samchain/econo-pairs-v1 huggingface dataset:
I would like to conclude by coming back to Newton's experiment, where he split white light into the colours of the spectrum using a prism, and then recombined them using a second prism. After breaking the challenges of financial stability down into a spectrum of five questions – which are not exhaustive – I would like now to recombine them into a single certainty: we, as supervisors and regulators, we the ACPR, will do everything within our power to safeguard financial stability in the new macrofinancial landscape. I shall give the floor now to Dominique Laboureix: I would just like to congratulate him on his appointment as Chair of the European Single Resolution Board, and thank him warmly for his powerful work as Secretary General of the ACPR for the past three years. 1 Those subject to Solvency II. 2 The ECB Blog, Bitcoin's last stand, 30 November 2022. 4/4  BIS - Central bankers' speeches

Már Guðmundsson: Iceland’s recovery – facts, myths, and the lessons learned Speech by Mr Már Guðmundsson, Governor of the Central Bank of Iceland, at the Official Monetary and Financial Institutions Forum (OMFIF) City Lecture, London, 28 January 2016. *  *  *  Accompanying figures can be found at the end of the speech. Chairman, Ladies and Gentlemen, I would like to begin by thanking OMFIF for giving me the opportunity to speak to you here today in the City of London about Iceland’s recovery. This is interesting for me because, for better and worse, the UK and Iceland deeply shared some aspects of the financial crisis, and because the City of London has for decades been Iceland’s international financial centre. But it also gives me great pleasure to see so many in the audience who have in various ways helped Iceland over the years. Today I will focus on the recovery from the crisis and the current challenges, including the task of lifting capital controls. But the recovery cannot be understood without an understanding of the nature of the negative shocks that hit Iceland during the crisis. It is well known that Iceland was the first advanced country to experience a full-scale banking crisis in autumn 2008, when its three big cross-border banks failed. It was also the first advanced country to go on an IMF programme during the Great Financial Crisis.
A risk-management approach to policy changes Of course, I realize that I could be wrong in my assessment. So let us consider how we should conduct policy when we don’t know for sure which scenario is really the one we face today. How can we avoid risking a repeat of either the stagflation of the 1970s or the slow growth of the 1930s? The problem, of course, is that policies that are optimal for the liquidity trap scenario would tend to generate higher inflation without significant reductions in unemployment if the structural impediments scenario were true. Conversely, policies that are optimal for the structural impediments scenario would leave the economy unnecessarily mired in depression and deflation if we were actually in the liquidity trap scenario. A middle ground proposal Fortunately, between these two extreme scenarios, there is a robust middle ground policy approach. The Fed could sharpen its forward guidance in two directions by implementing a state-contingent policy. The first part of such a policy would be to communicate that we will keep the funds rate at exceptionally low levels as long as unemployment is somewhat above its natural rate. The second part of the policy is to have an essential safeguard – that is, a commitment to pull back on accommodation if inflation rises above a particular threshold. This inflation safeguard would insure us against the risks that the supply constraints central to the structural impediments scenario are stronger than I think. Rates would remain low as long as the conditions were unmet.

In 2016, there were over 500 confirmed cases of measles, five times higher than at the turn of the century. If we turn from public health to economic and financial health, the costs of a lack of public trust and understanding are in many respects quite similar: expert advice and services may not be taken-up, worse alternatives may be sought out and contagious scare stories may be allowed to proliferate. Each of these has societal costs which may be significant. Financial exclusion (people excluded from access to core financial services and advice) remains pervasive in the UK. There are almost 2 million people in the UK without a bank account. 26  In the most deprived parts  (including parts of London, Manchester, Middlesbrough, Liverpool, Bradford, Birmingham and Glasgow), over a third of people do not have access to a bank account. 27  While not all of these problems can be  blamed on a misunderstanding and mistrust of finance, these are still depressing statistics. Many more people suffer the consequences, not of financial exclusion, but financial illiteracy. Studies have identified a range of ways in which this can adversely affect people’s financial health. Financial illiteracy is a key contributor to excessive indebtedness. in the run-up to the sub-prime crisis. 29  28  It is associated with an increased incidence of default, including  And illiteracy causes people to seek out high-cost, non-standard  sources of credit, the financial equivalent of alternative medicine.
4  Individuals might receive intrinsic utility from being thought of as high ability, or it might matter materially if future job prospects (including wages) depend on current reputation (see Scharfstein and Stein (1990)). The threat of corporate takeovers might also generate shortened managerial horizons, or agents might engage in hyperbolic discounting, which generates a short-term bias. 5  We assume no discounting, as in Rajan (1994). The qualitative results would not change were we to consider it. 6  is the probability assigned by the market of the bank being high ability, conditional on the bank setting a risky policy (unobserved by the market), the asset being bad, the macro state being and proportion other banks also setting risky policies. 4  BIS Review 168/2010  When the loan is bad, setting a tight (superscript ) policy yields  as the probability of a loss is unity under a tight policy and the bank obtains reputation . 7  The evolution of reputation is key for determining behavioural dynamics in the model. The marginal effect on reputation of banks adopting risky rather than tight policies is given by  improvements in the macro state increase the incentive banks face to We posit liberalise their risk management policies. When the macro state is good, any negative earnings are more likely to be attributed to low ability. This is the “Prince constraint”.

