samchain/econo-pairs-v1 huggingface dataset:
As a regulator, MAS looks at both the micro-prudential aspects, looking at the safety and soundness of individual financial institutions, as well as macro-prudential aspects, looking to see if system-wide risks have been built up in the aggregate. In doing this, we adopt a risk-based approach towards supervision and regulation, in order to promote sustainable development of the sector. For example, we set appropriate limits and capital charges to address the credit, market and other risks. The standards of governance and risk management are set at levels commensurate with the activities and the risks being taken. Sometimes we are accused of being overly conservative, but this prudence has served us well. In all instances, we seek to find the right balance between “principles-based” and “rulesbased” regulation; to avoid being over-prescriptive in rule-making or being over-reliant on market discipline alone to curb excessive risk-taking. Similarly, market conduct measures focus on upholding principles of fairness and transparency, for instance, through requirements on disclosure to investors and a fair-dealing sales process. The second leg of the tripartite approach is to put the primary responsibility for sound risk management and oversight of each institution on the board and senior management, which must set the right tone and culture. The third leg is to promote greater awareness among  BIS Review 147/2008  3  investors of their financial needs, encourage financial planning and promote deeper understanding of the risks and returns of different products, through educational programmes such as MoneySENSE.

Jean-Pierre Roth: Real estate crisis in the United States – similar risks in Switzerland? Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at the Banque Cantonale Vaudoise, Lausanne, 9 June 2008. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  In the past few months, developments in the mortgage and real estate markets have attracted increasing attention. Europe, and Switzerland in particular, have been indirectly affected as a result of commercial bank activities in US mortgage markets. Over the past few quarters, the European real estate market has also been affected, with a number of countries experiencing a downturn in prices similar to that in the United States. By contrast, other countries, such as Switzerland, have seen real estate prices rising at a steady pace. In some respects, what the United States went through is a classical property crisis of the type that Switzerland experienced in the early 1990s. However, the US real estate crisis spilled over to encompass the international financial markets, endangering their stability and prompting the intervention of several central banks. These events confirm the importance of sound real estate market developments for the economy. It is important to recognise that the Swiss mortgage and real estate markets are very different from their US counterparts.
Broadening the lens of the analysis, my staff then compared the Bronx to a random sample of comparable low income counties that were located in urban areas, again using data for 2013. They looked at the ratio of the volume of small business lending per small business. The ratio for the Bronx was $ as compared to a mean ratio of $ across the sample of other counties. While lower by $ this difference is not large. Taken together, the evidence suggests that while access to small business credit in the Bronx seems more constrained relative to Brooklyn, Manhattan and Queens, it is relatively consistent with what is typically available in lower income counties across the country. Of course, this may simply indicate that small businesses in lower income areas of the country are generally constrained in their credit access. Another way to investigate the question of credit constraints is to look for evidence that would reflect the consequences of these constraints. For example, more constrained access to credit might result in a slower rate of new business formation. My staff analyzed small business starts between 2010 and 2013. For the Bronx, the number of small businesses per capita grew at a 12 percent rate over that period, double the average rate for the sample of 50 lower income counties. This evidence can be viewed in multiple ways. My take is that, in general, it is difficult to prove or disprove the presence of credit constraints with the available data, especially at the county level.

In the case of the Bronx, we found evidence both for and against the proposition. In either case, we take seriously the feedback from local businesses that they perceive access to credit to be a problem. The question then becomes what can be done to improve the situation going forward. Not surprisingly, most loans to small businesses tend to be small. Microloans – defined $ or smaller – make up 90 percent of all loans to small businesses. These loans tend to be labor intensive and costly to underwrite relative to the returns they generate. This combined with the higher risk associated with these loans present challenges to banks. Community development financial institutions (CDFIs) can help fill this space. CDFIs are specialized financial institutions that target their efforts to areas underserved by traditional financial institutions. They provide a range of financial products including capital for investments to start-up or expanding businesses in low-income areas. Most CDFIs tend to be nonprofit organizations, but some are regulated institutions such as community development banks and credit unions. Examples of CDFIs operating in the Bronx include the Bronx Overall Economic Development Corporation, the Bethex Federal Credit Union and Spring  4  BIS central bankers’ speeches  Bank. However, CDFIs tend to make loans smaller than $ A challenge, then, is bridging the gap between the maximum loan amount typically provided by a CDFI and the minimum loan amounts typically provided by a bank.
Any one who travels outside the United States today returns with an appreciation about how rapidly public infrastructure is improving in many parts of the world, relative to what is evident in many parts of the United States. As global markets become more integrated and companies and capital can move more freely across borders, policymakers will face new challenges in the design of regulations. They will have to look more carefully at the balance of benefits and costs, when companies have more choice about where to invest. They will have to find ways for regulations to evolve more quickly in response to developments in markets. They will have to explore ways to cooperate more closely with other governments, where national approaches alone cannot be effective. We need to get used to a world in which we will see, in many areas, less willingness to adopt a U.S. model or to defer to a U.S. view on the appropriate global standard. You can see some of these dynamics in the financial arena, and concern about the erosion in the relative position of the U.S. financial system. Financial markets outside the United States are now deeper and more liquid than they used to be, making it easier for companies to raise capital domestically at reasonable cost. These financial markets are at an earlier stage in the process of capital market development, and they will therefore experience rapid growth in securitization and the role of derivatives.

