samchain/econo-pairs-v1 huggingface dataset:
Andrew G Haldane: Managing global finance as a system Text of the Maxwell Fry Annual Global Finance Lecture, given by Mr Andrew G Haldane, Executive Director and Chief Economist of the Bank of England, at Birmingham University, Birmingham, 29 October 2014. *  *  *  Accompanying charts can be found at the end of the speech. The views are not necessarily those of the Bank of England or the Monetary Policy Committee. I would like to thank Ambrogio Cesa-Bianchi, Edd Denbee, Jeremy Franklin, Carsten Jung, Matt Roberts-Sklar, Stephanie Quiet and Benedict Roth for assistance in preparing the text. I would also like to thank to Rob Elder, Jeremy Harrison, Kristin Forbes, James Smith and Stacy Williams (HSBC FX Quantitative Strategy Team) for insights and comments. It is a great honour to be giving this year’s Maxwell Fry Global Finance Lecture. Max was a tremendous colleague, both during his time here at Birmingham University and as Director of the Centre for Central Banking Studies at the Bank of England. Max also had a rare gift. Through his exceptionally rich academic and public policy career, he was able to integrate the insights from disciplines which all too rarely communicated – monetary theory and central bank practice, advanced and emerging market experience, financial markets dynamics and mainstream macro-economics. The global financial crisis could not have provided a clearer demonstration of the benefits of combining these insights.

Without them, it would have been impossible to make sense of the chaotic dynamics of global economies and financial systems at the time. In other words, nothing could have provided a better case study of the importance of Max’s work than the crisis. And it is lessons from the global financial crisis with which I want to begin. These are of course many and varied. But among the most important is also perhaps the simplest: to safeguard against systemic risk, the financial system needs to be managed as a system (Haldane (2009)). As put, this statement seems rather obvious, perhaps even tautological. Yet, pre-crisis, it was far from obvious. The orthodoxy then was that safeguarding individual financial firms was a necessary and sufficient condition for system-wide stability. This was the financial stability equivalent of the English aphorism: “look after the pennies and the pounds will look after themselves”. And so it appeared during the long pre-crisis period of stable growth and stable banks – the “Great Moderation” (Bernanke (2004)). The crisis has rewritten that orthodoxy. It revealed that the safety of individual banks was neither a necessary nor sufficient condition for systemic stability. Not necessary because, in any well-functioning system, individual banks can and should fail. Not sufficient because, in an integrated web, the chain is only as strong as its weakest link. In focussing on individual banks, policymakers had been, to coin another English aphorism, “penny-wise but pound-foolish”. That is why Great Moderation gave way to Great Recession (Gai and Kapadia (2010)).
This means that they have two key effects. First, they lift the path of potential output, either by raising the inputs to production – the supply and quality of labour and the amount of capital per worker – or by ensuring that those inputs are used more efficiently, i.e. by raising total factor productivity (TFP). And second, they make economies more resilient to economic shocks by facilitating price and wage flexibility and the swift reallocation of resources within and across sectors. These two effects are complementary. An economy that rebounds faster after a shock is an economy that grows more over time, as it suffers from lower hysteresis effects. And the same structural reforms will often increase both short-term flexibility and long-term growth. For example, reforms aimed at encouraging reallocation will not only support faster adjustment, but also higher productivity through raising allocative efficiency. 1 Reforms aimed at strengthening competition will not just encourage greater price flexibility, but also higher investment as young firms are able to enter new markets and expand more quickly. 2 A comprehensive package of structural reforms will therefore tend to increase both resilience and growth. These are clearly issues in which any central bank has a keen interest. But this is especially true for the central bank of a monetary union – and even more so in the conditions we face today. Let me explain why.