The Stability and Growth Pact has been strengthened to preserve fiscal stability; and a new procedure – the Macroeconomic Imbalance Procedure – has been established to prevent the accumulation of other non-fiscal imbalances. Also, the European Stability Mechanism and the banking union process have filled in two serious gaps. Now, to conclude, I shall try and respond to the questions to this panel about Germany’s role in the European debt crisis and whether Germany is a reluctant hegemon. Indeed, Germany has played a key role in the response by the European Monetary Union to its financial and fiscal crisis and to the dangers this crisis has entailed for the Union and the euro. In early 2012, many analysts and politicians considered it very possible that certain BIS central bankers’ speeches  1  countries might exit the Monetary Union, thereby triggering an extremely serious crisis. Many believed the European Monetary Union was running an almost terminal risk, at least in its formulation under the Maastricht Treaty. To Germany, then. Its economy and its Government have been fundamental in facing and overcoming these risks. Without a German political stance in defence of the Monetary Union and the euro, the single currency would surely not have survived. Obviously, Germany has not acted alone, but as the euro area’s leading economy, its role has been crucial. I do not believe Germany may be said to have exercised this role reluctantly.
It means being ready temporarily to raise regulatory requirements above their minimum level when risks from the economic and financial environment exceed anything remotely calibrated into the standards that apply in broadly normal conditions. And it means promptly relaxing those extra requirements once the risk to stability has passed. This is a massive step. No one is pretending that the policy community knows how to cast it in terms of a numerical target or a uniquely useful set of indicators, against which society can monitor us. And that underlines the importance of Parliament itself approving the instruments granted to the FPC, and of our being sufficiently transparent to enable public scrutiny of and debate about our analysis and policy decisions. The Bank/FSA Discussion Paper on macroprudential instruments published last December was a contribution to that.25 Back to current account imbalances: they do matter But that is not all that we, policymakers, should be modest about. If, as I believe, macroprudential policy can prospectively fill a gap, we must not pretend that it can be a cure for everything. Even if we had avoided the worst consequences of seriously suboptimal gross capital flows – a badly overlevered banking system dependent on flighty wholesale funding – there would still have been the problem of unsustainable global current account imbalances. Whether the eventual adjustment would have been disorderly and how costly is hard to tell.

Previous empirical work examining the falls in US and UK long-term interest rates over the 2004–2006 period foundfalls in term premia to have played the dominant role.27 Those studies put forward two possible explanations for their finding: lower perceptions of macroeconomic uncertainty or an effect from a “search for yield” in a low interest rate environment. The correlation found here between changes in short interest rate and distant real forward rates suggest that the possibility that monetary policy can affect risk premia should be taken seriously. 27  See Joyce et al (2011), “Understanding the Real Rate Conundrum: An Application of No-Arbitrage Models to the UK Real Yield Curve” and Backus and Wright (2007), “Cracking the Conundrum”. BIS central bankers’ speeches  19
They also provide a platform for the integration of economic analysis under the second pillar in a coherent and internally consistent way, which seeks to reflect past experience and fundamental economic relationships. Twice a year, the Monetary Policy Committee of the Eurosystem undertakes, with the help of a Working Group on Forecasting, a forecasting exercise which brings together staff from both the ECB and national central banks. The macroeconomic projections produced by these exercises combine analysis based on a variety of econometric models with expert assessments made by staff. The Eurosystem’s staff projections are therefore not the result of the mechanical application of a single econometric model. On the contrary, they combine a variety of different analyses, all of which rely on the staff’s technical expertise. Although they play a useful and important role, the projections are not a panacea. First, they are always based on specific assumptions - such as those concerning oil prices or exchange rates - with which it is possible to disagree or which can change rapidly, so that the projections become outdated. Second, the final projection depends to a great extent on the underlying conceptual framework or techniques employed in its production. Third, by their very nature, economic frameworks can only 3  BIS Review 109/2000  provide a summary description of the economy and thus do not incorporate all relevant information. In particular, some information is not easily integrated into the framework used to produce the projections or may change after they are finalised.

