samchain/econo-pairs-v1 huggingface dataset:
This leads to the limiting case of proposals such as Professor Kotlikoff’s idea to introduce what he calls “limited purpose banking” (Kotlikoff, 2010). That would ensure that each pool of investments made by a bank is turned into a mutual fund with no maturity mismatch. There is no possibility of alchemy. It is an idea worthy of further study. Another avenue of reform is some form of functional separation. The Volcker Rule is one example. Another, more fundamental, example would be to divorce the payment system from risky lending activity – that is to prevent fractional reserve banking (for example, as proposed by Fisher, 1936, Friedman, 1960, Tobin, 1987 and more recently by Kay, 2009). In essence these proposals recognise that if banks undertake risky activities then it is highly dangerous to allow such “gambling” to take place on the same balance sheet as is used to support the payments system, and other crucial parts of the financial infrastructure. And eliminating fractional reserve banking explicitly recognises that the pretence that risk-free deposits can be supported by risky assets is alchemy. If there is a need for genuinely safe  8  BIS Review 140/2010  deposits the only way they can be provided, while ensuring costs and benefits are fully aligned, is to insist such deposits do not coexist with risky assets. The advantage of these types of more fundamental proposals is that no tax or capital requirement needs to be calibrated. And if successfully enforced then they certainly would be robust measures.

The key centre for international finance in Asia was Hong Kong. It was the Asian outpost of the City of London, and the gathering point for bankers. Further north, Tokyo was growing in pace with the Japanese economy, which was leading Asia. There was no reason why a financial centre had to be located in Singapore in those days. Mr Lee Kuan Yew once called it a most “improbable start”. Our development as a financial centre was always an act of volition – we made it happen. We created a space for ourselves in international finance, starting with the Asian Dollar Market (ADM) in late 60s, followed in the early 80s by the Singapore International Monetary Exchange, or SIMEX. They were building blocks for what is today the third largest foreign exchange centre in the world, and a leading Asian player in global derivatives markets. We developed a strong core of local institutions even as we opened up to greater competition from foreign institutions in the domestic market, especially in the last 15 years. Our local institutions have held their own, not only in the domestic market but in regional finance. And underpinning all of this, we developed the skills and capabilities that have made us a credible player internationally. The development of skills was progressive. We lacked banking expertise when our development kicked off. The MAS, itself a fledgling institution, together with the Association of Banks in Singapore (ABS), formed a Training Committee in 1972 to organise formal programmes to develop skills.
(2017) ‘Brexit and interest rates,’ Speech given at the London School of Economics, available at: http://www.bankofengland.co.uk/publications/Documents/speeches/2017/speech1009.pdf Carney, M. (2017) Opening remarks to the Bank of England ‘Independence – 20 years on’ Conference, available at: http://www.bankofengland.co.uk/publications/Pages/speeches/2017/999.aspx Cunliffe, J. (2017) ‘The Phillips curve: lower, flatter or in hiding?,’ Speech given at the Oxford Economics Society, available at: http://www.bankofengland.co.uk/publications/Documents/speeches/2017/speech1008.pdf  12  All speeches are available online at www.bankofengland.co.uk/speeches  12

