samchain/econo-pairs-v1 huggingface dataset:
Market-based debt has accounted for all of the growth in the stock of debt to UK businesses since end-2007. Overall, that shift is positive for the resilience and stability of the system. Other things equal, £ of loss incurred in the non-bank financial system is almost certainly less disruptive to the wider economy than £ of loss incurred in the banking system. But without the right resilience, could the non-bank system also result in some damage to the economy in an economic earthquake? How should financial building standards adapt to the changing nature of the buildings in our economic city? 15  All speeches are available online at www.bankofengland.co.uk/news/speeches  15  Keeping up with a changing financial system Given the non-bank system’s growth and new-found importance, we face a challenge. There is little evidence of past performance to guide any assessment of the non-bank system. And it would not be sensible to wait until we have some. Our solution is to replace wait with simulate. So this is yet another area where we are developing cutting-edge work, this time to simulate how an economic earthquake could play out in the non-bank system.10 It is our version of what earthquake engineers call a ‘shake table’: a device for testing how models of new structures respond to tremors. The simulator considers generic markets – for equity, corporate credit, government bonds and some key types of funding and derivatives – and representative insurance, hedge fund and mutual fund sectors.

Where we draw the line within that for being in scope of this initial first step of the strong and simple framework will impact the extent of simplification we can achieve while maintaining strong standards. There is also the risk that simplifying requirements for smaller firms could increase barriers to growth, if the step up to the next level of our framework is too big. That being said, we could in the long run move to a graduated approach that covers all nonsystemic firms. Under such a regime the complexity of the framework would grow 2/5  BIS central bankers' speeches  commensurately with the size and complexity of a firm’s activities, minimising potentially steep barriers to growth. This is in fact the long-term vision we have outlined in our paper. But doing this will take time and, rather than delaying the roll-out of a simpler framework for everyone, we thought a better approach would be to do this step-by-step. One possible first step is to start with the smallest firms that would benefit the most from a radically simpler regime – but, as with all the trade-offs in our paper, this is something we would welcome views on. We also need to consider the position of foreign banks that operate in the UK. Internationally active firms will continue to be in scope of international standards; likewise, it may be appropriate for subsidiaries of international groups to stick with the international standards. But we have an open mind on this.
Although substantial losses have been taken up in the financial institutions’ balance sheets, and they have been allocated new capital to a large degree, we have not yet seen the end of the financial crisis. Different measures of risk premiums are still at a high level compared with the period prior to last summer. One can illustrate the problems in different ways, for instance by means of the so-called basis spreads, which demonstrate the difference between interest rates between the banks and the expected policy rate set by the central bank. This measure reflects pricing of the risk faced by the banks when lending to other banks. The basis spreads increased significantly in August last year. Sweden has also been affected by the global financial crisis, but to a lesser extent than many other countries. The basis spreads have, for instance, increased more in the United States and the euro area than in Sweden. But it is at the same time important to remember that the crisis has increased the Swedish banks’ vulnerability to shocks. Although the basis spreads have declined somewhat in the euro area and in Sweden since last spring, they have not returned to the earlier levels yet and one cannot exclude the possibility of new problems arising that will push risk premiums even higher. Weaker growth in the USA Economic developments in the United States continued to deteriorate during the first half of the year. This was largely connected to problems in the financial markets.

