samchain/econo-pairs-v1 huggingface dataset:
The intention is to achieve implementation as closely as possible to the G10 schedule. Examples of tricky issues to be considered with care are: how to (or whether to) apply operational risk requirements for smaller institutions; how to carry out the validation of internal models for both market risk (we still do not allow banks to use them for capital purposes) and IRB; how to encourage more complex banks to adopt IRB. There are, however, more pressing priorities for Brazilian supervision at present, such as the improvement of recently implemented processes of risk focused supervision, the consolidation of the New Credit Information System, the studies underway for the introduction of a supervisory rating system geared towards the determination of the adequate frequency and intensity of supervision for each particular financial institution/conglomerate and the definition of strategies for consolidated supervision and international co-operation. The New Accord will be most likely implemented in Brazil in a gradual manner, the new rules co-existing for a while with the old ones. This will be the case, for example, of the smaller banks, to which will be applied either the simplified standardised approach, which does not depend on external credit assessment institutions, or the current approach. One possibility is the application of the current approach with slight modifications, such as a review of the present weights and the incorporation of some innovations from the standardised approach. For these less complex institutions, the capital requirement for operational risk might not be explicit, but only covered under Pillar II.

In this sense, the use of IRB imposes a dramatic change in the supervisory approach. The judgemental capacity of supervisors will play an increasingly important role in examinations, which is why adequate training to carry out the validation of models and capital adequacy assessments will be of fundamental significance. Supervisors still have a lot of work to be done in order to implement Basel II. We understand that it is important to disclose, as soon as possible, an overview of our implementation plans to the industry while we internally make all the studies necessary to support the numerous decisions to be made. The next steps include, for example, the evaluation of simpler alternatives for smaller institutions (non-bank and small banking institutions, the definition and disclosure of aspects of national discretion, the definition of eligibility criteria for IRB, and, finally, the release of an “Advanced regulation notice” - open to public/industry comments, and a Country Quantitative Impact Study considering revised aspects of national discretion.
Switzerland is directly affected by the EU’s intention to introduce a system of automatic exchange of information between banks and tax authorities in order to enhance tax revenues on savings income within the European Union. One can of course fear that such a plan might trigger capital transfers to non-EU financial centres for purely fiscal reasons. Our position is known: we do not want the Swiss financial centre to become a privileged haven for funds seeking to avoid EU regulations. We are thus ready to consider a reform of our withholding tax regime along the line of the EU directive. We even consider the possibility of handing over to the EU part of the tax on interest earnings of EU residents. We have already 50 years of positive experiences with a withholding tax: it is a convenient and efficient way to collect resources without income declaration. We have never considered introducing any system of automatic exchange of fiscal information for our own citizens, and we are not ready to consider such a scheme for foreign depositors. We feel that our current system secures an appropriate balance between protection of the private sphere and safeguarding the interest of the State. There are many misunderstandings between Switzerland and the UK about this fiscal issue. Let me recall a few points: –  First, it is wrong to say that foreigners can invest their funds tax-free in Swiss banks. We have a 35% withholding tax imposed on all interest and dividend payments made in favour of residents and non-residents.

