samchain/econo-pairs-v1 huggingface dataset:
Access to the trade records of OTC derivatives activity that will be recorded in trade repositories also needs to be made available to be shared among regulators. Fourth, we need greater clarity concerning the responsibilities of the home versus the host country, especially when a bank encounters problems. Fifth, we need to work out how emergency liquidity should be provided on a cross-border basis. If a major financial market utility in London, for example, needs dollar liquidity to stay in operation, who will provide in it? Who will bear the risk and on what terms and conditions? The political unrest in the Middle East and North Africa underscores once again the fact that we operate in a shared world economy in which events in one country and region can have large impacts globally. And to support this globalized economy, global financial firms and a global payments and settlement infrastructure are needed to support this activity. Yet, we currently operate with a financial system that is largely regulated on a country-by-country basis. This is not tenable. What’s required is not some global authority dictating what national authorities can do but instead greater cooperation and trust in exchanging information and agreement on harmonized standards such as those laid out in the Basel III capital  BIS central bankers’ speeches  7  requirements and the CPSS-IOSCO Principles for Financial Market Infrastructures. There needs to be a good faith commitment to try to achieve a level playing field.

Vítor Constâncio: Effectiveness of Monetary Union and the Capital Markets Union Contribution of Mr Vítor Constâncio, Vice-President of the European Central Bank, for the magazine of the Eurofi conference in Malta (5-7 April 2017), 4 April 2017. * * * The euro area recovery is continuing at a moderate, but firming pace, and is broadening gradually across sectors and countries. The ECB’s monetary policy measures have been a key contributor to these positive developments, and the only expansionary macroeconomic policy in support of the recovery. Real GDP growth has expanded for 15 consecutive quarters, growing by 0.5% during the final quarter of 2016. Dispersion in growth rates across euro area countries has fallen. Economic sentiment is at its highest level in nearly six years. The unemployment rate is back down to single-digit figures and over four million more Europeans are employed now than three years ago. Since the onset of the crisis, the ECB has put in place a number of conventional and unconventional monetary policy measures to stimulate the economy and rehabilitate the monetary transmission mechanism, which had become impaired at the height of the crisis. This comprehensive range of measures has worked its way through the financial system, leading to a significant easing of financing conditions for consumers and firms. Together with improving financial and non-financial sector balance sheets, this has strengthened credit dynamics and supported domestic demand. Bank lending rates for both euro area households and non-financial corporations have fallen by over 110 basis points since June 2014.
Jean-Pierre Landau: Bubbles and macro prudential supervision Remarks by Mr Jean-Pierre Landau, Deputy Governor of the Bank of France 1 , at the Joint conference on “The Future of Financial Regulation”, organised by the Bank of France and the Toulouse School of Economics (TSE), Paris, 28 January 2009. *  *  *  Looking at the future of financial regulation is specially challenging in the current juncture. Right in the midst of the crisis, we cannot be sure that we fully understand its ultimate causes, its roots, and its dynamics. Furthermore, we do not want to be fighting the last war. We need a vision on how the financial system will evolve in the future, something very difficult to figure out right now. And yet, there is a strong political demand for orientations and measures to fix the problems and make sure they never happen again. This demand is fully legitimate, considering the social costs that the crisis is imposing on our societies, and more specifically, the financial burden taken on by tax payers. I have chosen to present some remarks on bubbles and macro prudential supervision. They should be seen more as a work program than a full-fledged answer to the many questions raised for the future. I will deal with three issues: what are we trying to achieve? What are the main challenges? Which are the proper instruments? What are we trying to achieve? Here, we have two certainties, and many questions.

