samchain/econo-pairs-v1 huggingface dataset:
5 In sum, a lot has been achieved in the past, not the least through the introduction of the euro, but more needs to be done in the future to reap the full benefits of the Single Market for Financial Services. Let me now mention some examples where we have focused our efforts to contribute – within the realm of our competencies – to improving financial integration and where we plan further work. We tend to group our efforts relating to financial integration in four types of activities: (i) giving advice on the legislative and regulatory framework; (ii) acting as a catalyst for collective private sector initiatives; (iii) enhancing knowledge and raising awareness; and (iv) providing central bank services. I select examples from each group. 3  Giannetti and Ongena (2007), Lending by example: direct and indirect effects of foreign bank entry in emerging markets, mimeo., Tilburg University. 4  Abiad, Leigh and Mody (2007), International finance and income divergence: Europe is different, IMF working paper, WP/07/64, March. 5  Baltzer, Cappiello, De Santis and Manganelli (2007), Measuring financial integration in the new EU member states, mimeo., ECB. 2  BIS Review 17/2008  As regards legislative and regulatory advice, the Eurosystem was fully involved in the review of the Lamfalussy framework that took place at the end of last year and published a contribution to the assessment regarding the banking sector.

We generally share the broad agreement among EU bodies that the Lamfalussy framework has significantly increased the efficiency and effectiveness of financial regulation and supervision in the EU. At the same time, however, a number of further improvements seem warranted to reap all the benefits. First, increased regulatory convergence is called for, in particular for reducing national options and discretions in EU directives. Indeed, the inconsistent implementation as well as the “gold plating” of EU rules at the national level give rise to significant compliance costs for financial institutions operating across borders. Second, we need to strengthen the basis and decision powers of the “level 3” committees of supervisory authorities pursuing supervisory convergence and cooperation Third, further improvements in the arrangements for the supervision of cross-border financial groups should be achieved. All authorities need to be adequately informed to effectively perform the ongoing supervision of cross-border institutions as well as to be fully prepared to address potential cross-border situations of financial distress. Given the increased scope and intensity of the cross-border activities of EU banking groups, the need for effective information-sharing and cooperation in their supervision is now more important than ever. In this respect, the Eurosystem underscores in particular the importance of strengthening information sharing also between supervisory authorities and central banks without supervisory responsibilities with respect to the major EU banking groups. Next, I am turning to our role as catalyst for market activities fostering financial integration.
Building block 15 calls for harmonised API data protocols and the Bank will support this objective in its development of an API layer. The Bank is also involved in the more exploratory building blocks in Focus Area E. In the light of the continued decline in cash for transactional purposes, and great technological advancement, many central banks, including the Bank of England, are considering whether introducing a CBDC would be appropriate. In March this year, the Bank published a discussion paper10 to explore the benefits, risks and practicalities of a retail CBDC in the UK. We have received valuable feedback from across the payments industry, technology providers, academics and public authorities and we look forward to setting out more information in due course. The Bank’s Financial Policy Committee also set out regulatory expectations for payment stablecoins in 2019 and 2020, which is feeding into our work on designing appropriate regulation and requirements for firms proposing these. As set out in the building blocks it is important that as these issues are debated it is also done with an eye to how they could support cross-border payments. These examples provide just a taste of the areas that the Bank of England is involved in and we will be working closely with other central banks and relevant organisations to address the building blocks as a whole.

I was delighted to be asked to chair the CPMI Task Force on Cross-Border Payments which led the Stage 2 work. To help to find solutions to this long-standing problem our assessment involved reviewing previous work undertaken, industry outreach and new analysis to get beneath the skin of what is really happening. It culminated in a 2 3  https://databank.worldbank.org/reports.aspx?source=2&series=BX.TRF.PWKR.DT.GD.ZS&country= See Annex 1 & https://www.fsb.org/2020/04/enhancing-cross-border-payments-stage-1-report-to-the-g20/ 3  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  3  CPMI report published in July 2020, outlining a set of 19 ‘building blocks’ necessary to enhance cross-border payments.4  Stage 3, just published by the FSB, is a roadmap setting out a high level plan on how to take forward the building blocks. I will say more about the roadmap later, but first I want to say more about the ingredients for success – the building blocks. An overview of the building blocks and focus areas  The building blocks took a broad view: rather than addressing an individual area such as payment systems or compliance or regulation, Stage 2 sought to bring together these issues allowing us to really start to address the challenge in a holistic way. The 19 building blocks were grouped into five focus areas, which I will highlight now.5  The building blocks in Focus Area A create a commitment to a joint public and private sector vision to enhance cross-border payments by agreeing a common set of objectives.
Fourth, the impact of the materialisation of the physical and transition risks of climate change may be very uneven across geographical areas and economic sectors. Moreover, apart from this geographical and sectoral diversity, the impact is also likely to be very uneven across economic agents. Given these special features, we banking regulators and supervisors have launched various initiatives to assist and oblige banks to take these risks properly into account. Thus, the European Banking Authority (EBA),8 the European Central Bank (ECB)9 and the Banco de España10 have each published supervisory guidelines and expectations explaining how banks are expected to consider these risks in their daily operations, their business strategies 7  See, for example, A call for action. Climate change as a source of financial risk, NGFS, April 2019, and Climate-related risk drivers and their transmission channels, BCBS, April 2021. 8  EBA report on management and supervision of ESG risks for credit institutions and investment firms, EBA, June 2021. 9  Guide on climate-related and environmental risks, ECB, November 2020. 10  Banco de España supervisory expectations relating to the risks posed by climate change and environmental degradation, Banco de España, October 2020. 3  and their risk management.

