samchain/econo-pairs-v1 huggingface dataset:
But while fintech could help increase competition in financial services, some of these new solutions might also lead to the migration of activity outside the perimeter of prudential regulation. So it is important that we analyse the implications of any such migrations for financial stability as well as the impact on, and strategic response of, the banks and insurers that we supervise through the PRA. This will be an important area of work for the Fintech Hub, working with supervisory colleagues in the PRA, in the coming months. AI The third area I’ll touch on, artificial intelligence, is an example of how a general-purpose technology is reshaping our world, with the potential to revolutionise the nature of both work and commerce. This will affect all aspects of the Bank’s mission, from the future behaviour of the labour market, through its effects on employment, productivity and wages, to the future nature of finance, through its effects on customer service, trading and risk management. I set this out in more detail in my speech “Setting Standards”, available at https://www.bankofengland.co.uk/speech/2018/daveramsden-remarks-at-iso-20022-conference. 10  4  All speeches are available online at www.bankofengland.co.uk/speeches  4  Finance is amongst the first sectors to deploy AI at scale. Deloitte estimates that financial services executives expect cognitive-related technologies to become mainstream in the next 2-5 years11. And the Global Association of Risk Professionals expect up to 80% of financial services firms to use it12. The technology has the potential to increase efficiency across the financial sector, including leaner, faster and more responsive operations.

Embracing Fintech Speech given by Dave Ramsden, Deputy Governor Markets & Banking  Innovate Finance Global Summit 2019 Tuesday 30 April 2019  I am grateful to Amy Lee, Irina Mnohoghitnei, Tom Smith and Oliver Thew for their assistance in preparing these remarks, and to colleagues in the Fintech Hub and across the Bank for helpful comments and suggestions. 1  All speeches are available online at www.bankofengland.co.uk/speeches  Introduction  Thank you for the opportunity to be here today and open the second day of this important global summit speaking on behalf of the Bank of England, as the Deputy Governor with responsibility for fintech. In the past ten years, growth in the digital economy, new technologies and an increased ability to capture and analyse large amounts of data have spurred a new wave of innovation by financial institutions. And that wave of innovation will intensify in the coming years. Fintech is enabling new players and business models to enter the market. This is increasing competition, helping meet unfulfilled customer needs, reducing inefficiencies and changing the way institutions provide – and consumers and businesses use – financial services. It could transform the structure of the financial sector, with implications for customers, firms and regulators. 1  Given our range of responsibilities, it is essential that the Bank of England keeps on top of this wave and understands and adapts to its implications.
Smith, R.D (2006), “Responding to global infectious disease outbreaks: Lessons from SARS on the role of risk perception, communication and management”, Journal of Social Science and Medicine, 63, 3113-3123. Tilman, D (1999), “The ecological consequences of changes in biodiversity: A search for general principles”, Ecological Society of America, Vol. 80, No. 5: 1455-1474. Voute, A.D (1946), “Regulation of the density of the insect populations in virgin forests and cultivated woods”, Archives Neerlandaises de Zoologie, 7, 435-470. Watts, D (2002), “A simple model of global cascades on random networks”, Proceedings of the National Academy of Sciences 9: 5766-5771. Watts, D.J and Strogatz, S.H (1998), “Collective dynamics of 'small-world' networks”, Nature 393 (6684): 409–10. Wheelis, M (2002), “Biological warfare at the 1346 Siege of Caffa”, Emerging Infectious Diseases, Vol. 8, No.9. Worm, B, Barbier, E.B, Beaumont, N, Emmett Duffy, Folke C, Halpern, B.S, Jackson, J.B.C, Lotze, H.K, Micheli, F, Palumbi, S.R, Sala, E, Selkoe, K.A and Stachowicz, J.J (2006), “Impacts of biodiversity loss on ocean ecosystem services”, Science, Vol. 314: 787790.