Compared with the June Report, only minor revisions have been made to GDP growth in Sweden up to 2002. Neither has the inflation forecast been altered more than marginally. That future inflation is not higher, even though the economic upswing is continuing and the forecast horizon has been shifted ahead, is partly a consequence of the amount of unutilised resources now being considered to be somewhat larger. Wage increases are judged to be somewhat lower, accompanied by marginally higher productivity growth. In the short run, however, inflation is expected to be somewhat higher than forecast in June, mainly because the oil price is higher and the exchange rate somewhat weaker. While the oil price and exchange rate assessments have been revised in the light of developments in the summer and early autumn, the forecast of inflation one to two years ahead still counts on a successive appreciation of the krona and a gradual fall in the price of oil. However, the uncertainty is considerable. A higher oil price and a weaker exchange rate could lead to inflation rising more rapidly than assumed in the main scenario. The assumption of a somewhat lower rate of wage increases is supported by, for example, wage outcomes to date this year as well as inflation expectations that are relatively low and stable. Still, there is considered to be some risk, albeit relatively small, of a development of wages that is considerably stronger, for example as a result of negotiators’ demands for parity and compensation.
Although the loan portfolio growth is below the previous years’ levels, it is satisfactory and at higher levels than in the region. Based on the periodical stress-tests, the Bank of Albania has identified all banks’ needs for capital, thereby enabling a rapid increase of the capital when necessary. Banks’ responses were instantaneous bringing in new capital. Total regulatory capital of the banking system increased 37.7 percent, being dominated by the core capital providing evidence for a qualitatively good and sustainable regulatory capital. The banking system’s capitalization level was significantly above the regulatory minimum required by our regulations and international practices. Efficiency indicator shows almost the same level as at year-end 2008, attesting to a prudential and stable growth of banking activity in general. On the other hand, shareholder’s equity is estimated to have increased 18.7 percent in 2009 versus 2008. Financial leverage reduced gradually during 2009. The decline of the financial leverage from 11.7 to 10.4 percent over a year implies that the system has relied less on debt to finance assets. Compared with the European Union countries, the Albanian banking system’s financial  6  BIS Review 78/2010  leverage remains low attesting to a low degree of the system’s borrowing practice. This indicator provides further evidence for the sound situation of the banking system. The network expansion of banking branches and agencies in the territory of Albania persisted in 2009 however at lower rates compared to the previous years.

The Paris financial centre and French public and private players have a recognised lead here, but they must consolidate it in a context of active competition. We will publish the scenarios by the end of March, and conduct the tests by December. I should point out that the results of this ground-breaking exercise will be published on an aggregated and anonymous basis. ** A word of conclusion on the Banque de France. Like you, we need to adapt, from payments to digitisation or cybersecurity. Our determined approach to innovation allows us to improve our performance and responsiveness. 2020 is the final year of our current strategic plan, through which we have reduced our headcount by more than 20% and our current expenses by more than 10% in five years. We will continue our transformation through 2024. We owe it to the people of France; but we also owe it to you, who are the leading players in the financing of our economy. Happy New Year to you, your staff, and our country. 3/3  BIS central bankers' speeches
The single supervisory mechanism has been defined as an integrated system of surveillance of financial institutions under the clear leadership of the ECB, which in turn benefits from the supervisory experience of the competent national authorities. Specifically, the ECB assumes all the relevant powers in respect of the supervision of credit institutions, and exercises them through decision-making arrangements centralised in a Supervisory Board on which both the ECB and the national supervisory authorities sit. The latter contribute, according to the Regulation, to the preparation and application of the decisions taken in a centralised fashion. The work of the national authorities will be channelled through what are known as the Joint Supervision Teams. These teams, which will regularly monitor each institution, will be made up of supervisory staff from the ECB and from the national authorities. Regular on-site inspections will, as a general rule, be conducted by the national authorities, following centrally set mandates and arrangements. As you can imagine, the work ahead over the coming months will be very intense. Having to assume supervisory powers in scarcely one year will make great demands in terms of organisation. Specifically, several groups made up of staff from the ECB and the national authorities have been set up in Frankfurt and are pushing ahead with the extensive groundwork.

I am going to talk about Texas tonight, this being my annual report on the status of the Texas economy. I will walk you through a series of slides that illustrate the strength of the Texas economy, a series of economic records we have set this year, and to provide a balanced view, some of the growing pains that we are encountering. But first, I want to make a comment on monetary policy. Thinking outside the box It strikes me as timely for the Fed to consider implementing one of the possible options under the “normalization principles” the FOMC articulated in September: allowing our security holdings to run off as the bonds in our massive portfolio mature. 1 Before you jump out of your skin at this “radical” thought, let me ask you to consider the following. The 10-year Treasury note has rallied in price and declined in yield to 2.29 percent. German 10-year bunds, the equivalent market-anchoring European security, are trading to yield 0.74 percent; the Japanese 10-year yields 0.42 percent. The spread between the U.S. and the German sovereign yields is slightly narrower than it was at the end of third quarter 2014, but it remains historically large and attractive for investors. 2 Hold that thought.
Once it had completed this legal reform, Spain announced ahead of other European countries that it was going to stress-test its banking system to show that the market’s perception of bank solvency was clearly lower than it actually was. Other European partners joined this initiative and by end-July 2010, the results of the stress tests had been published. As you are aware, compared with our European partners, the Spanish stress tests were far superior in terms of scope and transparency. In Spain, the decision was taken to stress-test the whole sector and not only institutions representing 50% of the sector. Furthermore, very extensive and detailed information was published. BIS Review 161/2010  3  The stress tests showed that Spanish banks as a whole were sound, despite taking into consideration very extreme and highly unlikely scenarios. However, they also served as a channel of communication because a lot of important information was disseminated. At present international markets are once again questioning the reliability of the European stress test exercise. As I mentioned earlier, the Banco de España published bank-by-bank information, not only about the assumptions made, but also about the various portfolios and the funds available to cover hypothetical losses. The Banco de España has recently once again revised the assumptions, parameters and estimates published four months ago and considers that they appropriately describe the current situation of the banking system and its exposures.

