samchain/econo-pairs-v1 huggingface dataset:
While these links are not new, they now warrant closer attention for two reasons. First, the financial system has come to rely more on central counterparties. The introduction of mandatory central clearing requirements in response to the crisis has made financial markets safer and more transparent. This is in large part thanks to the European Parliament’s push for stronger financial regulation, such as the European Market Infrastructure Regulation (EMIR). While this strengthening is of course welcome, it also means that CCPs have become more systemic. Second, the United Kingdom’s decision to leave the EU means that, under the current legislative regime, several CCPs clearing significant volumes of euro-denominated business will be operating outside the framework of EU regulation and the safeguards this provides. In this context, the Commission’s EMIR II proposal, currently being discussed by this committee, is a welcome and necessary initiative. The existing regime was never intended to cope with large-scale euro-denominated clearing activities being carried out in a country outside the EU. The EMIR II proposal would enable EU authorities to directly supervise systemically important third-country CCPs on the basis of EU regulatory requirements using EU supervisory instruments. The proposal provides for an enhanced role for the central bank of issue in this context, reflecting the strong links between clearing and monetary policy. The indispensable corollary to the EMIR II proposal is the recommendation to amend Article 22 of our Statute, which was unanimously adopted by the ECB’s Governing Council last June.

And, second, I will share three things that I think we – as supervisors – need to do to strengthen supervision of global firms and, at the same time, make it easier to get our jobs done. Three things global firms with U.S. presence can do •  First, improve communication and transparency with supervisors. Communication between supervisors and supervised institutions has to start with a “no surprises” philosophy, which serves as the basis for building the right channels of communication and confidence between firm and supervisor. This means identifying and discussing issues that could grow into significant risk events – even before all of the facts may be known or collected. “No surprises” also means more timely information sharing with key supervisors. Supervisors talk regularly and pass along key information; we are fine doing so, but firms could position themselves better if they communicate significant items to core supervisors on similar timetables. Given the global management structures of many business lines and risk functions, a risk event in one jurisdiction may have an immediate impact in other jurisdictions. Another element of improving communication is sharing more global information with host supervisors. In order for us to better understand your operations and to put the U.S. operations into the global context, we need to have a better understanding of the global operations. Many, if not most, firms assert that they manage businesses and risk on a global basis.
And so, as you battle against the incoming surge while you try to exit the MTR train (probably beneath a poster exhorting courtesy); as you are almost decapitated entering the lift by the person with his finger permanently on the doors-close button; as you are tripped over by the ubiquitous Hong Kong trolley being raced in and out of the pedestrian crowd; as your boss explains that, although vacation leave is of course an entitlement, it would be rather inconsiderate of you actually to take any; as the waiter throws you into a seat at Mr Wong's table, thrusts the napkin onto your lap and demands rather than enquires whether you'd like a drink - all before you've had a chance to explain that it is not in fact Mr Wong whom you have come to join; as the taxi appears deliberately to accelerate through the large puddle right by where you are standing; as your lunch guest spends the entire meal fiddling with his mobile phone, making it quite clear that he resents having been invited to a restaurant where he is not allowed actually to talk into it; as you discover that the dignitary who has agreed to propose the toast at your modest office-opening ceremony can in fact stay for only five minutes because he or she has to hasten along to your main competitor's gala dinner; if you are feeling increasingly stressed by all of this, just relax and console yourself that this is Hong Kong, and Hong Kong wouldn't be where it is if people had never been in a hurry to get on with things.

