samchain/econo-pairs-v1 huggingface dataset:
This year's conference will feature a very important topic, given the current economic context marked by a sharp increase in energy prices and the uncertainty regarding the war in Ukraine and the related sanctions. As a sad digression, I recall that last year's NBR-EIB conference was on the Eve of the war, on February 23rd. Coming back to the effects that can already be seen in the households' and investors' confidence, there is a deterioration of the economic climate expectations, there are pressures in the economies of our major trading partners and the risk perception towards economies in the region, with impact on the financing costs. 1/3  BIS - Central bankers' speeches  As we know, this event centers on the EIB's Investment Survey, an excellent country analysis conducted by the Bank. The conclusions of this survey are relevant for both companies and authorities, including the National Bank of Romania, as they capture appropriately the opinions of the real sector on some key issues, such as: (i) the most pressing problems that firms are facing in their activity; (ii) the investment needs and priorities; (iii) challenges raised by climate change and energy efficiency. The survey shows that firms in Romania have become less optimistic regarding investment conditions for the year ahead. While this is a worrying trend, we are rather positive that Romania will be able to overcome the main problem identified, the energy costs, in the near future.

The total capital ratio remained adequate, above the EU average, but the capital reserve shrank once with the marking to market, because of the fast-paced interest rate rise. Asset quality continued to improve, with the non-performing loan ratio falling to European levels and the NPL coverage by provisions staying at significantly higher levels than the European average; profitability increased. Yet, Romania's banking sector faces a number of vulnerabilities: (i) expectations on a higher risk of default on private sector loans amid worsening macroeconomic conditions, the uncertainty about future developments, and growing debt service due to higher interest rates, (ii) the close link between the banking sector and the government sector, and (iii) the polarization of credit institutions by size. The slowdown in lending, which started in the second semester of 2022, was also due to the rise in financing costs amid the tightening of both monetary policy stance and  2/3  BIS - Central bankers' speeches  credit standards. In the second quarter of 2022, banks tightened credit standards for loans to non-financial corporations and to households, and were expected to continue to do so in the third quarter of 2022. The prolonged energy crisis, the heightened geopolitical tensions and the mounting uncertainty about the economic outlook prompted banks to reassess the level of risk. In respect with challenges raised by climate change and energy efficiency, as of May 2022, the NBR started collecting information on green loans from banks.
The return generated by Norges Bank’s investment management in 2008 was 3.4 per cent lower than the benchmark portfolio used as performance measure. This is considerably weaker than might have been expected in light of our investment strategy, which relies on a large number of small, independent positions. In the period since 1998, the Fund has recorded a cumulative annual excess return of 0.04 percentage point lower than the return on the benchmark portfolio defined by the Ministry of Finance. Norges Bank’s aim is to generate added value through our investment choices. After many years of high performance, the Fund is now right back where it started. The Fund’s underperformance and the fall in overall return can largely be attributed to the financial crisis. Assessment of the results of our active choices should, in our opinion, also take into account the long-term perspective on which the Fund’s investment strategy is based. Norges Bank’s investment results since 1998 are different for the two asset classes equities and fixed income instruments. Although active equity management generated negative results in 2008, these were well within the limits predicted by our risk models for any one year. However, since the beginning the annual excess return on equities has been close to ½ percentage point. We have established an equity management strategy that seems to be fairly robust to market fluctuations and that has, as we have seen, generated solid returns viewed over a longer period. Developments in the Fund’s fixed income portfolio have followed a different path.

