samchain/econo-pairs-v1 huggingface dataset:
In addition, thanks to the solid solvency buffers and the support of the Central Bank of Cyprus that relaxed temporally the capital and loan origination requirements, the banking system has supported the domestic economy by providing fresh lines of credit from January 2020 to June 2022 of 8,1 billion Euros. 2,6b euros have been granted to households for mortgages, whilst 1,6 billions and 0,6 billions have been granted to the Wholesale and Hotel Industries which have been affected severely by the pandemic. Nevertheless, all the banks need to remain cautious, prudent and active in order to confront a challenging period that lies ahead us. Whilst the first round effects from the geopolitical crisis has been up until now manageable, the second round effects have  5/6  BIS - Central bankers' speeches  not yet materialised and uncertainty in an environment with high inflation and weakened growth prospects is elevated. Adverse macroeconomic developments may deteriorate banks' profitability and asset quality, causing delinquencies and an upward trend in impairments and provisions. Interest rate normalisation policies may support the banks' revenue capacity through higher yields. However, they might fall short to balance out the structural deficiencies that would be magnified if the economic prospects follow an adverse route. It is therefore of pivotal importance for banks to adapt their business strategies to the new realities forged by the consecutive crises. And this would not be an easy ride as challenges emerge, often in unpredictable ways.

This reasonably entails the costs of doing business of the same size being higher and the relationships between players being closer. This carries a risk, particularly in times of uncertainty, of affecting the functioning of the market. The inclination to take on risks then declines and with few players and problems with trading situations, the market has occasionally almost come to a standstill. As you know, there are differing opinions as to whether this type of problem can be solved or alleviated with the aid of electronic trading. I do not intend to become involved in that discussion. Part of the positive effects of electronic trading that I mentioned earlier on a more general level will probably be smaller in a market like the Swedish one than on a larger market. Of course, even in terms of direct operating costs, the savings will be less when calculated in kronor. At the same time, it is clear that electronic trading will involve new opportunities. Above all, we hope that it will bring about an increased interest from both Swedish and foreign players in being active and doing business on the Swedish market. How this turns out will undoubtedly depend on the actions of those in the system from the start. If they choose to limit entry or make it more difficult for new players, there is a risk that the socioeconomic gains with the new platform will not be very great. Settlement is important Allow me to conclude with a few words on business settlement.
In the meantime the United Kingdom will prepare both for the introduction of the euro on the Continent from next January and for our own eventual participation. BIS Review 29/1998  ˝  -4-  The fact is that monetary union will have a major effect on this country whether or not we are a part of it, and it is clearly in our national interest as well as the interest of the participating countries, that it should be successful. We benefit in macro-economic terms from a stable and prosperous Europe just as Continental Europe benefits from a stable and prosperous United Kingdom - and the same mutual interest, of course, applies between Europe and its Mediterranean neighbours. We can contribute to that success in at least three ways. Most immediately the Government has undertaken to use its current term as President of the European Union Council of Ministers to promote an orderly decision-making process during the crucial next few months. Not being part of the first wave leaves us free to concentrate on that, and while there are issues - such as the vexed question of the Presidency of the European Central Bank - which only others can resolve, the UK’s role is to give them every opportunity to reach timely decisions. More fundamentally, we can contribute to the success of the euro, even from outside by continuing to pursue policies directed towards macro-economic stability and supply-side flexibility in parallel with those persuaded within the euro area.

