samchain/econo-pairs-v1 huggingface dataset:
Therefore to apply technology to the payment system, a realistic interim target is to aim for cheque truncation. Cheque truncation means that the physical cheque is scanned at the point of deposit, and thereafter the electronic image of the cheque, rather than the paper cheque itself, is transmitted to the clearing house for sorting, and then onwards to the paying banks. In other words, the flow of the physical cheque is fully truncated at the point of deposit. The Singapore Clearing House Association, together with the Association of Banks in Singapore, is currently developing a cheque truncation system. This should be much faster and cheaper than handling paper cheques. We are also considering a national image archive to centralise the storage of cheques. The consolidation of such shared back-end services will yield economies of scale at an institutional level. To the customer, cheque truncation will mean faster processing of cheques deposited, thereby increasing the customer’s liquidity and reducing settlement risk. The system will be implemented nationwide by 2001, making Singapore the first country to implement cheque truncation on such a scale. BIS Review 130/1999  2  Development of capital markets Besides the need for strong banks, a second lesson from the Asian crisis is the importance of deep and liquid capital markets. There is now widespread recognition that Asian countries depended too heavily on bank loans for financing. Domestic banks lent excessively.

The banking system currently comprises 16 operating institutions, with total assets of around 53 per cent of the country’s GDP. The system is well capitalized and liquid. Its intermediation role is increasing. The lending activity although small (accounting for around 23 percent of total banking assets and around 12 percent of GDP), is strongly picking up. Other financial institutions are trying hard to increase and modernize their activity. However, many problems primarily legal and property rights related which are outside financial sector are making it difficult for them to increase their credit lines. Microfinance has proved to be a more effective way to deal with these problems. With its inventive formulas it makes financial resources become accessible to small and medium businesses that account for most of aggregate production during these development stages. These resources are often used to finance small projects in areas like agriculture, livestock or services like handicraft, small food stores etc. The first microfinance institutions in Albania, were set up in 1994 as development projects co-financed by the Albanian Government and the World Bank. 13 donors cooperate with the Albanian government in supporting the development of SME-s in Albania. From 1992 a large share of funds has been allocated in Albania as donation, but only a portion has been spent. Most of these funds has been  BIS Review 88/2005  1  given as soft loans for Albanian government. Aid represents around 30 % and only 5 % are direct commercial loans to co-finance the private investment.
Whether Ben’s daily routines have the same effect on the people in Cambridge, Massachusetts, we do not know. What we do know is that, fortunately for us, Ben is not quite as averse to travelling as Kant was. Most importantly, he lets his mind travel, exploring not only the world of economics but many other disciplines as well. But let me say a few more words about Ben’s contributions to monetary economics. His research covers all aspects of monetary policy. It spans everything from the technical details of how central banks steer short-term interest rates in money markets to fundamental questions about the mandate lawmakers should give to central banks. Doing justice to this vast body of work in a few sentences is impossible. I will therefore limit myself to a few key elements. Characteristic of Ben’s work is the critical analysis of ideas that have become fashionable in the profession. In the 1970s and 80s, when monetary targeting was in its heyday, Ben argued that central banks were too focused on the money supply and did not pay enough attention to other variables. In a number of influential papers, he showed that the amount of outstanding credit in the economy may be a useful predictor of future output and prices. Ben concluded that credit should play an important role in central banks’ decision making. The extent to which central banks should pay attention to credit aggregates remains a hotly debated question to this day.