The immediate future: consolidating the measures taken and putting the reforms on a firm footing In recent weeks international financial market dynamics have continued to be influenced considerably by the high degree of risk aversion and by fragile confidence levels. There has been a resurgence of the doubts – first seen in the case of Greece – about the solvency of euro area Member States. The uncertainty over the euro area’s fiscal sustainability cannot be explained merely by the economic downturn and its impact on public finances. The measures taken by authorities to avoid the collapse of the financial system have involved, in the case of Ireland, guaranteeing the funds lent to the banking system by depositors and wholesale investors. Markets are suspicious about the ability of certain small States, with relatively large banking systems, to meet these commitments. The European Union has come to the aid of Ireland, which has experienced problems precisely because it used substantial amounts of public funds to shore up a banking system bloated with real estate assets, particularly offices and houses in the Dublin area. In Spain the situation is very different as regards both the public sector and the banking sector. Despite the substantial rise in the budget deficit in 2008 and 2009, public debt as a percentage of GDP remains relatively small in comparison with the euro area average, which is 20 percentage points higher.
The exchange rate is generally a more potent transmission channel of monetary policy decisions than domestic interest rates, and it also plays a crucial role in explaining the pass-through to price developments in most accession countries. Thus, in order to achieve further disinflation and sustainable growth, excessive exchange rate fluctuations need to be avoided. In our view, and this view is supported by our previous experiences with the EMS/ERM framework, ERM II provides a useful mechanism to anchor exchange rate expectations. At the same time, ERM II, with its adjustable central rate and its current fluctuation band of ±15%, provides accession countries with the same degree of flexibility as the EMS/ERM following the decision to widen the fluctuation band in 1993. This may be suitable for accession countries. Given that accession countries still need to complete the process of restructuring their economies and catching up in terms of real income, the flexibility inherent in ERM II and its wider fluctuation bands provides accession countries with sufficient scope to accommodate these reforms. Bearing in mind that ERM II constitutes a multilateral arrangement, and that it is consistent with the regional integration process in which all accession countries are deeply involved, ERM II is likely to have fewer potential weaknesses than other alternative exchange rate arrangements have shown over recent years. Of course, as for any exchange rate arrangement, coherence between macroeconomic policies must be ensured for successful participation in ERM II.

Productivity gaps between regions and between large and small firms point to regulatory fragmentation which still needs to be addressed. To enhance productivity, measures to increase the scale of small firms in the SME sector, which tend to be smaller than in peer countries, need to be pursued. More attention needs to be placed on the education system and professional training to enhance human capital and reduce skills mismatches. Finally, greater investment in R&D and innovation by Spanish firms would enhance their competitiveness and contribute to generate more growth through higher value added. Only by raising productivity and correcting macroeconomic imbalances can the long-term growth potential of the Spanish economy rise. This is a condition to place Spain on a solid growth path, increase employment and raise wages to finally leave behind the financial crisis that erupted ten years ago. Let me conclude. The importance of increasing long-term growth potential is true for Spain as it is for the whole euro area. 3/4  BIS central bankers' speeches  At the same time, I cannot emphasise enough that a robust euro area economy has to rely on sound economic governance. Solidifying the institutional architecture of EMU is essential at this juncture in order to foster cohesive economic performance without fragmentation or excessive imbalances. Reforms at the national and EU level are needed to uphold a stable financial system and a resilient monetary union.
Media coverage of monetary policy actions is a central channel of a central bank’s communication with the wider public, and thus an important factor for its credibility and policy effectiveness. The evidence suggests that communication can be an important and powerful part of the central bank's toolkit since it has the ability to move financial markets, to enhance the predictability of monetary policy decisions, and potentially to help achieve central banks' macroeconomic objectives. Unlike the media, the legislature’s oversight over the operations of the central bank is normally enforced by statutory provisions. However, it is equally important for the central bank to proactively engage the two stakeholders in a way that maximises the transmission of accurate information to the market as well as promotes the transparency, accountability and credibility of the central bank. Finally, I thank you all for your attention and would like to reiterate my gratitude, Mr. Chairman, for inviting me to share in your celebrations. I thank you. 4  BIS Review 95/2009