At global level, the BCBS has published for consultation a paper on principles for the effective management and supervision of these risks.11 In any event, the improvement in banks’ management capability will presumably have to be supplemented by the development of a regulatory and prudential framework that properly takes into account the special features of the risks associated with climate change. There are two preliminary issues here: the existence of information and common taxonomies and the development of measurement methodologies. The need for common definitions and granular data To assess climate risks correctly, first it is necessary to have common definitions and data of sufficient quality and granularity. The Network for Greening the Financial System (NGFS), of which we, among 108 central banks and supervisory authorities from all over the world, are members, published in May 2021 a report12 emphasising the importance of having common worldwide definitions and standards for disclosure of information associated with these risks. Common definitions Owing to the complexity of the matter, the progress made towards establishing a global taxonomy is, unfortunately, still limited. Not only are productive technologies characterised by great heterogeneity at any given moment in time, which affects their environmental classification, but also a dynamic approach, which recognises the progress made in reducing their emissions, needs to be adopted. I would, however, like to stress the impetus the European Union has given to this issue, through the Taxonomy Regulation,13 which sets the foundations for a common European classification of “environmentally sustainable” economic activities. The regulation establishes six environmental objectives.
Islamic finance with a growth rate of between 10 to 12% annually in the past decade is gaining prominence at many fronts, including its ability to meet the unique demands of the modern economy. The sukuk market in particular, has produced a dynamic stream of cutting edge products with an appeal that transcends beyond borders and beliefs. It has a wide geographical spread, with global sukuk outstanding domiciled in over 20 countries, and an investor base that spans from Europe to the Middle East and Asia, thus allowing greater diversification of exposures and risks. Malaysia, with a consistent global sukuk market share of more than 50%, over the last 10 years, has sustained its position as the market leader. In the last few years, we have witnessed increasing sovereign sukuk issuances by non-Muslim jurisdictions to meet the varying motivations of its issuers. In 2015, at least 13 jurisdictions have tapped the global sovereign sukuk market. Issuances by the United Kingdom and Hong Kong, are testimonies that the sukuk has come of age. As for Malaysia, its market share of sovereign sukuk stands at 40% and the recent issuance of a Sukuk Wakalah by the Government, with 30-year tenure is currently the longest tenured sovereign sukuk globally. The horizons and usability of sukuk have also expanded into the sphere of Socially Responsible Investment (SRI); following the issuance of the first SRI Sukuk in 2015 by a Malaysian GLC. This is an example of innovative impact investing that generates positive social outcomes.

The first batch of CIFP graduates received their scrolls in February 2009 and all 32 have gained employment or have continued their studies further. This year, INCEIF will see the first batch of Masters in Islamic Finance graduate and next year will see the first batch of students to graduate from the PhD programme. This is indeed a significant milestone for INCEIF that is achieved in such a short period of time. As the Chancellor of INCEIF, it is my hope that the setting up of the INCEIF Chair of Islamic Finance will contribute to the development of expertise of the academic faculty and students at INCEIF in addition to expanding further understanding of Islamic Finance by the financial community. Please join me in welcoming Dr Abbas Mirakhor to deliver his lecture. 2  BIS Review 9/2010
This was Sweden’s experience with the combination of a currency peg and deteriorating public finances in 1991-1992. But now there is another danger. Given that the target of imminent euro adoption is gone, and the large euro area nations do not provide real leadership on fiscal soundness, there is less incentive for some of the new member states to stick to the consolidation of their public finances. This is especially obvious for Hungary, where the deficit was 7.5 per cent in 2005 and is, according to present plans, expected to increase to around 10% this year. For Poland and the Czech Republic the deficits will stay at the present level of around 3% in the coming two years. Whether in the old or new member states, there is an additional problem, as we are entering a period of intensifying structural changes. Old industrial patterns in Europe are being changed when confronted with both the boost to productivity from IT and globalisation and enlargement, all of which supports this process. These trends will eventually help productivity and growth in Europe to start catching up with the US again. But in the short term the structural changes will lead to higher frictional unemployment as old industries are more rapidly replaced by new ones. In addition, the recent downturn never led to a dramatic increase in unemployment or a dramatic decrease in employment in the euro area; hence, the upturn is probably also less likely to lead to rapid job creation.