It only helps if it is conducive to better macroeconomic performance. Volatility may be driven by fundamentals. Sharp movements in asset prices may help the financial system to serve as a cushion, an "absorber" for exogenous economic shocks. This is welfare improving since it avoids, or mitigates, adjustment in more rigid goods of labor markets. 1  I am indebted to Benoit Mojon for many useful suggestions and remarks. All remaining mistakes are mine. Opinions expressed are purely personal and do not necessarily reflect the positions of the Banque de France. BIS Review 37/2009  1  By the same token, not all procyclicality is bad. It all depends on the causal link: is the financial system the origin or the amplifier of destabilizing dynamics? Or does it simply react to cyclical evolutions in the real economy? We should only be concerned by "intrinsic procyclicality", which is created inside and by the financial system. Finally, cyclicality in the real economy can be beneficial to long term growth as it is one mechanism through which "creative destruction" can take place in the productive system. Real and significant damages occur if and when financial imbalances are allowed to build for a long time with two consequences: first asset prices significantly deviate from their fundamental value, which creates distortions in the allocation of resources; and second, those imbalances unwind suddenly and abruptly, triggering major disruptions in growth and the economic cycle. This is what is happening right now. And this closely resembles the definition of a bubble.
If supply responds to recovering demand, unemployment will fall more slowly than otherwise and the point at which we will re-evaluate the stance of monetary policy will come later. What of unbalanced growth? The Bank of England is alive to the risks of extended stimulus, and given its responsibility for macro-prudential policy, it can act in a timely fashion to mitigate them. The Bank demonstrated this flexibility recently with a package of measures targeted at the housing market, and it has outlined a broad range of additional tools if further action were required. The synergies of combining the monetary and macro-prudential authorities in one institution could be considerable. By sharing analysis and clearly assigning a hierarchy of responsibilities between them, the Bank’s MPC and its financial policy equivalent, the FPC, are ensuring that measures are timely, proportionate and targeted. For example, the Bank’s Funding for Lending scheme, originally put in place for monetary policy purposes, was refocused from household to small business lending for financial stability purposes. Similarly, both committees have made it clear that monetary policy is the last line of defence against financial stability risks, thereby establishing clear lines of responsibility and accountability. This coordination is particularly important if either of the “secular stagnation” stories is relevant. By addressing risks to financial stability, the Bank’s FPC helps ensure that monetary policy can remain as stimulative as necessary for as long as necessary to achieve its objectives. In doing so, it reduces the risk of a deepening liquidity trap caused by compounding debt-fuelled consumption.

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When the crisis struck Asia in 2008, there were fears of a drying up of trade finance as European banks started deleveraging and cutting back from the region. As it turned out, Asian banks stepped in decisively and trade finance volumes recovered strongly. •  Between 2008 and 2013, trade finance volumes at Chinese and Hong Kong banks have more than doubled while those at Indian banks rose more than half over the same period. •  Eurozone banks have since recovered some of their market share, but the Asian banks remain significant players. This afternoon I would like to discuss three key forces that will shape the course of banking and finance in Emerging Asia over the medium term: •  economic growth;  •  financial regulation; and  •  technological innovation. Economic growth Let me begin with growth. The near term economic outlook for Emerging Asia will be shaped by two themes: the ongoing recovery in the G3 economies and the slowdown in the Chinese economy. •  The underlying growth momentum in the US appears intact despite a disappointing start to the year. BIS central bankers’ speeches  1  •  The Eurozone is recovering from a double dip recession and financial stresses have abated. •  In Japan, domestic demand is strengthening, following the negative consumption tax shock of last April. •  However, China, which had been supporting global demand in recent years, is experiencing a deceleration in growth amid a property downturn and softer exports.

Norwegian banks and mortgage companies are now also entitled to issue mortgage-backed bonds. The rules for covered bonds entered into force on 1 June 2007. Norwegian covered bonds are very different from US CDOs backed by subprime mortgages. The regulations ensure that Norwegian covered bonds are a more transparent and substantially more secure investment alternative. Norwegian mortgages have a maximum loan-to-value ratio of 75 per cent. In addition, all holders of covered bonds have the same claim over the cover pool. A number of conclusions can be drawn from the turmoil in credit and money markets. Problems in markets far beyond Norway’s borders may have an impact on Norwegian banks even if the banks are not directly involved. As a result of the globalisation of financial markets and new and complex instruments, turbulence spreads quickly. Banks extend long-term loans. They should therefore be cautious about basing borrowing growth on short-term financing. They should ensure access to a solid local deposit base or long-term bond issues for any expansion. BIS Review 115/2007  9  When times are good, it may be difficult to perceive and assess risk. New products that are dependent on favourable economic developments are not viable. New products must be robust to slowdowns and unforeseen events. The housing market in Norway and the financial position of households The recent turbulence originated in the US housing market. It may be interesting to compare with developments in the housing market in Norway and in household saving and investment decisions.
We are going to put grants to work – grants for any financial innovation in Singapore – on a competitive basis. Very importantly, we are going to develop the skills and capabilities required to make this a new wave, not just a passing trend. It requires many new skills, as well as some of the old instincts that help ensure sustainability across the cycles. And which preserve trust in finance. We have a major national program in Singapore called SkillsFuture which we are putting a lot of effort into. Finance will be an important vertical in SkillsFuture: investing in the skills of the future. Finally, we will ensure that the overall environment is supportive of start-ups and innovation. Not many of the new players will succeed, not many will last. But they will always leave an idea behind, to be modified, taken over or improved. Thank you very much. BIS central bankers’ speeches  3

