samchain/econo-pairs-v1 huggingface dataset:
Prompt and transparent margining and, where possible, central counterparty (CCP) clearing helps avoid the situation in which the perceived stress on one major participant can cause a panic which amplifies stress across the market due to uncertainty about who else, is exposed – and whether those exposures are adequately protected by sufficient margin.1 As a result of those reforms, the financial system entered the Covid crisis in a much stronger position with regard to collateral and counterparty credit risk, with, for example, at least $ in additional collateral against over the counter (OTC) derivative exposures.2 Very significant and sudden changes in asset prices did not lead to counterparty credit risk – actual or anticipated. Margin call is of course pro-cyclical, insofar as it reflects movements in markets. This is not a bug in the system, it is a feature. As markets move, losers have to pay variation margin to winners. And as risks grow, initial margin rises to protect the members of a clearing house from the consequences of a future default by other members. This characteristic of margin is unavoidable if we are to ensure that collateralisation keeps pace with risks and counterparty credit risk is minimised. But it is right to try to dampen this dynamic to the extent practicable and to avoid unwarranted procyclicality. Against that background, let me set out the findings of the FSB group on margin and the proposed next steps.

Unlike 2008, the solvency and liquidity of the banking system was not at the very forefront of market and regulator concerns. And, of course, the shock itself did not originate in the financial system but rather in a once-in100 year pandemic that has left us with many other, more powerful, and disturbing memories. But it is worth refreshing our memories about just how extraordinary were the events of late February and March 2020. The realisation that we were facing a global pandemic – and that, in order to contain it, large parts of the global economy would need to be shut down – sparked a reassessment of financial asset values and, as one would expect, a ‘flight to safety’ by investors. In February 2020, as you would expect, risky asset prices fell sharply. At the same time, the price of traditionally safe assets rose sharply and yields fell – the yield on US treasuries for example fell by around 100 bps. This flight to safety was also reflected in the gold price, which rose by around 4% over this initial period. In the early weeks of March however – from the 9th to the 18th – a different dynamic took hold; an accelerating ‘dash for cash’ in which, given the illiquidity of other markets, investors sold their most liquid assets, driving safe asset prices down. A dash for cash which turned into a stampede. The numbers are impressive.
Central banks and financial supervisory authorities can, within their mandates, promote financial stability by ensuring that financial institutions include climate risks in their risk assessments. Climate risks must be addressed in the same manner as other risks facing the financial sector. To the extent climate risks lead to higher credit risk, funding risk and systemic risk, climate risks should be included in the assessment of whether banks are sufficiently capitalised and have adequate long-term funding. Climate risks and the Government Pension Fund Global Norges Bank manages the GPFG under a mandate from the Ministry of Finance. The capital is invested with the objective of achieving the highest possible return within the limits of acceptable risk. The GPFG’s mandate requires responsible investment activities to be integrated into investment management. The aim of being a responsible investor is in part to support the long-term financial performance of the GPFG's investments. In addition, we seek to mitigate the financial risks associated with environment-related and social conditions in investee companies. Chart: Invested in more than 9 000 companies in 73 countries Seventy percent of the GPFG is invested in equities. With ownership shares in more than 9 000 companies in 73 countries, we take part in global growth and value creation. Many of the companies in the GPFG’s portfolio could be impacted by physical climate change and the consequences of regulatory and technological countermeasures. Climate change could thus influence the GPFG's long-term return.

Gent Sejko: Oversight, analysis and vision of public governance in Albania Speech by Mr Gent Sejko, Governor of the Bank of Albania, at the presentation of the Supreme State Audit Annual Review 2015, Tirana, 1 February 2016. *  *  *  Your Excellency President of the Republic of Albania, Dear Chairman of the Supreme State Audit institution, Honourable Chairman of the Parliamentary Committee on Economy and Finance, Your excellency Ambassador Lu, Your excellency Minister, Dear representatives of public institutions, Honourable MPs, dear professors, dear participants, It is a special pleasure for me to be here today on the occasion of the annual review of the activity of the Supreme State Audit (ALSAI) for 2015. ALSAI is among the most important constitutional institutions in Albania, whose objective – ensuring good management of public finances – is highly significant. The effective use and certification of public funds in conformity with the laws regulating the economic and financial activity of the public sector, on-going public communication, in relation to irregularities and relevant responsibilities have been at the focus of ALSAI’s work in recent years. In this perspective, the role and mission of the ALSAI are highly important; therefore, the issues raised in ALSAI’s reports should be thoroughly analysed. They are both necessary and preventive instruments for the institutions subjected to ALSAI’s audit. Notably, the Bank of Albania and ALSAI have had a fruitful cooperation, in line with both current and prospective dynamics and developments.
These and many more questions need to be addressed in the months to come. Let me only mention the most obvious: •  A European banking supervisor only for the euro area or for the EU 27? A well-functioning financial market union is primarily in the interest of the monetary union. Nevertheless, non-euro area member states should be welcomed to put their institutions under the control of the European banking supervisor. •  A European banking supervisor for all banks or for the systemically important banks only? From my personal perspective, the European banking supervisor should only be entrusted with the supervision of the systemically important institutions on European or domestic level, at least at the beginning. Anything more is neither feasible nor desirable at the beginning of 2013. •  What shall be the division of labour between the ECB and the European Banking Authority (EBA)? From my perspective, EBA could be tasked with any future work on the Single Rulebook in the single market, ie for the EU 27. •  And finally, what shall be the division of labour between the ECB and the national supervisory authorities? It will be key to strike the right balance between relying on local know-how and expertise while safeguarding a single standard of supervision and a level playing field. The implementation of a European banking supervision is closely linked to the possibility of direct banking recapitalisation via the ESM in the future and should not least therefore be advanced without undue delay.

