samchain/econo-pairs-v1 huggingface dataset:
In fact, it represents a classic tail event: a loss of this kind is highly unlikely, yet would have dire consequences, particularly for the stability of the entire Swiss banking sector. In view of the aforementioned uncertainties in connection with risk assessment, would it not be justified to aim to create a somewhat more “well-padded” cushion of security, even if equity capital – like airbags – comes at a price? Finally, I would like to point out that central banks do not know better than banks or the market as to if and when and in what form a major crisis could hit the financial markets. In principle, we believe that the likelihood of severe disruptions in the financial system has actually declined as a result of innovations in the financial markets. At the same time, the repercussions of a crisis – should one occur  1  2  Risk Disclosures of Banks and Securities Firms, Moody’s Investors Services, May 2006. BIS Review 67/2007  after all – could be particularly severe given the current situation. With this in mind, I feel it is important that market participants – including the Swiss banks – should increasingly take tail events into consideration in their assessments. Stress tests are especially suitable in this regard. In our Financial Stability Report, we also underline the importance of stress testing.

Noteworthy in the area of regulation are the proposals made by the Basel Committee for Banking Supervision, which directly address the need to increase the amount and quality of capital held by institutions to absorb potential losses, the advisability of introducing minimum liquidity standards, and the usefulness of creating capital cushions to help moderate credit cycles. Specifically with regard to the aim of dampening the tendency of markets to amplify economic cycles, headway is being made in the design of provisioning systems which, in essence, are similar to those in place in Spain since mid-2000 (the dynamic or countercyclical provision). International accounting regulators, particularly the IASB, also seem to be converging towards these systems. Also with the aim of mitigating excessively procyclical behaviour of financial markets, management compensation guidelines have been drawn up to discourage excessively risky strategies. Also in the pipeline are major regulatory changes to mitigate the moral hazard problems posed by institutions which in various ways ultimately acquire what has come to be known as systemic significance. Naturally, this regulatory adjustment will have a significant impact on financial institutions. That means that, irrespective of how long a transition period is deemed appropriate, financial intermediaries should now set in motion the adjustment process, to ensure the least possible upheaval. Spain’s financial institutions have understood this and are notably strengthening both the level and quality of their capital. The restructuring process of the Spanish banking system runs alongside the reform of the global financial system.
Jeanette R Semeleer: To dollarize or not to dollarize – the Central Bank of Aruba’s point of view Speech by Ms Jeanette R Semeleer, President of the Central Bank of Aruba, at the conference “Opportunities and Risks of Dollarization for the Dutch Caribbean”, organized by the Minister of Finance of the Netherlands Antilles, Curaçao, at the Bank of the Netherlands Antilles, Willemstad, 24 August 2009. *  *  *  Ladies and gentlemen, good morning! 1. Introduction  I am truly honored to have been invited to speak to such a distinguished audience on a topic that touches everyone’s wallet, and that is dollarization. With dollarization in this context I refer to as the use of the US dollar as the exclusive legal tender in a country. I must admit that at the Centrale Bank van Aruba (CBA), although we have regular bilateral meetings, we have been quite surprised with the recent consideration of the BNA to replace the Netherlands Antillean guilder for the US dollar as the legal tender for the island of Curaçao on a very short term. In view of the far-reaching consequences of such a change, possibly for Aruba too, I highly applaud Mrs. De Lanooy’s initiative to organize a forum of experts, which could enlighten us further on a rather complicated issue. At the end, it is of crucial importance that the required political decision is based on a thorough assessment of the opportunities and risks associated with dollarization.

