samchain/econo-pairs-v1 huggingface dataset:
This is why the ESAs and national supervisors together with the central banks are members of the ESRB and why the ESRB and the ESAs form the European System of Financial Supervisors. The ESRB’s main tasks are threefold: to identify and prioritise systemic risks; to issue early warnings when significant systemic risks emerge; and to issue policy recommendations for remedial action in response to the risks it identifies. The ESRB will not focus on individual institutions, individual countries or individual macroeconomic issues – it will take a strong horizontal focus, across countries, across sectors and across the boundaries between the financial sphere and the real economy. Interlinkages and spillovers should be key terms in its analysis. To achieve these tasks, the ESRB is drawing on information from many sources, including strong analytical input from its members; intelligence gathered from financial system participants; and the data necessary to understand the nature of interlinkages that define the financial system. ESRB analysis must be broad-based covering potentially any aspect of the EU’s financial system – markets, institutions and infrastructure. The ESRB is being established at a time when the concerns of markets and policy-makers about short-term vulnerabilities seem to prevail over perceptions of medium- and longer-term risks. This confronts the ESRB, as well as other macroprudential bodies around the world, with specific challenges. The ESRB needs to consider what activities to initiate, well before a fully-fledged macroprudential policy framework is developed in the medium term.

Policy changes are assumed to be for a period of 3 years and the effect on GDP is the average fall over that period. Without reciprocity, the CCyB does not increase resilience for 11% of domestic credit assumed to be provided by foreign banks. In addition, one-third of any policy-induced fall in domestic credit is offset by higher credit growth from foreign banks. Charts 4 and 5: International marketable debt flows have increased more quickly than cross-border bank flows Advanced Economies  Emerging Economies  Notes: Pink lines show cross-border loans and deposits from all BIS-reporting banking systems to residents in advanced or emerging economies. The blue lines show amounts outstanding of international debt securities. For advanced economies, the blue line counts issuance outside the market where the borrower resides, and in the case of emerging economies the blue line counts issuance outside the market where the parent company resides. Sources: Hoggarth et al (forthcoming), IMF World Economic Outlook, BIS International Banking and Debt Securities and Bank of England calculations. Chart 6: Portfolios flows to emerging markets have been as volatile as bank flows  Note: The charts show the cross-country median of the standard deviation of gross capital inflows (as a % of GDP) divided by the average size of capital flows. Sources: Hoggarth et al (forthcoming), IMF International Financial Statistics and IMF World Economic Outlook (for GDP data).
Libor: Entering the Endgame  Speech given by Andrew Bailey Governor of the Bank of England  Bloomberg Webinar, London and New York 13 July 2020  I am grateful to Alastair Hughes for his assistance in drafting these remarks and Paul Brione, Andrew Hauser, Thomas Horn, Will Parry and Edwin Schooling Latter for their input. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches  Introduction “‘The passing of summer,’ I thought. ‘There can be no summer in this land without cricket.’” So wrote the journalist and author Neville Cardus.1 Covid has deprived us of many aspects of our communal lives this year. It has meant no cricket for us until last week, and in the US still no baseball. And to prove that we share an obsession with summer pastimes, a former colleague from many years ago when I was seconded to the New York Fed gave me a book to read called ‘How Life Imitates the World Series’. Sadly, my speech cannot match that for importance. But a more recent summer tradition has been speaking on Libor, a now annual event for the past few years – but one I do not expect to be a permanent fixture. The time is fast approaching to draw stumps on the Libor benchmark, or for those to whom cricket is a mystery – after all not everyone appreciates a sport that can last five days and still end in a draw – we will soon be at the bottom of the ninth for Libor.

