samchain/econo-pairs-v1 huggingface dataset:
Second, changes in the monetary policy of the euro area have repercussions. Interest rate cuts by the ECB usually lead to an appreciation of currencies in neighbouring countries. This dampens growth and lowers inflation. Third, uncertainty during the euro crisis precipitated capital flight towards neighbouring countries, thereby placing exceptional upward pressure on their currencies and thus rapidly changing their monetary conditions. The monetary policy of neighbouring countries must take into account the influences via these channels on domestic economic developments. The most significant advantage of conducting an independent monetary policy is that it allows the central bank to address the specific needs of its own economy. Countries which join a currency union relinquish this ability to control and stabilise in favour of other advantages – for example, by joining a currency union, a country may take on a more credible and therefore more successful monetary policy than its previous one. For Switzerland, however, the ability to pursue an independent monetary policy has clearly paid off. The structure of the Swiss economy is a singular combination of, first, a strong manufacturing sector specialised in producing high-quality, research-intensive goods (think of pharmaceuticals and watchmaking, but also the specialised machinery industry), and second, a major financial centre which, notwithstanding certain setbacks due to the financial crisis, has retained its global reach. Given this structure, the drivers of economic development in Switzerland are therefore often different to those of other European countries, so it makes sense to have an independent monetary policy.

Parentage would also be important – it would be highly desirable from our point of view that an internet bank was itself majority-owned by another well-established bank that could provide guidance and financial support if necessary. In general, we would need to be assured that the virtual bank has “substance”, and is not simply a “concept”, taking advantage of the popularity of the internet. On this basis, our authorisation and supervisory regime for virtual banks would be similar to that for conventional banks. However, an offshore internet bank, whether wholly “virtual” or not, might not attempt to take deposits in Hong Kong in the strict legal sense – in other words, the deposit contract might not necessarily be created in Hong Kong. Instead, the offshore internet bank might invite potential customers to send their money to a location abroad, where the deposit would be legally created. In this case, the bank would be taking deposits outside Hong Kong and would not require authorisation under the Banking Ordinance to carry on a deposit-taking business here. But that is not the end of the story. It is also an offence to advertise for deposits in Hong Kong, even if they are to be taken outside the territory, unless the disclosure requirements of the Fifth Schedule of the Banking Ordinance are adhered to. An advertisement would include one contained on a website. The problem is how to determine whether a particular offshore website is targeted at Hong Kong.
It is hard for domestic monetary policy to offset such effects, both because they are external in nature and because it is unclear how long they will dampen the U.S. recovery. One thing is for certain: Given the effects of banking crises on economic recoveries and the interconnectedness of financial markets, it is imperative that our European partners resolve their banking issues if we are to sustain a prolonged economic upturn. BIS central bankers’ speeches  5  This is not to say that the Federal Reserve has no role to play. Our franchise includes assuring an efficient financial transmission mechanism. For example, everyone acknowledges that small business is the originator of jobs and the incubator of our nation’s prosperity. In addition to wanting to see the whites of the eyes of growing final demand, needing clarity on fiscal policy and wanting regulatory relief, many of the small businesses that Dunk [Bill Dunkelberg] represents – and others that we survey – will need better access to the abundant and cheap liquidity the FOMC has made possible. Small businesses turn to community and regional banks for credit; their credit activity does not move the needle on the dashboards of the megabanks. It is incumbent on the Fed and other bank regulators to reduce the regulatory burdens that are inhibiting – indeed, overwhelming – community bankers whose business it is to lend to creditworthy small businesses. This is a supervisory and regulatory matter, not a matter of general monetary policy.

