samchain/econo-pairs-v1 huggingface dataset:
Furthermore, the FSM Bill would extend current Bank and FCA regulatory regimes for payment systems and e-money to cover the use of ‘stablecoins’ for payments. The Bank will have responsibility for any such payment systems which are systemic or likely to become systemic. The Bank intends to consult early this year on the regulatory framework that will apply to such systemic payment systems. The PRA’s intention is that new standards for PRA-regulated firms will be coherent with rules for other sectors. 14. ‘Implementing Basel 3.1 in the UK – speech by Phil Evans’, 07 December 2022. 15. For clarity, I note that tailoring must always be carried out in a way that is consistent with the PRA’s objectives and ‘have regards’. 16. Financial Services: The Edinburgh Reforms. The PRA is contributing to reforming the Ring-Fencing Regime for banks, removing rules for the capital deduction of certain non-performing exposures held by banks (the PRA will consult soon on removing these rules), a review into reforming the Senior Managers & Certification Regime (the PRA published an ‘Evaluation of the Senior Managers and Certification Regime’ in December 2020 and will soon issue a discussion paper with the FCA in coordination with the Government), changes to the Building Societies Act, and work on a potential UK retail central bank digital currency. 17. PRA Consultation Paper 16/22 – ‘Implementation of the Basel 3.1 standards’, November 2022. Page 10 18. ‘Fundamental Spreads − speech by Sam Woods’, 20 February 2023. 19.

Regarding the euro area, a digital euro would also contribute to supporting monetary sovereignty and strategic autonomy, by preventing the use of external digital assets – such as private crypto assets and non-euro CBDCs – as settlement assets, and by facilitating the emergence of a pan-European payment solution at the point of sale, which could serve as a vehicle for the use of a digital euro. But such a digital euro could and should be decentralised in its implementation, in the spirit of public / private partnerships mentioned earlier. On the other side of a mountain, you will obviously always find a side that is less exposed to the sun; here, this northern face is wholesale CBDC. It currently attracts little public interest, although it poses relatively less complex legal issues, and has two strong business cases. First, a wholesale CBDC could significantly contribute to improving cross-border and cross-currency payments, a topic on which we have made progress over the past year. Following a first report delivered to the G20 in July 2021, the Future of Payments Working Group of the BIS has recently finalised a new report outlining options for access and interoperability of CBDCs for cross-border payments. Second, a wholesale CBDC could accompany the tokenisation of securities as a safe and liquid settlement asset for them on a blockchain technology. Failing to offer market participants a wholesale CBDC could open the door to an extensive use of socalled stablecoins, which would pose a systemic risk.
Although, as recent years have shown, our economy has learned to adapt to external shocks, there are nevertheless a host of internal factors that leave us rather exposed. These include low economic diversification, insufficient flexibility of institutions and rules, a weak competitive environment (where new companies find it hard to enter the market and those lagging behind economically continue to do so for a long time). As a result, even given the potential for growth (which, as you know, the Central Bank estimates at 1.5-2%) there will potentially be significant fluctuations in output in the coming years. Therefore, there is an urgent need for structural changes that will raise the bar of potential growth above 1.5-2% and make it sustainable. The financial sphere is also in need of such structural changes. What policy response are we seeing in the face of these challenges in the financial sphere? 2 / 11  BIS central bankers' speeches  Above all, focus should be on maximum flexibility. Certainly, the floating rate should be upheld. It is crucial to adjust and constantly re-adjust regulation in established and new spheres based on the principles of proportionality to risks. Since rules quickly become outdated, it is important to gradually transition from management guided by rules to management by principles. Greater attention should be paid to systemic problems and risks, not just to the stability of individual institutions. Adopting the principle of countercyclicality, using macroprudential tools. Early warning of problems both in the system as a whole and in individual institutions.

Indeed, what we can do together to foster development of the financial sector and what the financial sector can do to foster development of the economy will be the subject of our discussion here at the congress. I look forward to the productive work and successful outcomes we will share. Thank you for your time. 11 / 11  BIS central bankers' speeches
There are nominal and real factors that affect commodity price developments. The most important real factor is due to the low price elasticity of not only supply of but also demand for these items. Because of low elasticity, a minor change in supply has the potential to affect market prices significantly. Likewise, a minor change in future real growth prospects has the effect of shifting the demand with a potential of large market price changes. This explains the real sources of commodity price volatility which is recently observed. Regarding nominal sources of volatility, most commonly cited explanations are related to monetary policies of major central banks and the structure of financial markets in commodities. I will elaborate more on real factors that is the lack of sufficient real supply increase in order to meet booming real demand from the developing world. The high growth potential in developing countries suggests that demand pressures are likely to stay with us over the years to come. Combined with the massive financial flows fueled by the exceptionally loose monetary policies, commodity price volatility will probably remain as a major challenge in the years ahead. I believe the key solution here lies in productivity increases in agriculture and energy in the medium term. Regarding agriculture, this necessity is much more evident in emerging markets – in order to keep up with the demand growth, considering the higher share of food in the consumption basket.

