samchain/econo-pairs-v1 huggingface dataset:
There is a tendency by market participants and some policymakers to consider central banks to be “universal problem solvers” whose balance sheets can be used, without cost, for all purposes. There is also a doubt, at least an ambiguity, in the minds of some analysts, about the true purpose of government bond purchases. Central banks’ activism may create doubts as to their ability to stick to their core mandate – price stability – in the face of increasing pressures and constraints. Overall, the euro area is well protected against all of these risks thanks to the robustness of its institutional framework Price stability is unambiguously the priority objective of monetary policy Monetary financing of governments is strictly prohibited The Eurosystem (the ECB and National Central Banks) is extremely well capitalised, which protects its independence. This has allowed the Eurosystem to implement nonstandard measures on a large scale without endangering its credibility. Of course, we do not control fiscal policy. We will never accept a situation where fiscal imbalances could constrain monetary policy. It is very important, therefore, that credible fiscal consolidation takes place across the euro area. This will make it easier for the Eurosystem to be active in protecting financial stability. On the contrary, doubts over governments’ resolve to ensure the sustainability of public finances would make us powerless to fight instability and expose the euro area to great dangers. Now for the more normative aspects. We may have to live with nonstandard measures for a long time.

Whatever the approach chosen, the main challenge would be to take account of climate risks, either through economic estimates that we master – such as GDP observed under stress – or directly through climate variables – such as the rise in temperature – which would require  BIS central bankers’ speeches  3  developing new methods and gathering new information. This, of course, would mean relying on expert judgment on these issues, in a context where financial institutions do not have enough experience to understand future risks. We will work on this with the ACPR and the public authorities concerned. *** Understanding and analysing climate risk is essential. The regulations currently being drawn up – the Act on energy transition and the work of the Financial Stability Board – on information disclosure are useful tools to ensure that the transition to a greener economy is active and therefore under control. These initiatives could also contribute to making market participants more aware of the need to use a discount rate that is more compatible with the transition to a greener economy. The Canfin-Grandjean report of June 2015 also includes many interesting avenues. However, we must at the same time remain modest. We, the public authorities, do not know everything. And we cannot substitute ourselves for private players, whether financial or nonfinancial.
14  A paired bid consists of a single nominal amount and two spreads at which the counterparty is willing to borrow against the delivery of narrow and wider collateral respectively. This provides participants with two opportunities to raise a specific quantity of funds whilst avoiding any risk of over allotment that might otherwise occur if two single bids for the same nominal amount were submitted. If both parts of a paired bid are above their respective clearing spreads, and therefore eligible to be accepted, the participant will be allotted against the bid which offers them better value (the bid with the highest spread relative to the clearing spread for that collateral type). 15  As opposed to the old LTRs which were run on a discriminatory price basis. BIS central bankers’ speeches  7  The mechanics of the allocation mechanism are relatively complicated. In a normal auction there will be one price at which the auction will clear. But in the ILTRs there are two clearing prices, one for each of the two types of collateral. And there will be pairs of clearing rates which ensure that the total amount lent in the operation equals the amount on offer.

1)  Considered theoretically as risk-free securities, government bonds are usually considered as floor rates and constitute the benchmark for pricing almost all other securities. Thus, rising sovereign yields mechanically shift funding costs upwards for all private agents. Interest rates on government bonds usually include small premia to compensate for liquidity and credit risk. For a proper monetary policy transmission, these risk premia should not reach such level and volatility that the signal from the key policy rates is no longer perceivable and no longer reaches the real economy. In recent months, the tensions rapidly spread to other markets to a point that jeopardized the transmission of monetary policy, as European government bond markets became largely dysfunctional. 2)  The second contagion mechanism goes through the banking system. On the liability side, banks are already suffering from increasing government debt issuance which has a crowding out effect and contribute to steepen the yield curve; it is a real issue as banks debts maturing in the next three years are significant while government support and central banks facilities are expected to be gradually removed. In that tense context, the sovereign debt crisis trigger increasing funding tensions for European banks owing to the contagion of sovereign to banks spreads. It reflects the traditional belief that domestic financial institutions cannot be less risky than the sovereign which are supposed to back them in case of need.
Financial stability is a public good which refers not only to banks, but also to the economy as a whole. Financial stability is influenced by the quality of the public policy mix. Since the previous Report (May 2017), financial stability has remained robust, yet we notice that certain vulnerabilities are still manifest or have been building up, especially with regard to upward pressures on the risk premium for emerging economies, tensions surrounding domestic macroeconomic equilibria stemming from slippages and uncertainty in the budgetary and fiscal policy and higher household indebtedness, the risks being compounded by the correlation between these factors. 1  Looking at macroeconomic fundamentals, several favourable indicators are noteworthy:       Romania’s major advantage is the low public debt stock (37.4 percent of GDP), together with the drop in the refinancing risk, due mainly to the extension in the maturity of public debt (Figures 1 and 2). Public debt spans mostly the medium or long term (94 percent of total, on the domestic and external markets alike – with domestic debt accounting for 48 percent of total or 17 percent of GDP) (Figure 3). Another advantage for Romania consists in the sizeable international reserves (Figure 4). Yet, international reserves play a preventive role and they cannot make up for the structural worsening of some indicators. The Romanian economy posted a high growth rate in the first nine months of 2017 (7 percent in the first three quarters of 2017 versus the same year-earlier period) (Figure 5).

