samchain/econo-pairs-v1 huggingface dataset:
Scotland played a very major part in that period of economic development, and in the first official history of the Bank of England, Sir John Clapham recorded that the Scots loved their banks. Banks were then important institutions supporting the industrialisation of the British economy and the trading system that fostered this growth. There is no difference today as the purpose of banks remains to support activity in the real economy, most obviously by intermediating between savers and borrowers to enable credit creation. Now an observer could easily intervene and say “yes, but, what I observe is that they have developed funny ways of going about it” – complicated products, likewise impenetrable slicing and dicing and re-packaging, all with the end of supporting bankers’ remuneration on a vast scale. There is some truth of course in that observation, but let’s not forget that there is a permanent interest of public policy to ensure the continuous provision of critical financial services to the real economy of this country, that is protecting savings, enabling payments, credit creation etc. What goes with this is a very sharp public policy interest in the state of the banking system. This will not change and nor should it – banks are too important to lose sight of them in ways that happened in the past. The job of prudential regulators is to maintain the safety and soundness of the banking system to ensure the continuity of those critical services to the economy and to the public.

We note that whereas most of our colleagues from Francophone countries are able to speak English fluently, our employees cannot even exchange a simple greeting in French without the aid of an interpreter. As you are well aware, Your Excellency, Zambia has eight neighbouring countries amongst whom, at least, one is French speaking; two are Portuguese speaking and the rest are Anglophone. As neighbours and countries falling under the same sub-regional and regional groupings, we collaborate a lot amongst ourselves on a number of regional cooperation agreements where inability to speak, read or write French or Portuguese is sometimes a major communication barrier. For instance, in Africa Zambia belongs to three regional groupings, namely SADC, COMESA and the African Union (AU). All these groupings include Francophone member states, and, at times, our interests, as a nation, have not been well articulated to our Francophone counterparts in these regional groupings due, in part, to our inability to communicate effectively in French. Further, as I stated earlier, Zambia shares a border with one of the largest and populous country in Africa - the Democratic Republic of the Congo (DRC) - where the official language is French. However, in spite of being neighbour to this huge market, Zambian enterprises have not captured the enormous business opportunities offered by the DRC, largely, on account of their inability to communicate effectively in French. The same also applies to Angola where there is a huge reconstruction programme going on, in which Zambian enterprises could participate.
The prolongation of the Spanish economy’s current growth phase over the coming months will essentially be based on the strong pace of expansion of national demand, although the external sector will continue – as seen since 2016 – to maintain its positive contribution. In particular, buoyant employment and the favourable conditions of access to credit are boosting household consumption and the pick-up in spending on residential investment and on equipment. 3/8  In the medium term, there will foreseeably be a gradual convergence towards more moderate growth rates, as a result of the disappearance of certain factors that have contributed to boosting activity. Such factors have been the declines in oil prices, the moderation of financing costs, supported by the ECB’s monetary policy, and the expansionary fiscal policy stance over the two-year period 2015-2016. As in the euro area as a whole, since late last year the year-on-year rate of change of the CPI has been highly volatile; it stood in May at 1.9%, the outcome – as earlier stated – of energy price fluctuations and, also, of the effect of the Easter holiday week in April, given that in 2016 Easter fell in March. These temporary factors will progressively peter out in the coming months, although the average rate for the year is expected to stand at around 2%. In 2018 and 2019, in the absence of further shocks, the rate of increase of the CPI might settle below this reference.