No additional suitcases will be provided and it will never be possible to completely refresh the contents of any of them. Oh – and you have to look after them, as any loss or damage will be a cost to you. Such a situation may sound rather fanciful but it is not too dissimilar to the BPA business model. It relies on a single premium upfront to fund liabilities far into the future, and the ability to change strategy or de-risk may be constrained by a number of factors. These factors include the illiquid or complex nature of the investments and the financial resilience of the balance sheet. In relation to security of benefits, once the pension scheme is bought out, there is no possibility of further scheme sponsor contributions to meet any member benefit payments. Boards’ ability to make  Page 5  decisions now, that carefully balance a long-term view against the pressure of short-term performance measures, is therefore critical to the future health of individual firms and to confidence in the sector as a whole. The events of the last two to three years, let alone last three or four decades, remind us that over the life of the liabilities taken on today, there will more likely than not be big changes; and the uncertainty inherent in long-term business needs to remain front of mind.
Change in number of unemployed on same month previous year Total number of unemployed and long-term unemployed 25000 20000  Total  15000  Long-term  10000 5000 0 -5000 -10000 mai 01 jul 01 sep 01 nov 01 jan 02 mar 02 mai 02 jul 02 sep 02 nov 02 jan 03  Sources: Statistics Norway and the Directorate of Labour SG Gausdal 31.01.03  Growth in the Norwegian economy was sustained by a strong increase in household consumption through 2002. In line with expectations, the sharp rise in real wages fuelled particularly high consumption growth last autumn. There are now signs that the strong growth in consumption may be slowing. Household expectations are lower than earlier and expectations concerning their own financial situation have also fallen markedly. Consumer confidence indicator 45  45  30  30  Trend 15  15  0  0  -15  -15  Unadjusted -30 -30 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Sources: Norsk Gallup Institutt AS, Association of Norwegian Savings Banks SG Gausdal 31.01.03  Household borrowing is remains high and the debt burden is still on the rise. Growth in credit to households has slowed in recent months, but growth remains at a double-digit level. On the other hand, the sharp rise in house prices in recent years seems to be levelling off. This may also result in lower credit growth through the winter and spring. Credit growth by borrower sector and house prices. 12-month rise.

The provision of cloud services carries a systemic risk of operational resilience and some providers are already "Too Big To Fail": the interruption or failure of a few of the big techs’ systems could indeed impact financial stability and the economy in general, given the very high level of concentration of providers1 and the dependence of financial institutions using their services. Moreover, some of their financial activities, which are closely linked to those of traditional financial players but are carried out outside the regulated framework - and therefore without any constraints! - carry a strong risk of moral hazard which could again prove detrimental to financial stability. One  1  The four largest providers (Amazon Web Services, Microsoft Azure, Google Cloud, Alibaba Cloud) control 70% of the market (FSI Insights on policy implementation, Big Tech interdepencies, by Juan Carlos Crisanto et al, July 2022). 5  example among others: if they were to provide both brokerage services and credit scoring services, these companies could be inclined to generate more business in order to collect commissions, while reducing the attention paid to credit quality, in the absence of risk participation. But alongside the big techs, other players, at the crossroads of IT and finance - maybe you will soon join one of them, once you have graduated from your engineering school - are profoundly transforming the latter. They offer a wide range of services, particularly focused on cryptoassets.
In these matters, however, most decisions have to be made at the national level. But the connection with conditions for monetary policy is evident: the better the economy can be made to work, the higher the growth that can be achieved without this generating increased inflation. Monetary union is likely to accelerate the process towards increased integration in Europe. In this way it will also contribute to new demands for structural adjustment. One of monetary union’s primary purposes is, in fact, to stimulate competition and structural changes, primarily to the benefit of consumers in the EU area. At the same time, such a development will probably entail a greater degree of joint action and harmonisation in the Union. 3. Interaction As I have outlined, monetary union involves a central direction of monetary policy and a broadly national direction of budget policy, though discretion in budget policy is demarcated by the Maastricht Treaty and the Stability Pact, for instance, and is being further curtailed by the gradual extension of international integration. At the same time, structural policy is to varying degrees a common EU concern. This raises the question of how a balanced policy can be constructed in such an environment. Bodies for decision-making and cooperation One approach to this question involves describing the EU institutions that have been set up for economic policy decision-making and cooperation. •  Ecofin, as the decision-making body for the ministers of finance and economy, is the principal forum in the field of economic policy.