This combination of measures has contributed to a stabilisation in the financial environment and an improvement in the transmission of our monetary policy. We need to carefully monitor further developments. It is also important to keep in mind that all our non-standard monetary policy measures are temporary in nature and that all the necessary tools are available to address upside risks to medium-term price stability in a firm and timely manner. Let me now explain our assessment in greater detail, starting with the economic analysis. Real GDP contracted by 0.3% in the euro area in the fourth quarter of 2011. Survey data confirm a stabilisation in economic activity at a low level in early 2012. We continue to expect the euro area economy to recover gradually in the course of the year. The outlook for economic activity should be supported by foreign demand, the very low short-term interest rates in the euro area, and all the measures taken to foster the proper functioning of the euro area economy. However, the remaining tensions in euro area sovereign debt markets and their impact on credit conditions, as well as the process of balance sheet adjustment in the financial and non-financial sectors and high unemployment in parts of the euro area, are expected to continue to dampen the underlying growth momentum. Downside risks to the economic outlook prevail. They relate in particular to a renewed intensification of tensions in euro area debt markets and their potential spillover to the euro area real economy.
That might be because corporations have taken advantage of stretched asset prices (and meagre returns for investors) to raise their debt levels. They might be reliant on that position continuing in order to sustain their low debt servicing burdens or to have sufficient collateral to secure their debts. An adjustment of market prices can expose a debt overhang as debts need to be refinanced at higher interest rates. The result can be dangerous to the wider economy: defaults and deleveraging, holding back corporate spending. The corporate sector can become reliant on stretch in other asset markets too. Three quarters of small and medium-sized companies in Britain use their own commercial property as collateral to secure bank loans. If they secure loans at stretched commercial property values, they can be exposed to any adjustment. That’s why falling commercial property prices lead to lower investment across the economy. 4  That channel can be pernicious if companies investing in commercial property at the top of the cycle are forced to reduce debt as prices fall and they break their loan covenants. They can be forced into sales of property, driving prices down even further and making life even more difficult for those companies in the wider economy that have secured their debts on their property. ii)  The banking system is exposed to an adjustment of asset prices  An adjustment of market prices can weaken banks, forcing them to cut back their lending to the wider economy.

As my colleagues Ben Broadbent and Gertjan Vlieghe have explained, downside risks to growth can be expected to increase the attractiveness of risk-free assets (gilts) relative to riskier assets (equities). See Vlieghe, G (2017), ‘Real interest rates and risk’; Also Broadbent, B (2014), ‘Monetary policy, asset prices and distribution’; 8 This might reflect that the sterling investment-grade corporate bond index includes a significant amount of issuers that are not UK-based and therefore not necessarily UK-focused. But internal analysis suggests that in recent years the spreads on sterling corporate bonds issued by UK-focused companies have tended to track the broader sterling investment-grade corporate bond market. 7  All speeches are available online at www.bankofengland.co.uk/speeches  7  It seems unlikely that rates can be so persistently low without either weaker growth prospects or more uncertainty. In London’s West End Office markets, the picture is particularly stark. Even if the magic combination of persistently low rates and historically typical rental prospects comes true, valuation methodologies similar to those being developed by the industry point to prices 10% below today’s level. Precisely why these markets have become stretched is impossible to know for sure, but I’d caution against placing too much weight on monetary policy as the primary or underlying explanation. A range of underlying forces have driven down natural rates of interest, including demographics, perceived downside risks, expected productivity growth. 9  Monetary policy may have been a prominent actor, but it was reading a script set by these economic forces.
The subject of this lecture is important as a greater understanding of the origins, the dynamics of financial crisis and the options for resolution is essential not only for its effective management but also for the lessons that can be drawn to prevent such future crisis. Given the severity and far reaching consequences of the current crisis, there has been a greater sense of urgency for the international community to come together to work towards a new international financial architecture that would allow for the more efficient functioning of not only financial intermediation within national economies but also across borders. History has shown that there have been more than 100 distinct banking crises within the span of the recent two decades. While the trigger factors for such financial crisis may be different, for most it involved disruptions in the financial intermediation process, the downward spiral of asset prices and a general loss in confidence. Varying responses at different stages of the crisis have shown wide ranging degrees of success. The objective to be achieved is the restoration of stability in the financial markets, the resumption of credit  BIS Review 87/2009  1  flows and the return of confidence. This would provide the beginning of the recovery of economic activity.

