samchain/econo-pairs-v1 huggingface dataset:
Let me give you some examples:  Table 1: The home-host relationship (both bank and group) Systemic HOST country  relevance  Systemic relevance Significant in HOME country  in Systemic relevance HOST country  in  Non-significant  Significant  Potential conflict of and coordination problems  interest Not a big problem  Non-significant  Potential conflict of and coordination problems  interest Not a big problem  … when branches and subsidiaries become systemically relevant Suppose there is a banking group of roughly equal systemic relevance in the home country and the host country. The home country supervisor is the consolidating supervisor and coordinates the activities vis-à-vis the group. If cooperation works well, the host supervisor will receive information from the home supervisor. But in the event of a crisis in the banking group, all authorities have a clear mandate to only protect their depositors and systems. One can easily imagine a situation where, as in my earlier example, the group has surplus capital in one of its parts, extra liquidity in another and the cause of the problem is in a third part. The lack of coordination might very well result in a worse (more costly) outcome for all involved. If the presence in the host country is a branch and not a subsidiary, the host supervisor has only limited means of obtaining information about – or taking actions against – the bank.

Solvency II one year in Speech given by David Rule, Executive Director of Insurance Supervision  Association of British Insurers, London 21 February 2017  1  All speeches are available online at www.bankofengland.co.uk/speeches  We are approaching the first round of annual results and disclosures under Solvency II. Today, I want to recap how Solvency II was designed to work for the UK insurance industry; to look back on our approach to implementation and experience of operating the Solvency II framework in the first year of its life; and to pick out a few areas where we now know that Solvency II needs improvement, in particular the impact the current design of the risk margin is having on UK annuity writers’ Solvency Capital Requirements (SCRs) and associated use of so-called Transitional Measures on Technical Provisions, which firms will be disclosing over the next few months. My focus will be life insurance, although I will touch on general insurance too along the way. First, some history. Prior to Solvency II, the UK regulatory regime for insurance had been designed by the Financial Services Authority in the early 2000s. One of its primary aims was to address the lessons from the near failure of Equitable Life in 2000. That company’s problems crystallised when it emerged it had insufficient funds to meet guaranteed rates on annuities. It lost a House of Lords court case brought by policyholders with these guarantees, leaving it with a liability of £ billion and forcing its closure to new 1  business.
MMFs play an important part in the story, because they act as a bridge between depositors’ desire for immediate liquidity and banks’ desire for term wholesale funding: providing the former with on-demand cash, while holding a significant share of their assets in banks’ term liabilities, including commercial paper (CP) and CDs. In total, sterling MMFs saw outflows of some £ or 10% of their total assets, in the eight days between 12 and 20 March (Chart 7). At first, they met these outflows by running down cash holdings. But as the outflows intensified, the MMFs tried to liquidate some of their CDs and CP, only to find, just as we’d heard, that the market was effectively closed. As MMF liquid asset ratios fell towards regulatory thresholds, we faced the prospect of one or more MMFs deciding to ‘gate’ access to investors, cutting off their access to liquidity in the fund – something that some feared could trigger further contagion. 3  The drawdown by Boeing of a $ syndicated loan facility on Wednesday 11 March was a particularly widely-cited example in global markets. 7  All speeches are available online at www.bankofengland.co.uk/news/speeches  7  As demand for cash grew, but supply failed to respond, sterling money market rates rose sharply (Chart 8). Though sharpest at longer tenors, we also saw a pickup in overnight repo rates: a particularly serious sign of dysfunction, and a challenge to our commitment to keep such rates broadly aligned to Bank Rate.

