samchain/econo-pairs-v1 huggingface dataset:
On the first of these options, we would want to look at which requirements the smallest firms find the most complex. For example, if it turned out that small firms struggle with some of the complexities of our Pillar 2 framework for liquidity, could we simplify the framework for them? Alternatively, on the second option one could imagine a regime in which more liquidity requirements get added as a firm’s funding model becomes more complex (See Figure 3). Other countries around the world have taken various approaches to this simplification issue. For example, in Switzerland small banks are subject to simpler prudential requirements if they have high enough leverage 7  and liquidity ratios. Australian small banks are instead always subject to simpler risk-based requirements. 8  On the other side of the globe, the smallest Canadian banks are proposed to be subject to simpler risk-based  7 See for example: https://www.finma.ch/en/supervision/banks-and-securities-firms/kleinbankenregime/ 8 See for example: https://www.apra.gov.au/sites/default/files/response_to_submissions__revisions_to_the_capital_framework_for_adis_0.pdf 7  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  7  9  requirements as well as a more tailored liquidity requirement. Whereas in the rest of North America, most 10  US banks face increasingly more severe risk-based, leverage ratio, and liquidity requirements as they grow 11  in size. As you can see, it’s not at all obvious from this picture what is the right approach to simplification, and there will also surely be lessons to draw from how small firms deal with the current crisis.

So boring in fact that when I gave an inordinately long speech on this topic I went all the way to Switzerland so that I could inflict it on their bankers rather than all of you – had I done otherwise I am sure the Lord Mayor would finally have banned me from speaking at this event. But this is a very, very important issue for financial services in the UK because it is the fundamental bedrock of increased dynamism in our  4  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  4  regulation. I am delighted therefore that this is the approach the government has proposed in its consultation on the Future Regulatory Framework, and I hope that it will be taken forward as the wider regime develops. Graduation  At this point I fear that the chair whom I annoyed so much last year is becoming restive again, fearing a long lecture on regulatory plumbing. So let me stick with dynamism, but move us on to something a little more tasty that we have been cooking up in the PRA kitchen. We made changes to simplify the credit union regime last year both because it is a good idea and because we are not constrained by EU regulation in that area.
Ultimately, global warming is still limited to 1.8°C by the end of the scenario (2050) relative to pre-industrial levels, but then remains around this level at the end of the century. [8] A ‘no additional action’ (NAA) scenario in which governments around the world fail to enact policy responses to global warming, other than those actions already taken. As a result, global temperature levels continue to increase, reaching 3.3°C higher relative to pre-industrial levels by the end of the scenario. In the scenario this leads to serious environmental impacts, including extreme weather events, destroyed ecosystems and rising sea levels. In some cases these changes are irreversible. While these changes take longer to manifest, they give rise to increasing and irreversible shocks that continue to grow beyond the scenario: UK and global GDP growth are permanently lower and macroeconomic uncertainty increases. Broadly speaking, the first two scenarios focus on risks from the transition to net zero, whereas the third one focuses on physical risks from climate change. And to reiterate a theme I will come back to later, the risks from climate change have been managed by the end of the first two scenarios – whereas in the third they continue to build. CBES headlines The results of the CBES were published today, and I would encourage anyone with an interest in  Page 5  this topic to read them in full.

