samchain/econo-pairs-v1 huggingface dataset:
I expect that this dynamic process will accelerate through work within the AIG, with supervisors outside of the Committee, and by banks in the months and years ahead. Risk management and complex products Our response to changes in risks must also be dynamic, and it is to this aspect that I would like to turn now. In recent years, we have seen tremendous growth in the derivative markets, which include a range of quite complex products. In addition, these markets have attracted new participants, in particular hedge funds, whose risk profiles and exposures may not be transparent to regulators or to other market participants. While these developments have had the beneficial effect of diversifying and spreading credit risk, they have also posed new risks. I would like to briefly discuss steps that both supervisors and the industry are taking to promote better management of these risks, and to ensure that supervision keeps track with market developments. Supervisory efforts One important area where we are working within the Basel Committee to promote sound risk management practices is through a review and, if necessary, update of the Committee’s 1999 paper on sound practices for banks’ interactions with highly leveraged institutions. As part of this review, we are looking at emerging best practices related to banks’ interactions with credit derivatives markets and hedge funds. In addition, we have had informal discussions regarding the potential impact on bank safety and soundness of prime brokerage activities.

Lessons learned That brings me to my second broad topic, which is the lessons we have learned over the years as we have developed Basel II. I am not looking back simply for the sake of nostalgia. Rather, in looking to the past, I would like to share some thoughts on how the things we have learned and reflected in the process of developing Basel II will help to make Basel II successful in the future, to stand the test of time and to have the impact that we intended. Focus on risk management First, Basel II is fundamentally about establishing incentive-based approaches to risk and capital within the three-pillar framework. We should never lose sight of the fact that Basel II is built around both qualitative and quantitative risk management elements. Why is this so important? As a bank supervisor and central banker, what most concerns me is financial stability. When I review the various reports on this subject that cross my desk, one thing they almost always have in common is an emphasis on the link between sound risk management and financial stability. It is my hope—indeed, it is my belief—that the incentives for risk management in Basel II will therefore promote greater financial stability in the future. Improved and more formalised risk management, as fostered by Basel II, will bring more awareness of risks and better quantification of these risks. To the extent that risk assessment and control methods become more formalised and rigorous, this will lessen the likelihood of making bad decisions.
Conclusion Looking ahead, globalisation will likely work if we widen the horizon that touches positively on all segments of society. Negative spill-overs are likely unavoidable. But it is incumbent upon us to formulate policies and give greater attention to those most adversely impacted by this process. Kofi Annan compared globalisation to gravity. With weightlessness, astronauts experience intense dizziness and lose their sense of orientation. Without gravitational pull, their bones weaken, ligaments deteriorate and muscles atrophy. The same can be said about the force of globalisation – without it, economies weaken, relationships deteriorate and growth atrophies. Globalisation is slowly but surely solidifying our shared future as one global nation of states. It is our collective responsibility to strengthen and sustain the state of this nation for the benefit of future generations. 4/5  BIS central bankers' speeches  Let me end here by thanking the eminent speakers and participants for being here, and I look forward to hearing your views. I hope that you will also take some time during your stay here to enjoy the diversity of our country. Thank you. 5/5  BIS central bankers' speeches