According to the latest IMF forecasts, world output will shrink by 1.3% and the advanced economies by no less than 3.8%. However, GDP in emerging markets, though lower than in previous years, will still grow by 1.6%. Despite the crisis, the long-run prospects for emerging market economies remain bright. Projections for long-term growth, based on demographic trends and models of capital accumulation and productivity, suggest that the emerging markets are likely to gain in global importance. A number of studies found startling results regarding the growth prospects for emerging markets. According to one study, Brazil, Russia, India and China (the so-called BRIC economies) could account for over half the size of today’s six largest industrialised economies from 2025 onwards. 1 We have to prepare for a very profound structural rebalancing of world output during the next years. The world economy is changing profoundly, as so should its governance. The creation and the recent reinforcement of the G20 and the enlargement to the G20 of the Financial Stability Board are milestones in this respect. The rise of the emerging economies will also be reflected in the reforms of the international financial institutions. What are the specific implications of the growing role of emerging markets for the euro area? The euro area has close links with emerging market economies. In trade terms, the euro area is actually more open than other major economies. Our exports and imports of goods and services account for more than 40% of GDP, significantly more than in the United States or in Japan.
In addition, the critics often speak of this sector as though it did not play any productive role, but was more or less disengaged from the rest of society. This is not the case. The financial sector is very much an integrated part of society. We participate in it ourselves when we, for instance, choose between different pension funds, when we withdraw money from an ATM, when we pay our bills or borrow money to buy a house or apartment. To begin with, therefore, I shall briefly discuss the fundamental tasks carried out by the financial sector in society. When we economists try to mediate knowledge in this field, we usually talk about three tasks or roles, namely mediating payments, channelling money from those wanting to save to those wanting to invest, and facilitating the management of economic risk. Easier payments and more investments The financial sector as a mediator of payments is possibly the role where the sector's significance for society is easiest to understand. Try to imagine an economy without the type of payment system offered by, for instance, postal giro and bank giro. In a world like that we would need to carry large amounts of cash around with us in order to make our daily transactions. We would have to rush off to the landlord once a month to pay rent, visit the telephone company to settle the telephone bill and queue in front of the TV building to pay our TV licence.

Many people have claimed in this context that companies in countries, which have recently deregulated their capital markets, have a tendency to take on more loans than they can manage. This does not appear to be the case. On the contrary, empirical research indicates that while non-financial companies with access to the international capital market increase their borrowing, their equity increases at the same rate. It also appears that these companies increase the duration of their loans. In this perspective, it is difficult to imagine that the risk of taking out excessively large loans increases as a result of deregulation. The various types of funds managed by many of you make a contribution to this, by supplying share capital to companies in other countries. 2  BIS Review 75/2001  Economic policy content of crucial significance Allow me to return to the criticism of developments on the financial markets. As I said, it cannot be dismissed out of hand. It is evident that there are some problems in the way these markets function. One only has to look at the Mexico crisis of 1995 and the Asia crisis of 1997-98 to see that. It is, however, important to remember that the origins of the crises lay in domestic problems in those countries that were hardest hit. In Asia, as was the case here in Sweden at the end of the 1980s, the countries developed a financial vulnerability through rapid credit expansion, over-investment in certain sectors, grossly inflated asset prices and short-term borrowing abroad.
The experience of Asia has clearly shown that adjustments through currency depreciation can easily get out of hand by setting off a financial meltdown, unless the process of currency depreciation is guided by exchange controls or credit restrictions. And, even then, the structural adjustments can probably only be postponed, not obviated. I hope that in pointing out these aspects of Hong Kong’s performance in the Asian financial crisis I have not given you the impression of being complacent or defensive. I am aware of the need to address such important issues as Hong Kong’s competitiveness and the provision of credit to small and medium-sized enterprises. But what I have mentioned are aspects which have, I fear, been very much neglected in the domestic discussions about Hong Kong’s performance in the financial crisis. But the fact of the matter is that, notwithstanding all the doom and gloom descriptions and predictions, and the death sentences that have been pronounced on our city, Hong Kong has performed reasonably well. The impact on Hong Kong of the Asian financial crisis has been severe. But we have stuck it out and, by and large, we have managed without catastrophes. Controversy It is true that we have had to take unconventional and controversial actions in the financial markets. But regulators do have a responsibility to deal with market failures, which in our case arose from market concentration and manipulation.

