samchain/econo-pairs-v1 huggingface dataset:
The aim, as I have said, is to enable the bank’s critical economic functions to continue, without taxpayer support, while it is being resolved. A great deal has been achieved. 10  All speeches are available online at www.bankofengland.co.uk/speeches  10  We now have agreed international standards covering the design of resolution regimes, the amount of ‘bail-inable’ resources banks must hold, and agreement with industry participants to ‘stay’ termination rights by counterparties in derivative and repo transactions if resolution is in train. Alongside this we also have international guidance on how to ensure continuity of access to FMIs as well as on the mechanics of executing a bail-in. The UK now has in place a comprehensive and effective bank resolution regime that implements the EU’s Bank Recovery and Resolution Directive (BRRD) and the international standards. The Bank of England has been established as the UK’s resolution authority with a wide range of powers to ‘bail in’ shareholders and creditors of failed banks. The biggest UK banks have begun to issue bail-inable debt at scale and are well on their way to meeting the target for loss absorbing resources in resolution. 7  Key policies and guidance to firms have been issued, notably on operational continuity and on the internal distribution of loss absorbing resources. Last October the Bank, with the publication of the Purple Book, the Bank set out in detail its approach to resolution and how it would tackle a failing bank.

Third, reduced technology sharing and collaboration will hamper the widespread adoption of best practices, thereby reducing efficiency and increasing costs. Fragmentation in the real economy will also have an impact on capital flows and financial markets. Geoeconomic fragmentation elevates financial market risk and disruption, as capital flows become more regionalised and less global. Consequently, this reduces market liquidity and returns and increases market volatility. The impact of disruptions in cross-border capital flows falls disproportionately on the less developed countries. In short, no country will emerge unscathed with rising geoeconomic fragmentation, with emerging market economies set to bear the brunt of reduced trade and capital mobility. In the last decade, emerging market financial assets benefitted from the rising tide of capital inflows that created a virtuous cycle of capital market reforms, deeper liquidity, and vibrant market development, which in turn drew in more capital inflows. The impact of a slowdown in capital inflows would be felt most acutely in those countries with the least developed capital markets and rely the most on foreign capital, putting them at risk of financial or balance of payments crises. Emerging markets that have already reached a more advanced stage of development, included in global indices, and run healthy external balances may be more resilient. LONG TERM: CLIMATE CHANGE  Perhaps the most significant financial risk for investors over the long term is climate change. This risk can materialise in two ways.
Jaime Caruana: Concluding remarks - conference on “Central Banks in the 21st Century” Speech by Mr Jaime Caruana, Governor of the Bank of Spain and Chairman of the Basel Committee on Banking Supervision, at the conference on “Central Banks in the 21st Century”, hosted by the Bank of Spain, Madrid, 9 June 2006. *  *  *  It is my pleasure to participate in this concluding session of the conference and to be accompanied at this table by Pedro Solbes. I hope you found the presentations and discussions inspiring and motivating. I certainly did. We are now witnessing some profound changes in the way our societies organise their economic relationships, and these naturally pose new challenges to central banks, regarding both their role of monetary policymakers and their responsibility to preserve and foster safer and more efficient financial systems. Over the last two days we have discussed some of the underlying forces of change and their implications for the design of sound monetary policy and financial architecture, including the question of how best to arrange payment and security settlement systems. Let me briefly elaborate on some of the issues raised at the conference which I found particularly interesting. I will first reflect on the difficult question of how monetary and financial stability relate to each other and then move to some particular issues of special interest for a currency area, such as Economic and Monetary Union (EMU).

This pragmatic view is consistent with the idea that monetary policy decisions should be based not only on the most likely scenarios but also on other, less probable ones which, however, may have far-reaching implications  2  BIS Review 53/2006  for the entire system should they materialise. Certainly, an abrupt asset price correction pertains to this class of low-probability event that may ultimately entail significant costs for a country’s welfare. More importantly, to place this approach to monetary policy in its right place, it is critical to recognise that some of the risks inherent in the financial sphere should first be the subject of an appropriate prudential framework. It is no exaggeration to say that any concern about unbalanced market developments is, at core, a concern about a problem of inappropriate risk management. This statement applies to the case in which, due to over-optimism or short-sighted behaviour, market participants fail to appreciate the true risk of their investment or lending strategies. Yet even if their behaviour can be thought as being fully rational from an individual perspective, nothing ensures that the final outcome will not convey important risks at a systemic level that are not properly internalised by single agents. As a result, a portion of the marked volatility and procyclicality of some key financial variables, like asset prices and credit, may be understood as a reflection of individual and collective risk misjudgement.
Let us not stop now. Thank you for your attention. BIS Review 64/2007  5