The “economics” of Europe starts from familiar arguments in favour of free trade and competition as the most effective means of ensuring that productive resources are efficiently deployed, promoting specialisation in areas of comparative advantage - and thereby satisfying consumer demands more effectively and increasing aggregate, macro-economic, welfare. These arguments apply, in principle quite generally - as much to international trade and competition as to regional trade and competition or indeed to trade and competition within individual national markets. The macro-economic benefits are less immediately obvious at the micro-economic level. Existing activity is threatened by greater competition, and there is a natural temptation - to employees, their employers and their national governments - to seek to defend their established activity through protective action in one form or another. The benefits of greater competition, and of the removal of barriers or distortions to free trade, on the other hand, flow essentially from the future activity that is likely to result - so that they are much less tangible. And the benefits - anyway in the short-term - do not necessarily accrue evenly across the free trade area - they accrue to those that are flexible and adaptable enough to take advantage of the new opportunities that free trade offers.
It is effects of this type that are referred to in the international debate when arguing that the policy rate is far too blunt an instrument to counter financial imbalances. Sweden's experiences also suggest that the policy rate cannot always be expected to be available for this purpose. Even when a central bank is leaning quite moderately against the wind, such a policy could be in conflict with the task of maintaining confidence in the inflation target. Here too, of course, the question arises of whether it is really so important to maintain confidence in the inflation target. Would it not be possible for monetary 7 [20]  policy instead to just lean against the wind and let inflation develop as it will? Once again, I will return to this shortly. Before continuing, I would like to add that there is a growing amount of research that explicitly attempts to calculate the costs and benefits of using the policy rate to attempt to counteract financial imbalances. The debate is ongoing and the jury is still out. 13 Of course, in this context, the view I present here should only be seen as a country-specific case study. But considering that practical experience of this type of policy is very limited, reflections from someone who has been involved in taking decisions in a country that is ‘ahead in the cycle’ may perhaps be of some value.

Structural factors can push inflation down in a way that can be difficult to counteract for a relatively long time, even if not permanently. It is therefore quite an important discussion that the Borio camp has initiated. 18 How should a central bank act in a situation in which, despite conducting the most expansionary policy it deems possible, it does not expect to be able to reach the target in a foreseeable time frame? As I see it, the reasonable decision in such a situation is to hold fast to the inflation target and continue with the expansionary policy. 19 If the central bank instead were to change its policy in a less expansionary direction, the inflation target would become even more distant and even more  17 Friedman (1963). It should be mentioned that, according to the so-called ‘fiscal theory of the price level’, fiscal policy has crucial influence over inflation, see for example Christiano and Fitzgerald (2000). To achieve low and stable inflation, a well-balanced monetary policy is therefore insufficient. It also requires fiscal policy to be conducted in a way that is compatible with the inflation target. However, this theory is controversial and does not actually question the value of central banks having inflation targets. 18 It should be emphasised that the BIS, where Borio is chief economist, has often been early to bring up issues of fundamental importance for central banks.
But it is not clear to me what this would be intended to achieve. Apart from the simple fact that the Bank is already in the market every week offering to buy corporate bonds, and we have been doing that for nearly four years, this aspect of the capital markets is functioning well in terms of providing credit to businesses. Any firm that has an issuance programme – typically the larger firms with credit ratings – can issue whenever and whatever bonds they choose at historically low interest rates. The backstop to corporate bonds provided by the Bank’s operations is still there – but it is not being used much because it is not needed. The power to intervene in credit markets is one to use cautiously. Any intervention by the public sector carries the risk of creating distortions. Usually, we intervene because there is a demonstrable failure of private markets – so that the central bank is undoing distortions caused by other factors. Buying private sector paper also carries the risk of credit losses – ultimately of public money. And it is a very short step to cross the boundary from seeking to improve credit supply generally to determining the credit allocation between individual borrowers – which the central bank is neither equipped nor empowered to do. That is best left to private markets. When a central bank – or any public authority – takes actions, it has to remember that the precedent of that action can be as powerful as the action itself.