Banks must not be able to reduce capital below a minimum level even if they extend loans that, according to the models, seemingly involve low risk. Second, regulation must to a lesser extent contribute to amplifying cyclical fluctuations. With losses now rising, as a result of the abrupt and pronounced turnaround, banks must increase equity capital. Consequently, the rules governing capital requirements amplify cyclical fluctuations. The rules must therefore require banks to build up strong capital buffers over and above the minimum requirement in normal times. Then the banks would not have to  4  BIS Review 60/2009  increase capital when a turnaround occurs, but on the contrary be able to absorb losses. This will counteract the need for banks to ration credit in adverse periods. Many Norwegian banks do not have sufficient buffers today to safeguard their own, their shareholders’ or the economy’s best interests. Third, banks’ funding methods make them vulnerable. Earlier, the two main sources of bank funding in Norway were retail and wholesale deposits. In recent years, banks have borrowed heavily in both domestic and foreign markets. During the crisis, this proved to involve high liquidity risk for banks. In the future, in regulations and in practice, deposits must again take precedence as the largest funding source for banks. We also anticipate that bonds collateralised by high quality mortgages will become important. The credit swap arrangements can be seen as building a bridge to such a market.
Therefore, their actions are focused, in all advanced economies, on making sure that the impact of their decisions is felt in all parts of the  2  BIS central bankers’ speeches  economy. In other words, they aim to ensure that the monetary policy transmission mechanism is working. Let us now turn to fiscal policy. In all advanced countries, and primarily in the US, the fiscal stance is being hotly debated. As we all know since Musgrave has introduced his famous distinction, fiscal policy has three dimensions: stabilization, allocation and distribution. In a post crisis environment, governments are struggling to find the right mix. Today, what constitutes a “growth-friendly” fiscal policy? Discussion has sometimes focused on the stabilization aspect, and more specifically, on one important, but limited feature: the so-called “fiscal multipliers” which are set out to measure the impact of a change in the fiscal balance on GDP. This narrow standpoint focuses on the negative impacts of fiscal consolidation, especially when the output gap is significantly negative, as is now the case. However, we need to take a broader perspective and take into account the effects of fiscal policy on consumer and investment confidence as well as on the efficient allocation of resources. Where could the gains come from? To answer this question, it is important to consider the interactions between the fiscal stance and debt markets.

In the case of Spain, yields decreased by 70 bps, while in Italy, they decreased by 30 bps. This is the first time in three years that a major crisis in one euro area country has not affected others. This sends an important message. The euro area is more robust today than it was a year ago. While challenges remain, the actions taken have increased our resilience to internal and external shocks. Before I move on to other areas of progress, I would like to say a few more words on Cyprus. First, the financial support provided by the euro area countries and the IMF was very substantial, up to EUR 10, 000 for every Cypriot citizen. This should put to rest the claims that the country was unfairly treated and discriminated against. Second, the commitment to protect insured depositors has been maintained in the euro area and, in fact, is strengthened as a result of recent events. Last but not least: Cyprus is a unique case. This was an extreme situation of moral hazard with big depositors looking for abnormal yields in the domestic banking system. And it justified an exceptional treatment. Cyprus is neither a precedent nor a template for future crisis management. It is also important to state that such a banking model has no place in the euro area. And such a situation would not have existed had the banking union been in place.
But they also alter the conditions for stabilisation policy and reduce the need for ‘insurance’. BIS Review 6/2002  1  In this context it may be worth recalling that the overheating that led up to the crisis in the early 1990s was by no means primarily due to the growth of demand being notably strong, though demand was certainly too high in relation to the economy’s productive capacity. Annual GDP growth from 1985 to 1990 was actually no more than 2.4 per cent. What really mattered was poor conditions for growth; productivity rose only 1.1 per cent and employment in hours only 1.3 per cent. If productivity growth in the late 1980s and early 1990s had been half or one percentage point higher, things could have been very different. Our tendency to concentrate the EMU discussion on stabilisation policy means that a number of important points about EMU cooperation are overlooked. They concern the longer run and aim precisely at improving conditions for growth and employment in this horizon. EMU has an important role here. Trade will be facilitated along with other cross-border activities such as investment. Simplified price comparisons can led to stronger competition. We will also have a broader and deeper capital market. Moreover, EMU implies better conditions for a stable development in the Union as a whole. Good examples are the crises in Asia and Russia around 1998 and last year’s abrupt slowdown in the American economy; had it not been for EMU, Europe’s financial markets would have been more turbulent.

