samchain/econo-pairs-v1 huggingface dataset:
It is to illustrate how far we are into the implementation phase of that reform programme, what remains to be done and, from the vantage point of a macroprudential regulator, how I view the future now that we are eight years on from the financial crisis and memories are beginning to fade. On the first point, the implementation phase, it is illuminating in itself that from a macroprudential point of view I have also chosen to talk about something else today. That is not to say that there is nothing that remains to be done. There is a vast amount of complex and difficult implementation that still needs to happen. My colleague, Andrew Bailey, will set out in a speech tonight the progress we’ve made so far on prudential regulation and three big areas of implementation left to complete: the Senior Managers Regimes, structural reform and competition. But as I have said before, the contours of the reformed regulatory framework for banks are clear – the Basel 3 capital and liquidity regime for banks, the reforms that address too big to fail, especially the regime for loss absorbing capacity in resolution that needs to be held by global systemic banks – which goes by the unlovely acronyms of TLAC and MREL and which is on course to be agreed by the G20 in Antalya this November. And the changes to derivatives and securities financing designed to increase transparency and reduce risk. There are, it is true, some material components of the reforms still under construction.

We probably won’t know for sure just how effective the new regime is until we reach another crisis. Meanwhile we need to guard against the reforms being rolled back as a result of a period without crisis. Let’s complete the programme, give it time to work, be supportive of growth wherever we can, and be open minded about change. But let’s also be cautious about the siren voices of financial self-interest that were partly responsible for luring us on the rocks in the first place. 12  BIS central bankers’ speeches  BIS central bankers’ speeches  13  Annex 1 – Risk based minimum capital requirements and buffers under CRDIV  14  BIS central bankers’ speeches  Annex 2 – Key policy initiatives, by intended implementation date  This diagram, which appeared in the PRA Annual Report 2014/15, highlights some of the major policy work streams that will support delivery of the PRA’s strategy. It includes initiatives for which there is a publicly identified implementation date at UK or international level; however these may be subject to future revision. BIS central bankers’ speeches  15
To be more concrete, let us take the example of Open Banking. The regulatory framework set out by the second Payment Services Directive (PSD2) has lifted the technical and legal barriers to accessing payment account data. The immediate consequence has been the development of a new ecosystem offering consumers a wealth of new services. However, we have also imposed high data protection requirements at the European level, in particular in the rules governing access to this information. Second principle: in order not to be mere spectators of change or react to it too late, we must fully take on the prospective observation, experimentation, and operational commitment. In the area of payments, the recent BigTech initiatives with a global impact have once again brought the current inefficiency of cross border payment solutions to the forefront. However, the issues of financial stability, monetary policy and sovereignty raised by these projects should encourage us to operationalise our efforts to promote more efficient payment systems where appropriate by considering an operational involvement of central banks, based on the consistent and coordinated use of new technologies. As regards infrastructures, we have taken an interest in blockchain technology since its early stages. We were the first central bank to develop, regarding the specific use of SEPA creditor credentials, a decentralised register system based on a blockchain protocol, the “MADRE” register. Of course, this is only a first step, which does not exhaust an extremely vast and diversified field of experimentation.

Durmuş Yılmaz: Role and responsibilities of emerging economies in the global monetary system Speech by Mr Durmuş Yilmaz, Governor of the Central Bank of the Republic of Turkey, at the conference on "Where Is Global Finance Heading? ", Istanbul, 2 October 2009. *  *  *  Dear Guests, I would like to welcome you all to Istanbul. It is a great pleasure for us to host this conference and such a distinguished group of central bankers, academics and experts. I hope this meeting, together with the upcoming events, will be helpful in shedding light on the future of the global financial system. It has been almost two years since the surfacing of global financial crisis of epic proportions and we are still dealing with its repercussions. One can easily identify a variety of reasons for its occurrence: Global macroeconomic imbalances certainly played a key role. Deficiencies in financial regulations and lack of coordination among monetary authorities and regulatory institutions played even a bigger role. Policy makers were quite complacent during the build up in asset bubbles. Accommodative monetary policies enabled access to cheap money. High leveraged transactions magnified the amount of liquidity created through financial system. Search for high yields led to excessive risk taking and use of complex instruments. Compensation scheme in the financial sector encouraged short-term bias. Above all, believed that with the use of complex financial instruments, one can wipe out the risk from balance sheets.
Turning to the technical aspects of this issue, I would note that even if we can agree on, and then measure, the minimum solvency standard which we should be targeting for our international banks, perhaps the really hard step is making a robust connection between individual banks' solvency and the solvency of the system. The latter is the primary focus of central banks though the former is obviously a necessary condition. I am encouraged to see that a number of the papers to be presented here have a go at making this connection. This is an issue which merits substantially more attention and research. It is far from just a statistical exercise: whilst we might just possibly be able to calculate statistically the joint probability of failure for a group of banks from their existing individual probabilities of failure, this does not of course reflect realities. Those realities are that the risk of collective bank failures depends on hard-to-measure and fluctuating factors such as correlations in risk profiles, and the mood and behaviour of the market once fragility at one institution becomes apparent. (c)  Consolidation  The changing financial landscape complicates the task, and this brings me to the third point I wanted to highlight, namely consolidation. Consolidation of financial institutions is a trend that is relevant to several different facets of systemic risk. First, does consolidation make banks more or less likely to fail?

