samchain/econo-pairs-v1 huggingface dataset:
To sum up, a cross-check of the outcome of the economic analysis with the signals coming from the monetary analysis confirms the need to closely monitor the risks to the outlook for  2  BIS central bankers’ speeches  price developments over the medium term and to be prepared to provide further monetary policy accommodation, if needed. Monetary policy is focused on maintaining price stability over the medium term and its accommodative stance contributes to supporting economic activity. However, in order to strengthen investment activity, boost job creation and raise productivity growth, other policy areas need to contribute decisively. In particular, the determined implementation of product and labour market reforms as well as actions to improve the business environment for firms need to gain momentum in several countries. It is crucial that structural reforms be implemented credibly and effectively as this will raise expectations of higher incomes and encourage firms to increase investment today and bring forward the economic recovery. Fiscal policies should support the economic recovery, while ensuring debt sustainability in compliance with the Stability and Growth Pact, which remains the anchor for confidence. All countries should use the available scope for a more growth-friendly composition of fiscal policies. The Investment Plan for Europe which the European Commission announced on 26 November 2014 will also support the recovery. We are now at your disposal for questions. BIS central bankers’ speeches  3

Let me focus on some of the implications of global economic and financial integration for central banks. What does globalization change and what does it not change? What complications does it introduce and what challenges does it ease? This is a vast and complicated topic, but I want to touch on some of the key issues. In passing, let me note Federal Reserve Vice Chairman Don Kohn’s recent assessment of what we know about the impact of globalization on short-run inflation dynamics in the United States and elsewhere. He noted that the evidence so far on these questions is “far from conclusive” but for the most part it suggests that to date the effects have been gradual and limited. There are, however, some important things we know about how economic integration affects the context in which central banks operate. For example, Harvard economist Ken Rogoff and others have pointed out that to the extent that globalization increases the degree of competition, it can reduce the “inflationary bias” or, to put it differently, it can strengthen the anti-inflation credibility of a central bank. By inducing greater price flexibility, competition lowers the short-run gains to output from an unanticipated inflation, and thus permanently reduces the incentives for a central bank to try to exploit those gains. The improved credibility of the central bank’s commitment to keep inflation low and stable should, in turn, allow it to deliver better inflation outcomes with fewer short-run costs to economic growth and employment.
Michael C Bonello: Launch of the Forum for Financial Stability Introductory remarks by Mr Michael C Bonello, Governor of the Central Bank of Malta, at the launch of the Forum for Financial Stability, Valletta, 23 May 2011. *  *  *  Ladies and Gentlemen, I should first of all like to thank you for having accepted our invitation to today’s launch of the Forum for Financial Stability. I would also like to extend a special welcome to our guest speakers, the Chairman of the MFSA, the Secretary General of the MBA and Mr John Fell, Deputy Director General of the ECB’s Financial Stability (Directorate General). In my own introductory remarks I shall attempt to provide a context for the creation of this Forum, in which I trust your respective institutions will play an active role. In this regard it is important to note that central banks have an intrinsic interest in financial stability. Indeed, this interest is recognized in statutory instruments. Thus while the Treaty states that the ECB’s primary objective is to maintain price stability, it also stipulates that it should contribute to the stability of the financial system. Echoing this thinking, our own Central Bank of Malta Act, while giving primacy to the implementation of the ECB’s monetary policy, also enjoins us to ensure the stability of the financial system. The concern of central banks with the health of the financial system is explained by the fact that price stability and financial stability complement one another.

