how I view the path forward. Before I continue, I need to give the standard Fed disclaimer that the views I express today are mine alone and do not necessarily reflect those of the Federal Open Market Committee (FOMC) or others in the Federal Reserve System. Dual Mandate Prior to sharing the outlook, I think it’s important to take a step back and explain some of the key factors that my colleagues and I at the Federal Reserve consider in reaching our policy decisions. The Fed has what we call a “dual mandate,” which are two goals set by Congress: maximum employment and price stability. With these goals in mind, our focus is understanding developments that affect labor markets, inflation, and economic growth.
Road shows to investors in the US and Europe ceased to be the preserve of the international giants and became common among smaller players whose whole asset base was in the UK. As the difficulties in the financial system have persisted and worsened, it has become clear that these developments have created real structural weaknesses in the banking sector. In particular: •  inflated aggregate balance sheets, whose expansion had outpaced growth in the real economy;  •  expansion into assets whose underlying value, credit quality and liquidity were uncertain;  •  liability structures which were overly reliant on sustained availability of wholesale funding whose maturity was often short;  •  capital and liquidity buffers which became too low , given these asset and liability risks; and  •  underappreciated, but potent interconnections between firms in the global financial system. Policy response For most of the last year, the Bank has adopted a twin track approach, as part of the Tripartite partnership with the FSA and the Treasury. The first track has been to provide liquidity to the market in order to give most banks time to make the necessary adjustments – including by raising capital. That has involved an increasing range of measures including long term repos on a wide range of collateral and the introduction of the Special Liquidity Scheme which allows banks to swap illiquid assets for Treasury Bills for periods of up to three years.

The recent dollar swaps and further extensions of the SLS and eligible collateral are further steps in that direction. And we recently announced a more permanent structure of money market operations including the introduction of a discount window. The second track has been to work closely with the FSA and Treasury to limit the repercussions from the failure of banks which do not have an independent future whether through arranging mergers or managing closure. Northern Rock was the first in line and led to a lot of criticism of the tripartite. I think we have learned a great deal over the year and have shown more skill and speed with subsequent cases including Bradford and Bingley recently. But in the last 6 weeks it became clear that this case by case approach was not enough either at home or internationally. Despite the provision of additional liquidity to the system, market conditions got worse over the summer as worries grew about the downturn in the broader economy and its consequences for bank losses. Once again the triggers for a further downward lurch came in the US. First Fannie Mae and Freddie Mac were taken into conservatorship and then, the following weekend, Lehman Brothers proved unable to find a buyer and filed for bankruptcy. That shook markets which had expected it to be saved by the State, if necessary, as had been the case with Bear Stearns earlier in the year.