samchain/econo-pairs-v1 huggingface dataset:
Table 1 Largest banks (by assets) and asset managers (by assets under management), end 2012 Bank  Country Assets $ % of total  Manager  Country AUM $ % of total  ICBC Mitsubishi UFJ Financial HSBC Holdings Deutsche Bank Credit Agricole BNP Paribas JP Morgan Chase & Co Barclays China Construction Bank Bank of America TOP 10  China Japan UK Germany France France US UK China US  BlackRock Allianz Vanguard State Street Fidelity AXA JPMorgan Chase Bank of New York Mellon BNP Paribas Deutsche Bank TOP 10  US Germany US US US France US US France Germany  2,789 2,709 2,693 2,655 2,649 2,516 2,359 2,351 2,221 2,212 25,154  2.5% 2.4% 2.4% 2.4% 2.4% 2.2% 2.1% 2.1% 2.0% 2.0% 22.4%  3,792 2,448 2,215 2,086 1,888 1,475 1,431 1,385 1,303 1,247 19,270  5.6% 3.6% 3.3% 3.1% 2.8% 2.2% 2.1% 2.0% 1.9% 1.8% 28.3%  Sources: The Banker Database “Top 1000 World Banks ranking” (2013), Towers Watson "The World's 500 Largest Asset Managers" (2012) and Bank calculations  BIS central bankers’ speeches  13  References Andonov, A., Bauer, R. and Cremers, M. (2013), “Pension Fund Asset Allocation and Liability Discount Rates: Camouflage and Reckless Risk Taking by U.S. Public Plans?” Adrian, T. and Shin, H. S. (2010), “Liquidity and Leverage”, Staff Report, Federal Reserve Bank of New York, No. 328. Amir, E., Guan, Y. and Oswald, D. (2010), “The Effect of Pension Accounting on Corporate Pension Asset Allocation”, Review of Accounting Studies, 15(2), p.345–366.

It shows a high correlation, with rises in equity prices inducing reallocations into equities. This suggests a potentially significantly pro-cyclical swing in portfolio behaviour. For example, a 10% rise in the S&P on average increases the equity portfolio share by over one percentage point – or around $ billion given the scale of US life insurers’ balance sheets. 6 If done quickly, this could be a potent procyclical amplifier. Similar patterns are evident among life insurers in other countries. A second piece of indirect evidence comes from the behaviour of regulators. There have been several incidences over recent years of regulators loosening regulatory constraints to forestall concerns about pro-cyclical behaviour in a downswing. For example, UK regulators loosened regulatory constraints on insurance companies in the early 2000s following the bursting of the dotcom bubble. This was due to fears of selling pressure on equities being amplified as insurance companies de-risked their portfolios as they neared regulatory constraints. Pension fund regulators have taken similarly-motivated actions recently due to depressed real yields boosting the market value of liabilities. A third piece of evidence comes from analysing the impact of ICPF asset allocation decisions on asset prices. In particular, at the Bank we have analysed the impact of purchases of longterm UK indexed-linked debt by UK ICPFs since the early 1990s (Zinna (2014)). Over this period, the combination of accounting and regulatory rules led to large cumulative purchases of long-term government debt by ICPFs. At the same time, long-term real yields fell from around 4% to around –1%.
It means that it is not reasonable to evaluate monetary policy in the basis of the opinion that inflation must always be on target. One should rather assume that inflation will rarely be exactly on target. In addition, the Riksbank deliberately allows inflation to deviate from target during shorter periods. This has been the case, for instance, when there have been temporary changes in inflation that we have not considered to warrant being counteracted by monetary policy. For example, we assumed that inflation would be below target at the beginning of 2004 due to energy prices having temporarily pushed up price in early 2003. However, inflation turned out to be even lower in 2004 than we had expected. But what I would like to say here is that one must expect inflation to deviate from target sometimes and that there are good reasons for this. I therefore consider that it is wrong to claim that monetary policy contributes to higher unemployment just because inflation is below target during a particular period. Another thing one can expect from the Riksbank is that we should make the best forecasts we possibly can. It is also important that our forecasts are evaluated. Last year our monetary policy was evaluated by two external professors, Giavazzi and Mishkin. They considered that the Riksbank’s forecasts for inflation compare favourably with those of other forecasters. However, for both 2004 and 2005 both we and other analysts overestimated inflation. This leads me on to some other questions I intend to take up.