In this context, we felt it was vitally important to defuse these unfounded fears that were not only fragmenting the euro area’s financial markets, but also, in the longer term, threatening to undermine the effectiveness of our monetary policy. That is why we created the OMT which will consist of an ex ante unlimited intervention on the secondary market to acquire sovereign bonds for which we consider the risk premium applied by the markets is unjustifiably high. The OMT will therefore represent a massive and effective backstop to the unjustifiable increase in sovereign yields and will allow us to counter the fragmentation of the euro area’s markets and restore the proper transmission of our monetary policy. The use of this instrument will be subject to very strict conditions: States must have previously negotiated a programme with the ESM and must respect their commitments regarding fiscal consolidation, financial reforms and competitiveness. This should enable a return of confidence and stability, not just in the short and medium term thanks to our action, but also on a longer term basis. *** Today, the euro area is advancing with determination in the right direction. The Eurosystem’s monetary policy is a source of immediate confidence and stability. Its governments are making fiscal, structural, financial and institutional reforms that will ensure the future stability and growth of the euro area. Our determination is total and our efforts must be continued relentlessly. I thank you for your attention. 4  BIS central bankers’ speeches
*** Returning to the present day, a little more than eight years after Europe’s leaders signed the Treaty of Maastricht and agreed on the necessary framework and timetable, we now have a functioning EMU with a single European currency. Nonetheless, I would not be surprised if, to some external observers, EMU might at first glance appear rather unusual and perhaps even somewhat confusing. This is no doubt a consequence of some of the specific features of EMU that I should take some time to explain. This also holds true of the European Union, which still does not fully correspond to the model of a union you may have in mind, namely the United States. Starting from basics, I should point out that some of these specific features relate to the fact that while the European Union is comprised of 15 Member States, only 11 of these have so far adopted the euro. We cannot therefore talk about the single monetary policy of the European Union, but rather, for this purpose, we must instead refer to the euro area, the euro zone or, as some people have chosen to call it, Euroland. A similar problem arises when we wish to refer to the authority responsible for the conduct of the euro area monetary policy. The Treaty establishing the European Community stipulates that this policy is to be conducted by an independent European System of Central Banks (ESCB), which comprises the European Central Bank (ECB) and the national central banks of the 15 EU Member States.

Since then, the process of European integration has continued to develop. Throughout this process national policymakers, economic actors and the general public have each had to undergo a learning process whereby the previous, narrowly defined, national perspectives have been replaced by an increasingly European vision. This was and is not always easy. Today, the European Union stands for a highly integrated single market with about 380 million people, which combines the economies of 15 European countries and accounts, like the United States, for around 20% of world GDP. Moreover, it stands for a Monetary Union with a common currency, the euro, which, at present, has been introduced by 11 countries. Finally, the European Union, even though it lacks international personality, is characterised by a substantial and growing degree of political cooperation and coordination. This applies to justice and home affairs as well as to foreign and security policies. 1  BIS Review 4/2000  *** The dynamics of the integration process and, with it, the increasingly European outlook of both politicians and citizens was essential for creating an environment in which Europe’s leaders could take the bold decision to adopt a single European currency. But there were also a number of more specific factors that facilitated this decision, some of which I should briefly mention. The first of these was the signing of the Single European Act, in 1986, which committed the then European Community of 12 to adopt the measures necessary to complete the “single market project” by the end of 1992.
The NGFS is keeping its momentum On the international front, it is a source of great pride to see the NGFS, which we initiated almost three years ago in Paris – along with seven other founding members – and for which we provide the Secretariat, blossoming with more than 70 Members, covering the five continents. The NGFS is striving with more than six deliverables produced to date, following-up on the six recommendations we issued in our First Comprehensive report (April 2019). Let me highlight three of its latest publications in particular, which bring some building blocks to a climate-risk assessment framework:  1/3  BIS central bankers' speeches  - The “Guide for Supervisors”, published last May, sets out recommendations for banking and insurance supervisors (for example: identifying exposures of supervised entities that are vulnerable to climate-related and environmental risks and assessing the related potential losses); - The “Guide on climate scenario analysis for central banks and supervisors”, published last June, which aims to provide a common starting point for analysing climate risks to the economy and the financial system. Indeed, the ACPR pilot exercise builds on these NGFS climate scenarios; - The NGFS has also started to tackle the link between climate change and monetary policy by publishing “Initial takeaways” in June 2020. Based on a comprehensive review of existing literature and expert analyses, it provides early answers to the following questions: (i) How does climate change affect key macroeconomic variables?

