samchain/econo-pairs-v1 huggingface dataset:
The tests carried out by the Bank should, however, be complemented by parallel tests conducted by individual institutions. In particular, banks should make an in-depth, bottom-up assessment of the potential implications of critical events to identify potential weaknesses at an early stage so as to be in a position to take early corrective measures. This would also serve to reduce the pro-cyclicality of such measures. In recognition of the need for a strong risk management framework, the Central Bank of Malta, in cooperation with the MFSA, has been working with a number of banks on their contingency funding plans and stress testing capacity. A new supervisory regime The lessons that are emerging from the financial crisis will almost certainly change the shape of financial regulation and supervision as we know it. The globalisation of financial institutions and markets, and the associated interdependencies, imply that a regime that has only a narrow institutional and geographic focus will prove inadequate. There is now a heightened recognition of the importance of the macro-prudential dimension of supervision and of the need to have mechanisms in place to address systemic risks, within and across national borders. In this regard, the recommendations contained in the de Larosière Report constitute an excellent basis for action. The Report distinguishes between micro-prudential supervision (the supervision of individual institutions) and macro-prudential supervision (the limitation of the distress of the financial system as a whole to protect the overall economy from significant losses in real output).

These tools pertain largely to depository institutions (DIs or “banks”) and include the discount rate – that is, the rate at which banks borrow from the discount window, the Fed’s lending facility administered through the twelve regional Federal Reserve Banks – and policies around reserves held by depository institutions at the Fed (including reserve requirements, and more recently, the payment of interest on reserve balances and term deposits). 1 However, it’s important to note that each of these tools is merely a means to an end, used to influence financial conditions in order to achieve the Federal Reserve’s dual mandate. Since 1936, the New York Fed has been selected each year by the FOMC as the Bank within the System responsible for the execution of OMOs. Within the New York Fed, the Desk, under the guidance of a manager of the SOMA selected by the FOMC – currently me – is responsible for conducting open market operations under the authorization and direction of the FOMC. 2 In practice, the FOMC’s operating objective for OMOs – for example, a target rate for overnight interest rates or a specified amount of assets to purchase – is communicated to the Desk through a policy “directive” that the Committee votes on at the conclusion of each meeting. This directive specifically instructs the Desk to conduct transactions for the SOMA in furtherance of the desired operating objective.
But this does not prevent us from discussing issues relevant to monetary policy and its  38 See Leeper (2018). 39 See Jansson (2021) for a detailed discussion of the division of roles between monetary and fiscal policy and a  more active fiscal policy. 40 See Leeper (2018). 41 See Australian Government (2023). 42 See Ingves (2020). 21 [30]  target fulfilment with, for instance, The Riksdag Committee on Finance and the Ministry of Finance. This could, for example, involve how we view resource utilisation in Sweden and abroad. How savings and consumption develop and why. Which shocks to the macroeconomy are permanent or temporary, or how the effects of major shocks to the economy should be analysed, such as during the pandemic. The main monetary policy tool should be the policy rate. My view of the Riksbank's various monetary policy tools is roughly as follows: The policy rate should be the main tool for managing normal cyclical fluctuations in inflation and resource utilisation. If necessary, the policy rate can be supplemented with other measures, such as the purchase of government bonds, but the threshold for such measures should be high. This could become relevant if monetary policy needs to become more expansionary and the policy rate would then need to be cut below what is deemed to be the lower bound. Where the lower bound actually lies and how much need there is for further stimulus may vary over time.

