samchain/econo-pairs-v1 huggingface dataset:
Table 1: Estimated relationship between annuity rates, risk-free rates and corporate bond spreads  (a)  𝐴𝑛𝑛𝑢𝑖𝑡𝑦𝑅𝑎𝑡𝑒 = 𝛼 ∙ 𝑅𝑖𝑠𝑘𝐹𝑟𝑒𝑒 + 𝛽 ∙ 𝑆𝑝𝑟𝑒𝑎𝑑 + 𝛾 Coefficients  p values  (b)  2  R  𝛼  𝛽  𝛾  𝛼  𝛽  𝛾  2007-15  0.753217  0.069835  0.035934  3.51E-50  0.007549  3.74E-58  0.890489  SII:  2016  0.630423  0.080868  0.03866  0.001673  0.785268  5.98E-07  0.786387  All:  2007-16  0.740991  0.068925  0.036442  9.18E-63  0.006131  5.02E-75  0.917595  Pre-SII:  Sources: Bank of America Merrill Lynch, Bloomberg, sharingpensions.co.uk and Bank calculations. (a) Estimated using ordinary least-squares. (b) p values below 0.05 are generally interpreted as being statistically significant – meaning all estimated coefficients in this table apart from the  of 0.785268 obtained using just 2016 data. 10  Using standard annuity rates for a 65 year old on average across males and females (sharingpensions.co.uk); 20-year sterling risk-free market interest rates (Bloomberg), to roughly match conditional life expectancy at age 65; and sterling-denominated option-adjusted corporate bond spreads (BoA-ML).

Even more important is how firms determine their capital resources. Reviewing the adequacy of reserving is a core element of our supervisory approach, particularly for general insurers. In the case of life insurers with significant annuity books, a key determinant of reserves is their use of the Matching Adjustment. Solvency II sets clear criteria for assets that can qualify for the Matching Adjustment. They must match the maturity of the underlying liabilities – so, for example, long-dated annuity liabilities require similarly long maturity assets – and they must have fixed cashflows. 8  These requirements are set by the Directive; they are not a feature of the PRA’s implementation. Indeed we have sought to interpret them in a purposive and proportionate way so that firms can back annuities with a wide range of assets, including illiquid assets, and still benefit from the Matching Adjustment. For example, we have allowed firms to restructure portfolios of illiquid assets, such as commercial real estate mortgages, infrastructure finance or equity release mortgages, using internal securitisations in order to create senior tranches that meet the Solvency II requirements. We have also allowed pairing and grouping of assets to meet the eligibility criteria - for example, combining a floating rate note with an interest swap, or a foreign currency-denominated bond with a cross currency swap. Restructuring of this kind has added complexity, operational risk and some costs for firms.
Chart 2 Highly indebted companies cut investment  Chart 3 UK current account balance as a  and employment more than unleveraged  percentage of GDP since 1955  companies in the global financial crisis Investment  Employment  Percentage change in crisis  % of GDP 6  15 10 5 0 -5 -10 -15 -20 -25 -30 -35 -40 No leverage  4 2 0 -2 -4 -6  High leverage  -8 1955  Sources: S&P Global Market Intelligence and Bank calculations. 65  75  85  95  05  15  Source: ONS  Notes: Change in investment and employment in the financial crisis for unleveraged companies and companies with high leverage ratios. Percentage change reflects the average log change in investment and employment between 2007 and 2009. High leverage companies are those with net debt/EBITDA ratio higher than four in 2006. See, for example, Olivier Blanchard and Gian Maria Milesi-Ferretti, ‘(Why) Should Current Account Balances Be Reduced?’, IMF Economic Review, April 2012 and Julián A. Caballero, ‘Do Surges in International Capital Inflows Influence the Likelihood of Banking Crises?’, Economic Journal, March 2016. 5  5  All speeches are available online at www.bankofengland.co.uk/news/speeches  5  Recent developments  What, then, has been happening in the UK to these drivers of underlying economic vulnerability? Developments are summarised in the ‘heat map’ below (Chart 4). The colours represent how high each indicator is relative to past outcomes.