William C Dudley: "Remarks at the Economic Press Briefing on the Regional Economy" Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Economic Press Briefing on the Regional Economy, Federal Reserve Bank of New York, New York City, 10 August 2017. * * * Good morning, and welcome to the New York Fed’s Regional Economic Press Briefing. Today, we will provide an update on economic conditions in the region, and then discuss the issue of regional wage inequality. As always, what I have to say reflects my own views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System.1  Current Economic Conditions The Federal Reserve has pursued an accommodative monetary policy since the Great Recession to facilitate achieving our dual mandate of maximum sustainable employment and price stability. This policy stance has provided support to the economy and helped lower the unemployment rate from 10 percent at the depths of the Great Recession to 4.3 percent currently. Measures of underemployment have also improved considerably and are near precrisis levels. Stronger labor market conditions are perhaps the best means to improve the economic wellbeing of most Americans, particularly those who have been struggling and are most vulnerable to economic downturns. Improved job opportunities have helped to support household income growth, consumption, and saving, as well as the housing market.
This was not the first time that Parliament had concerned itself with the affairs of insurance companies, however. In 1739, Britain entered into a war with Spain. As a consequence, trade with Spain ceased but – perhaps surprisingly – the underwriting of Spanish ships by British underwriters continued unabated. This led to a somewhat perverse situation in which British insurers compensated enemy merchants for shipping losses suffered at the hands of British privateers and squadrons of the Royal Navy. The value of insurance trade was, it seems, considered by many to be too valuable to forfeit voluntarily 10 as Britain entered a period of sustained warfare with Spain and then France. By 1748, attitudes had changed and Parliament passed an Act which banned the insurance of enemy ships by British insurers. Yet the Act was expired just a few months later (after the Seven Years War ended) such that insurers did, in fact, enjoy considerable discretion over which risks to underwrite, including foreign enemy ships. I think that what this example ultimately demonstrates is the importance of trade and competitiveness in shaping the British state’s involvement in the affairs of insurers. The protection of enemy ships was at direct odds with Britain’s foreign policy – but trade was ultimately considered strategically more important. In common with the environment in which our eighteenth-century forebears worked, trade and competitiveness remain important contextual factors in the debate about how we should regulate insurers today.

Bottomry, it turns out, was a type of contract whereby a lender would, for a fee, put up money (either in the form of a loan or sometimes a joint stake in the stock) for the purpose of advancing trade. This was on the understanding that “the borrower should, in consideration of a high rate of interest, be freed from liability in the event of certain accidents happening, e.g. failure of goods to arrive at their intended destination” 2. This looks to me rather like a Babylonian version of today’s catastrophe bond. 1  Plantin and Rochet (2007). See also Thoyts (2010). 2  Clayton (1971). See also, Bernstein (1996). 2  BIS central bankers’ speeches  The practice of bottomry flourished due to the proximity of another group of great traders – the Phoenicians, who adapted the basic concept to support trade expansion on the Greek coastline during the 10th and 9th centuries B.C., and to the increasing domination in the Aegean Sea after 800 B.C. of Greek traders who needed indemnity against their cargo. Hop westward across the Mediterranean Sea to ancient Rome, and citizens were paying subscriptions to so-called “burial societies” to cover the cost of expenses associated with their death – a kind of latter-day funeral insurance. This activity evolved such that by the second century A.D. it became common practice instead to pay the relatives of the deceased person a lump sum (the funeraticium), provided their subscription was not in arrears and the deceased had not committed suicide 3.
And, we must continue to devote sufficient attention and resources to complete the efforts. At the same time, though, it is important to take stock of the changes made over the past few years – for two important reasons: first, to assess the impact of those changes, both intended and unintended; and, second, to understand the contours of the “new” financial system operating under the range of new rules and regulations, both national and global in nature. Such a stocktaking is important to  BIS central bankers’ speeches  1  ensure that we collectively understand how the “new” financial system is operating. Firms and supervisors will continue to face challenges and competing demands as we press, in the months and years ahead, on implementing necessary changes and assessing the “new” financial system. What the future holds One of the topics that I feel will compete for, and will deserve, a lot of attention in the foreseeable future is cybersecurity. I am often asked about my list of “things that keep me awake at night,” and I think it’s fair to say that cybersecurity is at the top of that list – as I’m sure it is for many of you in this room. In fact, I think cybersecurity is one of the topics that should be on everyone’s list – from the most senior managers and boards of directors, all the way down to line managers.