The Pensions Regulator has noted that as of end-2021, c. 15% of the roughly £ in UK LDI assets were in multiinvestor pooled funds, which equates to roughly £ Due to the volatility of gilt prices and yields, these estimates will not reflect the current position, and the rise in gilt yields in 2022 will have reduced the total amount of hedging. 11. The UK corporate bond and fixed rate mortgage markets are around £ trillion, and gilt pricing also underlies a broader set of markets beyond these. 12. The Bank’s recent CCP Supervisory Stress Test used reverse stress testing to look well beyond historical precedent. 13. The Bank and the FCA have sent Dear CEO letters to firms following the default of Archegos and conducted a supervisory review of global equity finance businesses. This requires relevant firms to carry out a systematic review of the business strategy and organisation and financial risk management controls and governance. And the Bank put out a consultation on supervisory expectations for contingent leverage within banks’ ICAAP assessments and new requirements of its reporting. 14. TPR regulates pension schemes; the FCA regulates LDI managers. 15. See Building Financial Market Resilience: From diagnosis to prescription – speech by Jon Hall 16. This progress has been led by the FSB, with the involvement of international standard setting bodies. The FSB has set out its analysis  of non-bank risks and a programme of work last year and is due to report on next steps soon.
Chart 2: Return on equity for UK banks  Source: Capie and Webber (1985), Billings and Capie (2011), British Bankers’ Association, Megabank and Bank calculations. 12  BIS central bankers’ speeches  Chart 3: Global banks’ CEO compensation  Source: Published accounts and Bank calculations. BIS central bankers’ speeches  13  Chart 4: Order cancellation ratios  Source: Angel et al (2010), Nanex and Bank calculations. Notes: Data before 2010 are for the Nasdaq exchange only and refer to the ratio of cancellations to transactions. Data for 2010 onwards refer to all US exchanges and are the ratios of quotes to transactions. 14  BIS central bankers’ speeches  Chart 5: Flash crash dynamics Price dif f erence $  Index  0.40  11,000 10,800  0.30  Dow Jones (RHS) 10,600  0.20  10,400 10,200 Dif f erence in max and min price of GE shares (LHS)  0.10  0.00 14:20  14:30  14:40  14:50 Time  15:00  10,000  9,800 15:10  Source: Bloomberg, NANEX and Bank calculations. BIS central bankers’ speeches  15  Chart 6: Composition of European banks’ term debt issuance  Source: Dealogic and Bank calculations. Chart 7: Euro-area banks’ refinancing challenge, 2012  Source: Dealogic, CPWare, Crane, SNL Financial, National Central Banks and Bank calculations. (a) Senior unsecured funding issued in public markets with a maturity greater than 18 months. (b) Covered bond issuance and net take up of central bank repo funding as part of the two ECB 3-year LTRO operations.

The pattern is found throughout the animal world, in features as conspicuous as over-sized antlers and over-elaborate plumage.3 In many cases, these physiological features have evolved as a response to a competitive sexual race, a Darwinian tournament. Matthew Ridley calls this the Red Queen Race from the Alice in Wonderland scene in which “however fast they went, they never seemed to pass anything.4 As elephant seals, deer and peacocks can attest, it is a race in which, in their quest to win, the species as a whole may end up as loser. So nature can deliver an evolutionary equilibrium which is sub-optimal for its participants, a market failure. The more intense the competitive race, the greater this market failure or co-ordination problem. Elephant seals would prefer to co-ordinate on a lower-blubber equilibrium, deer on a shorter-antler equilibrium, peacocks on a smaller-tail equilibrium. Competition prevents them from doing so. If there were a benign, enlightened zoological planner, able to compel less-conspicuous features, this would benefit not only each animal but the species as a whole. Unfortunately, there is not. ************ These inefficient Darwinian equilibria are as common in social as in natural systems. Garrett Hardin’s 1968 classic Tragedy of the Commons uses the metaphor of individual herdsmen grazing their cattle on common land. “Each man is locked into a system that compels him to increase his herd without limit – in a world that is limited.
Rather, the New York Fed's actions have consistently been directed at securing its objectives as lender. As any lender in our position would do, the New York Fed has put into place a loan agreement that contains covenants designed to help ensure ultimate repayment of the loan – but these creditor's rights do not create an ability to manage AIG. Responsibility for AIG's day-to-day affairs continues to rest with AIG's chief executive officer, Edward Liddy, under the oversight of AIG's board of directors. Mr. Liddy, who has only become involved with AIG in a public-spirited attempt to resolve its troubled affairs, has  BIS Review 35/2009  1  made strides in dealing with AIG's opaque corporate structure, lack of centralized controls and complex risk exposures, but much remains to be done. In light of the inherent conflicts that would arise from either the U.S. government or the Federal Reserve exerting ownership control over the world's largest insurer, the Federal Reserve, with the support of the Treasury Department, directed in the loan agreement that an approximately 77.9 percent equity interest in AIG be issued to an independent trust established for the sole benefit of the United States Treasury. The trust, which now holds that controlling equity interest, is overseen by three independent trustees who are of the highest integrity and who have considerable experience leading major companies.

