samchain/econo-pairs-v1 huggingface dataset:
Germany gained unification in exchange for the euro. The southern countries (Italy, France and Spain) gained the stability of the German mark because they were unable to create such a currency at home. And those who were tied to the German mark long before the euro was created (Austria and the Netherlands) simply remained bound to Frankfurt after the Eurozone was established, only the Bundesbank building was replaced all of a sudden by the ECB building. There’s no basic euro story like this in the Czech Republic. Why should we try to create one artificially? Our story is one of maintaining monetary stability across regimes and governments and of keeping the koruna as the name of our currency continuously since the time of Emperor Franz Joseph (his monetary reform established a new currency – the crown, or koruna – throughout the Austro-Hungarian Monarchy in 1892) regardless of totalitarianism and the horrors of the 20th century. Neither the Nazis, nor the Communists had any tendency to rename the currency and kept this old monarchist name despite otherwise changing basically everything, and for the worse. Our country – unlike the rest of the Central Europe – has never experienced hyperinflation in its modern history, and this monetary stability has always served the entrenched mentality of small Czech savers well. Domestic scepticism about the euro – that’s our authentic Czech story. 6.

And operational reforms designed to address the deficiencies in the Bank’s pre-crisis lending tools and flag 5  clearly that the Bank was ‘open for business’ , have left the Bank capable of lending to a wide range of banks and non-banks, against many different types of collateral, at lower prices, and through a broad range of facilities. As of 2016, members of the Bank’s Sterling Monetary Framework – our main liquidity-providing tool – had pre-positioned over £ of collateral with us, including 30% of the UK’s total stock of household mortgage loans. Only a fifth of that collateral had been drawn against, through the Funding for Lending Scheme and other Bank facilities. Even after accounting for the Bank’s sizeable haircuts, that leaves well over £ of available credit: a much higher proportionate level of contingent exposure for the Bank than typically incurred by commercial banks through undrawn facilities. So our balance sheet may expand in both scale and riskiness at times of heightened liquidity stress: the Bank of England’s role as financial firefighter has shifted permanently upwards (Chart 5). 5  See http://www.bankofengland.co.uk/publications/Documents/news/2012/cr2winters.pdf; and the Bank’s new framework at http://www.bankofengland.co.uk/markets/Documents/money/publications/liquidityinsurance.pdf. The reforms are summarised in a speech by the Governor at http://www.bankofengland.co.uk/publications/Pages/speeches/2013/690.aspx. 6  All speeches are available online at www.bankofengland.co.uk/speeches  6  The third key driver behind our new risk framework has been the strong public demand for greater accountability and transparency from central banks since the financial crisis.
Our major banks, on average, maintain a healthy Common Equity Tier 1 capital ratio that is more than double the minimum requirement of 6.5%. Their liquidity buffers are healthy, with all-currency and Singapore Dollar liquidity coverage 6 / 15  BIS central bankers' speeches  ratios remaining above the minimum regulatory requirements. MAS conducted a stress test against an adverse scenario that is consistent with what we might possibly see in the current COVID crisis. Our stress scenario assumes that over a two-year period: The level of GDP declines by close to 6%, point to point over the two-year period. This basically means we go through a recession in 2020 and 2021; Unemployment rate rises to around 6%; Equity and oil prices fall by more than 30%; and Property prices fall by more than 35%. These are stress scenarios, not forecasts. The stress test showed that our major banks and insurers remain resilient against this very adverse scenario. The banks’ capital ratios, while diminished, remain above MAS’ minimum requirements. The insurers have pre-emptively bolstered their capital positions and have drawer plans to restore their capital position under severe stress. Sustaining the safety and soundness of our financial sector is critical for supporting the broader recovery of the real economy. Therefore, notwithstanding the encouraging stress test results, MAS has been in close discussions with the banks and insurers on their capital management plans. We want to ensure that they retain adequate capacity to continue providing financial services to support the economy even in extreme tail risk scenarios.