M R Pridiyathorn Devakula: The strengths and weaknesses of the Thai financial system Speech by Mr M R Pridiyathorn Devakula, Governor of the Bank of Thailand, at the Annual Dinner of Thai Bankers’ Association, Bangkok, 24 March 2006. *  *  *  Mr. Chairman of the Thai Bankers Association, Chairman and Director of Commercial Banks and Top Management of Commercial Banks Allow me to refer to my opening statement at this banquet last year. My message was a look back over 30 years ago when I first started working in a bank, I recalled an annual event which has become a tradition whereby senior managements of commercial banks and the Bank of Thailand would meet up one evening in a formal social gathering. The get together provided an opportunity for them to look back at their hard work and cooperative efforts in the past year. The gathering was not one between regulators and their supervised banks, but very much in the collegial spirit of partnership, of one sharing the same fate as participant in the financial system. On such an occasion, the Governor of the Bank of Thailand who has been entrusted the role of sea captain would provide the steer and guidance to the financial community in moving forward with future banking trends, pointing out objectively the strength and advantage of the players in the system and the weaknesses which should be addressed.
Indeed, due in part to capital conservation measures – and the extension of transitionals to recognise, for capital purposes, the new accounting framework for provisions – many banks’ capital ratios improved during 2020.3 The stress created by the pandemic is far from over and it is important that we only reflect on its full impact at that stage. There are various projects underway to distil the lessons that emerge from it. The Basel Committee (BCBS) has started to assess the impact of the ongoing pandemic on the banking system and published a report on  1 For example the exceptional levels of market volatility in Q1 and Q2 2020 led to an elevated level of so-called Value-at-  Risk (VAR) back-testing exceptions across the industry. In order to mitigate the possibility of excessively pro-cyclical market risk capital requirements through the automatic application of a higher VAR multiplier, the PRA allowed firms – on a temporary basis – to offset increases due to new exceptions through a commensurate reduction in risks-not-in-VAR (RNIV) capital requirements. 2 Broken down into direct budget support of $ trillion; and additional public sector loans and equity injections, guarantees, and other quasi-fiscal operations of $ trillion. 3 The aggregate CET1 capital ratio for major UK banks increased from 14.8% at end-2019 to 15.8% at end-September 2020.

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The nineties, in fact, saw many governments implementing pension reform initiatives, generally based on the three-pillar approach advocated by the World Bank. Under this approach, individuals may have up to three different sources of revenue during retirement, namely a basic state pension, the balance accumulated in a mandatory pension account and voluntary saving arrangements. A number of international studies show that the replacement of pay-as-you-go pension regimes by funded systems provides more incentives for private saving, and reduces the scope for tax evasion by linking contributions paid into the system directly to the benefits received. This contributes to increased investment and augments the productive base, thereby facilitating the financing of social security expenditure commitments. Apart from specific reforms in the social security system itself, an improvement in the fiscal position would have an overall positive macroeconomic effect, compensating in part for the addition in aggregate demand brought about by ageing. The lower absorption of resources by the State could also lead to a higher average level of productivity and to an improvement in the country’s balance of payments. Productive capacity would also be enhanced if the State creates fiscal and other incentives for individuals to provide for their own needs after retirement, leading to an increase in the household saving rate and, consequently, also to a faster accumulation of capital. Fiscal consolidation will, however, only solve part of the problems created by population ageing. The negative supply shock caused by this phenomenon must also be countered by a positive shock.

The adverse effects of the reduction in output are meanwhile compounded by higher consumption, which tends to crowd out investment expenditure and exert adverse pressures on price levels and the external balance of payments. The desirable outcomes of policies intended to meet population ageing are, therefore, not hard to identify. Such policies must aim at producing an increase in productive capacity and output, and stimulating saving and investment, thereby alleviating pressures on inflation, fiscal resources and the external account. Indeed, these outcomes are desirable independently of population ageing, but are rendered even more urgent by the onset of the phenomenon. It is the way in which this strategy is to be implemented that is often subject to contention. Opinions tend to diverge because it is not always appreciated that any course of action chosen, including a passive stance, involves sacrifices. An increase in resources devoted to pensions must imply higher taxation, a reduction in funds allocated to other equally worthy causes, or burdens on society as a whole in terms of higher inflation and interest rates. On the other hand, reforms that should engender a win-win situation in the long run could perhaps impose sacrifices on a number of individuals in the short term. It is, therefore, important to promote an informed debate which takes account of the costs and benefits involved in any course of action, with a view to reaching agreement on viable solutions.
These instruments will initially bear an interest rate of 0.5%, which will be reviewed annually. This mapping into the Central Bank is part of the mechanism that is intended to keep the remaining offshore krónur segregated in the face of domestic liberalisation. But why 0.5%, you might ask? You see this if you look at the Central Bank balance sheet and take into account that we are accumulating reserves. Basically, this rate reflects the rate at which the Bank is, at the margin, investing these funds, and no one can expect us to incur a significant cost of carry because of these positions. And this rate should not be confused with our key Central Bank rate, which is 5.75% on seven-day deposits. This rate is as high as it is for monetary policy reasons; it is intended to affect the spending and saving decisions of domestic residents and has nothing to do with these positions. I know that there are more questions, and Sturla Pálsson, Director of Market Operations and Treasury at the Central Bank of Iceland, and I are willing to answer them during the Q&A session. But let me take two before I conclude. First, why 220–190 krónur per euro? Why not the onshore rate? First of all, this is a different asset class from onshore krónur and has been trading at very different exchange rates.