That put excess upward pressure 4 BCBS report on “Early lessons from the Covid-19 pandemic on the Basel reforms”. 5 FSB report on “Lessons learnt from the Covid-19 pandemic from a financial stability perspective: Interim report”. 6 See statements made by the PRA, FPC, European Central Bank (ECB) and BCBS early on during the Covid-19 pandemic. 7 See October 2020 speech by Randal Quarles: “Lessons from Covid-19 stress on the financial system”. 4  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  4  on requirements. And firms’ liquidity positions were initially worsening, including as they fulfilled debt buyback requests whilst supporting an increase in credit facility drawdowns. We were worried that the combined effect of these concerns would mean that banks either did not have enough resources to support the economy through the Covid period and the recovery from it; and/or that, even if banks did have enough resources, they would nevertheless act in a procyclical way by hoarding liquidity and restricting lending for precautionary reasons, amplifying the standard cyclical effects of the shock. This underpins the prudential actions I noted earlier. Recap on buffers As indicated earlier, an important feature here is the presence of various regulatory buffers in the framework that the Basel Committee introduced after the financial crisis. These are intended to absorb the effects of stress and ensure that banks can continue to lend to support households and businesses: it is our expectation that they will be used as necessary to support the economy.
And many people in Germany, as elsewhere, on seeing that they are hardly earning anything on their savings, are wondering if we are ever going to see an end to quantitative easing. Today, the risks for growth and inflation are tilted to the downside. The best service that the ECB can provide to the citizens of the euro area is to fulfil its mandate so that inflation returns towards 2%, which requires the economy to pick up again, jobs to be created and exports to the euro area to find solvent outlets. We are aware that the low interest rates also have negative effects, notably on savings, and could pose risks to financial stability if they were to stay low for too long. We don’t want this monetary policy to last too long, but we will apply it for as long as necessary in line with our mandate. 2  BIS central bankers’ speeches  In other words? Governments need to take action and implement the necessary reforms in order to consolidate confidence and growth, and to demonstrate a credible fiscal policy. If the euro area policy for growth rests exclusively on the ECB’s shoulders, things will end badly! Admittedly, we are nowhere near that point. But we sense that there is a temptation to rely entirely on the ECB. What key measures do governments need to implement specifically in order to restore growth?

The measures included in this plan would have a positive impact of 0.2 pp on the average GDP growth rate. situation, use of the Next Generation EU (NGEU) funds and financing conditions that, while somewhat tighter than in previous quarters, remain favourable. Turning to the inflation forecasts, in step with the paths of the corresponding futures markets, the upward pressures of the energy component are expected to peak in the second quarter of 2022 and then decelerate. The inflation projections rest on two assumptions: (i) that, in line with the information from the EBAE, the pass-through of higher intermediate costs to final prices will only be relatively moderate (albeit more forceful than envisaged in the December projection exercise); and (ii) that the second-round effects will be limited, i.e. scant feedback effects between inflationary pressures on prices and wages. Inflationary pressures will be partly alleviated by the measures contained in the National Plan to respond to the economic and social consequences of the war in Ukraine.4 Furthermore, these projections do not yet include the possible changes in prices on the electricity market that are currently being negotiated in the European Union. Against this backdrop, the projections see inflation standing at 7.5% in 2022. It will then fall in 2023 to around 2%, thanks, above all, to the moderation of the energy component. Underlying inflation will not start to decline until end-2022, once the upward pressures on firms’ costs associated with energy prices and bottlenecks have corrected.
By international standards, the Governing Board is a very small decisionmaking body made up of just three people. Also, it traditionally reaches its decisions by a process of consensus. If the minutes of its meetings were to be published, discussions within the body would probably become less candid and open and – ultimately – the quality of decision-making would suffer as a result. Moreover, it is unlikely that publishing the minutes would in fact lead to better public understanding of monetary policy within Switzerland. That is why, in view of these special Swiss features, we have decided not to release the minutes of our meetings. BIS central bankers’ speeches  3  An additional way of increasing the transparency of monetary policy, and thus its effectiveness, could be the provision of information on the future path of reference interest rates. “Forward guidance” of this kind may be useful for many central banks. However, there are pitfalls and this could easily lead to confusion in the market, especially if the guidance is attached to too many conditions. However, I would not want you to misunderstand me. It is absolutely right that central banks should explain to the general public how monetary policy would react to certain developments. This is nothing new. In the case of the SNB, for instance, the conditional inflation forecast – our main interest rate indicator and an important element in our communications – already provides certain information about the future path of interest rates.

