samchain/econo-pairs-v1 huggingface dataset:
51  All speeches are available online at www.bankofengland.co.uk/speeches  51  Chart 20: Average 2007 risk weights, leverage and capital ratios of major EU, US and Canadian banks(a)(b) Tier 1 / Assets  European Union US  70  Canada  60 50 40 30 20 10 0 0%  20%  40%  60%  80%  100%  RWA / Assets  Sources: Bloomberg, FDIC, annual reports. (a) Data as of end-2007. Sample includes Bank of America, Barclays, BMO, BNP Paribas, BONY, CIBC, Citigroup, Crédit Agricole, Credit Suisse, Deutsche Bank, HBOS, HSBC, JPM, Lloyds, NBC, RBC, RBS, Santander, Scotiabank, Société Générale, State Street, TD, UBS, UniCredit, Wachovia, Wells Fargo. (b) Canadian and US banks’ balance sheet size is adjusted for IFRS. Chart 21: Estimated increase in the liquidity component of corporate bond spreads under different levels of initial redemptions (taken from Baranova et al (2017))  52  All speeches are available online at www.bankofengland.co.uk/speeches  52  Chart 22: Usage of key macroprudential tools since 2010 Instances of use  40 35 30 25 20 15 10 5 0  2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 SCR  CCyB  Liquidity  Lending standards  Sources: National central bank websites, IMF, European Commission Shim et al 2013, ESRB and MDB. Note: This chart documents the use of the CCyB, sectoral capital requirements (SCR), liquidity-based tools, and lending standards (including loan to income and loan to value ratio limits) over the period 2007-2017.

It was then renovated in the style of the day at the start of the following century by Robert de Cotte, the First Architect of Louis XIV, for the Count of Toulouse, the legitimated son of the Sun King and its new owner. Naturally, this place provides an appropriate setting for putting matters into perspective. This is most apposite for the discussions to which Mr Pohl invites us today, because they should be considered from both a historical and forward-looking perspective. Japanese philosophy teaches us that visiting the past teaches us new things. This privileged setting nevertheless does not isolate us from the world. The turmoil that we are experiencing gives a particular significance to your work. The current financial crisis and the unprecedented financial cooperation between countries to preserve financial stability should add a new dimension to the debate on Corporate Social Responsibility. I therefore hope that this approach in perspective will shed light on both the implications of the Corporate Social Responsibility (CSR) and its potential role as a force for change in a globalised world. CSR is a concept whereby companies and financial institutions not only consider their profitability and growth, but also the interests of society and the environment by taking responsibility for the impact of their activities on stakeholders, employees, shareholders, customers, suppliers, and civil society represented by NGOs. Companies (including banks) must take on new responsibilities that go beyond a simple policy of “paternalism” vis-à-vis their suppliers, customers and employees, such as that practised up until recent times.
Flexible inflation targeting builds a bridge between the long-term objective of monetary policy, which is to keep inflation  2  This is discussed in “Measures of core inflation” in Bank of England’s Inflation Report of February 2006. See www.bankofengland.co.uk. 6  BIS Review 49/2006  on target and provide an anchor for inflation expectations, and the more short-term objective of stability in the real economy. In some situations, it may be desirable to bring inflation rapidly back to target. In other situations, it may be desirable to apply a longer horizon. In this context, it may be appropriate to differentiate between supply-side and demand-side disturbances. The horizon must also been seen in the light of developments in house prices and debt. However, for monetary policy to function as intended, it is important that there is confidence in the nominal anchor. Thank you for your attention. BIS Review 49/2006  7