Getting our core job right, and so maintaining financial stability, is far and away the most important thing we can do to support the fight against climate change. Achieving net zero will not be possible unless our societies make considerable investments in developing and disseminating new technologies, and will require major changes across the economy. A stable financial system can support households and businesses through these changes, and channel investment where it needs to go to support the transition. Transitioning to net zero will be a major challenge for our institutions and societies even in a benign economic environment – doing so without confidence in the basic functioning of the financial system would be near impossible. It is therefore vital that firms can withstand risks to their safety and soundness, including those that arise as a consequence of climate change – both ‘physical’ risks like flooding and extreme weather events, and ‘transition’ risks that arise as the economy moves away from carbon-intensive activities. Firms therefore need to understand, at a granular level, how their balance sheets and business models are exposed to both present and future climate risks, so that they can take the right risk management actions today. This includes investing in their data and modelling capabilities, and  Page 3  carefully scrutinising the data they get from third parties. It means ensuring Boards and senior executives see climate risk as a strategic priority. [3] And ultimately, it means ensuring firms hold sufficient financial resources to absorb losses arising from climate change.
However, this poses a new challenge for users with little prior experience with digital tools, or with little financial knowledge, as they will not be given personalised advice when engaging services. Mirroring what I have said, concern over citizens’ level of financial knowledge has been increasing in recent years. In developed and emerging countries financial education is viewed today as an essential element of stability and balanced economic development in society. On OECD recommendations, many countries have developed national financial education strategies. In Spain, since 2008, the Financial Education Plan has been rolled out by means of a collaboration agreement between the CNMV (National Securities Market Commission) and the Banco de España, subsequently entered into also by the Ministry of the Economy and Enterprise. We consider these efforts to be essential and wish to boost them further in the future. 4  It is widely known that the engagement of banking services is through standard form contracts, which hamper or prevent negotiation between the two parties. 11/13  In addition, it has been opted to integrate financial education into the compulsory secondary education system, and specific subjects address these matters in greater detail in higher secondary education. Notwithstanding these efforts, much clearly remains to be done.

Public opinion shifts rapidly from criticising banks for their mistakes – frequently, for the mistakes “inherited” from banks that disappeared some time back – to criticising them for not sufficiently easing the way for  4/13  credit to reach economic agents; indeed, for the risk of financial exclusion stemming from potential branch closures. Like the song, it would seem we can’t live with or without them. But the truth is, with or without criticism, the role of banks remains as essential today for our economy as it was 20 or 30 years ago. However, debate has arisen over the future role of banks, set against the emergence on the scene of the so-called Fintech. This can be seen as a threat or as an opportunity. I believe it entails both. But in any event, banks must evidently adapt their business model to technological change, as Gonzalo so rightly said. If instead of looking at the small, innovative and nimble Fintech, we assess the potential effect that the irruption of one of the so-called Big Tech may have on the system as a whole, the debate takes on a systemic dimension. In this connection, the recent announcement of the launch of the “Libra” project, the virtual currency sponsored by Facebook, has potentially systemic implications. These are so serious that supervisors, central banks and credit institutions must all evaluate the possible consequences. Evidently, we must be sure that the project will not compromise the integrity of payment systems and the stability of the system as a whole.
In the long run, the higher levels of both employer and employee National Insurance contributions will result in lower growth of real take home pay - that is simply the price of better public services. Real incomes need not fall but, for a short time simply grow more slowly than otherwise. Indeed, if productivity growth rose, then real wages growth need not fall at all. Profits may bear some of the brunt in the short run, but over the longer term the adjustment will be to wages because firms will need to earn the going rate of return on new investment. It remains to be seen whether the additional National Insurance contributions will lead to attempts by firms to push up prices to recoup the higher employers' contributions and by employees to push up wages to offset their higher contributions. The commitment of the MPC to keeping inflation on track to meet the target, and its track record since 1997, should help to anchor expectations of inflation to 2.5%, thus encouraging the adjustment to occur without a rise in inflation. It is certainly helpful that the increased contribution rates have been announced well in advance so that expectations of real wage rises can adjust. In recent months the rate of increase of average earnings per person has been extremely low, partly because of a fall in average hours worked. For the economy as a whole, average earnings rose by only 0.9% in the year to February - the lowest figure recorded since April 1967.

It was as if the engagement was held in Bucharest and now, the official marriage is being celebrated here, in Tokyo. It was not an easy journey. The National Bank of Romania has shown its support and loyalty from the very beginning. Many of you, present here, played an essential role in making it happen: Minister Jan Kees de Jager, Governor Knot, Executive Directors Menno Snel and Ruud Treffers. I want to extend my thanks to them and to each and every one of you. Now we are a big family where trust is vital. I wish we have the opportunity to meet again in the future, look back on this day and be proud of our accomplishments. Thank you. 2  BIS central bankers’ speeches
Nevertheless, they have significant consequences for the  structure of markets, with a substantial impact on our ability to impose and control our public policy choices regarding financial services, in particular in terms of legal, technological and operational certainty. For instance, which law is applicable, when the provision of services involves players established in different jurisdictions with sometimes contradictory legal requirements? The United States in particular is characterised by a broad definition of extraterritoriality. Besides the identification of the legal framework, there is also the question of the ability of a judicial authority to enforce the law, given the size of financial groups, the large number of 1/4  BIS central bankers' speeches  intermediaries, or the location of their various activities. The digitisation of financial services also introduces a new form of dependence on physical (mobile phones and connected objects) as well as digital (search engines, mobile applications) entry points and on the non-European technology companies that control and dominate them. Yet, competition law, created in the 19th century in a period when the State took a stand on monopolies, is proving to be ill-equipped to deal with these technology companies. Lastly, the dematerialisation of activities, by increasing the number of interconnections and system entry points, makes them more vulnerable to potential “cyber-attacks” and to their use for money laundering and terrorist financing purposes, and makes them more dependent, to counter this, on non-European players who also operate outside the regulated financial sectors.