Bank of England consolidated balance sheet(a) Chart 1: Liabilities  Chart 2: Assets £ billions 450  £ billions 450 Other assets  Other liabilities  400  Reserve balances Notes in Circulation  400  Loan to APF (QE)  350  Short-term repos  350  300  Long-term repos  300  250  250  200  200  150  150  100  100  50  50 0  0 2007 (a)  2008  2009  2010  2011  2012  2013  2007  2008  2009  2010  2011  2012  2013  Weekly data to 13 February 2013  In addition to controlling the size of our balance sheet and/or the price of money, which may affect the total supply of credit in the economy directly, we can alter the composition of the assets held on the Bank’s balance sheet, or conduct off-balance sheet operations, and so affect the composition of private sector asset holdings. Executed judiciously, we can thus influence the price and/or quantity of particular types of credit in the economy. Finally, by talking about what we might do in the future, the Bank can influence the price and quantity of money and credit for some time to come. The power of communications as an operational tool should not be underestimated and the MPC has always used a range of communication channels to help accomplish its objectives.
(b) From 1940–1974 the total assets of the 3 largest clearing banks are used from the Bankers’ Magazine and banks’ published accounts. Bank observations are linearly interpolated between observations. (c) Total UK assets of the three largest UK owned banks are used after 1974 from Bank of England data. Chart 8: Holding periods in bank equities  Source: Bloomberg and Bank calculations. Notes: Average holding period of equities for a sample of 30 banks. BIS central bankers’ speeches  23  Chart 9: Market-based measures of capital ratios(a)(b)(c)(d)  Sources: Capital IQ and Bank calculations (a) “Crisis” banks are a set of major financial institutions which in autumn 2008 either failed, required government capital or were taken over in distressed circumstances. These are RBS, HBOS, Lloyds TSB, Bradford & Bingley, Alliance & Leicester, Citigroup, Washington Mutual, Wachovia, Merrill Lynch, Freddie Mac, Fannie Mae, Goldman Sachs, ING Group, Dexia and Commerzbank. The chart shows an unweighted average for those institutions in the sample for which data are available on the given day. (b) The “no crisis” institutions are HSBC, Barclays, Wells Fargo, JP Morgan, Santander, BNP Paribas, Deutsche Bank, Crédit Agricole, Société Générale, BBVA, Banco Popular, Banco Sabadell, Unicredit, Banca Popolare di Milano, Royal Bank of Canada, National Australia Bank, Commonwealth Bank of Australia and ANZ Banking Group. The chart shows an unweighted average for those banks in the sample for which data are available on the given day.

Andrew G Haldane: Control rights (and wrongs) Text of the Wincott Annual Memorial Lecture by Mr Andrew G Haldane, Executive Director, Financial Stability, of the Bank of England, Westminster, London, 24 October 2011. *  *  *  The views are not necessarily those of the Bank of England or the Financial Policy Committee. I would like to thank Evangelos Benos, Fergus Cumming, Jonathan Grant, Sam Harrington, John Lane, Iryna Kaminska, Priya Kothari, Fiona Mann, Vasileios Madouros, Roland Meeks, Joseph Noss, Peter Richardson, Victoria Saporta, Rhiannon Sowerbutts, Mervyn Tang, Matthew Willison and Peter Zimmerman for comments and contributions. Introduction It is a great pleasure and privilege to be presenting this year’s Wincott lecture. Banks are special. That has long been recognised in the design of their ownership, governance and regulation. This special status can have strange consequences. The historical distribution of risks and returns in banking is one. For a century, both risks and returns have been high. But while the risks have typically been borne by wider society, the returns have been harvested by bank shareholders and managers. The experience of the past two decades illustrates well this imbalance. In 1989, the CEOs of the seven largest banks in the United States earned on average $ million. That was almost 100 times the median US household income. By 2007, at the height of the boom, CEO compensation among the largest US banks had risen almost tenfold to $ million.
This is because when such adjustment is not made, though the amount of money received by way of interest may be high, its actual real value is lesser and lesser than before. It is tantamount to the awkward situation where savers pay interest in real terms to borrowers. Thus, inflation contributes to enrich borrowers at the expense of savers. The high borrowings so encouraged would further fuel inflation. At the same time, the much needed savings flow would dry up retarding the long term development. Third, arising from the same unadjusted interest rates, inflation discourages financial savings and encourages non-productive types of investments in real estate, gold, bullion and other types of precious metals. Bank deposits, stocks and shares are the main casualties, because their real value falls every year due to inflation. But, on the other hand, real estate and precious metals appreciate in value due to inflation. Hence, as an insulating measure against inflation, people would transfer their financial savings into such non-productive types of investments. But, for sustainable long term growth, the necessity is for savings in the form of financial savings and inflation would dry up that savings flow. Fourth, inflation distorts the resource allocation function of an economy. For the market system to allocate resources among competing uses, a price expressed in terms of another price called the relative price, should change. For instance, if the price of carrots increases relative to the price of cabbages, carrots would become more profitable than cabbages.

