samchain/econo-pairs-v1 huggingface dataset:
Zamani Abdul Ghani: Riding out of the global financial crisis – banking reforms and revival Closing remarks by Mr Zamani Abdul Ghani, Deputy Governor of the Central Bank of Malaysia, at the 13th Malaysian Banking Summit 2009 "Riding Out of the Global Financial Crisis – Banking Reforms & Revival", Kuala Lumpur, 12 May 2009. *  *  *  On behalf of Bank Negara Malaysia , I would like to thank ASLI for the opportunity to make the closing address for the 13 th Malaysian Banking Summit. Indeed the theme chosen is highly appropriate and timely as we are currently facing a period that is most challenging. The current global economic slowdown, as many are aware, has been compared to the Great Depression of the late 1920s. It began with the stock market crash in October 1929, otherwise known as “Black Tuesday”. As to whether the current global slowdown reach such proportions, it remains anyone's guess. But as events unfold and with lessons of hindsight gaining clarity, we have seen how institutions failed to fully understand or underestimated the complexity of products, and were unable to adequately measure tail risks as well, the procyclical impact of fair value accounting. While these may have merits in sharing the blame, others like the high levels of risk concentration and gearing together with the failure to manage maturity mismatches, are also equally apparent, if not fundamental, in contributing to the financial crisis. Comforting, however, is that none of our Malaysian institutions undertook complex derivative transactions.

Josef Bonnici: The changing nature of economic and financial governance following the euro area crisis Introductory remarks by Professor Josef Bonnici, Governor of the Central Bank of Malta, at the Malta Financial Services Authority, Attard, 17 January 2013. *  *  *  The success of the European monetary union was always contingent on three considerations. The first requirement is the maintenance of fiscal discipline; the second is effective financial regulation and the third condition is the management and minimization of macroeconomic imbalances. In reality, these requirements were often not met. In fact, there was a general lack of awareness of their importance. For the past several years, the headlines have been dominated by the ramifications of the European crisis, which was first manifested in the banking system and then in sovereign debt markets, and subsequently in the economic slowdown and related problems that followed the introduction of fiscal consolidation. The European Central Bank has engaged in a wide range of policy measures that seek to expand liquidity and restore normal conditions in the banking sector and in the financial markets. These monetary policy measures include conventional or standard measures, which have reduced policy rates to very low levels. In addition the ECB has adopted various non-standard measures, which have included long term refinancing operations that inject ample liquidity into the financial system. The ECB has gone a step further by announcing an Outright Monetary Transactions (OMT) programme.
Groups will be permitted to use simplifications, simplifying assumptions and proxies, although we would expect that need to reduce as the monitoring period progresses. The Bank of England supports the development of international regulatory standards, such as the ICS. As both a home supervisor of UK insurance groups with businesses around the world and a host supervisor of branches and subsidiaries of insurance groups from many different countries, I also welcome the monitoring period approach. It will give regulatory colleges a common language for measuring group risk and defining capital. No capital framework is perfect and ICS will be no different. But having agreement on common metrics will be a big step forward. It should further enhance supervisory cooperation and help build trust. Over time, it might reduce the need for multiple overlapping practices in measuring the same risks and help to limit fragmentation of capital requirements. 1  The IAIS identifies an Internationally-Active Insurance Group as being an insurance group that has total assets of at least USD 50 billion or gross written premiums of at least USD 10 billion (on a rolling three year average basis). In addition, its premiums are written in three or more jurisdictions and at least 10% of the group’s total gross written premium is written outside the home jurisdiction.