For the fixed income market, such tools might include raising the haircuts charged to securities dealers on their repo financing; raising the haircuts that the securities dealers assess against the collateralized borrowings of their customers as part of their prime brokerage business, or raising initial margin requirements on OTC derivatives transactions. Macroprudential tools are undoubtedly difficult to use effectively in practice. For example, it is difficult to judge their impact. If, for example, loan-to-value ratios for single-family mortgages are lowered by 5 percentage points, how big an impact will this have on housing demand? There also is a risk that the rules or regulations will simply be circumvented. For example, investors might move to instruments or to off-shore regimes with less stringent margin and leverage restrictions. Thus, it is important that the authorities have the ability to apply the macroprudential tools broadly throughout the financial sector. 11 None of this is going to be easy. A lot more work will be required to develop a portfolio of tools that could be used, that would be effective and would not be subject to significant evasion or unintended consequences. In terms of the use of macroprudential tools, let me briefly take note of another issue that requires significant consideration – the issue of governance. Who controls all these tools? Who decides when the tools will be deployed and how extensively or intensively? Having a sufficient toolkit seems like a good idea. But lodging all this authority within a single entity or institution might not be practical or desirable.
The “league” in which these players compete is clearly not a domestic one. Another example, which is particularly telling of integration, can be drawn from the rapidly expanding new European equity markets for technology and growth companies. Underwriting the initial public offerings or IPOs of this type of firm is the kind of service where we should expect the greatest degree of national segmentation, since the companies are usually accessing the capital market for the first time, possibly as captive customers of local banks. However, experience so far shows that, in most cases, a foreign institution was present alongside a domestic one. By contrast with the services provided to other financial institutions and large corporations, retail activities for personal customers and small and medium-sized firms are still confined quite noticeably to national territories. Within the euro area, both lending and deposit-taking by banks are largely conducted with domestic residents. Nevertheless, internationalisation is also making progress in this area. Business with customers located in other euro area countries is growing faster than domestic business in terms of all major balance sheet items of banks. It should also be noted that retail banking services still tend to be localised, even in individual countries such as the United States. Thus, segmentation of retail services should not necessarily be seen as the failure of integration. As regards the costs of payment services which banks offer, in particular for cross-border payments, I believe that these costs are still too high.

News conference  Berne, 12 December 2019 Thomas Jordan  Introductory remarks by Thomas Jordan  Ladies and gentlemen It is my pleasure to welcome you to the Swiss National Bank’s news conference. As usual, I will begin by explaining our monetary policy decision and presenting our assessment of the economic situation. I will also be addressing three additional subjects: five years of negative interest, the possible consequences of climate change for the SNB in fulfilling its mandate, and a study on the methods behind our company talks. After my remarks, Fritz Zurbrügg will report on the developments in the area of financial stability, and Andréa Maechler will then talk about the situation on the financial markets. We will – as ever – be pleased to take your questions afterwards. Monetary policy decision  I will begin with our monetary policy decision. We are keeping the SNB policy rate and interest on sight deposits at the SNB at −0.75%. We remain willing to intervene in the foreign exchange market as necessary, while taking the overall currency situation into consideration. Our expansionary monetary policy continues to be necessary given the inflation outlook in Switzerland. The trade-weighted exchange rate of the Swiss franc is practically unchanged compared with September 2019. The franc thus remains highly valued, and the situation on the foreign exchange market is still fragile. Negative interest and the willingness to intervene counteract the attractiveness of Swiss franc investments and thus ease the upward pressure on the currency.
Based on the kind of systematic adjustments indicated above, a tailor-made operational portfolio has been constructed. This reference portfolio serves as a basis for more traditional selections of securities. The fund’s largest holdings in terms of ownership share, both in equity and fixed income, are based on our own analyses of investee companies and countries. Chart: External managers The large majority of the fund’s investment decisions are made within our own organisation. Still, we have always used external management companies in areas where developing inhouse capabilities has not been an efficient option. Most of the external mandates have in recent years been directed to specialists in specific sectors or countries. The fund is a long-term, responsible investor. The objective of our management is to achieve the highest possible return at acceptable risk levels. Norges Bank’s work on responsible investing underpins this objective. As a long-term investor, we are dependent upon healthy and sustainable developments in investee companies and markets. Our work with responsible investment rests on three pillars: We promote international principles and standards, and express our expectations as an investor on certain issues. We exercise active ownership through voting and engagement with companies. And we integrate environmental, social and governance issues into the investment process and risk management. BIS central bankers’ speeches  5  Chart: Responsible investment I Promoting good industry standards is an effective way of safeguarding our investments and assets in the long term.