The International Financial Corporation (IFC) – an institution member of the World Bank Group that Romania joined in 1991 – has supported the Romanian banking sector by investing in various Romanian banks, especially during the privatization process. I welcome the current involvement of the World Bank in projects that aim to improve the health and education sectors, to reduce poverty, as well as projects focused on climate issues. Lastly, I thank you for the invitation to take part in this event. I am honored to be here, celebrating 30 years of renewed partnership and cooperation between Romania and the World Bank. To the team in Bucharest Office of the World Bank – which I considered, during these 30 years, as being competent and dedicated, aligned with our endeavors – I extend my warmest congratulations. Happy anniversary! At the same time, I would like to take the opportunity to express my appreciation for the management and staff of the World Bank in Washington for their work in pursuing the Bank's mission to foster sustainable development and promote social prosperity around the world. Thank you for your attention! 2/2  BIS - Central bankers' speeches
In November 2008, there were significant dislocations in many financial markets, especially in the markets for the U.S. federal housing agencies’ securities. 23 In addition, the housing market was a focal point of the financial crisis. To help support the housing market and improve conditions in financial markets, the FOMC announced an LSAP program on November 25, 2008, that consisted of purchases of agency debt and agency MBS.24 The stated purpose of this program was to “reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial markets more generally. "25 Research suggests that this program reduced “abnormal pricing” in agency MBS— the component of the spread considered to be due to market dysfunction—by about 70 basis points over its first six months.26 In that same time period, the spread of agency MBS repurchase agreements (repos) to Treasury repos fell from more than 200 basis points to near zero. In the framework noted above, this LSAP worked primarily through the market functioning channel. However, research also suggests that borrowing costs were lowered more broadly 27 6 / 10  BIS central bankers' speeches  through a portfolio balance effect.27 Overall, the Desk’s purchases, aided by the lowering of fed funds to the ZLB in December 2008, resulted in lower mortgages rates, which in turn reduced the cost of home purchases and allowed existing borrowers to refinance at more attractive terms.

Their approach to adding policy accommodation with a near-zero overnight policy rate has been to use outright purchases of assets, term lending schemes, and forward guidance on these policy tools.4 The policy of outright purchases of assets is often called quantitative easing (QE) because of the Bank of Japan’s earlier policy focused solely on increasing the size of the central bank’s liabilities.5 While QE is a useful catch-all term for this set of policies, it masks the fact that central banks make different choices in the assets they buy to expand their balance sheets.6 Central bank laws specifying which assets can be purchased and held outright vary, although nearly all central banks can buy and hold the debt issued by their sovereign.7 Indeed, most of the empirical work on the effectiveness of LSAPs is based on the analysis of sovereign debt purchases. More recently, a number of central banks have extended their purchases into the corporate debt and asset-backed securities markets. The Federal Reserve Act does not permit the purchase of privately issued debt such as corporate debt or privately issued ABS.
The third and final focus area – building financial capability and elevating financial literacy is a shared responsibility Government agencies, schools, families, workplaces and the financial service industry – all play an important role in building financial capability and elevating financial literacy of our population. This is a long-haul journey and requires significant resources and perseverance by various parties. Hence, inter-agency collaboration -providing various touch points at different platforms – is needed to increase the impact of financial education initiatives for the Malaysian public. This motivates the establishment of the inter-agency Financial Education Network – which was set up in November 2016. Apart from Bank Negara Malaysia, AKPK and KWSP, the Financial Education Network – also comprises representatives from the Securities Commission, Ministry of Education, Ministry of Higher Education, Perbadanan Insurans Deposit Malaysia and Permodalan Nasional Berhad. I believe all members of the FE Network are here today to lend support to this important initiative, and potentially to further boost its impact for the benefit of Malaysians. The FE Network has the objective of co-ordinating and driving the National Strategy for financial education in Malaysia. The National Strategy – will identify key target groups; define priorities; set measureable and realistic goals; and conduct regular assessment on financial education initiatives. Long-term financial and retirement planning would be one of the key priorities under the proposed National Strategy. The collaboration between AKPK and KWSP – to establish the retirement planning module is indeed timely and in line with the FE Network’s objective.