In the event, the Agents’ survey may, if anything, have understated the slowdown. Annual growth in average weekly earnings peaked at 2.8% in November 2016. It currently stands at 2.1%. Excluding bonuses, it stands at 1.7%. Data on pay settlements suggest that weak profile may persist. Private sector wage settlements are currently running at around 2.0%, down from 3% a year ago. These recent trends in wages, alongside further falls in unemployment, reinforce the impression of an exceptionally weak relationship between wages and employment, a pancake-like Phillips curve. Indeed, it is testimony to the flatness of the Phillips curve that wage growth is at similar levels today to when unemployment was at its recent peak back in 2011. The Bank’s May Inflation Report projections assume wage growth picks up to around 3 ¾% over the next three years. Given that unemployment is projected to be broadly flat over that period, the tight labour market will have to exert increasing upward pressure on pay growth if this wage profile is to be realised. Alternatively, whatever other factors have been dragging on pay growth will have to dissipate. Of course, wages are not the only determinant of underlying inflation pressures. That is why the Bank monitors a range of around 13 other indicators of domestically-generated inflation. Each of these has their own imperfections, but they share the aim of filtering out temporary influences on underlying inflation.
These problems made it difficult to maintain a sustained growth rate in the medium and long term, and rendered our economy particularly sensitive to the adverse events that might occur. Accordingly, redressing these problems through resolute economic policy action, especially in the area of structural reforms, was unavoidable. Notable among these imbalances was the excessive concentration of resources in the real estate sector and high private-sector debt, which were compounded by the persistence of serious structural deficiencies in the functioning of the labour market. Under these conditions, the 2008 and 2009 recession had a most virulent effect on Spain. This gave rise to a very intense fiscal policy response which, along with the other expansionary economic policy measures, helped soften the adverse effects of the crisis on activity. However, the budget deficit rose to a very high level and did not prevent more severe job destruction than in other countries, despite the fact that the decline in output was on a similar scale. The excessive levels reached by both the budget deficit and the unemployment rate opened up additional fronts of vulnerability in our economy, which was particularly affected by its high dependence on external borrowing, despite the enormous correction the external imbalance has undergone in the past two years. Against this background, the Greek crisis has undoubtedly had a contagion effect, exposing the weaknesses of the European institutional arrangements and the potential implications for the more vulnerable countries, Spain among them owing to the above-mentioned reasons.

These two forms of action are equivalent insofar as their main effects are concerned, because in SIPs (which are agreements containing clauses to ensure stability) the capacity to define key strategies and policies is transferred to a central entity and the participating credit institutions largely share their net assets and their liquidity, as well as pooling a high proportion of their profits. 4  BIS Review 92/2010  The FROB has a second mandate: to participate in the restructuring of unviable credit institutions, acting in this case secondarily to the traditional deposit guarantee funds (DGFs). This dual nature of the FROB and the consequent possibility that a distressed institution not involved in a merger or SIP process may undergo a crisis requiring the Fund to intervene (replacing directors and selling the credit institution or transferring its business to a third party) are an implicit incentive for financial institutions to seek partners with which to conclude merger or SIP agreements. The FROB has € billion in capital and € billion of funds from a debt issue and, if needed, it could raise up to € billion of funds from third parties. Since the FROB was set up, a period of 12 months has practically elapsed. The end of this period is marked by the deadline of 30 June 2010 set by the European Commission notification of 28 January 2010 on how to apply the general framework envisaged in it.
Suppose the pension fund owns a large amount of a particular corporate bond and wants to reduce this holding, but the liquidity for outright sales is limited. The fund may take a view that it will have less price impact by gradually selling the bond in the cash market over a period of a few months but, at the same time, it would prefer to take off the market risk immediately. If that is the case, the fund may take out a standardised CDS (Credit Default Swap) contract with a bank, probably written on a basket of corporate bonds issued by the same corporate. There would be basis risk from any mismatch in the bonds, so the CDS is not an exact hedge, but in most scenarios, holding the bond and the CDS contract together will ensure a substantial reduction in the net value of the market position, compared with holding the bond alone. The fund could then unwind the CDS contract simultaneously with slowly selling the cash bond. In short, the superior liquidity of the more homogenous CDS market (which benefits from relatively elastic gross supply) enables the pension fund to reduce the execution costs of its portfolio management whilst not sacrificing its nimbleness in terms of market risk management. In this example, the strategy seems reasonable. The probability that the corporate defaults in the few months the strategy takes to execute is probably pretty low, and the joint probability of the corporate and bank defaulting is even less.