I encourage any potential issuers to look at the 2  page on our website and speak to us at an early stage. More generally, jointly with FCA and consistent with our secondary competition objective, we recently launched a new insurer start-up unit as the sister of our new bank start-up unit, which has been around since 2016. It gives prospective UK insurers the information and support needed to apply for authorisation, covering the early stages of thinking about becoming an insurer, what you need to get an application started, the application process and life as a new insurer. Again, I point anyone interested to the pages on our 3  website, including our helpful new guide . We recognise that insurers can have very different business models and corporate forms. Our initiative is not just targeted at innovative Insurtech firms but equally at 2  https://www.bankofengland.co.uk/prudential-regulation/authorisations/insurance-special-purpose-vehicles 4  All speeches are available online at www.bankofengland.co.uk/speeches  4  prospective firms with more traditional business models. We see that many start-ups find it more efficient to operate as an agent and obtain capacity through an existing insurer or reinsurer, piggy backing on existing scale and diversification. But for those that do chose to be independent, our message is clear: our door is open and we welcome applications from new UK insurers.
Inflation targeting is thus much more demanding than a fixed exchange rate regime with regard to the central bank’s analytical work and its ability to communicate its policy. Whether this is something that should be regarded as a disadvantage or not is of course a question of judgement. For the Riksbank, the transition to inflation targeting heralded the start of a fairly comprehensive increase in competence in the field of economics. The number of PhD economists at the Riksbank has risen sharply in recent years and our research in areas related to monetary policy has expanded considerably. Financial stability Let me now move on to the other central component of an efficient payment system. This concerns the stability in the financial system; particularly in the financial institutions that supply payment services, i.e. primarily the banks. Financial stability is currently regarded, parallel to the price stability target, as the main task of a modern central bank. The financial system has essentially three main tasks: converting savings into financing, managing risk and providing efficient channels of payment. Let me give a basic example. A bank receives savings from households which it then lends to other households or to companies that need to invest. Banks are specialists at valuing, monitoring and managing credit risks in the households and companies to which they lend.

Are there any other objectives than price stability and financial stability that may be suitable for a modern central bank? Many countries also have objectives for developments in the real economy written into the regulatory framework governing the central bank’s activities. For instance, in the US legislation it says that the Federal Reserve shall promote “maximum employment”, while the British legislation says that the Bank of England shall support “the economic policy of Her Majesty’s Government, including its objectives for growth and employment”. In Sweden there is no specific objective for real economic developments written into the law, but it is nevertheless considered to be understood that the  4  See, for instance, Oosterloo, S. and J. de Haan, (2003), ”A Survey of Institutional Frameworks for Financial Stability”, Occasional Studies Vol.I/No. 4, De Nederlandsche Bank, for an overview of how the task of promoting financial stability is dealt with in different central banks’ regulations and in practice. 4  BIS Review 21/2006  Riksbank – as an authority under the Riksdag, the Swedish parliament – shall support the objectives of economic policy with the aim of attaining sustainable growth and a high level of employment. Exactly how the objectives are worded thus varies considerably between countries, often depending on the fact that changes and modifications have gradually been made to regulations originally written much earlier. I dare to claim nevertheless that the essence of modern central banks’ wording of their objectives is the same.
A wide interest rate differential could have a substantial impact on the exchange rate, with repercussions on inflation, output and employment. This is why low interest rates in large economies that were severely hit by the financial crisis quickly led to lower rates in countries where the cyclical situation, in isolation, would have implied higher rates. This was the case in Norway until oil prices fell. Other small open economies have been in the same situation. Chart: House prices These countries have imported low interest rates and experienced rapidly rising house prices and debt. They have introduced measures to limit elevated debt in order to prevent imbalances from building up further. In Norway, stricter mortgage lending requirements have been imposed on banks. These measures have probably contributed to the recent correction in Norwegian house prices. Over the past year, house prices have fallen. The shift in the housing market has reduced the risk of an abrupt and more pronounced decline further out. Household credit growth remains high, but over time lower house price inflation will dampen credit growth. The exchange rate places a limit on how far Norwegian interest rates can deviate from foreign rates. But with a floating exchange rate, monetary policy can help to stabilise the economy when it is exposed to shocks. In the previous monetary policy regulation, there was a reference to the stability of the krone exchange rate. This has been omitted from the new regulation, but will not lead to material changes in the conduct of monetary policy.