This is confirmed by the fact that most of the rating agencies as well as the IMF's recent mission to Estonia have expressed positive assessments of Estonia's economic outlooks. To support economic growth, it is necessary to reinforce the principles of open economy and market flexibility and to ensure the stability of the national economy. In order to meet these goals, the best state support is the resumption of investment in the private sector and using the new possibilities that accompany every crisis. Thank you for your attention! BIS Review 91/2009  3
Under the fourth option (the reduction of risk-weighted assets), it is the volume of credit made available by banks that is directly and adversely affected, moderating once again consumption and investment, and asset prices. Logically, the reduction in or release of these requirements would have the opposite consequences. Depending on the intensity of the increase in capital adopted, and on the economic environment into which it is introduced, banks might choose one or another option, or a combination thereof. For example, the empirical evidence suggests that banks resort to the first three options especially in expansions, when available liquidity and financing are abundant and, in general, when risks are being built up. The fourth option is chosen especially in recessions, crises or situations in which systemic risk is materialising. 5  For didactic purposes, it is assumed that banks decide to hold their management capital buffers – i.e. those additional to those required and which they can retain voluntarily – unchanged. 8  Consequently, the activation of capital tools in phases in which risks are accumulating will influence credit institutions especially via the increase in the cost of lending. By contrast, the deactivation of these tools when systemic risk is materialising or being mitigated might help sustain the supply of credit by banks. When these tools are used to tackle the time dimension of systemic risk, they are normally applied countercyclically to the entire banking system.

The impact that changes in Fed policy can have beyond our borders has led to calls for us to do more to internalize those impacts, or even further, to internationally coordinate policymaking. As I’ve already noted, we are mindful of the global effects of Fed policy, given the central place of U.S. markets in the global financial system and the dollar’s status as the global reserve currency. Accordingly, we seek to conduct monetary policy transparently and based on clear principles. Promoting growth and stability in the U.S., I believe, is the most important contribution we can make to growth and stability worldwide. There is, of course, the argument that Fed policy has been too accommodative for too long, creating risks for financial stability worldwide. Here, I think it’s important to consider carefully the counterfactual. Would countries beyond our borders really have been better off with a weaker U.S. economy – an economy that might have required exceptional monetary policy accommodation for a much longer period of time? The fundamental issue is whether U.S. monetary policy has helped support our dual objectives of maximum employment in the context of price stability, and whether this support is consistent with a healthy global economy. 2  BIS central bankers’ speeches  While explicit coordination looks neither feasible nor desirable, there may be more that central banks in general, and the Fed in particular, could do to be better global stewards. As an example, I would emphasize the importance of effective Fed communication.
We are also acutely aware that the credibility of our exchange rate policy is quite crucially dependent upon our ability to pursue sound economic policies. This we do with vigour and determination, to the satisfaction of many with a keen interest in our affairs, including the IMF who year after year gives us a clean bill of health in its annual Article IV Consultations on Hong Kong. They were in Hong Kong for the 1997 Consultation towards the end of October 1997 and witnessed the after effects of the currency attack. And the report was full of praise on how we handled the situation, which is to me quite comforting, in contrast to the criticisms then from all sides which had been heaved at the HKMA for inflicting too much pain in our defence of the currency. Little do these critics know, as I explained to you earlier, that our system operates on auto-pilot without the need for the HKMA to exercise discretion in intervention in either the foreign exchange or the interbank markets. This the IMF concurred and in its report said specifically that “it is important to recognize that allowing interest rates to rise in response to exchange market pressures is an essential element of the currency board mechanism that lies at the heart of Hong Kong’s monetary arrangements. Recent events demonstrate that the system is working exactly as intended .........“21 Review of Currency Defence 34.