I wish you success and thank you for your attention. 2  Werkgroep Bestuurlijke en Financiële Verhoudingen Nederlandse Antillen – Nu kan het… nu moet het!, p. 11 (8 October 2004). 3  H.J. Brouwer (director DNB) – Schuldsanering van het Land Nederlandse Antillen en de afzonderlijke eilanden., Staten-Generaal, vergaderjaar 2005–2006 30 461, D en nr. 4 (Bijlage 4). 4  BIS Review 164/2009
26.06.2018  Taking up of office by the Governor of the Banco de España  Pablo Hernández de Cos Governor  Honourable Ministers and Authorities, ladies and gentlemen, dear colleagues and friends, I believe today calls, above all, for a round of gratitude. First, I wish to thank Ministers Calviño and Montero for their presence here today. May they rest assured I am firmly committed to maintaining the close and loyal collaboration traditionally offered by the Banco de España to the Ministries for the Economy and Finance. I also wish to thank the previous minister, Román Escolano, for his presence at this ceremony, and for his proposal and defence of my appointment before the Parliamentary Committee for the Economy and Competitiveness. And my gratitude extends to the representatives of the Committee accompanying us today. I undertake to make every effort to improve the capacity of the Banco de España to face the challenges addressed during the Parliamentary Committee hearing. Ministers, as I am surrounded above all by colleagues, I trust you will allow me to continue in a more informal tone. As you know, including a three-year tour at the European Central Bank, I now have two decades behind me at the Banco de España. Professionally speaking, this is, then, my home. It is a real honour for me to have been appointed governor.

However, I believe all of us who have experienced this environment have emerged with a very different lesson learnt. Indeed, we cannot overstate the extraordinary potential this setting offers to an institution such as ours which has always valued, and legitimately so, the soundness of its judgement. With that conviction, we should devote most of our efforts to forging closer insertion, collaboration and coordination-based links with our European partners with an essential aim in mind: to reinforce our weight and ability to influence decision-making. This is a challenge and it is also an opportunity, but it is above all a responsibility to support, from the vantage of the Banco de España, the project for European construction. The second objective has to do with our contribution to financial and macroeconomic stability. After an unprecedented financial crisis, the reputation of economic policymakers, of central banks in particular and, indeed, of the economics profession as a whole was enormously dented. 4/5  Testifying to this were the regulatory and institutional changes set in train to prevent similar situations from recurring. However, the real test, where we place our social prestige and credibility on the line, will involve us truly being able to identify risks and vulnerabilities in due time, being able to issue warnings about them and, within our remit, being able to act to mitigate them or to contribute decisively to other players acting when they must.
Second, the euro area is experiencing a protracted recession and growth in many of the largest emerging economies has slowed. This has resulted in a very sharp slowing of U.S. exports, with an associated slowing in production and employment growth in the U.S. manufacturing sector. Thus, I continue to see the economy as being in a tug-of-war between fiscal drag and underlying fundamental improvement, with a great deal of uncertainty over which force will prevail in the near-term. This tug-of-war is clearly seen in the monthly employment data. Over April and May, the average monthly gain in employment in the private service-providing sector has been well maintained at 175,000. In contrast, employment in the manufacturing sector and the federal government declined a combined 20,000 per month. And the resulting uncertainty is, I believe, an important contributing factor behind the relatively sluggish pace of business investment spending. My best guess is that growth for all of 2013, measured on a Q4/Q4 basis, will be about what it has been since the end of the recession. But I believe a strong case can be made that the pace of growth will pick up notably in 2014. The private sector of the economy should continue to heal, while the amount of fiscal drag will begin to subside. I also see some indications that growth prospects among our major trading partners have begun to improve; for example, the rise in the June euro area composite Purchasing Managers’ Index.

Miguel Fernández Ordóñez: Procyclicality in the banking activity Speech by Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, at the Conference on Procyclicality and the Role of Financial Regulation, organised by the Bank of Spain and the Financial Stability Institute, Madrid, 4 May 2009. *  *  *  Good morning ladies and gentlemen. First of all I would like to welcome you to the Bank of Spain. Also, let me thank you all for your presence here today to discuss on one of the most difficult and relevant topics affecting financial regulation: procyclicality in banking activity. Let me also thank the BIS Financial Stability Institute, and in particular its Chairman, Mr. Josef Tošovský, for all the support and good advice received during these last few weeks during the preparation of this event that we have co-organized. We are very pleased to have as speakers in this conference a large group of excellent professionals who are directly involved in financial supervision and regulation. A high level meeting like this one is a major opportunity to start building up a common and efficient framework in order to face the procyclicality issue. Cyclicality can be considered an inherent part of economic activity. Banking activity is no exception; it is also affected by the upswings and downturns of the real sector cycles. Not only history proves this, but current events do also. Any doubt about this has been violently resolved after the summer of 2007.
Gilt yields fell sharply following the announcement of the asset purchase programme and our initial purchases of gilts. Yields have subsequently drifted back up, but this reflects a range of other factors and it is likely that yields are lower than they would otherwise have  4  BIS Review 86/2009  been. Borrowing costs within the commercial paper market appear to have fallen as a result of our operations. And in the corporate bond market, spreads have narrowed sharply in recent months and issuance levels have been at record highs. However, this has coincided with a global rally in corporate bond markets and so it is difficult to isolate the incremental impact of our purchases. Despite these encouraging signs, there have been some questions raised about the design and effectiveness of our operations, and I thought I would take this opportunity to address three particular criticisms that have been levelled against the asset purchase programme. The first is that the asset purchases have been too heavily skewed towards gilts and that we should have purchased a greater proportion of private sector debt. The aim of our purchases of corporate debt is to improve the functioning of corporate credit markets. This is in line with the remit specified by the Chancellor when establishing the Asset Purchase Facility. It is important not to judge the economic significance of these purchases by their scale. Even relatively small purchases of debt, if appropriately targeted, can improve liquidity and lower the cost of finance to businesses.

