samchain/econo-pairs-v1 huggingface dataset:
Third, efforts are underway to reduce counterparty risk exposures by requiring that over-thecounter (OTC) interest rate swaps, credit default swaps, and equity and commodity derivative trades be standardized where feasible – and that all standardized trades be cleared through central counterparties (CCPs). Standardized clearing through CCPs reduces  BIS central bankers’ speeches  5  the complex web of counterparty exposures that exist in the bilateral world of OTC derivatives. Everyone that centrally clears becomes the counterparty to the CCP. This enables a high level of gross bilateral exposures to be netted down to a much more manageable set of net exposures to the CCP. Fourth, recognizing that mandated central clearing will only reduce risk if the CCPs themselves are robust, efforts are underway to strengthen financial market infrastructures. In the United States, for example, the Dodd-Frank Act instructs the Financial Stability Oversight Council to designate certain financial market utilities (FMUs) as systemically important. Such FMUs would be subject to a tougher regulatory oversight regime. On a parallel track, at the international level, the Committee for Payment and Settlement Systems (CPSS) and the International Organization of Securities Commissions (IOSCO) are revising and strengthening a set of regulatory oversight principles and minimum business standards for financial market infrastructures (FMIs). These principles include numerous standards with respect to governance, access, risk management practices, and capital and liquidity standards.

In an integrated global economy, severe negative consequences can be felt far away from the center of the financial crisis – as they were in Asia in late 2008 and early 2009. This underscores our common interest in promoting financial stability on a global basis. Truly effective reform would generate sizable and widespread benefits. However, there are significant challenges to achieving this. One challenge arises from the fact that we have a global economy with many large, globally active financial firms, but our regulatory regimes are implemented at the national level. Another is that any attempt to improve regulatory standards will inevitably meet with resistance from parties that have a vested interest in the status quo. Today I will comment on the actions underway in the United States and internationally to make the financial system more resilient and robust. I will focus on the logic behind the reform efforts, progress to date, and areas where there still is considerable work to do. As always, what I have to say reflects my own views and not necessarily those of the Federal Open Market Committee, the Federal Reserve System, or my international supervisory colleagues with whom I work closely with on a regular basis. The financial crisis exposed significant vulnerabilities in the financial system. Without revisiting all the causes and consequences of the credit boom and bust that led to a boom and bust in the U.S. housing market, the bottom line is that our regulatory system failed in two important dimensions.
Unemployment has risen in all counties and among all occupational groups, except in primary industries. In Sør-Trøndelag unemployment was 3.7 per cent. Unemployment is highest in Oslo, Aust-Agder and Finnmark. It has increased most in Oslo and Akershus in the course of the past year. Even though unemployment in manufacturing has edged up in recent months, the increase in unemployment so far is primarily the result of restructuring and reduced activity in some service sectors. Unemployment has increased most in Eastern Norway, where there is a heavy concentration of these industries. The aviation industry is undergoing restructuring. The ICT industry has reduced activity considerably over the last year. In spite of the slight increase in unemployment, household borrowing has been high over a long period. Over the past year, growth in credit to households has stood at over 11 per cent. House prices remain high. Household financial saving (net lending) has dropped to almost zero in the past couple of years. Strong growth in household consumption will exert continued pressures on prices and wages. There are clear indications that household income is rising substantially. At the same time, the level of financial saving appears to be low. All in all, this suggests that growth in household demand for goods  BIS Review 65/2002  1  and services will remain high. There will probably be a shift in demand towards imported goods and services.