And even when such information disclosure requirements are successfully imposed in a particular market in a particular jurisdiction, and regulatory measures put in place, would there not be the danger of the market migrating offshore? Market participants are quite willing to take advantage of opportunities for disclosure or regulatory arbitrage that individual offshore centres may be keen in introducing so as to attract business. These are among the questions now being asked in international discussions. The task of achieving greater transparency in international finance is no doubt a difficult one, but it is in the interests of all developed and emerging markets - to support this initiative, to light up the dark room. And without going into the technical details, let me say this: with adequate international cooperation, involving all 5  BIS Review 120/1999  the significant financial centres, this is achievable. Regulatory authorities from these centres may just have to be a little more forceful. They could collectively say that these are the disclosure rules we have laid down on the basis of international consensus, under the auspices of an authoritative institution on international finance. * They could further emphasise that the disclosure rules are essential safeguards for systemic stability in international finance that is in the interests of all.
This is likely to be particularly true when there is increased uncertainty about unemployment.15  The literature suggests that both channels can be important. For example, Danish research finds evidence in favour of over-consumption in Denmark over 2003 to 2009.16 This captures consumption financed by mortgage equity withdrawal or second mortgages, although the results may in part be driven by consumer credit, as the study does not distinguish between mortgage debt and consumer credit. The authors of the study think of the subsequent cuts in consumption as ‘spending normalisation’. In the UK, however, research shows that a credit availability channel is best able to explain the historical movement between leverage and consumption.17 And studies in the US point to a range of channels, including credit availability and liquid assets.18  This variation in findings is not surprising. One would expect the channels to vary over time and across countries. But what does it mean for policy? 13  For example Andersen et al (2016), Kovacs et al (2018), Dynan and Edelberg (2013) and Fagereng and Halvorsen (2016). For example Bridges et al (2017) and Jorda et al (2016). For example, in Japan, Nakajima (2018) finds that precautionary saving – in particular due to concerns about potential unemployment and old age – played a significant role in explaining consumption cuts by highly indebted households. 16 Andersen et al (2016). 17 Kovacs et al (2018). 18 Dynan and Edelberger (2013) and Baker (2018).

The Bank has excellent access to both:  -  Many years ago, we set up our own survey of households in the UK – the NMG survey – to ask the questions that are most important to us. Every six months, a sample of six thousand households is asked questions about their financial position and outlook that help inform decisions by the FPC (and other Bank policy committees).19  -  The Bank does receive comprehensive data about the flow of new mortgages.20 And Bank staff have developed a model to use this – and information about how incomes are changing in the UK – to project the distribution of indebtedness relative to incomes in the stock of mortgages. A working paper on that modelling is being released today.21  We can use the surveys and models to estimate the distribution of current loan to income characteristics of the households with mortgages and compare that to the distribution in 2014. Surveys and model outputs involve uncertainty, for different reasons. But it is reassuring that in this exercise they give us broadly consistent results. 19  The survey is weighted to be representative of the age, gender, region, housing tenure and employment status distributions of Great Britain. 20 The Bank does also receive a snapshot of the stock but some variables crucial for risk assessment are not captured in this. 21 Levina et al (2019).