Some roles have undoubtedly been made harder: for example those involving the control of operational risk. But it has also forced us to exploit the benefits of technology in ways that many of us would never have dared do voluntarily. It has embedded flexible working in a far deeper way than before. It has brought a new understanding and respect for the challenges many staff have to deal with. It has given us back the many hours spent in mindless or stressful commuting. And, perhaps most profoundly of all, it has been a great leveller. Meetings conducted by video- or audio-conference have been more orderly – even if they are also more likely to be interrupted by over-exuberant children or misfiring wifi! Ideas and contributions matter more than who is making them, or how they are made. And we’ve become more inclusive, allowing us to share material in real time, bringing each other in and virtually raising our hands to talk. I am not sure that many people would have predicted that a global pandemic might end up being the thing that finally really moves the dial on diversity and inclusion. What I can say with some confidence is that it has been a privilege to lead the Bank’s markets function during this extraordinary period, and I look forward to discussing some of the themes I have outlined here with you further now. 15  All speeches are available online at www.bankofengland.co.uk/news/speeches  15
Our projections are based on the assumption that fiscal policy will provide some stimulus to aggregate demand and output in 2008 and 2009, but somewhat less than a mechanical application of the fiscal rule based on our oil price assumption would imply. 4  BIS Review 22/2006  Norges Bank operates a flexible inflation targeting regime and seeks to achieve an interest rate path that provides a reasonable balance between the objective of bringing inflation up towards 2.5 per cent over time and stabilising developments in output and employment. Norge Bank’s projections in the baseline scenario is based on an interest rate path that we find strikes a reasonable balance between the two objectives. In the baseline scenario, interest rates in Norway and abroad are assumed to rise somewhat faster in the longer term than current forward rates may imply. Exchange rate movements are difficult to project. The interest rate path at home and abroad may be consistent with an approximately unchanged krone exchange rate. The high growth rate in the economy implies a gradual pick-up in price and cost inflation. With interest rate developments as outlined above, CPI-ATE inflation is projected to increase from about 1¼ per cent today to about 2 per cent at the end of 2007. There are prospects of a further increase in inflation, with inflation projected to be close to the target of 2.5 per cent three years ahead. According to our estimates, capacity utilisation is now slightly higher than its normal level.

Spain has a significant productivity gap with the euro area and recent research has related this gap to an inefficient reallocation of resources towards less productive firms during the expansionary period. However, since 2008 there has been an improvement in the reallocation of resources, especially due to the disappearance of many unproductive firms. But business mark-ups stand at relatively high and rising levels. This could indicate a persistent lack of competition in some markets, with adverse implications in terms of competitiveness, for instance, those regulations that distort the cost of production among firms or affect incentives to grow, such as market barriers due to the heterogeneity of regulations across regions. More generally, the Spanish economy continues to exhibit a low productivity level in terms of the average firm, something that can be perhaps explained through different combinations of inadequate managerial skills and educational attainment of workers, as well as a relatively low a degree of technological capitalisation. Hence, it is important to pass reforms aiming at reducing the rate of early school dropouts and to foster the relationship between firms and both the vocational training and university systems. These, together with a new well-designed and effective system of incentives to suppport innovation  6/9  in the private sector are prerequisites for enhancing the Spanish economy’s stock of technological capital and its capacity to innovate. So far, I have addressed a number of issues mostly from a national point of view. But, indeed, solving Spain’s problems cannot be done in isolation from the euro area.
Promoting sustainable innovation is part and parcel of our mandate for two main reasons: it is a driver of efficiency gains and an enabler of inclusion. 1- There is no need to go back to ancient times and payments with seashells but we just have to take a glance at the situation three decades ago to acknowledge that in the field of market infrastructures and payments, clearly, innovation has been synonym of efficiency progress. The trend towards the dematerialisation of financial assets and means of payment, which has been underway for decades, is a good example. Rooted in the current surge in digitalisation, shifts in consumption patterns such as the growth of e-commerce go hand in hand with an increase in the use of electronic payment instruments, along with the development of internetbased technologies and multi-functional electronic devices. As a result, payment services are  becoming more available, ignoring some of the physical borders and time constraints to satisfy customer demand for instant, continuous, uniform and safe payment services, as economic agents become ever more mobile. However, the ongoing technological transformation triggers possible side and adverse effects from an efficiency and safety standpoint. Let me mention for instance the fragmentation of solutions with limited interoperability, the growing number of interdependent players, the increased exposure to cyber threats and data protection issues, and the possible constitution of monopolies (including technology monopolies).