We would then have had to reduce the interest rate sharply this summer. This would have amplified the pressures in the Norwegian economy, which are so clearly reflected in wage developments and household credit demand. It is more than likely that this would have required substantial increases in the interest rate in a year to eighteen months. Strict inflation targeting of this type would thus have resulted in more pronounced fluctuations in the interest rate and in aggregate demand and production. Information obtained via the regional network established last autumn was used when preparing the October Inflation Report. We will have six rounds of talks each year with business and community representatives concerning financial developments in their enterprises and industries. There will be a total of about 200 visits in each round. We have divided the country into 7 regions and established links with regional research institutions in six of them. These institutions will hold meetings with the representatives on behalf of Norges Bank. The private service sector is by far the largest in the Central Norway region, accounting for over 40 percent of total employment in the region. The private service and retail sales sectors together account for over half of the number employed, while a good tenth are employed in manufacturing. The share of manufacturing industry that is exposed to international competition in Trøndelag is relatively limited. Companies in the Central Norway region report small changes in prices and costs, except for export companies.
[13] This presents a challenge when considering implications for policy – and highlights the importance of continuing to plug the kinds of capability gaps I discussed earlier. As the results publication sets out, the Bank will engage with firms individually and collectively to help them target their efforts, and share good practices identified in this exercise. Implications for policy I hope it’s clear by this point that the CBES will be a valuable tool for helping us and financial firms to understand the challenges ahead. This exercise is not going to be used to set capital requirements for banks and insurers. But it clearly sheds light on that debate. The CBES results make clear that climate risk is a first-order strategic issue for the firms we regulate. But in my view it is not yet clear that the magnitude of transition costs require a fundamental recalibration of capital requirements for the system. [14] A persistent drag on profitability would be very nasty for firms, but so long as they are able to continue to make sufficient profits to maintain their capital buffers, its impact on safety and soundness might be less material. Had the results of this exercise suggested a fundamental threat to the solvency of these firms, our response would of course have been quite different. Set against that high level view, though, a world with climate change is without doubt riskier than one without.

Philipp Hildebrand: SNB’s performance against the background of financial market developments Introductory remarks by Dr Philipp Hildebrand, Member of the Governing Board of the Swiss National Bank, at the end-of-year media news conference, Zurich, 15 December 2005. *  *  *  Developments in the financial markets The international financial markets have been dominated in recent months by four key developments. Long-term capital market yields have improved; the equity markets have, on the whole, exhibited very positive developments; the US dollar has continued the uptrend which set in at the beginning of this year; and the gold price has climbed sharply. The movements of the past few months in the international capital markets are largely attributable to economic developments and US monetary policy. Long-term dollar interest rates climbed significantly in the second half of the year thanks to the robust economic climate, the positive outlook in the US and the continued normalisation of monetary policy by the Federal Reserve. A rise in yields was also observed outside the US. The spread between US and European capital market rates, however, remained considerable. This is not least reflected in the differing business cycle phases of the US and European economies. Despite the improved economic outlook and higher oil prices, inflation expectations have, on the whole, remained moderate on both sides of the Atlantic. The three major economic areas – US, Japan and Europe – exhibited divergent equity market developments. While the US equity market largely maintained its sideways trend, the European indices firmed substantially.
Intrinsically Linked, One with the Force The FOMC is mandated by Congress to promote maximum employment and price stability. The goals of our dual mandate are intrinsically linked. Specifically, price stability is essential for the economy to reach its full potential and to sustain maximum employment over the long term. Since the pandemic, imbalances between demand and supply have persisted throughout the economy, leading to high inflation and a tight labor market. Although we have seen some signs of a gradual cooling in the demand for labor—as well as for some goods and commodities—overall demand continues to exceed supply. I'll first discuss what this means for employment. At the national level, job growth has been robust, with monthly job gains averaging about 220,000 over the past three months. Other indicators show that labor demand is gradually slowing, yet remains very strong. For example, job openings have come down from their peak level in March of last year. Still, the ratio of job openings to unemployed far exceeds levels prevailing before the pandemic, when the labor market was very strong. Similarly, quit rates have been gradually declining, but are above pre-pandemic levels. In addition, the unemployment rate is at a historically low level of 3.4 percent. And in April, the employment-to-population ratio for those between the ages of 25 and 54 reached the highest level since 2001. The strength of the labor market is evident in parts of the Federal Reserve's Second District. Fairfield County in Connecticut has fully recovered from the pandemic.