So many banks were bidding for money that, collectively speaking, did not exist in the interbank market. As a result, the interest rate for overnight money shot up to almost 300%18. Contrary to press reports and comments from analysts, the high interbank interest rates were the making of the banks themselves and not the result of the HKMA squeezing towards the end of 1996, requiring all licensed banks to maintain a clearing account with the HKMA for the account of the Exchange Fund. In operating the Accounting Arrangements (1988 - November 1996) and the settlement accounts (since December 1996), the Monetary Affairs Branch and subsequently the HKMA have ensured that the whole of the monetary base is subject to the discipline of the currency board arrangement. 17 On 17 October 1997, Taiwan’s central bank vice governor Liang Cheng-chin said there was “no need for the central bank  to intervene” and it was “the right time” to let market forces determine the Taiwan dollar rate.” As a result, the Taiwan dollar closed 3.3% lower at $ per US dollar on that day. 18 This was only for about an hour on 23 October 1997. When speculative shorting of the Hong Kong dollar was quickly  reversed, the overnight interbank interest rate came down quickly and closed at 100%-150% on 23 October and further to 7% on 24 October. BIS Review 19/1998  -7the money market.
5, Paris, 2003.; Philipp M. Hildebrand, “Wo bleibt das Produktivitätswachstum in Europa?”, Speech at the „Vereinigung Basler Ökonomen“, 28 october 2004. 3  Edward C. Prescott, „Why Do Americans Work so Much More than Europeans?“, NBER Working Paper 10316, Cambridge, 2004. 2  BIS Review 27/2005  Beside the labour market reforms, other reforms should not be neglected. Different conditions in other input markets, for example capital markets, have probably contributed to lower potential growth in Europe. Frictions between national EU capital markets and payment systems render financing more costly. This pushes the capital-labour ratio down, resulting in relative undercapitalization and lower labour productivity. The same line of argument of inefficient allocation of capital applies to non-economic restrictions on corporate mergers and acquisitions as well as on profit transfers. If firms are not allowed to transfer profits from investments ex post the same disincentive to invest ex ante leads to undercapitalization. As in labour markets, the same dynamic is relevant here: Exit barriers are entry barriers. Different regulations in the product markets represent another important obstacle to an augmented growth performance in Europe. Modern information and communication technologies (ICT) in essence provide leverage to an economy. Product market restrictions on the scope of the use of the technologies lead to undercapitalization and underinnovation ex ante. The potential of these growth dynamics may be grossly underestimated as the costs of the regulations are not easily visible.

An additional, but not incidental, point on endpoint security: I observe a reluctance across the industry to share information about endpoint security experiences for fear that such transparency may expose an individual institution to concerns about its internal information security control environment. This is an understandable but parochial response which, collectively, has the potential to expose a network to considerable risk, especially if it inhibits socialization of known threat vectors and techniques. A solution to this vexing dynamic could be industry-led, operatorled, or supervisory-led. The impulse does not particularly matter; developing a venue for the coordinated sharing of endpoint intelligence and experience across the industry matters profoundly, and represents a fundamental mutual interest, compelling both leadership and collaboration. Conclusion I do not presume answers to these questions, and merely observe that they are important ones to inspire reflection in the collective pursuit of resilience and security for the anchor elements of our nation’s financial system. What better venue than The Clearing House’s payments symposium and annual conference to continue this discussion? In response to this generational challenge, let us be sure not to construct an inflexible Maginot line whose rigidities are easily subverted by a creative and nimble adversary.
To meet their delivery obligations in Swiss francs, the five banks draw on intraday liquidity, which the SNB offers through interest-free repo transactions. Since November, direct system participants have been able not only to use CLS services for their own purposes but also to offer these services to other banks. With this so-called third party business expanding and further direct participants and currencies joining the system next year, more and more payments will be settled through CLS. Currently, about 35,000 transactions in the amount of approximately USD 400 billion are settled in CLS every day. All parties involved are very satisfied with the system's mode of operation. By eliminating the settlement risk, CLS has made a significant contribution to the stability of the international financial infrastructure. 4  BIS Review 73/2002