Open unemployment did not fall more than to around 4 per cent at the peak of the most recent economic upturn. This also indicates that there are structural problems in the labour market that have also increased over time. There are, for instance, signs that the matching of unemployed and vacancies has deteriorated after the 1990s crisis. Increased globalisation and stiffer international competition, and the ensuing structural transformation, may also have played a role. The pressure for change in the labour market has been strong and adjustments have not been made as smoothly as might have been desirable. It is evident that the high unemployment that arose in connection with the crisis has to some extent been persistent. Research shows that the long-term unemployment level may be affected by major changes in actual unemployment. There is also research that show that generous unemployment insurances may contribute to the persistency of unemployment. Especially after major structural crises have occurred, such as the one in Sweden at the beginning of the 1990s. 4 I shall not develop this further. The functioning of the labour market lies outside the Riksbank’s field of responsibility and there are others who are better qualified to discuss the problems in this area than I am. My main message is that there are many indications of considerable structural problems in the Swedish labour market which may explain the high level of unemployment. These problems cannot be solved by monetary policy.
Singaporeans today are more educated, better informed, and keen to take part in the national debate. The government is adapting its style and approach to fit these aspirations of a new generation of citizens. Our strategic challenges have not fundamentally changed. We still have to make a living for ourselves, ensure the security of our homes and families, and build a better future for our children in an uncertain world. But the way Singaporeans mobilise themselves to respond creatively to these challenges has changed. The government will still play an active role, defining the issues, setting the agenda, and influencing opinions. But we also actively solicit opinions and proposals from outside the government. We are involving people much more in discussing and tackling national and community issues, whether it is managing their housing estates or reforming the financial industry. This will help strengthen Singaporeans’ sense of ownership and commitment to Singapore. Conclusion I have focussed on what Singapore and the other Asian countries are doing to get themselves back on track. But the region’s prospects also depend on the strategic backdrop – the relations among the major powers, namely the US, China and Japan, and particularly the role of the US. We have reasons to hope that US-China relations will remain stable. The US will not want a new version of the Cold War against China. And China’s over-riding priority for some decades to come will be to modernise and develop its economy and society, for which it needs peace and the cooperation of other countries.

It would not opt out of the region. Other investors may not have such a long history in Asia, but for you too, taking a long and informed view will be worth your while. 5  BIS Review 117/1999
In the long run, the persistence of structural reforms remains a priority for stimulating the economic growth rates. The Bank of Albania has constantly called for the restructuring of the Albanian economy and the need for a new economic growth model. It should be an export-oriented growth model and it should create a more favourable environment for promoting foreign direct investment  BIS Review 175/2010  1  at home. Increasing economic growth potential is, among others, a necessity against a background of steady employment growth and lower unemployment figures. The Bank of Albania has been consistent and transparent about the targeted macroeconomic policy approach. We have requested and welcomed the re-orientation of fiscal policy towards bringing the budget deficit down and keeping the public debt level in check. The successful borrowing via the issuance of Eurobond is a positive signal for the Albanian economy and it will help finance public sector’s activity with foreign currency in the short-run. On the other hand, the quotation of the Albanian sovereign debt in the international markets will require greater commitment in order to maintain appropriate parameters of fiscal sustainability. Pursuing these principles in 2011 budget and in the medium-term public finance framework would be the first right step in this regard. Keeping inflation under control will continue to guide our monetary policy judgment and decision-making on interest rates and the liquidity conditions in economy.