Indeed, central bank money is the cornerstone of settlements between financial intermediaries and has every reason to remain so in the future: experience shows that financial players need a risk-free settlement asset. However, with the development of the tokenisation of financial assets, would it be advisable to tokenise their counterpart, the settlement currency? Doing this may lead to changes not in what constitutes the very foundation of central bank money – confidence – but in the way it is issued. It is in this context that the opportunity for a “wholesale” central bank  digital currency could arise. This requires central banks to invest in the technical innovations underpinning the digitisation of financial assets and their transfer methods, to conduct experiments and take advantage of them in order to improve the performance of the services they provide to the economy. And that is what the Banque de France is doing. With the support of its Lab, it has been investing in blockchain technology for several years now, and is implementing it on an operational level with its MADRE project for 3/4  BIS central bankers' speeches  managing the databases for SEPA creditor identifiers and bank branches. Another recent example is the ECB’s launch of the TARGET Instant Payment Settlement (TIPS), with the aim of ensuring the coordinated development of instant payments.
15  Inferred from Bradley (2016), using the mean pay of the self-employed compared to employees. Hamilton (2000). 17 Gardiner (2016). 18 Because self-employed workers are not included in statistical measures of average weekly earnings, the self-employed effect would not have shown up arithmetically in this wages measure. But there will still likely be general equilibrium effects on wage-setting in the economy for those who earn a salary. 16  8  All speeches are available online at www.bankofengland.co.uk/speeches  8  A final piece of evidence, albeit indirect, comes from historical data. The move towards greater self-employment and less unionisation is, in some respects, a shift back to the future in the nature of work. Prior to the Industrial Revolution, and indeed for some years after it, most workers were self-employed or worked in small businesses. There were no unions. Hours were flexible, depending on what work was needed to collect the crops, milk the cows or put bread on the table. Work was artisanal, task-based, divisible. st  While the read-across to work patterns in the 21 century is far from exact, there are some parallels. That being the case, one question is how wage- and price-setting behaviour operated during this earlier period of more “divisible” labour markets. Were any of today’s wage patterns evident then? The data we have on wages and output in earlier centuries are partial and imperfect, but nonetheless tell an interesting story.

Since July last year, inflation expectations have risen by around 40bp in the UK and around 25bps in the US and euro-area (Chart 15). The downside skew in inflation expectations appears to have dissipated. And not just among market participants. The shift in inflation narratives among the public has been every bit as striking. Google searches for the word “deflation” are at their lowest level in several years, having been particularly elevated in 2015. Searches for the word “reflation” have risen fourfold comparing the first quarter of this year with last (Chart 16). Hopes of reflation have displaced fears of deflation as the popular narrative about global inflationary trends. 13  All speeches are available online at www.bankofengland.co.uk/speeches  13  This shift in inflation expectations has important implications for monetary policy. One of the concerns about below-target inflation was that any negative shock to demand could dislodge inflation expectations, requiring further stimulus at a time when the zero lower bound on interest rates potentially made this less effective. This asymmetry of risks can justify holding interest rates lower for longer, on “risk management” grounds. 24  With inflation expectations now having adjusted upwards, the need for such monetary policy insurance is now lower than nine months ago. Fourth, closer to home, some of the worst of the post-referendum fears about UK growth have failed to materialise. Growth has been more resilient than expected. The Bank’s Inflation Report forecasts for UK growth in 2017 have been revised up by over a percentage point since last August.
Finally, risk warnings and recommendations made by the ESRB have to be translated into concrete action, in particular by the national supervisory authorities. To conclude, the European Systemic Risk Board can be compared to a doctor who examines a patient, asking him about his ailment and suggesting that some tests be done. The doctor then makes a diagnosis and eventually recommends some medicines. It’s up to the patient to abide by the doctor’s recommendation. The doctor is not in a position to take direct action. He is not allowed to intervene, even when things get really bad, as in the case of a risk of contagion and the patient has to be put in quarantine. He might be the best doctor in the world, but his treatment will only be as good as the quality and completeness of the patient’s replies – and the patient’s willingness to take the medicines prescribed. This is the way in which the ESRB has been constructed in Europe. Its success will largely depend on the compliance of its “patients”, who hopefully have learned the lessons of this crisis. Thank you for your attention. 12  BIS Review 115/2009

