samchain/econo-pairs-v1 huggingface dataset:
Blackrock and Rhodium are using data analytics to assess the risks of climate change to assets such as mortgage backed securities under different scenarios. We have not tapped on the full potential of new technologies. 5 / 10  BIS central bankers' speeches  Research by IBM has found that quantum computing algorithms can compute the risk of an investment portfolio near real-time. This is a significant reduction from the present Monte Carlo simulation approach which can take days. The third big opportunity that Technology offers Finance is improving cost-efficiency. This is particularly relevant for banks – saddled with the high costs of maintaining extensive branch networks and deterred from entering new markets or reaching underserved segments of the population because the cost of setting up branches is too high. Technology is changing this in two ways. First, the use of digital platforms to quickly and cheaply acquire customers. The ubiquity of the Internet combined with the proliferation of the smart phone has helped to slash the cost of acquiring a customer. According to research by Oliver Wyman, it costs about $ to acquire an online banking customer compared to $ using offline channels. Basically, the smart phone is replacing the bank branch. Non-bank players have led the way in digital banking. In the UK, we have seen a proliferation of so-called “neo-banks” – basically non-bank start-ups who have obtained licenses to do banking business without physical branches. Starling has opened 520,000 personal accounts since getting a banking license in 2016.

Credit premia also increased for other fixed income instruments, such as conventional mortgage bonds, corporate bonds and loans to emerging markets, from summer 2007, although on a far more moderate scale than for subprime-backed securities. In the last half of July, the turbulence spread to other financial market segments. The risk premium required by investors rose, and equity prices fell sharply. The contagion was due to uncertainty as to the risk subprime-backed financial products represented for the financial system, and to a lack of information about who had invested in such products. Conduits and Structured Investment Vehicles (SIVs) were among the investor groups investing in the financial products based on subprime mortgages. As a rule, these investment companies were wholly or partially owned by banks. They invested in assets with a high rating, such as the senior tranche in subprime-backed securities. These investments were debt-financed, primarily in the short-term money market through asset-backed commercial paper (ABCP). High ratings on these assets gave investment companies favourable funding rates. Due to the turbulence in the subprime market, interest rates for ABCP have risen sharply and maturities have been reduced. The flow of money to investment companies through money markets has dried up. Banks have to a large extent had to finance the investment companies themselves. However, this increases banks’ liquidity requirements. There have been examples of banks that did not have the capacity to finance their investment companies.
BIS Review 66/2004  5  The concern relates in particular to the likelihood that some households may be underestimating the risks they face. These risks are associated first, with the higher sensitivity of households to changes in interest rates. In this regard, we have seen a tendency in some euro area countries to increasingly focus on borrowing at conditions which are linked to short-term interest rates. For many households this seems to be an attractive option as it implies a rather low interest rate burden notably at the beginning of the contract. What is often overlooked, however, is the fact that the currently low interest rates could well change over time. A second risk relates to future house price changes. Some valuation measures for property prices, such as the price-to-rent ratio, are now 10-15% higher than their average levels during the period 1995-2003 in the euro area as a whole. These valuation measures have even reached levels as high as 17%. Against this background, concerns have been expressed that substantial house price increases in some countries entail risks of a reversal of this trend that may currently be underestimated. It is not the first time we have been confronted with pronounced movements in asset prices in the euro area. Indeed, current movements in house prices are small when compared to some swings in stock market prices over the last six years. We have witnessed rather substantial share price fluctuations resulting from the new economy euphoria and the subsequent disillusionment.

