samchain/econo-pairs-v1 huggingface dataset:
Pursuant to Chapter 1, § 3 of the Act on Norges Bank and the Monetary System, “the Bank shall inform the ministry when, in the opinion of the Bank, there is a need for measures to be taken by others than the Bank in the field of monetary, credit or foreign exchange policy”. 2  BIS Review 60/2009  On the basis of this provision, Norges Bank, in a letter of 6 October to the Ministry of Finance, took the initiative to establish a swap arrangement. In a letter of 18 December, we also proposed measures to strengthen banks’ solidity. The chart shows events and the measures and proposals at the initiative of Norges Bank. A critical period was the end of September and the beginning of October with the collapse of the investment bank Lehman Brothers, the savings bank Washington Mutual and the insurance company AIG. The extensive measures that have been implemented have worked. The difference between Norges Bank’s key rate and the money market rate – the premium – has narrowed, but is still higher than prior to the crisis. The flow of interbank liquidity appears to have been restored to some extent, but the money market is still segmented and the central bank an important meeting place. Even if premiums in the money market and credit market have been high and volatile, the changes in central bank key rates have fed through to money market rates.

Indirect data suggest that aggregate demand has carried forward positive growth rates, but growth remains significantly below the potential of the Albanian economy. Macroeconomic factors determining private consumption and investments, and a prudent fiscal policy sustain the assessment for contained growth of the domestic demand in the first quarter of the year. Moreover, in the absence of complete data and in real terms on developments in the external sector of the economy, assessments suggest that the contribution of foreign demand to economic growth will be lower than in the past year. Fiscal policy was subject to a consolidation nature over the first quarter of 2012, in line with its objectives to keep budget deficit and public debt in check. The contained fiscal approach has been reflected in minimum public expenditure in the first quarter of the year, with an annualised rate of 0.7%. Furthermore, low growth rates of fiscal revenues continued their trend, settling at 1.2% in this quarter. The budget deficit was ALL 11.5 billion, or about 2.5% down compared with the first quarter of a year earlier. Developments in foreign trade over the first two-month period of the year point to contracted trade exchange in annual terms. Value of exports in these two months dipped by 20.5% against the corresponding period of a year earlier, reflecting the moderation of foreign demand and price developments in global markets. On the imports side, their growth rates were significantly decelerated, reaching a nominal annual growth of 1.8% during this period.
If true, an obvious follow-up question is whether this should be a concern from a supervisory and regulatory perspective. Today, I will discuss the premise that large banks in the U.S. have indeed become more similar and then consider some reasons why this might be a topic of interest for the official sector. I can think of several compelling microprudential and macroprudential reasons why this would be the case: the need for an appropriate risk management framework that is commensurate with evolving risks; the need for supervisors to ensure that our assessments are 1/5  BIS central bankers' speeches  proactive and flexible enough to evaluate evolving firms; the potential for similar firms to become “systemic as a herd,” where a given shock leads to correlated responses and large-scale disruption in the provision of financial services; and the potential for firms to move away from areas of comparative advantage, which could diminish the overall efficacy of the financial sector. I’ll conclude with some implications for our supervisory regime. Environmental Context The performance of financial firms in the decade since the financial crisis has been influenced by a broad range of external forces. I’ll focus on three factors impacting how financial services are provided and their impact on large firm similarity: the regulatory response to the financial crisis, the interest rate environment, and technological innovation.