Unlike the 1980s, the build up of debt in recent years has been in an environment of low inflation and low interest rates. The interest ratio, that is, interest expenditure as a share of disposable incomes, is much lower now than it was then. Although the level of households' debt ratios is not necessarily worrying, it is nevertheless the case that a borrowing level rising by more than 10 per cent a year is not sustainable in the long term. In the long term it needs to come down and be more in line with nominal disposable incomes. The Riksbank is assuming that household borrowing will continue to increase, but at a slower rate than before. The fact that interest rates have been raised contributes to this, as does the fact that economic activity is entering a calmer phase. The interest ratio has recently begun to rise but is still at an historically low level. The expected  BIS Review 60/2008  1  slowdown in household borrowing will mean that the interest ratio also increases at a slower rate in future (see figure 3). The chances are good that household borrowing and house prices will have a soft landing. Although borrowing is still increasing at a rapid rate, there has nevertheless been some slackening and this is expected to continue. House prices fell slightly in the first quarter of this year compared with the final quarter of last year. However, on an annual basis the increase was just over seven per cent.
But the MPC was conscious of the risk of misinterpretation, so the transition was made gradually – with the Governor reflecting on the market curve in his remarks at the February and May Inflation Report press conferences, and the MPC referring to the market curve in the minutes during the spring. By the time the switch was introduced in the August Inflation Report, MPC and markets understood the nature of the conditioning assumption, and the change itself was seen as the marginal improvement that it is. 16  See Inflation Report August 2004 pp 42-43. 17  Bean, C (2004) ‘Some current issues in UK Monetary Policy’ Bank of England Quarterly Bulletin Autumn 2004. 18  For further details on this issue see Brooke, M, Cooper, N and Scholtes, C (2000) ‘Inferring market interest rates from money market rates’ Bank of England Quarterly Bulletin November 2000. For further information and data, please see the Bank of England website www.bankofengland.co.uk. BIS Review 17/2005  9  Chart 4. Market beliefs about future interest rates – Inflation Report February 2005  Different inflation targeting central banks have evolved their own ways of communicating. At one extreme, the Governor of the Reserve Bank of New Zealand publishes his own forecast of future interest rates – though he is the sole decision taker in that regime.

There are promising signs, among business and regulatory sectors, that there is a growing space for captives to play a role. It is important that we move forward to harness this potential, responsibly and thoughtfully. 4/4  BIS central bankers' speeches
BIS central bankers’ speeches  1  The banking union can therefore support our single currency and can relieve monetary policy of some of the tasks undertaken during this crisis – notably, the task to repair or, in some cases, to bypass a clogged transmission channel. The non-standard measures may then be gradually phased out, as the changes introduced in the monetary policy framework during the crisis will no longer be necessary. This should not be confused with a change in course from the accommodative monetary policy. A phasing-out of certain emergency measures is desirable, given that new market distortions might otherwise emerge. Financial fragmentation affects monetary policy The years preceding the financial crisis were very favourable as regards the integration of capital markets in Europe, with the integration of euro area money markets forming a key pre-condition for the proper conduct of monetary policy. Our policy rate instantaneously transmits to the interbank money market rates and determines the refinancing conditions of the banking sector. In this regard, the money market further transmits monetary policy impulses to other markets and financing conditions and is key to the homogenous transmission of monetary policy across the euro area. Moreover, the integration of securities and wholesale markets plays an important role for the funding of the banking sector.

While this dichotomy did not appear problematic before the crisis – indeed, the presence of national regulation was often viewed favourably as a component of a more flexible regulatory and supervisory framework in Europe, which could be more easily adapted to countryspecific conditions – it led to important deficiencies that were first laid bare by the crisis. •  The lack of a robust regulatory and supervisory framework led to the failure to identify and control an unbalanced and unsustainable expansion of credit in some countries, during a period characterised by low interest rates, abundant liquidity and easy access to credit. •  A framework fundamentally based on the national perspective was also not conducive to identifying cross-country interdependencies and the potential for spillovers, which therefore went unaddressed. •  When the crisis erupted and the vulnerabilities materialised, the framework also revealed the lack of adequate crisis management mechanisms. National supervision proved to be a major obstacle towards a more efficient management of the crisis, leading to a serious setback in the process of financial integration. Monetary policy in the crisis In this environment of financial refragmentation of euro area financial markets, central banks had to step in. If risks to financial stability hamper the proper transmission of monetary policy, monetary policy may be rendered ineffective, thereby impeding the ability of central banks to safeguard price stability.
The continuation of the market turmoil does not allow me to talk to you with the benefit of detachment and the comfort of an ex-post assessment. However, I should like to take advantage of the occasion to share with you some considerations on the ECB’s response to the market turmoil drawing on the experience of the past year. 1  I am very grateful to Cornelia Holthausen for her valuable contributions. BIS Review 116/2008  1  2. The separation between monetary policy formulation and its implementation  Central bankers have, naturally, eyed the developments of the past year of financial turmoil – and, particularly, their recent intensification – with great concern, as they have the potential to influence adversely the ability of central banks to steer monetary policy rates, affect the transmission mechanism of monetary policy and, more generally, may pose a threat to financial stability. Once the credit concerns that had built up in the sub-prime mortgage market segment started to affect interest rates and traded volumes in the euro area money market, the ECB responded to these highly unusual market events by timely and forcefully adjusting its liquidity policy. I will not deal with the specificities of the ECB’s liquidity management over the past year – this will be carried out by the ECB staff in tomorrow’s session on “The Experience with Crisis Management” – but I would like to stress one fundamental principle underlying our response to the turmoil: “the separation principle”.

