samchain/econo-pairs-v1 huggingface dataset:
There is an economic logic behind this argument, notably with regard to infrastructure. But it ignores the sad reality, which is that no country has sufficient credibility at present to implement this policy effectively. Decades of deficits have created a deep-seated scepticism. The current balance is very fragile and, in this highly volatile environment, any major deviation from the required fiscal path would probably be punished with a sharp rise in interest rates. Fifth assertion: within the banks, we need to separate those activities which serve to finance the economy from those that are purely speculative; and prevent customer deposits or central bank refinancing from being used to fuel dangerous behaviour. The idea  2  BIS central bankers’ speeches  in itself is a sound one. Unfortunately, it has often translated into an absurd cleavage between commercial banks (by that I mean lending banks) and investment banks. In fact, it is not possible to make a clear distinction between “good” lending and “evil” markets. What is important is that all participants in the real economy find the right combination of financing to suit their needs. And for that, nothing can rival the universal banking model which provides a one-stop shop for a full range of banking products. III/- I’d like to look now at my own proposals for how we can reduce the uncertainty surrounding the financial sector.

I/ – When we look at the economic and financial environment today, we can see that it is characterised by five paradoxes 1/ – First paradox: we have carried out a lot of reforms, but the flow of credit, at least of bank credit, to the economy is still insufficient. After three years of intense efforts, the main international regulatory bodies – the Basel Committee, FSB, and G20 – have achieved impressive results. We have significantly reinforced financial regulation, tightened capital and liquidity requirements, built more robust and efficient banks with healthier and more solid balance sheets. But despite this, bank lending remains sluggish. At the same time, bond issues have shot up, including those by less creditworthy borrowers, while issuance conditions have become less and less rigorous. The main losers in this two-pronged scenario are SMEs. 2/ – Second paradox: the economy is struggling but stock markets are soaring. As you know, although many countries are now seeing a marked recovery, the overall pace of growth remains disappointing. Recent figures for the US are below expectations. There’s still some uncertainty over Chinese growth. And the euro area is struggling to get off the ground. Despite this, the main stock market indices have risen by around 50% in the past two years. For many, this contradiction serves to confirm the idea that finance exists within a world of its own and is disconnected from the “real” economy. 3/ – Third paradox: we have made the banks “secure”, but financial risks are appearing in other areas.
Besides, as Fintech was experiencing significant growth and was becoming a promising lever, the first measure to undertake was to introduce mobile payment, considering the high mobile phone penetration rate, which reaches 130 percent and allows coverage of almost the whole population. To  this  end,  we  have  developed,  together  with  the  National  Telecommunications Regulatory Agency, a national low-cost, secure, interoperable and real-time mobile payment solution. This offer is to be provided not only by banks and telecom operators, but also by payment institutions which formed an alternative network, and which we had begun to license based on strict specifications. 3  However, the adherence of retail merchants, necessary for a large-scale deployment of this solution, is still low, as that many of them still operate in the informal sector. Subsequently, we were prompted to collaborate with the Ministry of Finance in order to introduce tax incentives in the 2020 Finance Act. Today, we are rather optimistic. These incentives, combined with communication and awareness-raising efforts, will hopefully give a new impetus to this solution and contribute to a greater integration into the formal economy and to a reduced use of cash. Mobile payment has undoubtedly been one of the main levers of financial inclusion in Morocco, but certainly not the only one. We have also strived towards turning microfinance and micro insurance into channels of inclusion. To this end, the applicable amending legal texts have been finalized and are in the process of being approved.