TABLES: Table 1: Summary Statistics on the Global Financial Network  1985  1995  2005  Skewness  7.4  8.0  3.1  Kurtosis  71.3  80.6  14.3  Average path length  1.55  1.44  1.37  20  BIS Review 53/2009  Table 2: Climbing the Complexity Tree  Typical contract details(a) [1]  Pages in CDO^2 prospectus  300  [2]  Pages in ABS CDO prospectus  300  [3]  Pages in RMBS prospectus  200  [4]  Number of ABS CDO tranches in CDO^2  125  [5]  Number of RMBS in a typical CDO  150  [6]  Number of mortgages in typical RMBS  5,000  Metrics of complexity(a) [1] + [3]*[5]*[2]*[4] Pages to read for a CDO^2 investor  1,125,000,300  [2] + [3]*[5]  Pages to read for an ABS CDO investor  30,300  [4]*[5]*[6]  Max. number of mortgages in a CDO^2(b)  93,750,000  [5]*[6]  Max. number of mortgages in an ABS CDO(c)  750,000  Sources: Bloomberg, deal documents and Bank calculations  (a) CDO^2 is used as short-hand for CDO of ABS CDO. (b) Assuming there is no overlap in the composition of the RMBS pools that back the CDO or the CDO pools that back the CDO^2. (c) Assuming there is no overlap in the composition of the RMBS pools that back the CDO.
Having a central bank with a dual mandate for both price stability and financial stability might undermine the primary objective to pursue price stability. In addition, as elaborated above, such a dual mandate raises questions concerning appropriate accountability mechanisms, especially in view of the need for more stringent accountability obligations in the area of macroprudential policy. Macroprudential policy tools can be put into three broad categories. First, capital-based tools, which target the capital of credit institutions and aim, inter alia, to enhance their resilience. An example of such a tool is the counter-cyclical capital buffer. Second, borrower-based tools, which essentially target borrowers, inter alia measuring the debt they can contract against their ability to repay. Caps on loan-to-value ratios and loan-to-income ratios, for example, seek to address this objective. Third, liquidity-based measures, which are aimed at containing banks’ vulnerabilities deriving from overexposure to cheap but unstable sources of finance. Examples of such measures include requirements regarding loans-todeposits ratios, liquidity coverage ratios and net stable funding ratios. Although monetary policy and macroprudential policy pursue different goals, one policy domain can influence the other. This has already been reflected in the ECB’s monetary policy strategy. The design of the ECB’s monetary policy strategy takes into account that credit developments deserve special attention, and allows for a good amount of built-in flexibility.

As a consequence, the ECB independently defines its monetary policy strategy and quantifies the price stability objective. Instrument independence refers to the central bank’s ability to determine its policy tools in pursuit of price stability without interference. It means that the central bank has discretion to use and clarify its monetary policy instruments foreseen in primary law such as outright purchases, the collateral framework and its counterparties. Personal independence safeguards the capacity of the members of the ECB’s decision-making bodies to take decisions without external influence. This translates into requirements for appointment and protection from dismissal, as well as the length of mandates that should be longer than the electoral cycle. The members of the Executive Board have the requirements spelled out in the Treaty; their tenure is 8 years and their dismissal on grounds of either inability or serious misconduct is pronounced by the CJEU. The national laws for appointing governors, who in their personal capacity are members of the Governing Council, are to be compatible with the Statute of the ESCB. The reasons for dismissal are the same as for the members of the Executive Board and subject to the CJEU’s scrutiny as soon as there is knowledge of material evidence of such a procedure. Their terms of office must be 5 years at a minimum.
24 of Keynes, J M (1936), The General Theory of Employment, Interest and Money, Macmillan Cambridge University Press. BIS central bankers’ speeches  1  Having monetary, macroprudential, and microprudential policy under one roof makes gains from trade possible. It is our duty to exploit complementarities, synergies and economies of scope to maximise our impact by working together. To do so, we need research. And to some extent, research needs us. The need for research The way central banks have sought to achieve their objectives – the practice of central banking – has frequently moved ahead of the theory of central banking. Theory, in turn, subsequently catches up, and enriches and refines practice. The history of central banking is replete with examples. Tacit knowledge has often been more instrumental in determining policy outcomes than insights from formal research. Sometimes this works, as in Bagehot’s “dictum” (to lend freely at a penalty rate against good Montague Norman’s “never explain, never excuse”. 2 Research has meant that some modes of operation, like Norman’s, have rightly fallen by the wayside. It has helped nuance others, like Bagehot’s. And it guides us as to which practices to retain, reinforce and enhance, and which should be discarded. The practice of monetary policy in the Great Moderation is another example. It informed theorising and research on Inflation Targeting. And, in turn, through trial, error and refinement, research has helped inform policy with empirical insights and workhorse models.

