samchain/econo-pairs-v1 huggingface dataset:
These included the stress testing and recapitalisation of troubled banks; the identification of troubled real estate assets and their transfer to SAREB (Spain’s “bad bank”); and the reform of the savings banks. At the same time, actions and reforms at European level, including monetary policy (longer-term refinancing operations, LTROs, asset purchase programme, APP) and the move towards banking union, have ensured liquidity and strengthened confidence in Europe’s monetary and financial system. Financial reforms were accompanied by a series of reforms to labour and product markets and to the public sector. The 2012 labour market reform gave priority to collective bargaining agreements at firm level over those at sectoral or regional level. Reforms to product markets, including the law on market unity, have sought to reduce regulatory obstacles to firms’ growth, although implementation has been challenging. The Spanish economy has rebalanced as far as “flow” variables are concerned, while “stock” imbalances are gradually correcting. Banks’ asset quality and solvency has substantially improved, as reflected in higher capital ratios and a steadily declining ratio of non-performing loans (NPLs). The NPL ratio of Spanish banks has more than halved from 13.6% in 2013 to 6.4% now and continues to fall steadily. The banking sector has been able to finance growth with new loans while steadily deleveraging as legacy loans mature. Private sector debt has fallen considerably. Deleveraging of firms and households is well under way, with debt having declined by almost one-third since 2012.

There are some reasons for the deviation between “felt” and measured inflation after the cash conversion. For example, price increases occurred particularly in the case of frequently bought goods and services usually paid for in cash. Such prices are more strongly “felt” than prices for products which are only bought from time to time, for example, cars or computers. It is also possible that consumers are still comparing current euro prices with prices in the national currencies before 2002. This “frozen price memory” leads to distorted comparisons. It also needs to be taken into account that the introduction of euro cash in January 2002 coincided with increases – caused by external factors – in energy and food prices and in indirect taxes. They were not at all related to the euro. In the public perception, however, they were associated with the cash changeover. Institutional foundations of the euro Many observers did not think the ECB could ensure price stability and anchor inflation expectations. Indeed, the ECB is a young central bank which, together with the national central banks in the Eurosystem, has assumed responsibility for a new currency, the euro, in a new economic and currency area, the euro area. Therefore it could not be taken for  2  BIS Review 16/2009  granted that the euro would be able to establish itself so quickly as a stable and internationally recognised currency. This was only possible because the ECB and the national central banks of the Eurosystem have solid institutional foundations.
In this respect, should the recovery in domestic economic activity turn out to be faster than expected, the limited monetary policy tightening implied in the baseline scenario could be implemented earlier than envisaged. The fact that inflation will rise in the forthcoming period due to base effects and public price adjustments, poses an important risk factor through its potential impact on inflation expectations. Several adverse factors such as food and oil price increases, base effects and administered price hikes have brought about upward movements in inflation since the last quarter of 2009. Although these factors are temporary, they are likely to cause headline  16  BIS Review 31/2010  inflation to stay at elevated levels for some time. It is crucial that economic agents fully understand the temporary nature of these developments while forming their medium- and longer-term expectations. Under the assumption that resource utilization would remain low, labor market conditions would have an adverse impact on consumption expenditure, and fiscal policy would generate a gradual depressing effect on the economy, these temporary factors as well as other one-time cost push pressures would not lead to a significant deterioration in general pricing behavior. Currently, the annual rate of increase of services prices and core inflation are consistent with medium-term inflation targets, and no serious risk of pass-through is observed. Therefore, it is foreseen that policy rates would be maintained at low levels for a long period.