Impact of implementing the IFRS 9 by banks in Romania (June 2017)  Figure 16. Profitability of the banking sector: ROA, 2016 1.5  percent  1.0 EU median  0.5  0.0  percentage points  percent  50  0  40  -1  30  -2  20  -3  10  -4  0  -5  -10  -6  -20  -7  -30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Total  -0.5  1  change in total capital ratio GR IT CY PT DE ES FR NL AT PL IE MT SK SI LT RO CZ HU BG  -1.0  Source: ECB, consolidated banking data  change in impairment loss (expected loss; rhs) Source: NBR and credit institutions that are Romanian legal entities 13  Figure 18. Map of risks Map of risks to financial stability in Romania Deterioration in investor sentiment in emerging economies Tensions surrounding macroeconomic equilibria Higher household indebtedness through both banks and NBFIs Weak payment discipline in the economy, vulnerabilities in firms' balance sheets Faster increase in property prices severe systemic risk high systemic risk moderate systemic risk low systemic risk Note: The colour shows risk intensity. Arrows indicate the outlook for risk in the period ahead. 14  Figure 19. 5-year government bond yields 3.5  Figure 20.
To be clear, this is not going against the wish of Parliament in establishing these structures; rather, it is designed to reinforce that wish by making the pieces work closely together. And, it also emphasises that the Bank of England is a public policy institution with the overarching objective and responsibility of serving the public good. Interestingly, the language that we found to describe this public good comes from the Bank’s original Charter of 1694, though I should recognise that the detail of the description of what constituted the public good in 1694 is rather different from the one we have today. The key thing about a public good is that no individual or group of individuals can be excluded from using or consuming it, and use by one individual does not reduce the availability to others. Fresh air is a public good, and so is the stability of the economy. In our world, history shows that it takes a crisis to provide a decisive impetus to create and maintain the emphasis on the public good. Thus, stable low inflation – monetary stability – received its decisive impetus in many countries, including the UK from the painful experience of high inflation, most notably in the 1970’s. Out of that came a broad consensus on a central idea – low inflation is a necessary condition for stable economic growth and its resulting benefits for well-being.

First, the question of strategic independence of incumbents. If incumbents depend on BigTechs for key infrastructure such as cloud computing, if they rely on the same BigTech to 2/4  BIS central bankers' speeches  distribute their products through their platforms and then compete with BigTechs on certain segments, they see their strategic independence challenged in the same way as hotels and retailers did. This process of commoditization of incumbents may lower credit standards to compensate for higher pressure on margin and exacerbate the funding gap because of lower customer stickiness. Second, the question of cyber-risk. With greater interconnections between technologies and the financial system, cyber-risk is moving from an idiosyncratic risk to a potential source of systemic risk. Whether and how to address the type of issues I just mentioned is a challenging task from a regulatory and supervisory standpoint, as it involves an assessment of both the potential risks and benefits brought to the financial system and the economy more largely, which are by nature uncertain. It may give rise to a significant array of alternative courses of actions to  meet two key imperatives: ensure an adequate level of protection for participants and preserve the potential benefits brought by innovation. Let me illustrate this with crypto-assets. Because of incomplete information, a lack of data and the novelty of these monetary and financial objects, four options to tackle them from a public policy standpoint can be considered and have actually been under consideration to drive action: monitoring, isolating, regulating or banning.
The focus here is on maturity transformation and affordability risk in mortgage lending. In the short term, this may allow banks to increase their profitability, but the flip side is that this also makes them more vulnerable to interest rate shocks and corrections on the mortgage and residential real estate markets. Domestically focused banks would be particularly exposed to a major interest rate shock. As we explain in our Financial Stability Report, in the event of a normalisation of interest rates, banks would initially benefit from the restoration of the liability margin. However, a major interest rate shock would cause net interest income to fall significantly at many banks, potentially resulting in losses. The greater a bank’s maturity transformation is, the higher these losses will be. Even if the current low interest rate period were to continue and interest rates were only to rise very gradually, the possibility of a major interest rate shock should not be ruled out. Experience has shown that interest rate corrections can sometimes be sudden and sharp. It should also be borne in mind that interest rates on the money and capital markets are currently more than 300 basis points lower than at the beginning of 2008. In other words,  2  BIS central bankers’ speeches  even if interest rates were to return to levels previously considered normal, this would still constitute a major correction.