The programme will (i) create a one-stop knowledge hub, (ii) forge a community of practice and innovation, (iii) deploy advisory support for green transformation, and (iv) promote green investment and financing activities. 10. As a first step, we are pleased to formally launch the Alliance’s membership programme by inviting five leading banks in Asia with demonstrated achievements in green finance to join as Cornerstone Members. 11. They are, in alphabetical order, Bank of China (Hong Kong), Citi, Crédit Agricole CIB, HSBC, and Standard Chartered. 12. The Cornerstone Members are committed to making further progress in mainstreaming green finance, achieving carbon neutrality, and having an environmental, social and climate risk management system. 13. They will also support the Alliance’s strategy and outreach plans to expand the membership network, promote green finance market and product development, and spearhead knowledge sharing and thought leadership activities. 14. The Alliance also seeks to amplify the synergy by bringing in institutions that are engaged in cutting-edge research, capacity building, and standard-setting related to green finance. 15. We are delighted to announce that Carbon Trust, the Institute of Public and Environmental Affairs, and the Resource and Environment Branch of China National Institute of Standardization have joined the Alliance as Global Partners. 16. We are also honoured to have the University of Chicago joining the Alliance as a Knowledge Partner to assist the Asia Chapter’s training and thought leadership efforts. 17.
Asymmetric information also creates issues on the liability side of a bank’s balance sheet. The banks’ creditors – depositors or providers of funding – don’t have as much information about the health of the institution as insiders do. This asymmetry makes banks opaque and inherently fragile, which can subject them to runs. This type of “run risk” has been largely mitigated, at least in the case of retail depositors, by deposit insurance, access to lender of last resort facilities, and other elements of the bank safety net. Importantly, however, a broad safety net weakens market discipline of banks and can create incentives for excessive risk-taking. This contributes to the need for risk-sensitive regulation and supervision. Regulations can control risk-taking through a variety of means such as setting minimum requirements for capital and liquidity positions, while supervision can identify and constrain activities that are not well-captured through regulation but still affect a firm’s risk management, governance and control infrastructure. One common objective is to counter the incentive for excessive risk-taking by intermediaries. •  Externalities A second and distinct type of market failure that creates a need for public sector intervention stems from the externalities that the failure of a large, systemically important bank failure can have on the rest of the financial sector or the economy as whole. For example, the financial crisis vividly demonstrated how the distress of a large financial firm can destabilize broader financial markets and impact other financial firms. These effects can be seen through direct linkages via counterparty exposures.

In order to achieve this, Eesti Pank is of the opinion that in addition to the steps taken in February, this year's fiscal deficit needs to be reduced by a further 6.5 billion kroons. In addition to fiscal consolidation, it is important to ensure long-term fiscal sustainability. Once the acute crisis is over, the first thing to do is to achieve fiscal balance. Then it is necessary to restore the public sector's extensive fiscal reserves. The national budget strategy recently approved by the government creates a necessary macro framework according to which the budget should reach balance by 2011. Eesti Pank is of the opinion the new strategy is a timely and ambitious document which requires cooperation also at Riigikogu level. Taking into account that government expenditure as a ratio to GDP has soared, budget adjustment must be done primarily on the expenditure side. Tax revenue increases may support the adjustment, but they should not play the main role. If only tax advances were used to finance costs at the current level, Estonia's long-term economic growth would be imperilled. Also, we support the principles of the current tax policy, according to which the share of indirect and pollution taxes would increase on account of direct taxes. I would like to emphasise once again that the measures taken over the past half a year in both the public and the private sector have improved Estonia's ability to exit the crisis.
Their joint, coordinated action stopped the dangerous spiral of financial deterioration and economic contraction in which the world economy found itself at the end of 2008 and in the first few months of 2009. However, whatever the changes in implementation, there is one main principle that remains. I refer to the belief that monetary policy – conventional or not – cannot solve the ultimate causes behind the loss in investors’ confidence or the tensions in financial or banking markets. In fact, its main role is to provide time to adopt the necessary measures to reform and/or adjust. Macroprudential policy The other area in which I see more changes for the role of central banks is in the oversight of efficiency of financial markets and their interaction with macroeconomic stability. One of the main lessons of the crisis is that price stability, without financial stability, does not guarantee macroeconomic stability. Therefore, there is an emerging consensus on the need to develop a specific new area of economic policy, with a preventive focus and the explicit objective of ensuring the stability of the financial system as a whole. This has been named “macroprudential policy” and together with monetary policy, is bound to become one of the main elements in the policy set in the foreseeable future. Macroprudential policy is articulated around two dimensions. The first one, looks at how risk is distributed in the financial system at a given point in time.

For instance, a distinction should be introduced between “proprietary trading” and “market making” in line, by the way, with the draft banking sector reform that is being currently discussed in France. Concluding remarks Ladies and Gentlemen, let me conclude. Central Banks have played a crucial role in the economic and political response to the financial crisis of 2007/2008. Their use of new and non-conventional tools was decisive to control the financial deterioration and economic contraction that the world was confronting at the beginning of 2009. In so doing, central banks have moved away, to a certain extent, from the old monetary policy model. It might be said that a new one is emerging where central banks will use two sets of policies – monetary and macroprudential policies – to ensure a broadly defined financial stability objective. Thank you very much for your attention. BIS central bankers’ speeches  5