Page 15  Chart 10: MPC asset purchase targets  Balance sheet policies So far, I have focused on the outlook for Bank Rate, consistent with the MPC’s view that this is now the ‘active tool’ for the conduct of monetary policy. But the transition in monetary policy that is underway has broader implications. In particular, it creates scope to start running down the asset portfolios accumulated as a result of quantitative and credit easing policies implemented by the Bank in the past. The impact of these policies over the past decade or so remains controversial. A recent publication by Bank staff surveys the large body of research and analysis conducted on central bank asset purchases. [16] It concludes that, although QE did help the Bank pursue its monetary policy mandate, both the magnitude of its effect and the channels through which it was transmitted are difficult to estimate precisely, and are anyway likely to have varied in both absolute and relative magnitude over time, as the economic context in which they were implemented changed. However one views that evidence, with inflation having risen and Bank Rate moving away from its effective lower bound, the case for employing those monetary policy tools has disappeared, at least for now. The MPC set out its plan for running down the asset portfolios accumulated through QE in its August 2021 Monetary Policy Report. [17] Consistent with that plan, once Bank Rate reached 0.5% in February of this year, reinvestment of maturing gilts in the QE portfolio ceased.
Steps were taken in order to remove distortions in the Turkish economy, to renew the financial system and to change the dynamics of the economy with the purpose of achieving price stability, sustainable public finances and sustainable growth in the long run. First of all, right after the 2001 crisis, economic policies aimed, in the short run, at maintaining financial stability and convincing market participants that sound macroeconomic policies would be put into practice with determination in order to solve the problems of the economy. In my opinion, the most critical change that came after the 2001 crisis was the amendment to the Central Bank Law. The Central Bank of Turkey has been given independence after a period of 30 years of high and chronic inflation. The primary objective of the Bank is now defined as achieving and maintaining price stability. It was a turning point in the economy and highly contributed to the changing dynamics in the Turkish financial system. In addition, it is now explicitly indicated in its law that financial stability is the Central Bank’s auxiliary objective, and the Bank gives utmost importance to maintain it. In the fourth article of the Law, the Bank’s responsibility of financial stability is defined within the framework of the functions of central banks that I mentioned before.

The most important result of international efforts aiming at sound financial markets was the approval of modern risk management techniques as a part of regular financial intermediation process. In this context the Basel II, the new capital adequacy framework, is a very important outcome of the action taken in the international arena. Although, the main aim of the original Basel Accord, which was applying institutionalized and international standards to the global financial system, has not changed in the Basel II Accord, the Basel II puts more emphasis on the risk management aspect of the financial intermediation process. It is expected that a sound and resilient risk management in the banking sector would also lead to more efficient risk management in the real sector. Therefore, in this way, as the financial system becomes more stable, less pro-cyclical and reinforced against shocks, more sources will be available for the real sector. However, it should also be considered that healthy and efficient risk management requires more than the three main pillars of the Basel II Accord. A good understanding of the risks that a financial institution might encounter, a clear definition of risk taking procedures, compliance of risk taking decisions with the strategic goals of the institution, ensuring the risks are within the limits that were set by the management and adequate capital for given risk structure are other essential elements for a more significant advance in risk management in financial institutions.
While the IMF used to be the guardian of the system of fixed exchange rates established in Bretton Woods in 1944, it now works to promote international financial stability. In this role, it oversees the overall economic and financial position of its member countries. More than ever before, its activities are primarily aimed at crisis prevention. BIS Review 111/2006  1

Gent Sejko: Launch of new banknotes Address by Mr Gent Sejko, Governor of the Bank of Albania, at the Launching of the two banknotes, 1000 lek and 10000 lek, of the New Albanian Banknote Series, Tirana, 15 June 2021. * * * Dear Ladies and Gentlemen, Welcome in this special day, when we are introducing to the public the two next denominations of the new Albanian banknote series. One of the main responsibilities and legal obligations of the Bank of Albania is guaranteeing the supply of economy with cash, both in value and structure, and ensuring confidence of the public in the national currency. After 20 years, the Bank of Albania, in 2016, undertook the initiative to start the production project of a new banknote series, which is legal tender, by improving and fully refreshing up its style and shape. In this framework, in September 2019, the Bank of Albania launched the new banknote series, which consists of six denominations: 200 lek, 500 lek, 1000 lek, 2000 lek, 5000 lek and 10000 lek. The theme of the new series of the Albanian banknotes embodies the portraits of the most illustrious national figures, and evokes the most notable moments in the history of our nation in its endeavours for freedom and prosperity. The theme echoes through historical eras, starting from Antiquity, moving through the Middle Ages, the National Awakening, the Independence of Albania, and concluding with the symbols of the national flag and anthem on the largest denomination, the 10.000 lek banknote.
Preserving a strong focus on professional standards Second, future talent strategies must not lose sight of the critical importance of preserving a strong focus on professional standards to regulate conduct and behaviour. Over the last decade, Malaysia's banking industry has made important strides in raising standards of professionalism. This is evident from the number of accredited banking professionals that has more than tripled over the last four years. Customers expect banks to stand with them through the good and bad times. The economy relies on resilient banks performing a critical intermediation function through economic cycles. The standards applied to professional bankers must therefore also stand the test of time. This means preserving high ethical standards that underpin the character of bankers, while expanding standards on professional skills and competencies expected of bankers to respond to a fast-changing landscape. I commend the exemplary leadership shown by GBEStB in pioneering the development of global education standards in new areas such as sustainable finance and digital financial literacy. In Malaysia, we also see efforts by our own professional development bodies to raise the bar through initiatives to refresh the Chartered Banker programme and the development of the Certificate in Climate Risk (CICR). A strong focus on standards should continue to direct these efforts to ensure that skills and competencies acquired will be fit for the future. The industry will also need to be more deliberate about integrating a sound risk culture into standards adopted for banking education and professionals.