Emilija Nacevska: Strengthening the capacities of the system for fight against counterfeiting of the euro Speech by Ms Emilija Nacevska, Vice Governor of the National Bank of the Republic of Macedonia, at the opening conference of the Twinning Light Project "Strengthening the capacities of the system for fight against counterfeiting of the euro", Skopje, 15 January 2019. * * * Dear Minister Oliver Spasovski, Your Excellencies Samuel Zbogar and Thomas Gerberich, dear Project Leaders Biljana Celeska Anevska and Peter Spicka, dear Mr Damir Bichanic, distinguished representatives of the Delegation of the European Union in the country and representatives of the Ministry of Interior, distinguished colleagues, dear guests, It is my honor and pleasure to greet you on the behalf of the National Bank and to welcome you to today’s event held in our institution, marking together the beginning of this very important Twinning Light Project aimed at strengthening the capacities of the institutions involved in the system for fight against counterfeiting of euro. At the very beginning of my speech, I would like to express the gratitude of the National Bank to the European Union, because it has recognized the determination of our key institutions responsible for fighting money counterfeit to put their maximum in establishing a strong and efficient system for protection of the national, as well as the financial interests of the Union.
It had responsibility for the CHAPS system, providing high-value, same-day settlement with a minimum value of £ (equivalent to around £ in today’s prices).5 Today there is no minimum value, but CHAPS settles around £ billion every working day, representing 93% of non-cash payments in the UK. Around 40% of CHAPS payments originate from organisations based overseas, reflecting the UK’s strong links to the global economy. Bringing CHAPS into the Bank When RTGS was established in 1996, it became the settlement infrastructure for CHAPS, increasing financial stability by ensuring the highest value payments were settled real time in central bank money. The CHAPS Co Clearing Company Ltd (CHAPS Co) continued to operate the CHAPS scheme from a member perspective until last year. Bringing CHAPS in-house marked an important milestone in our ongoing work to make CHAPS and RTGS safer, more secure, more accessible, and in line with international best practice. Until last year, the UK was unusual in that a private sector company (CHAPS Co) was responsible for the governance and rulebook6 of the high-value payment system, while the Bank provided the underlying settlement infrastructure. In 2017 the Bank’s analysis concluded that there were structural constraints in this model. Given the status of RTGS as critical national infrastructure, CHAPS Co could not be given the full range of information on RTGS that it would need to identify and manage risks across the whole payment system.

We engaged with them to discuss these risks and how “de-tiering” could alleviate them. Each of these banks now accesses CHAPS directly. Over the last year, they accounted for 17% of total CHAPS values, demonstrating a clear and measurable reduction in risk, which in turn, benefits the wider payments ecosystem and all of its participants and end users. In April 2012, after consultation with all CHAPS participants, formal tiering criteria were introduced to CHAPS based on a presumption that Indirect Participants that breach the criteria should transition to direct access. The Bank will continue to analyse the financial stability risks presented by indirect access and further refine if we consider there is an unacceptable level of risk. Expanding eligibility to non-banks. Where it can be done safely without compromising our mission to maintain monetary and financial stability, we also seek to promote efficiency, innovation and competition through our operation of RTGS and CHAPS. We have therefore recently widened the access criteria for RTGS and CHAPS to enable non-bank PSPs to join. Key to this was working closely with the FCA, HM Treasury and the PSR to develop a supervisory regime that would allow non-bank PSPs to access settlement in RTGS and participation in the CHAPS payment system without increased risks. In April 2018 Transferwise was the first non-bank PSP to join RTGS and was followed by iPagoo who in August 2018 was 8 i.e.