The second condition may be even more stringent. Ultimately, what makes a reserve currency is the ability to serve unconditionally as a store of value. The country must therefore develop deep, liquid and unfettered financial markets. It also entails an ability to offer “benchmark” safe assets that keep their value in all circumstances, and may serve as vehicles for reserve accumulation. Typically, only government debt will be used as a reserve asset. So, being a reserve currency also means that “foreigners” will permanently hold a large part of Government debt and their judgment will ultimately prevail as to the true solvency of the Government. Being a reserve currency therefore implies constraints as much as it brings benefits. That may be the reason why countries, including China, would proceed cautiously on the road towards full reserve currency status. There is a distinction between being a reserve currency, on the one hand, and a global currency, on the other. The first concept refers to the currency as a store of value; the second may concern only its role as a medium of exchange. These are two different attributes. A currency may be widely used in transactions without being considered for reserve accumulation. This distinction maybe relevant when looking at the composition of the special drawing rights (SDR). As you know, this is the “basket currency” that serves as a unit of account for the IMF and, to a limited extent, as medium of exchange between its member countries.
So there is a degree of intrinsic uncertainty both about where in the risk bucket the true PD lies and indeed about whether it lies in the assigned risk bucket at all. To gauge the importance of these uncertainties, the mortgage portfolios of two large banks were examined and capital calibrated using their reported models. These capital ratios were then simulated under two counterfactual assumptions: (a) that true PDs were uniformly distributed within the risk bucket; (b) that true PDs were higher than recorded PDs by one risk bucket. The results are illustrated in Charts 1 and 2. Chart 1 looks at the distribution of the reported capital ratio, indexed to 100, assuming model uncertainty only exists within each risk bucket and is symmetric. Even under this assumption the confidence intervals are significant, with the “true” capital ratio lying anywhere between 15% above or below the reported ratio. Once we allow for the possibility of PDs being systematically under-estimated, the degree of uncertainty is greater still. The “true” ratio then lies up to 35% below the reported ratio. That equates to several percentage points of capital. A different way of gauging the effects of model uncertainty is to look at how different banks value essentially identical exposures. For UK banks’ wholesale credit portfolio, the FSA conducted just such an exercise in 2009.6 A hypothetical portfolio was constructed based on 64 externally rated corporate, bank and sovereign exposures.

Less directly related, but just as important, are our Stock Exchange, and our network of asset  1/3  BIS - Central bankers' speeches  managers and professional advisers. They anchor a company, especially its finance function, in Hong Kong and naturally encourage it to tap our financial intermediaries for advice and financing. 7. Turning to policy support, a key source of growth in finance in recent years has been green and sustainable finance. An area where the Government has been active in supporting is Hong Kong's sustainable loan market. 8. It is estimated that 100-150 trillion US dollar in climate finance will be needed in the next three decades to achieve a Paris-aligned scenario of limiting global warming to 1.5° Celsius. In Asia, we will need 66 trillion US dollar; a significant share of this would go to China. 9. With surging demand for green financing, it is important that there are widely recognized standards that market participants can rely on when investing or when tapping the capital markets to meet their financing needs. In this regard, I would like to compliment APLMA for the good work. Its Green Loan Principles, Social Loan Principles and Sustainability-Linked Loan Principles provide useful guidance and benchmarks for the market. 10. Hong Kong as an international finance centre can contribute a great deal to channeling capital and investments and helping the region bridge green financing gaps. In fact, we have one of the Asia's largest sustainable loan markets.
The intermediate variable – the money supply – is known when decisions are made and provided it is closely correlated with the path of inflation one to two years ahead, monetary policy will be very transparent. However, basing monetary policy on a money supply target is not a simple matter. It is questionable whether a straightforward and stable relationship between the money supply and inflation also exists in the short and medium term. This is because the relationship has been disturbed by various factors. Financial innovations have contributed, for example, to changes in the pattern of household payments and investment. Moreover, a number of major factors still have to be forecast in order to arrive at what may be an appropriate target for the money supply. So in practice even a money supply strategy has to be based on forecasts of a number of variables and an assessment of, for example, the output gap. Moreover, when the strategy was used in a number of countries in the 1970s and ‘80s, it was not particularly successful. In the absence of a straightforward, stable relationship between the intermediate variable (the money supply) and the ultimate objective (price stability), a conflict may arise between them because the central bank has only one instrument, its interest rate. If the central bank chooses the minimise fluctuations in the money supply, a probable consequence – given that the relationship is not exact or stable – will be increased fluctuations in inflation and output.