Market discipline through enhanced disclosure does of course form one of the pillars of the new Basel Accord but there are also broader international initiatives underway on this front. What I would like to do is spend a little time here discussing how increased public disclosure, and certain other aspects of the new Basel Accord, could affect financial efficiency and financial stability. Is it possible to achieve advances in both? Enhanced disclosure Clearly the architects of these initiatives believe so. Increased disclosure should help the market distinguish between well-managed and adequately capitalised banks and their poorly managed and unsound counterparts. The latter will as a result come under pressure to improve their performance. This should produce clear financial stability benefits, and also financial efficiency ones, since the weaker banks are likely to be those who in some sense misdirect, or rather mis-price, credit to borrowers. Greater disclosure should also help to address the propensity in financial markets for self-fulfilling crisis. By this I mean, the tendency as conditions deteriorate and confidence is dispelled for market participants to act in a way that precipitates crisis for firms that would otherwise be solvent. The greater the uncertainty the more participants will be liable to trigger a crisis in this way. Increased disclosure has a part to play in reducing this risk. But it also explains the importance that we attach to liquidity management and the need to ensure that, given the current focus on the new Basel Accord, the regulation of liquidity is not overlooked.
From 1986, changes in the exchange rate or the prospect of changes in the exchange rate had implications for interest rates. A stable krone exchange rate was the nominal anchor. In Norway, this has been reflected in wage determination because labour cost developments among trading partner countries have been an important reference. BIS Review 11/2002  1  Exchange rates between major international currencies fluctuate widely. The US dollar has appreciated by more than 30 per cent since 1995. The German mark – the euro since January 1999 – has depreciated by about the same between 1995 and autumn 2000. The Japanese yen has been particularly volatile. Smaller countries have also experienced fairly wide exchange rate fluctuations. The Swedish krona has depreciated by more than 10 per cent since summer 2000. The Australian dollar has weakened by over 30 per cent since spring 1997. The UK, Canada and New Zealand have also experienced wide exchange rate fluctuations. The Norwegian krone exchange rate, on the other hand, has been relatively stable. 2  BIS Review 11/2002  Countries whose exports include a large component of raw materials tend to experience considerable volatility in their exchange rate. Australia is one example. Fluctuations in commodity prices entail changes in countries’ terms of trade, which measures the ratio of export to import prices. Changes in the terms of trade have an impact on the exchange rate, which in turn curbs the effects of changes in commodity prices on profitability in the business sector.