9  Bernanke (2010) shows that Fed policy rates do not seem excessively low given real-time FOMC forecasts. 10  See Del Negro and Otrok (2007), Jarocinski and Smets (2008), Edge, Kiley, and Laforte (2008), and Iacoviello and Neri (2008). 11  See Nyberg (2010) for similar arguments. BIS Review 16/2010  3  (although they could have ended the Great Moderation with a deep recession and deflation). 12 However, going beyond the Fed’s actual monetary policy, perhaps it is possible that the Fed’s emphasis on its readiness to relax monetary policy aggressively in the wake of a sharp fall in asset prices, as expressed by Greenspan (2002) for example, may have induced expectations of a floor under future asset prices and contributed to the asset-price boom, the so-called Greenspan put (Miller, Weller and Zhang, 2002). Arguably, this is more of a communication issue than one of actual policy, and less emphasis on the readiness to clean up after a sharp fall in asset prices might have been a preferable alternative. The International Monetary Fund (2009, Chapter 3) has investigated the role of monetary policy in causing financial crises. A large number of countries and financial crises were included in the sample.
The difficult judgment facing the Monetary Policy Committee is to what extent that increase in labour supply, and hence potential output, will allow a faster expansion of total money demand without upward pressure on inflation. Given the uncertainties about the supply potential of the economy, we will need to keep our eye on the ball and monitor closely the evolution of wage and cost pressures. But it is no easier for the Monetary Policy Committee to read those than for most English batsmen to read Shane Warne’s deliveries, and it is just as difficult for someone who, in terms of MPC meetings is 114 not out as it is for those still playing themselves in. The new factor is that, although wage pressures have so far been subdued, it is still not clear that earnings have been sufficiently restrained to accommodate the past rises in energy prices and the fall over the past year in the prices of our exports relative to our imports without a squeeze on profits. Ultimately, both developments must result in lower real incomes. At this point, let me save the economic commentators a degree of anguish. Nothing in this speech is meant as a hint about our decision in November, which will be based on an assessment of the outlook for inflation two years or so ahead. That decision will be taken only in November, and much can change between now and then. Rather, I have tried to explain the challenges facing the MPC when it decides on interest rates.

The negotiations between the United Kingdom and Europe are led by Michel Barnier on the European side. So we certainly defer to Mr Barnier when it comes to the political direction of those negotiations. It is clearly very positive that the UK authorities are willing to engage in a constructive way, in a practical way, in a detailed way. It will be for Michel Barnier to react to the paper. That said, and beyond the positive news in terms of how the discussion is moving on, we also believe at the ECB that private players, industry, have a responsibility to prepare for the worst outcome. So hope for the best, but prepare for the worst. In fact it seems like we have an agreement to have similar regulation in the industrial sector and the agricultural sector, but not the services sector. As we know, the financial services sector is what worries investors the most. Is this the big concern here? I will defer to Michel Barnier to pass judgement on that. What we certainly believe very strongly – as does the European Commission and as do all Member States – is that the key principles which uphold the Single Market should not be harmed. Certainly, a good solution should be found with the United Kingdom, but that cannot be at the expense of the fundamental principles that have upheld the functioning of the Single Market. Should the EU actually extend the deadline beyond March 2019 – if that’s a possibility – to have a better agreement?
7  6  Chart 6a  Chart 6b  Stylised effect of drop in discount rate  Decline in expected growth  Chart 6c  Chart 6d  Rise in two sided uncertainty  Rise in downside tail risk  This obviously depends on the sizes of the changes involved. Chart 6(c) simulates the effect of increasing the standard deviation of annual growth from 2% to 3%. Given that, even over the past twenty years, the true figure – for both world and UK growth – has been around 2%, that’s a fairly significant rise. Chart 6(d) shows what happens when you raise the perceived probability of an economic “disaster” by only 1% point (from 3% to 4%) and, although the simulated disaster is indeed very bad (a 20% drop in output) it’s not out of line with some of those that have occurred in the past (Barro 2009)). BIS central bankers’ speeches  Now these are extremely stylised simulations and one should obviously take them with a pinch of salt. Even within this basic framework there are plenty of other things that might have reduced the equilibrium risk-free interest rate.

