samchain/econo-pairs-v1 huggingface dataset:
In time tighter credit conditions could mean weaker business investment, though so far forward indicators of investment intentions still point to fairly strong growth. And any marked increased in uncertainty about demand conditions could lead to investment plans being shelved. But it is still early days – too early to draw strong conclusions about the size of these effects. Even more uncertainty surrounds the possible impact of tighter credit conditions on household spending, which alone accounts for three fifths of total domestic demand. There is already some evidence that banks are tightening the price and non-price terms on which they lend, especially to borrowers with relatively poor credit histories. And quoted fixed rate mortgage rates have already risen relative to market expectations of Bank Rate – though since markets now expect Bank Rate to fall instead of rising, the pick up in actual mortgage rates remains quite small. Overall, households seem to be in a relatively strong position: debt has risen a lot relative to incomes, but so too have holdings of financial and real assets. Mortgage arrears and repossessions remain well below their peak levels in the early 1990s. But the share of income which needs to be devoted to interest rate payments was already set to rise sharply,  2  BIS Review 136/2007  largely as a result of rising debt levels. And there is a growing minority of households who are reporting difficulties with their debts.

Indeed, the accord could smooth the punishing volatility of capital flows in and out of emerging markets as banks and investors better understand lending risks by applying the new rules. “Good risk management should also support emerging markets,” he said. Caruana said he welcomed China's announcement in August that it would delay adoption of the new accord, introducing its own rules in the meantime as its capital-weak banks struggled to modernise and reform. “It was perfectly consistent with what we were saying...a right timing and a proper sequencing was important, not to rush,” he said. *  *  *  Caruana, man of simple taste, faces complex Basel II Bank of Spain Governor Jaime Caruana is a man of simple tastes. A recent visitor to the Bank of Spain commented on the elaborate chandeliers in a conference room, a mass of coloured glass grapes. “I love those chandeliers,” the visitor said. “Personally I find them rather excessive,” Caruana replied. For a fan of the simple, it's no small irony that Caruana is driving a highly complex rewrite of global bank safety rules as the head of the Basel Committee on Banking Supervision, in one of the most dramatic and controversial financial reforms ever. In his most difficult job to date, Caruana took control of the committee at a time of unprecedented criticism for New Basel Capital Accord or Basel II, designed to replace the 1988 accord that set out how banks allot cash to buffer against surprise risks.
The arrival of the euro marks a profound and almost certainly irrevocable change to the financial landscape – perhaps the most important event in the international monetary system since Bretton Woods in 1944. Instantly, a major new reserve currency has appeared; indeed the euro is already being used in international transactions more extensively than any currency other than the dollar. As the most international financial centre anywhere in the world, London’s business has already been profoundly affected by the euro. This is because, although the UK is ‘out’, London is ‘in’. The conversion weekend – the changeover from participating national currencies to the euro in wholesale  BIS Review 43/1999  2  markets at the beginning of this year – was one of the biggest logistical operations that the London market has ever undertaken. It was also arguably more complex in London than in some countries in the euro area, because London traded in all the euro area national markets, and they all changed over to the euro in slightly different ways. And, though hard numbers are difficult to come by, we are confident that London is maintaining its market share. In exchange traded short-term interest rate derivatives – one of the few areas where we have precise figures – LIFFE has around 80% of euro business. On the London Stock Exchange, over 40% of turnover in the first two months of this year was in stocks of firms in the euro area.

This has led to the built-up of imbalances which increase the risk of a substantial price corrections and of loan losses (charts 13 and 14).6 A second, related, danger is that low rates may induce excessive risk-taking in financial markets – as opposed to reviving productive risk-taking, which is one of the objectives of low policy rates. Here, the economic literature stresses two channels: investors who are unable or unwilling to accept low returns are liable to take higher risks and increase leverage to reach their return objective, a phenomenon known as “search for yield” (chart 15).7 In addition, by pushing up asset prices and dampening price volatility, low interest rates reduce  5  This view is also reflected in market expectations. For instance, 10 year inflation expectations for the US, derived from the yield differential of inflation-linked government bonds and nominal government bonds, stood slightly below 2.25% in August 2013. 6  Empirical evidence suggest that a simultaneous built-up of imbalances in real estate and credit markets is a key leading indicator of subsequent financial instability. Cf., for instance, Schularick and Taylor (2012) and Borio (2012). 7  Cf. Borio and Zhu (2008) and Gambacorta (2009). 4  BIS central bankers’ speeches  measured risk and may lead investors to misjudge the true risk of a given investment.8 A long period of low rates, for example, may lead borrowers and lenders to overestimate debt affordability and underestimate the risk of higher debt servicing costs in the future.
12  Figure 6 IMCE (1)  Depuc (2)  (diffusion index) Trade  80  (index, 1 January 2012 = 100) Construction  Manufacturing  500  IMCE w/o mining  60  375  40  250  20  125  0  0 18  19  20  21  22  18  19  20  21  22  (1) Business Confidence Index. Value above (below) 50 indicates optimism (pessimism). (2) Economic and Political Uncertainty Index. Moving 30-day average. As from December 2021, the index includes an update to the dictionary of words used for its construction, as a way of incorporating new elements that influence local conditions. Sources: UAI/ICARE and Central Bank of Chile based on Becerra and Sagner (2020). Figure 7 Current account by institutional sector (percent of GDP, moving one-year average)  Households  10  Government  Businesses  Current account  5 0 -5 -10 -15 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 2016  2017  2018  2019  2020  2021  2022  Source: Central Bank of Chile.

