samchain/econo-pairs-v1 huggingface dataset:
Becoming a leader does not mean you have made it and have nothing left to learn. Rather leadership is a discipline that involves deliberate practice and continuous learning. 23  In this spirit, policymakers must remain humble as they work to build a more resilient financial system. We must remember that, although we can make financial crises less likely to happen and less severe when they do occur, we cannot abolish them. Something will go wrong again even if we do not know exactly what or precisely when. Accepting this means our best strategy is to create an anti-fragile system that can withstand potential shocks when they happen. To accomplish that we are bridging, buttressing and burying. Bridging by overhauling the way we provide liquidity. The Bank of England is now open for business with a wider range of collateral, to a wider range of counterparties, for longer terms, at lower fees than ever before. Whereas before the crisis, the combination of banks own liquidity resources and their access to central bank facilities covered a mere 10% of short term liabilities of banks prone to run risk, today the figure is more than 100%. The benefits of this new approach were clear around the Brexit referendum. In the run-up to the vote, the Bank undertook extensive contingency planning which included encouraging banks to pre-position enough collateral in our facilities to enable them to draw up to £ billion in liquidity on demand.

In 2001, average inflation rates in the region as a whole fell to single figure levels for the first time since the fall of the iron curtain and, thereafter, they have continued to decline. In this context, let me highlight that, bearing in mind the potential inflationary pressures that might arise from completing structural reforms, the conduct of a  BIS Review 58/2002  1  monetary policy in the accession countries aiming at price stability should be seen as a medium-term objective, rather than as a short-term target. However, the sound management of macroeconomic policies cannot rely on monetary policy alone. In particular, stability-oriented policies in accession countries need to be supported by sound fiscal policies. Prudent fiscal policy management has been key to making sustainable progress in terms of macroeconomic stabilisation in the accession countries. At the beginning of the transition to a market economy, poor tax collection and governments' limited access to financial markets led to substantial monetisation of public deficits. However, from the mid-1990s onwards, fiscal policy has focused on macroeconomic stability. Therefore, a key lesson from the accession countries' experience is that responsible fiscal policy has been a crucial element in achieving and maintaining macroeconomic stability. Looking ahead, the best contribution that fiscal policies can make to sustainable noninflationary growth is by pressing ahead with fiscal consolidation, as is necessary to ensure the flexibility needed to deal with potential domestic and/or external economic shocks in the medium term.
The effort is clear to see. It is too in terms of foreclosed assets, which have fallen by almost 40% from their 2012 peak, and stood, as at June 2018, at around € billion. Nonetheless, the foregoing figures remain high in historical terms and dynamic management of these types of assets by banks remains necessary. They must set ambitious but credible objectives. 5/8  In designing these objectives, banks should bear in mind the supervisory expectations defined over the past 18 months. In particular, they should be very mindful of the guidelines the SSM published in March 2017 and the addendum thereto released in March 2018. The guidelines are predominantly qualitative. They describe measures, processes and best practices in the management of non-performing exposures, with a view to banks defining strategies that enable them to reduce the accumulated volume of such exposures. The addendum complements the guidelines and sets supervisory expectations as to the prudential provisioning levels for new non-performing exposures, considering as new those classified as such as from 1 April 2018. These expectations set a timeframe of two years for 100% provisioning of unsecured exposures, and one of seven years for 100% coverage of secured exposures. In this latter instance, moreover, provisioning is expected to be gradual, such that it is not left until the last year to set aside the provision.