It may convey information about our reaction function. But such a commitment is not easy to design. If too general, it will not add anything to our existing – and over-riding – commitment to do whatever it takes to hit the inflation target. If too precise, it will not capture the myriad of factors that affect the outlook for inflation. The array of judgements underlying the Committee’s policy decisions are not easily summarised by reference to one or two economic variables. The Committee’s preferred approach is to describe its assessment of the outlook for output and inflation, and allow the public and markets to make their own assessment of the likely future path of interest rates. In the most recent Inflation Report published in May, the  2  BIS Review 86/2009  Committee judged it was more likely than not that CPI inflation would be below the 2% inflation target in two or three years time if interest rates followed a path implied by market yields and the stock of purchased assets increased to £ Market participants subsequently revised down their view about the pace at which Bank Rate was likely to rise. 2. Strengthening the policy framework  I remain firmly convinced that an inflation targeting framework should continue to be central to the design of macroeconomic policy in the UK. The benefits of low and stable inflation are clear and well understood.
Table 3: Results for regressions of non-performing loans as % of total loans on the Regulatory-Supervisory Independence Index  Regulatory-Supervisory Independence Index  (1) (a)  (2) (a)  -1.194 ***  -1.300 **  (0.405)  (0.495)  Regulatory-Supervisory Independence Index  -0.970 **  lagged by one year  (0.322)  Observations  29,782  28,002  Adjusted R2  0.227  0.245  (a) The regression equation includes bank fixed effects, country fixed effects, and year fixed effects. Standard errors, which are clustered at the country level, are reported in parentheses. The results are robust under different specifications, including using a set of bank-specific control variables (total assets, z-score, cost-to-income ratio, efficiency ratio, total debt, total liabilities, total gross loans) and country-specific GDP growth. This association is there even as the set of control variables in the regression is varied. The association is also persistent: the coefficient on the reforms lagged by one year is similar in magnitude and statistical significance. The association is also economically significant. A reform that increases the index in a given year is associated with a 1.3 percentage point reduction in the rate non-performing loans and a 0.97 percentage point reduction in the subsequent year, all else equal. These results are consistent with what other papers have found. Dincer and Eichengreen (2012) find that lower non-performing loans relative to GDP in countries in which the supervisor is independent of the government.

Adequate and consistent information on capital flows will also greatly improve Balance of Payments Statistics for Zambia and serve as an early warning system for Government on potential financial crises and other external shocks. Mr. Chairman, Zambia has adequate technical capacity to collect, analyse and disseminate data and information on foreign private investment. It has, however, lagged behind in terms of the frequency of these surveys compared with some other countries in the region. For instance, while we are now at the third phase of the Survey, Uganda, Tanzania and Malawi are in their eighth, fifth and fourth phases, respectively. This only emphasises the critical need to conduct this enterprise survey more regularly. To this end, I wish to reiterate the Bank of Zambia’s, continued support and commitment in working in close collaboration with Government and other Balance of Payments Statistical Committee member institutions in ensuring that the collection of this vital information is done on an annual basis. Accordingly, it is my hope that participants at this workshop will appreciate the importance of this survey and find the results useful. Distinguished Guests, I am particularly happy to learn that compared to other countries in the region, the Zambian team has conducted this enterprise survey in record time. It shows true commitment and dedication of the team to this project. Please keep up the good work. Be reminded, however, that you have established a benchmark, which can only be improved on.
Zeti Akhtar Aziz: Advancing financial inclusion to its next level Keynote address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Alliance for Financial Inclusion (AFI) 2014 Global Policy Forum – “Advancing financial inclusion to its next level”, Port of Spain, Trinidad and Tobago, 10 September 2014. *  *  *  It is my very great honour to be invited to speak at this year’s AFI Global Policy Forum in beautiful Trinidad and Tobago. First of all, on behalf of Malaysia, let me express how greatly honoured we are to be given this opportunity to host the headquarters of AFI. Malaysia is strongly committed to the financial inclusion cause and will strive to the fullest and best of our ability to provide the necessary support to AFI towards achieving its objectives. This is an exciting time for advancing the global financial inclusion agenda, as the world economic recovery gains further progress and as there is increasing world attention and priority being accorded to achieving financial inclusion and to an economic progress that is more inclusive. While stability and growth has been restored in many parts of the world, all of us recognise that economic growth, no matter how stellar, will begin to fade when inequality sets in, and as income disparities widen. Additionally, experience has shown that financial crisis and economic recession entrenches the cycle of poverty.