Under both the LA and EA scenarios, climate change has broadly been brought under control by the end of the 30 year period. By contrast, with no additional action the impacts will persist well beyond the 30 years of our scenario – incurring substantial economic costs not captured in these estimates. [11] Even sticking within the 30 year bounds of the scenario – and focusing on financial sector impacts – the NAA scenario is pretty grim. Projected impairment rates for banks are up 50% compared with normal levels. And whereas the ‘transition’ scenarios offer clear opportunities for banks to increase their profits by investing the transition, the ‘no action’ scenario offered no such opportunities. Instead the world gets poorer and more uncertain for all sectors, particularly those directly exposed to physical risks. The ‘no action’ scenario is particularly unpleasant for life and general insurers – even sticking to the 30 year window, their losses in this scenario were worse than in the transition. For instance UK and international general insurers, respectively, projected a rise in average annualised losses of around 50% and 70% by the end of the NAA scenario. It’s worth emphasising that these costs would be mostly passed on to consumers through higher premiums. Ultimately, in a ‘no action’ scenario, we would see a reduction in access to lending and insurance for so-called ‘climate vulnerable’ sectors and households. To give an example of what this means, homes at risk of flooding would likely become prohibitively expensive to insure or borrow against.
In the long term, there may even be a risk associated with investments in government bonds. This has been experienced by the Norwegian state. The State Reserve Fund, established in 1904, lost much of its capital during the First World War as a result of losses on investments in German and French 2 government bonds. Chart 16. From oil to assets Per cent of mainland GDP 18  18  15  15  Cash flow from petroleum activities  12  12  Return on Petroleum Fund  9  9  6  6  3  3 0  0 2000  2010  2020  2030  2040  2050  Sources: Ministry of Finance and Norges Bank  Buying a bond means lending money to others. Buying equities is the same as investing in real assets. Buying equities gives us direct ownership of the means of production in global business and industry. On the one hand, these ownership rights provide high returns when companies are flourishing. On the other, shareholders are the first to sustain losses when companies fail. As a result, returns on equities fluctuate far more than returns on bonds, reflecting the higher level of risk. Over the past 75 years, equity returns in the US market have been negative almost every third year. Chart 17.

Chairperson: The Bank of Zambia, in conjunction with the Bank Negara Malaysia (the Central Bank of Malaysia) is pleased and greatly honoured to co-host this pilot Financial Inclusion Advisers Conference. We have no doubt that this Conference will provide the necessary impetus to advance the frontiers of financial services provision to our people in the region. Ladies and Gentlemen: The genesis for this important forum goes back to the Langkawi International Dialogue, in 2007 at which the Governor of the Central Bank of Malaysia proposed this initiative. The purpose was to bring together practitioners and regulators of microfinance to learn from each other on how to deepen and broaden financial services provision. The proposal was concretized at the Global Southern Africa International Dialogue under the CPTM SMART Partnership Movement, held here in Lusaka, in August 2008 following an agreement between the Bank of Zambia and Bank Negara Malaysia to conduct the first Financial Inclusion Advisers Programme in Zambia. Distinguished Guests and Participants: As you may know, the debate on financial inclusion has been going on for some time now. A common understanding arising from this debate is that financial exclusion has negative economic and social effects on society. For instance, lack of access to financial services tends to restrict the economic opportunities open to the poor and makes them vulnerable to adverse events. The absence of savings products in particular makes it difficult to build up capital.