BIS Review 37/2004  1  “circularity problem”, a difficulty encountered by every central bank faced with a signal extraction problem, in particular when it tries to get information from asset prices. Let me now turn to my first point:  1. What is the information content of inflation-indexed bonds and why is it relevant for a central bank? Over the past decade, policy makers have come to rely on long-term bond yields to measure the public’s long-term inflationary expectations. According to some empirical research3, “almost 80% of the movement in the long nominal rates appears to be due to changes in expected long-term inflation”. According to the Fisherian theory of interest rates, the long-term nominal interest rate depends upon the ex-ante real interest rate and the expected long-term inflation, factoring in an inflation risk premium. The main problem for the central bank is that, in practice, these three components are unobservable. In this respect, the central bank faces a signal extraction problem, which has important implications in terms of monetary policy decision-making. I will mention three of them. First, aggregate spending decisions are generally viewed as more closely related to long-term [real] interest rates. This implies that changes in short-term interest rates, used as the operational target for implementing monetary policy, will only affect aggregate spending decisions if they impact long-term interest rates. Under this rationale, the term-structure of interest rates and the relationship between long-term interest rates and long-term expected inflation becomes central to the design of monetary policy.
Beyond talk of hiring more data scientists and cyber-security experts, or automating counter and customer services, most institutions have not fully examined how changes to workflows or business strategies under different digital scenarios will impact existing jobs. It is also not uncommon for institutions to chiefly focus on ITrelated technical skills as a core competence for future workers. Yet we all recognise the speed at which technical knowledge becomes quickly obsolete. In reality, learning agility, creative thinking and behavioural insights may be far more important in future workers. In responding to technological disruptions, the implications for the workforce therefore demand much more rigorous attention than the cursory acknowledgement that it is getting today. We intend to work with financial institutions over the coming months to take this forward, beginning with a holistic assessment to better understand the dynamics of the financial sector workforce as a basis to forecast skill demand and supply under different scenarios. This in turn aims to support the formulation of strategies – both an the institution and industry level – to effectively transition the workforce. For Malaysia, with a significant majority of jobs in the high-skilled category, technology is more likely to augment and redefine job roles in the financial sector, rather than eliminate occupations altogether over the next decade. Nevertheless, some segments will inevitably face the risk of displacement. We aim to work with the industry to establish appropriate mechanisms to re-skill workers and enhance their prospects for gainful employment in different roles.