Jean Claude Trichet: Hearing at the Economic and Monetary Affairs Committee of the European Parliament Introductory speech by Mr Jean Claude Trichet, President of the European Central Bank, at a hearing before the Economic and Monetary Affairs Committee of the European Parliament, Brussels, 7 December 2009. *  *  *  Dear Madam Chair, Dear Members of the Committee on Economic and Monetary Affairs, This is our first meeting since the entry into force of the Lisbon Treaty. The new Treaty is a reason to celebrate: in Europe generally, here at the European Parliament, but also at the ECB. It will make the Union stronger, more effective and more efficient. The powers and responsibilities of the European Parliament increase. The ECB formally becomes an institution of the European Union, and all its essential features, above all its independence, are confirmed. Dans le cadre du nouveau traité, nous nous réjouissons de notre collaboration à venir avec le Parlement. La qualité de cette coopération a été exemplaire à mes yeux au cours de ces dernières années. Unsere heutige Anhörung ist drei wichtigen Themen gewidmet: erstens, unserer Einschätzung der aktuellen wirtschaftlichen Lage; zweitens, unserer Exit-Strategie zum Auslaufen der außergewöhnlichen geldpolitischen Maßnahmen, die wir in dem Höhepunkt der Krise eingeführt hatten; und drittens, dem Thema der systemischen Risiken im Finanzsystem. 1. Economic and monetary developments  The economic situation and outlook have continued to improve since my previous hearing before this Committee ten weeks ago. The euro area economy shows increasing signs of recovery.
If the downward revision to income expectations proves to have been justified then the level of output is unlikely to return to its previous path. We don’t know yet – it will depend in part on how persistent these shocks turn out to be – but this is clearly important to the longer-term outlook for both growth and inflation. In the near term, whatever the source of the changes in perceptions of permanent income, it is likely that growth will continue to be below the previous trend until more of the real adjustments to balance sheets across the economy have been made. That includes households, the public sector, banks and other businesses. In my view we are maybe two thirds to three quarters of the way through in each case, varying both across and within sectors. There is nothing scientific or “official” in that assessment! It’s just a personal best guess on the back of how the economy is behaving plus some direct knowledge of the progress of the banks with their deleveraging plans. To be clear, we do not need to be 100% finished before growth strengthens at all, and we may be beginning to see some signs of a pick-up. And I think this prognosis is consistent with our Inflation Report central projection of  BIS central bankers’ speeches  3  a gentle, albeit sustained, recovery over the next three years. That is a somewhat sobering, but not calamitous, outlook for real growth.

We have already seen positive benefits just from the supervisors working more closely with the Bank over the past couple of years. And last summer, when the Bank and HMT launched the Funding for Lending Scheme (the FLS) it received policy support not just from the MPC, but from the FPC, the FSA and the DMO. I think it may have been a world first for such a wide group of policy acronyms to be working together to implement a single initiative! I should also mention the creation of the Financial Conduct Authority, a new institution formed out of the old Financial Services Authority (and not part of the Bank), which will be responsible for ensuring that relevant markets function well. In doing so, it will aim to advance the protection of consumers, the integrity of the UK financial system and promote effective competition. It will be responsible for the conduct regulation of all financial services firms, and the microprudential regulation of those financial services firms not supervised by the PRA, for example, asset managers, hedge funds, many broker-dealers and independent financial advisers. Developments in the real economy Whereas those institutional arrangements are new and exciting, the economic data have been disappointing for some time, notwithstanding some improvement in the most recent indicators. Since the trough in output in mid-2009, GDP has averaged just 0.3% per quarter.
It is my pleasure to welcome you to this year's dialogue session between Bank Negara Malaysia and the insurance and takaful industries to discuss the challenges and opportunities the changing environment presents. A year ago, the focus of the discussions was on the strategic issues facing the industry as we transitioned towards a more competitive market environment. The emphasis was on the expectations on the industry to deliver a fair proposition to consumers, its relevance in the changing environment and its readiness in terms of capacity, and to support and sustain a successful strategy for growth. While the theme for this dialogue is to focus on how the industry should position itself to meet the new challenges, it will specifically address the transition towards a risk-based and a more self-regulated market conduct regime, and the development of a dual financial system for the insurance and takaful industry. This year, the dialogue has been jointly organised by the industry with the Bank. The industry's active involvement will be important in making this important event a success. This dialogue will provide an opportunity for deliberations on the strategic issues confronting the industry in the changing environment from the different perspectives between the industry and Bank Negara Malaysia . At this juncture, let me take this opportunity to share with you some of the recent economic and financial developments and the major policy initiatives by Bank Negara Malaysia .