Since the end of February the national currencies are no longer legal tender, the major exertion by society is over and life is beginning to return to normal in the euro countries. For Sweden, however, a changeover of banknotes and coins still lies ahead, if we were to say "yes" in a referendum on full membership of the monetary union. It is therefore important that all of us in various sectors of society take a look at how the changeover has worked in the different countries and learn from this. Today I intend to begin by discussing what experiences Sweden could learn from the cash changeover. After that, I shall say a few words about the timetable for a potential Swedish full participation in the third stage of EMU. The cash changeover in the EMU countries The overall picture painted by the ECB, the European Commission, embassies, central banks and media with regard to the euro introduction is that it has gone smoothly, and above all quickly. Only a few days into 2002 the euro was being used in most cash transactions and only a few of the problems that had been feared actually arose. On the other hand, other, rather more unexpected problems arose in the aftermath of the cash changeover, because of the rapid pace at which it occurred. I shall mention some factors here, both positive and negative, which have affected the outcome of the introduction of the euro.
Subsequently, we have raised the deposit facility rate to 2%, a cumulative increase of 250 basis points (bp), the fastest in the euro's history. We have also created the new Transmission Protection Instrument to ensure the smooth transmission of monetary policy across the euro area. We have amended the conditions of the longer-term refinancing operations, with the specific aim of strengthening the transmission of interest rate increases. And we have announced our intention to stop reinvesting, from early March 2023, all the principal payments from maturing securities under our asset purchase programme, which will give rise to a gradual and predictable reduction in the size of the portfolio. Overall, this monetary policy normalisation process has already translated into a significant increase in market interest rates. But what can we expect in the future? At the last Governing Council meeting we stated that interest rates would still have to rise significantly at a steady pace to reach levels that ensure that inflation will return to its target. As I mentioned earlier, the latest ECB projections forecast inflation of 2.3% (i.e. above the 2% target) in 2025. Those projections were based on the market expectations for the future path of interest rates when they were prepared. Deeming the projections valid, interest rates would therefore need to rise more than the markets expected when they were prepared in order for inflation to return to its target.

I will also offer my opinion on how other economic policy should make a consistent contribution, so that we can chart a course through these uncertain times towards prosperity and opportunity. 1. Euro area: situation and outlook A succession of adverse shocks, including that triggered by Russia's invasion of Ukraine, have rocked the global and, naturally, the European economy. Indeed, given our geographical proximity to the war zone, our close trade and financial ties to Russia and our high dependence on fossil fuel imports from that country, the euro area economy has been one of the hardest hit by the war. The war has sent the prices of energy and other commodities soaring. As these are products that the euro area does not have at its disposal and needs to import, this has led to a significant deterioration in our terms of trade of around 2 percentage points (pp) of (nominal) GDP to 2022 Q3. Moreover, this shock has unfolded amid sky-rocketing global inflation, which has reached levels not seen in several decades and is prompting sharp falls in real income. The reasons behind the rise in inflation are manifold and combine supply and demandside factors, whose weights differ depending on the geographical area in question. In  1/8  BIS - Central bankers' speeches  the case of the euro area, higher energy and food prices have added to the effect of other supply-side factors related in particular to supply-chain disruptions.
This has been one of the Committee’s priorities and many significant steps have been taken and will be taken to improve the ownership of the standards and inclusiveness of the processes. For example, the Committee has a long-standing working group that includes representatives from sixteen non-member countries, and we have increased our interaction with this working group. This past July, the Committee met in joint session with this working group in Krakow, Poland to discuss, among other things, Basel II implementation issues. In addition, we encouraged non-G10 supervisory participation on working groups that are addressing issues related to validation and operational risk. I believe that this dialogue will, over time, foster greater consistency among Committee and non-Committee members. The Committee is therefore committed to heightening this dialogue and will consider further ways to promote consistency. I noticed a quote on the cover page of the FBE’s response to the European Commission’s Green Paper on Financial Services Policy: “time passes quickly, we can not save it or buy it, but we can make it work and be fruitful”. In the context of this speech I hope that you feel the past 20 minutes have passed quickly, have worked and been fruitful, and I wish you successful discussions for the rest of the day. Thank you for your attention. BIS Review 84/2005  5

2  BIS Review 20/2004  The stronger productivity growth is probably connected with economic activity; at the beginning of a recovery the available production resources are used to a greater degree and it is only when the recovery is secure that investment and new recruitment accelerate in earnest. However, there are numerous indications that productivity has risen more than is usual for the economic situation, a pattern that has been even more evident in the United States. It is conceivable that this development is linked to the factors I mentioned earlier; globalisation, deregulation and increased competition. However, more lasting changes in productivity may also be linked to the large investments in IT and telecommunications at the end of the 1990s. It is possible that the full impact from the investments made and technological advances is first achieved in connection with cost-cutting and rationalisation. We have a special boxed article on this subject in the report, which I can recommend reading. It is not possible to determine with any certainty what has caused the improvement in productivity. However, given this more favourable picture, we have nevertheless anticipated a rather higher level of productivity growth in the near future. The new inflation figures received also indicate a slightly more subdued inflationary pressure than we had estimated. The outcome shows not only that electricity prices have fallen back as expected, but also that prices have increased at a slower rate in general.
11  The rising cost of Tier 2 debt owes, at least in part, to smaller banks issuing these instruments to comply with MREL resolution requirements. This factor may have had an important impact, given that MREL requirements are binding from 1 January 2022 and banks must reach the required levels. 12  The balance of bank deposits held by the resident private sector in Spain rose by 4.1% in 2021, compared with growth of 8.9% in 2020. In March 2022, deposits increased by 5.1% year-on-year, compared with rates of over 7% in the same month a year earlier. 13  In 2021, the cost of capital increased over the first ten months of the year, from 6.4% at December 2020 to 10.8% at October 2021, and then fell back over the last two months, standing at 8.1% at year-end. Thus, the average cost of capital for the full year was 8.8%, in any case below the sector’s ROE. 14  So far this year the cost of capital has continued to fall, to 7.3% in March and 6.9% in April, below the ROE for 2022 Q1 (11.7%). 15  The CET1 ratio and its denominator (risk-weighted assets (RWAs)) recorded similar declines (0.9% for CET1 and 1.1% for RWAs), so the ratio rose by barely 2 basis points (bp) to 13.3% at end-2021. 11  Indeed, at December 2021, the leverage ratio of Spain’s significant banks (5.7%) was only slightly below the European average (6%).