Market making means the temporary transfer of risk to intermediaries to smooth out imbalances of supply and demand. But market makers have to be able to bear the risks. Pre-crisis, market makers funded their inventory with short-term borrowing and very small amounts of loss absorbing capital. As a result, when exposed to a severe stress, market makers simply disappeared from the scene. So liquidity is a good thing. It does play a key role in the functioning of effective markets. And financial market intermediation and engineering can help ensure the price is as low as possible, consistent ultimately with an asset’s underlying characteristics. But taken too far, these can create the illusion of liquidity rather than liquidity itself and expose the system to risk when the illusion disappears. We should not in particular refer to metrics of the pre-crisis period to see what some “good” level of liquidity looks like. Some markets may indeed not function as smoothly or cheaply as they did in the run up to this crisis. But that may well be the counterpart of less poorly priced liquidity risk in the system. Promoting true liquidity That is not to say that nothing can be done in this area. First, we should ensure that regulatory changes are coherent. Regulators have dealt with the under-pricing of liquidity risk in part by remedying inadequate capital requirements.
Denis Beau: From open banking to open finance Speech by Mr Denis Beau, First Deputy Governor of the Bank of France, at the France Payments Forum “The Europe of banking and financial services” – Paris Europlace – France Innovation, Paris, 24 March 2022. * * * Technological innovations, changes in demand, the arrival of new players: the changes underway in the financial sector are providing a strong impetus to relax the conditions of access to the market, in order to foster competition and thus encourage the development of new, more efficient and less costly services. In Europe, in the field of payments, this relaxation has already occurred. The EMD, the PSD1 and finally the PSD2 directives have all resulted in the emergence of more agile players, particularly in terms of data exploitation. The pressure to open up data now extends to insurance and savings: after open banking, we now speak of open finance. This pressure calls for further adapting the regulatory framework. But what should our guiding principles be? In the payments sector, the main objective of the directives I mentioned was to reconcile openness and security. While this challenge remains relevant for the transition from open banking to open finance, with digitalisation and the development of the platform economy, we have seen two other challenges emerge: reconciling innovation and integration on the one hand and competition and sovereignty on the other.

Andréa M Maechler: Developments on the financial markets and Swiss National Bank’s experience with negative interest in Switzerland Introductory remarks by Ms Andréa M Maechler, Member of the Governing Board of the Swiss National Bank, at the media news conference of the Swiss National Bank, Berne, 16 June 2016. *  *  *  I will begin with a review of developments on the financial markets, before commenting on our experience of negative interest in Switzerland. I shall conclude with some remarks about important innovations affecting financial market infrastructure relevant to the SNB. Situation on financial markets Let me start with developments on the financial markets. Risk sentiment deteriorated markedly at the beginning of 2016 due to weak economic data worldwide and a sharp decline in oil prices. Volatility increased temporarily during this period, leading to significant losses on the equity markets (slide 1). In mid-February, investors’ risk appetite returned for a time, thanks to a stabilisation of oil prices and, in particular, improved economic data in the US, China and the euro area. However, by the beginning of June, investor confidence had once again come under pressure due to concerns about a possible exit of the UK from the EU. With the exception of the US and the emerging markets, the major share indices are trading significantly lower than at the beginning of the year. This turbulence caused many market participants to seek refuge in safe investments. Yields declined substantially on the major government bond markets.
Nonetheless, this pattern is at least consistent with a shift in working practices, towards a more divisible, idiosyncratic workforce, having contributed to a flatter Phillips curve relationship. None of this evidence is definitive or decisive. Taken together, however, it is at least suggestive that recent trends in the nature of work may have had some bearing both on wage-setting behaviour in general and on the weak wage puzzle in particular. Shifts in working patterns seem very unlikely, by themselves, to have been the prime-mover of weak wages. But they have probably been a contributor in the past and, more significantly, are likely to continue to do so in the future if these trends, as seems likely, perpetuate. 9  All speeches are available online at www.bankofengland.co.uk/speeches  9  The Case for Holding Fire  Let me now turn to monetary policy. Clearly, wages are a key factor when judging inflation pressures in the economy and the monetary policy stance. Continuing the pattern since the crisis, recent wage growth has been, once again, surprisingly weak. Despite unemployment falling to its lowest level, and employment rising to its highest level, in a generation, whole-economy wage growth has failed to pick-up. Indeed, wage growth over recent months appears, if anything, to have been falling. At the start of the year, the Bank of England Agents’ annual wage survey suggested pay settlements would slow from 2.7% last year to 2.2% this. At the time, there was healthy scepticism within the Bank about these findings.