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This means having an effective regime against: •  market misconduct and misdemeanours; and  •  illicit finance, namely money laundering and terrorism financing. MAS is stepping up enforcement action against misconduct such as insider trading, false trading and front running by individuals and traders in the securities market. •  We have sought criminal actions or higher civil penalties to send the right deterrent message. •  In April last year, MAS imposed a civil penalty of close to $ million for insider trading – the highest quantum in a single case so far. BIS central bankers’ speeches  5  When it comes to anti-money laundering and countering the financing of terrorism (AML/CFT), the rules are strict and in line with international standards. Financial institutions must: •  know their customers;  •  assess the risks and perform additional due diligence where the risks are higher;  •  monitor transactions on an ongoing basis and report any suspicious activities. Supervision of financial institutions is rigorous. •  In recent years, MAS has stepped up its onsite supervision of AML/CFT controls – increasing the number of inspections by six-fold. •  This is resource-intensive business: each AML/CFT inspection of a bank takes about 4–8 weeks and involves 4–6 supervisors. We have now set up a dedicated AML Department.

Last year, the Ministry decided that the Fund should prepare the ground for investing in real estate at 5 per cent of the strategic benchmark portfolio. In time, this may reduce the fixed income share to 35 per cent. Under the Fund’s investment strategy, more equities are purchased when equity prices fall and fewer when prices rise. Thus, the Fund purchased a large volume of equities in the  BIS Review 58/2009  3  period 2001-2003 and is buying a considerable volume now. Of the equities now held, 40 per cent were acquired in 2008 when prices were falling. The Fund currently owns a little more than 1¼ per cent of listed European equities, and the Fund’s average ownership share in international equity markets was ¾ per cent at the turn of the year, with allocations to equities accounting for close to 50 per cent at that time. The Government Pension Fund – Global is invested in almost 7900 equities and bonds from 2200 different issuers. Although the Fund is well diversified, its size means that it will have large individual positions in capital markets. The largest equity holdings include multinational companies like Royal Dutch Shell, Nestlé, BP, Exxon Mobil Corporation and Novartis, to name a few. Since summer 2008, the Ministry of Finance has allowed the Fund to hold up to 10 per cent of a company’s shares.
There has been an enormous increase in lending activity at a time when the nation is engaged in the largest investment it has ever undertaken, its financial system has been revolutionised, and the housing market has seen a virtually unparalleled injection of capital, to name just a few things. Neither can it be denied that competition has abated considerably, the market has become much more concentrated, and duopoly is common. It cannot be debated that effective competition in as many areas as possible is the main premise for the successful transmission of any central bank’s decisions into the economy. Managers of companies in the export sector have complained vociferously about the policy and activities of the Central Bank of Iceland. Their comments and criticisms are understandable, especially those coming from the fishing industry, which has had to stand up to the double blow of unfavourable exchange rates and an unavoidable cut in the cod quota. What has lightened the load for exporters, however, is that many of them, especially those in the aluminium and fishing sectors, can command high export prices at the moment. But while we must understand that exporters are dissatisfied with the current circumstances, it is not a given that their complaints are founded on the right premises. Many people consider the exchange rate of the króna disquietingly high and blame the Central Bank’s interest rate policy for it.

The problems we encountered in communicating monetary policy, which arose in conjunction with the substantial rate cuts during the second half of the 1990s, were also a significant reason for the Riksbank's decision in 1999 to publish a clarification of the formulation of policy and the application of the inflation target.1 Among other things the clarification specified the situations in which there may be reason to deviate from the simple rule of aiming policy at meeting the target of 2 per cent CPI inflation one to two years ahead. My discussion today is based on exactly the same line of reasoning as in that clarification. The second example is taken from spring 2001. Higher food and energy prices due to foot and mouth disease and mad cow disease, as well as supply shocks in energy production, caused a sharp rise in CPI inflation. The price increases were judged to be temporary, and the Riksbank decided therefore not to raise the repo rate. As the prices rises were estimated to disappear from CPI inflation relatively quickly, there was no need in this case to depart from the Bank's simple rule of monetary policy. However there was a need in our external communication to illustrate clearly the assessment that it was mainly transitory price increases that had caused CPI inflation to be so high above target.