Among other things, in our own bank lending survey, banks have been reporting an increase in loan demand for all loan categories for two successive quarters, as well as an easing in credit standards for loans to enterprises. However, we should not forget that credit standards overall remain rather tight from a historical perspective. As mentioned before, it was exactly against the backdrop of weak credit dynamics contributing to a subdued inflation outlook that we decided in early September to adopt a number of additional monetary policy measures, specifically designed to support the  2  BIS central bankers’ speeches  extension of credit to the real economy. As they work through the economy, these measures will help inflation rates return to below, but close to, 2%. What else is needed: well, it is now in the hands of governments to act decisively on further structural reforms that will ensure higher sustainable growth and employment in the euro area. Also, on the fiscal policy side, governments should not unravel the progress made in fiscal consolidation, but use any leeway to make fiscal policies more growth-friendly. As regards monetary policy, we remain fully determined to counter risks to the medium-term outlook for inflation. As I said in the European Parliament last Monday, we stand ready to use additional unconventional instruments within our mandate, and alter the size or composition of our unconventional interventions should it become necessary to further address risks of a too prolonged period of low inflation. BIS central bankers’ speeches  3
ICT, Security, Operations, Credit Control, Anti-Money Laundering and Fraud Investigation departments need to break down the various silos to facilitate faster detection and prevention of cyber financial crimes. No single department or function can be an island in this battle. In the same vein, no bank or financial institution can be an island. One financial institution brought down by a cyber-attack would impact other banks and could ultimately destabilize the entire financial sector. It is for this reason that I call upon all CEOs  2|Page  here present to ensure that Cyber Security is entrenched in our day-to-day operations and strategic plans. Ladies and gentlemen, I am aware that other countries have set up Computer Incident Response Teams (CIRTs) for various industries, including the Financial Sector. It is high time that we seriously begin to consider setting up a financial sector CIRT in Zambia. I believe that the CIRT would, not only assist in ensuring that all financial institutions are collaborating and working as one in mitigating cyber risks, but also enable information sharing. I am therefore calling upon Bankers Association of Zambia to work with Bank of Zambia to ensure that this is achieved. Ladies and gentlemen, I wish you the best and I encourage you to participate actively during the presentations and discussions. Use every opportunity to tap into the vast experience of the resource persons and your peers during these few days. With these remarks, I declare this workshop officially open. Thank you and God bless you all. 3|Page