6  The model, developed by the economist Robert Barro, and based on an earlier idea by Rietz, allows for the effects of one-sided tail risk – the potential for macroeconomic “disasters” – as well as more conventional, two-sided uncertainty (Barro (2009)). The downside skew to growth reduces the risk-free interest rate and pushes up the required return on risky assets. I used this model to speculate about the causes of low investment in a speech a couple of years ago (Broadbent (2012)). BIS central bankers’ speeches  5  simulates a 1%-point decline in expected future growth). They also return less from that point on. Qualitatively, increases in uncertainty have similar effects – they reduce equilibrium interest rates and depress equity prices (Charts 6(c) and 6(d)). But their sizes are rather different. Changes in two-sided uncertainty don’t do that much (6(c)); by contrast, small rises in the perceived chance of very bad economic events can have powerful effects on the risk-free interest rate.7 Intuitively, this makes sense: an asset whose payouts are immune to such disasters are valuable. Even if that downside risk rises by only a little, people are prepared to pay quite a bit more for – and to tolerate lower returns on – the “safe haven” of government debt. And I think it’s plausible, at least, that an increasingly negative skew to global growth expectations might help to explain the divergence between equity and bond yields in Chart 2.
These possibilities are why the Bank has already taken a number of steps to encourage FinTech’s development. 4  For a summary of the new regulatory arrangements see “Changes to the Bank of England”, Murphy, E. and Senior, S, Quarterly Bulletin Article (Q1 2013). 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  The PRA and the FCA have changed their authorisation processes to support new business models. The New Bank Start-Up Unit, created in 2016, works closely with firms seeking to become banks. Already, four new ‘mobile’ banks have been authorised. 5  The Bank also established a FinTech Accelerator last year. Since then, we have worked with a number of firms on proofs of concept ranging from strengthening our cyber security to using AI for regulatory data, and improving our understanding of distributed ledgers. Today we are opening our 4th round of applications to the Accelerator. We are looking to work on new proofs of concept on maintaining privacy in a distributed ledger and applying a range of big data tools to support the Bank’s analysis. 6  More broadly, the Bank is working to ensure that this time the right hard and soft infrastructure are in place to allow innovation to thrive while keeping the system safe. Let me expand briefly with three examples. The Right Soft Infrastructure First, with respect to soft infrastructure, the Bank is assessing how FinTech could change risks and opportunities along the financial services value chain.

Fiscal policies might play a bigger stabilisation role without neglecting the constraints associated with current high debt levels and the implications of demographic changes for the public budget. In both cases, structural policies to expand productivity growth will ease the difficulties associated with the fulfilment by both monetary and fiscal authorities of their stabilisation functions. Macroprudential policies can also be used as additional macroeconomic stabilisation mechanisms, in addition to their role in guaranteeing financial stability. And all of this will have to be achieved while keeping a close eye on financial developments and innovations that will have to meet new demands, mainly to do with the insurance of the longevity risk in an ageing, lowinterest-rate world. 16
In advanced economies, fiscal multipliers ii are particularly high for public investment:  In this respect, this harsh crisis can also be an opportunity to bridge the skills and innovation gaps thanks to productive investment. But unfortunately, this key debate over the quality of spending is the blind spot in our European democracies. II. Public finance in France Now, allow me to illustrate these principles with reference to the country I know best. In France, we sometimes have a strange relationship with austerity: we are the country that fears it the most but one of those that practises it the least. This unfounded fear distracts us from our real problem: the weakness of our growth and the excessive cost of our public services even though we have the same social model as our neighbours. I strongly believe in our European social model, which is not a handicap but one of our strongest common European assets. And let me be clear: I am not promoting austerity – with cuts in public expenditure – but moving gradually towards a stabilisation of public expenditure in real terms. Our challenge is the 10 percentage-point differential between our government spending-to-GDP ratio and that of the rest of the euro area:  Since 2008, the pace of growth rate in our public expenditure has diverged significantly from that of GDP growth, in contrast to Germany or the rest of the euro area.

Yes, a big step forward has been made thanks to Next Generation EU, financed by a shared debt instrument. Before thinking of possibly increasing its size, we should accelerate its implementation: speed, even more than weight, is what is currently lacking in Europe. But our real leap forward will come when the existence of a permanent common fiscal capacity, – although less limited in amount, although different from a standing budget because not systematically activated, – allows genuine countercyclical action to be taken. Conversely – and not contradictorily –, adequate fiscal discipline is key to cope with economic reversals. Look at Germany, which fixed the roof while the sun was shining, and made appropriate use of its financial leeway during the crisis. There will be a debate, to be concluded most likely next year after the German and French elections, on the Stability and Growth Pact, following three years of warranted suspension between 2020 and 2022. We should avoid a fruitless confrontation between “illusionists” – who plead for debt cancellation, which is completely out of the question – and “traditionalists” – who want to keep the same old rules as if nothing had changed, including on the level of interest rates. We do still need rules, but revised and simplified ones. Indeed, the current low interest rate environment (with r<g) does not mean that public debt sustainability issues have become irrelevant: it only implies that governments have more time to ensure debt sustainability.
In the short term, a financial institution that is seen condoning money laundering and terrorism activities will lose public confidence and the confidence of their depositors. The institution will also face higher liquidity risks as funds derived from illegal activities tend to be less stable. Ultimately, in the long term, coupled with higher cost of doing business, the institution’s ability to perform its important economic intermediation process will also be affected. Understanding of money laundering and terrorism financing risks is key for an effective AML/CFT measures For an AML/CFT measure to be effective, we need to understand our money laundering and terrorism financing risks and vulnerabilities. Understanding of the risks will facilitate our efforts in channeling our resources and priority towards areas that would pose the greatest risks to the country and the institutions. Recognising these needs and in line with the requirements of the FATF Standards, at the country level, we had conducted a national risk assessment (or the NRA) to identify, assess and understand specific money laundering and terrorism financing threats in the country, in particular the scale, sources and methods of those threats, as well as the vulnerabilities and risks across various sectors. We will share with you shortly the result of the NRA so that you will have better understanding of the risks at the country’s level. Subsequently, the results of this NRA needs to be translated into your institution’s own policies, procedures and risk controls. Effective AML/CFT regime is important.

