samchain/econo-pairs-v1 huggingface dataset:
The important thing to recognise is that we now have tools other than interest rates that can be used to contain risks in the property and financial sectors. These so-called macroprudential tools were not available to us before the crisis and we are now fully prepared to deploy them if that were needed. The Bank of England is now in a position, for example, to supervise lending to specific sectors more intensively, to make recommendations to banks and building societies to restrict the terms on which new credit is provided, or even to raise capital requirements on mortgage or other types of lending. 6  In June 2013 the Financial Policy Committee concluded that there was scope for banks to reduce their holdings of liquid assets in the near term, and recommended a relaxation in liquidity requirements in order to strike the appropriate balance between achieving resilience and reducing possible impediments to the supply of credit to the economy. That relaxation was subject both to banks meeting the minimum capital threshold, and to additional firm-specific considerations. Today the Prudential Regulation Authority (PRA) has agreed with that recommendation, and is announcing how it will be implemented. The PRA will be making a more detailed statement today and writing to individual firms in due course. 6  BIS central bankers’ speeches  Having these in our toolkit – and if necessary using them – will help us to keep interest rates low to secure recovery without creating risks that make that recovery ultimately unsustainable.

The MPC’s guidance is fully consistent with price stability. I can also assure you of my personal commitment to price stability. I certainly have no hesitation in raising interest rates when required – when I was Governor of the Bank of Canada, we raised interest rates as the recovery there gathered pace. But that was the appropriate policy for Canada at that time. The challenges in the UK today are different, and policy must be tailored accordingly. The Bank of England’s remit recognises that, at times, it is appropriate to bring inflation back to target more slowly in order to avoid unnecessary volatility in output. With a depressed level of output and inflation above target due to temporary factors rather than demand  3  The trend is adjusted for the secular decline in North Sea oil and gas production. BIS central bankers’ speeches  3  pressures, this is such a time. The MPC is charting the right path back to its 2% inflation target. CPI inflation is currently being pushed up by rises in utility prices and tuition fees that do not reflect the underlying pressure of demand on supply, along with the effect of past increases in import prices. Underlying domestic inflationary pressure is subdued, with wages growing at only around 1% per year. Although there will be bumps in the road, inflation is set to fall back over the next two years. In these circumstances it would not make sense to choke off the recovery by raising interest rates prematurely.
3 15 0,4 2  3 2  9 8  * Market shares of Controlled banks multiplied by their capital share, end of 2002  BIS Review 53/2003  Romania  7 1 0,6 6  7,5 1,2 2,3 5,9 2,2 1,5 4,3 6 3,3 3,9  Bulgaria  15  Croatia  5 1 3 3 16 9  18 4 9  3  CEEC 5- Total  Slovakia  15 0,2  Slovenia  7 9 8 6 5 3 3 3  Poland  KBC Bank Bayerische Landesbank Intesa Bci HVB Group Raiffeisen GE Capital Citibank Erste Bank Societe Generale UniCredito  Czech republic  Hungary  Role of Foreign Banks  0,1 14 6 7  7 4  2 4 3  7 27  5 19  8 0,5  20  5  As said above, the economic transformation had a large negative impact on balance sheets. Banks tended to lend to previously existing companies undergoing privatization that were faced with a sudden loss of foreign demand (mainly from Soviet Union) and had to restructure themselves by laying off a big part of their workforce. This proved to be a recipe for financial disaster. Financing of newly established companies with no track record, with business plans based more often on good intentions than on thorough analysis was no better. In addition, the political elite, who saw bank financing as the quintessential source of economic growth, encouraged this lending boom. Existing risks were widely disregarded.

