samchain/econo-pairs-v1 huggingface dataset:
These two assumptions imply, in the context of the staff projections, a continuation of overall contained domestic cost pressures, which contributes to the moderation in inflation projected in 2009. It has been the view of the Governing Council that the risks to this medium-term outlook for price developments are fully confirmed to lie on the upside, mainly relating to possible further rises in oil and agricultural prices, and increases in administered prices and indirect taxes beyond those foreseen thus far. In addition, against the background of sound economic fundamentals, stronger than currently expected wage dynamics may emerge, while an increase in pricing power in market segments with low competition could materialise. As regards economic activity, incoming information had confirmed the sustained nature of economic expansion in the euro area, with real GDP growing by 0.7% quarter-on-quarter in the third quarter, while indicating some moderation in the fourth quarter. Overall, the  BIS Review 3/2008  1  economic fundamentals in the euro area remain sound. Looking ahead, Eurosystem staff projects annual real GDP growth to lie between 2.4% to 2.8% in 2007, between 1.5% and 2.5% in 2008, and between 1.6% and 2.6% in 2009. In comparison with the September 2007 ECB staff projections, the range projected for real GDP growth in 2008 has been revised slightly downwards, whereas for 2007 the new range lies within the upper part of the previous one.

So it is unsurprising that Statistics Iceland's standard of living study revealed that households with onerous housing costs have declined substantially in number. About 10% of homeowners and 14% of renters consider their housing costs burdensome. This shows that debt service has risen less than could be inferred from public discourse. Just over half of households who have taken loans in the past three years have seen their debt service rise by less than 30,000 kr. per month. After adjusting for wage growth, the ratio of debt service to disposable income is broadly unchanged. As of this past January, the share of households whose debt service exceeds 35% of disposable income had risen by only 2 percentage points, from 7% to 9%. The winds are now changing in the real estate market, and the Central Bank is determined to push real rates upwards, whether through policy rate hikes or by lowering inflation and inflation expectations. This is why, in its most recent statement, the Financial Stability Committee encouraged mortgage lenders to "work with borrowers, as they have in the past, to prevent financial distress insofar as is possible." I expect that we will be taken seriously and that the banks will be prepared to respond when fixedrate clauses expire this coming winter. On the other hand, there is no reason for taxpayers to subsidise borrowers' mortgage interest expense - not at this point in time, at least.
However, the uncertainty regarding the way the economy will develop leads to uncertainty over the future interest rate, too, which is reflected in the fan around the repo-rate path. My impression is that there is normally very little opportunity to influence market expectations further than six months ahead by publishing a repo-rate path. Goodhart and Rochet also show in their evaluation that it is the Riksbank’s repo-rate path that adjusts to market rates rather than vice versa, except in the short term, when the influence is mutual. But they also point out that the data period is so short that it is not possible to draw any far-reaching conclusions.21 Check against other monetary policy frameworks We should check the repo rate produced in our forecasts and models against other monetary policy frameworks. Personally, I usually check to see whether the repo rate level is reasonable by looking at what the Taylor rule would imply. In the original Taylor rule, the policy rate is determined by inflation and the GDP gap.22 According to this rule, the policy rate shall be set equal to the long-term level of the policy rate plus 1.5 times the deviation in inflation from target plus 0.5 times the deviation in GDP from potential GDP. The Taylor rule has the advantage that it is based solely on information in the current situation and not on forecasts. Measured inflation is used as an indicator of future inflation, which may be reasonable if there is some sluggishness in the inflation process.