Ardian Fullani: Brief overview of key topics and the appropriate macroeconomic policy response Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the joint press conference of the International Monetary Fund (IMF) mission with the Ministry of Finance and the Bank of Albania, Tirana, 3 November 2010. *  *  *  Dear Mr. Minister, Dear Mr. Bell, Dear media representatives, It is a pleasure for me to appear before you today following a week of intensive and fruitful discussions to present the Bank of Albania’s position. Allow me first to underline that the meetings held broadly confirmed the conclusions provided in our last monetary policy report and the Bank of Albania’s outlook regarding its future performance. In what follows I will provide a brief overview of our opinions, dwelling upon the key topics of discussion: current and expected economic developments; risks and related concerns, and; the appropriate macroeconomic policy response. The Albanian economy had a positive performance in the first nine months of 2010, expressed in positive growth rates and improved key parameters of macroeconomic stability. In turn, the recovery has been reflected in contained and downward inflation rates, improved current account deficit, lower budget deficit and relative sustainability of public debt figures. These developments contributed to fully restoring confidence in the banking system, lowering the interest rates and the risk premiums, enhancing the exchange rate sustainability and improving the liquidity and financial sector’s balance sheet indicators.
12  All speeches are available online at www.bankofengland.co.uk/news/speeches  12  b) CPI inflation Per cent 3.5 EU referendum 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Jan 14  Jul 14  Jan 15  Jul 15  Jan 16  Jul 16  Jan 17  Jul 17  -0.5 Jan 18  c) UK and G7 growth Percentage changes on a year earlier 4.0  EU referendum  3.5 3.0  Swathe of other G7 countries  2.5 2.0 1.5 1.0  UK GDP growth  0.5 0.0 2015  2016  2017  -0.5 2018  Sources: Eikon from Refinitiv and Bank calculations. Sterling dropped immediately following the referendum, the biggest recorded single day move, and it subsequently traded around 15 to 20% below its late-2015 peak ahead of the referendum being called. Inflation rose well above the 2% target, eventually peaking at 3.1% in late 2017, an overshoot entirely due to the referendum-induced fall in sterling. UK growth dropped from the fastest to the slowest in the G7. Households trimmed spending, as the effects of sterling’s fall showed up in higher prices in the shops and squeezed their real incomes. Business investment was cut back more markedly, despite supportive financial conditions and (at the time) strong global growth, as companies understandably put projects on hold whilst they waited for greater clarity over the UK’s future trading relationships.

This has been confirmed in an ECB assessment of Malta’s monetary and exchange rate policy in connection with the Pre-Accession Economic Programme Report for 2002, where it is noted that the current regime has served Malta well in promoting real and nominal convergence. In view of these considerations, and given the importance which exchange rate stability has for trade and investment, the current regime remains the preferred arrangement for Malta. Taken together, therefore, the institutional arrangements governing ERM II and the successful experience with the current fixed exchange rate regime suggest that the way forward will consist of a gradual reduction in the weight of the US dollar and sterling in the currency basket, such that by the time Malta will be ready to join ERM II the euro will be the sole reference currency. If the United Kingdom were to join EMU in the meantime, this would automatically raise the proportion of the euro in the currency basket, making the approach to ERM II that much easier. Consistently with this objective, the weight of the euro in the basket was increased from 56.8% to 70% last August. BIS Review 70/2002  3  Given that Malta’s optimal exchange rate strategy in the run-up to ERM II has been identified, the next question concerns the choice of the central exchange rate and the fluctuation bands. The choice of the central exchange rate and fluctuation bands Some might argue that the choice of the central rate is not vitally important.
Having clarified this point, I can potentially see four main ways of increasing resolution capacity: The first would be to increase the amount of regulatory capital held by CCPs, and explicitly ring-fence a share of this capital as a means to recapitalise a new entity in a resolution scenario. In the EU, CCPs are required to hold sufficient own resources to cover operating costs over a six-month period – this requirement could be strengthened, not only in order to cover for a potential wind-down, but also to meet the funding costs of a new entity. For the reasons described above, I believe there would be important drawbacks in relying only on CCPs to increase their regulatory capital. CCPs should provide a proportional contribution to the resolution process, but should not bear all the costs. A second policy option could be to make use of initial margin haircutting as a means to fund the resolution process and establish a new CCP. While this would provide CCPs with significant resources, mutualised across the entire clearing membership, and could provide a base for re-launching a viable CCP with some degree of certainty over the sharing of losses, it would also imply a significant change in the way clearing members understand their liabilities towards the CCP – indeed, in certain jurisdictions, initial margin currently has to be bankruptcy-remote. It would be difficult to predict the potential pro-cyclical effects resulting from this tool, as well as the effects on incentives for members to take part in central clearing.