In addition to surveys, international organizations have mobilized to develop a range of indicators to assess the different dimensions of financial inclusion. Since the Cannes Summit in 2011, the G20 has focused on developing financial inclusion indicators, including indicators on access to and use of financial services, financial literacy, and the quality of financial service provisioning and consumption, as part of a continuous reflection process integrating new international trends in this field, notably the development of new distribution models and the emergence of digital financial services. The AFI also published a set of basic indicators on access to and use of financial services in 2013 and on quality in 2016 with the aim of harmonizing data among its members by providing them with a common tool to ensure comparability and foster peer learning. Ladies and gentlemen, In Morocco, since 2007 both the Ministry of Finance and Bank AlMaghrib have considered financial inclusion as a major instrument to develop a comprehensive strategy of the financial sector by 2020 which aims to deepen the national banking market, develop capital markets and position our country as a regional financial hub. Through our commitment to the Maya Declaration in 2013, we announced our pledge to promote access to and use of quality financial services based on sound and solid foundations. That same pledge was 4  reaffirmed in 2016 as part of the roadmap of aligning the Moroccan financial sector to sustainable development goals at the COP 22 held last year in Marrakech.
Particularly concerning is the low degree of export to import coverage, signalling structural problems of this deficit due to still-low competitiveness in our economy. In this direction, a special attention should be paid to checking costs and productivity growth in the economy, by raising investments in education, and by attracting most advanced technologies in production. Also, in the medium run, the macroeconomic policies should be  2  BIS Review 94/2009  prudent in terms of public and private savings level, in order to control the need for using foreign financing resources. The fiscal policy during the first half of 2009 had an expansionary stance, being featured by a rapid growth of expenditures and budget deficit. Budget revenues have recorded a more moderate growth, partially reflecting even the economic slowdown effects. Though remaining within the projected level for 2009, the budget deficit by about ALL 30 billion constitutes a much higher amount than in the same period of the previous year. Under these conditions, the Bank of Albania would appreciate the taking of measures for keeping budget deficit levels and public borrowing in check, helping the maintaining of the internal and external balances in the economy. Preserving the projected budget parameters will impact positively on macroeconomic stability, by controlling the fiscal stimulus on aggregate demand and dampening the pressures on monetary markets. The demand for monetary assets increased during the last months.

Grant Thornton Europe Regional Meeting  What monetary policy cannot do Address by Dr Mario Vella, Governor of the Central Bank of Malta 24 May 2017  Almost ten years have passed since the outbreak of the global financial crisis, triggered by the collapse of Lehman Brothers in the autumn of 2008. During this period, central banks have become, according to The Economist, “the most powerful financial actors on the planet”. Central banks have often been portrayed as the only institutional players with the knowledge and capability to prevent a global financial crisis from turning into a second Great Depression, on par with the one seen in the 1930s. And yet, despite this aura of power, central banks are both fallible and constrained. In this address, I would like to touch upon what monetary policy can do and, equally importantly, what monetary policy cannot do. As you know, Malta has formed part of the euro area since January 2008. Therefore, the Central Bank of Malta no longer formulates and executes a monetary policy of its own. Rather, as one of 19 members of the Governing Council of the European Central Bank, the Governor of the Central Bank of Malta takes part in the formulation of monetary policy for the euro area as a whole. At the same time, the Bank is responsible for implementing the Council’s monetary policy decisions in Malta. Monetary policy in the euro area aims at price stability. According to the Treaty this is the primary objective of the European Central Bank.