With the urgency for immediate measures receding, it is hoped that it will give way to consensus on finding fundamental solutions that involve regulatory and institutional reforms both at the national and international levels. Conclusion Today, we have the opportunity to listen to Professor Ito's lecture on the similarities and differences between the Asian Financial Crisis and the Japanese crisis of 1997-1998, and the US financial crisis of 2008-2009 and the valuable lessons that can be drawn in a global environment that is more complex and interconnected. Professor Ito has written extensively on financial policy and has been a policy advisor to the Government of Japan. We look forward to benefiting from your experience and wisdom on this subject. 2  BIS Review 87/2009
In the future, of course, problems may “catch up” with borrowers in those industries where demand is recovering more slowly, both because of the restrictions and because of the change in people’s behaviour. But in general, the situation does not currently look too alarming. Retail lending is also gradually recovering: after a decline in April and stagnation in May, the growth rate in June—July reached almost pre-coronavirus levels. In contrast to 2019, most of the growth comes from the mortgage sector thanks in large part to the Government’s preferential programs. For example, in June they covered about 45% of all mortgage loans issued. Specifically, more than a third (37%) were covered by the “6.5 Programme”. Since the beginning of the year, the retail portfolio on the whole has grown 6%. During the same period last year, growth stood at 11%. However, back then the main driver was unsecured loans. At the end of 2020, we expect retail portfolio growth to be up to 9% as well. That said, the growth structure of retail lending (more mortgages, fewer unsecured loans) is a positive factor. During the pandemic, some households experienced a sharp temporary decline in income, which is linked with an increased debt burden on borrowers. To ensure that this situation does not increase pressure on banks’ capital, we have reduced macroprudential buffers by 30– 50 percentage points. The maximum reduction is for borrowers with a low debt burden, so that the recovery of retail lending occurs without a dangerous increase in household debt overburden.

In general, the proposals put forward by Mr Aksakov, there are many of them regarding several areas — we will, of course, carefully develop them together with you. Some have been worked out, some require further development, and we will maintain constant dialogue with you. We also understand that we have a fairly consistent, intense, and constructive dialogue with the Association, and we value it very much. In conclusion, I would like to say that yes, every crisis entails losses. Yet, there are not just losses, there are opportunities. It is a platitude, but we can see from the situation in the banking sector that this could be a new impetus and, above all, could kick-start the expansion of digital banking. That should be taken advantage of. On our end, as a regulator, we will do our best to ensure that all banks are on an equal footing in this race. To close, I would like to highlight that the way the banking system is handling the situation really inspires optimism. Rapidly adapting to new conditions, restructuring its work all the while implementing large-scale restructuring programs (I do not recall there being such large-scale restructuring programs in recent history), and at the same time not stopping lending — it really was a very serious challenge. The banks are dealing with it honourably. There are rough edges of course. There are always problems and we are discussing them, but in general, of course, we are coping.
It is therefore reasonable to try to find out whether the Riksbank can use new methods and techniques to offer means of payment that are guaranteed by the Riksbank in the same way as banknotes and coins. 16  The Riksbank's role as supplier of liquidity in a changing world Technological advances and structural changes affect not only the methods of payment, but also the risks and threats to the financial system. This means that the authorities need to regularly evaluate and test their crisis preparedness. The Riksbank also needs to review and maintain its liquidity tools in good shape. Although the banks are still central to the payments system and comprise a natural focus in the Riksbank’s financial stability analysis, other agents such as central counterparties (CCPs) are gaining increasing importance in the financial system. Structural changes, such as the banks’ funding or how they choose to organise their cross-border operations, affect the liquidity risks in foreign currency, among other things. This is something that the Riksbank and other authorities must monitor. Financial innovations such as trading robots and other types of automated financial services can contribute to greater efficiency, but they can also give rise to considerable liquidity stress. 17 In line with technological advances, the speed at which the transactions can be implemented is also increasing. The fact that money and securities can, at the touch of a button, be moved immediately from one continent to another, is something that hardly reduces the liquidity risks in the financial system.

Some said that the development in the last three decades was a miracle and was almost incredible. Instead, I would describe it as a “world-shaking” development. Having encountered enormous difficulties and challenges at every single stage of reform and opening up, China, as the country with largest population in the world, managed to carry out an unprecedented transformation from a planned economy to a market economy. As there was no precedent to learn from, China could only rely on its own efforts and took one step at a time. Hong Kong has played an extremely important and irreplaceable role during the process of China’s reform and opening up. At the initial stage of opening up, China focused on attracting foreign investors to set up manufacturing factories. Hong Kong manufacturers were the first to move their operations to Mainland China. In the past 30 years, Hong Kong has always been the largest source of direct investment in the Mainland. In 2009, Hong Kong invested $ billion in China, accounting for one half of the total foreign investment in the country. In the course of investing in China, not only has Hong Kong injected capital but, more importantly, it has introduced skills in production and management. In the past decade, the Mainland projects in which Hong Kong invested have gone through some significant changes. The focus has been shifted from investment in the manufacturing industry to a range of diversified and multi-dimensional investments that include investment in all kinds of service industries.
This requires us to build up our own in-house teams of IT experts and to provide them with the proper training and guidance on what to look for. We are currently trying to do this and have recently hired an external consultant to help us to develop the right processes and techniques. This is part of a more general move to enhance our supervision to make it more sensitive to the various types of risk with which our banks are faced, and more focussed on the processes used for managing those risks. This becomes all the important in the New Economy, because although technological change presents obvious new opportunities to the banks, it also magnifies their risks in certain respects and increases the complexity of their business. Security risk is one clear example of this, as I have already mentioned. But increased liquidity and credit risk could be added to the list - the former because the internet will make it easier to move funds between banks at the touch of a button and the latter because banks may in future have a more transitory relationship with their customers. Technology risk is also a concern. With technology changing so rapidly, it becomes more vital that banks invest wisely in new systems and choose the right moment to do so. Early movers run the risk of being saddled with systems that do not work as promised, or which quickly become obsolete. Equally, there is the risk of being left behind by competitors if you wait too long.