First, we announced the implementation of the Pandemic Emergency Purchase Programme (PEPP). This programme, with an initial envelope of € billion, which was subsequently increased to € trillion until June 2021, permits the ECB to purchase government and private sector bonds, as well as other debt instruments. The ECB already had a purchase programme, the APP, which increased in volume at the onset of the crisis. Why did it then need a second programme? The APP has a relatively rigid structure regarding the distribution of asset purchases both over time and by jurisdiction. 3  In the latter case, APP purchases are distributed under the so-called “capital key”, a concept referring to the percentage of the ECB’s capital held by each national central bank, which is linked to the weight of each country’s economy and population. However, faced with an emergency such as that in March, the ECB had to be able to buy proportionally more bonds from some countries than others so that it could concentrate those purchases on countries whose financing conditions, at any given time, were subject to a greater degree of tightening. The PEPP was designed precisely with that degree of flexibility in the distribution of asset purchases over time and by geographical area, although the capital key continued to act as a guide for the latter.
The appropriate response for us in setting interest rates, therefore, is to try to stay in step and keep pace - not running ahead, but equally not lagging behind. BIS Review 22/2001  3  The third and final area of uncertainty I want to focus on is the underlying strength of demand in the UK economy. The US slowdown may, as I have said, have some dampening effect on other countries, including the UK. The supply-side improvements I have described may enhance our growth capacity. Both these factors could provide grounds for the monetary stance to provide more stimulus to the economy, depending on how events develop. But a third area of uncertainty - the underlying strength of demand in the UK - could point to less need for stimulus. Consumer spending may be slowing somewhat, but it remains relatively buoyant. Retail sales continue to grow and housing market activity may be picking up. Consumer and business confidence remains steady, with new orders holding up well. The easing in sterling has improved our competitiveness in key export markets. Business investment is picking up. The planned increases in government spending are beginning to come through. Employment remains high and earnings are showing signs of some upwards creep as businesses experience skill shortages. All of this is welcome evidence of a healthy and thriving economy, and, with inflation remaining low, it is a performance that can be sustained without immediate risk of overheating.

The gross foreign reserve level, at the end of this period, was estimated at USD 1 billion and 244 million, adequate to cover 5.1 months of imports of goods and services. Based on the aforementioned developments, we may conclude that year 2004 contributed generally in further consolidating the country's macroeconomic equilibrium. Although full data for the yearend of 2004 are not yet available, there is a crystallization of the idea that the primary targets projected in the medium-term plan on the country's development have been met satisfactorily. According to the latest estimations, the Albanian economy grew by 6 percent under the conditions of a low inflation rate, far closer to the bottom level of the targeted band. The structural reforms, through their problematic concerns, have progressed during 2004. All this consolidating process has created the premises for a better stability in the future. The development program of the country for year 2005 already exists, part of which are the primary targets of monetary policy. The primary target of monetary policy for 2005, projected in the monetary program, remains the maintenance of the annual inflation rate within the two-to-four percent targeted range. This target is supposed to be met through the control of the monetary supply growth at an approximate level with the nominal growth of GDP, presuming that the velocity of currency circulation in the economy is stable. In this light, the annual growth rate of money supply for year 2005, projected in the monetary program, is 9.4 percent.
This period coincided with the consequences caused by the pandemic. Second, the Bank of Albania has initiated and implemented a plan of measures to increase the use of the national currency, in the financial system. This plan of measures aims at strengthening the financial stability of the banking sector and economy and at the better monetary policy pass through. It has induced positive effects in terms of reducing the share of loans in foreign currency around the level of 50% and increasing the interest for holding savings in our national currency. Third, the Bank of Albania has successfully managed the consolidation process of the banking sector. This process, consisting in a huge investment of time and energy, has aimed at not simply reducing the number of commercial banks (from 16 to 12), but – above all – at the introduction of new and motivated actors in the domestic market and increase of competition in this market. Albania has benefited a more competitive, efficient and safer banking sector. Last, the Bank of Albania has worked for the adoption of the best practices in the banking regulation and supervision field, aiming at the convergence with the euro area standards and focusing on the analyses and address of large risks. In reflection of this work, the Bank of Albania is already a member of the supervisory colleges of central banks. We have also established and approved a complete and functional framework on resolution of banks, thus being the first amid regional countries. These efforts have given their fruits.

