samchain/econo-pairs-v1 huggingface dataset:
Achieving a complete and consistent macroprudential safety net, in addition to completing the microprudential one, is also desirable in the current context to enable banks to absorb further shocks while maintaining the provision of key services. This should take several avenues, ranging from countercyclical buffers, to be set at 0.5 % in France as of 2023, to borrower based measures. In this regard, there is clearly a need to act across Europe with regards to the buoyancy of the residential real estate market. In France, the macroprudential authority has put in place since 2019 a framework to regulate lending standards in the residential real estate market by imposing a debt-service-to-income ratio 2/4  BIS central bankers' speeches  cap of 35% and a maturity limit of 25 years on new housing loans. Such measures together with the prominence of fixed rates in France, has strengthened households’ financial resilience against any potential increase in market interest rate and any related rise in loan maturity. 3.Challenges associated with climate change and digitalisation of finance The challenges brought forward or amplified by the war in Ukraine should not blind us to more structural vulnerabilities, which the war in Ukraine has not made disappear. What I have in mind here is the transition to a sustainable economy and the digitalisation of finance. To conclude my remarks I would like to say a few words about the role we can play as supervisors and central banks to help banks address those two challenges.

Regarding the first one, the publication at the beginning of the month of the last contribution to the IPCC 6th assessment report on climate change mitigation reminds us of the need for an urgent transition toward carbon neutrality, which will entail major transition risks for banks. Supervisors have already started to assess the exposure and disclosure of financial institutions to those risks to incentivize them to identify, assess and manage those risks as mainstream ones– and the ACPR played a pioneering role in this respect, with the achievement of the first bottom-up climate risks stress-test last year. From now on climate risks will be progressively integrated into the prudential framework,  starting with pillar 3 and pillar 2 requirements. Banks must step up their efforts to prepare meeting these forthcoming regulatory requirements, including those related to climate stress-tests and banks’ transition plans, which are part of the CRD6 proposal currently in negotiation. As regards the pillar 1 framework, let me note that the integration of climate risks is still a hotly debated topic and I hope the upcoming publication of a discussion paper by the EBA on this issue will allow us to move forward. We shouldn’t jump to conclusions though. There are many methodological and data shortcomings to address before implementing new requirements. In any case, let me emphasise that from my supervisory perspective the pillar 1 should remain risk-based and that we should overcome the green / brown dichotomy by assessing transition risk on the basis of the transition plans instead.
Or would it be better to take the more direct, but less nuanced approach advocated by some and simply break up the most systemically important firms into smaller or simpler pieces in the hope that what emerges is no longer systemic and too big to fail?1 As I will explain tonight, I believe we should continue to press forward on the first path. But, if we fail to reach our destination by this route, then a blunter approach may yet prove necessary. As always, my views may not necessarily reflect those of the Federal Reserve System. What is the too-big-to-fail problem? The root cause of “too big to fail” is the fact that in our financial system as it exists today, the failure of large complex financial firms generate large, undesirable externalities. These include disruption of the stability of the financial system and its ability to provide credit and other essential financial services to households and businesses. When this happens, not only is the financial sector disrupted, but its troubles cascade over into the real economy. There are negative externalities associated with the failure of any financial firm, but these are disproportionately high in the case of large, complex and interconnected firms. Although the moniker is “too big to fail”, the magnitude of these externalities does not depend simply on size. The size of the externalities also depends on the particular mix of business activities and the degree of interconnectedness with the rest of the financial industry.