BIS Review 84/2007  3  These factors, more than other differences in tax, accounting, or legal regulatory regimes, account for the bulk of the declines' share of equity and debt raised in the United States by companies around the world. And this shift is something that we benefit from, not just in the direct sense that U.S. financial institutions play an important role in those markets, but in the broader sense that we will gain from the improvements in economic growth that come from financial market development around the world. But in this context, we need to be more attentive to the risk that specific aspects of our system, regulations or other constraints, create a greater disincentive to locate a financial business here, or to invest here, or to raise capital here, than would have been the case five or ten years ago. We need to take a careful look at how we regulate financial activity in a world where capital is more mobile, and the structure of the financial system has diverged substantially from the system for which our regulatory framework was designed. That does not mean we should contemplate weaker regulation or lower standards. The strength of the U.S. system is in part the result of the confidence we have developed in the integrity and resilience of our markets, in part by establishing strong standards for investor protection, market practices, and safety and soundness. Sustaining this confidence will be critical to the future strength of our financial system.
The sectoral structure of the Spanish economy, skewed more towards services such as wholesale and retail trade and the hospitality sector, only partially explains our country’s poor level of productivity, as measured in terms of output per hour worked. This output stands 14% below that of the euro area. If Spain had the sectoral structure of the euro area, this negative gap would still be 10%.2 1  Endogenous growth models show that knowledge is the only factor of production that generates positive externalities and economies of scale. Romer (1986), Lucas (1988) and Aghion and Howitt (1992). 2  This figure is a 2020 update on the figures set out in Cuadrado, Moral-Benito and Solera (2020). 2  Nor can lower productivity be attributed simply to the smaller size of Spain's business sector. When the registry data on firms from Spain, Germany, France and Italy are grouped together by size, Spanish firms are between 10% and 20% less productive than their European peers, regardless of size.3 In reality, this lacklustre productivity is symptomatic of an array of interconnected shortcomings. Today I will focus on five factors behind these shortcomings. The first factor concerns the very minor role played by innovation in our economy. To give one example: between 2020 and 2021 the ratio of research and development and innovation (R&D&I) expenditure to GDP stood on average at 1.2% in Spain, 0.8 pp below the euro area average.4 The private sector’s failings in this area are particularly striking.