In the theoretical space, this process led to Woodford’s dictum that in modern central banking very little else matters beyond expectations. 3 In contrast, the practice of central banking in a messy real world where people use various heuristics, including rational inattention, has shown the limitations of such logical extremes. Research showed how central bank transparency and accountability make essential contributions to policy effectiveness, in a way that is complementary to ensuring central banks have democratic legitimacy. That remains an important insight in the era of enlarged and empowered central banking. Practice moved ahead of theory; theory caught up and refined practice. And the effectiveness of policy improved as a result. The crisis has meant practice has once again leapt ahead of theory. During its depths, the lessons of history and insights from psychology were arguably more valuable than precisions of dynamic programming. Our workhorse models didn’t have financial sectors; meaning questions of financial stability were not even asked, let alone answered. A great deal of improvisation was required to avoid a second Great Depression. It is vital that we draw on the experience from the crisis to rethink the way we understand the economy, the financial system, and the institutions we supervise. To do so, we need not only to study recent history more deeply but also to apply formal methods to refine our depictions of economic dynamics, as well as the policy tools we have to shape those dynamics in socially desirable ways.
Cash transport robberies are a major problem in our society and this serious crime must be combated with a number of measures by both the government and private sectors. This goes beyond the Riksbank’s area of responsibility, but we are happy to take part in discussing issues that affect our field of operations and where we can contribute constructively. The establishment of this cash management advisory board – which is the reason we have gathered here today – should, among other things, be regarded as such. It is important that we continue to have a dialogue on these issues and contribute to greater breadth and depth in the discussions of cash management. Thank you for listening, and let us now open the debate! BIS Review 33/2006  3

Concluding, I would like to thank you all for the insofar cooperation and avail myself of the opportunity to invite all the participating institutions to continue and intensify the cooperation in the future, in the commitment to contribute to the future generations and the Albanian society. 2/2  BIS central bankers' speeches
Put another way, since competitiveness is relative, a solution for some cannot be a solution for all. Second, the degree of flexibility is not just an abstract economic choice; it is also a political one that determines the burden of risk sharing between labour, firms, and the state. 19 Third, internal devaluation always forces down nominal incomes for a time, regardless of the degree of price and wage flexibility. 20 In more flexible economies, these reductions are concentrated in wages; in less flexible ones, unemployment. Cumulative nominal GDP growth since the crisis has been no better in Ireland than it has been in Spain. And it is this  16  As President Draghi recently said, EMU is incomplete and there is unfinished business. See Draghi (2014), “Stability and prosperity in monetary union”, speech at the University of Helsinki, Helsinki, 27 November 2014. 17  A truth laid bare by the large flow of people out of the Irish economy, overwhelmingly to economies outside the euro area, since the crisis (Chart 5). 18  The only way to recycle surplus savings in peripheral economies has been to export them. But since peripheral countries are not the average euro area economy, the euro exchange rate has not depreciated as far as would be warranted for them alone. To move to running a current account surplus, they have needed to undergo painful internal devaluation against the core countries of the euro area, by driving down demand, prices and wages.