Ardian Fullani: Recent economic and financial developments in Albania Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the press conference on the Bank of Albania’s Supervisory Council decision on monetary policy, Tirana, 23 February 2011. *  *  *  Today, on 23 February 2011, the Supervisory Council of the Bank of Albania reviewed and approved the monthly Monetary Policy Report. Based on a thorough analysis of Albania’s latest economic and monetary developments and discussions on their performance outlook, the Supervisory Council of the Bank of Albania decided to leave the key interest rate unchanged at 5.00%. The Supervisory Council confirmed that the actual monetary conditions remain appropriate for meeting the medium-term inflation target and for supporting the domestic economic activity. I would like to proceed with a brief overview of economic developments and main issues discussed at today’s meeting of the Supervisory Council. *** Recent data from the global economy confirm the positive underlying momentum of the economic activity in developed and developing economies. Despite the gradual withdrawal of fiscal and monetary stimulus, economic growth has been stable, as a result of the recovery in the private sector demand in developing countries. On the other hand, the higher demand has triggered a price increase in commodities, basic products and food items, thus impacting the shift of the inflationary pressures upward. Nevertheless, globally, consumer price inflation remains still contained, as long as major economies continue to be characterised by below-potential economic growth.
Christian Noyer: From Maastricht to the present and beyond Speech by Mr Christian Noyer, Governor of the Bank of France, at the GIC / Drexel Spring 2007 Conference, Philadelphia, 16 April 2007. *  *  *  We have just passed the European Union 50th anniversary. It is a good time to reflect upon the essence and future of this extraordinary endeavor. Never before, in the whole history of mankind, have democratic nations pursued and reached, through peaceful cooperation, such a close degree of interdependence, involving, in many crucial areas, deliberate pooling of sovereignty. Of course, the process has not been without difficulties and tensions, many of which are still apparent and acute. Of course, numerous challenges remain and the future is paved with roadblocks which could still derail the whole project. But, for the first time in more than a thousand years, Europe is at peace and prosperous, with democratic regimes everywhere. This is, by historical standards, an exceptional achievement. At the start, EU was built on a strong intuition: by sharing the instruments and policies underpinning economic prosperity, European nations would create an irreversible situation of interdependence and solidarity where conflicts and wars of the past would become impossible. This intuition led to the creation of the European Coal and Steel Community in 1951, then, a few years later, to the European Community. Thus in 1957 the signature of Treaty of Rome was the starting point of this unique experience of regional integration in modern History.

This was more than a simple customs union since, from the beginning, external trade policy was a full Community competence. Even the CAP, whose image to day is not universally positive, was seen, at the time, as the archetype of a common policy, bringing together the shared interests and joint actions of member states. The project was further developed and enriched in two directions. A further impetus was provided by the adoption of the Single European Act in 1986. This Act set a timeframe for launching the Single Market and reaffirmed the need for achieving Economic and Monetary Union (EMU). The Single Act created the framework for full economic integration, with total freedom in the flows of goods, services and capital between member states. Even today, in some service sectors, the EU is a more integrated area, from a legal and prudential viewpoint, than the United States. And second, the intrinsic solidarity between European nations was embedded into a policy of “cohesion” through which very important financial transfers took place, over a long period of time, between the richest and the poorest members. At some stage, some members have benefited for several years from such cohesion flows to an order of 5% of their GDP, significantly more than what most poor countries get from the IMF and the World Bank. Many other developments – both on institutions and policies – took place over the years. And it is clear that, to day, the EU is much more than an economic project.
•  A second reason is that the changes in relative prices and wages that are necessary for the economy to develop can occur more easily if there is a low, positive inflation rate than if there is no inflation. In other words, some inflation can function as a lubricant in the economy. •  A third reason, and the one that has perhaps received most attention in recent years, is that if an inflation target is set too low, it will leave insufficient scope to stimulate the economy by cutting interest rates in a deep recession. Important that the inflation target remains in place But the most important thing is to choose a certain level for the inflation target and then build up confidence in this level. Such confidence can hardly be created if the inflation target is constantly being adapted to actual inflation. Many economic agents now assume that inflation will be around 2 per cent in the coming period. It is important that we can rely on this being the case. This does not mean that the Riksbank can ensure that inflation will always be 2 per cent. It is not possible to formulate monetary policy with such precision. Inflation will deviate from the 2 per cent level during certain periods. One reason is that unforeseen events will always occur, another is that it takes time before changes in monetary policy have a full impact.