Of course, there is no reason to ban books, but the unrest caused by this book is actually a positive thing. It is a sign of changing times, enhanced understanding, and diminishing prejudice. When that book was published in the mid-20th century, hardly anyone thought of it as being hurtful or offensive in any way. But now we see that it can indeed be those things, and this is why the publication of the book and the ensuing discussion are a positive indication of new times and changed perspective. Actually, recent decades have seen a fervent effort to recast well-known terms and names for all sorts of phenomena so as to avoid injuring those who, either temporarily or for the long term, might be vulnerable. This is also positive, though some of these philanthropic efforts have gone a bit too far in their enthusiasm. Another phenomenon we see is that newly coined terms soon become cloaked in a sort of semi-divinity in Iceland – like the term “international expansion,” which no one dares oppose lest he be accused of being an anachronism, devoid of a sense of “vision,” as it is now called, and of not knowing when the time is ripe for action. Upon closer scrutiny, the term “international expansion” seems to be nothing more than investment abroad – together with utilisation of knowledge and talent, of course.
As with climate disclosure, such strategic assessments will need to go global if the world is going to stabilise temperatures below two degrees. That is one reason why the Bank is developing its stress testing approach in consultation with industry, the Credit Rating Agencies and the Network for Greening the Financial System (NGFS) – a group of 42 central banks and supervisors (including the JFSA) that represent half of global emissions. Fourth and finally, the TCFD should consider how asset owners could best disclose how well their portfolios are positioned for the transition to net zero. construction; automobiles; and food, agriculture, and forest products. The United Nations Environment Programme Finance Initiative worked with 16 large global banks to pilot the TCFD recommendations and develop a scenario-based approach for assessing the potential impact of climate change on the banks’ lending portfolios. 17 The Bank of England set out in its July 2019 FSR its intention to test the UK financial system’s resilience to the physical and transition risks of climate change. It will gather views on the design of the exercise and, as a first step, will publish a discussion paper in autumn 2019. More information available at: https://www.bankofengland.co.uk/-/media/boe/files/financial-stability-report/2019/july-2019.pdf. 10  All speeches are available online at www.bankofengland.co.uk/news/speeches  10  For sustainable investment to go truly mainstream, it needs to do more than exclude incorrigibly brown industries and finance new, deep green technologies. Sustainable investing must catalyse and support all companies that are working to transition from brown to green.

It provides them with a more stable environment than the former dollar-based regime. Today, the euro and the dollar act to some extent like mutual shock absorbers. As a result, small currencies are closer to their economic fundamentals than earlier, which gives third countries a real opportunity to implement independent monetary policies aiming at price stability. BIS Review 72/2004  5
The Spanish economy Spain, as I said earlier, has been one of the euro area economies that has continued to post high growth rates, compared with the relative slackness of the area as a whole. The new base-year 2000 National Accounts estimates for Spain, released a few weeks ago, indicate that its GDP grew in 2004 at a significantly higher rate than the previous estimate (3.1% against 2.7%), albeit with a more unbalanced composition. Moreover, the growth rate has remained on a mildly accelerating path, which has continued into 2005 Q1, when output stood at 3.3% compared with the same period in 2004. As indicated in the Annual Report, it has not yet been possible to analyse in depth the new National Accounts series, although the first comparisons with previous estimates indicate that both datasets offer a fundamentally similar diagnosis of the economy’s performance. In particular, the higher growth the new figures - available so far from 2000 - show has confirmed the continuity of the long expansionary phase in train since the mid-nineties. The expansion has been the result of the notable momentum of domestic demand combined with high employment-generating capacity and the extension of the supply side of the economy, two mutually reinforcing phenomena over these years which have provided a sound base for growth. Spanish euro area membership lay at the root of the significant expansionary impulses experienced by household and corporate expenditure.

Thus in 2004 Spanish credit institutions again achieved very high levels of profitability, whether measured as growth on the previous year or as ROE, which was more than 14% higher than the average reported by their international competitors. The high business volumes, which more than offset the negative effects of low interest rates on net interest income, and the tight control over operating expenses, which enabled the efficiency ratio to be further improved, are the two basic factors behind this favourable performance. Moreover, business activity has been stepped up precisely through instruments that provide institutions with collateralised assets, specifically mortgage loans, which are characterised by lower default rates. Finally, this favourable earnings performance is also a result of the diversification of income sources, with significant growth of those associated with the provision of collection, payment and non-banking product services. Solvency remains at levels comfortably above the minimum regulatory requirements, although the strong growth of business, and therefore of capital requirements, meant that the bank solvency ratio decreased slightly in 2004 with respect to 2003. In the case of Spain, this solvency was strengthened by a rigorous bad debt provisioning policy. That said, the more optimistic and favourable the central scenario, the greater the need to pay careful attention to potential fragilities.
This will equip supervisors to deal with the future evolution of Basel II in a constructive and coordinated way. I also foresee greater transparency surrounding the risks faced by banks, and in how banks are measuring and controlling them. In the future, I expect banking supervisors to place greater emphasis on the techniques of securities regulators by requiring more information to be disclosed to the markets and the public. We will likely place even greater reliance on market processes and corporate governance to ensure that banks are soundly managed and well capitalised. Sound precepts of risk management and prudential supervision While there will inevitably be ongoing challenges to the vision of capital adequacy embodied in the new framework, particularly to its more technical aspects, I have no doubt that the sound precepts of risk management and prudential supervision that underpin the new framework will be an enduring feature of future versions regulatory capital requirements for banks. Alas, the requirements and modeling of certain types of risks may get excruciatingly complex. Indeed, for some of us, they have already reached that point. But in selecting and imposing such requirements, supervisors will be practical, and will look to the best risk management practices of banks and other financial institutions as the basis for setting risk sensitive capital requirements. And as supervisors become confident that the risk management processes of an institution are appropriate to match its risk appetite and operations, minimum capital requirements will edge downward.