Gent Sejko: Address to the Parliamentary Committee on Economy and Finance Address by Mr Gent Sejko, Governor of the Bank of Albania, to the Parliamentary Committee on Economy and Finance, Tirana, 23 February 2022. * * * Honourable Chair, Honourable Members of the Committee, Thank you for this public hearing organised in the framework of my nominee for the renovation of the term as the Governor of the Bank of Albania. At the beginning of my address, please allow me to highlight that I am very honoured that the Parliament of Albania re-affirmed the confidence to continue to contribute in the field of Albanian economic and financial area management, as a member of the Bank Albania’s Supervisory Council. In the same spirit, I would like to point out that my nomination for the position as the Governor is motivated by an internal incentive: finalising the thoroughly transformation of the Bank of Albania and turning it in a modern central bank. In my vision, the Bank of Albania should converge towards the conjures of a modern central bank, suitable to be part of the European System of Central Banks; able to deal with the challenges lying ahead in the path of the sustainable economic development, for the comprehensive modernisation of the financial system, for the European integration, and in its function as a reliable partner of Albanian public, civil society and academic world.
The experiences during the 1970s and 1980s contributed to the formation of the new monetary policy regime, which targets low, stable inflation. The inflation target has been set at 2 per cent. That level allows some leeway to zero inflation, which, among other things, reduces the risk of deflation and enables adjustments in relative wages without normally requiring nominal wage decreases for different groups in the labour market. On the whole, as I mentioned, it has also worked well. Inflation has fallen at the same time as economic growth has been relatively high compared with the immediately preceding decades (see Chart 2). Unemployment has gradually declined since the crisis in the early 1990s, even though it is considerably higher than in the 1960s. After the introduction of the inflation target, we thereby had maybe the clearest evidence that there is no trade-off between inflation and unemployment since both fell at the same time during the 1990s. The absence of a long-term relationship between inflation and unemployment has also been confirmed by extensive studies in a large number of OECD countries. Monetary policy and employment in the short term Having now spoken about the Riksbank’s inability to influence employment in the long run, the question remains of how monetary policy can affect employment in the short term. Monetary policy can have a short-term impact on economic activity and therefore at best reduce the fluctuations in the cyclically determined component of unemployment. 2  BIS Review 65/2004  Monetary policy is estimated to affect inflation 1-2 years ahead.

In addition, we have been active internationally – both bilaterally and multilaterally to ensure we have a coordinated, well-informed and mutually supportive approach. This includes our work as a member of the Financial Stability Board. So, while there are challenges, we are very much alive to them. We monitor the risks closely and work continuously with our partners to prepare, and stand ready to take any appropriate action. Opportunities for Hong Kong Having acknowledged the immediate challenges, I think it’s time now to turn towards the opportunities, above all in this region. For while the challenges from the West are deep, they should not blind us to the opportunities within Asia. I would say that the coming opportunities for the banking industry here are bright – even if at times they may appear to be obscured by clouds abroad. In fact, I believe that they put us on the threshold of a new era for the banking industry in Hong Kong. I would like to highlight two of the most promising opportunities. The first is the offshore RMB market, which has developed rapidly over the past two years. The second is the increasing demand for asset and wealth management services, both institutional and individual. Opportunity 1: offshore RMB market On the offshore RMB market, Hong Kong bankers have been the first ones to exploit the new business opportunities.
I will start with a brief recap of the Asian crisis, drawing some lessons and comparison with the European debt crisis. I would briefly discuss the economic setting and policy reform that brought Asia out of the crisis and end with some thoughts and reflections on the post crisis recovery period. Ladies and gentlemen, As a well-known American author, Mark Twain puts it, “history doesn’t repeat itself, but it does rhyme”. So despite the differences in the context and details of both the Asian and the European crises, the underlying root causes are not dissimilar. First, both crises, like most others in the recent economic history of the world, are often associated with the mispricing of risk and distorted incentives structures. In the case of Asia, our problem was both a currency and a banking crisis. We had to abandon the pegged exchange rate system which led to massive devaluation of our currency. With the corporate sector largely overleveraged and loaded with foreign debt, the sharp depreciation of the currency technically bankrupted firms overnight. Banks NPLs shot up and brought on with it the banking crisis. It was clear that the region’s “original sin” was well beyond redemption. We borrowed in foreign currencies and used it to finance projects that did not generate foreign exchange earning to service such a debt. In the case of Thailand, the amount of private external debt was over three times the level of international reserves.

Mr Duisenberg discusses the ongoing dialogue on monetary policy, the overall economic situation and other activities of the Eurosystem  Introductory statement by Dr Willem F Duisenberg, President of the European Central Bank, at the Hearing before the Committee on Economic and Monetary Affairs of the European Parliament, Brussels, on 20 March 2000. *  *  *  It is my pleasure to continue today our ongoing dialogue on monetary policy, the overall economic situation and other activities of the Eurosystem. Since our previous hearing in November, the European economic outlook has brightened further, while, at the same time, the balance of risks to price stability has shifted upwards owing, in particular, to external factors. Against this background, the decisions of the Governing Council of the ECB to raise interest rates in early February and last week, as well as the reasoning behind these steps, are at the centre of my presentation today. Moreover, I should like to touch upon the overall European economic environment. Finally, I shall briefly turn to some other activities of the Eurosystem which might be of particular interest to you. 1. Current economic developments and prospects  As you are aware, the Governing Council of the ECB decided on 3 February and 16 March 2000 to increase the three main ECB interest rates. These two decisions followed the interest rate decision taken on 4 November 1999.
François Villeroy de Galhau: Identifying various forms of savings in France Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the 25th Parliamentary Conference on Savings, Paris, 2 February 2016. *  *  *  It gives me great pleasure to take part in this 25th Parliamentary Conference on Savings. Before answering your questions, I’d like to share with you an observation followed by a few possible avenues for thought. I  First, the observation, which is that here in France, we have plenty of savings, but not enough goes towards financing investment and hence growth. a) France certainly doesn’t lack savings. It has one of the highest household saving ratios in the euro area, at 15.2% 1 in the third quarter of 2015 compared with 12.7% for single currency bloc. The vast majority of these funds are invested in property; however, nearly 7% of household income is channeled into financial investments. At end-September 2015, close to EUR 4.4 trillion were invested in financial products – that’s twice the size of French GDP. b) That said, French savers are increasingly opting for safer forms of investment, primarily bank deposits and regulated savings products, which are highly liquid, and eurodenominated life insurance products, essentially bond funds: 63% of household financial assets in Q3 2015 compared with 56% in 2006.