Following quarter-on-quarter growth in GDP of 0.9% in the first quarter, the latest information indicates that activity is expected to maintain a strong rate of expansion, whereby a further slight quickening in output is estimated in the second quarter, to 1% in quarterly terms. Average growth in the first half of the year, in annualised terms, is thus expected to be around 4%. The projections for the rest of 2015 and for next year point to continuing dynamism, with Spain clearly outpacing most of its euro area partners. However, this momentum might be slightly contained by the weakening of some of the expansionary impulses, such as the fall in oil prices and the depreciation of the euro. For 2016, the projections estimate average growth of 2.7%, with greater uncertainty naturally accompanying the longer time ahead involved. In terms of the composition of spending, the most recent phase of the recovery has been marked by the growing weight of national demand, which has replaced external demand as the main net contributor to growth. Foreseeably, in the near future, this pattern will continue, with a contribution by the external sector to the increase in GDP that is practically neutral in net terms. Exports, particularly to the euro area, are expected to post higher growth, while the tempo of imports will slacken somewhat.
This can lead to some households borrowing so much that they will experience difficulty in meeting interest and amortisation payments in the future. To avoid this, which would make it more difficult to attain price stability and stable resource utilisation, the interest rate needs to be raised relatively soon. Conclusions Forecasts are always uncertain and both the Riksbank and other analysts make forecasting errors. However, forecasts are a necessary part of the monetary policy conducted in Sweden. This is because monetary policy’s effects on the economy come with a time lag and it is therefore necessary to look ahead to attain the inflation target. Moreover, the forecasts show how the Executive Board was thinking when the monetary policy decision was made, which is an important part of our communication with the general public. One can also note that the forecast evaluations show that thorough forecasts are better than just assuming that developments follow the indications given by an auto-regressive model. The Riksbank uses both models and expert assessments in its forecasting work. The models are necessary if one wants to analyse the effects of different policy alternatives. They also help us to quantify different types of risk scenario. It is sometimes very difficult to formulate a risk scenario so that it can be fed into a model. An example of this is the risk of a financial crisis. Nevertheless, we should have the ambition to quantify the risks that are considered relevant to our monetary policy decisions.

I wish therefore, to commend BancABC for sponsoring the CASE Handbook, which I am sure will provide valuable information to active and potential players on the Stock Market in Zambia. With these remarks, I wish to declare the CASE handbook officially launched. I thank you for your attention. 2  BIS central bankers’ speeches
Dear colleagues, •  Before proceeding with the presentations and discussions today, let me share a few words on the experience of the BNB which provides examples, relevant for the topic of today’s conference. •  We have seen that the compatibility of monetary, micro- and macro-prudential policies is possible in reality, and not only in theory. The BNB has successfully implemented such a policy mix for many years, during all stages of the economic cycles, before and during the recent global crisis. •  We have also seen that it may take years and perhaps at least one serious financial or banking crisis, to design and then enforce central banking policies which are optimal for a country. In Bulgaria the policymakers, legislators and the public at large came to the consensus of introducing the currency board regime and the very strict banking supervision and regulations. This happened only after our own deep financial and banking crisis which took place in the mid-1990s. Our experience has convinced us that there are no universally superior or “one-size-fits-all” frameworks. Neither in the areas of monetary policy and banking supervision, nor in the design of regulatory structures or the governance of central banks. Alongside the processes of financial integration and global regulations and practices, which are inevitable, we believe that countries should be allowed to retain sufficient levels of flexibility to apply countryspecific solutions.

With the current practices that are available worldwide which can hide the identities of true owners, it is now almost impossible for regulators to only rely on ownership limits to deal with undue influence, or be assured that seemingly unrelated parties are not actually related! Consequently, markets are increasingly looking towards the application of good Corporate Governance practice to overcome any ill-effects that may arise out of ownership concentration and it is generally believed that if good governance is in place, concentrated ownership, known or unknown, may not adversely affect the risk management process of the institution. In the case of banks especially, regulatory limits on ownership in banks are prescribed in a number of countries to prevent banks from being controlled by a single owner or a group of connected owners. However, a majority of countries in the world still do not have such regulations. In fact, according to a World Bank survey of 157 countries in 2003, 112 did not have regulations on ownership limits. Nevertheless, in many countries, indirect regulations such as limits on related-party transactions and fit and proper tests for bank directors and executive officers are in place to promote this aspect of good Corporate Governance, and I think, regulators genuinely believe that such practices would increasingly ensure the better risk management of banks, thereby leading to a more sound system.
There are a number of other, similarly key, requirements in the guidance which I will not detail here – for example the need for a responsible and accountable legal entity behind the operation and for governance arrangements which allow for timely human intervention, ensuring that expert judgement and decision making is available to deal with unforeseen circumstances. The guidance also provides considerations for what should be considered systemically important in this context, though I should note that all payment systems are encouraged to observe the PFMI. The point is that in this one area of the financial system, systemic payments, we are engaged in the work to deliver “same risk, same regulatory outcome”. Stablecoins used primarily for payment are just one element of the crypto- ecosystem. For the ‘same risk, same regulatory outcome’ approach to be effective, it needs to be carried forward across international standards and those standards need to be incorporated into domestic regulatory regimes. Similar work is also in train in other areas. The Basel Committee on Banking Standards is in the process of issuing guidance on the prudential treatment of cryptoassets held by banks[6]. IOSCO is looking at the application of the standards for investor protection and market integrity across cryptoassets, exchanges and platforms for lending and trading[7]. These international standard setting bodies are working closely together on stablecoins to ensure we understand how we treat  Page 7  similar risks in different regulatory regimes and how the regimes might interact with each other.