One important explanation for the rapid growth is that previously planned and closed economies have been transformed into market economies and opened up to the outside world. The forecasts in the Monetary Policy Report entail world GDP growth slowing down to around 4 per cent a year in 20082009 and later rising again to around 4.5 per cent in 2010. Growth in the world was thus expected to remain relatively strong, despite the fact that we see ahead of us a couple of years of slower growth in the United States and the euro area. This is because of the strong growth in emerging and developing economies. For instance, the OECD calculates in its most recent forecast on an average annual GDP growth rate in the so-called BRIC countries of 4-5 per cent for Brazil, 7 per cent for Russia, 8 per cent for India and 10 per cent for China during the years 2008 and 2009. The emerging economies together account for around half of the world GDP and for three quarters of the growth in the world in 2008 and 2009. Rising and falling commodity prices in the world market The strong world growth has been the most important reason behind the sharp rise in commodity prices. Commodity prices have risen for six years, and these increases have accelerated over the last two years. Rapid growth has led to an increase in the demand for energy. It is almost impossible to make good forecasts for the oil price.
BIS central bankers’ speeches  5  During 2013, we continued our work to approximate the regulatory framework and working practices with EU directives and ECB standards, in the framework of the European integration process. The last annual report of the European Commission confirms the progress made by the Bank of Albania with regard to achieving European standards in all the fields of its activity. It also commends the contribution of the Bank of Albania to maintaining the country’s macroeconomic stability. Last, but not least, I would like to underline the approach of the Bank of Albania to the public. In our medium-term strategy, we have, among others, set forth two important factors that help achieve our main objective: public education, with the Bank of Albania assuming the role of the financial educator, and enhancing the confidence in our institution. In the framework of financial education, after introducing financial education as an elective subject in the high school curricula, this year we targeted the elementary education, with a new teaching set for both pupils and teachers. We have also consolidated our position as a scientific research centre. Every year, the Bank of Albania brings together economists and academics from different countries and institutions. During 2013, a part of our resources was invested to enhance research and organise scientific research activities. *** Concluding, I would like to reiterate our long-term commitment to maintaining price stability as the primary objective of the Bank of Albania. The monetary policy has been appropriate and has contributed to maintaining macroeconomic stability.

It will continue to be stimulating for the economy in the period ahead, as stated in our public communications. I must underline, however, that not all things can be solved by the monetary policy, and the central bank alone cannot achieve all. Many economies are facing the difficult situation of sluggish economic growth and low inflation rates. These conditions require all authorities at home to coordinate active policies and approach a new economic thought. This approach should aim at establishing a favourable climate for investments, boosting demand, increasing productivity in competitive sectors, supporting technology development, improving education level and implementing reforms in the labour market. In particular, I would like to draw the attention on the implementation of FSAP recommendations, to develop further the Albanian financial system and enhance its stability. I think that 2014 poses new and difficult challenges for sustainable and all-embracing economic growth. These challenges require long-term solutions and the work to face them must continue, without delay. Thank you. 6  BIS central bankers’ speeches
On the other hand, Sweden is in a much better initial position than many other countries. Sweden’s public finances are in good shape and, unlike some other countries; Sweden did not suffer a significant downturn on the housing market in connection with the financial crisis of 2008–2009. It is rather the case that the Swedish economy grew so quickly during the major part of last year that there was a risk of overheating and rising inflationary pressures. The companies reported rising labour shortages, and other measures of resource utilisation in the economy also increased. There were periods during the year when several indicators were higher than normal. However, there has been a turnaround in these indicators over the last few months. Company surveys show that labour shortages are no longer as acute in most sectors. Capacity utilisation in the manufacturing industry has declined and is somewhat lower than the historical average. Other indicators, such as unemployment and the employment rate, also point to more spare capacity than normal in the economy. My assessment was therefore in line with the overall analysis in the February Monetary Policy Report, that is that resource utilisation in the Swedish economy had declined and was below a normal level at the end of last year. This is shown in Figure 8. I therefore think that there is very little risk of overheating at the moment. BIS central bankers’ speeches  9  Figure 8.

At the same time, the decisions by the ECB in December and in February to offer the banks in the euro area three-year loans against collateral have helped to stabilise the situation on the financial markets. So, although the situation in Europe is still problematic, we can see that progress is being made at approximately the rate the Riksbank has estimated. In such a scenario we can expect to see a recovery in the euro area, although a weak one, over the next few years. Poorer performance abroad leading to slowdown in Sweden The weak performance in Europe at the moment is affecting the Swedish economy in several ways. First, the demand for Swedish exports is falling. This was also the main reason why growth slowed down in the economy at the end of last year. Second, household and corporate confidence in the economy is falling and this in turn is leading to a slowdown in consumption and investment. The financial situation in Sweden is also affected by developments abroad. The fall in share prices in 2011 reduced the financial wealth of the households, which contributed to an increase in saving. It is unlikely that there will be any significant decline in saving in the period immediately ahead as the low level of growth is expected to reduce employment and increase unemployment.
One issue that has led to questions and been discussed considerably is that some leading politicians have actively involved themselves in the debate and on repeated occasions expressed very specific requirements for immediate interest rate cuts and in one case even a change in our meeting schedule. The question is whether this is appropriate or even wise. This is not a new issue, and it is one I have faced on numerous occasions since I began work at the Riksbank. My point of view has always been that we have a statutory task to perform. We shall perform this independently and to the best of our abilities. The law is crystal clear; we are not allowed to accept political instructions or even advice. Moreover, even before the new legislation was in place we had chosen to design a clear framework for our work. Our target of maintaining price stability has been specified as an inflation rate of 2 per cent. We have also “tied” our actions in other ways, such as publishing forecasts and systematically following particular working methods. This enables those outside of the bank to assess our actions and motives and thereby to be sure that we are not taking  BIS Review 9/2004  9  account of inappropriate considerations. Given this, over the years I have had a fairly relaxed attitude to politicians' interference in the general debate. However, this issue has further implications than such.