However, the task is complex and banking supervision in itself is too important to present solutions under time pressure that will not work in practice. We should therefore take the time it takes to get it right. Financial stability and monetary policy Having reviewed the additional tasks that central banks are asked to take over, a question regards the implications for the practice of monetary policy. I will hence explain in the following how the two responsibilities will complement each other. The crisis has clearly demonstrated how essential financial stability is for the effective conduct of monetary policy. Financial market developments have always been an integral part of our monetary policy considerations and have influenced the design of our non-standard measures. Nonetheless, in my view and looking forward, monetary analysis and financial market analysis should play an even greater role for the conduct of monetary policy – particularly with regard to financial imbalances and financial fragilities. Here I would see three main areas in which further work is needed to incorporate the lessons from the crisis. First, we are faced with the fact that the smooth functioning of the financial sector is key for macroeconomic outcomes and monetary policy transmission. We saw that adverse financial conditions can have strong and impairing effects on the effectiveness of monetary policy. Academia and central banks have already taken up this research agenda and  BIS central bankers’ speeches  7  macroeconomic models and monetary policy assessments are refined in that regard.
As such, a key lesson from the financial crisis is the need to expand the range of instruments available to policymakers, so they are better equipped to ensure the resilience of the financial system. This missing instrument problem provides the backdrop to the Government’s announcement earlier this year that it intends to create a new policy committee in the Bank – the Financial Policy Committee – which will have responsibility for conducting macroprudential policy. In 2010, quantitative easing was entered into the Oxford Dictionary of English, along with chillax and defriend (don’t ask!). I predict that 2011 may be the year of macroprudential policy. The legislation determining the precise tools and objectives of macroprudential policy is still to be enacted. But as the Governor recently emphasised, the over-riding objective is to ensure the resilience and stability of the banking system. 4 If successful, macroprudential policy will represent a significant advance. As we have seen repeatedly through history and across countries, banking crises come hand-in-hand with deep and costly recessions. Promoting the resilience and smooth functioning of the financial and banking system in bad times as well as good would contribute greatly to our future economic stability. But it would be wrong to conclude from this that macroprudential policy is likely to solve the missing instrument problem entirely. That is for at least three reasons. First, macroprudential policy is not the instrument that will solve the problem of global imbalances.

According to SWIFT data, almost 40% of transactions are denominated in euro. It truly is the second most important currency in the world after the dollar. The European Commission has recently taken steps to further strengthen the role of the euro, which are most welcome. iv Among other things, the Commission has launched the Capital Markets Recovery Package that introduced targeted amendments needed to develop euro-denominated derivatives for energy and raw materials. 1. Supplying euro denominated safe assets and enhancing Capital Markets Union An international currency is only as strong as the safe assets it can offer. The euro sovereign debt market is still fragmented and only a few Member States are issuing global assets in a sufficient quantity. In this regard, there have been interesting recent developments in Europe. In June 2021, Europe launched Next Generation EU (NGEU) which will raise over 800 billion euros through a joint issue of European bonds. More broadly, the deepening of European Capital Markets Union should, at end, be instrumental. v It would help both for the allocation of capital within the euro area and for the stability and balance of the International Financial System. Such an initiative is important as we face new policy challenges. The transition to a greener economy will require immense financing, and the digital transformation will also require both public and private investments. This all calls for investments in global public goods to be increasingly managed at the EU level. Two open questions remain.
The restrictions on mobility have affected small businesses more than large firms – which typically have recourse to digital platforms and are able to implement remote working. The pandemic has also sensitised us to how vulnerable we all are to the forces of Nature. If we do not act decisively to limit the increase in global temperatures, we are putting at risk the future of our children and grandchildren. It is perhaps this realisation that has helped to make 2020 a record year for climate pledges – despite being in the midst of the Covid-19 pandemic and economic crisis. The number of commitments by governments and businesses to reach net zero emissions has almost doubled in less than a year. The crisis has also demonstrated the power of technology to help find solutions to difficult problems. From making vaccines to contact tracing, from online learning to telemedicine, technology has been at the forefront in the fight against Covid-19 and its effects. Likewise, technology can play a potent role in shaping the post-Covid world. FinTech in particular has great potential to be a force for good. 1 / 10  BIS central bankers' speeches  We can bring together the power of finance and technology, to help create a more inclusive society and a more sustainable planet. FINTECH FOR AN INCLUSIVE SOCIETY – INDIVIDUALS Let me begin with what FinTech can do for an inclusive society, using Singapore as an example. This is the vision: every citizen and every enterprise digitally enabled and financially included.

