samchain/econo-pairs-v1 huggingface dataset:
The financial institutions have the responsibility to establish a compliance mindset throughout the organization as a foundation that places high regard on ethics, trust and values. Energies that are used by some banks and financial institutions to design ways and means of flouting instructions and defying directives should be diverted to observance of governance and compliance. 6.2 I have highlighted the challenges that financial institutions could encounter in implementing GRC amidst ongoing increasing globalization, continuously changing laws and regulations, various forms of financial stresses and continuous evolution of complex financial products. These challenges underscore the importance of compliance and best practice, which have already been set by the financial services industry regulators and supervisors as well as the international standard setters. 6.3 In the present financial industry environment, where the stakeholders and other interested parties put pressure for greater transparency and corporate responsibility, the Board of Directors and senior management have to set high standards in all aspects of GRC. The increase in investments to improve the IT infrastructure and human resources to integrate GRC management can improve risk management as well as compliance performance and its efficiencies. The financial institutions that have strong governance and  6  BIS Review 15/2008  compliance processes in an integrated GRC framework will be more capable of winning public confidence, attracting investors, improving corporate reputation and efficiency, as well as contributing to promote financial system stability.

But the steep rise in implied future yields five years ahead suggests that inflation is expected to be higher in the medium term. That could be associated with expectations of softer macro-economic discipline, perhaps more specifically reflecting market uncertainty about EMU in the light of the ongoing debate about prospective membership and about how far the ECB will in practice be free to pursue its statutory task of maintaining price stability. It may, on the other hand, simply reflect some kind of market imperfection. The same analysis can be applied to Italy and Spain, for example, to try to assess market expectations about their possible membership of EMU as part of the first wave. It shows that notwithstanding the recent falls in short-term interest rates in those countries - which can largely be explained by their improved economic performance - 5 years forward yields remain significantly higher than those in Germany and France suggesting that early EMU membership is not at all certain in the eyes of the markets. BIS Review 22/1997  -4-  What can we conclude from all this, Mr. Chairman? Well, the conclusions that I draw are essentially threefold and hardly very surprising. I conclude, first, that markets at present are reasonably persuaded that the world economy as a whole will remain relatively stable at least by comparison with much of the post war period.
Table 1 FLS data The table below includes all participating groups that had signed up to the scheme and certified their Base Stock of loans by 24/09/2012 FLS Group  Certified lending to UK households and PNFCs Aggregate outstanding FLS £ drawings £ Base Stock of loans as at 30/06/12  Quarterly net lending flow  Cumulative net lending since 30/06/2012  1,211,736  n/a  n/a  n/a  Aldermore  1,567  n/a  n/a  n/a  Barclays  181,020  n/a  n/a  n/a  Hinckley & Rugby Building Society  433  n/a  n/a  n/a  Ipswich Building Society  444  n/a  n/a  n/a  Kleinwort Benson  11  n/a  n/a  n/a  Leeds Building Society  7,567  n/a  n/a  n/a  Lloyds Banking Group  443,255  n/a  n/a  n/a  629  n/a  n/a  n/a  Nationwide Building Society  152,155  n/a  n/a  n/a  Principality Building Society  5,408  n/a  n/a  n/a  RBS Group  214,816  n/a  n/a  n/a  Santander  189,339  n/a  n/a  n/a  Virgin Money  15,093  n/a  n/a  n/a  TOTAL  Monmouthshire Building Society  The FLS measure of lending covers drawn sterling loans to households and private non-financial corporations (PNFCs) by the FLS Group, which includes all UK resident monetary financial institutions and related specialist mortgage lenders within a group.