Since 2015, cybersecurity issues attract an increasing level of attention, and regulators have produced a large number of regulatory texts, both at national and international levels. This was called for to trigger the appropriate response and efforts from the industry. It helped the sector to reinforce its safeguards. Nevertheless, we must ask ourselves whether the multiplication of new regulations can have a counterproductive effect. From the panelists’ interventions, two issues need to be addressed: • First, we should avoid the possible proliferation of texts by standardsetters for banking, payments, securities services, insurance and/or financial markets. The FSB has already provided such evidence in a stock-taking exercise performed in 2017. Regulators are paying attention to cyber risks, and while they share the same objectives, regulatory texts tend to differ across regulators and as a result add to firms’ burden in terms of compliance with these various regulations, with  Page 3 sur 6 little marginal gain. Clarity would be enhanced by reducing the multiple variations in the formulation of requirements across institutions. In turn, regulators’ efforts would be streamlined and their experts employed more effectively. How can we better coordinate regulation? Obviously, a “principle-based” regulation on cybersecurity is preferable, rather than increasingly prescriptive standards, too rigidly “rules-based”. Supervision completes regulation. Principle-based regulation would give supervisors some room for manoeuvre to modulate their expectations to the risk profile of the institutions. • But then, we should also pay attention to the risk of regulatory arbitrage. Regulatory differences can create opportunities.
Jürgen Stark: The adoption of the euro – principles, procedures and criteria Speech by Mr Jürgen Stark, Member of the Executive Board of the European Central Bank, at the Icelandic Chamber of Commerce, Reykjavik, 13 February 2008. *  *  *  I Ladies and gentlemen, It is a great pleasure for me to attend this conference, together with distinguished guests and speakers. In my remarks, I would first like to set out the European Union’s approach towards the adoption of our single currency, the euro. I will then spell out the EU’s and the ECB’s stance on unilateral euroisation. I will conclude my remarks with a brief overview of the potential economic costs and benefits of unilateral euroisation. The EU’s approach towards the adoption of the single currency The creation of the single currency has been a long and truly historic process. Sixty years ago, Europe was marred by political disarray and economic disorder. With the Treaties of Paris and Rome, Europe’s leaders started the construction of a united Europe on the ruins of the Second World War. Since then Europe has achieved a lot: •  One of the most important achievements is the Single Market, with the free flow of goods, services, capital and people across national borders. Consumers in Europe benefit from the larger supply of goods and services. The European companies benefit from the enlarged markets.