Henrique Meirelles: Challenges for monetary policy – Brazil and the international context Speech by Mr Henrique Meirelles, Governor of the Central Bank of Brazil, at the Conference “The Impact of Brazil on the Global Scenario”, São Paulo, 10 July 2008. *  *  *  In mature economies, the years from the beginning of the 1990s to mid-2007 were characterized by low GDP volatility and low inflation, circumstances that led prominent economists to name the period as the era of the “great moderation”. That environment resulted from better monetary policy, a fact that translated into credibility gains for central banks, globalization and advances in productivity linked to information technology developments. At the time there was a substantial consensus that the emergence of Asia, particularly of China and India, would contribute to keep global inflation permanently under control. Thanks to cheap labor and the intensive use of new technologies on the production process, China – and to a lesser extent India – exported deflation (or at least disinflation) to the world economy through a consistent decrease in their export prices. There is now growing evidence that this era might have came to an end with the unbalances between the expansion of global demand and supply. Moreover, there are also signs of increasing labor costs in China, due to both changes in labor legislation and increasing shortages of specialized workforce. In the benign environment that prevailed through mid-2007, central banks of mature economies engaged in neutral or even expansionary monetary policies for relatively long periods.
BIS Review 103/2009  1  Figure 1: Annual CPI Inflation and Target Path 14 12 10 8 6 4 2  Annual CPI Inflation Yıllık Enflasyon  Outer Band Aralığı Belirsizlik  II*Index*  Target Path Hedefle Uyumlu Patika  1109  0909  0709  0509  0309  0109  1108  0908  0708  0508  0308  0108  1107  0907  0707  0507  0307  0107  0  * Temporary tax adjustments corrected I Index. Source: TURKSTAT, CBT. In addition to the sharp contraction in aggregate demand; the fall in commodity prices and temporary tax cuts within the scope of fiscal measures were also instrumental in the sharperthan-expected drop in inflation. The fall in commodity prices specifically led to a more-thananticipated decline in annual processed food and energy inflation. The fall in annual inflation has reached approximately 19 percentage points for processed food prices and 25 percentage points for energy prices since October 2008, when the effects of the turmoil started to prevail (Figure 2 and 3). Figure 2: Food Prices  Figure 3: Energy and Processed Food Prices  (Annual Percentage Change)  (Annual Percentage Change) 35  27  Processed Food  24  22.35  Unprocessed Food  21  Energy  30  Processed Food  25  18 15  20  12 9  15  6  10  3 5  0 -3  Source: TURKSTAT, CBT.

Distinguished members of the Press and Esteemed Guests, Against this background, assuming that there is further easing in policy rates in the near term followed by no change until the end of 2010, medium-term forecasts suggest that, with 70 percent probability, inflation will be between 4.9 and 6.9 percent with a mid-point of 5.9 percent at the end of 2009, and between 3.7 and 6.9 percent with a mid-point of 5.3 percent at the end of 2010. Furthermore, inflation is expected to come down to 4.9 percent by the end of 2011 and to 4.8 percent by mid-2012 (Figure 26). Figure 26: Inflation and Output Gap Forecasts* (Percent)  Forecast Aralığı* Range * Tahmin  OutputAçığı Gap Çıktı  Band for 2009 2Uncertainty 009 için Belirsizlik Aralığı  Yıl SonuInflation Enflasyon Hedefleri Targets End-year  13 11  KontrolRange Ufku Control  9 7 Yüzde  5 %  3 1 -1 -3 -5 -7 -9 1  2  3 2009  4  1  2  3  4  2010  1  2 2011  3  4  1  2  2012  * Indicates a 70-percent confidence interval for the forecast. Revised forecasts indicate that even if policy rates are kept at low levels for an extended period, aggregate demand conditions will continue to underpin the disinflation process over the next two years. Forecasts also indicate that significant base effects may lead to some inflation volatility in the short term.