Rating system design  The first area concerns the design of a risk rating system, which is, of course, central to ensuring the effectiveness of the IRB approach. The Basel Committee believes that banks’ internal rating systems should accurately and consistently differentiate between degrees of risk. The minimum IRB standards in this area build on the strongest risk management practices observed in the industry. To illustrate the point, many organizations either already have, or are in the process of developing a ratings system that captures both the risk of borrower default, as well as transaction-specific factors that shed light on the amount of loss that would arise if default occurs. In other words, these banks’ systems are now oriented to capturing the several essential components in estimating credit risk under the IRB approach. Credit risk rating systems are clearly improving in various dimensions, including how finely they seek to distinguish differing degrees of borrower risk. To do so, banks typically look to expand the number of ratings categories into which they slot their exposures. However, just establishing more rating categories is not enough. The challenge is for banks to define clearly and objectively the criteria for these ratings categories in order to provide more meaningful assessments of both individual credit exposures and, ultimately, their overall risk profile. The clarity and transparency of the ratings criteria will be critical to ensuring that ratings are assigned in a disciplined and reliable manner. b.
Hungary Macaristan Mexico Meksika New Zealand Y.Zelanda Poland Polonya S. Africa G.Afrika S. Korea Kore Turkey Türkiye  900 0.03  700 0.02  400  0909  0107  0 0906  0909  0609  0309  1208  0908  0608  0308  1207  100 0907  200  1.4 0607  1.5  0.01  0506  300  0106  1.6  0509  500  0109  1.7  0908  600  0508  1.8  0108  800 1.9  FX Oynaklığı* Volatility Kur  0.04  0907  2  1000  0507  TL/Kur Sepeti (0,5 euro+0,5 ABD doları) TRY/Basket (0.5 Euro+0.5 USD) EMBI+Türkiye EMBI+ Turkey (sağ eksen)  2.1  *50-day moving standard deviation of daily exchange rate changes. Source: Bloomberg, CBRT. BIS Review 143/2009  9  Distinguished Members of the Press, The second quarter gross domestic product (GDP) release was broadly in line with the outlook presented in the July Inflation Report. Within this framework, the GDP decreased by 7 percent in the second quarter of 2009 compared to the same quarter last year (Figure 22). Meanwhile, the GDP in seasonally adjusted terms displayed a significant upswing compared to the previous quarter bringing an end to the persistent contraction in economic activity observed since the second quarter of 2008 (Figure 23). While domestic consumption demand rose markedly during the second quarter mainly owing to the fiscal stimulus package, external demand remained weak.

The ECB has had to use different instruments at different stages of the crisis. Now the economic and financial situation in Europe is significantly better. Financial fragmentation has receded, Member States have made significant efforts towards economic convergence and the governance of the euro area has been strengthened. We are gradually moving out of the  BIS central bankers’ speeches  1  crisis phase into a different environment, with the focus shifting from solving the crisis to ensuring stable economic growth and inflation close to 2%. It requires a different approach and different instruments. The developments beyond our eastern border are the big topic of debate in Poland at the moment. Could the conflict between Russia and the Ukraine affect Europe and its economy in any way? The impact on trade or the financial system has thus far been limited. But this situation does give rise to uncertainty, so it can be regarded as a potential negative factor that could hinder economic growth in Europe, and that is part of our risk assessment. What about the strong euro? Aren’t you worried it could cause problems for European exporters and hinder the recovery? The ECB doesn’t target the exchange rate. Our primary mandate is price stability, and within this mandate, the exchange rate of the euro is among the factors determining the level of inflation. And indeed, the strong euro is contributing to the current low inflation.
Realised real rates – calculated as observed nominal rates minus the realised inflation rates – have also declined, and have been substantially lower in the 2000s than in the 1980s (chart 3). There are several potential explanations for this development. A first explanation is the “global savings glut” hypothesis, which states that the decline in real interest rates was the result of an increase in savings from emerging economies and oilproducing economies. It is argued that this increase was driven by, among other things, an accumulation of foreign exchange reserves, elevated oil prices and precautionary savings (chart 4).2 But the decline in real rates could also result from a decrease in growth prospects – itself caused, for instance, by a decline in the growth of productivity or population, or by demographic shifts, particularly a reduction in the working population relative to the nonworking population (charts 5 and 6).3 None of these possible explanations for the reduction in real interest rates has been fully confirmed, and therefore they do not constitute a sound basis for forecasting future interest rate developments. But the discussion highlights the fact that, in order to understand longerterm trends in real interest rates, we have to rely on low frequency changes in fundamental economic factors, while monetary policy does not play a primary role here. The cyclical downturn Let us now turn to more recent interest rate developments. As mentioned, since the financial crisis and the global economic slump that followed, we have seen a further fall in rates to very low levels.