A country that has joined the EU has the obligation to eventually join the euro area. However, it does not adopt the euro immediately upon its accession to the EU. Instead, it becomes what is called in EU-term a “Member State with a derogation”. Countries in the derogation phase have a number of obligations. •  Upon accession of the EU, new Member States are required to treat their exchange rate policy as a matter of common concern and to pursue price stability as the primary objective of monetary policy. The Treaty foresees that at some point following accession, new Member States will join the Exchange Rate Mechanism II (ERM II). •  Moreover, they have to regard their economic policies as a matter of common concern. The economic policies of these Member States become subject to coordination and surveillance at the EU level. This is an essential preparation for the monetary union. Members that once adopted the single currency have to put more emphasis on coordinating economic policies because monetary policy is no longer under national responsibility. III  But policy coordination is not sufficient. To join the euro area, Member States must fulfil a number of legal and economic convergence criteria. The legal convergence criteria oblige the euro area applicant countries to put in place the legal foundations for participation in the monetary union, of which central bank independence is a cornerstone.
At a time when globalisation may leave many behind in advanced economies, when the debate about inequalities is coming back to the forefront – and these are real challenges behind the populist wave –, now is not the moment to give up our social model. Europe and Japan are quite close in their choices. How to move forward: four accelerators of the Economic Union. The assets that I have presented constitute a valuable achievement for Europe. Now, we must actively build on them, and not lazily rest on our laurels. I will now present some avenues of improvement. Indeed, we have clearly succeeded in building a Monetary Union, but this is not sufficient. It is now time to make concrete progress on Economic Union, on which we have not been very effective yet. We are in agreement on the "why". Monetary policy cannot be the only game in town, and therefore we should not overburden it. Furthermore we aim at greater stability, to counter the risk of a new crisis befalling an unprotected euro area, with all its damaging political and economic repercussions; and  Page 5 sur 6 greater growth, to catch up our past lag on the United States and finally treat the fatal disease of mass unemployment in Europe. As for the “when”, we obviously have a unique historic opportunity: with the economic recovery; with the new French President and also stable governments in the Netherlands and hopefully in Germany.

No decision has yet been made regarding its issuance or its final design, but we launched the investigation phase of the project last year in order to ensure we are prepared in the event that future developments warrant its launch. Our work is now focused on deepening the conceptual analysis by assessing the different design options, as well as the distribution model. The first step was to identify the use cases to focus on, namely those that better support the policy objectives of a digital euro and facilitate network effects. Payments in e-commerce and physical stores, as well as person-to-person payments are, clearly, natural candidates. They either represent important market segments or have a clear potential to grow, and they rely heavily either on cash or on non-European providers and technologies. Payments between governments and individuals have also been considered a priority, given their potential synergies with the aforementioned ones. In any case, focusing now on these payment segments does not mean ruling out others, but simply leaving them for future stages. The next step of the analysis has covered what we consider to be the foundational design options. They refer to the way a digital euro should be transferred, the level of privacy and the tools to control excessive use and, hence, limit its impact on the stability of the financial system.
Likewise, further headway would be needed in reducing sovereign-banking links, which contributed notably, as is known, to heightening the severity of the crisis in the euro area. In this connection, the banking union requires supranational support that would increase the financial capacity of the Single Resolution Fund in the event of a systemic crisis and which would afford it greater power during the transition process established for its full constitution. The European Commission’s proposal that the European Stability Mechanism should provide this support might be an appropriate solution. It is also necessary to create a common deposit guarantee scheme whereby depositors’ confidence in banks is irrespective of the health of their Public Treasuries. Progress on the set of initiatives encompassing the Capital Markets Union would also contribute to achieving greater financial integration, diversifying sources of financing and empowering to a greater extent private mechanisms geared to sharing the risks that originate through these markets. Conclusions In any event, it should be stressed that, although the recovery is providing for the correction of some imbalances, some fallout from the crisis remains at large. The high levels of unemployment and of public and private debt, low productivity growth and the weakness of the capitalisation process pose challenges that require greater reformminded ambition.

Dimitar Bogov: When pressures on prices are relieved, we will stimulate economic growth Interview with Mr Dimitar Bogov, Governor of the National Bank of the Republic of Macedonia, in “Kapital” weekly magazine, published on 8 November 2012. *  *  *  Bank affairs are always possible In the countries in the region banking affairs have erupted, in connection with criminal activities of some banks in conjunction with politicians. What is the situation in Macedonia? Is everything under control in the banking sector? NBRM controls the banks in terms of their compliance with the regulations, the quality of corporate governance, and assesses the risks that banks undertake in their operations. Banking supervision is a strong prevention against criminal operation. But that does not mean that as anywhere in the world, banking affairs could not take place also in the banking sector in Macedonia. Spasijka Jovanova The National Bank of the Republic of Macedonia lowered the forecasts for the economic growth this year to 1 percent and raised the concerns of inflation. The condition when no growth is registered, i.e. there is a downturn, and there is higher inflation, is called stagflation, which is the worst stage of an economic crisis. Is the Macedonian economy in such a stage? I would not agree that the Macedonian economy is entering stagflation. However, there were unusual movements in the world economy.