Aldous Huxley who wrote the "Brave New World" in the 1930s believed technology and automation would put workers on the fast track for better pay, better hours, better relationships with bosses, and a better workplace environment. (I will let you be the judge of how far that is true today). Science-fiction writer and futurist, Sir Arthur Clarke, predicted in the 1960s, "a world in which we can be in instant contact with each other, wherever we may be, and that it will be possible for a man to conduct his business from Tahiti or Bali just as well as he could from London." This is certainly true today. In the 1980s, many predicted jobs that would be extinct and replaced by robots, such as cashiers, bank tellers, receptionists, servers, floor workers. Today, automation has changed these roles for sure, but it may interest you to know that only one occupation appears to have been fully eliminated in the last 60 years – and that is the elevator operator! 1/5  BIS - Central bankers' speeches  Roy Amara, American scientist and researcher, in 1982 predicted that the greatest changes to come in the workplace would be cultural. He said, "the workplace would be more cooperative than adversarial, and workers will want intellectual and psychological fulfilment, not just financial reward". Certainly, it could be said of hiring today that being part of a team that creates a positive impact on society and encourages emotional and intellectual growth, has strong appeal for job seekers.
Page 6  Undertaking the assessments of access and operating hours is critical The reports encourage central banks and authorities to review the benefits, risks and barriers of expanding access and operating hours and set out a framework to do so. The report on access sets out a holistic framework that central banks and authorities can follow and by providing realworld examples and case studies of jurisdictions that have successfully expanded access. And the report on expanding operating hours encourages authorities to assess the three end-states and reviewing the opportunities, risks and policy implications for each of them. While the reports say “encourage”, I would really urge central banks to undertake such reviews – the more that change, the greater our ability to meet the FSB global targets. With building blocks 10 and 12 being foundational for the roadmap, undertaking the assessments and taking action to expand access and operating hours will also have a direct positive impact across many building blocks. The Bank of England’s Renewed RTGS service I want to bring this to life by outlining what the Bank of England will be doing in response to these two reports and how our RTGS Renewal Programme will support this work. [18] The Bank is in the process of a multi-year project to renew RTGS. While changing our domestic infrastructure, this Programme also has an eye to opportunities to enhance cross-border payments.

Today, that fraction is less than 15%. There has also been a sharp fall in the fraction of shares held directly by individuals, from more than 50% in the 1960s to little more than 10% today. Today, these individual holdings tend to be indirect, operating through investment intermediaries of various types. That means the beneficial owners of shares – individuals – tend to have little direct communication with, involvement in, or indeed knowledge of, the firms in which they are investing. One consequence of a more dispersed and disinterested ownership structure is that it becomes harder to exert influence over management, increasing the risk of sub-optimal decision-making. 17 There is some empirical support for this hypothesis. For example, companies tend to have higher valuations when institutional shareholders are a large share of cashflow, perhaps reflecting their stewardship role in protecting the firm from excessive risk-taking (La Porta et al (2002), Claessens et al (2002)). (c)  Short-termism  A third friction in the manager/shareholder relationship, distinct but related, arises when different classes of shareholder have different rates of time preference. In particular, there have been concerns about the rising share of investors with excessively high discount rates and low holding periods – in other words, about “short-termism” (Kay (2012)). There is clear evidence of the investor scales having rebalanced in this direction over time. Average holding periods of shares have been in secular decline in a large number of countries for a number of decades (Chart 1).
The establishment of temporary credit institutions or bridge banks is emerging as a key resolution tool, but the new resolution frameworks need to address a number of related technical issues, such as the question of who provides the necessary capital and liquidity to the bridge institution, how the bridge bank can use the infrastructure of the failed bank, and how and when it is ultimately dissolved, since bridge banks are temporary entities needing a good exit strategy. Finally, the design of bank levies, which could usefully be collected into resolution funds, is also a delicate area. Mechanisms are under examination both to recoup the losses of the crisis and to create provisions against future events. I believe that ex ante funding is a crucial element, since it may reduce moral hazard and improves the authorities’ ability to react to crises earlier, thus strengthening the credibility of such actions. Levies are valuable revenueraising mechanisms with which to finance crisis measures. Uncertainty remains as to how they would affect the particular problem of moral hazard in the financial sector, and both the rate and the base of levies need to be determined with care, especially if we want to include the aspect of systemic risk as well. However, maintaining a level playing field and coordination between Member States remains in my view paramount in order to avoid a distortion of fund contributions and resolution tools. Challenges ahead – more integration I am confident that the emerging EU regime will appropriately address all these challenges.