These concerns are supported by the fact that as a member of the EU’s Economic and Financial Committee, I can watch the integration process every day on-line as an insider, so to say. The title of this conference stresses the fact that European integration started 60 years ago. You know that exactly 60 years ago a completely different project, originally aimed to build up something “brand new”, also appeared quite far away from Europe – in China. What irony of fate that after these sixty years it is now the Chinese who seem to be on their way up, running fast, while the European Union is stagnating or even descending economically. What bitterness, when one realises that on its way up, China is still a desperate and crazy communist regime that has just allowed its citizens a bit more freedom in the area of economic life. Of course, a part of the explanation lies in the fact of simple economic convergence. But without any doubt, the EU is losing its momentum. Not just now, in the crisis; this is a longer process. In the EU it seems to me that we have started concentrating more on conservation or preservation of the existing wealth, rather than on wealth creation. The question of why the European Union is not as economically powerful and efficient as it would like to be, is certainly complex.
According to the current financial conditions and the results of the Loan Tendency Survey, there has not been any noticeable change in demand and supply conditions in commercial and consumer loans in the first quarter of 2015. Accordingly, we envisage that credit growth will maintain its current trend in the upcoming period. These reasonable levels in credit growth are expected to continue to limit medium-term inflation pressures on the one hand, and support the improvement in the current accounts balance on the other. 2  BIS central bankers’ speeches  2. Macroeconomic developments and main assumptions  Now, I will talk about the macroeconomic outlook and our assumptions on which our forecasts are based. First, I will summarize the recent inflation developments, and then continue with the domestic and foreign demand outlook. In the fourth quarter of 2014, annual consumer inflation posted a quarter-on-quarter decline by 0.7 points and stood at 8.17 percent remaining below the forecasts of the October Inflation Report (Charts 9 and 10). Annual inflation decreased across sub-groups in this period, the most remarkable slowdown being in the energy group, which was led by the plunge in international oil prices. The food group remained as the largest contributor to inflation. Core goods registered a slight fall in annual inflation, while the improvement in the underlying trend, which continued from the second quarter on, halted. Meanwhile, we witnessed the considerable effect of the fall in oil prices on fuel-related services and saw a notable improvement in the underlying trend of services.

We announced the outline of the monetary and exchange rate policy for 2015 through a press meeting on 10 December 2014. We also launched new macroprudential policies to limit macro-financial risks and to support prudential borrowing at this meeting. In this scope, to encourage the extension of maturities of external borrowing, we raised the required reserve ratios applied to non-core foreign exchange (FX) short-term liabilities of banks and financing companies. Additionally, we embarked on the remuneration of TL required reserves to encourage core liabilities in January 2015. Moreover, we implemented technical adjustments in reserve option tranches and coefficients to meet the FX liquidity to be required due to the changes in required reserve ratios. We envisage that the automatic stabilization feature of the Reserve Option Mechanism (ROM) will gain strength with these adjustments. Through these policy measures we announced, our final aim is to limit macrofinancial risks and contribute to balanced growth by supporting prudential borrowing. The rate of increase in the loans extended to the non-financial sector in the last quarter of the year maintains a reasonable course owing to the CBRT’s tight monetary policy stance and the macroprudential measures. Supported also by the actions of the Banking Regulations and Supervision Agency (the BRSA), consumer loans grew slower than past years, while commercial loans displayed a higher rate of increase (Charts 7 and 8).
It is not part of our mandate. This is more effectively done by fiscal policy. I don’t believe any other central bank specifically takes this into account either. • But going forward, the Swedish parliamentary committee on finance has asked the Riksbank to evaluate the distributional effects of the expansionary monetary policy in recent years. So this is an area we are working on now and will continue to do so. • As the theme of this conference is “reshaping globalisation” I would like to end by adding some words about my views on the global perspective on equality and the possible explanations for increased inequality in many developed economies during recent decades. As I have said, the contribution from monetary policy to equality should in my view in general be minor. • I do not think you can talk about globalisation without also talking about technology. Some argue that increased inequality in many countries is due to the latest technological progress having been skills biased, resulting in a rise in the skill premium and the decline of some labour market institutions in advanced economies, emerging markets and developing countries 4.

Individual lenders fail to take into account that their behaviour has an impact on the ability of other market participants to bear debt. This applies, for example, when investors are increasingly exposed to the same risks and invest in the same markets. For instance, let us assume that a large number of companies or households simultaneously take out loans to purchase real estate. This situation creates systemic risk because a negative surprise on the real estate market can lead to many of these investors incurring losses at the same time, forcing them to sell off their assets so that they can continue meeting their loan 15  On ‘Black Monday’, 19 October 1987, the Dow Jones index plunged by more than 20%. As a result, equity markets around the world came under heavy pressure. Page 8/16  commitments. This can generate a self-reinforcing spiral of falling real estate prices, more borrowers who can no longer service their debts, and thus greater pressure to sell. Distorted expectations  Moreover, the behaviour of economic agents during a credit boom is not always entirely rational. This brings us to the third factor that can contribute to excesses on the credit market – distorted expectations (cf. slide 12). A glance at the history of financial crises shows: The longer an economic upturn persists, and the higher asset prices rise at the same time, the more over-optimistic economic agents are about future growth.