Thus, in 2013, we set up the Moroccan Foundation for Financial Education, and introduced, in the 2014 Banking Law, payment institutions with a scope of activity limited to small-value transactions. As a result, several stakeholders  2  took various and disparate initiatives, which prompted us to federate them to develop a National Financial Inclusion Strategy. To this end, we proceeded from a situation analysis based on objective supply and demand data, which were collected through field surveys, mainly the Findex survey conducted by the World Bank in several countries. The paradoxical finding which emerged is that, based on indicators such as credit or deposit-to-GDP ratios or the FSAP assessment, Morocco’s financial system proves to be deep if compared internationally, but suffers from significant inequalities in terms of access. To give you some figures, the share of adults holding an account is estimated by the Findex survey at 34 percent at the national level. This proportion ranges from 20 percent in rural areas to 37 percent for urban dwellers, from 17 percent for women to 41 percent for men and from 16 percent for young people under 25 to 33 percent for those aged 25 and over. Based on these data, it became clear that priority should be given to targeting the most disadvantaged groups in order to reduce the gaps.
Overnight rate 5 ahead years according to market pricing and expectations of the policy rate 5 years ahead 8 Expectations of the repo rate, 5 years ahead Nominal forward rate, 5 years ahead  7 6 5 4 3  2 1 0 97  00  03  06  09  12  15  Sources: TNS Sifo Prospera a nd the Riksbank  Increased risks to the financial system A persistent low interest rate environment may threaten the stability of the financial system. A stable financial system forms a condition for monetary policy and also fiscal policy to succeed. If the financial system is threatened, the government may need to intervene with various support measures. This may be very expensive, not least in Sweden, considering the size of the Swedish banking sector. One lesson from the economic crisis at the start of the 1990s is that healthy public finances form a condition for achieving good economic development with stable inflation. To reduce the risks to the financial system and public finances – and, ultimately, monetary policy – it is therefore important to have a smoothly functioning regulation of the banking system. The policy area with main responsibility for counteracting the emergence of financial imbalances and contributing to the stability of the financial system is macro- and microprudential policy.

In June this year, we raised the SNB policy rate by half a percentage point, and in September by another 0.75 percentage points. This was done in order to counter the risk of a further build-up of inflationary pressures and to bring inflation back within the range of 0% to 2% that we equate with price stability. We do not aim to fine-tune inflation within this range. However, when faced with large shocks that increase the risk of persistent movements of inflation away from the range, determined action is necessary, irrespective of whether these movements are below or above the range. Determined action today is consistent with our resolute response to deflationary pressures in the past. Finally, I would like to conclude my remarks with a comment about the importance of humility. Conclusion  3/4  BIS - Central bankers' speeches  The SNB decides its policy using an approach that is simultaneously pragmatic, consistent and determined. This allows us to fulfil our commitment to price stability in the face of economic shocks in a manner that is both flexible and resolute. In and of itself, such an approach provides no guarantee of success. From time to time, we miscalculate and misjudge the situation. It is therefore important that we remain humble and open-minded when reaching our decisions. In order to improve our understanding of a continuously changing economy, we draw on work from researchers both inside and outside the SNB.
If the central bank allowed transfers from bank accounts to the digital currency, it would have to cap the amount a single individual could hold in the digital currency, perhaps at the level of the median monthly salary. In the absolute extreme, the central bank could also determine what goods the helicopter money could be spent on. For example, real estate might be excluded in order to prevent a buildup of bubbles in the housing market. In a nutshell, any digital currency used by central banks for monetary policy purposes would have to be heavily customized and tailor-made. It would hardly resemble any of the cryptocurrencies, from bitcoin to bilur, as we know them. Thank you for your attention. 3/3  BIS central bankers' speeches

Alternatively, could it encourage an FMI to endeavor to return to normal operations prior to assurance of complete confidence in and sanitization of a production environment? To put it plainly: could the 2-Hour RTO unwittingly exacerbate rather than assuage the impact of a severe 2/5  BIS central bankers' speeches  disruption and/or impede prospects for recovery? Reflecting upon these important questions, allow me to offer the following practitioner’s interpretation, which I hope maximizes the value of the intent of the 2-Hour RTO while minimizing the downside risks of its mis-application. Rather than spending valuable time and industry resources re-litigating established supervisory guidance, we should consider the 2-Hour RTO as a vital organizing objective for planning purposes in peacetime, an aspiration to mobilize our best critical thinking to achieve, rather than an inviolable requirement that must be met in all circumstances recognizing the fog of war. A common understanding of this nuance across policy makers, supervisors, and operators strikes me as an important step forward both to focus our resiliency preparations in advance of an extreme event and to promote sound decision making in its remediation. Provocative Question Number 2: To what extent does the proliferation of risk management and information security frameworks to which FMIs must comply risk creating a “check the box” mentality to security and resilience that diverts resources and management attention from other critical initiatives?
Even without this, economic activity could slacken in connection with decreased investment on account of falling demand and lower profits, as well as with a lower consumption propensity among households whose debt burden is already very high. In the euro area the available statistics indicate that the slackening of activity in the late autumn and winter was more marked than expected, mainly on account of weaker exports. Manufacturers and households differ in their assessments of the future; the former count on a turn for the worst, whereas consumer confidence has continued to improve. The direction in which confidence moves for these two groups will be crucial for prospects in the euro area. The optimistic trend among households has so far helped to mitigate the consequences of decreased external demand. The question is whether this will continue to be the case if industrial activity does not take a turn for the better. The Japanese economy has not shown any clear signs of recovering, though in some respects it does seem to have stabilised. The future path here is still highly uncertain. All in all, the statistics point to an international trend in the next two years that is weaker that in the Riksbank’s main scenario last autumn, though the differences should not be exaggerated. Together with lower commodity prices, the weaker international activity should result in lower external price pressure. The outlook in 2000 and beyond is, however, very difficult to foresee. One uncertainty is the endurance of U.S. economic growth.

