samchain/econo-pairs-v1 huggingface dataset:
With a common monetary policy and (micro)supervisory policies, and a fiscal policy with almost no room for manoeuvre, the macroprudential policy becomes a much-needed ‘degree of freedom’ to deal with the lending cycle, a task that traditionally has been allocated to central banks too. As the recent article IV visit of the IMF made clear, Spain is one of the few countries in Europe still not to have a macroprudential authority. Given the role that macroprudential policy will play in the future, it is probably high time that we all reflect on the optimal design of this authority in order to enhance financial stability. 2  See J. Saurina and C. Trucharte: “The countercyclical provisions of the Banco de España 2000-2016”. Banco de España, 2017, for an account of dynamic provisions in Spain, why they were introduced, their impact and lessons drawn for prudential policy. 3  See G. Jiménez, S. Ongena, J.L. Peydró and J. Saurina: “Macroprudential Policy, Countercyclical Bank Capital Buffers, and Credit Supply: Evidence from the Spanish Dynamic Provisioning Experiments”, Journal of Political Economy, 2017, for a thorough quantitative analysis of the countercyclical impact of dynamic provisions in Spain. For a broader discussion of the interaction of dynamic provisions with monetary, fiscal and regulatory policy, see A. Estrada and J. Saurina “Spanish BoomBust and Macroprudential Policy”, Financial Stability Review, Banco de España, May, 2016. 6/7  Let me conclude by stressing the relevance of the conference, given the importance of the correct measurement of credit risk.

In this regard, the correct calculation of provisions plays a crucial role in the way banks manage appropriately their credit risk. A consistent level of provisions according to the risk profile of each bank will prevent any undesired impact on solvency levels, which would be the final resource to absorb any loss arising from the ordinary activity of banks that has not been eliminated before by the correct application of provisions. In addition, appropriate macroprudential tools in the hands of policy-makers might help reduce the volatility of credit and business cycles. Allow me to express once again my gratitude to the co-organisers of the event for their excellent work, and to wish all the participants a fruitful conference and a pleasant stay in Madrid. We are all looking forward to hearing from the experts on the different challenges that the new provisioning paradigm entails, so without further ado I give the floor to Fernando Restoy, Chair of the Financial Stability Institute (FSI), to start with the first panel. 7/7
But the reason why so many of us now have a smartphone in our pockets is because the innovation did not end there – someone had the idea to combine these tools into a single device. The Eurosystem’s vision for 2020 is not so different. Over the coming years, we will seek to draw on the synergies between TARGET2 and T2S. One idea is to consolidate some components of the technical infrastructure and maybe even form a single platform. This will allow TARGET2 to benefit from some of the state-of-the-art features of T2S, such as the implementation of ISO 20022 standards. Migration to ISO 20022 in TARGET2 was originally planned for November 2017, but upon the banks’ request, we have postponed implementation and will work together with the market, under the umbrella of our Vision 2020, to find the most appropriate method and timing for migration. The enhancements we envisage for Europe’s financial market infrastructure will benefit users from a technical perspective in that they will have access to all available services via a single gateway. Moreover, these enhancements will provide an opportunity to further increase the resilience of the system. As regards the business benefits for users, we will seek to enhance the services currently provided by TARGET2, for example by further optimising liquidity-saving mechanisms. In addition, it could be possible to add statistical tools to support banks with their regulatory reporting.