Asia remains the fastest growing and most dynamic region in the world today and is likely to remain so in the foreseeable future. According to projections by The Conference Board, China’s growth in the next ten years will average close to 5% per annum, with India at about 4.2% and the rest of Asia at 4.5%. 1 These projected growth rates for Asia are well above the 3.8% for emerging economies as a whole, and the 1.7% expected for the advanced economies over the same period. Looking further into the future, the Asian Development Bank has projected that the sum of the GDP of China, India and ASEAN in purchasing power parity terms could quadruple by 2030 and even exceed that of the US and Europe combined. 2 5. Asia’s already large middle class, will continue to register strong growth. In ASEAN for instance, the middle class is projected to rise to two-thirds of the population by 2030, from less than a quarter in 2010. 3 The rapid expansion of the middle class will, from the demand side, spur the growth and development of a wide range of goods and services. 6. Alongside Asia’s sustained economic development in the medium-term, financial services will be an important facilitator of growth as well as a growth engine in its own right. 1  “New measures for global growth projections for The Conference Board Global Economic Outlook 2014,” The Conference Board, November 2013. 2  “ASEAN, PRC and India: The Great Transformation,” ADB Institute, Asian Development Bank, 2014.
This package included a reduction in Bank Rate to a new low of 0.25%, and the launch of a Term Funding Scheme to reinforce the pass-through of this cut, alongside a £ increase in our stock of UK government bonds and the purchase of up to £ of investment grade non-financial corporate bonds. As central bankers and money market enthusiasts know, the issue of pass-through is of utmost importance. The paper begins with the premise that a necessary condition for competitive money markets is that any change in the Fed’s policy rate is passed through, one for one, to all market transaction rates. In truth, one can make the much broader statement that the very efficacy of monetary policy and its usefulness as a tool for influencing the economy is premised on the pass-through of changes in policy rates to money market rates. And that’s why some of us have endless appetite to discuss any wedge between them. With that in mind, I’d like to pick up on two of the central themes of Darell and Arvind’s paper. •  The first is the impact of regulation – in particular the leverage ratio – on money market function. I will restate the case for having a leverage ratio, but will also argue that it can be much improved by the exclusion of central bank reserves from the exposure measure. •  The second is the role of central banks in money markets.

•  If central bank reserves are included in the leverage exposure measure, banks must think carefully before accepting a deposit. If it implies an increase in their overall asset size, their leverage capital requirement will increase commensurately, and that will bring a shadow regulatory cost of the same order of magnitude as those calculated in the paper. This disincentivises competition for deposits, and drives a wedge between the central bank policy rate and rates that banks will pay on wholesale deposits. •  If central bank reserves are removed from the exposure measure it instantly gives banks somewhere to place cash without impacting their leverage ratio. They would therefore maximise profits by competing for deposits at rates all the way up to the rate that can be earned on reserves at the central bank, thus improving passthrough to average bank deposit rates and strengthening the transmission of  2  For example, IMF (2009) and Aikman et al (2014), and others. BIS central bankers’ speeches  3  monetary policy to the real economy. And the early indication from market participants is that they do indeed expect this change to strengthen the link between money market rates and Bank Rate. In short, although regulatory innovations such as the leverage ratio are here to stay, we can and should attenuate some of their impact on money market function where it is possible to do so without reducing the financial stability benefits.
According to the Accenture study, 48% of customers said they wanted relevant advice and product information from their banks as they go about their daily lives. They also want banks to play a supporting role in the purchasing process for products such as a house or new car, and even related services such as insurance. Banks need to focus on providing long-term value for customers, rather than viewing them as a short-term opportunity for sales. We have already seen the harmful impact of this ‘short-term’ outlook that led to the subprime-mortgage crisis, as banks sold mortgages to customers who couldn’t afford them. Banks’ profits surged in the short term, but everyone suffered in the end; not only customers and the broader economy but also the banks. Banks therefore need to revisit their value propositions towards their customers in order to ensure that they are truly providing the products and services their customers need while keeping the interest of their customers and the society in Central Bank of Kuwait - Public ‫ عام‬- ‫بنك الكويت المركزي‬  - 11 -  mind. It will be helpful for the industry to reflect upon its ultimate objectives – to ensure inclusive prosperity and put the welfare of society on a sustainable footing. iii. Battle for Efficiency To win over customers and provide value, banks must operate in an efficient and intelligent manner, with their limited resources optimally deployed. The battle for efficiency is the third of the battles that banks need to win.

By winning the battles for customer loyalty, value, efficiency, resilience and talent, banks can remain the dominant players in this space. The bank of the future will be completely unrecognizable from that of today. It will be closer to its customers, digitally enabled, and ahead of the curve when it comes to anticipating customer needs. It will be more efficient, more resilient and better able to address the economic and social challenges of the future. In the end, only collectively, we as the key stakeholders in this industry can take the difficult yet necessary steps required to shape the future of the banking industry. As Einstein said: “A new type of thinking is essential if mankind is to survive and move toward greater levels.”  Thank you.
During the crisis 2008–2009, GDP fell from a peak prior to the crisis in the fourth quarter of 2007 to a trough in the first quarter of 2009 by around 7.5 per cent. These falls are thus in the same magnitude as the insurance premium. If the premium and the damage are about the same size, is it a sensible insurance policy? It is actually possible that in certain special situations effects may arise from relatively small increases in the interest rate, when combined with words of warning from the central bank and financial supervisory authorities. As Charles Bean, deputy governor of the Bank of England, said in his paper presented at the Jackson Hole conference in 2010: ”[T]here may be times when a mixture of words and modest interest rate action can be effective in cooling excessive market exuberance[. ]”7 However, as far as I know, no such effect from limited interest rate increases has been actually proved. Moreover, there is hardly anyone who would claim that the Swedish housing and mortgage market is characterised by “excessive market exuberance”. As far as I know, no one has referred to any indicators of exaggerated and unrealistic optimism regarding current developments in housing prices. In his paper, Bean reaches the same conclusion that is supported today by extensive research and practical experience: “[G]enerally speaking, monetary policy seems too weak an instrument reliably to moderate a credit/asset–price boom without inflicting unacceptable collateral damage on activity.