This principle relates to the dichotomy between the ECB’s monetary policy and its liquidity policy or, in other words, between the formulation and implementation of monetary policy. During the turmoil, the separation principle proved to be very effective. Supported by the flexibility of its operational framework, the ECB was able to react in a flexible and quick manner to a changing market environment, and it allowed the steering of interest rates close to the policy rate by means of temporary quantity adjustments, albeit without increasing the aggregate supply of euro liquidity to the banking sector. The main objective of the ECB’s immediate and lasting responses to tensions in the money market was to keep under to control the very short-term interest rates as the first step in the transmission of monetary policy. Broadly speaking, the ECB’s liquidity policy response consisted of three elements: First, it changed the timing of the liquidity provision within the maintenance period (the so-called “front-loading policy”), and thereby allowed banks to build up temporary liquidity buffers. Second, it lengthened the average maturity of its tender operations: before the turmoil, the bulk of liquidity was supplied through one-week operations, and only about 30% was auctioned for three months. As the turmoil unfolded, the ECB gradually increased the share of the three-month operations and moreover introduced a six-month maturity operation. Finally, it participated in the joint coordination effort of an increasing number of central banks around the world within the context of the Term Auction Facility.
A cautious combination of a negative repo rate and bond purchases So how have we chosen to act, and what have the results been, so far? Up to this point, we have kept to changes to the repo rate and repo rate path, and purchases of government bonds. As it has not been completely certain how these would function in practice, there has been reason to proceed cautiously. We have combined several measures over the past year to make the combined effect sufficiently great. Over a number of stages, we have cut the repo rate and/or the repo rate path, at the same time as we have announced and initiated bond purchases in amounts that have been increased in several stages (see Figure 4 and Figure 5). In addition, in our communication, we have emphasised our preparedness, if necessary, to also rapidly increase monetary policy stimulus between the ordinary monetary policy meetings held every second month. In March 2015, we did exactly this – we took a decision on new monetary policy stimulus between two ordinary meetings. The repo rate cuts have largely worked As regards the repo rate cuts, so far we have been able to observe that lending rates followed to a normal extent, while deposit rates have stopped at zero for everybody except some larger companies.

Hurricanes don’t care about your organizational chart, and cyber attackers would actually like a copy of it to use it against you. Since threats aren’t siloed, our defenses can’t be siloed either. One of the insights of enterprise risk management is that good outcomes rely on integration across organizational boundaries and types of risk. That’s why it’s not just risk management, its enterprise risk management.3 We can use approaches from enterprise risk management to create bridges across silos. To start, enterprise risk management focuses on an organization’s objectives and the critical processes that support them. Critical processes span organizational units in a connected chain of activities, starting with inputs delivered by suppliers, to value-added transformations within the organization, to the final delivery to customers. So, to strengthen resilience, we identify the risks to process outcomes and then design processes and controls to address those risks. Since silos weaken resilience, you may want to look in your organization at some of the hotspots where enterprise-wide coordination is essential. I’d start with incident response. Are you ready for complex threats that require teamwork across organizational units? Another challenging area is external dependency management. Do you have a coordinated and coherent approach to understand and manage vendor exposures across the full spectrum of risks, including information security, data privacy, compliance, business continuity, and credit? Risk silos are as problematic as business-line silos.4 While the specialization of risk disciplines has benefits, common negative side effects are insufficient communication and coordination, followed by information gaps and ineffective decision making.
Sources of finance are increasingly diversified between banks and markets, helping to keep the cost of finance low. And the system is demonstrating an ability to dampen shocks rather than amplify them. Despite this transformation, there are nascent risks that, if left unchecked, could reverse the progress made and ultimately undermine the G20’s objective of strong, stable and balanced growth. Indeed, the global financial system is at a fork in the road. On one path, we can build a more effective, resilient system on the new pillars of responsible financial globalisation. On the other, countries could turn inwards and reduce reliance on each other’s financial systems. That would, in turn, fragment pools of funding and liquidity, reduce competition and impede cross-border investment. The net result would be less reliable and more expensive financing for households and businesses, and very likely lower growth and higher risks in all our economies. 3  The British Social Attitudes Survey (2013) reported that only 20% of UK citizens now think banks are well-run, down from 90% in the late 1980s. 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  The outcome of the Brexit negotiations could prove highly influential in determining which path the global financial system takes.