Unfortunately, a satisfactory agreement has still not been reached: unless we can make progress rapidly in the  1/4  BIS - Central bankers' speeches  industry, which is what we are still hoping for, we will, if necessary, adopt an ACPR recommendation by mid-2023. Jean-Paul Faugère will come back to this later. Last, and most importantly, the return of uncertainty, and difficulties in anticipating risks. One risk is certain: the economic slowdown in Europe and more generally the world. The Banque de France does not anticipate a hard landing for the French economy; but we are collectively – and no doubt durably – having to face an "energy levy" of around 2% of GDP, which must be distributed equitably, including across businesses and households. Regarding financial stability, the number of incidents has multiplied over the last two years, especially in non-bank intermediation – I shall come back to this. For the time being, none of these events has had systemic consequences; but we need to be more vigilant on all levels as we cannot claim to know where the next crisis will come from, and we need to further strengthen our resilience. First by transposing Basel III and the Solvency II review into European law; then by enhancing our supervision of those risks that are still not sufficiently covered by the reforms. II. Five questions on the French financial system The first two seem clear to me and underline the French financial system's relatively favourable position in this new environment.
Credit lines were closed, margin calls were made, and all but the safest assets sold off at fire sale prices. Emerging market assets experienced a sell-off as a part of this process, and funds were repatriated back to the US in order to meet margin calls and repay debt. In normal times, managing liquidity across currencies from countries with free movement of capital and relatively developed capital markets is not much of an issue. In these conditions, FX swap markets can speedily be used to convert liquidity from one currency to another at spreads that closely reflect the differences in domestic money market rates in the two countries concerned. In other words, the covered interest parity condition broadly holds. Visà-vis the US dollar, this relationship showed periodic strain for most currencies after the  BIS Review 9/2010  3  financial turmoil erupted in late summer 2007, but it broke down almost completely after Lehman. There are probably several reasons for this, some of which were analysed in BIS publications such as the Quarterly Review during the period when I was still there. 2 Thus, for instance, we know that before the crisis, European banks had a structural imbalance where they had invested in longer-maturity USD assets and financed them partly in USD interbank markets at shorter maturities. When these dried up, there was probably a scramble to get USD liquidity through FX swap markets, with the result that those markets became dysfunctional as well.

It might be of some interest that the possibility that the Icelandic banks might fail in precisely the way they did was much more widely foreseen than is currently acknowledged. Available on the BIS website is a speech that I gave on 18 May 2007 before the Institut International d’Études Bancaires, entitled Financial globalisation and challenges for prudential policies and macroeconomic management, where I said: “...emergency liquidity assistance will be complicated or even impossible for central banks to deliver when internationally active banks face liquidity problems in currencies other than that of their home country. Iceland is a case in point.” 4 But this was before the breakout of the financial turmoil in August of the same year, and in company with many others, I saw this as a tail event rather than an immediate possibility, although concern was beginning to creep in. However, as the financial crisis intensified, the risks mounted, and by early 2008, both the banks themselves and the Icelandic authorities were acutely aware of it. 5 This is why the Central Bank was actively seeking to conclude FX swap agreements with major central banks and why, in May 2008, parliament authorised large-scale foreign borrowing in order to boost reserves. Both efforts were largely unsuccessful, except for the € bn swap agreement with the Nordic countries. The committee investigating the collapse will probably throw light on why that was. 3  Moody’s Global Credit Research (2009). Corporate Default and Recovery Rates, 1920–2008. 26 February 2009. 4  Gudmundsson, Már (2007).
For example, the firm might notice that the yield on corporate bonds relative to Treasury yields was higher than the range observed in recent years. If Long-Term Capital believed the former relationship would reassert itself, it would buy corporate bonds and sell short Treasury bonds. If the spread narrowed as expected, the firm would profit. If, however, the spread continued to widen, the firm would incur losses. This basic strategy and many complex variations was followed across many interest rate products in the US and many overseas markets as well. The firm was active both in traditional securities markets, and perhaps more importantly, in derivative product markets such as futures, swaps, and options. Anticipating that some positions would move in their favor and some would move against them, the firm relied on diversification across a large number of product and geographic markets. Long-Term Capital proved quite successful at this strategy, generating returns in excess of 40 percent in 1995 and 1996, though somewhat less in 1997. Perhaps their success went to their heads. Long-Term Capital took on larger and larger positions. They also leveraged their investments at higher levels, returning capital to their investors but not, apparently, reducing risks. We now also know that they took on significant positions in equity markets, through both swap and options contracts. The reputations of the Long-Term Capital partners, as traders and economists, and their initial success, appear to have contributed to so many counterparties’ willingness to deal with them.