9, 10 Growth has certainly been high over the last 12 months, so isn’t this a reason for tightening monetary policy? Here it is important to remember that monetary policy does not aim to stabilise growth. It aims to stabilise inflation and resource utilisation. The impact of increased growth on monetary policy depends on the impact of this growth on the forecasts for inflation and resource utilisation. Whether high growth indicates higher or lower resource utilisation depends on the reasons for the higher growth. In this respect there is no difference between growth and other indicators of the state of the economy. The extent to which they affect monetary policy depends solely on how they affect the forecasts for inflation and resource utilisation. If monetary policy is well-balanced in the initial position – a strong assumption – and growth shifts both the inflation forecast and the resource-utilisation forecast upwards, then increased growth is a reason for tightening monetary policy. However, if monetary policy is not well-  6  See for example Dagens Industri (2011), Eklund and Svensson (2010), Financial Times (2011a, b) and Frisén (2010). 7  See Svensson (2005) and Svensson and Tetlow (2005). 8  One possible exception may be if the repo-rate path were to pose a threat to financial stability and there were no other means that could be used to tackle the problem. See the discussion in Svensson (2010b, c). 9  See Giavazzi and Mishkin (2006) and Mishkin (2010).
They’re more likely to narrow (we may already be seeing some signs of that correction in the data). 19  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  19  Particular glitches aside – and some of those are also the result of the pandemic – supply in many of these markets is also reasonably responsive to higher prices. For this reason, periods of rapid inflation in most non-oil commodities, and in manufacturers’ input prices in general, tend to be followed not just by lower but by below-average rates of inflation. The retreat of pandemic-related shifts in demand would also help to correct any mismatch in the domestic economy. And in the past, the UK labour market has often proved sufficiently flexible to absorb shocks, and reallocate resources – for example after the financial crisis – without a significant and lasting effect on the NAIRU or on wage growth. However, these judgements get progressively more uncertain as one goes down the list. Even if the heat comes out of some of the final demand for goods, there’d probably be pressure on suppliers for a while afterwards, if inventories need to be restored. With vaccination rates in much of Asia lagging those in the rest of the developed world there are still risks to global supply chains from potential outbreaks of the virus. And, even if a reduction in domestic mismatch is more likely than the opposite, we can only be unsure about the time and expense required to address it.

Thomas Jordan: Financial crisis dispersing? Economy changing direction? Speech by Mr Thomas Jordan, Member of the Governing Board of the Swiss National Bank, at the general assembly of the Handels- und Industrieverein des Kantons Schwyz, Schwyz, 25 August 2009. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  The situation on the international financial markets has recently brightened again. This is mainly due to the positive keynote in company earnings reports and a series of unexpectedly favourable economic data. The relaxation of monetary policy was pursued further through the implementation of unconventional measures in March 2009, and this is also likely to have had a calming effect. Price advances since March should, however, be partly seen as corrections to excessive downward movements in the previous period. Considerable uncertainties still prevail and the danger of setbacks should not be carelessly underestimated. The recessionary developments in the world economy weakened significantly in the second quarter of 2009. Expansionary monetary policy around the world, together with fiscal support programmes, have probably played an important role in this respect. Economic indicators are also showing a turn for the better in the Swiss economy. Nevertheless, in view of the exceedingly low level of utilisation of production capacity, industrial investment will probably continue falling. Given the increasingly gloomy outlook for employment, private consumption is also likely to put a damper on the resumption of cyclical activity.
Different inflation measures 4  4 CPI  UND1X xe  UND1X  3  3  2  2  1  1  0  0  -1  -1  -2  -2  Jan 95 jan-95  Jan 96 jan-96  Jan 97 jan-97  Jan 98 jan-98  Jan 99 jan-00 Jan 00 jan-01 Jan 01 jan-02 Jan 02 jan-03 Jan 03jan-04 Jan 04 Jan 05 jan-99 jan-05  Note. 12-month changes in per cent. Inflation measures computed according to Statistics Sweden’s new method. Sources: Statistics Sweden and the Riksbank  6  BIS Review 25/2005  1b. Different inflation measures 4  4  3  3  2  2  1  1  0  0 KPI CPI  -1  -1  UND1X UND1X UND1X exkl. energi UND1X excluding energy  -2 95  96  97  98  99  00  01  02  03  -2  04  Note. 12-month changes in per cent. Inflation measures computed according to Statistics Sweden’s old method. Sources: Statistics Sweden and the Riksbank  BIS Review 25/2005  7  2. Inflation: goods and services 5  (excl.