In turn, these experiments will lead us to assess whether the regulatory framework currently in force needs to be adapted since we are carrying out these experiments within the current legal framework. Besides, this autumn, the Eurosystem has adopted a similar hands-on approach for its experiments on a digital euro for the general public, in which we are participating, alongside with the ECB and other Eurosystem central banks. The experiments underway directly relate to the need for the Eurosystem, should circumstances so require, to be ready to issue a CBDC in order to ensure that central bank money is accessible to the general public and to preserve their freedom of choice of means of payment and their confidence in our currency. 4/5  BIS central bankers' speeches  *** To conclude, let me say that a thriving, creative and efficient innovation ecosystem is a key element in the transformation of the financial system towards greater efficiency and stability. This is why at the Banque de France and the ACPR, we feel it is important to support it and contribute to it. 5/5  BIS central bankers' speeches
With a limited battery life of an hour and weighing more than a pound, that might not be entirely surprising. But another key reason was probably this – there was no m-commerce at that time. (b)  The present – opportunities offered by m-commerce/m-payment  5. Let’s fast-forward to 20 years later after the birth of the first smart-phone, and get back to the present. We are all witnessing the sea change in the landscape of e-commerce, and are enjoying its huge benefits. 6. Most smartphones are much lighter now and have much longer battery life. But more importantly, what was once known as “e-commerce” is expanded by what we now call “m-commerce”. It is the name of the game. 7. People are no longer satisfied with buying or selling things online using their desktop or notebook computers. They want to do these in both the virtual and the real world anywhere, anytime, using their mobile devices like smartphones or tablet computers. 8. Let’s face it: businesses can take place in the virtual marketplace, but people don’t live there. Books can be made digital, but coffee cannot. We still enjoy – and need – physical goods and services. That’s why “m-commerce” is becoming the “game changer”, as it fills the gaps of “e-commerce” by making it portable and connecting the virtual world with the real world. 9. Furthermore, the penetration power of m-commerce has been significantly boosted by new marketing tools made possible by combining mobile technology with Big Data analytics.

Location-based “push” marketing and mobile coupons are helping companies to attract new  1  BBC: World’s first “smartphone” turns 20, Aug 15, 2014 (http://www.bbc.com/news/technology-28802053). BIS central bankers’ speeches  1  customers and encourage existing ones to spend more. And all sorts of creative “apps” are making the “matching” process between buyers and sellers much more fun and efficient. That is the beauty of the “online-to-offline”, or “O2O” value chain, an increasingly vital element of m-commerce. II. The HKMA’s policy objectives towards electronic payments  10. The benefits of m-commerce are not confined to individual companies. From a macro perspective, m-commerce and m-payment will, no doubt, help to enhance economic efficiency by cutting costs of businesses, make the payment process safer, facilitate price discovery of goods and services, and contribute directly to price stability and increased competition. 11. A study conducted by Moody’s Analytics last year estimated that the greater use of electronic payments added nearly $ trillion in global economic growth over a five-year span between 2008 and 2012. That growth in GDP was equivalent to creating 1.9 million jobs. 12. In view of the importance of electronic payment, the HKMA has carefully considered the approach that it should adopt in view of its dual role both as a regulator and a facilitator to promote a healthy development of electronic payments. 13. In short, we are adopting a three-pronged approach. i)  First, we have made it a priority to promote the further adoption of electronic payment means.
The adopted solution was embedded in the so-called Emergency Act, which was passed by Parliament on 6 October 2008. The Emergency Act saved the domestic operations of the banking system by creating new banks, which involved carving domestic assets and liabilities out of the old, failing banks. The rest – and the much larger part – went into a resolution process. In order to reverse the ongoing run on domestic deposits, a declaration was made that all deposits in Iceland were safe, but this did not include deposits in foreign branches. Furthermore, all deposits in Icelandic-headquartered banks were given priority over other unsecured claims, including in foreign branches. As regards the blanket guarantee, the distinction made between domestic deposits and foreign currency deposits in the banks’ foreign branches added fuel to the fire of the so-called Icesave dispute about the settlement of deposit guarantees in the Dutch and British branches of one of the banks. But guaranteeing those deposits would never have been credible and might have bankrupted the Government had it been attempted. The deposits in question were in foreign currencies and amounted to 11½ billion euros – far in excess of Iceland’s available FX liquidity at that time, as the sovereign was completely closed off from foreign capital markets.