Why are budgetary rules needed at EU level? This interaction is fairly well understood, if not always acted upon, at national level. But at the EU level there is an extra dimension. Many countries’ fiscal policies are now matched by a single monetary policy. One possible risk is that the ECB would in the end have to bail out a fiscally undisciplined country from an unsustainable debt. However, many EU member states’ unwillingness to meet the Stability and Growth Pact has shown that problems can arise before matters have gone as far as to a full-blown debt crisis. The problem might be a bias towards fiscal laxity that has to be counterbalanced by tighter monetary policy - hence a bad policy mix. With a single monetary policy the effect of fiscal stimulus in one country will be diluted in the whole area and will therefore by definition meet with less of a monetary policy response than it would if monetary policy had been national. Furthermore the nature of the political set-up makes it more difficult for the ECB to comment on individual national budgets. This means that there will be a strong temptation to “free-ride” by expanding the budget at the expense of fellow euro area nations. But the dilemma goes further – given that it is rational for others to expand their budgets it becomes rational for your own country to do so too – even if your instinct is not to “free-ride”.
The present assessment Today the Riksbank is presenting a new economic assessment of the coming one to two years. The general features of the picture are the same as in our June report. Although the economy has moved further along the upward phase, we continue to believe in a main scenario that combines a strong  BIS Review 87/2000  2  economic trend with no unduly alarming inflationary tendencies. It is important to note, however, that there are also a number of clear risks that we must keep an eye on in the future. Monetary policy is currently formulated on the basis of an assessment of inflation excluding transitory effects from indirect taxes, subsidies and house mortgage interest expenditure (UND1X). In the main scenario in the Inflation Report, UND1X inflation with an unchanged repo rate of 3.75% is forecast to be 1.5% one year ahead and 1.9% after two years. When various alternative paths are taken into account - above all the risks of a higher oil price, a weaker exchange rate and more rapid wage increases - the rates of inflation are judged to be somewhat higher, namely 1.6% and 2.1%, respectively. The inflation assessment starts from a continuation of strong international economic activity. Together with rising consumption and a favourable development of investment, this provides conditions for further rapid growth in Sweden, too. GDP growth in the main scenario is forecast to be 4% this year, 3.7% in 2001 and 3% in 2002.

In addition, the central banks have, for example, taken steps to contribute liquidity to the financial system. The Riksbank will be presenting a new Inflation Report next week. As usual it will contain a main scenario and a spectrum of upside and downside risks. Considering the circumstances I have outlined earlier, the main scenario is inherently uncertain. The risk spectrum will therefore be particularly important to monitor in future as new information is obtained and events unfold. Which direction will cyclical activity take? How will the exchange rate develop? What are the underlying factors here? And how will inflation expectations move? These are critical questions for the Riksbank’s future action this autumn and winter. Unfortunately there are no clear answers. BIS Review 82/2001  5
Lars Nyberg: The Riksbank's monetary policy strategy Speech by Mr Lars Nyberg, Deputy Governor of the Sveriges Riksbank, at the Foreign Banker’s Association, Stockholm, 14 September 2006. *  *  *  Introduction Let me begin by thanking you for the invitation. It is a pleasure to be able to come here and talk about the Riksbank and our monetary policy. When conducting modern monetary policy, it is important that the principles guiding interest rate decisions are known to all. Monetary policy largely has an effect through its influence on expectations of future inflation and interest rates. Therefore, we regularly describe our views on economic developments in our Inflation Reports and publish the minutes of our monetary policy meetings to enable everyone to understand the considerations we make. In addition, twice a year the Governor of the Riksbank holds a public speech for the Riksdag (the Swedish Parliament) Committee on Finance and responds to questions from members of parliament and journalists. Moreover, we Executive Board members hold a large number of speeches, in which we discuss various aspects of the Swedish economy and explain our interest rate decisions. I should say that a continuous debate on monetary policy and its terms is a necessary condition for the policy to function satisfactorily. One difficulty with monetary policy is that it does not have an immediate impact. It is therefore necessary to base monetary policy decisions on forecasts of future inflation and developments in the real economy.