The four firms met at the Federal Reserve at 7:00 p.m. A draft term sheet was reviewed which provided detail with respect to the consortium approach. The terms and conditions were debated, altered in some places, and ultimately refined so that the four firms could present it to a wider group. Although Federal Reserve officials were present at the meeting, we did not participate in the discussion about terms and conditions. At about 8:30 p.m., a meeting of a wider group involving 13 firms began. Meanwhile, some representatives of the Core Group called Long-Term Capital to discuss the terms and conditions of the consortium approach. Federal Reserve officials did not participate in any conversations with Long-Term Capital regarding the terms and conditions. In the meeting with the wider group, Peter Fisher explained the importance of avoiding a disorderly close-out of Long-Term Capital’s positions. He also underscored the desirability of parallel efforts to resolve the problem. It was agreed that the group would reconvene at 10:00 a.m. the following morning. It was clear to everyone that time was of the essence. I returned to New York from London around midnight. During the early morning hours, I called various foreign central bank officials to inform them of the situation. At about 9:30 a.m. my colleagues and I met with the Core Group to review the status of the situation.
BIS Review 68/2010  1  Growth Rates and Unemployment Rates in Advanced and Emerging Economies Growth Rates (Annual Percentage Change)  Advanced Economies Unemployment Rates (Percent)  10  11 USA  Euro Area  8  9  6 4  7  2 0  5 -2 Advanced Economies Emergi ng Economi es Export Weight ed  6. 01 08  01 06  01 04  0309  0307  0305  0303  0301  0399  0397  Source: Bloomberg, CBRT. 01 02  3  -6  0100  -4  Source: Bloomberg, CBRT. Commodity prices, which fell drastically in the last quarter of 2008 due to the significant contraction in global economic activity, hovered at low levels in early 2009. However, commodity prices began trending upward as of the second half of the year mainly on the back of the growing optimism about the global economic recovery and the boosting demand stimulated by the fiscal incentives implemented in China. The liquidity glut that was particularly fuelled by stimulus packages implemented in advanced countries, and the accelerating global economic activity resulted in an increase in oil and commodity prices, which further continued into the first quarter of 2010 as well.

4  BIS Review 68/2010  Risk Premium Indicators 5-Year CDS Rate Changes*  EMBI+ 900  5.5  Turkey Brazil S.Africa Hungary S.Korea  4.5 3.5  EMBI+ Turkey 800 EMBI+  700 600 500 400  2.5  300  1.5  200  0210  1009  0609  0209  1008  0608  1007  0210  1209  1009  0809  0609  0409  0209  1208  1008  0808  *Rate changes with base August 2008 (equals 1 on August 29, 2008). Source: Bloomberg, CBRT. 0208  100  0.5  Source: Bloomberg. 13. However, an important point that needs to be highlighted is that risk indicators for the Turkish economy have exhibited a more favorable performance compared to that of other emerging market economies especially since the height of the crisis during the final quarter of 2008. This development not only implies the soundness of the Turkish financial structure, but also indicates that our economy has gained resilience and strength against global crises compared to previous periods. 14. Turkey’s CDS rating changed dramatically at the end of 2009. Medium to long-term forecasts for Turkey were revised positively, many investors increased the weight of Turkish assets in their portfolios, and more importantly, prominent credit-rating agencies upgraded Turkey’s credit rating. There may be some credit upgrades in the upcoming period, in case a fiscal discipline backed by structural reforms is achieved and maintained.
Finally, we must remember that the application of strict standards, as required by the law, will, at least in the short term, limit the access to owner-occupied housing of certain low income groups. I sincerely believe that in the medium and long-term the effect will be more positive, by fostering greater price stability over the business cycle. We should remember that runaway growth of prices is the main factor that ultimately restricts access to owneroccupied housing. In any event, it is up to public authorities to shape the social measures that aim to guarantee decent homes for the less well off. It should be noted that construction of subsidised housing is currently at low levels, despite the economic recovery. Certain initiatives in our neighbouring countries are of interest, such as the role played by the deposits and consignments fund in France or the state guarantee arrangements in the Netherlands for housing up to a certain value. It is true that banks must not forget to apply strict economic criteria in their business, but it is just as true that a fair and responsible society should not be guided by economic criteria alone. 11/15  Use of the new macroprudential tools. In the last part of my speech I would like to depart a little from the real estate credit law to discuss the new macroprudential tools recently introduced by Royal Decree-Law 22/2018. As I have already mentioned, the crisis highlighted the insufficiency of microprudential supervision to identify, prevent and mitigate the materialisation of systemic risk.