Jean-Claude Trichet: Interview in Handelsblatt Interview with Mr Jean-Claude Trichet, President of the European Central Bank, in Handelsblatt, Germany, conducted by Ms Marietta Kurm-Engels and Mr Andreas Hoffbauer on 12 May and published on 14 May 2010. *  *  *  Handelsblatt (HB): Mr Trichet, you intend to withdraw all of the liquidity that you are currently injecting into the markets via the purchase of government bonds. Do we have to face inflation in the euro area? Trichet: No, not at all. Price stability is our primary mandate and over the past 11½ years we fulfilled our mandate successfully. We have not changed our monetary policy stance. The additional liquidity that we are providing through the purchase of government bonds will be withdrawn again. Interest-bearing time deposits are an appropriate way to withdraw this liquidity. HB: What induced you to take this extraordinary step on Monday morning? You had made no mention whatsoever thereof at the press conference just three days earlier. Trichet: On Thursday afternoon and Friday, we were facing a situation that we regarded as fundamentally abnormal. That situation deteriorated abruptly, sharply and extensively. The very moment where the agreement was reached in Europe to provide Greece with financial support and the imminent decision of the International Monetary Fund (IMF) to approve the Greek standby should have contributed on the contrary to ease tensions in the markets … HB: … which was not the case? Trichet: No, the contrary happened.
Swiss economic outlook What does the economic outlook for Switzerland look like, given a baseline scenario with a world economy on a weak growth path as described above? After two years of fairly robust recovery, we expect the Swiss economy to slow considerably in 2012. The situation remains very challenging for Switzerland. On the one hand, the still very strong Swiss franc is weighing on export performance. Firms are suffering from compressed margins. If the difficult exchange rate situation persists, companies may consider relocating production capacity to other regions. On the other hand, the slowdown in external demand, as expected in our global baseline scenario, will likely weigh on investment spending and labor demand in the quarters to come. Although some recently released indicators point to a slight stabilization, we project the Swiss economy to grow only weakly over the next few quarters. Moreover, as mentioned before, there is a very high degree of uncertainty regarding the global outlook. This is also true for the Swiss economy, which depends particularly on economic conditions in the euro area. If the risk scenario of a further escalation of the debt crisis were to materialize, economic activity in Switzerland would suffer a much more pronounced slowdown than just described. Such a development would lead to a severe risk of deflation. Current Swiss monetary policy Given this highly uncertain outlook, the SNB is – more than ever – committed to enforcing the minimum exchange rate with the utmost determination at any time.

However, we expect growth rates in China and India – the most important countries in emerging Asia in economic terms – to remain below potential in the near term, due to prior monetary policy tightening, high inflation, and sluggish external demand. Looking at the US, recent data suggest that the situation has improved slightly. However, this should not hide the fact that economic growth in the US is likely to remain sluggish. As you may know, unemployment is still high and the fiscal environment remains contractionary. For the euro area – Switzerland’s most important trading partner by far – the economic outlook has deteriorated since last autumn. Uncertainty  BIS central bankers’ speeches  1  about an escalation of the sovereign debt crisis is undiminished. As a result, the euro area is likely to face a mild recession in early 2012. This short overview shows quite plainly: we still live in a world with substantial downside risks. Thus, the global economic situation might turn out to be worse than described above. One possible risk is a more pronounced slowdown in emerging market growth. This would reinforce the downturn in European countries. Another risk is that fiscal consolidation in the US may exert a greater drag on growth than projected today. But the main risk is – without doubt – a further escalation of the European debt crisis. Were such a risk to materialize, the consequences for the international financial and banking system – and in turn for global activity – would be severe.
2  BIS Review 69/2007  The chart on the left of slide 6 introduces a composite indicator of financial market liquidity in the euro area equity, bond, foreign exchange and credit markets. It is constructed to gauge three different dimensions of market liquidity. The first dimension is tightness , that is the magnitude of risk premiums required by market-makers for holding inventories of securities, and it is measured by the bid-ask spread. The second dimension is depth and resiliency , that is the degree to which the volume of transactions impacts on asset prices, and it is measured by using ratios of asset price movements to transactions. The third dimension relates to liquidity risk premia, that is, the compensation required by investors for the risk that attempts to unwind positions could be challenged by uncertain market conditions in the future. This is measured using yield spreads between securities which are known to have varying degrees of liquidity. The evolution of this indicator over time confirms that financial market liquidity has increased significantly since 2001. It rose sharply in 2003 and 2004 and markets have remained very liquid since then. The increase in market liquidity may reflect structural changes in financial markets; for example, the liberalisation of international flows of capital, the securitisation of loans, the development of new financial instruments, and the rapidly growing market presence of highly active financial market participants, such as hedge funds.