Mark Carney: Fortune favours the bold Lecture by Mr Mark Carney, Governor of the Bank of England and Chairman of the Financial Stability Board, to honour the memory of The Honourable James Michael Flaherty, P C, Dublin, 28 January 2015. * 1. *  *  Introduction  It is a pleasure to be in Dublin and an honour to give this Iveagh House lecture in memory of Jim Flaherty. Jim’s attitude and actions typified the Flaherty family motto: Fortune Favours the Bold. Born the sixth of eight children in La Chine, Quebec; Jim Flaherty worked odd jobs and won a hockey scholarship to put himself through Princeton. Successful in private and public sectors; he rose to become Attorney General and Minister of Finance of his province before becoming Canada’s 37th Minister of Finance. Once there, his accomplishments were legion, ranging from creating and enhancing support programs for the disabled and care givers to setting the country back on the path to fiscal balance after the crisis and ensuing recession. His tenure as Canadian finance minister was shaped by that crisis and its aftermath. It was my honour to work with him as Canada weathered the storm. And many of you worked closely with Jim as Ireland negotiated agreements with the Troika and devised policies to rebuild its battered economy. I am confident he would be proud of the progress Ireland has made. I suspect he would be more than a little frustrated with the euro area, however.
The civilian unemployment rate is 5 percent, not much above the level generally viewed as consistent with full employment. For example, in the September FOMC Summary of Economic Projections, the median estimate of the longer-run unemployment rate was 4.9 percent. And, broader measures of unemployment―such as indicators that include people that are working part-time for economic reasons and discouraged workers who have left the labor market but still want a job – have also shown substantial improvement over the past year. Discerning the degree of slack remaining in the labor market becomes more difficult as the margin of unused and underused labor resources shrinks. My own assessment is that some margin still remains. I reach that conclusion for two reasons. First, broader measures of unemployment are still high relative to where you would expect them to be given a 5 percent civilian unemployment rate. Part-time workers and discouraged workers remain a potential source of additional labor, and the labor market participation rate seems low even when adjusting for demographic factors. If the normal historical relationship between the broader U6 measure of unemployment – which includes part-time workers that want a full-time job and discouraged workers – and the narrower U3 measure of unemployment – which excludes these workers – were to reassert itself, this would imply about an additional ¼ to ½ percentage point of labor market slack in my assessment. Second, we have still not seen compelling evidence that a tightening labor market is leading to more rapid labor compensation gains.

On balance, I believe we have been making progress toward our goals, recognizing that a few issues still cloud the outlook. Most noteworthy is the fact that inflation continues to run well below our 2 percent objective. With respect to the economic growth outlook, the softness in third-quarter real GDP – which according to its initial estimate rose at only a 1.5 percent annualized pace – and the weakness of the manufacturing sector have raised concerns that the U.S. economy may be losing some forward momentum. Sharp reductions in oil and gas drilling activity and a loss of international competitiveness associated with the dollar’s appreciation over the past year have restrained factory output. Judging from historical experience, the impact of the dollar’s recent strength has the potential to be protracted, so that the trade sector probably will continue to be a drag on growth in 2016. Thus, the manufacturing sector is likely to continue to lag behind the rest of economy. But these negatives need to be set against the many positive aspects of the economic outlook. In particular, domestic demand continues to grow at a solid pace as increases in consumer spending, housing and business fixed investment all contributed to the third quarter’s 2.9 percent annualized gain in real domestic final sales. A large decline in the pace of inventory accumulation was the main reason why real GDP growth faltered in the third quarter.
The terms of trade measure the prices for goods and services that we export in relation to the prices for those we import. Commodities account for a substantial share of Norwegian exports. Commodity prices are subject to wide variations. Experience shows that a deterioration in the terms of trade results in a depreciation, whereas an improvement leads to an appreciation. The exchange rate thus acts as a stabiliser, a buffer that partly curbs the effects of changes in the terms of trade on economic activity. Developments in the krone exchange rate can also contribute to restraining the effects on prices of higher wage growth and other domestic cost disturbances when there is confidence that inflation will be stable over time. Oil and gas are the commodities that account for the largest share of Norwegian exports. A substantial portion of the revenues from the sale of oil and gas is invested in foreign equities and bonds through the Government Petroleum Fund. The Fund has thus diminished the impact of short-term fluctuations in oil prices on the domestic use of petroleum revenues. In the last 20 years, fluctuations in the terms of trade have been three to four times greater for the Norwegian economy including the petroleum sector than for the mainland economy. The Petroleum Fund thus relieves pressure on the krone exchange rate. The relatively low level of uncertainty that market participants seem to attach to krone exchange rate developments may be a reflection of this.