These exclusions include companies responsible for large-scale environmental damages, and companies whose business models relies heavily on thermal coal. . Specific central bank challenges in policy portfolio management Aside from the GPFG, Norges Bank, as other central banks, also manages policy portfolios. The Bank’s foreign exchange reserves amounted to USD 64 billion at end-June 2019, divided into a 80% fixed-income portfolio and a 20% equity portfolio. The equity portion is invested in around 1,500 companies worldwide, with a focus on the larger markets and currencies, and managed according to similar principles governing responsible investment in the GPFG. The investment of the major part of the FX reserves is to a high degree determined by our central banking policy objectives. Consequently, we face specific challenges in any extension of responsible investment practices. First, this relates to respecting our legal policy mandate in the investment of our FX portfolio. Second, our investments must take due account of liquidity needs for monetary and financial stability purposes, as well as international financial commitments to the IMF. Third, we need to be vigilant to safeguarding independence and preventing conflicts of interest. And finally, while we are a transparent central bank, we need to strike a considered balance between transparency and remaining needs of confidentiality, to avoid undermining our 2/3  BIS central bankers' speeches  primary policy objective. International cooperation To conclude, like in other policy areas, there is a crucial role to play for international cooperation also in the field of climate risk.
Indeed, I would subscribe to the idea that, by and large, the crisis does not provide clear arguments with which to question a particular business model or line of activities, such as retail intermediation, wealth management or investment services. It does however encourage us to analyse whether those banking activities are conducted in a sufficiently efficient way by specific institutions so as to make them profitable. That said, pure European retail banks admittedly face specific challenges in the current environment, which need to be effectively addressed in order to preserve the social function that those institutions provide. Let me mention three of the most obvious challenges. First, the low interest rate environment, which is putting heavy pressure on financial margins, particularly for institutions –such as most of those belonging to the ESBG - with little investment in securities that could be revalued as rates go down, and with much funding obtained from retail deposits, which impedes a full transmission of very low or negative market rates to funding costs. Second, the accumulation of non-performing loans in several regions of the euro zone. This is particularly a challenge for banks, again mostly retail banks, with a significant concentration of exposures in a single country or even a single region subject to a subdued macroeconomic performance in the recent past. Third, regulation. Banks are now facing new requests to raise more and better-quality capital. More importantly, significant institutions will have to hold on their balance sheets substantial volumes of liabilities that could be subject to bail-in.

We have often referred to the benefits of having a floating exchange rate regime in an open economy like Chile, which is regularly subject to shocks in its terms of trade and external financing. Preserving the float during good times provides exchange rate flexibility to address situations like the present one and thus promote a more efficient adjustment of the economy. It also plays a key role in preventing currency mismatches that have been so costly in other countries in the region and in Chile in the past. Thus, the period of favorable financial conditions that we have seen in recent years has not resulted in higher short-term debt or currency mismatches in the banking system or in the non-financial sector. The credibility of the inflation target of the central bank is another important asset, which provides room for monetary policy action, as are compliance with the fiscal rule and the soundness of our banking system, which is well-regulated and supervised. Free trade and diversified target markets for our exports also play a key role in ensuring that the transition to the new macroeconomic configuration is smooth. One example of its usefulness is the way in which non-mining exporters have managed to avoid the appreciation of the local currency in recent years and weather the international crisis. Despite the difficulties they have faced in some markets such as Europe and the United States, they have been able to retain global leadership positions, maintaining or increasing their shares in world trade.