Prices rose by around 3 per cent annually for a long period, but since 1995 they have been falling by about 6 per cent annually. This kink point coincides with the dismantling of the restrictions on textile trade and with a period of rationalisation in retail trade in Norway. The rapid growth of production in China, India and other newly integrated economies has led to a substantial rise in demand for oil and other raw materials. At the same time, increased trade has engendered higher demand for shipping services and favourable freight rates for a period. BIS Review 39/2006  1  These changes have provided Norway with increased revenues thanks to a remarkable strengthening of our terms of trade. Prices for imported goods are falling in relation to prices for goods we export. The impact of the rise in oil and gas prices is particularly strong, but the terms-of-trade gains on goods in the mainland economy have also been high. The situation in Norway differs from that of its Nordic neighbouring countries. Sales of Swedish and Finnish high-tech products are growing strongly in terms of volume, but prices are falling. Denmark has a diversified business sector, which is moving on a steady path overall. The high energy prices have contributed to increased cross-border capital flows as income is transferred from oil importers to oil exporters. Consequently, a savings surplus has been building up in oil exporting countries such as Norway.
Implications of Basel II for supervision  When we last met as the community of bank supervisors in Cape Town under a brilliant South African sun, you may recall that the chairman of the Basel Committee at that time, Bill McDonough, described the revision of the capital framework as a “tremendous journey” for all of us. He was quite right. Our journey has lasted five years. Supervisors, central bankers, and representatives of the industry have spent countless hours researching and debating the paths to follow. The public and transparent nature of our consultations subjected our proposals to intense scrutiny. This made our journey a difficult one, but by testing our ideas, we found ways to improve the capital framework. Today, two years and an ocean away from our mid-point meeting in Cape Town, I am privileged to announce that our journey to “Basel II” concludes a key stage here in Spain. For that, I would like to express my deepest appreciation to you, the members of the supervisory community, for your collaboration, your contributions, and your commitment to the new framework. Basel II emerged from the remarkable spirit of goodwill, cooperation, and dedication to financial stability shared by bank supervisors and central banks worldwide. By providing your perspectives and experience, you helped to ensure the relevance of the “three pillars” to many kinds of banks in many different economies. BIS Review 52/2004  1  Because of your assistance, the question before us today is not whether Basel II is applicable to a particular market.

Robert Ophèle: Micro economic analysis of companies Introductory speech by Mr Robert Ophèle, Second Deputy Governor of the Bank of France, at the Plenary Meeting of the European Committee of Central Balance Sheet Data Offices (ECCBSO), Paris, 18–19 October 2012. *  *  *  Mr President, Ladies and Gentlemen, It is a great pleasure for me to welcome you in our new conference center. I am delighted to receive so many distinguished participants to this meeting, coming from the same universe of statistical institutions or central banks – whether they are members of the Eurosystem or not – and sharing the same interest for micro economic analysis of companies. We are very happy indeed to organise this year’s ECCBSO regular meeting which will enable you to discuss in depth about the past achievements of your task forces and the prospects, drawing possibly some kind of action plans. Undoubtedly, we need to explore further a number of those issues where your Committee is fully and often very successfully involved. I am grateful that BDF can provide, in its turn, the opportunity to host this conference. As you know, Banque de France is one of the co-founders of the Committee and has always shown its commitment by actively contributing to these task forces.
If I compare the euro area – but I think this would also be true for Europe as a whole – with the US, we have public spending as a proportion of GDP that is significantly higher than in the US. We have a social safety net and social protection in general which is more comprehensive than in the US, and hence the role of automatic stabilisers is significantly more important. It represents a much larger part of GDP. An order of magnitude could be that for the same decrease of GDP, you would have perhaps twice as much influence of automatic stabilisers as a percentage of GDP in the euro area as compared with the US. A large level of public spending as a proportion of GDP is not something that we necessarily have to be very proud of, but it is some kind of “amortiser” in periods that are very difficult. FT: In Britain you’re looking at a potential 8 per cent budget deficit next year of GDP, and in America the word is for the next fiscal boost, name a number and go higher. And the doctrine of overwhelming force, the Powell doctrine, will be used to throw everything at this problem. Now, do you see risks in that approach, or are you sympathetic?