Priority 5: Improving cooperation and partnerships The fifth area relates to that which has been highlighted in the theme for this Forum, the need for greater cooperation and innovative partnerships. The goal of achieving financial inclusion that delivers real and positive impact to the poor is a shared responsibility. The barriers to financial inclusion can only be resolved when different stakeholders, each with different spans of authority and oversight, work together in a coordinated and cohesive manner. It will need to involve the cumulative efforts of the government, regulators, market agents, the financial industry and the consumers. At the national level, improving inter-agency cooperation is vital to ensure that the respective strategies are aligned to achieving the common goals of financial inclusion. This may call for institutional arrangements to bring authorities together to secure a joint commitment towards clearly defined and measurable financial inclusion goals, with well-defined lines of accountability. Brazil, Mexico, Tanzania, Indonesia and Fiji have also established national  BIS central bankers’ speeches  3  co-ordination frameworks, which offer AFI members diverse examples of such national collaboration. While we focus on financial inclusion initiatives at the national level, equally important is that adequate attention be accorded at the global level. In this regard, AFI assumes a unique role because it is the only global network that comprises of practising financial inclusion policy makers.
This option makes the bank harder to manage but supervision is a very effective tool against speculators. On a more micro side, we have been putting good governance into our financial institutions. By good governance, we mean transparency, competitiveness and good internal management. Bank directors BIS Review 86/2000  2  are now required to have no more than three directorships in other limited liability institutions so that they can spend enough time running the bank. Of the 70 people who did not qualify, 50 have now complied and we are working on arranging for the rest to be compliant as soon as possible using the traditional amicable Asian way of trying to change things. We are also working on getting the major shareholders not to vote for independent directors so that minority shareholders are better represented on the board. One government bank has done this and the new private commercial bank to be set up at the end of this year has agreed to do so. Seeing that it could be done or how it could be done, we expect the remaining private commercial banks to follow suit in next year’s annual shareholders’ meeting or at other relevant times. Audit committees are now a requirement and many banks have nomination and compensation committees to reduce the power of the major shareholders in the management of the bank. Nearly all banks have risk management committees or at least asset and liability management committees, which is preferable to having no risk management at all.

ERM-II is a useful prelude to full euro area membership and, other things being equal, will reduce exchange rate volatility. But ERM-II membership is not a magic solution, and the accession process can prove risky. As a result, it is important that economic policy and the regulatory framework be designed to maintain economic stability and keep financial risk within acceptable limits. Most of the changes that will improve economic policy under a flexible exchange rate will also be helpful in the run-up to euro area membership. These changes are discussed in greater detail later in this chapter. Chapter 24 focuses on what euro area membership and full participation in European Central Bank (ECB) operations entails. A number of amendments must be made to the Act on the Central Bank of Iceland in order for the Bank to fulfil the requirements made of national central banks in the euro area, as regards independence and the ability to carry out the tasks entailed in euro area membership. In addition, increased requirements are made concerning central banks’ participation in the formulation and implementation of financial stability policy (see Chapter 25). Money serves as a medium of exchange, a unit of account, and a store of value. The better it retains its value against goods and services and other currencies, the better a store of value and the more reliable unit of account it is. The more it used in trade and the more generally it is recognised in settlement, the better a medium of exchange it is.