First, the question is being raised as to whether price stability should not be interpreted more broadly and should include asset prices in addition to consumer prices, in order to prevent future financial crises. In my view, this would be the wrong conclusion. Although it is correct that central banks cannot and may not neglect the movements of asset prices, and, in particular, those of real estate prices, they should not attempt to stabilise asset prices with the aid of the interest rate tool, if this would lead to a conflict of goals with respect to price stability. Macroprudential tools are therefore needed in such a case, in order to counter imbalances on the real estate markets. I will return to this point in my comments on the role of central banks in financial stability. 2  BIS central bankers’ speeches  Second, the question is raised as to whether the inflation targets set by most central banks might not be too low. The argument is that, in normal times, higher inflation targets would lead to higher nominal interest rates. This would open up the freedom of action for conventional monetary policy because the zero bound for interest rate policy would not be reached so quickly. This reasoning does not seem conclusive to me either. For instance, given the history of the struggle against inflation, it is rather bold to assume that wellanchored inflation expectations can simply be released and then immediately locked in at a desired higher level.
Ben Broadbent: Compositional shifts in the labour market Speech by Mr Ben Broadbent, Deputy Governor for Monetary Policy of the Bank of England, at the “Understanding the Great Recession: from micro to macro” Conference, Bank of England, London, 23 September 2015. *  *  *  Accompanying charts and table can be found at the end of the speech. I would like to thank Will Abel and Rebecca Burnham for research assistance and I am grateful for helpful comments from other colleagues. The views expressed are my own and do not necessarily reflect those of the Bank of England or other members of the Monetary Policy Committee. I want to begin by thanking the organisers for putting together this excellent conference and for asking me to come along. I’m honoured to be in such distinguished company. Up front, I also want to thank Bank economists – especially Matt Corder and Alina Barnett – for their help. If this were a working paper it would have multiple authors. Today’s tagline – “from micro to macro” – is a sobering one for macroeconomists. We’re used to describing the economy in broad, sweeping terms, using numbers on aggregate output, total employment, average wages. Yet, in practice, the modern economy is hugely diverse and, underneath the surface, highly dynamic. New ideas replace old, businesses fail and are formed and, even when the net change in employment is small, and the labour market in aggregate looks stable, the gross flows in the labour market can be huge.

A more accurate description of the red line is average wage growth for people continuously in employment, adjusted for any the impact of changes in average age and experience across the workforce. BIS central bankers’ speeches  13
For the time being, the UK has conducted a referendum and triggered Article 50 but doesn’t leave the European Union until March next year: there are no tariff or trade barriers. Yet the pound fell immediately after the referendum result in anticipation of more difficult external trading conditions in the future; this has substantially hurt the purchasing power of UK households. Business investment slowed down – as apparently it has in Canada due to NAFTA uncertainty. The Bank of England estimates that UK real GDP is already 1¾-2% lower than it otherwise would be as a result of Brexit. Fiscal policy Uncertainty about fiscal policy in many advanced economies is a second source of policyinduced uncertainty. Public debt has risen significantly since the Great Recession. Average gross government debt in the Euro Area rose from around 65% of GDP in 2007 to peak at over 90% in 2014 and is currently still over 85%, despite the fact that primary balances have improved on average across the Euro Area. The macroeconomic costs of fiscal uncertainty can be felt even without an actual sovereign debt crisis. Risk premia increase and raise the cost of borrowing but without any riskadjusted increase in return for savers. The risks of fiscal uncertainty are highly non-linear and one could almost say binary due to the reaction function of financial markets, as we have seen since 2010 in the Euro-zone. Below a certain threshold, fiscal uncertainty has very limited effects on sovereign borrowing spreads or economic activity.

First prize The first prize was awarded to PEGI MYSHQERRI, a student at the Goethe University, Germany, for the study on the Master's theme: The effects of ECB Asset Purchases on European Corporate Bond Markets)". In her work, Pegi has assessed the impact and channels of the European Central Bank's quantitative easing policies on the interest rate of corporate bonds. The author has also analysed the behaviour of firms toward these programs of the European Central Bank, and whether they have affected or not in the issuance of an acceptable (adequate) debt. More specifically, Pegi has employed the econometrics methods to assess that both programs - the purchasing program in the corporation sector (CSPP) as well as the emergency purchasing program during the pandemic (PEPP) - have had an effect on the interest rate of corporate bonds, but the scale of the impact of each program has been different. Furthermore, results show that quantitative easing programs have had a considerable role in mitigating the lending conditions to corporation in the Euro area, affecting thus the increase of both the number and volume of corporate bonds issued. First, I would like to commend the winner of the first prize for choosing this theme; a rather interesting and relevant theme for banks in advanced economies, but which has been gaining traction in emerging countries.
Lorenzo Bini Smaghi: Private sector involvement – from (good) theory to (bad) practice Speech by Mr Lorenzo Bini Smaghi, Member of the Executive Board of the European Central Bank, at the Reinventing Bretton Woods Committee, Berlin, 6 June 2011. *  *  *  The title of this first session of the conference is: “Policy responses within countries and inside the eurozone since 2010: an appraisal”. The topic is very broad and I cannot cover it in such a short time span unless I am selective and focus on some specific issues. I would like to consider mainly what has not gone as expected and the disappointments. This enables me to avoid talking, once again, about the ECB’s actions over the last 18 months. There are at least three things that have gone wrong. The first is that governments of the countries under stress waited too long before recognising that they needed financial assistance, and submitting their requests for support to the IMF and EU. This is true in all three cases, Greece, Ireland and Portugal. More often than not support programmes are delayed and within well integrated economic and financial regions such as the euro area these delays exacerbate market turmoil and create contagion. There is thus an externality in leaving it entirely to the country in question to turn to the IMF and EU for financial assistance.