And yet, even in this blessed state, there are too many unemployed and underemployed, just as there are in the rest of America. We can do better. America must do better. The question is: How? To create employment, we must have economic growth. The simplest of econometric equations posits that the key components of economic growth are domestic consumption, plus foreign demand for U.S.-produced exports, plus investment by businesses, plus spending by government. I think it is pretty clear to everyone who lives on the planet that in order to grow our economy and put our people back to work, we must rely on our ability to curry to domestic and foreign  1  The Great Recession’s end date was established by the National Bureau of Economic Research, which officially declares the beginning and end of recessions. BIS central bankers’ speeches  1  consumption and invest here at home to produce the goods and services to sell in the marketplace. You’d have to be from Mars to believe that the federal and state governments will be the source of much direct spending stimulus to the economy. Presently, all eyes are focused on the budget negotiations in Washington as the debt-ceiling clock ticks on. Aesop’s classic fable comes to mind. Rather than work like ants to build and store for difficult times, our fiscal authorities – Congress after Congress, under Republican and Democrat leadership alike, and with presidents of both parties occupying the White House – have been proverbial grasshoppers.
We can formalise and specify this reasoning somewhat by saying that it is a case of selecting a policy rate path that minimises a forecast loss function, written as the following common quadratic form:  BIS Review 29/2009  3  2  Evaluation ex ante – given the information available at the time of the decision So, given that a central bank conducts flexible inflation targeting, how should we evaluate the monetary policy the bank conducts? When evaluating monetary policy, as when evaluating decisions in general, we may adopt one of two different starting points. The first option is to base our evaluation on the information that is currently at hand; that is also including the information that has become available since the decision was made. This is, in other words, an evaluation after the fact. We can call this an ex post evaluation. The second option is to put ourselves in the position of the decision makers at the time the decision was made and to try to evaluate the decision given the information that was then available. We can call this an ex ante evaluation. When evaluating monetary policy, the most interesting question is not whether the decision could have been better after the fact. As I said earlier, monetary policy is conducted under conditions of great uncertainty – there is a time lag before monetary policy has an impact on inflation and the real economy and the economy is constantly subject to new shocks.

Among the major non-bank financial institutions, the most important part of the financial system today where we need a stronger capital regime relates to the GSEs. Even with the improvements in risk management at these institutions over the last few years, we are some distance from the point where their regulatory capital requirements appropriately reflect their risk. While critically important, capital alone does not define an institution’s strength. It is vitally important for firms to continue to invest in strong internal controls and to make sure that advances in the operational infrastructure keep pace with rapid growth, particularly in complex transactions. Strong operational controls can help ensure smooth market functioning in times of stress, and when they are weak they can exacerbate adverse market dynamics. An important element of a sound operational control environment is timely and accurate information for senior managers, especially when it is most critical for them to have a clear picture of the firm’s exposure. As such, strong operational controls can help reduce some dimensions of uncertainty and therefore help markets function better in conditions of stress. The challenge of ensuring that operational controls keep up with front office advances in the complexity and volume of transactions is particularly evident today in the area of credit derivatives.
SMEs are the engine room of our economy, generating around 60% of all private sector employment and accounting for over half of all private business turnover.16 And yet SMEs face a £ funding gap.17 Almost half of all SMEs don’t plan to use external finance, citing the hassle or time associated with applying. Of those that have approached their bank, two fifths have been rejected.18 Part of the problem is that the assets that SMEs are seeking to borrow against are increasingly intangible – the value of a brand or user base – rather than physical assets, like building or machinery. SMEs that have not borrowed lack the historic data required for credit scoring. And legal requirements to prevent money 15  See: https://libra.org/en-US/. Federation of Small Business: https://www.fsb.org.uk/media-centre/small-business-statistics. NAO report ‘improving access to finance for SMEs (Nov 2013). 18 Report by British Business Bank: Small Business Finance Markets (2019). 16 17  6  All speeches are available online at www.bankofengland.co.uk/news/speeches  6  laundering and “Know Your Customer” make the process especially burdensome for a small business with limited resources. This should not be the case in a data-rich world. Lenders should be able to access a broader set of information on which to base credit decisions. Already, search and social media data are supplementing traditional metrics to unlock finance for smaller enterprises whose assets are increasingly intangible.