Experience suggests that asset price cycles continue to be very substantial In the last two decades market forces have indeed tended to cause misalignments between equilibrium and actual asset prices. Stock markets in particular have experienced this phenomenon. But in foreign exchange markets as well, prices have also a tendency to diverge substantially from their “equilibrium level”, although those divergences have been contained through fruitful G7 co-operation during the last 15 years. In addition, some markets have seen an increase in volatility and frequent volatility peaks. Although cyclical moves should be clearly distinguished from volatility, the latter may in some circumstances exceed what can be considered optimal, making the price determination mechanism less efficient and thus contributing to misalignments. Moreover, as demonstrated by a number of financial crises during the last two decades, contagion among countries and across financial markets has been frequent. As a result, investors have faced asset price fluctuations that might be more synchronised than before. Lastly, the connections between credit, asset price and business cycles have tended to amplify cyclical swings. Credit, in particular, is playing an important role in asset price fluctuations. Observed in particular during the “speculative bubbles” of the 1980s and early 1990s, this trend has persisted. Another example is provided by boom-bust cycles in asset prices which have often been associated with sharp economic contractions. Several factors are in play when financial asset prices experience amplified moves I shall give a few examples.
At a coffee shop chain in Stockholm one can buy a plastic card for SEK 20 and then charge it with cash in any of the chain’s shops. If one uses the card one receives a discount when buying coffee and sandwiches. There is also a discount on buns and other items. It is evidently rational management at the sales outlets and, moreover, is appreciated by the consumers. We Stockholmers can also take pleasure in the congestion charges, where the fee is automatically drawn from our bank accounts when our cars are automatically registered when passing the control points. There are many technical innovations, even with respect to account-based payments. And how about the future…? An important task for us who work at the Riksbank is to assess how the Swedish economy will develop in the future. The art of making accurate forecasts fills us with respect. I shall therefore refrain from all categoric statements about what will happen with payments. Developments are steered by technology and I am no engineer. However, allow me to make a few reflections and guesses. •  I believe the “cashless society” is as far away as the “paperless society” was when one once began to speak of it. There will always be a need for banknotes and coins, although cash transactions continue to decline as a share of GDP. Cash is an efficient form of legal tender for certain purposes and will continue to be so.

When we look at future prospects, a good estimate for the output gap can therefore provide a better indication of the outlook for wage and price inflation. Both these simple measures are based on stylised assumptions concerning productivity growth and must therefore be used with caution. Wage gap1) and output gap Per cent 4  4  3  3  Output gap  2  2  1  1  Wage gap  0  0  -1  -1 -2  -2 1) Up to 2000: difference between rise in hourly labour costs in manufacturing in Norway and among trading partners. Thereafter growth in excess of 4.5 per cent. -3 -4 1991  1992  1993  1994  1995  1996  1997  1998  1999  2000  2001  -3 -4  2002  Sources: Statistics Norway, TRCIS/IMF and Norges Bank SG Gausdal 31.01.03  The high level of wage growth in 2002 implied a tight monetary policy. The interest rate differential against trading partners widened. The krone appreciated further. Relationships in the foreign exchange market are unstable, but there are a number of fundamental forces that influence the krone. High oil prices and the phasing in of petroleum revenues into the Norwegian economy are part of the explanation, but the predominant factor is probably the cyclical divergence between Norway and abroad. Krone exchange rate1) and 12-month interest rate differential against trading partners.
I remember that the last thing I did in this respect, before I went to the Bank for International Settlements in Basel to focus on other things, was to try to sell the system to a Russian audience that was considering pension reform in their own country. 2 On what was this view based? In order to answer that, I must first remind us of the attributes of a good pension system. Of course it is obvious that it must be a mechanism for saving for retirement. But in order to be an efficient such mechanism, it must take due account of the lifetime risks facing individuals, as well as the economic and financial risks facing society as a whole. These are, for instance, risks related to life expectancy, ability to work, demographics, the productivity of labour, and the rate of return on financial assets. Furthermore, some at least would make the demand that the system have a certain degree of income equalisation built into it, and most would accept that it should at least not be regressive. Then we would want the pension system to have some degree of flexibility and to provide scope for individual choice. Finally, we want the pension system to be designed so as to promote economic performance; that is, saving, growth, and financial sector development. This is a tall order, of course, and in practice there are bound to be trade-offs between these goals.

