samchain/econo-pairs-v1 huggingface dataset:
Also, a positive, constructive culture can be an important pillar aligned with the execution of a firm’s business strategy. •  Culture cannot be set by fiat. Leadership is indispensable, and requires more than a “tone from the top.” Managers of all levels must take action to promote a greater sense of personal responsibility and stewardship among employees. The next generation of financial leaders will reflect the expectations of leaders today. •  Despite firm-wide statements about values and codes of conduct, banks may have several dissonant sub-cultures. “Silos” or “tribes” as they are sometimes called, appear in most if not all of the episodes I described earlier. By sharing best practices across the industry, firms might identify common warning signs of problems within sub-cultures and behaviors that are incompatible with the firm’s values. •  Diversity of thought and background are valuable cultural assets because they generate better questions and decisions, contributing to effective challenge. A diversity of views, though, must be complemented by a sense of common purpose. Certain basic principles-fair treatment of customers and employees, for examplecannot be open to debate. The Federal Reserve Bank of New York recently launched a webpage that collects resources on bank culture.15 We’ve included the papers by the Group of Thirty and other organizations that I have mentioned, and summaries of our two workshops on culture. I hope you’ll take a look. To conclude, the Financial Crisis and subsequent scandals revealed deep and continuing flaws in the culture of banking.

Notably, none of these recent episodes had anything to do with capital  1  William C. Dudley, Enhancing Financial Stability by Improving Culture in the Financial Services Industry, Remarks at the Workshop on Reforming Culture and Behavior in the Financial Services Industry, October 20, 2014. 2  Cf. William C. Dudley, Opening Remarks at Reforming Culture and Behavior in the Financial Services Industry: Workshop on Progress and Challenges, Federal Reserve Bank of New York, November 5, 2015, (“The banking scandals that followed the financial crisis are evidence that something fundamental is wrong. I would encourage each of you to consider not just specific examples of misconduct, but the patterns within them that point to underlying causes. I suspect we will see a strong overlap with those factors that contributed to the financial crisis.”). 3  SeeThomas C. Baxter, Jr., Reflections on the New Compliance Landscape, Remarks at The New Compliance Landscape: Increasing Roles – Increasing Risks Conference, July 24, 2014. 4  See Order Approving Stipulation and Consent Agreement, In re Make-Whole Payments and Related Bidding Strategies, No. IN 11–8-000, IN 13–5-000, U.S. Federal Energy Regulatory Commission (July 30, 2013). 5  See Baxter, supra n.3. BIS central bankers’ speeches  1  levels or liquidity ratios. The many post-Crisis reforms to bank balance sheets – including the Dodd-Frank Act and new standards developed by the Basel Committee on Bank Supervision and the Financial Stability Board-provided necessary bulwarks against systemic risks.
These policy prerequisites for adopting the euro may, on the other hand, complicate the mobilisation of strong popular support for the euro project. The case for fiscal consolidation may be compelling from a long run growth perspective, but the dividends of such a policy course may fail to materialise in a sufficiently short time to generate the necessary support. Likewise, the introduction of the euro may be perceived as entailing the prospect of higher prices, generating further scepticism among the social partners. And let us not forget that it is these same partners that have to be relied on to deliver the flexibility in the labour and product markets that is required for a successful transition to the euro. An active and constructive social dialogue is, therefore, necessary to support the process. Given the considerable policy challenges inherent in the adoption of the euro, the European Commission and the ECB have an important role to play in providing the NMS with both practical and moral support for their efforts to achieve this next step in European integration. Such support might not only take the form of regular reports and consultations in order to reassure the markets, but also an effort to minimise uncertainties about the application of the criteria used to assess eligibility for euro adoption.