Collateral should be required, but good collateral can never outweigh a borrower with a poor credit rating or an uncertain project. The bank must also make a realistic assessment of the value of collateral. For example, it is common to provide the borrower’s own premises as collateral. However, when a borrower goes bankrupt the value of the premises often declines substantially, as it is difficult and costly to adapt them to another user. The banks accepted high concentrations, not merely in lending to individual borrowers, but also credit granting to individual sectors and geographical areas. For example, the banks’ loans to the property sector, or with property as collateral, accounted for more than 60 per cent of all loan losses. This is a concentration risk that contravenes all sound risk management and is currently prohibited. However, it is easy to say all this with the benefit of hindsight. At the end of the 1980s, the banks had substantial profitability and low loan losses. Economic activity was strong. I believe that all of us active in the financial system then would have found it hard to believe that a crisis was impending. Nevertheless, the Swedish banks had one important piece of the puzzle already in place prior to the crisis. They were well capitalised and had built up capital reserves that corresponded to, or exceeded, the statutory level of 8 per cent. This created some resilience and to a great extent reduced society’s direct costs when the crisis occurred, as the bank owners’ money was lost first.
I will begin by talking about the prominent issues related to the discontinuation of the minimum exchange rate. This will be followed by our present assessment of the Swiss economy and price developments and an explanation of our current monetary policy. Alongside our willingness to intervene on the foreign exchange market as necessary, negative interest on SNB sight deposits plays an important role in monetary policy. I would therefore like to look at this subject in greater detail today. Rationale for discontinuing the minimum exchange rate Let us begin with the reasons for discontinuing the minimum exchange rate. In the course of 2014, there were growing signs that a US exit from a highly expansionary monetary policy was drawing closer. In the euro area, by contrast, there was increasing evidence that monetary policy would be eased further. Against this backdrop, the euro depreciated considerably against the US dollar. These diverging monetary policy stances in the major currency areas affected the Swiss franc in two different ways. Like the euro, the Swiss franc weakened against the US dollar. Against the euro, however, it gradually approached the minimum exchange rate of CHF 1.20. At that time, the weakening of the euro had not yet cast doubt on the sustainability of the minimum exchange rate. Consequently, at the monetary policy decision in mid-December, we made the decision to leave monetary policy unchanged. Shortly after our monetary policy decision, the economic crisis in Russia escalated.

Subsequently, the SNB had to make very substantial interventions in the foreign exchange market to enforce the minimum exchange rate. In order to support the minimum exchange rate, we introduced negative interest on sight deposit account balances at the SNB. At first, the situation quietened down again. However, this proved to have been the calm before the storm. Due to growing expectations that there would be a further substantial  BIS central bankers’ speeches  1  relaxation of monetary policy in the euro area, the euro weakened again significantly in the first half of January 2015. In the wake of this downturn, pressure on the minimum exchange rate increased enormously. Unlike the situation in 2012, when the monetary policy stance in the US and the euro area remained unchanged, it became evident that this time the minimum exchange rate could only be enforced through permanent currency interventions of rapidly increasing magnitude. In other words, the minimum exchange rate of CHF 1.20 per euro was no longer sustainable. Adhering to the minimum exchange rate would have led to an uncontrollable expansion of our foreign currency holdings and, thus, of our balance sheet, potentially to a level several times Swiss GDP. The risks associated with a balance sheet expansion of this scale would have been out of all proportion to the benefits of the minimum exchange rate for the Swiss economy. In particular, an expansion of the balance sheet would have severely impaired the SNB’s ability to conduct monetary policy in future.
That insurance needs to be provided on terms that do not incite imprudent liquidity risks, and that are time consistent, in the sense that we avoid needing to recast our regime when really difficult times hit. The Bank set out its approach in the paper we issued last autumn on the launch of our Discount Window Facility, through which we stand ready to lend against a wide range of  BIS Review 39/2009  3  collateral at pre-determined fees to banks that are not facing fundamental problems of solvency or viability. Capital, and capital-of-last-resort I have talked about liquidity partly because, as our community returns to thinking about bank supervision in terms of stability as well as consumer protection, it needs to be centre stage again; but also because we can think about capital regulation under the same broad headings. What should count as capital; what risks should it protect against; and what happens when the system turns out not to have enough capital? On the definition of capital, I agree with the Turner Report that what matters to stability is common equity (and possibly, subject to further analysis, also instruments that can unambiguously be converted into common equity at the option of the bank or regulator). That is because confidence in a bank as a going concern is crucial to the stability of its deposit and wholesale funding base.