We have to closely monitor how fintech evolves and better understand its impact. Our workshop today serves that goal. It brings together fintechs, banks and supervisors, and it allows us all to share our ideas and experience. It helps us to shape our supervisory views and limit potential risks. And it helps the financial industry to provide modern and safe financial products. Such exchanges are vital. I therefore thank all those who are contributing to this event and all those who made it possible in the first place! Thank you for your attention. 3/3  BIS central bankers' speeches
Overall, economic activity is likely to be very weak for the remainder of this year, before gradually recovering in the course of 2010. In particular, the substantial fall in commodity prices since the summer of 2008 is supporting real disposable income and thus consumption. In addition, external as well as domestic demand should increasingly benefit from the effects of the significant macroeconomic stimulus under way as well as from the measures taken so far to restore the functioning of the financial system both inside and outside the euro area. Taking all these measures and their effects into account, as well as the pronouncedly negative growth in the first quarter of this year and the most recently published forecasts by public institutions, the risks to this outlook remain broadly balanced. On the downside, there are concerns that the turmoil in financial markets could have a stronger impact on the real economy, as well as that protectionist pressures could intensify and that there could be adverse developments in the world economy stemming from a disorderly correction of global imbalances. At the same time, there may be stronger than anticipated positive effects due to the decrease in commodity prices and to the policy measures taken. Annual HICP inflation was, according to Eurostat’s flash estimate, 0.6% in April, unchanged from March. As explained on earlier occasions, the decline in inflation since last summer primarily reflects the sharp fall in global commodity prices over this period. Moreover, signs of a more broad-based reduction in inflationary pressure are increasingly emerging.

In the planning phase for the technical feasibility and during initial production tests in 2010, it became evident that the complexity of the new security features necessitated a postponement of the issue date to autumn 2012. In autumn 2011, during an early phase of the serial production, technical difficulties arose which had not been discernible in the testing phase, whose results were positive. For this reason, the SNB this year decided to conduct a comprehensive re-assessment of the entire project together with the industrial partners producing the new banknote on its behalf. As a result, several mostly technical measures were defined and in some cases have already been implemented. These measures should ensure that the series can go into long-term industrial production. Owing to the complexity and scope of the necessary work, the first denomination of the series, the CHF 50 note, may be expected in 2015 at the earliest. The SNB will announce the issue date as soon as production of the first banknote denomination has been completed. Since the National Bank wants to continue meeting the highest quality standards, it has accepted a postponement in the new issue, a decision which was rendered all the easier because the banknotes currently in circulation continue to offer a high standard of security. BIS central bankers’ speeches  3
I wish more people had dared to work on disruptions of energy supply (or global value chains) a few years ago. Likewise, the latest report of the Working Group III of the IPCC (dedicated to climate mitigation) contains a chapter (#5) that places great emphasis on the need for sufficiency and behavioral changes, and it discusses the literature exploring how we could thrive as societies and individuals without depending so much on GDP growth. Professor Dasgupta also invites us not only to acknowledge that GDP growth will be limited at some point even if you are a techno-optimist, but also to think about new approaches to economic value and social well-being that do not rely on GDP. All this begs us, and especially the young scholars present today, to ask what will be essential in 5 to 10 years from now. In addition to this need to promote new approaches, it is urgent to act. 9  Page 10 sur 12 We cannot afford to lose time or to wait until we have elaborated “perfect” tools. We need to seek how transformative changes can be implemented as soon as possible and if needed, develop and revise our scenarios, metrics, approaches. The responsibility to revert nature loss falls first and foremost with governments, and no central bank – above all in a democracy - can replace them.

Conference “Frontiers of climate and nature in macroeconomics and finance” Paris, 24 October 2022  Central banking in the Anthropocene: How to re-embed our economic and financial systems within planetary boundaries? Speech by Sylvie Goulard, Deputy Governor of the Banque de France  Page 1 sur 12 Ladies and Gentlemen, I am very pleased to open this conference, as nature is a topic close to my heart. I would like to start by thanking the organizers from the Banque de France, the NGFS, the Sustainable Macro initiative and the INSPIRE research initiative for putting together this important event on the frontiers of macroeconomics and finance with regard to climate and nature. In addition, I truly appreciate the presence of many young researchers. It is key to transform the study of macroeconomics and finance for a new ecological era. I would also like to use my time with you this morning to pay tribute to the next speaker at today’s conference, Professor Sir Partha Dasgupta, who published an incredibly powerful report last year.i The introduction of the so-called Dasgupta Review makes it clear that (and I quote): “My reader is the concerned citizen. She is someone who has watched television documentaries on the state of the biosphere and has read reports in newspapers and magazines on the extent to which Earth is being degraded and biodiversity is being lost.
On our side of the Channel, our collective response to Brexit may possibly be a further integration of Europe, with the new and promising Commission led by Ursula von der Leyen, rather than isolationism or paralysis. Europe should build on its most valuable assets: the euro, which is celebrating its 20th anniversary this year, the single market and its shared social and environmental model. II. Making the digital leap with lucidity Let me now turn to our shared common challenges. Digitalisation is shaking up the way we live and consume, opening up a world of possibilities for corporates and customers alike. Worldwide, it clearly represents both an opportunity and a challenge for banks, as well as for supervisors. New players are becoming increasingly important. Fintechs do not have the capital resources to disrupt incumbent banks and can even be acquired by them. By contrast, Bigtechs do have the potential to fundamentally redefine financial intermediation: they have strong brand recognition, a 1/4  BIS central bankers' speeches  worldwide customer base and privileged access to cutting-edge technologies. This new situation is a major challenge for regulators and supervisors. Of course, financial regulation should remain technologically neutral: the basic principle “same activity, same rules” must apply. This is a good thing for the level playing field. However, beyond traditional financial regulation, international cooperation should be developed in four areas, four cornerstones of the regulation of digital finance. First, cybersecurity is a sine qua non for a reliable and sustainable digital future.