Whether we choose to bolster the tools for CCP resilience, CCP recovery or CCP resolution, we will need to be aware of potential trade-offs in the way losses are allocated, and remember that there may be no ideal approach. I have provided an overview of the pros and cons of these various approaches. It will be crucial not to lose sight of the systemic view when discussing CCP loss absorption, and to pay close attention to the interconnections between CCP exposures and bank exposures, and to the impact of CCP risk-management on pro-cyclicality in the global financial system. I look forward to learning from our discussions today and I hope they will shed new light on some of the trade-offs I have identified. Thank you for your attention. 10  BIS central bankers’ speeches
François Villeroy de Galhau: European Central Bank monetary policy and the resilience of the eurozone Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at Columbia University, New York City, 19 April 2017. * * * Accompanying slides. I am grateful to P. Antipa, L. Py, T. Mouakil, F. Haas, Ph. Andrade, B. Mojon and M. Dujardin for their assistance in preparing these remarks. Thank you for inviting me to Columbia University and your School of International and Public Affairs (SIPA). Columbia University is well-known as an institution of excellence. What might be less well-known is that Columbia has a unique relationship with France and with my institution, the Banque de France. Let me say from the outset that I will not comment on the current events in France and on our presidential election: I would just like to remind you that there are two rounds, the first one on Sunday and the second one on 7 May. Especially in moments like these, it is worth looking past the present, with a long-term view. The Maison Française on the campus was created 100 years ago. Your French department is one of the best in the United States. Moreover, the Banque de France has always followed very closely and valued Columbia academic production, including two concepts that I will use today: the research of Robert Mundell on Optimal Currency Areas and the research of Mike Woodford on Forward Guidance.

The policy rate is a blunt instrument in counteracting financial imbalances, as it has a broad impact on the economy. But at the same time, it can be a strength compared with macroprudential tools exactly because it is difficult not to be affected by a policy rate increase – monetary policy “gets in all of the cracks”, to use an expression minted by Jeremy Stein, previously on the Federal Reserve Board of Governors.18 Low interest rates over a long time can contribute to imbalances Macroprudential policy may also need support if monetary policy is actually a contributory factor to the imbalances the macroprudential policy is trying to counteract. This is an argument that has arisen both with regard to “the Great Moderation” and the origins of the financial crisis, and to the period that followed. If monetary policy is very expansionary over a long period of time, it may contribute, despite being justified with regard to the prevailing economic situation, to the build-up of imbalances on the financial side of the economy – for instance, the formation of distorted expectations of how high interest rates will be in the future and of how the housing market will develop, and so on. In this type of environment monetary policy may need to support macroprudential policy, by contributing less to such imbalances building up in the first place.
The measures included in this plan would have a positive impact of 0.2 pp on the average GDP growth rate. situation, use of the Next Generation EU (NGEU) funds and financing conditions that, while somewhat tighter than in previous quarters, remain favourable. Turning to the inflation forecasts, in step with the paths of the corresponding futures markets, the upward pressures of the energy component are expected to peak in the second quarter of 2022 and then decelerate. The inflation projections rest on two assumptions: (i) that, in line with the information from the EBAE, the pass-through of higher intermediate costs to final prices will only be relatively moderate (albeit more forceful than envisaged in the December projection exercise); and (ii) that the second-round effects will be limited, i.e. scant feedback effects between inflationary pressures on prices and wages. Inflationary pressures will be partly alleviated by the measures contained in the National Plan to respond to the economic and social consequences of the war in Ukraine.4 Furthermore, these projections do not yet include the possible changes in prices on the electricity market that are currently being negotiated in the European Union. Against this backdrop, the projections see inflation standing at 7.5% in 2022. It will then fall in 2023 to around 2%, thanks, above all, to the moderation of the energy component. Underlying inflation will not start to decline until end-2022, once the upward pressures on firms’ costs associated with energy prices and bottlenecks have corrected.

Such a spiral in Spain would only exacerbate the pernicious effects of the current shock, since, in the present context, a simultaneous rise in prices and wages would erode our external competitiveness vis-à-vis other euro area countries and would aggravate the already harmful effects of the current shock on competitiveness, employment and economic growth. Further, were it to spread across the euro areas as a whole, such a feedback loop would require a more aggressive normalisation of the ECB’s monetary policy to ensure compliance with our price stability mandate. In my view, an incomes agreement, like the one I have been advocating since October, is warranted in order to ward off these scenarios. But what shape should this cost-sharing agreement take? In my view, this burden-sharing should be set out in an agreement forged under the framework of social dialogue (which we have termed an “incomes agreement between firms and workers”). However, I believe it should be defined based on certain general principles. I will specifically mention five that I feel are particularly important. First, the costs must be shared among all agents. In an extreme scenario in which firms attempt to keep their unit profits intact, a reduction in household purchasing power would ultimately translate into lower demand for firms’ products. At the other extreme, maintaining workers’ full purchasing power would pose a threat to firms’ capacity to generate sufficient funds to conduct their investments and, ultimately, would jeopardise their survival, to the detriment of employment and welfare.