François Villeroy de Galhau: The challenges of the euro area at the dawn of 2019 Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at a seminar at the Bank of Portugal, Lisbon, 22 February 2019. * * * Acccompanying slides of the speech. Ladies and Gentlemen, [meus caros amigos], It is a real pleasure to be with you in Lisbon – Cidade da Luz e Rainha do Mar [City of light and Queen of the Sea] – the first bridge between Europe and Asia thanks to the audacity of your descobridores [explorers]. And still today, your country is an inspiring example of economic recovery thanks to its courageous reforms. I wish to express my warmest thanks to my friend and colleague, Governor Carlos Costa, for his invitation. Before focusing on our challenges for 2019, let me start my speech on a more positive note, as this same year marks the 20th anniversary of the euro, and elaborate a bit on its success. I. The euro’s success was built on three principles that are now more vital than ever As to whether the euro has been a success, there are few among us today who would have any doubts. It is more interesting to look back on the reasons for this success, which, to my mind, was built on three founding principles: the Eurosystem’s mandate of maintaining price stability; the means employed to carry out this mandate, i.e. independence; and the spirit that drives its action – general European interest. 1.
Significant progress has been achieved in this direction during the recent period with the creation by the IMF of new facilities and a new SDR allocation, the biggest ever, for the equivalent of 250 bn USD. More needs to be done and work should be undertaken to find sources of international liquidity truly substitutable to reserves without creating undue and excessive moral hazard. And, finally, an important question is to find, in the future ,reliable international stores of value. The crisis has amplified the “asset shortage” as some instruments, up to now considered as riskless, have proved very vulnerable to changing financial conditions. The ability of the private sector to create “safe” assets through financial innovation has proved largely illusory. So, in the period to come there may be both an increased demand worldwide for risk free assets and much less certainty on their future supply. The search for a reliable international store of value has been going on for many decades. When discussions were held to build the Bretton Wood system, Keynes proposed the creation of a new international currency, the “bancor” which could serve both as a source of liquidity and a store of value. Thirty years ago, there was extensive discussion in the IMF on the creation of a substitution account. Most recently, in 2009, Governor Zhou has reopened the debate and suggested, over the long run, the creation of a new “super reserve” currency, while, in the meantime, enhancing the role and status of the SDR.

Jean-Pierre Landau: Rebalancing the world economy – a common challenge Keynote address by Mr Jean-Pierre Landau, Second Deputy Governor of the Bank of France, at the Chinese Academy of Social Sciences Economic Forum, Beijing, 11 November 2010. * * * In preparing those remarks, I was very influenced by the works by Ricardo Caballero and Raghuram Rajan (see references) among others. All interpretations and errors are mine. Great changes are taking place in the world economy. The center of gravity is moving to Asia and the emerging world. This has been recognized in the landmark agreement on IMF reform reached at the last G20 Ministerial meeting. China has become the IMF’s third shareholder, India has moved up by five ranks and Brazil is now on par with Canada (a G7 country). Symmetrically, the European representation in the Board will be reduced by the equivalent of two chairs (out of nine currently held). At the same time, we are facing great challenges. Output is growing fast in emerging economies but this relative shift in production has not been fully matched by a rebalancing in demand. Overall, beyond the turbulences caused by “hot money”, net capital flows are going “uphill” from emerging to developed economies. That means that some of the poorest citizens of the world are lending money to some of the richest, allowing those to finance their consumption. And financial bubbles have tended to proliferate in an environment of permanently low inflation and ample liquidity.
In addition to these conventional unconventional measures there are also unconventional unconventional measures. When credit markets are dysfunctional, as some are at present, targeted purchases by the Bank of England of assets may improve liquidity in markets for those credit instruments. The objective of such purchases would be not only to boost the supply of broad money but also to increase liquidity and trading activity in the markets for those assets. A reduction in the illiquidity premium for a particular credit instrument might help to stimulate issuance by corporate borrowers and the resumption of capital market flows, thus reducing reliance on bank lending. It could also raise the values of assets that are currently under-priced because of high illiquidity premia, helping to strengthen the balance sheets of banks and other financial institutions. Yesterday the Government authorised the Bank of England to conduct such operations, financed by the issue of Treasury Bills, in order to improve the flow of credit to companies. But at some point the Monetary Policy Committee might wish to adopt these unconventional measures as an instrument of monetary policy. In conducting such operations, it is important to choose the markets in which to intervene extremely carefully. There is a fine dividing line between helping to oil the wheels in markets which are temporarily impaired, and artificially supporting markets in which there is no underlying demand.