A box in our Report makes a brief review of the factors that intervene in this relationship, showing that the transmission of global financial shocks to emerging economies is more intense when they have a fixed exchange rate regime. It has also been shown that, in the face of episodes of financial stress, the volatility of interest rates is higher in economies where the currency does not float freely. In fact, one characteristic of the developments of recent weeks has been that the increase in long-term interest rates in several emerging economies has occurred along with the depreciation of their currencies. About the fragility of the macroeconomic fundamentals, we can see that countries with high levels of inflation; high interest rates and bulging current account deficits are more likely to suffer significant adjustments in the prices of their assets when external conditions tighten. On this issue, a recent study published by the Bank presents empirical evidence that a rise in the interest rate of the Federal Reserve affects more those countries that have a worse solvency situation—measured by their level of indebtedness—and liquidity, measured through their external asset position. 5  How vulnerable does Chile look based on these criteria? Within the group of emerging economies, Chile stands out positively in institutional matters. In particular, it has an independent Central Bank, committed to a floating exchange rate regime; It also has an appropriate fiscal institutional framework, where the structural balance rule is worth noting.
The ECB’s Comprehensive Assessment has gone a long way towards ensuring adequate recognition and provisioning of NPLs, but there is still a legacy stock of NPLs on many  3  For a discussion of the “switching costs” created by relationship lending see Kim, M., D. Kliger, and B. Vale (2003), “Estimating Switching Costs: The Case of Banking”, Journal of Financial Intermediation Vol. 12, Issue 1. 4  Brunnermeier, M. (2009), “Deciphering the Liquidity and Credit Crunch 2007–2008”, Journal of Economic Perspectives, Vol. 23, No. 1. BIS central bankers’ speeches  3  banks’ balance sheets. This affects incentives to lend because, although some tolerance by banks towards NPLs can act as a shock-absorber, when NPL ratios exceed a critical level slow and inefficient resolution becomes a major impediment to both banks and the economy at large. From the bank side, it undermines the payment culture, as it rewards strategic defaulters while discouraging performing debtors from continuing to repay their debt. The process of handling and supervising NPLs also often raises operating costs. 5 And in the wider economy, it prevents creative destruction in the form of resolving non-viable companies, as well as swift restructuring of viable but over-indebted firms. All this perpetuates the macroeconomic effects of the debt overhang and retards the economic recovery, which in turn slows down the recovery in credit demand. Critical to addressing this problem is a legal and operating environment that encourages both banks and firms to accelerate NPL resolution.