But unlike monetary policy, which usually follows the Tinbergen rule of having as many policy instruments as there are targets, fiscal policy tends towards perpetual indeterminacy. It has to achieve multiple objectives, including cyclical stabilisation, supporting long-run sustainable growth, or dealing with the efficiency-equity trade-off, through the use of multiple, but often insufficient, instruments and subject to constraints, most importantly, the need to ensure the sustainability of public finances. In this context, the history of the monetary union reveals a constant tension between the quest to achieve short and medium-term national objectives and the hope that the common institutional framework would yield consistent supranational outcomes. The shortcomings of the original framework are well known. 2 They can be summarised in five points. First, the original rules set at the time of the Maastricht Treaty were overly simplistic and did not take into account the impact the cyclical position of the economy has on the headline deficit. In particular, it failed to avoid expansionary (procyclical) fiscal policy during periods of high economic growth, as the rules were silent about the need for Member States to save during good times. And this also led to contractionary fiscal policy during recessions since the deficit rule would call for adjustment at times when the automatic stabilisers were pushing public finances deep into the red. Consecutive reforms attempted to address this shortcoming, at the cost of increasing complexity. Specifically, the focus shifted to the use of medium-term “structural” variables.
I wish you all a great webinar. 3/3  BIS central bankers' speeches

Because the investment with the Fed is riskless, little or no economic capital would be needed to support such arbitrage by banks. In this way, the IOER rate should theoretically form a “floor” beneath short-term interest rates, allowing the Fed to achieve its target for the fed funds rate even with a very high level of reserve balances. In practice, however, many lenders in the U.S. money markets are not banks and so cannot earn IOER. Moreover, from the perspective of a potential lender to a bank, the arbitrage  2  In the five years prior to the crisis, total reserve balances averaged $ billion and excess reserves – balances in excess of those required to satisfy reserve balance requirements – averaged about $ billion. Currently, total reserve balances are about $ trillion, nearly all of which are excess reserves. 3  For discussion of changes in recent years to activity in the fed funds market, see the Liberty Street Economics blog posts, “Who’s Lending in the Fed Funds Market” and “Who’s Borrowing in the Fed Funds Market,” at http://libertystreeteconomics.newyorkfed.org/. 4  The FR 2420 is a transaction-based report that collects daily data on federal funds transactions, Eurodollar transactions, and certificates of deposits from domestically chartered commercial banks and thrifts that have $ billion or more in total assets and from U.S. branches and agencies of foreign banks with total third-party assets of $ million or more.
However, both large and smaller banks tightened their credit standards more on loans to large firms than on loans to SMEs. This was especially the case at the beginning of the financial turmoil, but the net tightening was still slightly stronger for large firms in the second quarter of 2009. This may be surprising, given that there is a general perception that access to finance has of late become more difficult in particular for SMEs. The pattern of a stronger net tightening for loans to large firms can also be observed in Italy. This indicates that both large banks and large firms, which rely more on market-based financing, were initially more strongly affected by the financial turmoil than smaller banks and SMEs. Since the second quarter of 2008, however, the differences in lending behaviour between large and smaller banks have diminished. This probably indicates that the economic downturn has played a major role in the general tightening of standards when evaluating the creditworthiness of firms. Let me now turn to the question of how banks have tightened their credit standards. Both large and smaller banks have done so predominantly by increasing loan margins. In Italy, the net tightening of margins on average loans was similar to that for the euro area as a whole. At the euro area level, large banks increased margins on loans to enterprises somewhat more than smaller banks, which is in line with the overall stronger net tightening of credit standards.

And we will insist that banks' risk  2/3  BIS - Central bankers' speeches  management practices are fully aligned with all our expectations by the end of 2024 at the latest. It is clear that central banks and supervisors are not primarily responsible for addressing the ongoing climate and environmental crises. They are climate and environment policy-takers, whereas governments and legislators – including the European Parliament – are climate and environment policymakers. The European Union and its co-legislators are clearly committed to the Paris Agreement. The EU is taking concrete steps to implement legislation that puts this commitment into practice. Central banks and supervisors cannot ignore this in the pursuit of their mandate. Similarly, on the path to meeting the Paris Agreement goals, we cannot ignore scenarios which include a greater manifestation of physical risks from climate change and environmental degradation. And we will not ignore all this. To the contrary. We acknowledge that we cannot deliver on our mandate if we assume a status quo in which the world will not transition as the baseline scenario for the future. And by rejecting that status quo as the baseline, we are becoming a force that contributes to the transition. And we will continue to be just that: a force that contributes to the transition. Within our mandate. And in the pursuit of our mandate. Thank you very much for your attention. 3/3  BIS - Central bankers' speeches