Fifth, I would like to encourage the Albanian and international media to uphold the good tradition of accurate and real-time transmission of economic and financial developments in Albania, including the activity of the Bank of Albania and the financial sector, which occupy a significant place. Last but not least, I would like the Albanian public to continue to be discreet and have full confidence in the financial architecture we have built. We commend its added prudence, which is reflected in its propensity to increase savings. Therefore, household balance sheets remain positive, an indicator that sends positive signals for a potentially growing consumption in the near and distant future. I take this opportunity to reiterate that optimism shapes our present and our future. The time has come for the consumers’ sentiment to start its take off. This would create the desired chain reaction for accelerating money velocity and circulation of goods in the economy, making the economy recover to its pre-crisis parameters. On my behalf and on behalf of the Bank of Albania, I would like to thank the Bank of Italy and the Bank of France for the assistance and partnership during the twinning project. At the completion of this project, the Bank of Albania has upgraded the organisational and operational framework of its main departments and has approached to its European counterparties. 6  BIS central bankers’ speeches
That seems to produce a better guide to the real financial strength of banks and to be properly conservative in not recognising profit before it is earned. I am aware that this runs counter to a powerful school of accounting theology but I have been encouraged by proposals circulated recently by Paul Boyle at the FRC for cyclical reserving and I hope that will be pursued. An alternative approach would be to vary regulatory capital floors with the cycle and require banks to hold undistributed reserves in the upswing which could be drawn on in the downswing. This is a second best because the reserves are taken after profit is struck, with all the signals that sends investors and staff. But it could have much the same effect as dynamic provisioning and may be capable of implementation rather earlier. But capital requirements are not the only approach. Counter cyclical limits could be introduced on the liquidity position of a bank. For example, banks might be required to invest a varying proportion of their assets in a war-chest of government bonds and highly liquid assets. Or they could face varying constraints on the extent to which they are allowed to tap short-term wholesale funds. Finally we could introduce restraints on the terms on which banks can lend money to households and companies. Loan to income and loan to value ratios tend to rise in any credit boom as lending standards become lax and asset prices inflate.

But the outlines of a scheme are beginning to emerge in the academic literature – not least in an impressive recent report by Charles Goodhart of this parish and friends – and they are being taken up vigorously ( especially by the British members) of the FSF and G20. Preventing the regulatory system from exacerbating the cycle A minimum step is to remove as far as possible features of the regulatory system which exacerbate the cycle. This is not as easy as it sounds. Both accounting rules on provisions and regulatory capital requirements are based on estimated probabilities of default and estimates of losses given default. Both of these tend to rise sharply when an economy turns down, arrears mount and the value of collateral declines. So as trading conditions tighten, capital requirements are raised. The FSA announced last month a series of measures which seek to address that pro cyclicality by basing their capital requirements on average loss rates through the cycle rather than on estimates of loss which vary through the cycle. A similar approach is being ironed out internationally in the Basel Committee and FSF. Protecting the banks from the cycle A more ambitious goal would be to use the regulatory system to dampen the impact of the economic cycle on banks and other financial institutions – to protect the banks from the cycle. The Spanish system of dynamic provisioning is an example of this approach.
There will be some similarity in functions, but there will also be scope for each city to develop its own characteristics as a financial centre. The logical trend in financial services, given the continuation of exchange controls on the mainland, in contrast to the free flow of capital in and out of Hong Kong, as enshrined in the Basic Law, seems to be for Shanghai to develop as China’s domestic financial centre and for Hong Kong to develop as its international financial centre. But there is no reason why they should be deliberately constrained to these roles. China has room for at least two global cities. Nor is there any reason why, in the event the mainland attains the financial and other freedoms enjoyed in Hong Kong, Shanghai should not have a go at the business of international finance, or why Hong Kong, with its highly sophisticated financial infrastructure, to facilitate efficient international as well as domestic financial intermediation, should not have a go at the RMB business. A little competition is no bad thing, as long as it is fair competition, and Hong Kong’s free enterprise is very good at it. The only residual worry is that the playing field might be a tilted one, involving subsidies and other forms of support or protection from the authorities. But WTO entry is thankfully conditional upon the removal of many of these obstacles to free and fair competition, to the advantage of those that are good at this game and are prepared to embrace it.

This doubling in China’s share in the world’s external trade will be complemented by an opening to the world of large sectors of the economy that have hitherto been closed to external investors: the telecommunications, financial services and distribution industries, for example, and a variety of technical and professional services. These are all areas with enormous potential in China. They have already, over the past decade, seen dramatic change and expansion through the - still raging revolution in information technology. WTO entry will give them a further boost by breaking down restrictive barriers and opening the channels for direct investment and technology transfer from outside. Increased foreign competition in these areas will force Chinese enterprises to speed up their reforms to meet the challenges. From a larger and longer perspective, further economic liberalisation and integration into the global economy will undoubtedly be a stimulus to regulatory, institutional and cultural change within China: I note that this is an important theme in today’s conference, although it seems to be a matter of some considerable debate what path, or paths, that change will follow. The general view, nevertheless, is that WTO entry will mean growth, integration and globalisation for the mainland’s economy. 1  BIS Review 68/2000  The implications for Hong Kong The view on the implications for Hong Kong are, on the other hand, somewhat divided.
17  Young people are particularly reliant on social  media, with 28% of 18-24 year olds saying it is their main source of news, putting it ahead of television (Chart 1). Media has always been open to the criticism that it tells people what they want to hear rather than 18  the difficult truth . But the selection and delivery of news by algorithms which guess users’ preferences based on content they have previously read and liked would seem to dramatically increase the risk of living one’s life in an informational echo chamber. 14  Estimate by Harvard School of Public Health cited in Nichols, Thomas (2017), The Death of Expertise, Oxford: Oxford University Press. 15 Popper, Karl (1963) Conjectures and Refutations: The Growth of Scientific Knowledge, London: Routledge. 16 There have been several recent examples where the release of data and attempts to replicate results has fostered healthy debate. See for example Reinhoff and Rogoff (Growth in the Time of Debt, NBER Working Paper No. 15639) and Thomas Herndon, Michael Ash and Robert Pollin (Does high public debt consistently stifle economic growth? A critique of Reinhart and Rogoff, Cambridge J Econ (2014) 38 (2): 257-279), and Picketty (Capital in the 21st Century, translated by Arthur Goldhammer, Harvard University Press) and Giles (‘Data problems with Capital in the 21st Century. See https://www.ft.com/content/9bb07a8f-11bc-366b-98bb-fb2d450f1189). 17 Newman, N., Fletcher, R., Levy, D.A., Nielsen, R.K. (2016) Reuters Institute digital news report 2016, Reuters Institute for the Study of Journalism.