We appreciate that firms are at different stages on the development of the diversity and inclusion data strategy and the purpose of this survey is to understand better what data firms currently collect about their workforces. We are especially keen to receive feedback on the challenges of collecting diversity and inclusion data. I would like to take this opportunity to encourage you to participate in the survey as it may help to shape potential future regulatory returns, so the more information we can learn from firms, the better. It is particularly valuable to hear from small firms to ensure that we receive a representative sectoral response and it is important that the voice of the mutuals sector be heard in this discussion. Climate change Since our former Governor, Mark Carney’s speech in 2015 on ‘the tragedy of the horizon’, the Bank has been working with many other organisations, with our particular focus on financial stability, from physical and transition risks. Our expectations for firms were set out in Supervisory Statement 3/194 and firms contribute to work on their implementation plans. Firms should consider how they can assess the climaterelated financial risks associated with their clients and counterparties and have a clear high-level strategy for adapting to the range of potential climate outcomes. The PRA is mindful of the need to take a proportionate approach and accept that smaller firms do not have the resources to develop as sophisticated an approach as larger firms.
François Villeroy de Galhau: Prospects, challenges and promises New Year wishes to the Paris financial centre New Year wishes to the Paris financial centre by Mr François Villeroy de Galhau, Governor of the Bank of France, 12 January 2017. * * * I would like to welcome you all, our partners throughout the year – public officials, financial and economic players, journalists – to this magnificent Golden Gallery for this happy tradition of extending New Year wishes to the Paris financial centre. I would like to start by extending to you, on behalf of the whole of the Banque de France and the ACPR, our warmest wishes for 2017, for you and your loved ones, as well as for all of your staff. To these personal wishes, I would like to add several collective wishes this evening: first for Europe and its economy, then for our country, and finally for the smooth financing of our economy and for financial institutions. 1. For Europe and its economy A year ago, I had noted with you that 2016 had begun as the year of volatility, with the turbulences in the financial markets. In fact, 2016 was rather the year of uncertainty, with the Brexit victory in June, the American election in November and the Italian referendum in December.

In the long run, output is determined by the supply of labour and capital and adaptability, but in the short and medium term monetary policy can also have an impact on the real economy. The economy grows over time. Output moves in waves. Output will in some periods lie below trend growth and in others above trend. The difference between trend output and actual output is called the output gap. Stabilising output growth means that one seeks to maintain actual output near trend. The output gap provides an indication of pressures in the real economy. Developments in the output gap provide a basis for assessing output stability and can thus also shed light on domestic inflationary pressures in the economy. When the economy is booming, the output gap is positive. When the economy is at a low ebb, the output gap is negative. We have had pronounced economic cycles in the Norwegian economy. The downturn at the beginning of the 1990s was followed by an upturn from 1993. This upturn peaked in 1998. There was a shift from a recovery to a period of strong expansion. Growth came to a halt in 2002. An upturn is now in progress. BIS Review 16/2004  1  Other indicators may also shed light on stability in output and employment. The wage gap is an indicator of the social partners’ perception of employment and labour shortages.
It is, of course, possible that neither of these two reasons - investor protection and protection against financial stability risk - will be relevant because the very instability and riskiness of the world of unregulated crypto finance, most recently demonstrated by FTX, will in the end ensure that the sector cannot grow. Indeed, some have argued for regulators grappling with the crypto world to keep it outside the regulatory framework to ensure that users’ ‘caveat emptor’ concerns prevents both growth and connection with mainstream finance[4]. And that leads to my third reason. Forecasting the direction and pace of technological innovation is an even more uncertain game than economic forecasting. Promising technologies fall by the wayside; unexpected ones flourish. And technologies combine in ways that cannot be anticipated. But the technologies that have been pioneered and refined in the crypto world, such as tokenisation, encryption, distribution, atomic settlement and smart contracts, not only seem unlikely to go away as our everyday lives become more ‘digital’, but may well have the potential to improve efficiency, functionality and reduce risk in the financial system. A potential example of this is the integration of functions in ‘smart contracts’ that I mentioned earlier. A possible use case for such integration, which has been pioneered in the defi world is the combining the functions of trading, clearing and settlement of tokenised financial assets into a  Page 6  single, instantaneous contract, rather than being carried out in sequence by three separate institutions over a number of day.

For others, the message is perhaps that the crypto world and its technologies are a very long way from influencing, let alone changing, the way financial services, including payments, are delivered at scale in the real world. It is, as I said earlier, very difficult to predict which technologies will be successful and when and how they might begin to change the way we do things. The bursting of the dot.com bubble in the early years of this century did not herald the end of the development of internet commerce though it took longer than its original enthusiasts imagined and emerged in a very different form, dominated by big tech platforms. Our work on a digitally native pound is driven by the trends we now see both specifically in payments, including the reducing role of cash, and more generally in the increasing digitalisation of daily life. It is motivated by two primary concerns. First, that in a world in which new, tokenised forms of money emerge, enabled by new technology, we remain able to ensure that all forms of money that circulate in the UK are robust, interchangeable without loss of value and denominated our unit of account – the pound sterling. Physical cash plays a role in ensuring that, at present, all forms of commercial bank money in the UK have to be redeemable in cash - Bank of England money - on demand in cash and without loss of value.
Resource utilisation lower than normal The Riksbank’s RU indicator, standard deviation 2  2  1  1  0  0  -1  -1  -2  -2  -3  -3 96  98  00  02  04  06  08  10  Note. The Riksbank’s indicator for resource utilisation summarises information from surveys and labour market data. It is normalised so that the mean value is zero and the standard deviation is one. Source: The Riksbank  Fewer risks of high inflation The second risk relates to the rate of inflation. CPI inflation was high last year, which could have led to a substantial increase in inflation expectations and to excessive wage increases in the autumn round of collective bargaining. But this has not turned out to be the case, so far anyway. Long-term inflation expectations have declined and are now close to the inflation target of two per cent two and five years ahead. In addition, wage agreements have now been signed for large parts of the manufacturing industry. Providing that the new wage agreements for other sectors are in line with the norm set by the manufacturing industry, it appears that total wage increases this year will be around 3.5 per cent. This is actually a rather large wage increase given the fact that unemployment is relatively high, but not so large that it is likely to lead to any serious inflation risks.