This package has delivered a broad-based easing of euro area financial conditions since June 4/5  BIS central bankers' speeches  2014: money market conditions have improved substantially; long-term government bond yields, corporate and bank bond yields, as well as bank lending rates to firms and households, have declined markedly; and positive credit growth has returned to the euro area.8 The exceptionally favourable financial conditions have helped the economy recover from the shock waves of the financial and sovereign debt crises. They have insulated the recovery from global headwinds that have engulfed the euro area over the last two years, such as the tensions in global financial markets in August 2015 and the slowdown of global demand since the first half of 2015. More recently, the firming recovery has also broadened across countries and sectors. As regards inflation dynamics, our determined policy actions have been material in warding off deflation. They have also contributed to a re-anchoring of long-term inflation expectations. Market-based measures of inflation expectations, however, have not yet returned to their precrisis levels. Underlying inflation dynamics remain subdued, and risks and uncertainties still prevail, especially those related to the geopolitical environment. To sum up, the ongoing economic recovery is still predicated to a large extent on very favourable financing conditions that, in turn, depend on continued monetary policy support. The firming recovery is not yet sufficiently robust to ensure a self-sustained convergence of inflation rates to levels closer to 2%.
The story of FinTech regulation is still unfolding but let me highlight three areas where good progress has been made in the last 10 years: setting standards for distributed ledgers; making cloud computing services safer; and dealing with artificial intelligence. Setting standards for distributed ledgers Experiments in applying distributed ledger technology to financial services began about 15 years ago and gathered pace from about 2018 onwards. The early days were characterised by both hype and fear. Popular imagination and regulatory concerns were focused on so-called crypto currencies or assets – essentially crypto tokens which assumed a life of their own as means of payments or investment assets outside the distributed ledger. But the euphoria did not last long. Crypto tokens failed to achieve scale as more people realised that they did not have the properties of either currencies or assets. Today, crypto tokens are confined to specific purposes and limited ecosystems. But after several false starts and failed use cases, the underlying distributed ledger technology or DLT started making significant inroads in the financial industry. Essentially, DLT made financial transactions and processes more efficient, more transparent, less risky, less costly. The three areas that saw the biggest transformations were in compliance, trade finance verification, and cross-border payments. As DLT systems became more pervasive, they began to assume properties of critical infrastructure with systemic implications. There were information security-related risks as well as operational risks associated with interoperability across multiple platforms.

There are benefits to depositor preference both ex-ante (by heightening debtor incentives to monitor risk) and ex-post (by facilitating resolution). There are also some potential downsides, including causing unsecured creditors to run sooner. It may be a good time to reweigh these arguments in the UK. •  Reconsidering the industrial organisation of banking: Over the past few decades, the global banking system has evolved into a particular organisational form, with a small number of large banks, a high degree of concentration and relatively low rates of entry and exit. Events of the past two years have accelerated these trends. In 1998, the five largest global banks had around 8% of global banking assets. By 2008, this fraction had doubled to around 16% (Chart 10). These structural trends worsen the time-consistency problem for the authorities, increasing the pressure for state support to banks “too important to fail”. This has heightened recent interest in rethinking the industrial organisation of finance. 19 There are a number of potential forms such a restructuring could take. 20 In weighing these options, there may be lessons from an, on the face of it, unlikely corner of finance: hedge funds. Hedge funds started this crisis in the doghouse. Yet they are the dog that has not barked. Their industrial structure may explain why. Unlike banking, the hedge fund sector does not comprise a small number of large players, but rather a large number of relatively small players.