It contains informative materials which straightforwardly offer basic guidelines as to how to reach the end of the month, how to invest and how to manage one’s finances at different stages in life, or which explain the characteristics of specific, basic bank products and services. I trust that, through the actions promoted by the Financial Education Plan, of which the foregoing are just two examples, the public and private authorities and the financial supervisors are contributing to enhancing Spanish citizens’ financial culture, both for their own benefit and for the sustainability of the financial system. Conclusions I shall conclude as I began. The customer is at the core. This is an idea that is repeated in various fora in which technological innovation in the provision of financial services and the new challenges facing banking are addressed. Transparency, market conduct and financial education are priority areas of attention that are gaining in prominence both on the European agenda and at the heart of the respective national authorities. And more importantly and, probably, what is more effective in the medium and long term, they are taking root in the very organisation of banks. Developing a responsible banking model, with suitably designed products, distributed in the appropriate channel, to the ideal customer, and having regard to individual needs, should today be a priority objective for all: European authorities, national authorities and the banking industry. Thank you for your attention. 8/8
Let me turn to the third and final issue, namely how do we think about the issue of systemic risk, and systemically important status, for insurers? This is obviously topical in the context of the IAIS proposed policy measures for globally systemically important insurers. First of all, in my view the case for systemic importance for insurers has to be proved. It does not follow that because major banks are systemically important, the same must be true for insurers. And, second, if a case can be made, it does not automatically determine what the response should be; in other words, it does not follow that the same capital treatment of systemic firms and/or a statutory resolution regime are needed as for banks. The calibration of these responses will have to be proven, and the response will need to be consistent with mitigating the cause of the systemic risk. So, let’s put banks to one side, but only after making one important point, that whereas systemic risk in banking is dangerous in good part because that it is in the nature of banking that the confidence issue combined with a very high level of  BIS central bankers’ speeches  5  inter-connectivity of risk within the system creates systemic risk, this is not true to the same extent in insurance.

Since then, positive demand news has lifted the starting level of UK output. If this level was maintained along the same growth trajectory, the average output gap over the next three years would be 3 percentage points smaller than in May. With a Phillips curve slope of a third, inflation at years 2 and 3 would be around 1 percentage point higher than expected in May. Another significant piece of news since May has been in asset prices. Since then, shorter-term interest rates have fallen by around 25 basis points, risky asset prices such as equities have risen by almost 7% and the sterling exchange rate has fallen by around 2¼%. Taken together, these asset prices movements represent a material loosening in UK monetary conditions. On standard ready-reckoners, they would boost output by around ½%, and inflation by around 0.2 percentage points, at the policy horizon relative to the May scenario. Finally, imagine we plugged this news about the expected output gap and inflation into a standard Taylor Rule, in which interest rates are mechanically set in line with these two factors. Assuming weights on the 22  All speeches are available online at www.bankofengland.co.uk/speeches  22  two terms of 0.5 and 1.5 respectively, the Taylor Rule implied path of interest rates would, on average, be around 1 percentage point higher over the policy horizon as a result of the news about asset prices and demand, relative to the May-implied scenario path.
21  See page 7 of the Remit and Recommendations for the Financial Policy Committee. 12  All speeches are available online at www.bankofengland.co.uk/news/speeches  12  That’s what we’ve been tasked with. It’s what we’ve done. And it’s what we’ll continue to do. Thank you. 13  All speeches are available online at www.bankofengland.co.uk/news/speeches  13

As you know, a number of policy initiatives have been launched at the global level since the summer, for instance by Financial Stability Forum 5 or by the Porto informal ECOFIN 6 and it is still difficult to anticipate precisely the legal aspects which will be examined more particularly by the various international and European fora and bodies involved in this discussion. However, these initiatives provide an indication of possible legal considerations which might emerge, in particular in the European context. Legal certainty should go hand in hand with transparency. The focus on the transparency of complex financial instruments, of institutions and vehicles and on the appropriate disclosure of information on securitised debt and other structured financial products indicates that there is a need for regulatory and supervisory authorities to have a closer look on the legal frameworks applicable to securitisation transactions and market standards and how special purpose vehicles are currently regulated and supervised in the various EU Member States and at also at the international level. The report of the European Financial Markets Lawyers Group (EFMLG) of May 2007 on legal obstacles to cross-border securitisations in the EU 7 contains recommendations for further convergence of securitisation laws in the EU and invites the Commission to consider the adoption of a EU directive on specific legal aspects of securitisations which would enable Member States to adopt a certain number of principles common to all jurisdictions to ensure a high level of transparency, efficiency and legal certainty with regard to securitisation transactions.