It is also well-known that, despite their social challenges, many with autism have powerful intellectual skills – for example, in pattern recognition. That it is why it has been estimated that as many as 50% of Silicon Valley innovators may have Asperger’s Syndrome, a type of 8  autism. Yet how easy would it be for those with autism to thrive in our organisations? The facts rather speak for themselves. Only around 12% of high-functioning individuals with autism are in work. Another aspect to recruitment which inhibits diversity-building is that it tends to be judged with individual, rather than the organisational, attributes in mind. Let’s take a simple example to illustrate. Consider two candidates for a job sitting a test. The first scores 8 out of 10, the second 4 out of 10. The first person is clearly the best person for the job. But are they the right person for the organisation? 8  See The Economist (2016) ‘Beautiful minds, wasted: how not to squander the potential of autistic people’. 5  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  5  That is not so clear. What if the second person answers correctly the two questions the first candidate gets wrong. And what if the same is true of most of the existing employees in the company – likely, as they will have probably helped set the test. In this situation, the second candidate may well be the better one for the organisation because they bring organisational strength through diversity, despite being individually weaker.
The structure of the credit market and the wording of the loan contract also affect property prices, and lead to differences in trends between countries. One example is that in some countries, such as the United States and Denmark, there is an opportunity to renegotiate fixed-rate loans - at a very low cost - when interest rates fall. 2  BIS Review 51/2004  One phenomenon that is probably significant for indebtedness and property prices in some other countries, but which does not appear to be particularly common in Sweden, is that private households invest in property to rent out. This occurs, for instance, in the United Kingdom and, probably to an even greater extent, in Australia, where loans for making investments comprise approximately one-third of the banks’ lending to households.1 The fact that households borrow money to buy property in addition to their own housing to rent out probably increases the risk of speculative elements in the price-setting. At the same time, it makes households more vulnerable to changes in interest rates and income. They also become more sensitive to changes in the balance of the rented property market. This means that the risk of substantial fluctuations in house prices is probably greater in countries where it is common to buy housing to rent out. There has thus been an increase in indebtedness internationally, parallel to a rise in property prices. As has been the case in Sweden, questions have arisen regarding the sustainability of this trend and what happens when interest rates rise.

Ultimately, the total volume of assets transferred amounted to USD 38.7 billion, where the purchase price was roughly USD 1 billion below the book value of the assets at UBS at the end of September 2008. In addition, a substantial portion of the amount transferred includes liabilities in the form of derivatives which currently do not need to be financed by the SNB. The initial financing of the StabFund was therefore considerably lower than the purchase price. It comprised the SNB’s loan to the StabFund totalling USD 26.6 billion and UBS’s equity contribution in the value of USD 3.9 billion. The fund’s portfolio contains several thousand positions. Table 1 gives an overview of the portfolio and the different investment segments. The portfolio management concept is based on a long-term risk/return assessment. For assets where the cash flow is expected to exceed the current market price, we are mainly pursuing a hold-to-maturity strategy. For assets where this is not the case, we will sell if the opportunity arises. The objective of our portfolio management is to repay the SNB’s loan in full if at all possible. Market developments to date have impacted strongly on the StabFund’s assets. As it stands, most of the assets do not have to be entered in the balance sheet at market value. Rather, they only have to be written down if the balance sheet value is no longer considered sustainable based on the results of an impairment test.
I am delighted to be working with Mark, and he also brings his experience as Chairman of the Financial Stability Board, which is spearheading the work to create simple global capital standards for insurers as a central plank of its work on insurers which are of significance to the financial system. I will say some more on this later. I hear occasionally the charge that the PRA and the Bank lack senior level knowledge and experience in insurance. As I hope you can tell, I don’t accept that argument. The Bank of England has the objective of promoting financial stability by ensuring a more resilient financial system that, inter alia, is able to support the credit creation and asset allocation necessary to build and sustain economic recovery. A more resilient financial system will support that recovery, and by reforming and bringing the Bank’s monetary and financial stability objectives closer together, I can assure you that we are working very hard to use our toolkit to the best advantage. And this includes insurance supervision, where the new arrangements have already brought about a closer understanding of the role of insurers in the transmission of monetary policy, and the issues that arise in a world of sustained very low interest rates and Quantitative Easing. A key part of the new structure of the Bank of England is the Financial Policy Committee. The FPC has the so-called macro-prudential responsibility which has at its heart the resilience of the financial system as a whole.

But it raised an important theme that has to be considered more widely, namely that our approach to supervision of firms ensures that senior individuals are properly accountable and thus incentivised. The record of the banking crisis indicates that this senior accountability was not effective in banks that failed. Often, the simplest points are the most powerful, and complexity is a poor guide. Andrew Tyrie and his colleagues have done a great service by making a simple but powerful  BIS central bankers’ speeches  3  point – as supervisors we must incentivise and hold to account those at the top, and not seek to do the job of management by influencing excessively further down. I could not end without talking about Europe and Solvency II and wider global developments in insurance regulation. A month or two ago I ruffled a few feathers by criticising the cost and time taken preparing for a European Directive that isn’t finalised. I have no regrets, because as public officials we have to speak honestly and transparently. I was making a point on behalf of firms because I feel strongly that you have been put to too much expense and time spent by management and boards. But, in saying this, I should be clear that the PRA has not withdrawn from involvement in Solvency II, far from it. As Tidjane said this morning, the insurance industry and its regulators cannot operate in a vacuum.