Bank liquidity remains at historically high levels, and this, coupled with the fierce competition for new lending business, has pushed down lending margins, particularly in the all-important mortgage portfolio. 1  BIS Review 93/2000  It is not only that the market is not growing as fast as it did. The traditional, local players are also beginning to encounter more pressure from global firms, non-bank entrants and competing sources of finance. The competitive environment is giving added impetus to the need for banks to consider how they can use the new technology, and particularly the internet, to drive down costs and broaden income sources. In Hong Kong around 20 banks have introduced transactional banking services for retail customers. Many have already introduced corporate banking services through the internet, or will shortly do so. So far the take-up of these services seems in general to be rather slow. However, a few banks have achieved reasonable levels of usage by customers either because they were early movers or because of their leading market position. Customer acceptance of the internet will undoubtedly grow. But it will not happen overnight, and the contribution to the bottom line will be slow to emerge. In the meantime, the banks will have to bear the extra costs of the investment in the new technology, while margins may come under pressure from the increased ability of consumers to shop around and compare prices.
Some of the gains of the past few years have dissipated, and our disposable income might fall by close to 10 per cent in 2009. In periods of substantial uncertainty, investors will seek to repatriate investments in foreign currency. The fragility of the Norwegian krone was illustrated when investors fled the currencies of small countries, and the krone weakened considerably. When speculators withdrew, daily fluctuations increased and hedging against exchange rate volatility became  BIS Review 37/2009  5  more expensive. The krone fell to a record-low level in December last year, but has appreciated since then. Consumer price inflation reached a peak in October of 2008, and has slowed markedly thereafter and was 2.5 per cent in February. Underlying inflation is still above the inflation target, and stood at approximately 3 per cent in February. Even though inflation has been falling, the rise in prices has been somewhat sharper than expected recently, particularly for imported consumer goods. The depreciation of the krone last autumn has probably fed through to prices more rapidly than usual. Nevertheless, looking forward inflation will abate. Norges Bank has over a number of years focused on anchoring inflation expectations around  6  BIS Review 37/2009  the target of close to 2.5 per cent over time and given weight to predictability, with a recognizable response pattern. The downturn has not affected long-term inflation expectations to any great extent.

Jean-Pierre Danthine: Swiss banks from a financial stability perspective Introductory remarks by Mr Jean-Pierre Danthine, Vice Chairman of the Governing Board of the Swiss National Bank, at the media news conference of the Swiss National Bank, Berne, 20 June 2013. *  *  *  As my colleague Thomas Jordan has explained, economic and financial conditions for the Swiss banking sector continue to be challenging. Against this background, I would like to examine the situation at Swiss banks from a financial stability perspective, looking first at the big banks and then moving on to a discussion of domestically focused banks. Big banks: strengthening resilience Over the past year, the Swiss big banks have substantially improved their capital situation. Risk-weighted capital ratios have been raised markedly, and both banks are now very well placed in an international peer comparison. Moreover, with its capital-building, Credit Suisse has also raised its leverage ratio considerably. Measured in terms of loss-absorbing capital – defined as Common Equity Tier 1 capital plus high-trigger contingent capital instruments – leverage ratios at the big banks are now at roughly the same level. However, given the prevailing risks in the environment and the losses incurred in the recent crisis, the SNB still considers current leverage ratios at the Swiss big banks to be low. In addition, a number of comparative studies imply that, in terms of leverage ratios, UBS and Credit Suisse are currently below the international average.