The charge that central banks are out of monetary ammunition is wrong, but the widespread absence of global price pressures demands that our firepower be well aimed. Indices of policy uncertainty are about 1¼ times their pre-crisis averages in the US and Japan, and as high as three times in China. In the UK, progress since the financial crisis has been more than totally unwound this year with the measure having risen to five times its precrisis average by the start of the official referendum campaign (Chart 3). 5  A closely watched measure of economic uncertainty – the VIX – spiked when the global financial crisis hit. Measures that combine this with other sources of economic uncertainty, such as dispersion among forecasters’ growth projections, households’ unemployment expectations, and currency volatility, show clear variation over time, and rise at times of economic stress. See Haddow, A, Hare, C, Hooley, J and Shakir, T (2013) “Macroeconomic uncertainty: what is it, how can we measure it and why does it matter?”, Bank of England Quarterly Bulletin, Q2. 6  One way some of this has been measured is again to count occurrences in media articles of references to economics, uncertainty, and policy terms like “deficit”, “regulation” or terms relating to monetary policy. See: Baker, S, Bloom, N and Davis, S (2015), “Measuring economic policy uncertainty”, NBER Working Paper No. 21633, October. BIS central bankers’ speeches  3  While clearly these three uncertainty measures are related, distinct movements are visible.
A number of data sets have already been, or are about to be, made available by the ESAs:   banking sector data, collected by the European Banking Authority (EBA) on a quarterly basis, relate to: supervisory data on solvency, credit risk and asset quality, earnings risk and balance sheet structure ( key risk indicators), as well as to data on large exposures, broken down by instrument and by sectoral and geographic counterpart, for samples of EU large banking groups;    insurance sector data collected by the European Insurance and Occupational Pension Funds Authority (EIOPA) on an annual basis and, possibly, at a higher frequency relate to aggregate solvency and profit-and-loss data for large EU insurance groups;    quarterly data provided by the European Securities Markets Authority (ESMA) refer to the number of shares admitted to trading in the European Economic Area (EEA), by country and by market, as well as to the list of EEA markets. 1  Council Regulation (EU) No 1096/2010 of 17 November 2010 conferring specific tasks upon the European Central Bank concerning the functioning of the European Systemic Risk Board (Official Journal of the European Union, L 331, 15.12.2010, pp. 162 ff.). 2  BIS central bankers’ speeches  The ECB, in turn, is in the process of making datasets available to the ESRB and the ESAs that meet their requirements.