Ardian Fullani: Analysis of economic and financial developments in Albania Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the 24th Conference of Banking Supervisors from Central and Eastern Europe, Tirana, 12 April 2011. *  *  *  Distinguished ladies and gentlemen, Allow me to first wish you a warm welcome in the 24th conference of banking supervisors from Central and Eastern Europe, which this time is taking place in Tirana. The Bank of Albania considers this forum as very important and a platform where participants may exchange their institutions experiences with each-other. This forum is a modern highway that allows for a rapid convergence of our supervision practices with the best standards. Let me now continue with a summarised analysis of economic and financial developments in Albania over the last two years, focusing on some concrete issues requiring more attention by the banking industry and the supervisory authority in the future. The Albanian economy was characterised by positive developments during the pre-crisis period. Annual economic growth was on average 6 per cent, with admirable and stable core macroeconomic indicators. Growth relied on a firm strengthening of internal demand components while funded by internal resources, mainly through rapidly increasing loans to the private sector and loans for investments. The banking sector, which dominates the domestic financial system, has also undergone a significant transformation in recent years. This is due to the entrance in the market of renowned European banking groups, expansion of banking infrastructure and upgrade of customer services.
Central banks have an additional stake in this game. Cash is one of our main products and an increased supply of services from non-banks is likely to reduce its usage. On the one hand, central bank should embrace the development from an efficiency point of view. On the other, a rapid decrease in the use of cash is not without problems. This is only a few of the aspects that may be debated in the second session. The third topic is the future and we all want to know what it will look like. Will the banks be reduced to mere suppliers of infrastructure and account holding services while other actors, the non-banks, have most of the end-user relation-ship? Or will the banks win by knock-out? Will the non-banks become banks over time as their activity expands? Will payment services be delivered to us by Apple? Google? Facebook? Alibaba? What about Bitcoin and its peers? Will we simply have payment services provided by an anonymous network? In addition to having all these kinds of issue debated among representatives for market actors and authorities, we will also have the pleasure of listening to the academic perspective of Professor Charles M. Kahn from the University of Illinois. I’m really looking forward to learning more about all these topics today. BIS central bankers’ speeches  3

In particular, despite the positive factors I have cited, the growth in manufacturing output has been only moderate, with the  BIS central bankers’ speeches  3  overall manufacturing capacity utilization rate still below its pre-recession level. Thus, outside of the energy intensive sectors, there still appears to be little near-term motivation for firms to invest in order to increase their productive capacity. Businesses seem to be waiting for stronger demand before they significantly increase their investment outlays. Thus, we have a second chicken-egg problem. On the trade side, the news is mixed. Although Japanese and European economic activity has picked up recently, the sustainability remains in question. Even as Europe emerges from its recession, growth is likely to be anemic at best over the next year, constrained by continued fiscal consolidation and tight credit conditions as their banks continue to deleverage. In Japan, the consumption tax is scheduled to increase significantly next year, which is likely to constrain domestic demand. Moreover, the recent improvement in Europe and Japan has been offset by slowing in some emerging market economies. In fact, some emerging market economies are under pressure because they are running large current account and trade deficits. Any forced correction among these countries on trade is likely to be a drag on global growth and on U.S. exports over the near term.