Singapore is home to many foreign nationals and migrant workers who send money back to their home countries frequently. If we can make cross-border remittances cheaper and faster, our migrant workers can provide better and more timely support for their families. 2 / 10  BIS central bankers' speeches  Three years ago, the Monetary Authority of Singapore (MAS) embarked on a pioneering journey with the Bank of Thailand: to link our respective national faster payment systems – PayNow in Singapore, and PromptPay in Thailand. I am happy to say that the PayNow-PromptPay linkage will go live by mid-2021. Anyone who registers for PayNow or PromptPay will be able to send money directly from Singapore to Thailand, or vice versa, using just their mobile phone numbers – instantly, securely, at competitive rates, and at any time of the day. This linkage between two countries’ national faster payment systems will be the first-of-itskind in the world. We will start off with a small group of banks on both sides, and scale up participation to include more banks and non-bank providers over time. MAS is keen to partner other central banks in the region to expand the linkage, so that more people across Southeast Asia can benefit. Timely Health Insurance Claims Next, pain points relating to making an insurance claim for hospitalisation. Today, an individual being hospitalised may face uncertainty over his claimable insurance amount. Hospitals have to access multiple systems to request for or provide information to different insurers; and some of these processes are still paper-based.
Moreover, it struck me that such a stance risked creating a perception that the FOMC might be a little bit trigger-happy in reacting to short-term developments in the securities markets; that we were collectively signaling there was a readily available “Bernanke Put.” The press and the Street are currently brimming over with assumptions about new fixes. Market operators are, to varying degrees, pricing in probabilities of one or more of the following: further expansion of our balance sheet; an “Operation Twist,” wherein we lengthen the duration of our portfolio so as to drive down already historically low nominal intermediate and longer-term rates (rates that are below 2 percent all the way through the 10-year range and have negative yields in real terms); reducing from 25 basis points to zero what we pay on excess reserves (though the banks that deposit these reserves with us reportedly aren’t able to identify a sufficient number of willing borrowers or believe they need a cushion to deal with regulatory concerns). The Federal Reserve has done a great deal to reverse the situation that we confronted in 2008 and 2009. As I have said repeatedly, we have filled the gas tanks of the economy with affordable liquidity. What is needed now is for employers to confidently step on the pedal and engage the transmission that will use that gas to move the great job-creating machine of America forward. Sources of uncertainty That confidence is not lacking because of U.S. monetary policy.