There is no one size fits all approach, and while there is a common view across jurisdictions that liquidity should move to overnight near risk-free rates where appropriate, this is not to exclude the use of other robust benchmarks. There is a workstream under the US working group – the ARRC6 – that is currently looking at the potential to develop alternative dollar reference rates that include a credit-sensitive spread element, perhaps as an alternative or add-on to the new near risk-free rate across a subset of products. But market demand for credit-sensitive rates that seek to reflect changes in bank funding costs and directly pass these on to borrowers cannot come at the expense of ensuring those rates are sufficiently robust. Introducing new approaches that simply replicate the inherent weaknesses of Libor would be a failure. Would-be producers of such rates face the challenge of doing so in markets where liquidity may be thin or variable. Those choosing to use such rates would need to understand the exposure they were taking on to the liquidity conditions in those markets, and the volatility in the benchmark rate this could cause. We will continue to work domestically and internationally to prevent financial markets being materially exposed to risks from fragile benchmarks in terms of both the integrity of those rates and ensuring continuity of provision. 6  The Alternative Reference Rate Committee is a group of private market participants convened by the Federal Reserve Board and New York fed to help ensure transition from U.S. dollar Libor.
The value of confidence and credibility has been the subject of extensive analysis in many fields, including jurisprudence and the social sciences. One conclusion is clear – progress can be achieved if promises are kept. If keeping promises is clearly beneficial, why is it then so difficult? The expressions empty promises and empty threats reflect the temptation to renege. The social scientist and philosopher Jon Elster writes in his book “Ulysses and the Sirens” 2 about weakness of will, shifting preferences over time, and the complexities of human nature. This is familiar ground. As early as 1960, the economist Thomas Schelling 3 discussed similar issues in analyses for which he was awarded the Nobel Prize in economics. According to Schelling, a credible threat can be difficult to establish when realising the threat involves costs for all the parties involved. A promise or a threat will be more credible if the person who has made the promise ties himself to the mast. Two other economists carried out groundbreaking work when they applied Schelling's analysis to economic issues. In 1977, Finn Kydland from Norway and Edward Prescott 4 from the US wrote an article showing that authorities who attempt to follow an optimal economic policy plan may have strong incentives to depart from the same plan at a later time. This applies even if no news has emerged to indicate that the plan should be changed. 5 Later, Kydland and Prescott were awarded the Nobel Prize in economics for their work.

EMBARGO: not for release before 19:30 on Wednesday 4 October 2017 Geofinance Speech given by Sam Woods, Deputy Governor, Prudential Regulation and Chief Executive Officer, Prudential Regulation Authority  Mansion House City Banquet, London 4 October 2017  I am grateful to Alex Holmes for his assistance in preparing this speech and to other colleagues for comments and contributions. 1  All speeches are available online at www.bankofengland.co.uk/speeches  EMBARGO: not for release before 19:30 on Wednesday 4 October 2017  Lord Mayor, Ladies and Gentlemen  The Prudential Regulation Authority had a bracing return from the summer break. There was no time for supervisors to compare sun-tans, which was just as well given the deathly pallor I acquired from a summer spent in London and Ireland. The only person with an even worse sun-tan than mine was a colleague who, in what I’m assured was not a political statement, took his summer holiday in Brussels. In fact, I was so desperate to boost my Vitamin D levels in September that (like a few others in this room) I headed south to Frankfurt, where I regret to inform you all that it was very sunny indeed. Yes, even the weather – a traditional safe harbour topic for financial regulators – seems to have acquired a Brexit-y tinge this autumn. It was therefore a relief to get stuck into some domestic topics when we returned from the summer.
For example, the NCS programme only covers holiday periods and participants pay a small fee to participate. By contrast, the AmeriCorps programme lasts for up to a year and participants are offered financial support towards educational costs. This has meant AmeriCorps has not only encouraged volunteering; it has also provided incentives for generations of Americans, especially from poorer backgrounds, to stay on in higher education. This small financial nudge has thus potentially delivered lifelong returns. More generally, the UK already encourages giving money by allowing charities to reclaim tax on donations through “Gift Aid”. Is there a case for providing tax-based incentives for people who instead volunteer time? The idea is not without precedent. In 2008, the Canadian Parliament debated a bill that proposed taxpayers who volunteer at least 250 hours be issued a tax credit up to $ 39 It was rejected. But since 2011, Canadian firefighters, most of whom are volunteers, have received a tax credit of $ if they complete over 200 hours of volunteering a year. Such a policy may sound ambitious, certainly administratively, as it would require auditable records of volunteer hours worked. But it is not impossible to conceive of a system of Individual Volunteering Accounts (IVAs) for people engaged in formal volunteering. Relative to the value created, the administrative costs would probably be modest. Once in place, those IVAs could serve a number of useful purposes.