In the more recent period, this trend has been reinforced with increased overseas investments by Korea and Malaysia. Eight, engaging the emergence of large new markets in the region. Overall, as a high level of integration exists at the regional level in terms of trade and FDI, shifts in trading and investment patterns both from external sources into the region and within the region itself have been a dynamic process. Hence, given the emergence of large new markets in the region, the opportunities present in these markets show complementarities in the region. Countries in the region need to therefore focus on these complementarities in new potential areas of growth. In an  BIS Review 43/2003  3  increasingly competitive environment, economic progress in the region is benefiting from the strategic specialisations which are supported by the leverage on comparative advantages. Nine, regional cooperation gathers momentum Given the existing mutual interest amongst countries in the region, regional cooperation efforts are gathering momentum in East Asia, notably in the context of ASEAN+3 and EMEAP. To-date, the focus of such cooperation by Governments has been on regional surveillance, developing institutional arrangements and according high priority to co-operation in trade and investment. The drive toward regional cooperation will continue to increasingly focus on enhancing regional trade and investment linkages to maximise the comparative advantage of each member country. Toward this end, studies have already been commissioned to explore the feasibility and identify the preconditions for the creation of an Asian common market, a logical long-term objective of regional cooperation.
These findings suggest the need for a communications campaign that gives the issue of inflation perceptions priority attention, as well as for effective price monitoring mechanisms. Measures are being taken on both fronts. Inflation perceptions are being addressed in TV slots, newspaper articles and official statements. These messages will be intensified in the coming months. As far as pricing abuses are concerned, the national euro Master Plan has invited businesses to adopt dual display from January 2007 and makes it mandatory from the day the irrevocable conversion rate is fixed until the end of June 2008. The dual display of prices has gained momentum since the introduction of the Fair-pricing Agreements in Retailing (FAIR) initiative towards the end of last year as a voluntary, self-regulating mechanism whereby businesses commit to refrain from increasing prices simply as a result of the changeover. They, in turn, benefit from nationwide publicity recognising their commitment to adopt a code of conduct. 5 In addition, consumers are constantly encouraged to use the national telephone helpline not only to seek information, but also to report cases of suspected noncompliance with the guidelines. With the assistance of international experts, including the Austrian Price Commission, a Euro Observatory has also been set-up to monitor and analyse pricing trends during the changeover period. The unit is supported by 70 Euro Assistants who carry out fieldwork in towns and villages across the island.

Indeed, 65% of Maltese respondents believe that the euro will result in a one-time increase in prices. And this despite the fact that around 60% considered that the euro will deliver price stability in the medium-term; and that a large majority are aware of the various initiatives that are being taken to limit price abuse and consider that the dual display of prices 3 is helping people get used to the new currency. 4  2  53% and 43%, respectively. 3  According to the April 2007 NSO survey, 91.4% of respondents. 4  The first observation is based on the results of Flash Eurobarometer Survey No. 207. The second and third observations are based on the National Statistics Office survey which was conducted a few weeks after the completion of fieldwork for the Eurobarometer survey. While corroborating many of the findings reported in the Eurobarometer survey, including the same level of concern about potential price abuses, the NSO survey reveals some facts which are not discernible through the questions featuring in the Eurobarometer survey, including the two reported here. BIS Review 77/2007  3  What is equally striking is the fact that while a high level of education and young age are correlated with a positive attitude towards the euro, there is no discernible pattern across age groups or education levels when it comes to expectations about the potential inflationary impact of the changeover. Apprehension is widespread.
As a consequence, credit institutions see their loan loss provisions to vary more closely in line with the credit risk existing in their balance sheets, and the profit and loss account fluctuates less over the cycle. The main point here is that this strengthens the solvency of each individual credit institution and the stability of the entire financial system. Before continuing with the background to the dynamic provision, I should like to address a criticism made by accountants. It was said that this provision amounted to a distortion, and sometimes even a manipulation of the income statement. This is far from true. The Spanish regulator required institutions to advise the market of the amount of this provision so that analysts and investors could, if they so wished, “discount” its impact. The mechanism is completely transparent and institutions cannot use it to manipulate their results. Admittedly, bankers did not welcome the statistical provision as warmly as we supervisors did. In fact they openly opposed it at first, arguing, with some reason, that this provision, by tightening the requirements for Spanish institutions alone, gave rise to an uneven playing field, especially for those institutions most heavily exposed to international competition. With time they came to appreciate that this provision helped strengthen their solvency and, therefore, their medium-term attractiveness and resilience, despite the fact that around 10% of their net income had to be assigned to the statistical provision.