BIS central bankers’ speeches  7  Similarly, reforms designed to reduce bottlenecks to new investment that come from onerous business conditions should also have mainly benefits in the short-term. This would include measures such as reducing the administrative burden on young firms, or speeding up insolvency proceedings that raise the opportunity cost of investment by tying up capital for years longer than initially assumed. For many euro area countries there are several “low hanging fruit” that can still be picked in this area (Chart 10). The EAGLE simulations show that if reforms are also well coordinated across the euro area, the short-term benefits for a medium-sized country can be further maximised, especially in terms of limiting the downward effects on inflation (Chart 12). This reinforces what I have said about the need for stronger common governance of structural reforms in the euro area: if all countries reform together, then all countries benefit more. And these findings hold even under the assumption that monetary policy is constrained. Interaction with other policy measures But it is also important to underline that this assumption is in fact inaccurate for the euro area today. Contrary to models in the literature, monetary policy is not constrained because we have reached the lower bound. Rather, as I laid out in a recent speech in Washington, I think we have demonstrated in recent months how effective monetary policy can be when it has to resort to unconventional measures.
Denis Beau: European Association of Cooperative Banks Keynote speech by Mr Denis Beau, First Deputy Governor of the Bank of France, at the General Assembly of the European Association of Cooperative Banks, 29 April 2022. * * * Ladies and gentlemen, I’m delighted to be with you, even if I would have preferred a more serene context after two years of crises. The war in Ukraine is casting a new shadow on our times with deep and possibly long standing consequences on economic and financial relations at global and regional levels. In the short run, it could alter significantly our macroeconomic and macrofinancial environment, bringing new challenges and amplifying old ones both for financial institutions and public policy makers and supervisors. Today, I would like to discuss some of these challenges, by sharing with you, with my central banker and supervisor lens, my perspective on short run challenges associated with the macroeconomic and the financial stability outlook and on longer term challenges associated with climate change and digitalisation of finance. 1.The macroeconomic outlook: the challenges associated to a new interest rates environment The war in Ukraine is likely to play an important role in the growth and price perspectives in the euro area, as it represents a so-called “slow-flationary” shock whose impact in terms of length and magnitude is highly uncertain at the current juncture.

By way of conclusion, let me say that there is currently no shortage of challenges. However, the reforms introduced in the regulation and the efforts made by banks to enhance their resilience over the last decade have borne fruits and the European banking system has demonstrated with the Covid crisis not only its ability to withstand enormous shocks but also its ability to support public authorities efforts to overcome difficulties to the benefit of the European people. This is a major positive development. While this is not the time for complacency, this development should collectively encourage us to maintain our attention and efforts and to address the current and forthcoming challenges with both confidence and determination. 4/4  BIS central bankers' speeches
The scope of our consultation is potentially huge. So I want to say a few words about how we will give focus to our work, and to give a sense of the questions we are asking in our consultation document. The framework we will be using is shown in Figure 3. It divides up areas where the fairness and effectiveness of FICC markets may be deficient into six categories. Three of these relate to the structure of those markets: so-called market microstructure; competition and market discipline; and benchmarks. And three relate to conduct: standards of market practice; firmlevel responsibilities, governance and incentives; and surveillance and penalties. Let me say a little more about each in turn. 1. Microstructure  The first category relates to the microstructure of FICC markets – covering such things as the arrangements for trading, price transparency, market access and the range of asset types. As I noted earlier, many of the products in these markets are tailored to the specific needs of individual borrowers or investors. Although that may be good news for them, it does  BIS central bankers’ speeches  5  mean that quite a number of FICC markets are relatively thin and lack widespread transparency and are hence intrinsically more vulnerable to manipulation. So there may be a tradeoff between the benefits of customisation, and the costs in terms of weaker liquidity and potentially greater vulnerability to abuse. Regulatory and technological change is already leading to greater standardisation and transparency across many FICC markets.

In the consultation document, we ask whether that process should go further, whether through industry-led standardisation, removing barriers to entry for new electronic trading platforms or utilities, or further transparency enhancements to practices such as new issue allocation. Or could imposing standardisation or transparency standards in excess of those already in place harm, rather than enhance, market functioning and risk transfer? Do practices such as ‘internalisation’ – where banks match off client orders internally – pose any challenges? 2. Competition and market discipline  The second structural category is competition and market discipline. Concentration in some FICC markets is relatively high both amongst intermediaries and amongst the major asset managers, and has risen further since the financial crisis. For example, the top six dealers account for over 60% of the UK interdealer FX market. In some cases, firms have also engaged in horizontal or vertical integration – raising potential conflicts of interest and concerns about information asymmetries. A number of recent misconduct cases have involved attempted collusion, abuse of market power or inadequate management or control of conflicts. The ability of FICC market participants to exercise market discipline against those engaging in misconduct may also have diminished somewhat in recent years. At the same time, the market maker system has delivered important benefits, including tight pricing and deep and near-continuous liquidity in a wide range of market conditions.
47  All speeches are available online at www.bankofengland.co.uk/speeches  47  Chart 14: Long-run UK liquidity ratio (sterling liquid assets relative to total holdings of UK banking sector) Percentage of total assets (all currencies) 35  Broad ratio Reserve ratio Narrow ratio  30 25 20 15 10 5 0  1968 72  76  80  84  88  92  96  00  04  08  12  16  Sources: Bank of England and Bank calculations. Notes: Data for building societies are included from 2010 onwards. Prior to this, data are for UK banks only. Data are end-year except for 2017 where end-July data are used. Broad ratio defined as Cash + Bank of England balances + money at call + eligible bills + UK gilts. Reserve ratio proxied as Bank of England balances + money at call + eligible bills. Narrow ratio defined as Cash + Bank of England balances + eligible bills. Chart 15: Individual banks’ 2006 capital positions and 2006-2016 lending growth Growth in net loans (%), 2006 to 2016  600  400  200  0  -200 5  10 Tier 1 capital ratio in 2006 (%)  15  Sources: S&P Capital IQ and Bank calculations.