According to preliminary national accounts figures, mainland GDP grew by 2.2% from 2009 to 2010. Norges Bank’s regional network contacts expect solid growth to continue in the coming quarters. Unemployment is low. There are prospects of  BIS central bankers’ speeches  1  fairly strong growth in the Norwegian economy ahead, driven by solid income growth and an increasing population. Chart: Population growth In 2010, the population grew by 1.3 per cent. With the exception of 2008, this is the highest rate of population growth since 1920. A high birth rate has contributed, but strong population growth primarily reflects high inward migration. This is boosting demand for goods and services, including housing. Nonetheless, it is likely that a high proportion of labour immigration will enable the economy to grow faster without fuelling price and wage pressures, even though bottlenecks may arise in some areas. Chart: Consumer prices 2010/11 The rise in consumer prices slowed through 2010, and in recent months inflation has been fairly low. Inflation has varied from month to month as a result of wide fluctuations in electricity prices. Overall CPI inflation rose by 2.5 per cent in 2010. If we exclude fluctuations in energy prices, the rise in prices has been low. In 2010, CPIXE inflation was 1.7 per cent. Chart: Interest rate forecasts Norges Bank raised its key policy rate to 2 per cent in May 2010. Through 2010 the Bank’s interest rate forecast was adjusted down, and further increases were deferred.
Under the assumptions regarding liquidity stated above, the Central Bank’s 2007 liquidity management strategy will be as follows: (i)  The Central Bank will continue to announce overnight borrowing and lending interest rates between 10:00-12:00 and 13:00-16:00 in the Interbank Money Market within the CBRT. In case of a liquidity shortage during the day, banks will be able to borrow at the Central Bank’s lending rate against collateral within their limits. In the event of a fall in interest rates due to increasing liquidity, banks will be able to lend New Turkish Lira to the Central Bank at the Central Bank’s borrowing rate. (ii)  The Central Bank will continue to provide the Late Liquidity Window Facility in the Interbank Money Market within the CBRT between 16:00-16:30 such that banks may borrow from or lend to the Central Bank against collateral without any limit. (iii)  In case of a temporary or permanent liquidity shortage, the Central Bank will continue to carry out liquidity management through one-week repo auctions. When there is liquidity shortage in the market, the Central Bank will announce the amount of repo auction for that day on Reuters’ CBTF page at 10.00. While determining the amounts of the auction, the Central Bank - as long as no extraordinary fluctuations are observed in the market - will endeavor to maintain the average auction interest rate; a.

Finally, I should mention the agreement reached to introduce a new supervisory instrument, the leverage ratio, which is not directly linked to a bank’s level of risk; for this reason, it counters to some extent the potential shortcomings present in internal models for calculating capital needs. That leads us to one of the major issues currently under consideration: the use of internal models for evaluating the weighting of risks. There is known to be wide-ranging variability in the calculation of risk-weighted assets across different banks. The Basel Committee itself has published a report on this matter, and increasing numbers of experts and regulators deem it advisable to study the implications of the use of internal models in terms of how they affect the lack of transparency in the calculation of capital requirements and in order to ensure a level playing field for all banks. The prudential regime of systemic banks: more capital and a resolution framework A further aim of the FSB has been to eradicate, or at least alleviate, the externalities created by systemic “too-big-to-fail” institutions. Systemic banks are those which, given their interrelatedness, size and complexity, might entail, in the event of bankruptcy and disorderly liquidation, serious difficulties for the rest of the financial system. The systemic repercussions of the collapse of a bank of such characteristics, as evidenced following the Lehman Brothers bankruptcy, was the driving force behind the authorities having subsequently to bail out other institutions, with the ensuing burden on public funds.
The pick-up in our competitive capacity is highly tangible in terms of Spain’s unit labour costs relative to those of the rest of the euro area. These costs fell by 14% between 2008 and 2019, after rising forcefully during the pre-crisis years. The gains in competitiveness vis2/6  à-vis the euro area were reflected, in the early stages of the crisis, in heavy job destruction, and throughout the subsequent period, in wage moderation. Contributing to this were the successive amendments to the labour market legal framework during the crisis, which proved to be effective levers for boosting the recovery in employment. Overall, these developments enabled the competitiveness lost in relation to the other euro area countries – measured via relative unit labour costs (ULCs) – to be restored. Specifically, while for the market economy as a whole ULCs growth in Spain from 1999 to 2008 exceeded that observed in the euro area by 16 pp, the current relative level is 5 pp below that of 1999. We must add to these improvements the enhanced financing conditions for resident agents as a whole. Included among these agents are Spanish firms which, from end-2012, saw their financial costs ease strongly. Also, most particularly, there was a correction to the differences in the interest rates they had previously to pay compared with their competitors in the core euro area countries.

To continue reducing debt vis-à-vis the rest of the world, sustained external surpluses must be run. And that in turn calls for the maintenance of gains in competitiveness, which throughout the recovery have been based on the moderation of labour and financial costs and which, hereafter, should hinge to a greater extent on productivity gains. Indeed, in the recovery to date, the increases in total factor productivity continue to be smaller than those in other developed economies. That is in response to numerous institutional, regulatory and structural factors that public policy should seek to correct. These factors include certain shortcomings in the labour market – such as excessive turnover and temporary contracts – and in the education system; scant generation and dissemination of technological advances; competition-curbing regulatory elements; and the improvable quality of business management. In this respect, it should be borne in mind that, during the expansionary phase prior to the crisis, the loss of competitiveness in terms of the surplus per unit of output was on a similar scale to that mentioned for ULCs. However, the subsequent correction has been much smaller, which explains why the current level of the value-added deflator has grown 10 pp more in Spain than in the euro area as a whole in cumulative terms since the monetary union began functioning. The design of a regulatory framework more conducive to competition should allow for a greater contribution of business margins to gains in competitiveness visà-vis the euro area.
There are two reasons for this: First, exchange rate movements and foreign exchange market conditions can be of critical importance to domestic financial institutions; and second, the personnel and other service elements necessary to build up two effective institutions in this field are limited. The Central Bank of Iceland published its last Financial Stability report in May 2008. The present report has been written without confirmed information on the banks’ and savings banks’ balance sheets, operations, and ownership structure. Consequently, it is not possible to assess the status of the banking system as a whole, as has been done in previous reports. Nonetheless, the Bank considered it important to issue a Financial Stability report at this time, both to document certain information on the financial crisis and the subsequent  BIS Review 136/2009  3  recovery work, and to discuss anticipated projects related to the regulation and supervision of financial activities. It is important to note that this report does not attempt to present a comprehensive analysis of the causes of the banks’ collapse, nor does it pass judgment on the actions taken by the Government and the supervisory authorities prior to the crash. In recent years, the Central Bank has engaged in broad-based contingency work in preparation for a possible financial crisis, in collaboration with domestic authorities and supervisory institutions, and with foreign central banks. That work is not discussed in the present report.