Let me remind you in conclusion that we central banks cannot be “the only game in town”: to give an obvious example, only an accurate carbon pricing will allow for a full integration of climate risks into any business decision. We cannot do everything, but rest assured we will do our utmost. 3/3  BIS central bankers' speeches
Nonetheless, the available information indicates that the profile of smoothly moderating activity apparent since the second quarter continued in the third quarter, and this pattern can be expected to persist throughout the rest of the year, with scant deviations from the forecasts published by the Bank on 30 March (3.7% for 2007). This slight slowdown is based on domestic demand and, more specifically, on the consumption and residential investment components, while the contribution of net external demand to growth in the first half of 2007 improved further. The slowdown in GDP seems to point to a gradual shift to a growth rate of around 3% in 2008 as a result of some rebalancing of the domestic and external sectors. However, the shocks affecting the international financial markets since August have also increased uncertainty over the forecasts for the Spanish economy and have possibly heightened the downside risks. Allow me to spell out some of the factors behind this scenario of a smooth slowdown, compatible with continued highly dynamic activity and employment. BIS Review 130/2007  3  First, the change in monetary and financial conditions will foreseeably ease the adjustment to a more sustainable pace of private-sector spending and indebtedness. This adjustment started some time back and is proceeding smoothly.

Miguel Fernández Ordóñez: Recent developments in the Spanish economy Testimony of Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, to the Parliamentary Budget Committee, Madrid, 9 October 2007. *  *  *  Ladies and gentlemen, My appearance before this Committee as part of the Parliamentary discussion of the State budget for 2008 comes at a time when shocks are still reverberating through some of the major international financial markets, and the attendant uncertainty inevitably bears on the analysis of the economic situation. In my appearance before the Parliamentary Committee on Financial Affairs on 17 September, I examined in detail the origin and the main implications for ECB monetary policy and for the Spanish economy of these shocks, which emerged last summer against a background of marked momentum of the economy and of world trade. A significant part of this dynamism – reflected in growth rates above 5% for world output and above 6% for trade – derives from the sound performance of the emerging economies in recent years; indeed, they seem to have been less affected by the shocks than the more developed Western economies. This is, in fact, a significant feature of the present bout of turbulence which, if I may briefly recall, originated in a financial market of a developed country (the US sub-prime mortgage market).
It can significantly contribute to the prevention of ring-fencing measures conducive to the fragmentation of funding channels, which leave credit institutions and the real economy exclusively reliant on domestic funding. Additionally, before it can become operational, the SSM will support the European Banking Authority’s development of the single rulebook for financial services that, together with the single supervisory handbook, will contribute to a level playing field in the European financial market. The exclusion of banks from the direct supervision of the ECB is not tantamount to exclusion from the ECB’s supervisory reach. First, national supervisory authorities will have to abide by ECB regulations, guidelines and general instructions and be subject to the ECB’s broad oversight power over the functioning of the SSM; second, to ensure consistent application of supervisory standards, the ECB may decide at any time to exercise direct supervision on less relevant credit institutions, upon its own initiative after consulting with national authorities or at the request of the national supervisory authority. Although aimed at revising the institutional arrangements of the euro area, the SSM is not a closed system. It is open to those national competent authorities of non-euro area Member States that intend to participate by entering into a close cooperation with the ECB. Once a Member State enters into a close cooperation, national competent authorities will participate on equal footing as regards supervisory decisions, but will equally have to adhere to the guidelines and instructions issued by the ECB.

An online portal for registration will open tomorrow morning, with attendance determined shortly thereafter by a ballot. 11 Debate on social media is already underway, 12 and there will be live webcasts available on the day. The Open Forum is open to everyone, because the UK’s markets matter for everyone. Our goal is to discuss the prospects for market functioning, where regulations might overlap or conflict, and whether enough has been done to build the real markets the UK deserves. Markets that merit social licence and reinforce social capital. In the best traditions of Harvard, we should use the compass of Veritas, so that, when we too are dust, others can build on our legacy, as so many have on that of Southwark’s John Harvard. 11  See www.boeopenforum.co.uk. 12  See #BoEOpenForum. BIS central bankers’ speeches  7
These efforts should be put to more productive use. With price stability and trust in place, the list of economic benefits is long. In particular, the price development becomes more stable and predictable. This allows financial markets and businesses to operate more efficiently. As for the National Bank, it can conduct monetary policy more easily with expectations strongly anchored. A key feature of trust is that it must be underpinned by transparency. We too have learned from past experience that Swiss monetary policy gains from increased transparency. Earlier than most central banks, we have embraced the notion that it is better for the conduct of monetary policy if people can understand what their central bank is thinking, doing and why. Transparency also eliminates the doubts that the central bank is working with an informational advantage. Information asymmetries breed mistrust and skepticism. It is much easier to instill trust in an institution if it is open about its goals and strategies. All this enhances the National Bank’s accountability and reinforces the trust we have fostered. What steps has the National Bank taken to improve the transparency of monetary policy? We have a long tradition of setting monetary targets, but since the announcement of our new monetary strategy more than two years ago, the discussion of monetary policy is even more clearly defined by norms, rules and procedures than before. The explicit definition of price stability gives Swiss citizens a yardstick for measuring how the central bank has performed.