Before I move on to my personal reflections on the situation in the Swedish economy, I would like to say that I make the same assessment of the economic outlook in Sweden as that made by the majority of the members of the Executive Board at the latest monetary policy meeting. This assessment is that there will be relative low inflationary pressures and slow growth in the period ahead. It was expected that the Swedish economy would slow down at the end of last year, but the slowdown was more severe than we believed it would be. In the December forecast the Riksbank predicted that growth would decline and that there was some probability of a further repo-rate cut in February. In February, our assessment was that the slowdown in growth in late 2011 had been even more severe. This was because the indicators for exports, among other things, suggested this. I therefore voted with the majority to cut the repo rate by a further 0.25 percentage points. Since then, we have learned that the outcome for GDP growth in the last quarter of 2011 was even worse than we expected at the time of the monetary policy meeting in February. This is largely because exports were even weaker than expected. However, we have also received outcomes for foreign trade in January which indicate that exports strengthened again after the turn of the year.
Arthur Yuen: Remarks Discussant´s remarks by Mr Arthur Yuen, Deputy Chief Executive of the Hong Kong Monetary Authority, at the AMPF 2021 and MAS-BIS Conference on Macro-Financial Stability Policy, 28 May 2021. * * *  Opening 1. It gives me great pleasure to share my views on Hong Kong’s experience in the use of macroprudential measures to safeguard financial stability. I am grateful to Mr (Robert) McCauley and Professor (Catherine) Schenk for their research efforts, and their recognition of the effectiveness of the macroprudential measures implemented by the Hong Kong Monetary Authority (HKMA) since the 1990s. The importance of macroprudential policies 2. Today’s discussion on macroprudential policies is timely considering recent market developments. The accommodative monetary policies adopted by major economies in response to the COVID-19 health crisis have provided renewed impetus to rising property and asset prices in many markets. How to rein in asset price inflation and prevent it from endangering financial stability in the event of an abrupt price adjustment is a topical issue within the central banking community. 3. As mentioned in Robert and Catherine’s joint paper, the HKMA’s macroprudential measures on mortgage lending were first introduced in 1991. They have helped Hong Kong weather several crises including the Asian Financial Crisis, during which property prices plunged by as much as 70% between 1997 and 2003. Being an early adopter, we are encouraged to see that macroprudential measures have gained wider international acceptance after the Global Financial Crisis (GFC).

The operators of these systems are supervised as banks by the Swiss Federal Banking Commission (SFBC). Cooperation between the SFBC and the SNB is facilitated as the provisions in the Banking Act and the requirements stipulated by the National Bank Ordinance are partly similar, and both authorities wish to minimise the regulatory burden. This is also in the interest of the systems that are subject to oversight. I should add that not only the SFBC, but all of the evaluated systems have the opportunity to comment on our classification. The classification will be finalised at the beginning of next year. Basel II: a never-ending story? The National Bank is involved in the implementation of the recommendations on the international convergence of capital measurement and capital standards, known as Basel II. The National Bank does not only provide a member to serve on the Basel Committee on Banking Supervision. As an authority committed to system stability, it also shares the responsibility of adequately implementing the Committee’s recommendations. The SFBC’s fundamental hypotheses are undisputed, namely that the current provisions are in need of reform and that the recommendations of the Basel Committee are to be implemented with  1/2  moderation, while at the same time any dilution of the capital adequacy requirements aimed at reducing the insolvency risks has to be avoided. We are confident that the parties directly involved, ie the SFBC and the banks, will again succeed in agreeing, within the given time frame, on pragmatic and acceptable solutions.