Lastly, the challenges of population ageing must be tackled by means of a broad economic policy strategy. It is vital here that the path of fiscal consolidation should be resumed and that the public debt should return to a downward trend, so as to better position public finances to address the issues arising from ageing. The sustainability problems of the pension system may indeed be alleviated if employment and productivity in the economy trend favourably. In this respect, there is much room for improvement in the goods and services markets, in education and employee training, and in the labour market too. 6/6
Lord Mayor, as we prepare to toast the Bankers and Merchants of the City of London, we remember that the City is more than banking and that banking is much more than the trading of complex securities. So all of us here tonight would like to pay tribute to your work since you became Lord Mayor, to support your efforts to promote financial literacy, and to thank both the Lady Mayoress and yourself for the splendid hospitality which you have extended to us all this evening. So I invite you all to rise and join me in the traditional toast of good health and prosperity to "The Lord Mayor and the Lady Mayoress", Ian and Lin Luder. 4  BIS Review 76/2009

The paper envisages that whole classes of intermediary, such as custodians and CCPs, could become redundant, replaced by smart contracts. There is no likelihood of such an extreme revolution occurring any time soon: much more work is needed across a whole range of issues, including: speed and scaleability; confidentiality protections; developing common protocols; integrating cash and securities movements; and establishing regulatory and legal norms. In many cases, reform to outmoded business processes will need to precede any application of the technology itself. But there is clearly scope for less ambitious but still potentially transformational applications in specific markets, not least those where current infrastructure is less well developed. A key challenge for incumbent firms is whether to take on competition with challenger firms headon, or partner with them to develop and implement the most promising forms of technology internally. But doing neither is a risky approach. The final driver for change is regulation, which since the financial crisis has greatly increased the focus on centralised post-trade infrastructure as a means of promoting transparency and reducing system-wide risk. Amongst other things, banks and other financial intermediaries have been required to hold more high-quality collateral and be ready to mobilise rapidly across a wide range of businesses in response to margin calls. They have faced much stronger incentives to use centralised clearing and avoid settlement fails. And they have faced the need to support an increasing range of account types and reporting requirements. In turn, supervisors have increasingly expected infrastructure operators to act as systemic risk managers.
Clearly we need to learn what we can from recent history and take steps now to make domestic and international financial systems more resilient. Crises are opportunities for implementing change, and in the US and internationally, significant reforms traditionally have been born of crisis. To effect meaningful and appropriate reform, however, we must fully understand cause and effect and the broader trends of international financial intermediation. Today, I would like to share with you my perspective on these issues based on US and international experience, with special emphasis on the need for additional preventive measures. BIS Review 64/1998  -2-  Importance of sound banking systems Over the long run, a nation must be able to mobilize domestic savings and other sources of funds needed to finance investment and other productive expenditures. This requires the development of an effective banking system that transfers surplus funds of households and businesses to borrowers and investors. Fair and impartial allocation of credit accommodates the economic development that results in improved national living standards. Notwithstanding broad changes in the intermediation process which have reduced the role of banks in favor of the capital markets, banks retain a critical role in direct intermediation and as managers of financial risk. Sound financial institutions, and banks particularly, remain integral to a sound economy. Effective financial intermediation is particularly important in the context of most emerging market countries given the relative scarcity of savings, a relatively underbanked population, and large-scale investment needs.

François Villeroy de Galhau: Present challenges for France’s central bank Hearing of Mr François Villeroy de Galhau, Governor of the Bank of France, by the Senate Finance Committee, Paris, 30 March 2016. *  *  *  Madam President, General Rapporteur, Senators, Thank you for receiving me this morning, just a few months after your vote of confidence. I attach great importance to these regular exchanges in order to inform you of matters essential to the Banque de France. In 2016, the world in general, and Europe in particular, are experiencing a period of uncertainty: uncertainties relating to our security, with the threat of terrorist attacks still real; political uncertainties, with the risk of “Brexit” and the refugee crisis; as well as economic uncertainties, with lower economic growth in emerging economies, including China, and excess market volatility in January and February. Faced with this turmoil, the Eurosystem, of which the Banque de France is a member, is acting decisively. Its monetary policy is supporting the economy and creating a favourable environment for taking all the other actions necessary to return to strong, sustainable and job-creating growth: France, and Europe, must seize this opportunity to regain confidence. 1. Monetary policy, first of all, is doing its fair share of the work. The Eurosystem is determined to fight the low inflation that we are facing today and thus underpin economic activity. This is our mandate and we are striving vigorously to achieve it.
Moreover, this choice should preserve and strengthen the stability of the Algerian banking system, which has been achieved in particular by strong economic and financial performance since 2001 and the enhanced supervision capacities. The strengthening of these capacities over the past years constitutes a major asset for the Bank of Algeria and should make it possible not only to successfully ensure that Algerian banking regulation and supervision complies with international standards (such as the Basel Committee’s Core Principles for Effective Banking Supervision), but also to efficiently prepare the implementation of Basel II with a good take up of the Accord by Algerian banks. As Governor of the Banque de France and Chairman of the Commission bancaire, I am aware of the extent to which the preparation of the implementation of Basel II requires efforts and resources on the part of both institutions and supervisors. Allow me to illustrate this by briefly presenting initiatives carried out by the Commission bancaire and its General Secretariat for effectively implementing Basel II in France. By 31 December 2007, over 30 on-site inspections will have been conducted in 20 institutions, involving at times up to 100 inspectors at a time. These on-site inspections examined IRB systems for credit risk and advanced operational risk measurement approaches.

