samchain/econo-pairs-v1 huggingface dataset:
The provision of potentially significant amounts of liquidity in times of crisis is a prerequisite for successful resolution. The framework for the ECB to provide "Eurosystem resolution liquidity" has yet to be built. The other priority, at the other end of the spectrum, is to shift from resolution "for a minority" - a far too  Page 7 of 9 small minority of cases: two in the last nine years - to resolution "for the majority" of cases, including small and medium-sized banks. The European Commission's proposal for a revised crisis management and deposit insurance framework is a step in the right direction. Yet, greater pooling between the Resolution Fund and deposit guarantee schemes is debatable, as is the fact that large companies would potentially benefit from the same protection as the smaller deposits of individuals or small and medium-sized enterprises. Five more "thematic" risks also call for more stringent measures, some of which are already in place. With regard to customer protection and the sound supervision of business practices, Jean-Paul Faugère and I had clearly requested greater transparency - and moderation - of unit-linked life insurance fees. Fortunately, discussions with industry professionals have gathered pace in recent days to establish a system that better serves the interests of customers. Our objective is to significantly bolster the measures proposed last December by France Assureurs to ensure that unit-linked policies that are both overpriced and underperforming are more effectively removed from commercial offers. The industry should make a public announcement detailing these measures by next week.

Luis de Guindos: Key vulnerabilities for euro area financial stability Remarks by Mr Luis de Guindos, Vice-President of the European Central Bank, at the meeting of the Financial Stability Contact Group, Frankfurt am Main, 2 October 2019. * * * Let me start by thanking you all for participating in this meeting of the Financial Stability Contact Group. These meetings are a key feature of the ECB’s market intelligence gathering activities. The financial stability environment has certainly remained challenging since this group last met in March. The global economic outlook has worsened since then, and political and policy uncertainty has increased in a number of areas. Taking this into account, we continue to see four key vulnerabilities for euro area financial stability: (i) first, a risk of mispricing of some financial assets; (ii) second, high public and private sector indebtedness in several countries; (iii) third, in view of banks’ subdued profitability outlook, we see a risk of hampered bank intermediation capacity; and (iv) fourth, vulnerabilities stemming from increased risk taking in the non-bank financial sector. We see the likelihood of these vulnerabilities unravelling in a disorderly manner over the next 18–24 months as remaining largely unchanged. This is because the now widely expected “lowerfor-longer” interest rate environment mitigates many of the possible triggers for corrections over the short to medium term.
Andrew Bailey: Culture in financial services – a regulator’s perspective Speech by Mr Andrew Bailey, Deputy Governor of Prudential Regulation and Chief Executive Officer of the Prudential Regulation Authority at the Bank of England, at the City Week 2016 Conference, London, 9 May 2016. *  *  *  It is good to be at City Week again. Also, congratulations on the welcome approach to the geography of City Week – bringing it to the Oval means that for those of us who live south of the river, we don’t feel that the City always involves crossing into that other land north of the river. Whether the culture is different south of the river is for everyone to judge. I am going to speak today on the subject of culture in financial services. For the avoidance of doubt – and in view of recent history – I want to start with what I intend as an unambiguous statement, namely that the culture of firms and the people that make them up - and of course therefore the culture of industries insofar as it can be generalised – is of the utmost importance to financial regulators. Culture matters a great deal. And this is true for both conduct and prudential regulators. Today I am speaking as the CEO of the PRA, but at the beginning of July I will become the CEO of the FCA. One thing that this move does not require is a change of view on the importance of culture in firms.