Speeches  Published Date: 29 April 2021  "Inflation & Expectations" - Opening Remarks by Mr Edward S Robinson, Deputy Managing Director (Economic Policy) & Chief Economist, Monetary Authority of Singapore, at the Seminar on Inflation and Cost of Living in Singapore and Asia on 29 April 2021 Introduction 1. Thank you for inviting the MAS to join this virtual webinar and live discussion on “Inflation and Cost of Living”, a joint initiative of the Sim Kee Boon Institute for Financial Economics, the IMF Institute and DBS Bank. It is encouraging that academia, industry and an intergovernmental organisation have come together on an important issue of common concern. 2. I recall launching the Singapore Index of Inflation Expectations or SInDEx, as it was known then at SMU in January 2012, and it is heartening to see it nurtured over the past decade. The MAS is grateful to the SKBI for its commitment to this project and to DBS for its generous sponsorship of the DBS-SKBI-SMU Singapore Index of Inflation Expectations, that counts among the key indicators that MAS looks at in its economic surveillance. 3. My comments are in two parts. First, I will make some broad observations on the somewhat complex inflation dynamics that confront us since the onset of COVID-19. Second, I intend to reiterate the important role that expectations play in driving the behaviour of key macroeconomic phenomena, including inflation.
3  As the 2007 financial crisis unfolded and its effects spread-out, this framework helped us to avoid large costs and evade financial problems despite our strong ties with the global economy. In the aftermath of the crisis the local currency depreciated around 45 percent in seven months, while the monetary policy rate was reduced from a relatively high level of 8.25 percent in December 2008 to a point five percent in July 2009, remaining there for about a year. Together with lowering the interest rate, the Central Bank implemented a program of liquidity provision that significantly reduced the market interest rates to a level much closer to the monetary policy rate. Additionally, in the middle of 2009 it established a term liquidity facility for banking institutions, granting 90- and 180-day liquidity at the prevailing monetary policy rate, signaling a more expansionary path for the monetary policy rate than the market expected. The active monetary policy response, together with an expansionary fiscal policy, favored by a healthy fiscal position that was achieved thanks to a fiscal rule where expenditures are determined as a function of long-run copper prices and economic growth, facilitated a rapid adjustment. After only one period of negative annual growth in 2009, the economy was able to sustain growth rates above 4 percent in the years that followed. The inflation rate fell well below the target range for about a year, but inflation expectations remained well anchored at our target of 3 percent in the two-year horizon.

Central Bank of Chile’s Twenty-first Annual Conference “Monetary Policy and Financial Stability: Transmission Mechanisms and Policy Implications” Opening remarks by Governor Mario Marcel  Good morning and welcome to the Twenty-first Annual Conference of the Central Bank of Chile. It is a pleasure to host this event that every year gives us an opportunity to reflect and discuss about issues that have direct implications on our work as central bankers from a broader perspective. I am looking forward to active discussions through the rest of the week on this year’s conference theme: monetary policy and financial stability. Ten years have passed since the onset of the Global Financial Crisis and we are still dealing with its economic consequences. But we have learnt a lot, and a decade of hindsight about the causes and long-lasting effects has led us to rethink the way we conduct monetary policy, how to ensure financial stability, and how these two elements are, or should be, interconnected. One of the most important policy lessons from the crisis concerns the relevance of actively seeking financial stability in a context of ever-increasing financial complexity. And central banks worldwide have been increasingly involved in assuring this, since it has become clear that financial stability is a pre-condition for price stability.