Vítor Constâncio: A European solution for crisis management and bank resolution Speech by Mr Vítor Constâncio, Vice-President of the European Central Bank, at Sveriges Riksbank and ECB Conference on Bank Resolution, Stockholm, 14 November 2011. *  *  *  Introduction Ladies and gentlemen, It is an honour for me to speak at today’s conference, which has provided a stimulating debate on the challenging topic of bank recovery and resolution. The complexity of developing an effective framework for crisis management and resolution arises from the objective of achieving stability in increasingly integrated financial systems, where the authorities responsible for safeguarding their respective stability are still responsible towards their respective taxpayers. This element of complexity has been taken into account in a number of policy initiatives and suggestions worldwide. Especially in the EU context, I wish to acknowledge the pivotal role played by Lars Nyberg in this domain. His long-time devotion to the design and implementation of EU crisis management arrangements, coupled with his qualities as a central banker, have made Lars a key policy-maker for crisis management in the EU. I would also like to thank Lars for his long-standing and fruitful collaboration with the ECB in this field. Principally in the context of the work carried out by the Banking Supervision Committee, but also as Chairman of the EFC High-Level Working Group on Crisis Management, Lars has very often acted as a catalyst for coordination and cooperation among national authorities and EU institutions.
For all of these reasons, I do not fully understand the concept of separation, whereas I do understand that of stopping speculation. At the same time as bank failures are continuing, banks have obtained an easing of their liquidity constraints under Basel III. Isn’t this a paradox? That's not what it’s about. We have always believed that a liquidity ratio was necessary – and, incidentally, we have applied our national rules for many years, which is not the case everywhere. But the draft agreement was finalised too quickly and we had to rework it. We need to strike the right balance between strict regulation and supporting the financing of the economy. But will the timetable be put back? Yes, I am in favour of putting it back a bit, if necessary, in order to make these major tradeoffs and to give banks more time for the implementation phase so that they can adapt to the new standards. Should banks carry less sovereign debt? Banks should facilitate the financing of the economy; from this point of view, they should not hold huge quantities of sovereign bonds, even if these constitute liquid assets that are precious in assets and liabilities management. But the excessive concentration of liquid assets on sovereign debt in the calculation of the liquidity ratio can run into difficulties – either when the sovereign has its rating substantially downgraded or, on the contrary, when the country has low levels of debt, such as Australia or Switzerland.

Indeed, in most circumstances, global capital markets are deep and liquid enough – having a sufficiently wide range of participants able to trade with each other, and with different risk appetites and different actual risk exposures – to absorb shocks. But history suggests that strains can appear at times. And as the system develops, we need to be alive to whether cracks might show up in new places or old weaknesses manifest themselves in new ways. 4  BIS Review 50/2005  The two challenges I have sketched out for today’s markets – the incidence, now and then, of structural short option positions amongst short-term traders; and of controls occasionally lagging behind innovations – have a common feature. They both entail understanding markets as something more than the positions of atomistic agents. In the first case, market participants have an interest in factoring into their risk management an assessment of whether a market has structurally imbalanced option (or option-like) positions. In the second case, market participants have an interest in working together to establish robust practices and infrastructure when a particular innovation takes off. Many risk managers are, of course, well seized of this. Let’s hope they are empowered too. As practitioners, you can, and should, play a part in buttressing the system – by continuing to innovate, and by factoring collective outcomes into your private calculus and risk management. BIS Review 50/2005  5