Jeremy Stein at the Federal Reserve's Board of Governors has expressed it as the advantage of monetary policy being that it "gets in all of the cracks”.27 It is also worth pointing out that in countries such as Norway and Canada they are fairly explicit in saying that the policy rate has a role to play in this context – and this is despite the fact that they have come further in the macroprudential field than we have.28 It remains to be seen where we eventually will end up when it comes to this issue. My own opinion is that we will probably not be able to have a completely strict division of labour between monetary policy and macroprudential policy and that the policy rate cannot be ruled out as a tool for counteracting financial imbalances. There will probably always be situations where macroprudential policy needs the support of a monetary policy that at least to some extent “leans against the wind”. But we still do not have any certain answers and I believe it is wise to keep all doors open. A formative stage Let me round off. There is no doubt that we are internationally in what one might call a formative stage with regard to macroeconomic policy in general and monetary policy in particular.
BIS central bankers’ speeches  3  This creates an additional source of funding for banks which in turn increases the supply of credit to the private sector. A last channel is the signaling effect. By acting decisively and more aggressively than anticipated, we hope to lift inflation expectations. Conclusion Let me conclude with my assessment of the impact of the QE. So far, recent indicators suggest that our quantitative easing has had a positive effect on inflation expectations. This is true when looking at market-based measures at short term horizons, although less so at long term horizons. Looking at the recent release of the ECB survey of professional forecasters, there is an upward trend in inflation expectations over the medium to long term. But, as shown by the US experience, re-anchoring inflation expectations takes time. The Eurosystem is ready to go further if necessary to deliver on its mandate of maintaining inflation close to but below 2%. But monetary policy will be more effective if, at the same time, governments increase the potential growth rate by implementing ambitious structural reforms. 4  BIS central bankers’ speeches

But when interest rates soared from 1980 onwards, the payments to service this debt began to cripple the economy. At the same time, the projects these investments went into failed to deliver the expected returns. It all ended in a severe debt crisis that set back Latin America by at least a decade. Essentially, a mispricing of capital resulted in cheap funding and overinvestment. 11. Developed economies are equally prone to the risks of mispriced capital. The subprime mortgage crisis, which precipitated the global financial crisis less than three years ago, is another example of mispriced capital leading to excessive risk taking and leverage. Low interest rates in the US fuelled both a housing and a credit bubble that eventually burst, dragging down investors and intermediaries alike. 12. In emerging Asia, today, high levels of domestic savings coupled with large capital inflows pose the risk of unproductive investments and asset bubbles. When capital inflows slow down, as they inevitably must, the consequent unwinding will be rapid and possibly unpleasant. Asian policymakers have been responding to the situation in various ways 13. First, they have allowed the price of capital to rise – either through exchange rates or interest rates or both. Second, they have regulated the demand for capital through fiscal tools, such as transaction taxes and stamp duties. Third, they have regulated the supply of capital through administrative tools, ranging from restrictions on bank lending to selective capital controls. 14. The most effective way is to price capital correctly.
As shown in the chart, the risk premium in capital markets on long-term credit to enterprises has increased. In addition, many international enterprises now have a poorer credit rating than earlier This has also affected borrowing in Norwegian companies, which now have to place greater emphasis on their customers’ ability to honour commitments. International financial and capital markets are characterised by uncertainty and unrest. This unrest is not found among economic agents in Norway. As long as oil prices are high, the Norwegian economy is fairly sheltered. Many central banks are now reducing their key rates. As our economy is affected to a lesser extent, the differential between short rates in Norway and abroad may widen. Monetary policy The long-term objective of monetary policy is to provide the Norwegian economy with a nominal anchor – domestic price stability, and thereby the basis for a stable krone. Nominal stability is the best contribution monetary policy can make to economic growth and prosperity. A nominal anchor is also a necessary precondition for stable financial markets and property markets. High inflation and wide swings in the exchange rate impair the function of prices as an information vehicle. This leads to booms followed by busts and an arbitrary redistribution of income and wealth. Inflation therefore poisons the economy. By linking movements in the krone to the euro, we have chosen to follow the same standard for nominal stability in the economy as set by the euro area countries.

Mervyn King: How international cooperation can raise Britain’s economic performance Opening remarks by Mr Mervyn King, Governor of the Bank of England, at the Panel on EU/US cooperation at the Advancing Enterprise Conference, London, 26 January 2004. *  *  *  Chancellor, Ladies and Gentlemen, In this session we shall examine how international cooperation can raise Britain’s economic performance. Before introducing our speakers this afternoon, I would like to present a few facts about productivity in this country, and then pose three questions. You might ask why a central bank governor is chairing a panel on enterprise. Well, some believe in prudence for a purpose; we believe in stability as a spring-board, a springboard for enterprise. Since the start of the Railway Age in the 1830s, output per person has increased ten-fold in Britain; it has increased twenty-fold in the United States. That is because over that period output per person rose on average by 1 ½% a year in the UK and by 2% in the US. The result is that the level of output per person is now around 25% lower in Britain than the US. In part this reflects shorter working hours, but it also reflects a lower level of productivity. From around 1980, however, the productivity gap between Britain and United States started to close, and for the following 15 years or so labour productivity actually rose significantly faster in the UK than the US, at an annual rate of 2.1% compared with 1.4%.