Let me first explore some features that make financial market infrastructures different from other financial institutions: •  Service continuation (“critical services”) is more important in the case of FMIs. They are utilities at the heart of the financial system. Their smooth operation is essential for all other types of financial service. •  In most cases, there are only a few, if any, substitutes or alternative providers. •  Unlike banks, FMIs have ex ante loss allocation rules that they can draw on for the purpose of recovery. •  Not all FMIs are exposed to credit risk (but they are still systemically important). •  The size and composition of their balance sheets (e.g. rarely subordinated debt instruments) is different, which makes bail-in as a recovery or resolution tool difficult. •  To the extent that the use of a CCP is mandatory, it is absolutely essential that the relevant clearing services are preserved regardless of the circumstances. In conclusion, the recovery of CCPs in order to maintain service continuation is much more important for CCPs than for other financial institutions. That’s why the PFMIs require CCPs to be able to allocate any losses that are not already covered by regular risk management. [slide 8] So if the recovery of CCPs is so vital, is there any scope for resolution at all? I think there is, for a number of reasons: First of all, the attempt to recover may simply fail: the ex-ante recovery plans may prove inadequate ex post.
The internet undoubtedly brings us the prospect of greater choice and efficiency in financial deals, but it also sparks certain concerns. These fall under two headings: consumer protection, with worries about scams, transparency, security, accountability, legal recourse, and so on; and systemic stability, with questions as to whether the financial system might become more vulnerable to crisis as a result, for example, of a major technical failure or of a massive herd movement of money in a particular direction. This is a vast subject, so I need to narrow down my focus today. I want to discuss some of the issues which businesses or individual members of the public may face in relation to electronic money on the internet. And I then want to discuss some points which a central bank has to address in the monetary policy context when confronted with electronic money. In fact there are two types of electronic money: that which is held on the internet and that which is held in stored-value cards. Multi-purpose stored-value card schemes have been slow to become established, despite quite lengthy pilot projects in a number of countries. Hong Kong was nevertheless one of the first places to introduce regulations governing the issuance of such cards. Meanwhile, limited-purpose cards have proved more successful; we have a particular example in Hong Kong with the Octopus card, used to pay for public transport, which is hugely popular.

The reason we are taking a while to bring down inflation is that our job is also to contribute to keeping as many people in employment as possible. We do not want to restrain the economy more than that required to tame inflation. Many people are now worried about trying to make ends meet. Borrowers are facing higher interest rates on top of high inflation. Many families are facing tighter budgets, which will be hard for some groups. But by raising the policy rate, we are helping to bring down inflation. Norges Bank  Economic perspectives 2023  10  The road ahead The past few years have reminded us that price stability cannot be taken for granted. We have also been reminded that events that constrain the supply of goods and services can have a substantial impact on prices. We must be prepared for potential threats to price stability in future too. Some of the driving forces that kept inflation low in the decades up to the pandemic may be going into reverse. Globalisation has been met with growing opposition. Already before the pandemic, new trade barriers were erected – often to promote a country’s own economy. The pandemic and Russia’s invasion of Ukraine have demonstrated that long global value chains and trade in strategically important goods make us vulnerable. Lower trade globally and measures to build more robust supply chains could lead to lower productivity and higher prices. Demographic trends are also shifting. In many countries, the working population is on the decline.
And this brings me to my final lesson – that innovation and regulation are, in the end, friends not enemies. As I said earlier, the initial use cases for the technologies developed in the crypto world, such as speculative crypto assets, may have a limited future. But we can see that a range of other use cases are being proposed and developed in both the crypto and the non-crypto world. On the retail side, while Libra/Diem, the most high profile proposal for stablecoins for retail payments, including cross border, has withdrawn, a number fintechs and established firms are exploring the potential for technology in this area. Similar exploration around tokenisation and DLT is happening in the area of wholesale payments. A separate but rapidly developing field is the deployment of crypto technologies and smart contracts in the exchange, clearing and settlement of financial securities. Today, in mainstream finance these activities are carried out in sequence by separate entities at significant cost. However, some of the protocols that have begun to be developed in the crypto world have pointed to the possibility of collapsing these activities into a single entity and automating through the use of smart contracts. If successfully developed, such technologies could simplify the network of relationships that need  Page 8  to be maintained for trading in shares and bonds and lead to lower costs, greater speed and greater transparency for end investors.

Page 1  Some lessons from the Crypto Winter − speech by Sir Jon Cunliffe Given at British High Commission, Singapore  Page 2  Published on 12 July 2022  Jon Cunliffe sets out what he thinks are the lessons from the recent instability and losses in crypto markets – also called the ‘crypto winter’. He discusses how: • technology cannot remove all financial risks • regulators should continue and speed up their work • future regulation should be designed on the principle of ‘same risk, same regulation’ • appropriate regulation will support innovation  Speech In recent months we have seen a dramatic bout of instability and losses in crypto markets – dubbed by some commentators as the ‘crypto-winter’. A widespread collapse of crypto-asset valuations has cascaded through the crypto ecosystem and generated a number of high-profile firm failures. The totemic indicator of the crypto winter is that Bitcoin, the signature crypto asset, has lost 70% of its value since November. Regulators, of course, have not been slow to comment. And, true to type, I want today to pull out four lessons I think we can draw from this episode: Technology does not change the underlying risks in economics and finance; Regulators should continue and accelerate their work to put in place effective regulation of the use of crypto technologies in finance; This regulation should be constructed on the iron principle of ‘same risk, same regulatory outcome’ ; Crypto – technologies offer the prospect of substantive innovation and improvement in finance.