The growth in international trade, inter-linkages of the global financial system and advancement in technology have presented both the risks and opportunity to the private sectors. From the business perspective, this development provides for greater access to the wider global market. From the money laundering perspective, this also means that criminals have greater means and tools to launder their illegal proceeds into a form which appears to be legal. Using the tools provided via the advancement in technology such as the internet banking and wire transfers, these proceeds could subsequently be transferred out and layered into another transactions either in Malaysia or abroad. Changes in the business and economic landscape present a challenge to law enforcement agencies, financial regulators and supervisors. To ensure that we are effective in protecting the financial system and the broader economy from the threats of money laundering and terrorist financing, cooperation and collaboration is not an option but a vital requirement. In this regard, there must be strong working partnerships between all the law enforcement authorities, regulators, supervisors and the private sectors. Without that, our efforts will be futile. In terms of the legal framework, concerted efforts have been taken to ensure that our AML/CFT law and policies are comprehensive. On this note, I am happy to inform that the main law governing the AML/CFT has been passed by the Parliament and gazetted into a law on 29 August this year.
Though the current liquidity levels in the Swiss franc money market are still extremely high, and interest rates are fluctuating around zero, conditions on the money markets have slowly started to normalize and extremely negative rates have disappeared. This is reflected in the recent increase of the three-month Libor, which can be ascribed to a normalisation of the rate’s risk premium and should therefore not be seen as a change in monetary policy. Though few loans are currently being concluded on the interbank market, the Libor remains an important benchmark for many credit transactions in the economy. Concluding remarks The period of low interest rates in which we live is the outcome of cyclical and secular circumstances which are unlikely to last forever. Even if we accept the “savings glut” hypothesis, the demographical and regional factors to which it refers could soon lose relevance. While the call for deleveraging should prompt increased savings in advanced economies, the demographic forces in the west are likely to have an opposite effect on the supply of savings. Similarly, the maturing of emerging markets in the east should lead to smaller current account surpluses and to a gradual reduction in the build-up of precautionary reserves by public authorities. It is also clear that the increased risk appetite associated with the “Great Moderation” was, at least to some extent, based on over-optimistic assumptions.

“The financial market impact of quantitative easing.” Bank of England Working Paper No. 393. July 2010, revised August 2010. Krogstrup, Signe. 2012. “The effects of the SNB’s liquidity expansion on asset prices at the zero lower bound.” SNB Internal Note. February 2012. Krogstrup, Signe, Samuel Reynard and Barbara Sutter. 2012. “Liquidity Effects of Quantitative Easing on Long-term Interest Rates.” SNB Working Paper. January 2012. (forthcoming). Taylor, John B. 2009. Competing Explanations: A Global Savings Glut. pp. 6–7. BIS central bankers’ speeches  5  6  BIS central bankers’ speeches  BIS central bankers’ speeches  7  8  BIS central bankers’ speeches  BIS central bankers’ speeches  9  10  BIS central bankers’ speeches  BIS central bankers’ speeches  11
The rapid upturn in inflation last autumn was largely due to rising energy and food prices, a reflection of the fact that prices rose rapidly on the world market. At the monetary policy meeting I pointed out that it is not possible to immediately counteract such rapid price impulses from abroad with monetary policy. Quite simply, it must be allowed to take some time. In the Monetary Policy Report the rapid price increases are to some extent assessed to be of a temporary nature. If world market prices do not continue to rise at the same rapid pace in future, inflation will fall back again. This is also what is forecast in the main scenario of the Report. However, to some extent, it also concerns the effects on inflation which risk becoming more permanent and which may need to be counteracted with monetary policy. When inflation rises and is above the target, as CPI inflation now is, it is important that it is not allowed to become entrenched and become permanently high. The risk of this increases if inflation expectations rise, and that is exactly what has occurred. Inflation expectations have risen not just one year ahead, but even two and five years ahead, which is troublesome. The monetary policy decision The upturn in inflation and in inflation expectations in the slightly longer term were also factors that indicated the interest rate should be raised at the monetary policy meeting in February.