I am pleased that Dick Berner, a former NABE president now at Treasury, running the Office of Financial Research, is here. I believe it was Dick who, during a round of golf at Jackson Hole [Wyo.] long ago, told me the bad joke about the fellow who suggested that a moose crossing sign be moved because “there is too much auto traffic where the sign is currently located.” I also see Bill Dunkelberg, another former NABE president, who has been most generous in sharing with me and my staff his understanding of the whys and wherefores of small business, an important input into the way we look at things at the Dallas Fed. There are many others here today whom I would acknowledge if time permitted, but I ask their forbearance so that we can get down to business. As learned economists, you are fully aware of the nation’s predicament. Chairman [Ben] Bernanke reviewed it concisely in his speech at Jackson Hole and again, just last week, in Minneapolis. Knowing that most of you read those speeches, my guess is that you are looking to me for two things today. The first, given that you are in Dallas and the nation is in the throes of a presidential election season with two Texas contenders for their party’s nomination, would be the Dallas Fed’s perspective on the much-discussed Texas economy.
Given the relationship between money growth and inflation in the very long run, that means that the rate of inflation has no effect on the real equilibrium. In practice, high rates of inflation have proved highly variable, injecting uncertainty into the economy, which can have real effects. 13  Buiter, W. H., 2006, “How Robust is the New Conventional Wisdom in Monetary Policy? The surprising fragility of the theoretical foundations of inflation targeting and central bank independence”, paper presented at the 2006 Central Bank Governors’ Symposium “Challenges to Monetary Theory”, at the Bank of England. 14  For example, Lucas, R. E., 1987, “Models of Business Cycles, 1985 Yrjö Jahnsson Lectures, Basil Blackwell, Oxford. 15  For the genesis of this term in the literature, see Rogoff K., 1985, “The optimal degree of commitment to an intermediate monetary target”. Quarterly Journal of Economics, November, volume 100, number 4. 16  From the vantage point of being Private Secretary to Governor Leigh-Pemberton (1989-1992), and later as an official implementing policy and then heading the Bank’s Monetary Assessment and Strategy Division. BIS Review 66/2007  3  the Bank would not be able to account for its monetary stewardship on the Floor of the House of Commons. In a Parliamentary system of democracy, it is Ministers who are accountable. 17 Those circumstances are specific to the UK. Other conditions and histories act as constraints elsewhere.

Other things being equal, bank balance sheets – and so broad money – would expand, but it might be hard to judge the extent of any inflationary impulse coming through a “shock” to the supply of broad money over and above that stemming from a relaxation in credit constraints and higher asset prices. Also, although a “counterparts” approach to the monetary aggregates would incline one to think that shocks to the supply of credit would flow into broad money, changes in the “technology” of banking and financial intermediation might in some conditions make the connection tenuous. After all, the intermediation of credit occurs via capital markets and not just across bank balance sheets. That could matter, for example, if an increase in the supply of credit happened to occur at much the same time as an increase in incentives or the means for banks to securitise – ie sell – the loans they originate. In the limiting case, a big positive shock to the supply of credit could coincide with shrinking bank balance sheets and so negative broad money growth. That is, of course, not at all what we have 33 seen recently. But the thought experiment underlines two things. First, we need to attend carefully to the underlying drivers. As part of that effort, the Bank has recently launched a new Credit Conditions Survey, which should enrich our grasp of what is going on.
Such a view ran counter to that espoused by many central bankers, most notably Federal Reserve Chairman Alan Greenspan, who questioned the feasibility of addressing such financial imbalances with preemptive monetary policy; in his view, monetary policy should instead focus on minimising the fallout from any subsequent correction – the so-called “cleaning” approach. 4 While the logic of leaning against the wind is sound in principle, the key question is whether a monetary tightening of plausible magnitude is likely to be effective in attenuating an established credit boom. Even if policy rates may appear with hindsight to have been held too low for too long in the years preceding the crisis, particularly in the United States, the empirical evidence suggests that they would need to have been significantly higher to have had a meaningful impact on the rate of credit expansion. 5 It is a brave central banker who would deliberately induce a recession in order to head off the mere risk of a future financial correction. 3  For instance, William White (2006), “Is price stability enough?”, Bank for International Settlements Working Paper 205. 4  Alan Greenspan (2002), “Opening Remarks” in Rethinking Stabilization Policy, Federal Reserve Bank of Kansas. 5  Charles Bean, Matthias Paustian, Adrian Penalver and Tim Taylor (2010), “Monetary Policy after the Fall” in Macroeconomic Challenges: The Decade Ahead, Federal Reserve Bank of Kansas.

The respective slopes of these two schedules depend on the relative impact of the policy rate and the macroprudential tool on aggregate demand and on the quantity of credit. A well-chosen and well-designed macroprudential tool is one that has a relatively large effect on the quantity of credit but only a modest impact on aggregate demand. That would generate a relatively flat FS schedule. Moreover, since changes in policy rates also affect aggregate demand through routes other than the credit channel, such as the exchange rate, it seems reasonable to assume that the PS schedule is relatively steep. That is the configuration of relative slopes shown in the Chart. Provided the two schedules do not coincide, both price and financial stability objectives can be achieved simultaneously. With this configuration, it is natural to assign the monetary instrument to the pursuit of price stability and the macroprudential instrument to the pursuit of financial stability. Moreover, with these slopes and this assignment, no active co-ordination in the setting of the instruments is strictly necessary: a process whereby each instrument is set independently, taking the other as given would converge on the equilibrium, A. That said, appropriate co-ordination and information exchange is desirable to achieve it efficiently and is facilitated in the real world by housing the MPC and the FPC in the same institution, with overlapping memberships, and the scope to meet jointly when required. Some sorts of shocks will involve a tightening in both instruments.