In addition to the practical issues I have mentioned, behind dynamic provisioning there lied a conviction, resulting from many years of supervisory experience and, more recently, also from empirical evidence, that credit risk appears in bank balance sheets at the time lending is granted. Risk is an ex ante concept, and default is no more than the ex post manifestation of this credit risk. As I just mentioned, banks commit lending policy errors in upturns, when there is excessive optimism and it is believed that the business cycle has disappeared and that recessions are a relic of the past that will not return, and when bankers, caught up in this wave of exuberance, relax their credit granting standards. By contrast, and as we are all experiencing at the moment, a reaction in the opposite direction occurs in recessionary phases. Banks, pressured by high default rates, which impact their income statement and their level of capital, contract credit significantly, granting financing only to those borrowers whose solvency is beyond all doubt. The end result is as follows: an overly expansionary credit cycle during the upswing and, by contrast, overly contractionary credit growth during the downswing. In addition, there may be a perverse effect on institutions’ income statements and levels of capital. During upswings, the failure to recognise risk through loan loss provisions results in very high profits.
And it would not stop speculators from exploiting the reality that sharp capital movements can themselves affect an economy’s fundamentals and panic other investors. For the avoidance of any misunderstanding I should state once again, for the record, that I am not advocating capital controls of any kind for Hong Kong. The concerns that arise from ‘hot’ capital flows are particularly acute in Asia, whose markets are relatively small by the standards of the large industrial countries, yet relatively liquid by the standards of developing markets as a whole. The world will not become a safer place for such countries — or a better place for intermediating capital flows that ultimately foster growth and development — until we take concrete steps to reform the global financial architecture. Transparency is a critical issue. On the one hand, there is widespread support for the notion that governments should be more open in their operations — and I am happy to say that Hong Kong is at the leading edge in this area. On the other hand, there is only lukewarm support for the notion that the operation of markets could be enhanced by increased transparency on the part of private participants. I fail to see the basis for this asymmetry on conceptual grounds. On practical grounds, there are no doubt important issues to be resolved and obstacles to be overcome. But progress will not be made until all parties concerned start to address the issue in a more energetic and concerted manner.

Dimitar Bogov: Creating an environment for sustainable economic growth in Macedonia Opening address by Mr Dimitar Bogov, Governor of the National Bank of the Republic of Macedonia, at the 13th Macedonian Stock Exchange Annual Conference, Skopje, 4 May 2012. *  *  *  Honorable Mr. Zoran Stavrevski, Deputy President of the Government of the Republic of Macedonia and Minister of Finance, Honorable Mr. Ivan Steriev, Manager of the Macedonian Stock Exchange, Distinguished ladies and gentlemen, During my last year’s address at this conference I announced that “the National Bank will create environment for sustainable economic growth through price stability, stable Denar exchange rate and stable, competitive banking sector which will produce sound credit growth. In order to achieve this, I will seek to conduct policy of optimal level of reference interest rate and optimal level of prudential banking regulation. In my view, optimal interest rate is the lowest interest rate that provides Denar exchange rate stability and price stability, and optimal prudent banking regulation is a regulation that provides necessary bank liquidity and solvency, without being a regulatory burden on the banks’ balance sheets”. Concerning the latter, in September last year, we integrated the Denar and foreign currency liquidity rate in a single liquidity rate. Simultaneously, we recognized a long-term character of twenty percent of time deposits that fall due, promising that this percent will increase in future. With these measures, we ensured larger liquidity management flexibility and higher income for the banks without deteriorating liquidity indicators.
Internal risk assessment procedures must recognise the interrelationships that exist between categories of risk before, not when, markets are under strain.