4  BIS central bankers’ speeches  •  Foreign labour, which had driven Singapore’s labour force growth since the late 1970s, was already one-third of the total workforce. •  It was neither economically efficient nor socially desirable to allow the foreign workforce to expand much faster than the local workforce. By 2020, average total labour force growth was down to 1% per annum. The central thrust of economic strategies in the 2010s and early 2020s was therefore to shift to a productivity-driven growth model. The aim was to increase productivity growth to at least 2% per annum, from the 1.4% averaged during the 2000s. •  The growth of lower-skilled foreign labour was curbed through increases in the foreign worker levy and reductions in the foreign worker dependency ratio ceilings. •  Financial incentives were given to firms to undertake capital deepening and adopt technology solutions to raise productivity. •  Programmes were put in place to help Singaporeans develop and master skills in new growth clusters. While the manufacturing sector had continually undergone restructuring and moved up the value chain in the preceding five decades, this was the first time the entire economy was undergoing such a transition. •  It proved particularly challenging for many traditional domestically-oriented services like retail, hospitality, construction, real estate, and social services, which had come to be heavily dependent on cheap labour over the decades.
Lastly, it is true that, even if a reform is approved which assimilates our labour institutions to those in the more developed countries, this does not ensure the immediate resolution of our problems of growth, public finances or banking system health. More measures have to be adopted and, among them, as I have said, budgetary consolidation is key. But let there be no mistake: while labour reform is not a sufficient condition, it is nevertheless an absolutely necessary and essential one without which the other measures or reforms adopted will have a much diminished effect on the competitiveness of our economy. Thank you. BIS Review 27/2010  7

Once again, I would like to congratulate the winners, finalists and participants in this competition and, naturally, the organisers. I encourage them to sustain their efforts to boost the expansion of financial education. Thank you very much. 2/2  BIS central bankers' speeches
But recent events suggest the market may be very sensitive to changes in expectations of growth or inflation. 20  For UK assets, there has been the additional impact of fluctuations in Brexit news and sentiment. The evaluation of Brexit outcomes seems to have dominated responsiveness to near-term domestic news. 13  All speeches are available online at www.bankofengland.co.uk/speeches  13  As always, the risk picture is mixed. From a financial stability perspective, the right response to this picture is to ensure that the financial system is sufficiently resilient to a very severe but plausible correction in values should it occur. A colleague of mine recently asked me why the financial stability side of the Bank was so gloomy, always pointing to risks on the horizon and seeing the glass as half empty at best? My answer was that it was our job to worry about what could plausibly happen - and to ensure that if it did happen, the glass did not suddenly empty entirely. 14  All speeches are available online at www.bankofengland.co.uk/speeches  14

The Banco de España was one of the first to join (in April 2018); it is a Plenary member and plays an active role in all of the workstreams. From my personal experience I can confirm that it is a forum for global  6  Banco de México, Bank of England, Banque de France and Autorité de Contrôle Prudentiel et de Résolution, De Nederlandsche Bank, Deutsche Bundesbank, Finansinspektionen (Sweden), the Monetary Authority of Singapore and the People’s Bank of China. cooperation characterised by continuous learning, drawing on both the experience of the members themselves and the analytical work performed by the different workstreams. Meanwhile, the Eurosystem, the European Central Bank (ECB) and the Banco de España have also been devoting considerably more resources to better understanding the implications of climate change. Notably, this includes: i) ii) iii)  the incorporation of climate-related issues within the ECB’s monetary policy framework. the integration of sustainable and responsible investment practices into own portfolio management. the assessment of climate risks in microprudential supervision. Monetary policy First, with respect to our monetary policy mandate, in 2021 the ECB’s Governing Council presented an action plan to include climate change considerations in its monetary policy strategy. The measures aim to reduce financial risk related to climate change on the Eurosystem’s balance sheet. Moreover, they are designed in accordance with the Eurosystem’s primary objective of maintaining price stability, and the secondary objective of supporting the green transition of the economy in line with the European Union’s climate neutrality objectives.