Subordinated debt may well help to protect depositors in the event of liquidation, but it cannot absorb losses on a going-concern basis and so does little to avoid the incentive to run or, therefore, the slide into resolution. Nor does subordinated debt alter the position of retail depositors, who can look to the deposit-protection scheme, especially now that it provides 100% cover up to £ Subordinated debt can enhance recoveries made by the Financial Services Compensation Scheme. But it is not directly stability-enhancing. The composition of regulatory capital was allowed to become too complicated. Including debt instruments is effectively to allow double leverage. The Basel Committee is itself returning to this question. As with liquidity, I do not want to say much today about how to measure the risks that capital should cover. I applaud the Turner Report’s analysis of “trading book” risks; as discussed in the Bank’s Financial Stability Review a few years ago, making Value at Risk the bedrock of market risk requirements allows capital to fall, or leverage to rise, during periods of unusually low volatility. The Basel Committee are addressing this. More generally, the degree of stress that capital should enable banks to withstand, whether against default risk or market risk, should be decided by the authorities not by individual banks, precisely because of the systemic significance of banks to the payments and credit system.
Therefore, we have a small increase in bad loans, which reached about 12 percent. I think this process will slowly wind down. Then, together with the reduction of the risks that banks see in the real sector, and which will come to the surface now after the positive signals from the European economy, lending to companies will become a little more intensive. In one of its reports NBRM has pointed out that one of the limiting factors for higher credit growth are some conservative strategies in the local banking groups. What specifically did you mean? Yes, we pointed out the conservative strategies. And it is no secret that here we primarily think of the problems that some of the banks present in Macedonia have in their home countries. Banks in Slovenia and Greece are in serious problems, even though their banks in Macedonia are among the best, by both the quality of corporate governance and the credit risk management, and also the level of capital and liquidity they have is the highest in our  BIS central bankers’ speeches  1  banking system. So, their banks in Macedonia have no impediment to normally work and grant loans. But don’t they grant loans normally? Well, some of them are quite restrained. We constantly talk to them and they promise to be more active in the market. Which of them are restrained? Stopanska Banka has been quite restrained in recent years, but it always had positive rates of credit growth. It has never cut lending.

Dimitar Bogov: We will need foreign loans also in the coming years Interview with Mr Dimitar Bogov, Governor of the National Bank of the Republic of Macedonia, in Utrinski Vesnik, conducted by Ms Nina Nineska-Fidanoska and published on 22 August 2013. *  *  *  Mr. Bogov, in June, lending grew by only 3.7 percent, which is considered a very low rate. Few months ago, businessmen called for an annual credit growth rate of 8 to 10 percent. Is there a chance to reach that goal and when? It is usually considered that credit growth should be two times the nominal growth of the gross domestic product. This means that if we want to achieve long-term real GDP growth of some four to five percent and inflation of two to three percent, then certainly I would say that credit growth of 10 to 15 percent is normal and desirable. But we were in a period of slower economic growth, so that the credit growth rate was relatively low in the last year. This year it continued, and in June we had an annual credit growth rate of 3.7 percent. It is low, but in line with our projections. For the entire year we expect credit growth of 7 percent and we believe we will achieve that rate. In June and July we already have a more intensive monthly credit growth compared to the previous months and we expect that trend to continue.
Thus, the more open and aggressive equity market environment of the anglo-saxon model seems to have delivered ultimately the fitter economy. But we should remember that the stock market doesn’t serve everyone who is looking for equity finance. There is a large population of smaller and mediumsized businesses which cannot aspire to access the market. Nevertheless they are important contributors to the economy and need equity funding. Few, if any, economies have been able to match the USA when it comes to enterprise culture and the relatively abundant sources of funding available to SMEs. Even in Hong Kong, where we pride ourselves as being highly market-oriented and enterprising, we cannot claim that life is a bed of roses for SMEs. But I am encouraged by the launch of the Growth Enterprise Market - the stock exchange’s second board – which fills a particular gap, albeit only one, in the needs of smaller or younger companies. The final years of this century have also seen inflation largely conquered across much of the world economy. Low inflation should provide a propitious climate for the issuance of medium and long-term debt instruments. In Hong Kong the debt market has been growing, although more at the short end than the long, and the secondary market is not greatly active, except for Exchange Fund bills. There is of course nothing wrong in investors wanting to hold instruments to maturity; indeed, in one sense it may be interpreted as a sign of confidence.

Norman Chan: Hong Kong as an international debt financing centre Remarks by Mr Norman Chan, Deputy Chief Executive of the Hong Kong Monetary Authority, at the cocktail reception of HKCMA Forum 2005, Hong Kong, 26 January 2005. *  *  *  Mr Yiu, ladies and gentlemen: I am very pleased to be invited to speak at this Cocktail Reception today. Let me first congratulate the Hong Kong Capital Markets Association for successfully organising this Forum. I am glad to note that the Forum has drawn together many market participants to discuss a number of important issues related to the role of Hong Kong as an international debt financing centre. Over the years, the Hong Kong Monetary Authority (HKMA) has been working closely with the HKCMA in developing the debt market of Hong Kong. This co-operation has turned a new page last year with the establishment of the Hong Kong Treasury Markets Forum, or the TMF in short, on which the HKCMA is represented. As the Chairman of the TMF, I would like to take this opportunity to introduce how the TMF intends to work with the industry associations, including the HKCMA, to enhance the competitiveness of the treasury markets in Hong Kong. As some of you may already know, the TMF was set up in March 2004 by restructuring the previous Foreign Exchange and Money Market Practices Committee.