Against this background, Norges Bank defined company behaviour towards the authorities regarding environmental and climate issues as a focus area for active ownership as early as in 2006. In recent years, interest in responsible investment, and not least climate risk management, has increased among investors. Investor activity can be divided into two main categories: working with the companies in the investment portfolio or changing the composition of the portfolio. The GPFG does both. We draw up expectations for portfolio companies, engage them in dialogue and exercise our voting rights. The composition of our investment portfolio also differs somewhat from the broad market index. The Bank’s responsible investment work is concentrated on three pillars. The first pillar, which we like to refer to as "setting standards", consists of our support for 5/7  BIS central bankers' speeches  common international standards and the published expectations drawn up for all the companies in the portfolio. The Bank’s expectations with regard to companies' climate change-related work were first published in 2009. If we and other investors are to understand our own exposure to climate risk, we will need adequate company reporting. To quote Bank of England Governor Mark Carney: "In order to watch we must be able to see".4 To ensure consistency across markets, disclosures should comply with a common international standard. This would also contribute to raising the bar for all companies. I have already mentioned the TCFD recommendations. The GPFG supports this work. The second pillar of the GPFG’s responsible investment management is exercising ownership.
These strategies are broadly based on two approaches: •  The one called “single point of entry resolution” (SPE groups), in which resolution powers are applied at the top of the group by a single resolution authority;  •  And the one called “multiple point of entry resolution” (MPE groups), where resolution tools are applied to different parts of the group by two or more resolution authorities acting in a coordinated way. Of course, the choice of the strategy needs to take into account the structure and business model of each banking group. A “Single Point” strategy may be better suited to a firm that operates in a highly integrated manner (through, for example, centralised liquidity, trading, hedging and risk management). On the other hand, an “Multiple Point” strategy may be suitable for financial groups with a decentralised structure and greater financial, legal and operational separation along national or regional lines, with sub-groups of properly capitalised, self-funded subsidiaries, which have enough managerial resources as stand-alone businesses. The feasibility and credibility of the “Multiple Point” strategy will mostly rely on two main issues: •  First, an effective cross-border coordination based on the cooperation agreements, the resolution plans and with the involvement of the resolution authorities of the main jurisdictions in which the groups operate. •  Second, a balanced loss absorbing capacity allocation across the group, according to local business risk profile in each jurisdiction.

The FSB’s recommendation to develop alternative reference rates alongside LIBOR recognises that there are, broadly speaking, two main applications for benchmark interest rates: (i) as reference rates in credit products, including bank loans, thereby helping banks to hedge their unsecured funding costs; and (ii) as reference rates in derivatives contracts, whose users are likely to be seeking to hedge exposure to the general level of interest rates, or to hedge secured funding costs. LIBOR originated as a reference rate for bank loans, and became the dominant reference rate in interest rate swap contracts because it was already the major established reference rate at the time the swap market developed. However market participants’ input to the FSB report suggested that many users of derivatives would prefer not to have exposure to banks’ term funding costs through LIBOR swaps, and would instead prefer those contracts to reference a near risk-free rate. This change will not happen spontaneously – liquidity in long-dated swaps is firmly concentrated in contracts referencing LIBOR and no individual player can change that situation. What is required is a collective effort to change market practice. That is why we have initiated the Working Group on Sterling Risk-Free Reference Rates. It will be tasked with identifying a suitable near risk-free reference rate for sterling markets, and formulating a transition plan to catalyse a change in market practice so that a significant portion of derivatives contracts reference the new RFR rather than LIBOR.
Fraziali Ismail: Closing ceremony of the Project Greenback 2.0 Kota Kinabalu Welcoming remarks by Mr Fraziali Ismail, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the closing ceremony of the Project Greenback 2.0 Kota Kinabalu, Kuala Lumpur, 14 February 2020. * * * Before I begin, I would like to convey my deepest condolences to the family members and friends of those who were involved in the boat crash incident near Pulau Tanjung Aru, yesterday. Let us pray for the safety of the victims as well as the search and rescue team. Ladies and gentlemen, After we concluded Project Greenback in Johor Bahru more than two years ago, Bank Negara Malaysia together with the World Bank sat down to choose the second “remittance champion city”. Among others, we considered Ipoh, Butterworth and Kota Kinabalu. We discussed long and hard, and weighed our options. Our assessment suggested that Ipoh and Butterworth would have presented us with a rather similar case study to Johor Bahru. This is in view of the similar profile of the target groups who are largely made up of urban migrants, therefore exhibiting similar remittance behaviors. The odd for success would have been easier and kinder to us. But our intention has never been about replicating our experience in Johor Bahru. Kota Kinabalu offers a much more exciting proposition. This is despite our full cognisance of the challenges ahead of us, such as geographical barriers and connectivity issue.

From our engagement sessions, it was not uncommon for us to hear about stories of anger, resentment and frustration from the migrant workers about the difficulties they had to go through in remitting money to their families. The workers whom we approached in Sapong estate for example, told us that they only had two options to access the remittance service: the closest is in the town of Tenom which is located 8 kilometers away from their estate; or if that is not available, the next option is to go to Keningau which is about 50 kilometers away! We also knew of instances where the workers were robbed on their way to remit money. Some told us that the money that they sent through hawaladars did not reach their families. These aptly sum up why it is crucial for us to promote a remittance service that is safe, affordable and convenient. This is also the primary reason why we decided that Project Greenback 2.0 Kota Kinabalu should be focusing on accelerating usage of digital remittance services.