But it also put in place a monitoring framework to ensure that this assessment is kept current and keeps pace with rapid developments in this area. The FSB also identified a number of non-financial-stability risks that need to be addressed by the relevant regulatory bodies in line with its mandate to prevent regulatory underlaps and overlaps. 4  All speeches are available online at www.bankofengland.co.uk/news/speeches  4  And it is not just in the scanning of risks and responses to them that the post crisis reforms have left us in much better position. The stronger institutional framework, reporting to the highest political level, and the development of more granular and more comprehensive standards, provides much greater assurance for jurisdictions about the import and export of financial sector risks. That was the objective of the global leaders at the Pittsburgh Summit when they committed to developing and implementing global standards in a way that ensures a level playing field and avoids fragmentation of markets, protectionism, and regulatory arbitrage. And that is why, five years later, G20 leaders felt able to conclude that ‘jurisdictions and regulators should be able to defer to each other when it is justified by the quality of their respective regulatory and enforcement regimes, based on similar outcomes, in a nondiscriminatory way.’  We need to make sure we can sustain this especially in the face of new challenges. Crisis concentrates minds.
And it means that for the largest, most systemic entities in particular, in all likelihood the subsidiary will not survive the death of its parent. (For that matter, it is likely also that for many groups neither would the parent survive the death of a major subsidiary). This suggests that, as well as a coordinated approach to resolution (with SPE for highly integrated firms) so we need also to have close and committed supervisory cooperation. The third phase: how we take international supervision forward The post-crisis regulatory reforms have, I think, laid the foundations for a constructive and integrated approach to national supervision of international banks – one that can take us away from the initial response of regulatory balkanisation and towards what I have termed committed cooperation. Given the benefits that international banking brings, we are keen to be open for business, provided that business is undertaken safely. But what’s safe depends on what business is being carried out, what legal entity it’s carried out in, and what policy regime applies to those entities. For example, we have a clearly articulated risk appetite for activity undertaken in non-EEA branches, published in 2014. Our appetite is not limitless. It is driven by the equivalence of the home regulator, an appropriate agreed split of responsibilities with the home regulator, and assurances over resolution from the home regulator which embeds a coordinated approach to resolution. We pay close attention to the activities carried out within the branch, particularly if such activities are important to UK financial stability.

As a general rule, the forward price of a currency comprises the spot price plus the interest rate differential between the two currencies. However, for some time now, this rule has only applied to a limited extent for most major currencies. There are several possible explanations for this distortion: on the one hand, a greater need on the part of investors to hedge currency risk; on the other, a decline in bank arbitrage options resulting from more stringent regulations. 3 As chart 6 shows, this has created a situation in which it has become more expensive for foreign issuers to raise Swiss franc capital on a hedged basis. 4  1 2  3 4  Excluding mortgage loans to corporations. If mortgages were included, bank loans would account for an even larger share of corporations’ external financing. Following the introduction of negative interest, capital market rates once again fell much more strongly than bank lending rates. Despite the fall in capital market rates, the banks did not lower – or only partially lowered – their deposit rates to prevent customers from withdrawing their deposits; customer deposits are a stable source of financing. Equally, banks could not simply cut their lending rates in an effort to head off a decline in their interest margin. Cf. Zurbrügg, Fritz (2016), ‘Negative interest rates: necessary from a monetary policy perspective – but with what risks for the banks?’, speech held at Volkswirtschaftliche Gesellschaft des Kantons Bern on 24 November 2016. Cf. Borio, Claudio et al.
We have an effective monetary Eurosystem consisting of the ECB and the 19 national central banks; we have the legal framework for a single financial market and – in part – a Banking Union; we have an exceptional savings capacity – one of the highest in the world – with an annual flow of EUR 400 billion in euro area financial savings in the second quarter of 2018.2 However, as yet we do not have a “financial Eurosystem”, made up of stronger and panEuropean financial institutions and shared market infrastructures. Let’s be clear: there will not be a single City for the continent, but rather an integrated polycentric network of financial centres, with specialisations based on areas of expertise. A polycentric system of this nature can function, as illustrated by the United States: New York’s financial centre is favoured by corporate and investment banks, Chicago’s financial centre handles futures, while Boston specialises in asset management. Paris is well qualified to become the “market hub” of this new European constellation. Our capital hosts four of the euro area’s eight global systemically important banks, the top life and non-life insurance sector and asset management industry, one of the leading bond markets and the largest continental commercial paper market with NEU-CP. It is also the biggest private equity investor in continental Europe. In addition, the French financial authorities, including the Banque de France and the ACPR, are working together to facilitate the dissemination of sound and safe financial innovations and to foster the scaling up of sustainable finance.