In this respect, the strong krone is a sign that the Norwegian economy is faring well. Looking ahead, the outlook and balance of risks suggest that the key policy rate may be raised further in the period to summer. The prospect of higher price and cost inflation will in the short term outweigh weaker growth in the world economy. At the meeting on 13 March, Norges Bank’s Executive Board held the interest rate unchanged at 5.25 per cent and presented the interest rate path shown in this chart. The Board’s strategy is that the key policy rate should be in the interval 5-6 per cent in the period to end-June, unless the Norwegian economy is exposed to major shocks. The projections are uncertain. New information may reveal aspects of economic developments that indicate that the Norwegian economy is moving on a different path than projected. On the one hand, unexpectedly high cost inflation, higher import prices or a weaker krone may result in higher-than-projected inflation. On the other hand, if the global downturn has a stronger-than-expected impact on the Norwegian economy or if the krone appreciates markedly, inflation may be lower than projected. The uncertainty surrounding the interest rate ahead is illustrated by the shaded areas in the chart. The Government Pension Fund – Global Now, let me turn from the financial turmoil and economic developments in Norway to the Government Pension Fund – Global and the issue of sovereign wealth funds.
3 Today, with my focus on the mortgage and real estate markets, I would like to explain the cyclical dimension of systemic risks in greater detail. Experience shows that cyclical systemic risks often stem from the mortgage and real estate markets. Upheavals on these markets after periods of excessive price and credit growth have repeatedly triggered chain reactions with a negative impact on the banking system, public finances and the economy as a whole. History also shows that crises originating in mortgage and real estate markets entail particularly high costs for the economy as a whole, for example by causing recessions that are typically long and severe. 4  3 4  Cf. Zurbrügg F., After the storm: ten years on, how weatherproof is the Swiss banking system today?, speech held at the University of Lucerne, 6 September 2018. Cf. Jordà, O., M. Schularick, and A.M. Taylor (2015), ‘Leveraged bubbles’, Journal of Monetary Economics, vol. 76(S): 1–20. Page 3/12  Let me remind you of the example from Switzerland in the early 1990s. After a long period of rising real estate prices, mortgage interest rates increased and prices declined significantly. This triggered a banking crisis, which in turn led to a recession and a lengthy phase of economic stagnation. The global financial crisis of 2008 was also closely connected with declining prices on real estate markets, particularly in the US, the United Kingdom, Spain and Ireland. In this case, lax lending standards prior to the crisis proved to be a key factor.

We are, above all, interested in the question of whether banks are sufficiently capitalised in view of the aforementioned vulnerabilities, and are able to maintain their economically important functions such as lending despite incurring losses. Our stress tests confirm the relevance of the aforementioned vulnerabilities. They show that banks would suffer substantial losses in the event of an abrupt and steep interest rate rise combined with declining real estate prices. Affordability risks would materialise, meaning that numerous borrowers would no longer be able to pay their mortgage interest. Furthermore, many mortgages would be insufficiently covered, i.e. the mortgages concerned would no longer be fully secured by the value of the properties. In such a scenario, the capital ratios of numerous banks would drop below their target values and, in some cases, even below the regulatory minimum requirements. Equally, our stress tests underscore the importance of the capital buffers currently held by banks, which comprise voluntarily held buffers besides the capital required by statutory regulations. With these capital buffers, our assessments suggest that most banks would be capable of absorbing potential credit losses. In other words, we consider the resilience of most banks to be adequate. Current situation requires vigilance  Ladies and gentlemen, the fact that we consider banks’ capitalisation to be sufficient at present does not mean that we can relax with regard to the vulnerabilities on the mortgage and real estate markets. That the current situation is not more precarious is due not least to the measures taken in recent years (cf. slide 5).