In the current situation, Norwegian interest rates on a par with interest rates in the euro area would lead to instability. If monetary policy had not contributed to curbing demand, the pressure on economic resources would have led to accelerating inflation. Countries participating in EMU have gained access to a large, liquid financial market in their own currency, with low transaction costs. The risk of exchange rate losses associated with cross-border investment and borrowing in the euro area has been eliminated. This can result in substantial gains, not least for some of the smaller countries. The business sector in the euro area is taking advantage of this. The volume of bonds issued by non-financial corporations has increased substantially each year since the introduction of the common currency in January 1999. Financial markets are small and fairly illiquid in Norway compared with the euro area. Combined with the uncertainty associated with exchange rate developments, this can add a premium on the required rate of return on investments in NOK. This can in turn contribute to a higher long-term interest rate in Norway than in the euro area countries over time. In the long term, financial market participants expect Norwegian interest rates to be close to 1 percentage point higher than in the euro area.
But this would be a significant step towards improving the competitive foundations of the Spanish economy, a vital ingredient for any sustained recovery scenario. This is why it is essential to see through the liberalisation processes under way in the sector further to recent legislative initiatives and, in particular, to the transposition of the Community Directive on services. Diminished domestic demand has also exerted an influence on the reduction in the external deficit, on a scale difficult to imagine only two years back. As explained in the Annual Report, this correction is largely due to the reduction in the trade deficit as imports ground to a halt and, from this standpoint, it appears to be chiefly attributable to cyclical factors. It should be stressed, however, that goods exports have shown a strong capacity for recovery in recent months, as has trade in services. Both developments are promising and need to firm in the future if the nation’s net borrowing is to be permanently reduced and if growth is to pivot on an export sector that is stronger and less reliant on imports. Despite this progress, substantial adjustments have still to be made, and as promptly as possible, if they are not to act as a drag on the recovery. I refer in particular to the need to complete the absorption of excess capacity in the residential construction sector, to continue the financial restructuring of the private sector and to improve the Spanish economy’s competitive position.

It has done this by adjusting its schedule for withdrawing the extraordinary crisis-combating measures put in place, so as to attune it to developing financial market tensions. It thus re-established its six-month liquidity-providing operations, resumed its fixed-rate full-allotment tender system for three-month tenders and recommenced dollar-denominated liquidityproviding operations. Furthermore, the ECB started up a public and private asset purchase programme with a view to remedying the dysfunctions in certain financial market segments which were endangering the normal operation of the monetary policy transmission mechanism that is essential to ensure price stability. Along with these actions on the common European front, the other essential component of the response to the emergency situation is the reaction of national governments to ensure the sustainability of their finances and to undertake the reforms needed to restore vigorous and stable growth of both output and employment. In this regard, the sequence and content of the fiscal consolidation packages adopted by the Spanish government have naturally been influenced by recent developments. The Spanish government took a first step towards fiscal consolidation when it defined the State budget for 2010 and, later, when it presented the Updated Stability Programme in January this year, following the recommendations of the ECOFIN.