In addition, if issuers of stable coins also want to offer banking services such as deposits, financial investments and loans, then they will have to obtain a banking license in all countries where they operate. Otherwise these activities would be illegal. Stable coin projects reveal gaps in existing cross-border payment systems. Hence, at the European level, we should aim at promoting a genuine European strategy for retail payments. Payments are no longer a mere boring back-office technicality. They are innovative, and they provide two strategic assets: data, and daily customer relations. The raw truth however is that the European payments market is already dominated by non-European stakeholders. Furthermore, the growing role of non-European digital firms – be they American or Chinese – offering payments solutions should be taken seriously. Despite the creativity of the European ecosystem of payments, our market remains too fragmented. We don’t have much time left. We – the Eurosystem and the Banque de France – call for the creation of pan-European payment solutions, building on a common brand and on a state-of-the-art instant payment such as the Target Instant Payment Settlement infrastructure (TIPS) managed by the Eurosystem, and contributing to much more efficient international payments including for remittances. Some also suggest that the right answer to Libra is accelerating the creation of a Central Bank digital currency (CDBC). This is a scintillating subject, but a separate one.
The rapid and profound changes that have occurred in the Islamic financial system in the recent five years have strengthened its position as an integral component of the overall financial system, as has been envisaged in the Financial Sector Masterplan. The strong growth in Islamic financial assets has been sustained to constitute 10.5% of the total assets of the banking system today. The Islamic financial system has now entered into the third strategic phase of institutional development where a number of domestic banking groups are now in the midst of strategically participating in the transformation process from Islamic banking windows into Islamic subsidiaries. The entry of foreign Islamic banking players will also contribute toward further increasing the level of innovation and competition in the Islamic financial system. Indeed, Islamic financial products have become more diversified to include variable rate and equity based mechanisms as well as hedging instruments that strengthen the risk management capabilities of Islamic financial players. The participation of multilateral institutions in the issuance of Islamic securities further diversifies the asset classes and the investment alternatives available to investors, expanding the breadth and depth of the Islamic financial market and enhancing its liquidity. The comprehensive Shariah and legal infrastructure that has been put in place has also increased the level of confidence in conducting Islamic financial transactions.

How should we view financial bubbles, what causes them and what can we do about them? What drove the latest bubble, what can we learn from it and what is needed more generally to make stock markets function more efficient? BIS Review 50/2002  1  Nothing new about periods of undue optimism One important lesson is that in a deregulated world, waves of excessive due optimism can arise and result in pronounced financial cycles. In the 1990s there were several periods of financial turbulence. One was Sweden’s own bank and currency crisis about a decade ago. At the same time there were problems in other countries and turbulence in the European exchange rate mechanism (ERM). That was followed by the crises in Asia and Mexico, the problems with the major hedge fund Long Term Capital Management, Russia’s suspension of payments, the IT bubble and, most recently, the difficulties in Latin America. Further back, there have likewise been periods of excessive optimism and financial crises. Here, briefly, are the most spectacular items in Sweden’s economic history. •  The first real financial crisis in Sweden occurred back in 1857. It mainly involved the real estate market and obliged the government to support the banking system for the second time in our history. The first occasion had been in 1668, when the Palmstruch Bank was taken over by parliament and ultimately became what we now call the Riksbank.