We cannot write a rule to take care of every situation that may occur, and as a forward looking supervisor we are applying judgement in conditions of uncertainty about the future. How firms deal with the uncertainty of the future will also shape their culture. I firmly believe that what we can best do in this area is to provide a clear sense of direction and guidance through open communication starting with those of us at the top, in which we are clear on what we expect of firms. Open and transparent communication of this sort should then be supplemented by the clear understanding that we will all stick to the script. Trust is important. Consumers need to be confident in the firms that they choose to use, and inevitably trust is an important part of that confidence. Likewise, as supervisors, our judgements are inevitably conditioned on whether we can trust the people with whom we deal. Good culture is a product of trust and it matters a lot for both prudential and conduct regulators. Culture is everywhere and nowhere in firms; everywhere in the sense that it is shaped and determined by all the features of the firm – its people, organisation, reward structures etc; and nowhere because culture is not a tangible thing sitting on a shelf that can be prodded and changed of itself.
From our point of view, while there is no agenda to increase capital levels, neither do we start from the viewpoint that the sector is obviously overcapitalised. We would expect that there will be significant changes at the level of individual measures, most notably the risk margin which we all agree is mis-calibrated for longer term liabilities, at current low levels of interest rates.7  And of course while dealing with the current regulatory regime we must be careful not to lose sight of our longer term forward-looking priorities: the impact of climate change and measures to mitigate this; the growing importance of Fintech and the role of shifting demographics across the globe. Conclusion  7  See June 2018 letter from Sam Woods to Treasury Select Committee 6  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  6  I began these remarks by highlighting three things that insurers do for the wider economy:   Provide protection for significant financial losses;    Channel investment into a wide range of assets; and    Provide security of retirement income in the form of savings and annuities, facilitating stable demand for goods and services. On the first, there is a critical role for insurers to adapt and ensure they are able to meet customers’ insurance needs, particularly during the transition out of the crisis and also into the longer term. Firms should take early steps to assess what this could mean for their current business models.

It would be in no one’s interests for the experience of the Covid-19 crisis and responsiveness of business interruption cover to reduce consumer confidence in the value provided by insurance for financial protection. In the life insurance sector there is an opportunity for firms to leverage their position as long-term investors in a wide range of assets and productive investment, to support our economic recovery but this must not come at the expense of policyholder protection and the provision of secure retirement income. We would expect to preserve the current, adequate level of capital in the sector whilst seeking to reduce complexity and frictional costs within the regime. A financially resilient, competitive and productive insurance sector not only ensures that individual policyholders are protected, but signals an industry that is able to support the recovery of the wider economy whilst maintaining high prudential standards. 7  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  7
We expect inflation to stabilize around 5 percent in the medium term (Chart 18). We expect inflation to considerably exceed the 5-percent target by the year-end, and decrease significantly as of the start of 2015 and fall to 6.1 percent at end-2015. This noticeable decline we forecast in inflation is driven by the projections that cumulative exchange rate effects will continue to taper off, food inflation will recede to past year averages and commodity prices, chiefly oil, will stay at expected lower levels. Moreover, we believe that demand conditions and the announced tight fiscal policy stance will support the decline in inflation in this period. The fluctuating course in 2015 inflation forecasts that you see on the slide stems from the base effects (Chart 18). Distinguished Guests, In addition to these forecasts, alternative scenarios on the inflation outlook and the global economy are discussed in the Risks section of the Inflation Report. You can examine the Report for details. While concluding my remarks, I would like to thank all my colleagues who contributed to the Report, primarily those at the Research and Monetary Policy Department as well as the members of the Monetary Policy Committee, and thank every one of you for your participation. BIS central bankers’ speeches  9