The ABF Hong Kong Bond Index Fund made history by being the first bond exchange-traded fund launched in Asia. The PAIF has also set two records. It is the first listed Asian bond fund to invest in as many as eight bond markets in the region. As a listed fund, it allows easy access by both institutional and retail investors who wish to have exposure to the Asian bond markets in a cost-effective and convenient manner. Secondly, the PAIF is the first foreign institutional investor that has access to the interbank bond market of Mainland China. This is an important step in the opening up of China’s bond market to foreign participants. I am glad to see that the PAIF has played a catalytic role in development not only in China but also in all the markets in which the fund invests. 4. I take this opportunity to thank State Street Global Advisors (SSgA), the fund manager of the PAIF, for their commitment and dedication to the development of this innovative product and to the idea of an Asian bond market. We have seen a favourable response to the ABF Hong Kong Fund, and I hope that the PAIF, with its broader investor base, will also be well received by markets. I wish you every success in promoting the PAIF. Thank you. BIS Review 50/2005  1
For example, after rising at a 3.25 percent annual rate during the second half of 2009, there has been a progressive slowing – to a 2.75 percent annual rate during the first half of 2010 and, most likely, to an even slower rate when the third-quarter real gross domestic product (GDP) figures are released at the end of this month. With demand growth barely keeping pace with firms’ ability to increase productivity, job creation has been too weak to significantly reduce unemployment, which stands today at 9.6 percent. And, as is typical in such circumstances of considerable slack, the rate of inflation has declined. Viewed through the lens of the Federal Reserve’s dual mandate – the pursuit of the highest level of employment consistent with price stability, the current situation is wholly unsatisfactory. Given the outlook that the upturn appears likely to strengthen only gradually, it will likely be several years before employment and inflation return to levels consistent with the Federal Reserve’s dual mandate. Why are we experiencing this soft patch now? There are several reasons:   As is typical for the early stages of a recovery, the economy over the past four quarters has benefited from a strong inventory cycle. The swing in inventories from liquidation back to restocking contributed about 1.75 percentage points of the 3 percent growth of real GDP over that period. But this effect is now petering out.   The growth impulse from the 2009 fiscal stimulus package is beginning to wane.

We are monitoring developments closely in order to evaluate any potential impact on the housing market, financial institutions and the overall economy. The key role that housing has played during this recession and recovery makes it a timely topic for our regional economic briefing. Regional economic conditions (update since the July regional press briefing) Now, let me turn to regional economic conditions. Overall, the recession seems to have been less severe in much of our region than in many other parts of the country, though unemployment remains unacceptably high. As attendees at previous Regional Press Briefings may recall, the New York Fed produces Coincident Economic Indicators to help track the performance of the regional economy. Since July, these indicators point to recovery in New York State, and particularly in New York City. Although New York City and New York State are recovering, elsewhere in the region, the story is different. In New Jersey, although activity is no longer declining, there has yet to be a sustained recovery. New Jersey’s economy remains essentially flat. An index produced in Puerto Rico by the Government Development Bank shows that the pickup in economic  BIS Review 137/2010  3  activity there in late spring and early summer has retreated and activity in the past few months has again turned down. Now, let’s look at jobs, which are the key for people to truly feel the recovery in their lives.
Such instruments might have proven very helpful had they been in place before and during this crisis. Investors would have anticipated that common equity would be replenished automatically if a firm came under stress, and this knowledge might in turn have tempered anxieties about counterparty risk. At a minimum, contingent capital instruments might have enabled common equity buffers at the weaker firms to be replenished earlier and automatically, thereby reducing uncertainty and the risk of failure. There are many details that still need to be worked out to determine the potential for contingent capital instruments to enhance financial stability. For example, what are the circumstances under which conversion is triggered? How much common equity do debt holders receive upon conversion? However, our early work on this issue suggests that contingent capital may be a promising mechanism for injecting common equity into the banking system in times of stress without unduly raising intermediation costs or pushing financial activity out of the banking sector into the unregulated sector. On the liquidity front, there are a host of initiatives underway. For starters, the Federal Reserve is now supervising most of the holding companies of the systemically important financial institutions. That was not true at the start of the crisis.

Such a long balance sheet would have made further monetary policy measures substantially harder. At the same time, we would have jeopardised the fulfilment of our mandate in the long term, since reabsorbing such a huge volume of liquidity once monetary policy began to normalise would have been very difficult. At its monetary policy assessments, the SNB had analysed the costs and benefits of adhering to the minimum exchange rate. On the basis of this kind of analysis, the Governing Board concluded, on 15 January, that a minimum exchange rate of CHF 1.20 per euro was no longer sustainable, and thus justified, from a monetary policy point of view. If it had ignored the changes in the international environment, the SNB would have jeopardised its credibility. It would have been irresponsible to maintain the minimum exchange rate even longer and thoughtlessly accept the high costs of this policy, without considering its sustainability. Once we had reached this conclusion, swift action was necessary. Holding off any longer would have increased pressure on the minimum exchange rate because of mounting speculation. Had we delayed the discontinuation, the turmoil on the financial markets would have been no less severe. However, the impact on the Swiss economy would have been stronger and the losses on the SNB’s balance sheet would have been greater. Ladies and gentlemen, the decision of 15 January has far-reaching consequences and was anything but easy for me and my colleagues on the Governing Board.