The response to Brexit should be the economic and financial strengthening of the euro area: if we remained mired in technical nit-picking with self-satisfaction from some, disparagement from others, and distrust on all sides, we would not only have missed an opportunity, we would, collectively, have failed in our duty. ** I would like to conclude on that note. The unity demonstrated by the EU27 in their Brexit position, behind their negotiator, Michel Barnier, who has done a remarkable job, has been impressive. And everyone now better appreciates – at least in the sense of what they would miss – all the advantages offered by our Europe and our common market. This political desire to “protect” must now unfold into an ambition to “construct”, to build a more effective Europe. Thank you for your attention. 1 European Central Bank press conference, 25 October 2018. 2 Four-quarter cumulative flows. 3/3  BIS central bankers' speeches
Along with other MPC, as well as FPC and PRA Board members, I undertake regular visits around the country organised by the Bank’s network of regional agencies to better understand the economy. They provide an extremely important window on the world, one that data and analysis alone is rarely able to provide. Traditionally, these visits focus on the Bank’s company contacts – in other words, the visits provide, first and foremost, a corporate window on the world. But not least in the light of the Open Forum, I have recently reconfigured those visits. Now, as well as the Bank’s business contacts, I speak to local schools, colleges and universities and to local voluntary organisations, charities and community groups. This has opened a completely new window on the world for me. It is different voices – from the third sector, from trade unions, from students and educators – with different perspectives. There is probably scope to expand the reach of these visits in the years ahead. I am attracted to the idea of “Trust Town Halls”. These would enable me to engage more directly with as wide a spectrum of the general public as possible, in a language that is hopefully non-elitist, in a format that means I am listening as much or more as I am speaking. It is a move out of the echo chamber, an attempt to begin the process of building personalised trust, bridging that Great Divide. Conclusion The Great Divide is a problem for banking, but not just banking.

Global data reveal that close to 95 million people during 2020, fell below the threshold of the poverty line, more that it was expected or projected at the start of the crisis. In this context, labor market data clearly indicate that youth, low skilled workers and women particularly in emerging and developing economies, have been hit harder. There is statistics pointing to a global employment rate for men below the pre-pandemic level by about 5 percentage points, while the women employment rate is still 7 percentage points below the prepandemic level. Given the nature of the crisis, Western Balkan region was not shielded from this global shock. Economies in the region are small and highly open in trade and financial terms, heavily exposed to external developments. GDP in the region declined by 3.4% in 2020, but with intensity that differs across counties in the region, ranging from –1% in Serbia to –15.2% in Montenegro. Henceforth, the disproportionality of the impact of the crisis pertains to the region, as well. Let me use labor statistics to illustrate some important aspects of how COVID affected women. First of all, in general, I can say that this crisis hit women more heavily than men, and this has come on top of the fact that women faced pre-crisis gaps in many respects on the labor market. Couple of numbers in this segment.
2 Recent expressions of solidarity from all over Europe following the barbaric terrorist attacks on staff at the satirical magazine “Charlie Hebdo” in Paris show what a central role the rights to freedom of speech and freedom of expression occupy in our system of values. These values of freedom are central among those accorded great importance in newer Member States from the former Eastern bloc. With the awareness that the common currency within the EU is evidence of closer integration, the introduction of the euro – especially in countries such as Lithuania most recently – is also perceived as a demarcation from, and protection against, purportedly aggressive hegemonic powers. This shows that the European Union and the euro area are far more than an amalgamation of independent nation states. Shared values are all the more important when the cement that typically holds together the parts of a full political union is missing. Alongside a shared identity – a loose concept which has sometimes been maliciously abused in the past, yet one which cannot merely be reduced to a successful football team – or language, this is often long-term transfer payments to even out differences in living conditions. Germany has this in the form of horizontal financial equalisation among the federal states [Länderfinanzausgleich], as well as transfer payments to the states of former East Germany, which are financed by the solidarity surcharge [Solidaritätszuschlag]. It may well be that one day the political will considers fiscal transfers between the Member States of the euro area necessary and desirable.

More than this, I could say that based on diversity and stability, this constituency has gradually emerged, as one supporting the interests of small open economies such as our countries. And today, with Belgium and Luxembourg joining, we are one of the largest and diverse constituencies among European chairs, with a substantially higher voting weight and a voice to play an even stronger role in the IMF Board in the future. Not only do we count nearly a quarter of all the EU members, but we have among us countries with broad experience in the world of finance. I wish to remind you that the first Managing Director of the International Monetary Fund was Camille Gutt, the distinguished Belgian economist. The fifth Managing Director, Johannes Witteveen, was a Dutch national. The First Deputy Managing Director for a long period of time, during the last twenty years, was Stanley Fischer. The historical lesson that a country like Romania has learned for the past forty years as a member of the Dutch Constituency is the importance of continuity. Continuity has given us the feeling of belonging to a great family which is caring and providing for its members. For many of us, former communist countries, being part of this constituency has offered a unique opportunity to benefit from the expertise of Western specialists, in the great effort of institutional development. An example is the Romanian central bank in the early ‘90s.