Credit is based on real savings and savings can only earn a return if directly invested in creating activities. Finance and the real economy are closely linked. In the Islamic system, banks can neither carry highly leveraged exposures nor acquire risky financial structured products. By the way, even if the Islamic nature of their finance is not the only explanation, we can note that Islamic finance countries, compared with those of conventional finance, have been relatively less impacted by the crisis. But on the other hand, Islamic banks pose risks to the financial system that in many regards differ from those posed by conventional banks, with respect, for example, to liquidity, operational and legal risks. Indeed, Islamic banks face specific obstacles in liquidity management, as the prohibition of interest has led to the underdevelopment of funding sources. Moreover, operational risk and legal uncertainty can be amplified by the lack of product standardization and the lack of harmonization of Islamic standards, with for example possible differences between Shariah scholars' interpretations, accounting standards, and so on. In the same way, prohibition from financing specific sectors limits the kind of eligible assets for investment, which contributes to increasing the risk of concentration in potentially cyclical sectors such as real estate. This is what happened in certain Gulf countries. •  As the analysis of the principles of Islamic finance does not settle the issue of the relationship between Islamic finance and financial stability, it needs to be supplemented by an empirical analysis.
The margin exchanged to reflect those losses and gains (VM) across UK CCPs in Q1 2022 were larger than those observed during the 2020 Covid crisis. [6] UK CCPs’ aggregate initial margin requirements also increased, but by relatively less than we saw during Q1 2020. [7] This was partially because the shocks to asset prices were less broadbased, and partially because commodity markets had gone through a period of volatility just a few months earlier, so initial margin was already elevated. Page 4  Some early lessons Just because central clearing has been a success, does not mean that CCPs and CCP regulators do not need to keep learning. CCPs have been central to making the financial system safer over the past decade. But we have also seen new significant strains that need to be addressed. Policy makers and market participants have deliberately and sensibly put CCPs in the centre of the financial system. To continue to earn that trusted role we need to keep learning – we cannot be defensive. I see three areas for further work  (1) Tackle the side effects without sacrificing the cure By design, post-crisis reforms mean that in events of market turmoil losses are crystalized promptly and risk is repriced. But as we have seen in 2020 and again in 2022 this can mean very sharp strains on liquidity in parts of the system. The answer here is obviously not to return to pre-2008. We need to avoid having such short memories that we return to a pre-Lehman system.

Nature’s education website declares: “Ignoring Population Structure Can Lead to Erroneous Predictions of Future Population Size.”[11] The lesson is no different in markets – underlying market structures matter. CCPs – who are in the risk management business – can help with this by understanding and managing the markets in which they operate. This includes client positions and the role of physical delivery. The recent events in the nickel market are a good example. The historic price moves I just spoke about can be the result of things completely outside of the financial system – weather, plagues, and invasions. But they can also be exacerbated or even driven by market structure. In the case of nickel, much of the price move was related to the build-up of a very large position in the form of a tangled and opaque web of derivative exposures involving a single client. We have seen these before: Archegos, Long Term Capital Management. This time, while the bulk of the contracts were bilateral, many were centrally cleared. There will be important lessons learned from the events in nickel – both with respect to the specific incident and more generally,[12] and I am sure I will have more to report following the conclusions of the independent review we have commissioned. Page 6  When it comes to this early lesson, CCPs could form part of the solution.
The first implication, that the central bank has a strong stake in preventing financial instability, has several elements. The central bank needs to be willing to respond to limit financial market bubbles from developing in the first place. This includes not just paying attention to asset price bubbles, but also to related excesses in leverage and in short-term funding markets. As I noted in a speech a few years ago, this is difficult to do in practice.3 After all, bubbles are difficult to identify in real time and the central bank’s policy toolkit to deal with bubbles may be limited. However, this difficulty cannot be an excuse for inaction. Using the bully pulpit, implementing macroprudential measures, or adjusting monetary policy can generate superior results compared to inaction. The central bank also has to ensure that the financial system is sufficiently robust and resilient so that if there are financial market shocks, the banking system can absorb any shocks and continue to perform its credit intermediation function. This has many elements including tough capital and liquidity requirements for banks and strong financial market infrastructures. It also includes taking action to eliminate sources of vulnerabilities whenever they may arise – for example, strengthening the triparty repo system, reducing the vulnerability of money market mutual funds to runs, or forcing derivatives contracts to be standardized and centrally cleared. These actions should be undertaken during “peacetime” rather than when a crisis is already underway.