The current target range lies between 0.25% and 1.25%. We reacted to the increasing signs from Switzerland and abroad that point to a delay in the economic recovery and slower-than-anticipated economic growth in 2002. We now forecast the average growth rate for real GDP to fall clearly short of 1% in 2002. In addition, the further appreciation of the Swiss franc tightened the monetary conditions, which were regarded to be undesirable under the current environment. Concluding remarks It is more than one year that we are in this difficult economic situation. The loss in business confidence began with the downturn in economic activity lead by a sharp correction in capital spending. The path to economic recovery has been recently overshadowed by the loss in investor confidence, which found its origins in the highly publicized scandals involving fraudulent balance sheets. This setback in investor confidence undermined the required trust in financial markets that the right rules are in place and that those rules are being enforced. Although I am confident that stronger rules will merge to restore trust in financial markets, consensus will not be achieved overnight. Corporations must continue to build on the social capital that is entrusted in them by investors. They should promote the efficient operation of financial matters, and optimize the benefits that markets can bring to everyone in society.
Ben Bernanke has advocated a temporary shift from inflation to price level targeting when policy rates reach their lower bound.36 Others have suggested moving from a point target to average inflation targeting. Both options would require policymakers to “make up” any period of low inflation arising from the constraints of the lower bound with higher inflation in future, increasing monetary stimulus. However, these strategies might work less well in open, than closed economies, particularly ones like the UK where exchange rate pass-through is large and protracted. The response of the exchange rate to shocks would likely push up inflation during downturns in domestic activity, leading make-up strategies to generate perverse policy prescriptions. See Evans, C, Fisher, J, Gourio, F and Krane, S (2015), 'Risk Management for Monetary Policy Near the Zero Lower Bound’, Brookings Papers on Economic Activity, Economic Studies Program, vol. 46(1), pp. 141-219. 36 See Bernanke, B et al, ibid. 35  24  All speeches are available online at www.bankofengland.co.uk/news/speeches  24  An alternative and more radical approach than developing tools to provide stimulus at the ELB is to make it less likely that policy rates need to reach it. Absent divine reflation, the most frequently discussed option is to raise the inflation target. In theory, once achieved, and if inflation expectations moved up smoothly consistent with the new target, then this framework change would reduce the frequency of hitting the ELB. However, like many ideas in economics, this works better in theory than practice.

Actually, the overall purpose of financial stability is the proper functioning of markets and to avoid having to arrive at these degrees of turbulence and dislocation. From the macroeconomic standpoint, risks must be overseen and signaled, because the primary  6  The Fed does not have an explicit financial stability objective, although its role in this matter is widely known. See, for example, Plosser (2007). 7  The idea is that investors could sell their shares at a given minimum price in the future, which is equivalent to a put option. 4  BIS Review 150/2008  objective is to prevent major crises. And if they do occur, every necessary measure must be taken to limit the damaging effects of their propagation. Two points are worth commenting here in the policy options menu, and which can be complementary to monetary policy decisions: one is the information that monetary and credit aggregates can provide, and the other is the role played by macro-prudential regulation. An asset price increase induced by rapid credit growth is a first sign that these assets may be overvalued and financial markets are taking excessive risks. This is particularly important in the case of real-estate, which frequently end up in a financial catastrophe. Monetary aggregates in general, but especially the wider money aggregates as well as credit aggregates may signal unsustainable tendencies.