The first school, usually identified with Professor Paul Krugman of MIT, is best summarized by the two fashionable phrases “crony capitalism” and “Asian values.” The emphasis here is on inept domestic policies, inefficient resource allocation to politically connected individuals, unrealistic speculation - particularly in real estate - and imprudent public spending, all fuelled by over-borrowing, poor bank supervision, extreme moral hazard, and a hubristic attitude generated by several years of fast growth. The trends were unsustainable, and the Nemesis came with a loud and very messy bursting of bubbles throughout the region. Asia’s downfall, says Professor Krugman, “was a punishment for Asian sins, even if the punishment was disproportionate to the crimes.” The second school, led by Professor Jeffrey Sachs of Harvard, sees the crisis in less moralistic terms. The turmoil, he says, was a classic financial panic: a run on the banks and mass capital flight exacerbated by the maturity mismatch of many Asian banks and the currency mismatch of many Asian borrowers. This was accompanied by speculative attacks on currencies and the collapse of asset values. While this approach stresses the fragility of many of the banking systems in the region, it maintains that the Asian economies were in relatively healthy shape according to the usual indicators, and that the magnitude of the crisis far exceeded the faults and errors of individual jurisdictions. Both the Sachs and the Krugman schools have much in common. But their logic points in different directions.
Indeed, already 20 years ago Staiger, Stock and Watson 9 pointed out that the most striking feature of NAIRU-based inflation estimates is their lack of precision, not to mention model uncertainty as evidenced by the righthand chart on slide 3. So what, then, is causing the sluggish performance of inflation? Here I want to argue that there are more subtle forms of hysteresis in the economy that are altering how we typically understand labour market slack. These are the scratches rather than the scars. 3/9  BIS central bankers' speeches  A different perspective on labour market slack One of the features of the recent employment recovery is that many new jobs have been of a lower “quality” compared with those seen before the crisis. While employment ratios have rebounded strongly, employment of full-time workers with permanent contracts has in fact declined. The latest EU Labour Force Survey (LFS) data suggest that “core” employment – that is, full-time positions on open-ended permanent contracts – now account for just over two thirds of all employees. You can see on slide 4 that this is the lowest share since the survey was first conducted. The LFS also suggests that of the net employment created since the crisis, around a third has been for workers on temporary contracts, and around a quarter part-time. Of course, a fraction of those seeking part-time employment do so as a way to balance work and other commitments. But, for others, the choice for part-time work is involuntary.

Consequently, banks which sold euros for less than CHF 1.20 did not receive the best market price and had – relatively speaking – to accept losses. Since there is no compulsion to make business transactions at the best prices, such anomalies cannot always be excluded. However, they can only be maintained for a very short period. How is the SNB organised in operational terms for implementing the minimum exchange rate? Since the introduction of the minimum exchange rate, the SNB has monitored the foreign exchange market from market opening in Asia on Sunday evening to market closing in New York on Friday evening without any interruption. The same applies to holidays. The interbank market, which is the market of relevance for the SNB, includes its counterparties. The SNB accepts well over 100 banks with more than 700 trading desks as counterparties. Thanks to this network of contacts, the global foreign exchange market is almost completely covered. On the part of the SNB, the trading limits amount to some hundreds of billions of  BIS central bankers’ speeches  1  euros a day. These limits can be flexibly adjusted by the SNB, should this be necessary. Via electronic trading systems, the banks have access at all times to the offers. The SNB’s strategy for implementing the minimum exchange rate has proved effective – including in the last few days. On the relevant interbank market, CHF 1.20 per euro qualifies as the lowest exchange rate. Consequently, the minimum exchange rate applied at all times.