There is some evidence of cyclicality in volunteering, with it falling at the start of the recession and rising during the recovery. A recent report suggested that volunteering numbers had reached a ten-year high. 10 It is possible this upward trend will continue. An ageing population will boost older cohorts where volunteer participation rates are high. And among younger cohorts there is evidence of a behaviour shift, with participation rates having doubled in the past decade. Taken together, these patterns suggest that volunteering is tightly-woven into the UK’s social fabric – a fabric which is large, diverse, international and potentially growing. Measuring the value of volunteering So far we have established that labour inputs into volunteering are considerable. But this does not tell us what value these volunteers create for the economy, much less for society. This is important when gauging the contribution volunteering makes to societal welfare. It is possible to build up an incremental, if somewhat piecemeal, picture of this contribution from its various sources. These are shown schematically in Figure 9 as layers of a “volunteering onion”. At the centre of the onion are the volunteer army, all 15 million of them. The outer three layers then measure respectively: •  The economic value of goods and services created by volunteers – if you like, the GDP-equivalent value of volunteering services;  7  Salamon et al (2011). 8  See for example http://enews.fergananews.com/news.php?id=2697, describing a recent subbotnik in Uzbekistan in August 2013. 9  Volunteering England (2009).
Our motivation towards adopting inflation targeting as the monetary policy framework was signaled a number of years ago, as we recognised it as the most appropriate way to escape from the high inflation-low growth trap. The weakened relationship between money and inflation and deepening financial markets were among the major factors that encouraged this move. Under the proposed FIT framework, the Central Bank will aim to preserve price stability of the economy by targeting an inflation range of 4-6 per cent. We believe that this target range is desirable for a country like ours in view of the vulnerability of the economy to supply or external shocks. We will employ market-based instruments, particularly the policy interest rates and open market operations (OMO) of the Central Bank, to influence market conditions and to navigate inflation in the targeted mid-single digit range. Variables such as overall monetary expansion and credit disbursements to the private sector by commercial banks will remain as key indicative variables to guide monetary policy conduct. We have now progressed into a time-bound plan to make this leap towards FIT a reality. The period starting from 2018 will be vital in laying out required reforms to facilitate a smooth transition to a FIT framework. In this context, we have identified three important pillars as the building blocks for adopting a FIT framework; 1. Strong Central Bank mandate and credibility 2. Effective monetary policy conduct 3. Strong fiscal policy support and commitment Now let me discuss some key elements and building blocks of FIT.

This is largely aimed at institutional features, organisational features, operational features, monetary policy implementation, exchange rate policy and foreign exchange operations as well as capacity building, while aligning both fiscal and monetary policy towards achieving economic targets set in a coherent manner. When setting our monetary policy actions and directions, we cannot disregard the external environment. In the global economy, for the first time since the Global Financial Crisis, there is currently a divergence of monetary policy among the major economies. This is likely to result in greater volatility in capital and currency markets. This requires us to be vigilant. We are aware that interest rate hikes in advance economies such as the US and the UK as well as in emerging economies could have some spillover impact on the Sri Lankan economy through capital reallocation. Meanwhile, economic and political developments in major export destinations, as well as trends in key commodity prices, will also have a significant impact on the domestic economy. 16  3. Financial Sector Policies for 2018 and Beyond Being guided by its mandate, the Central Bank promotes a dynamic and resilient financial sector, which supports sustainable growth, primarily through regulation and supervision of financial institutions, ensuring sound and safe payment and settlement systems, establishing risk management systems and instilling good corporate governance standards and practices in the financial sector.
Mr Bäckström discusses the Swedish economy in the 21st century  Speech given by Mr Urban Bäckström, Governor of the Sveriges Riksbank and Chairman of the Board of Directors and President of the Bank for International Settlements, at the Swedish Shareholders Association, held in Gothenburg on 22 November 1999. *  *  *  First a word of thanks for the invitation to Gothenburg to discuss the Swedish economy in the 21st century. A week or so ago the Riksbank raised the repo rate from 2.90% to 3.25%. The decision was based on the assessment of inflation prospects we had presented in the October Inflation Report and our analysis of economic statistics that had subsequently become available. By raising the instrumental rate now, we aim to contribute to the continuation of a favourable economic trend, with stable prices and sustainable growth. We made the increase somewhat larger than was expected so as to be in a position to leave the repo rate unchanged for the rest of this year, given that the Swedish economy follows the path predicted by the Riksbank. Under these circumstances there is no point in dwelling on current monetary policy and its conditions. Instead I shall be considering a couple of matters to do with growth conditions for the Swedish economy in the longer run. This has a topical flavour on the threshold of a new millennium, perhaps particularly so at a time when so much discussion refers to the so-called new economy.