On that basis, it was possible to build a whole architecture of asset prices, whose relative riskiness is determined according to the intrinsic characteristics of assets and investors’ risk appetite. The important word here is “relative”. To price financial assets, markets need a basis – a risk free rate. That basis has now been shaken. Immediate consequences seem benign in the US. Markets have judged, and rightly so, in my view, that there is currently no alternative to US debt as the most liquid market and it remains the ultimate benchmark for assessing risk. So, if anything, the downgrade of US debt was followed by new inflows into Treasuries and a decrease in US interest rates across the yield curve. At the same time, however, a pervasive uncertainty has been created, which might be  BIS central bankers’ speeches  1  responsible for the strong decline in confidence and equity prices that has occurred over the last weeks. In Europe, of course, sovereign credit risk has had more immediate and dramatic consequences, with an abrupt increase in sovereign spreads for peripheral countries following the July 21st statement. It remains difficult to foresee how, in the longer run, markets will assess debt sustainability in different countries and jurisdictions. That assessment depends on a complex process, where, together with economic fundamentals, subjective probabilities, self-fulfilling beliefs and other influences play a major role. The certainty that debt would be paid in full strongly anchored market perceptions in the past.
As long ago as 1997, the International Organization for Standardization (ISO) released a standard for the Classification of Financial Instruments (ISO 10962) and designated the Association of National Numbering Agencies (ANNA) as the registration body for this standard.31 More recently, following G20 commitments, the industry has been working to standardise classification of OTC derivative products. The International Swaps and Derivatives Association (ISDA) is working with derivatives clearing houses and other financial institutions to use Financial product Mark-up Language (FpML), which is already used in the industry for communications and processes, to provide a standardised presentation of each listed or cleared product. ISDA published the latest version of its OTC taxonomies in March 2012.32 SIFMA is backing the use of FpML. At a greater level of granularity still, LexiFi is selling a commercial programming language, MLFi, which breaks down financial transactions into their primitive constituents. These elements can be combined using a standardised syntax to describe instruments at any level of complexity. In essence, this approach is an attempt to create a “DNA string” for derivatives. As yet, we are some distance from having a consistent global method for financial product identification. The prize beyond that, a big one, would be to integrate LEIs and PIs using a commonly-agreed global syntax - an HTML for finance. This would allow us to move from words to sentences. It would provide an agreed linguistic base for a common financial language.

I want to build on that track record to do the same for our new tasks because in everything the Bank does, I and my colleagues are conscious that we are accountable to you. The Bank of England has changed radically since that Bank Holiday Monday in 1997 when Eddie George and I sat in the Bank contemplating our new role, unaware of the roller coaster ride on which we were about to embark. The Bank will change again next year with its new responsibilities. But some things don’t change. Here again is Mr. Montagu Norman: AUDIO INSERT: “I would sum up the vital characteristics of the Bank as experience in affairs, cooperation on all sides, independence of judgement. But you know these three things – experience, cooperation, independence – are no good unless people have confidence in you. I like to believe that the Bank, with its long history and tradition, stands high in public esteem. But only by service to the community can that esteem be maintained through times good and bad.” That’s true not just for Montagu Norman’s day, but for today too. The present crisis is far from over, as events in the euro area illustrate weekly. Our own economy is still not back to health. Although inflation has fallen back in recent months, it is still too high. And despite efforts to stimulate the economy, the recovery is proving slower than we had hoped. It will come.