Inflation expectation indicators also remain low over all horizons, far from the ECB’s 2% benchmark. 2  BIS central bankers’ speeches  However, it must be emphasised that monetary policy’s ability to address the challenges posed by a situation such as that we face today is not without limits. Laying the foundations for a sound and long-lasting recovery in activity, investment and employment requires an approach in concert with other economic policies, especially fiscal policy, along with institutional reform, labour and product market reforms and strengthened European governance. Thus, according to their individual circumstances, euro area countries should use the room for manoeuvre provided for in the Stability and Growth Pact to bolster aggregate demand and growth in activity. Admittedly, in many cases, the precarious state of public finances leaves little room for stimulus measures, such as tax cuts or higher public spending, especially because the countries with most spare capacity are also those with the highest levels of public debt. However, fiscal policy’s contribution to growth is not only determined by revenue and expenditure levels, but also by their composition. In that respect, there is some scope (broader in some countries than in others) for a shift in the tax structure towards taxes that are less distortionary and more favourable to growth. A further objective is to make public expenditure more efficient and direct it to those components that are more favourable to growth.
Finally, I will briefly touch upon a number of recent policy proposals. On the basis of these ideas, and drawing on the history of central banking, I will then offer some personal reflections on what a simple but effective policy response might look like. In closing, I will briefly comment on the Government of Singapore Investment Corporation (GIC), one of the most prominent SWFs in the world. As you know, UBS last week turned to the GIC for a substantial capital injection in connection with losses in the sub-prime credit markets. BIS Review 150/2007  1  2. The rise in sovereign wealth funds  I noted at the outset that the rapid growth in SWFs is largely a by-product of global macroeconomic imbalances. Slide 3 shows that the current account deficit of the US has increased every year since 1992. The deficit surpassed USD 800 billion, or 6 percent of GDP, in 2006. Such a large current account deficit is unprecedented in US history. 1 This rise in the US current account deficit has been mirrored almost one to one in the combined rise of surpluses in South East Asian countries and oil exporting countries. I will refer to these two country groupings as the surplus regions. By definition, the surplus regions are investing less than they are saving, and hence, both regions are accumulating net financial claims on foreigners. But the underlying reasons for the current account surpluses in the two regions are distinct.

The Fund’s own history includes a period that illustrates the importance of not changing strategy during a downswing. After the dotcom bubble burst in 2000, the value of the Fund’s equity holdings fell sharply for a period. At the same time, the Fund’s fixed-income investments partly offset the losses on the equity side. Norges Bank is the operational manager of the Government Pension Fund – Global. Since the Fund’s establishment, we have built up an organisation that is capable of implementing the strategy laid down by the Ministry of Finance. Pursuant to the mandate assigned to Norges Bank, we seek to generate value added in excess of the return that follows from the strategic allocation. The Fund has achieved an average annual real return of 4.25 per cent since 1997. The contribution to the return from active management has averaged 0.39 per cent annually in the same period. Active management has thus made a contribution of about 9 per cent of the Fund’s total return. This result has been achieved without changes in the Fund’s return variability or risk exposure. Norges Bank’s investment management has thus improved the risk to return trade-off. In the long run, even a small percentage increase in the average annual rate of return will have a substantial impact on the Fund’s size. A stated goal of operational management is that a large number of investment decisions are to be taken independently of each other both at a given point in time and over time.
We look forward to a productive day and continuing the conversation after the event. Thank you.12 1 From Robin Willner, NYS P-TECH Leaderships Council 2 From Sarah Conte, Per Scholas NY  3/3  BIS central bankers' speeches

3  See Atif Mian and Amir Sufi (2011), ‘‘House Prices, Home Equity-Based Borrowing, and the U.S. Household Leverage Crisis,’’ American Economic Review 101, 2132–56, and (2011), ‘‘What Explains High Unemployment? The Aggregate Demand Channel,’’ University of Chicago, unpublished paper. BIS central bankers’ speeches  3  reversal reduced the aggregate wealth of homeowners and, in the worst case, left many “underwater,” meaning that the amount of mortgage debt secured by their home exceeded its current value. This outcome is reflected in the dramatic decline in owners’ equity in household real estate, seen in Chart 3 (Result was a Huge Decline in Owners’ Equity in HH RE). It is interesting to note that while home prices rose during the boom, homeowner’s equity share remained constant. Thus, prior to the end of 2006, on average for each 1 percent increase in home prices, homeowners increased their mortgage debt by 1 percent (through higher balances on first mortgages, cash-out refinances, second mortgages, and home equity lines of credit). When house values began to fall, so did corporate equity values, which depressed household wealth further Chart 4 (Stock Market Wealth also Fell Sharply), limiting households’ options for reducing their debt burdens or sustaining their prior levels of consumption. Consequently, and in line with the logic of the research I discussed earlier, U.S. households decreased the cash flow available for consumption by paying down debt during the recession and early recovery.