Are there differences between Europe and the United States that may have a bearing on the pace with which new technology is introduced? And what part does EMU play in this context? One important factor in the process of industrialisation in the late nineteenth century, when Sweden was transformed from poor country into a wealthy nation with almost the world’s highest growth rate, was the contemporary development of the financial system. Banks were established and financial know-how grew when interest controls had been abolished. As a result, inventions could be exploited and investment in the nascent industries could be financed. A mounting body of research findings published in the 1990s indicates that economic growth in various countries is appreciably affected by how the financial system works: the more highly-developed the financial system, the greater the stimulus to economic growth. An accessible banking system and efficient financial markets contribute to the development of investment and thereby to the economy’s growth trend. One conceivable reason why the US economy is being transformed more rapidly than is the case with Sweden and, even more so, the European Community, is the efficiency with which the US financial system works. Corporate financing may well be facilitated by the breadth and liquidity of diverse financial markets. 3  BIS Review 129/1999  With the rapid development of information technology, moreover, a new type of company has emerged. It differs from the traditional pattern in that its operations involve highly mobile human capital.
During recent episodes of market volatility which saw substantial capital outflows by foreign portfolio investors, insurance companies were among the large domestic institutional investors that provided stability to the market. Indeed, the insurance has become an important component in the Malaysian market in contributing towards the growth of bond and sukuk markets. Low penetration signals opportunities for insurers There is no doubt that the industry has come a long way. This journey has been made possible with the commitment of many in this room today who have led their various institutions to greater heights, and who understood and supported the reforms introduced in the industry over the last two and half decades were critical to take the industry to a new  BIS central bankers’ speeches  1  level of maturity. It was painful but necessary. The fruits of the various reforms we made are for all to see. The industry is now more resilient and robust. Over the last 4 decades together, we had laid a strong foundation for the insurance industry to grow even larger. Therefore, our aspirations for the industry ought to be more ambitious. Under the Government’s Economic Transformation Programme (ETP), a penetration level of 75% by 2020 has been set as a goal for the industry. After two decades of steady growth, the current level of insurance and takaful penetration, at 54%, still remains below targeted level. While this ratio is in no way flattering, it also reflects the enormous untapped potential in the Malaysian insurance sector.

6  BIS central bankers’ speeches  Changes in market prices can, of course, affect the value of the collateral the Bank has taken in its operations. As a result, the Bank calls margin on any shortfall.8 In its sterling operations, the Bank calls margin daily and is moving to that standard for all other transactions. Limits The Bank also manages the risk on its balance sheet using concentration limits. Those serve two purposes. First, they help the Bank diversify across institutions – for example, counterparties can only bid for a maximum of 30% of the funds on offer in the Bank’s ILTRs. That helps ensure that any single counterparty doesn’t corner the market for reserves (intentionally or by accident). Second, they help diversify across instruments in the wider collateral pool – for example, the Bank requires that the adjusted market value (AMV) of securities that any single issuer delivers to the Bank as wider collateral in OMOs is less than the greater of £ million or 25% of its total OMO collateral delivered. Other recent policy initiatives The Bank has, for a number of years, been refining and improving its collateral policy. In November 2010, the Bank announced that it would allow counterparties to use “raw” (i.e. unsecuritised) loans as collateral in the DWF. By removing the need to securitise assets, that initiative expands the range of collateral that banks would be able to use in times of stress.
Period averages conceal large, long-lasting swings in growth over time (Chart 4). Their revised measures suggest growth did not flat-line prior to 1750, even though it averaged zero. Rather, growth oscillated wildly. Second, given the scale and duration of these oscillations, they decompose their growth data into “expanding” and “contracting” periods. Chart 5 plots these for the UK over the past 700 years. A broadly similar pattern of expanding and contracting periods can be found in Spain, France, Italy, Portugal, and the Netherlands over roughly the same period. This decomposition changes the growth story radically. Even prior to the Industrial Revolution, economies experienced notable periods of strongly positive growth. Between 1300 and 1700, GDP expanded slightly more than half the time. Over these expanding periods, growth averaged 5.3% per year. The reason average growth was far-lower over this earlier period – indeed,  18 19 20  Solow (1956), Mincer (1984), Romer (1990), Iyer, Kitson and Toh (2005), North (1990). Haldane (2015a). Broadberry and Wallis (2017). 6  All speeches are available online at www.bankofengland.co.uk/speeches  6  little more than zero – was because expanding periods were almost exactly offset by contracting periods. They accounted for slightly less than half the period, during which growth averaged minus 5.4% per year. So what has changed in the period since the Industrial Revolution? Growth during expansion periods is relatively little changed. Since 1750, it has averaged 3.2% per year. That is in fact a bit less than growth during expansion periods prior to the Industrial Revolution.

52 For example, Dauth, Findeisen, Südekum and Woßner (2017). 53 IMF (2017). 49  13  All speeches are available online at www.bankofengland.co.uk/speeches  13  technology than their positive longer-term effects on pay, productivity and the demand for new goods and jobs. It is the balance of these two effects, each large in gross terms, which will ultimately determine where unemployment will settle. 54  No one could say with confidence today the long-run net effect will be. What can be said with confidence is that the scale of gross displacement may be larger than ever-previously. This means that, if technological unemployment is to be avoided, positive effects on productivity, goods and jobs will also have to be commensurately larger. That has led some to argue that technological unemployment is more likely this time around. 55  Even if it is avoided, the societal costs of transition could well be larger, in terms of rising wage inequality, a falling labour share and damage to social cohesion. And if that recessionary impact of technological change on individuals and societies is sufficiently large, it could well call into question the merits of having pursued the creative course in the first place. Or that, at least, is the lesson of history. What experience since the Industrial Revolution has taught us is that this risk can be mitigated by an appropriate institutional response.