  The analysis of financial institutions’ sovereign debt exposures constitutes another example where (regular) publicly available information has proved to be insufficient to carry out a reliable macro-prudential analysis. On the eruption of the sovereign debt crisis, market participants reacted abruptly to any news concerning those exposures. Analysis on the basis of aggregated data on banks’ consolidated foreign claims vis-à-vis the public sector in several countries proved to be too imprecise. When the individual exposures to sovereign debt of the largest players in the  4  BIS central bankers’ speeches  European banking system were released by the EBA in the context of the stress test exercise in July 2011, spillover effects diminished and markets started to differentiate across the banks. In this case, enhanced transparency proved to be helpful in influencing markets and market participants’ behaviour.   Examples of indicators where individual bank data would sharpen macroprudential analysis are numerous. In the context of the analysis and assessment of funding vulnerabilities, reporting on banks’ reliance on retail and wholesale funding has ample scope for improvement. Details of banks’ deposits, interbank, senior and subordinated debt are poorly disclosed, and the analysis based on loanto-deposit ratios, currently the best proxy for maturity mismatches, can provide an only incomplete picture of possibly emerging imbalances. A critical area is also that of asset quality indicators, the comparability of which is very poor across banks in Europe on account of different definitions of non-performing assets and loan loss provisions.
Early last year, renminbi was estimated to represent 1% of the global foreign exchanges reserves, and the share will grow. Recently, we have also started to see interests in SDR bonds, with the inaugural issuance by the World Bank in China’s domestic bond market, followed by subsequent interests from commercial entities. Having this seminar thus at this juncture is indeed very timely. Uneven global growth with gravity shifting to Asia, particularly China For the past couple of years, the global economy had softened, with a marked slowdown observed throughout both the developed and emerging economies. The International Monetary Fund (IMF) recently revised their global growth forecast to 3.1% for 2016, from 3.2% previously, reflecting softer-than-expected growth in advanced economies and the impact of Brexit. Global trade continued to be subdued, with the World Trade Organization (WTO) expecting only a 1.7% expansion in 2016, marking the slowest pace of global trade growth since the global financial crisis. While China is also contending with moderation in growth during its economic transition, it continued to become the largest contributor to global growth. The gravity centre of global growth has for now, shifted to emerging economies, particularly Asia. China’s slowdown is not all negative – as China’s economic transformation, through various efforts to restructure its economy and internationalise its markets, are important towards a more sustainable path of development. Furthermore, a 6.7% growth rate is an economic performance many would aspire to.

Liquidity needs to be deployed and invested to generate returns. As the liquidity pool increases, financial institutions should capitalise on this and develop the range of renminbi money, bonds and equity products, which can leverage on the RQFII access. The impact of the Chinese economy on Asia, including Malaysia has been significantly broadbased and encompassing. Financial linkages with China have strengthened. China’s financial markets, already among the world’s largest markets, will be home to a growing number of global Chinese multinational companies with global outreach. The strong interest and commitment to infrastructure building and financing will be a long term theme that will shape Asia and China’s presence in the global markets. There are huge potential that lies ahead and we must be ready to tap the opportunities in all these initiatives. Our financial institutions, corporations and businesses should work together to ensure the readiness of our businesses and economy to keep up with the developments and capture these opportunities. With this, I wish you will have a fruitful discussion and insightful conference today. 4/4  BIS central bankers' speeches
A feature of the current stage of the development of the euro money market, which is particularly worthy of note, is that differences in overnight interest rate spreads mainly reflect differences in the credit standing of banks rather than that of the country in which the transaction takes place. 1  BIS Review 63/1999  These structural developments are, of course, positive. For the Eurosystem (i.e. the ECB and the national central banks of the 11 countries participating in the euro area) the existence of a deep and liquid money market enhances the efficiency of monetary policy operations. In this respect, I should like to draw your attention to the “market friendliness” of the framework applied by the Eurosystem to the conduct of monetary policy operations. By this I mean that the framework is based on tenders in which markets decide who receives the liquidity. The standing facilities are open and recourse to the marginal lending facility is not subject to scrutiny. In addition, the list of eligible collateral is extensive. Prospects for the development of financial markets in the euro area Looking now at the financial markets from a broader perspective, it is important to remember that the financial markets of the euro area began the process of integration before the start of Stage Three of Economic and Monetary Union. An indication of the pace of integration before January 1999 is provided in particular by the evolution of spreads between yields on the bonds issued by the various central governments of the euro area.

In this regard, the smooth changeover of the financial system to the euro demonstrates the virtues of efficient and careful forward planning. Third, I do not view efficiency and stability of the financial system as being contradictory. In many ways these qualities actually support each other by laying a firm foundation for the financial system. An inefficient financial system, in addition to being costly to society, can be more vulnerable to shocks. At the ECB, we play our part in the evolution of the euro area financial system by providing it with stable monetary conditions. By creating an environment of price stability, we allow private sector agents to focus their attention on the questions that are most relevant to their activities and to take advantage of the benefits of this stable environment, such as the lengthening of their planning horizons. 5  BIS Review 63/1999