While it is too early to draw definitive conclusions from the current episode, it is nevertheless apparent that progress needs to be made by credit institutions, for example in the management of credit risk, market risk, liquidity risk, the risks associated with certain activities such as asset management and risks linked to the valuation methods used for some financial instruments. Regarding credit risk: –  It is important to check that banks’ internal rating systems, along with the estimation of the different risk parameters they use, are updated in order to reflect the increase in default risk and losses in the wake of the current turmoil. It is indeed vital that these systems do not lead to risk being underestimated. This update appears all the more necessary at the present time given that in the case of real estate loan portfolios, estimates of risk parameters have perhaps not been sufficiently rigorously tailored by all banks to the specific features of some risky forms of credit such as US subprime mortgages. The same thing may have happened in other countries.
Moreover, better supervisory oversight would also give us the agility to mitigate emerging risks before they materialize. Having said that, it must be acknowledged that we can’t regulate every aspect of the banking system. Ultimately, banks should assume prime responsibility for their actions and behaviors. Being dependent on public confidence, banks can ill afford to operate with weak corporate governance 4  or poor risk culture. This necessitates that banks maintain robust corporate governance standards, duly supported by strong internal controls, and prudent risk management. We are fully cognizant that these regulatory measures are costly for banks; nonetheless, costs of any financial crisis, both in financial and social terms, are far more substantial. Therefore, it is only wise and rational to strengthen the capacity of our banks in benign times. I believe our proactive approach has actually paid off, as banks in our region generally entered the low oil price environment from a position of strength. Yet banks’ resilience is not infinite and may come under severe pressure if necessary economic and structural reforms are dropped - or even delayed. Hence, we should not lose sight of the broader economic context in which our financial systems operate. After all, the banking sector is just a component of the overall economic landscape, though a very crucial one. While ensuring banking stability is critical, it is only a necessary condition for overall economic stability – and not a sufficient one.

1 Keynote speech delivered by His Excellency Dr. Mohammad Y. Al-Hashel, Governor, Central Bank of Kuwait in the 12th  High Level Meeting for the Middle East & North Africa Region, jointly organized by the Basel Committee on Banking Supervision, the Financial Stability Institute and the Arab Monetary Fund, held on December 7, 2016 in Abu Dhabi, UAE. 1  To start with, technology is supporting the outreach of formal financial services to the millions of otherwise unbanked customers. According to the World Bank, the poorest 20% of the world population is more likely to have access to a mobile phone than to clean water and sanitation. Capitalizing on this opportunity, a number of countries have managed to swiftly expand access to finance in recent years. Globally, number of adults who were previously out of formal financial system has dropped by 20% during 201114 alone. As these encouraging trends suggest, digitalization offers an unprecedented opportunity to improve access to finance to the millions of people who have remained financially excluded so far. Likewise, programing breakthroughs like blockchain are potentially transforming the way we verify transactions and enforce contracts. By allowing parties to transact without central intermediaries, blockchain can strip off costs, reduce inefficiencies, and enhance customer services. Host of other innovations are reshaping the way we transfer money or obtain credit. For instance, mobile wallets are enabling payments by smart phones, peer-to-peer lending is providing new sources of financing, and roboadvisors are offering financial advice.
Meantime, public spending climbed significantly, largely as a result of the increase in unemployment benefits and in the interest burden, but also as a result of spending on pensions and on government consumption. A further expression of the rapid deterioration in the deficit was the most substantial rise in public debt as a proportion of GDP. The first conclusion that may be drawn from this analysis, and one which is very relevant for understanding our present difficulties, is that the budget deficit arising with the crisis was eminently structural. That is to say, it was not only due to the downward cycle, or to the temporary discretionary measures with no lasting effect on public finances. In any event, the outcome has been that the public debt/GDP ratio has not stopped growing since 2007, and  BIS central bankers’ speeches  3  we will end the current year 2012 with a level close to 85%: i.e. an increase of almost 50 pp of GDP over a period of only five years, which in itself is an indicator of the seriousness of our crisis. Reducing the budget deficit from its 2009 peak is proving anything but easy. Indeed, the correction made in 2010 and 2011 was very scant, and was of course less than that initially planned and desired. The budgetary adjustment is being made in highly adverse economic and financial circumstances, compounded by the impact in the short run of the austerity measures on economic activity.