It was not surprising that during those times the financial stability was not of a main concern for the central bank. As the central banks learnt during the second half of eighties to deal more properly with inflationary disturbances, the price stability was broadly achieved again. Consequently, the interest in financial  BIS Review 20/2005  1  stability issue has been increasing during the nineties. In my opinion, there are two main reasons for it. First of all, central banks have learnt one important rule: that their role of the lender of last resort is something the central bank should be ready to fulfil, but in fact it is optimal, never to do it in practice. Second of all, the financial system is in the end completely incomparable to the pre-World-War-II system. Nowadays, we live in a global world and, although we are more capable of minimising the impact of inflationary disturbances, there are other types of shocks arising. To sum up, the main message we can learn from the history is that price stability as the ultimate goal of monetary policy is not in contradiction with the effort to achieve the financial stability. Indeed, on one hand, price stability is a necessary condition to achieve financial stability, as the inflationary disturbances have the potential to cause serious damages to the financial system; on the other hand, a sound financial system enables the monetary policy to smooth its actions in order to achieve price stability. Ladies and gentlemen, thank you for your attention.
SPEECH DATE:  31/05/2021  SPEAKER:  Governor Stefan Ingves  VENUE:  Swedish Economics Association  SVERIGES RIKSBANK SE-103 37 Stockholm (Brunkebergstorg 11) Tel +46 8 787 00 00 Fax +46 8 21 05 31 registratorn@riksbank.se www.riksbank.se  New financial environment - how is the Riksbank meeting the new challenges?1 Thank you for inviting me here to the Swedish Economics Association to speak again this year. I always enjoy coming to speak to you as it gives me the opportunity to discuss a subject in greater depth. But this year I intend to take a somewhat broader perspective and talk about the Riksbank's three main business areas: payments, monetary policy and financial stability. In the public debate, there is often a tendency to focus on one area at a time. Recently, for instance, payments have been in focus as a lot is happening in the payments market. Monetary policy is almost always in focus, but often without mentioning that financial stability is a necessary condition for price stability. But it is fairly natural that this is the case, if only because it is difficult to be an expert in all of these areas at the same time. During my professional life, I have had the privilege of being responsible for each of these areas at some point. I have also experienced what it is like when one of them is not functioning, and how this affects the other areas. This has helped me to better understand how the different areas are inter-dependent.

Mohammad bin Ibrahim: Islamic finance and Malaysia’s role Luncheon address by Mr Mohammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia, at the 21st Conference of Presidents of Law Associations in Asia: “Islamic Finance and Malaysia’s Role”, Kuala Lumpur, 27 July 2010. *  *  *  Allow me to express my thanks to the organizers for inviting me to this 21st Conference of the Presidents of Law Associations in Asia. It is my pleasure to speak before such a distinguished gathering of legal practitioners from all over Asia on the topic of Islamic finance. The support provided by the legal fraternity has been important in the advancement and significant growth of the Islamic finance industry. The existence of appropriate laws and well-developed related institutional framework has been fundamental to the orderly and sound development of Islamic finance in Malaysia. And our legal community has been at the forefront of advancing the expertise in Islamic finance, enabling and contributing to the dynamism of our Islamic financial services industry. The contribution of the legal fraternity has been significant given that Islamic financial transactions are driven to some extent of the lawyers’ ability to structure legal documentation to conform and consistent with the principles advocated by the Shariah. It has now been more than three years since the world’s financial systems were engulfed with a crisis of an unprecedented magnitude in modern history. Yet its far-reaching repercussions continue to reverberate around the world today.