In closing, I want to reiterate that external auditors have truly been one of our key partners in the quest for greater financial stability. Thailand’s financial industry is currently in the midst of structural changes with the implementation of our Financial Sector Master Plan. One of the goals of the master plan is to promote greater competition, which in turn, may result in the evolution of bigger and more complex financial institutions. Against this background, our supervisors will need to fully embrace a risk-based supervisory philosophy and its focus on the quality of internal controls and risk management systems. Therefore, our relationship with external auditors will become even more important in the years ahead as we seek to strengthen banks’ risk management systems and enhance fnancial stability. Thank you. 2  BIS Review 55/2004
To put it somewhat differently, but with the essence more or less the same, the rule means that monetary policy should normally be aimed at meeting the inflation target of 2 per cent CPI inflation one to two years ahead. BIS Review 26/2004  1  The fact that we use primarily the inflation forecast one to two years ahead as a kind of intermediate goal for the real target of 2 per cent actual inflation means that temporary shocks that only have an impact on inflation in the coming year do not generally affect our rate setting. It is conceivable that drastic changes in interest rates could bring inflation back to the target faster than over one to two years. But such a policy would probably result in sharp, undesired fluctuations in both the real and financial economy. Against this backdrop it could be said that we normally deliberately tolerate the target deviations that result from temporary shocks to inflation and that arise and diminish over the next year. However, sometimes temporary effects on inflation arise that do not subside during the subsequent year. These effects then show up in the inflation forecast, measured in terms of the CPI, one to two years ahead. But if the effects are expected to disappear quite soon afterwards, there may be cause not to counter them through repo rate adjustments.

The journey has not been entirely problem-free, and the experiences we have gained on the way have prompted us to make some changes to practical aspects of policy, or perhaps rather as regards how policy is communicated to the public. We have also had to change and improve our analysis of inflation in different respects. I intend today to touch upon the problems we have encountered on our journey and how we have tried to deal with them. Important to have explicit communication So what difficulties have we encountered as regards defining the inflation target in terms of the change in the CPI? To illustrate this I need first to say a few words about the principles that underlie the Riksbank's interest rate decisions. Like other central banks that have adopted inflation targeting, the Riksbank has worked from the premise that monetary policy affects inflation with a certain lag; it is generally assumed that it takes one to two years before a rate adjustment achieves its full impact on inflation. Against this background, and as a step towards clarifying how we try to attain our target, we have formulated a simple rule for monetary policy: if the forecast of inflation one to two years ahead exceeds 2 per cent the repo rate should normally be raised, and if the forecast is below 2 per cent the repo rate should normally be lowered.
It is way too vulnerable, due to high presence of exports in sectors exposed to changes in world prices and world demand as well as due to significant reliance on private transfers as source for financing the trade deficit. Additional problem is the approach to external financing. It is less available. Expenses increased. Investors have either lost their capital or they are waiting for better and less risky period. Under such developments in the current and capital account of the balance of payments as well as due to generated unfavorable expectations of the economic agents the pressures in the foreign exchange markets become bigger. The fall in the external demand caused reduced activity among export-oriented industrial sector in the Macedonian economy. The volume of the industrial output in the last quarter of 2008 registered an annual drop of 7.6 percent, which intensified during January 2009, thus reaching 16.7 percent. Tightened conditions for credit as well as pesimistic expectations for the length of the recession reflect over domestic demand. Initial signs of a deceleration of household consumption growth are registered in trade, in which during q4, 2008 the amount of turnover registered dropped by 5.1 percent. In circumstances of private sector refraining from investments, the expectations are looking towards deceleration of the investment activity. In any case, the risks for the current projection of the economic growth definitely are in direction of the realization of growth significantly lower then projected, and maybe even that is a high optimism.

The form of government was unstable, the payment system was rather chaotic and there was a general shortage of credit facilities. People who wanted to try something new found themselves restricted. Many saw no alternative to emigrating and trying their luck in America. It seems that more than a million people left Sweden for the new country in the west before the process of industrialisation began in earnest here. Less than a hundred years later, at the end of the 19th century, the Swedish economy had undergone a dramatic transformation. Inflation was low and the payment system functioned properly. The country vibrated with energy in every sphere. An impressive number of new products were developed on the basis of Swedish inventions and many of them became world leaders. Swedish financial experts were involved early on in exploiting the innovations. More and more people found work, living standards rose and Sweden achieved one of the highest growth rates in the world. When it comes to the causes of Sweden’s rapid economic transformation, there are some differences of opinion. The industrialisation taking place elsewhere was probably a major factor. Another was the possibility of importing capital for large investments. Domestic reforms in key areas may also have helped create the conditions for growth. Price stability was presumably of some significance. Low, stable inflation reduces uncertainty about the future for those who have to plan for the long term.