Admittedly, prior to the presentation of the State Budget, Parliament and the Senate have approved the budget targets, both for overall general government and for each of its sub-sectors, on the proposal of the Government and following a report by the Fiscal and Financial Policy Council and the Local Government National Board. Yet clearly the budgets of each regional government and each municipality are approved separately, there being no document containing information on all of them, together with that on the State and Social Security Budget. Hence, although we do have ex-post information that enables the public spending outcomes and outturn for the four major spending groups – central, regional and local government, and the Social Security system – to be analysed, we do not have an ex-ante or prior document that provides a detailed analysis of budgetary projections for overall general government and its compatibility with the objectives set. It should be recalled, however, that the new Budgetary Stability Law introduced substantial improvements in this respect. Specifically, it stipulates that, before 1 October each year, regional and local government shall submit information on the essential items contained in their forthcoming budgets to the Ministry of Finance and General Government. Then, before 15 October, the Ministry of Finance and General Government will release a report on the alignment of this budgetary information with the stability objectives, in such a way that the Ministry may make recommendations should it perceive slippage.
Capital markets could go through a process of progressive and partial fragmentation: no significant capital account opening would occur in many parts of the world. Conversely, new barriers could be erected either in the form of “soft” capital controls or through national regulations forcing financial institutions to ring‐fence local pools of capital and liquidity. There would be little convergence in domestic financial systems and regulations. Foreign exchange reserves would keep growing, both in absolute terms and as a percentage of world GDP. This scenario may be seen as the only realistic response to increased diversity in a multipolar world. The systemic consequences, however, are not clear. In such a world,  BIS Review 127/2010  3  current account imbalances would be heavily influenced by public actions and policies. Regulatory competition would determine the location of financial activities and the allocation of savings. In the absence of some “rules of the game”, tensions would naturally arise between countries regarding many aspects of their domestic and international macroeconomic policies. The opposite scenario would involve the progressive opening of all capital accounts, together with some (more or less intensive) convergence in financial systems and regulations. This would allow for the emergence of a unified world capital market, an efficient allocation of savings across countries and a smooth financing of current account imbalances. Experience shows, however, that an open international financial system is not inherently stable and, therefore, very dependent on strong infrastructure. Two elements of such an infrastructure seem especially important.

Conclusion: policy should be flexible but don’t over-react to low inflation We’ve heard a lot about the risk that deflationary expectations persuade people to defer spending. We’ll no doubt hear it again if inflation were to dip below zero over the next couple of months. But it’s at best a partial point. All else equal, the incentive to save depends not on inflation expectations per se but on how far away they are from the nominal interest rate, i.e. the real interest rate. By any measure – even if you use the near-term household surveys as measure of inflation expectations – the real rate is extremely low, and still negative (Chart 15). The extensive empirical evidence for this “inter-temporal substitution” channel is in any case relatively weak – as the Governor pointed out recently, the more important threat, particularly in developed economies with large balance sheets, is debt deflation. And in that regard, it’s the gap between interest rates and nominal income growth that matters. Notably, nominal income growth has not declined of late. Real interest rates still need to be low. Our inflation target is 2% not zero: what makes the current position “good” is not low inflation per se but the fact that, in this particular instance, it’s been caused by something (a drop in oil prices) that improves real incomes.