Our assessment throughout the year has been that the outlook for inflation and the economy over the coming years indicates that it is reasonable to assume the repo rate will need to be gradually increased. In accordance with this view, we have raised the repo rate four times so far this year and my assessment is that the repo rate will need to be raised further in future. However, as I mentioned earlier, we both can and should change our assessment if the economy develops in a manner we had not expected. Thank you! BIS Review 84/2006  5
At times, we may be more effective by helping to convene a group of market participants to reach consensus on best practices or a common solution than we would be defining or imposing a solution ourselves. Of course, not all problems are amenable to a solution by public support of private initiative, but we should be open to these types of approaches when they are likely to be successful in achieving our objectives. And sixth, we have to be careful that the necessary and constructive attention that has been devoted over the past several years to meeting control and compliance challenges does not detract from the classic safety and soundness requirements of risk management. These should not be competing priorities. The financial costs and reputational damage associated with compliance and control failure can be very large. And the investments in the internal control infrastructure—in audit and corporate governance changes and in controls over financial reporting—are crucial parts of the foundation for a credible risk management framework. But we need to make sure that the demanding and ever evolving challenges of managing credit and market risk receive a degree of attention by senior management and boards that is commensurate with the risks. And this balance needs to be reflected in where we focus our supervisory efforts, as well. These classic prudential issues, those that make a critical difference in reducing the vulnerability of markets to systemic risk, need to be a principal focus of supervisory attention.

This is a time where I believe it is important to encourage more care and conservatism in the discipline of risk management. There are three areas at the top of our hierarchy of concerns. First, it is very important that the major dealers make the investments necessary to improve the operational infrastructure that underpins the credit derivatives and broader over-the-counter (OTC) derivatives market. Operational risk and infrastructure failures have played a prominent role in past financial crises, and the infrastructure weaknesses that have characterized the credit derivatives markets since their inception are another credible source of concern. The major market participants, both the dealers and the traditional and nontraditional investors, are in the process of improving the infrastructure that supports these markets. The changes underway to clean up the backlog of unconfirmed trades, to automate the entire post-trade-processing environment, and to improve the settlement process in events of default will help reduce operational risk in the derivatives market and reduce some sources of uncertainty that could exacerbate a market shock. We are encouraged by the progress made to date and will continue to encourage further improvements. Second, we believe that the major dealers, as well as the large commercial and investment banks, should take a cold, hard look at financing conditions and margin practice, particularly with respect to hedge fund counterparties and in OTC derivatives.
There is also the effect of net exports, part of which we saw in the first quarter, resulting from both higher prices in dollars and the reallocation of internal resources derived from the real depreciation of the currency. Add that the developed world will perform better. Finally, there is the impulse coming from public spending, particularly investment, because of the low budget execution of 2013. In the opposite direction point the aforesaid deterioration in business confidence and the downward revisions to the investment project agenda made by the Chilean capital goods corporation for 2014. The 2014 current account deficit forecast is revised downwards mainly because of the foreseen deceleration in investment and a slight increase in savings because of lower private consumption. In the trade balance this is visible mainly in a downward revision to imports. Accordingly, the baseline scenario includes a current account deficit of 2.5 percent of GDP in 2014 (3.6 percent in March). The lower outlook for expenditure also implies that, at trend prices, the deficit will decline further, to 2.2 percent of GDP (3 percent in March) (table 2). The forecast path for inflation rests on several assumptions. For one, in that the passthrough from the peso depreciation to prices will be in line with its historical pattern. In addition, the Board uses as a methodological assumption that the real exchange rate (RER) will remain close to current values, as it is now within the range that is considered consistent  BIS central bankers’ speeches  3  with its long-term fundamentals.

Since the summer, the exchange rate has fallen by almost 20%; and oil prices have fallen by around two-thirds, both of which will boost demand. No one can know at what point the impact of all this stimulus will have a visible effect on activity; the lags in economic policy are notoriously long and unpredictable. But welldesigned policies implemented within a consistent policy framework will eventually work. BIS Review 8/2009  5  1. Ten largest monthly falls in UK equity prices  Percentage change on a year earlier  South Sea  Aug-Sep 1720  Black Monday  Oct-Nov 1987  South Sea  Sep-Oct 1720  10 Se p-10 O ct 2008  10 Sep-10 Oct 2008  Oil shock & secondary bank crisis  Nov-Dec 1973  Oil shock & secondary bank crisis  Jul-Aug 1974  France fall to Germany  Jun-Jul 1940  Oil shock & secondary bank crisis  Feb-Mar 1974  Unexpected rate hike  Aug-Sep 1981  Oil shock & secondary bank crisis  Nov-Dec 1974  2. Chinese electricity production 30 20 10 0 September 2008  -20 Jan 01  -60  -40 -20 Percent change  Jan 03  Jan 05  4.