Even if liquidity abounds, it does not move from those who have it in excess to those in demand, because of the great uncertainty that exists and the decision of financial entities to hold on to their liquidity surpluses to cushion themselves against balance-sheet shocks (Allen and Carletti, 2008) or simply to benefit from buying assets at discount prices. The financial crisis is the outcome of two key phenomena. On one side is a period of stability, low interest rates, abundant liquidity, fast economic growth and an asset price bubble (figure 7). This combination of aggregate factors gives way, as often occurs, to a phase of fast credit expansion. Actually, a financial crisis is much more likely to owe to a credit expansion, but not every credit boom ends up in a crisis 4 . At the same time, many countries have recorded a real-estate boom, but not all of them have found themselves in the extreme financial system breakdown as the United States. The problem is that this has occurred within a spiral of financial innovation in very poorly regulated market segments. One important task will be to figure out why the financial systems of different economies with similar credit growth rates and housing price behaviors have had so different outcomes. The low interest rates prompted a search for better returns. Individuals with zero repayment capacity were provided loans, and to reduce the risk, said loans were securitized and often taken out of the banks' balance sheets (i.e.
68  That is more than counter-balanced, however, by productivity performance in the lower tail. This tail appears to be both materially longer and lower than the UK’s main international competitors (Chart 8). Moreover, this lower tail has lengthened by more over the past decade than in those countries. 69  The already slower rates  of technological diffusion in the UK, by international standards, have slowed further over the recent past. These diffusion dynamics are important to productivity and living standards. The wider dispersion and longer lower tail of companies helps explain the UK’s roughly 30% productivity gap with, say, France and Germany. And the widening dispersion in productivity performance between the upper and lower tails of companies helps explain the UK’s relatively poorer productivity performance than these countries over the past decade. These diffusion dynamics are also consistent, or at least are not inconsistent, with the dawning of a Fourth Industrial Revolution. This will have had the effect of shifting outward the technology and productivity frontier for pioneer firms. There is clear evidence of that having happening. Productivity among firms in the top 1% of the distribution grew, on average, by 8% per year over the ten years to 2014. The most-productive 0.1% of firms exhibited 12% annual growth. 70  As a point of comparison, the lower 99% tail of firms have experienced annual average productivity growth of less than 1% over the same period.

It may be relatively easy to discuss the transition plans with counterparties that are also financial institutions, as everyone is more or less on the same page. But IBORs are also used by banks’ different clients, both corporations and individuals. There is a big gap among these IBOR users on the awareness of the benchmark reform, so the situation becomes less straightforward. 12. Therefore, client education is another vital task. Banks should begin outreach to their clients, and educate them about the benchmark transition early. This could help to minimise misunderstanding and costly litigation in the future. Raising market awareness in Hong Kong 13. Closer to home in Hong Kong, the Treasury Markets Association (TMA) has been working with bank representatives on benchmark reform for many years. More recently it has intensified its reach-out to other sectors. It has set up a Working Group to engage a wider spectrum of stakeholders including accountants, lawyers, bank customers and industry 2/4  BIS central bankers' speeches  associations like ISDA. It is important that different market participants understand what the transition will mean for their business operations and how they should prepare for these changes. The Working Group is now looking at issues like the implications on accounting and the transition of cash products. It will further engage stakeholders to explore means of encouraging the adoption of alternative reference rates in their day-to-day transactions and business activities. 14. At the same time, the HKMA supervisors has also been actively engaging banks.
Jaime Caruana: The importance of transparency and market discipline approaches in the New Capital Accord Keynote speech by Mr Jaime Caruana, Governor of the Bank of Spain and Chairman of the Basel Committee on Banking Supervision, at the Market Discipline Conference, Federal Reserve Bank of Chicago and BIS, Chicago, 1 November 2003. *  *  *  Overview Good morning. I would like to thank President Moskow, Malcolm Knight, and the staff of the Federal Reserve Bank of Chicago and of the Bank for International Settlements for organising and hosting this timely conference. It is a pleasure for me to join your discussion in Chicago today. I can think of few venues better situated to talk about markets and to explore the links between transparency, corporate governance, and the role markets can play to encourage prudent risk taking. Bank regulators in recent years have begun to view markets as an ally to our system of supervision. We have consequently sought to incorporate market discipline directly into the supervisory framework. Markets value well capitalised and well managed institutions as much as supervisors do, and can create rewards for banks that manage their risks appropriately. Yet banks can be very complex institutions and no market discipline is possible without widespread public access to timely, accurate, and comprehensive information on a bank’s exposures, its risk management processes, and its outlook for the future.