One of the criteria was that solutions should solve Iceland’s balance of payments problem in a manner that allowed Iceland to lift capital controls without taking undue risk with economic and financial stability; preserved stability in both the short and the long run; limited risk to Government finances, reserve adequacy, and credit ratings; avoided socialisation of private debt or risk; allowed the exchange rate to reflect economic fundamentals, unaffected by nongovernmental legacy issues; honoured international obligations concerning equal treatment under the Icelandic Constitution; and gave preference to measures offering simplicity over complexity, minimal legal risk, and as much finality as possible. The guiding principle and the criteria were used to design the solution for the estates of the old banks. The solution allowed the estates to choose between two options. Under the first option, they would receive exemptions from the capital controls in order to go into composition and make distributions to creditors while offering to fulfil stability criteria that fully mitigate the negative effect on the exchange rate and/or the FX reserves. According to the stability criteria, the estates would pay sufficient stability contributions (through the transfer of króna assets) to mitigate the negative effect, lengthen the maturity of their FX financing of domestic banks, and repay Government and Central Bank support and debt. Under the second option, a tax would have been levied on the estates that fully mitigated the negative balance of payments effect of the resolution.
One issue that will have to be carefully examined in the future is the cause of the real estate boom and the housing crisis, and why it occurred in the United States. At this point it is clear that lending standards were relaxed beyond reason, and financial innovation went too far. 3 2. Inflation targeting and asset prices  A corollary of those blaming monetary policy is that, apart from focusing on the variation of the prices of goods and services, it should also take into consideration asset prices, beyond their direct impact on projected inflation. Under an inflation targeting regime, increased lending and asset prices can have repercussions on the inflation outlook, through their impact on the output gap. This would require a monetary policy adjustment to prevent a persistent rise in inflation. Hence, in an inflation targeting regime, asset prices and the level of credit aggregates affect the monetary policy decision to the extent that they affect the inflation perspectives (Bernanke and Gertler, 1999). 2  Interestingly and, according to Blinder and Reis (2005), using Taylor rules as from the first quarter of 1988, the residuals indicate that in all the mentioned episodes the Federal Reserve set the interest rates significantly below those prescribed by the rule. 3  Ellis (2008) shows that in the U.S., households had strong motivation to increase their leverage through tax, legal and regulatory incentives.

William L Rutledge: Implementing the New Basel Accord Speech by Mr William L Rutledge, Executive Vice President of the Federal Reserve Bank of New York, at The British Banker’s Association Basel 2 / CAD 3 Half Day Conference, London, UK, 13 March 2003. *  *  *  Introduction Thank you and good morning. It is a great pleasure for me to be here today to offer some thoughts on Basel implementation issues - thoughts that will reflect partly my role as the head of Bank Supervision at the Federal Reserve Bank of New York, and partly my role as a member of the Basel Committee. In that latter capacity, I’d like to begin by offering my thanks for all of the extremely helpful and constructive comments that the BBA has provided throughout the Basel consultative process. In my experience, having a candid dialogue between the industry and the supervisory community is the best way to develop well informed regulatory policy. Given our desire for Basel II to be consistent with the best existing and emerging risk measurement and management practices, getting specific feedback from the industry is particularly critical. It is also critical that we understand calibration issues so that we set appropriate numerical standards; in that connection, I’d like to offer my further thanks to all of the banks represented here that participated in the latest Quantitative Impact Survey. I know that gathering all the necessary data and providing it in the prescribed format was a daunting task.