Certainly, the more flexible is your economy (in terms of public finances, the labour market, and so on), the easier it is to cope with shocks and the less monetary policy is needed. However, the case of the Eurozone shows how tricky it is when the absorber in the form of monetary policy is switched off and nothing replaces it. The shocks are bigger and hurt more. Listeners themselves can answer the question of whether the labour market and labour law are likely be made more or less flexible (and dismissals made easier) in the future. In doing so, they will answer the question of whether there will be a need in the future for more or less domestic monetary policy in the Czech Republic, a country whose conservative population is so averse to upswings and downswings. 1/3  BIS central bankers' speeches  The “convergence trilemma” The standard “monetary trilemma”, which you know very well (a country cannot simultaneously have a fixed exchange rate, an open capital account and autonomous monetary policy), is accompanied in a converging economy of our kind with something I call the “convergence trilemma”. No country can simultaneously have high convergence growth, a fixed exchange rate, and low macroeconomic imbalances, be they internal or external. In our case, catching up with our wealthier, low-inflation Western peers means a long-term tendency for our currency to appreciate. This is hardly consistent with a permanently fixed exchange rate.
Two of these relate to the risks to price stability. One of these stipulates that our own projection for inflation 18–24 months ahead should be at least as likely to fall below 2.5% as to be above it. The other asks whether there is any evidence that measures of the inflation expectations of households, businesses and market participants have become insufficiently well-anchored to the target. At this stage, we do not see anything to worry about on this score. The third override condition, delegated to the Bank’s Financial Policy Committee, relates to whether the monetary policy stance is resulting in the build-up of dangerous financial stability risks. If the FPC cannot contain these risks using the range of recommendations and powers at its disposal, then it will alert the MPC, who will then decide whether an increase in Bank Rate is called for. Increasingly noisy commentary that a new housing bubble is brewing – and concerns that the second stage of the Help to Buy scheme will add fuel to the fire – may mean that this condition becomes material. I do not have time left today to do justice to this issue. But it is important to remember that mortgage approvals for house purchase are still running at a little over half their pre-crisis average and, outside London, house price inflation is still quite modest. So we appear to be still some way off seeing an unsustainable house-price boom on the back of excessive credit growth.

Indeed, for European banks affected by big operational events, this deterioration has stood at over 1.25 pp of CET1 in the past five years, with a rise to 2.1 pp in 2018. In Spain’s case, the potential materialisation of costs associated with legal risks continues to contribute to deposit institutions’ operational risk. The processes linked to past litigation such as that of the floor clauses have had an estimated cost for the sector  7/10  of over € billion to June 2019. Moreover, there are other significant legal processes still pending resolution. In any event, legal risk and certain other factors relating to banks’ conduct have had a considerable impact on the reputation of the banking sector, and not only in Spain. It is worth recalling here that reputation and customer confidence are fundamental to the banking business. Therefore, institutions should strive to reverse this tendency by providing their customers with financial products and services suited to their needs and capabilities, and they should likewise supply the relevant information clearly and transparently. Lastly, in relation to the systematic assessment of the balance of risks to financial stability that we regularly make at the Banco de España, we are including other elements, whose materialisation could occur over a longer horizon. I refer here to the potential changes technological innovation may entail for the market structure of the financial sector, and those arising from climate change. The importance banks give to these changes will have to increase accordingly.