xxvii  That is perhaps why studies of expansionary monetary actions generally find they reduce, not increase, inequality while raising demand and supporting jobs. xxviii  And there appears to be little evidence that  stimulative monetary policy makes groups worse off. Do these lessons apply to the most recent UK recession and recovery? Macroeconomic Outcomes The 2008 financial crisis threatened depression and mass unemployment, with the least well-off most exposed. Fiscal policy quickly came under severe strain as tax revenues plunged, the costs of social benefits rose sharply, and the huge bills for too-big-to-fail banks came due. Since then sustained austerity has reduced the fiscal deficit from around 10% of GDP in 2010 to around 3 ½ % today. While necessary, this has, on average, subtracted around 1 percentage from demand each year. Over that time, structural policies have boosted participation in the labour market but have been unable to return productivity growth to anything resembling its historic average. For seven years, in the face of severe headwinds to growth, monetary policy has been the only game in town. Its task has been complicated by those historically low equilibrium interest rates. These likely turned negative in the aftermath of the crisis, meaning that monetary policy has had to run very fast just to stand still. Given constraints on how low nominal interest rates could go, the Bank of England’s MPC had to buy gilts – so-called Quantitative Easing (QE). What if the MPC had not acted?
[20]Padoa-Schioppa, T. “  An institutional glossary of the Eurosystem” presented at the conference on "The Constitution of the Eurosystem: the Views of the EP and the ECB", 8 March 2000, and “  Transparency in the monetary policy of the European Central Bank”, ECB Monthly Bulletin November 2002. [21]In particular, these are: the requirement to submit reports to the European Parliament, the EU Council and the Commission on an annual and quarterly basis (Article 284(3) TFEU and Article 15.1 of the Statute of the ESCB); the presentation of the annual report by the President of the ECB to the Council and the European Parliament which may hold a debate on the basis of it (Article 284(3) TFEU); and the publication of weekly financial statements (Article 15.2 of the Statute of the ESCB). Furthermore, at the request of the European Parliament, or at its own initiative, the President of the ECB and other members of the Executive Board may be heard by the competent parliamentary committees (Article 284(3) TFEU). The President of the ECB must also be invited to participate in Council meetings when the Council is discussing matters related to the objectives and tasks of the Eurosystem (Article 284(2) TFEU). The President of the ECB also answers a significant number of queries by members of the European Parliament.

As macroprudential policy does not generally involve ESCB policy decisions, the question of the applicability of the principle of independence under Article 130 of the Treaty is less relevant in this area. A possible exception is the case where macroprudential considerations are taken into account under the second pillar of the ECB monetary policy strategy – monetary analysis. As the specific tools under Article 5 of the SSM Regulation are used, the independence http://www.ecb.europa.eu/press/key/date/2017/html/sp170330.en.html[03.04.2017 15:53:14]  Central bank independence revisited  provisions of the SSM Regulation would be applicable with respect to decisions pertaining to those tools. To that extent, the ECB enjoys, in this particular case, a high degree of operational and financial independence; instrument independence is confined and personal independence is not protected equally for all members of the Supervisory Board in the same way as for the members of the decision-making bodies of the ECB. Rationale for having different mandates for monetary policy, macroprudential policy and microprudential supervision Let me finally elaborate on the rationale underlying the legislator’s decision to keep separate the mandates for monetary policy, macroprudential policy and microprudential supervision. This helps us to understand why it is justifiable to treat different mandates differently and why certain institutional aspects characterising those mandates, like independence, might vary, even within the same institution. The first reason to keep monetary and macroprudential policy separate lies in the differences between the financial and business cycles, which are often de-synchronised or have different amplitudes.
Muhammad bin Ibrahim: Financial markets and the ringgit - our journey forward Opening remarks by Mr Muhammad bin Ibrahim, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Financial Market Association (PPKM) Annual Dinner "Financial Markets and the Ringgit: Our Journey Forward", Kuala Lumpur, 18 November 2016. * * * It is my great pleasure to address the members of the financial market industry at the Financial Market Association of Malaysia’s annual dinner. This dinner regularly held towards the end of the year, has developed its own unique tradition and camaraderie. Another year is passing by and we find ourselves in a very familiar situation; heightened volatility and uncertainty, low growth and low interest rates. The specificities or circumstances behind these may be different and indeed some of these developments were considered highly unexpected or even irrational. Hindsight, which gives us 20/20 vision, does not necessarily provide us with a better understanding. The global markets continue to be imbued with financial market and policy uncertainties. To add to this, are the evolving geopolitical uncertainties and challenges arising from Brexit and the impending changes following the recently concluded US presidential elections. 2016 is turning out to be a year of many surprises, something that policy makers tend to be uneasy with. I hope 2017 will bring less of these, but then for financial market players, surprises, volatilities and uncertainties are not totally undesirable as they also bring along lucrative trading opportunities.

The rationale is to give public recognition to an institution that contributes towards raising the volume and value of transactions in the FX derivatives market. Last but not least, let me take this opportunity to congratulate the FMA on its accomplishments this year. FMA recently signed a collaboration agreement with the Asian Institute of Chartered Bankers and Asian Business School that would contribute towards enhancing the integrity, ethical standards and professionalism of market participants. FMA certainly has been an important driver and partner to bring the financial market development to a higher level. And organizing this annual event is also one of its perennial successes. On this note, I wish tonight’s dinner will be an occasion for us to enjoy and cherish. 5/5  BIS central bankers' speeches