Low bond yields reflect global economic conditions: Governments, businesses and households are seeking to save more, while demand for safe investments has increased. Substantial asset purchases by central banks are pushing in the same direction. Low yields may also reflect modest expectations of economic growth further ahead. Historically, equities have yielded higher returns than bonds. We also expect that to be the case ahead. Still, it is doubtful that equity prices will continue to rise at the same pace as in recent years. Weak or moderate growth in the real economy will feed through to the return on equities. The share allocated to real assets has increased gradually after equities were first introduced in 1998. Soon, almost two-thirds of the fund will be invested in real assets. As we gain experience in real estate investing, it may be natural to invest in other types of real assets, or increase the equity allocation further. In the long run, a bond allocation of 20–25 percent should suffice to maintain the fund’s needed hedge against fluctuations in equity prices and execute the rebalancing strategy. Chart: Global investments Another of the fund’s characteristics, which in particular has an effect on risk management, is its large size. A main tool to manage the risk faced by the fund is diversification. With a fund of this size, we have ample opportunities to diversify.
Among other things, these sound practices call upon banks to: •  establish clear policies governing their involvement with HLIs;  •  adopt credit standards addressing the specific risks associated with HLIs;  •  establish meaningful measures of potential future exposure;  •  establish meaningful credit limits, incorporating the results of stress testing; and  •  monitor exposure on a frequent basis. Banks generally tightened the credit risk management standards for their HLI exposures after the near-collapse of LTCM. However, it is important that supervisors ensure that progress  3  BIS Review 37/1999  continues. Memories tend to be short, and we want to make sure that as markets calm down, as they have in the past months, banks do not return to the old ways of doing business. Possible Future Changes in the Capital Accord As you know, the Basle Capital Accord is one of the great successes of the Basle Committee. Well before the events of last fall, the Basle Committee was developing fundamental revisions to the Accord to better reflect the many changes in financial markets and risk management practices since the Accord’s creation in 1988. Among the G-10 supervisors, there is broad agreement that the future Accord should make greater distinctions among a bank’s credit risks. These discussions are continuing. The strong link between sound risk management practice and the Capital Accord provides another reason for rapid adoption of the Basle Committee’s sound practices. The HLI report raises several important technical issues of relevance to the Accord.

We have been flexible in our implementation, but the size of the benefit offered by the MA and the relatively coarse framework for measuring levels of retained asset risk have necessitated strict eligibility conditions. 3  See June 2020 FPC remit response letter See speech by Alex Brazier (2020): ‘Protecting economic muscle: Finance and the Covid crisis’ See speech by Alex Brazier (2020): ‘Protecting economic muscle: Finance and the Covid crisis’ 6 See speech by David Rule (2018): 'An annuity is a very serious business' 4 5  5  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  5  It is extremely difficult to model the behaviour of long-dated, illiquid assets, particularly under economic stress. The size of the MA benefit that a firm can take on its liabilities is driven by the credit rating assigned to its assets, which in turn depends on correctly assessing the risk of default or downgrade – an assessment which may be performed by an external rating agency, or by the insurer itself. Furthermore, when firms stress their balance sheet to calculate capital requirements they have to consider the impact of changes to the MA under stress. This means making assumptions about the impact of a stressed economic environment on default and downgrade risks, on ratings migration, and on the cost of re-establishing an MA-compliant position if necessary. Each step introduces the possibility of inappropriate or over-optimistic assumptions and therefore inadequate capital.
Svensson, Lars E.O. (2010a), “Inflation Targeting”, published in Friedman, Benjamin M., and Michael Woodford, eds., Handbook of Monetary Economics, Volume 3a and 3b, Elsevier. Svensson, Lars E.O. (2010b), “Why a lower repo-rate path?” speech held at Umeå University, 24 February 2010, www.riksbank.se. Sveriges Riksbank (2010a), Monetary Policy in Sweden, www.riksbank.se. BIS Review 158/2010  17  Sveriges Riksbank (2010b), Minutes of the monetary policy meeting on 30 June 2010, www.riksbank.se. Sveriges Riksbank (2010c), Minutes of the monetary policy meeting on 26 October 2010, www.riksbank.se. Walentin, Karl, and Peter Sellin (2010), “Housing Collateral and the Monetary Transmission Mechanism”, Sveriges Riksbank Working Paper No. 239, www.riksbank.se. 18  BIS Review 158/2010

1  Nout Wellink, ‘The Role of National Central Banks within the Europeans System of Central Banks: The Example of De Nederlandsche Bank’, 30th Economics Conference, Oesterreichische Nationalbank, June 13 – 14, 2002. 2  BIS Review 46/2002  This would not, however, represent much of a change because already today the Bank has only limited autonomy in the conduct of monetary policy. As far as the transition to the euro is concerned, therefore, the path that Malta should follow seems fairly straightforward, given the starting point of the existing exchange rate regime. Today, the basket consists of the euro, the US dollar and sterling, with weights of around 52%, 26% and 22%, respectively. There is no fluctuation band. The peg is backed by official external reserves, which have comfortably exceeded the monetary base over the years and are equivalent to a fifth of broad money. The first step would be to increase the weight of the euro in the currency basket at the expense of either or both of the other component currencies. If the United Kingdom were to join EMU, this would automatically raise the proportion of the euro in the currency basket, making Maltese entry into ERM II that much easier. On accession, the timing for joining ERM II, as well as technical questions relating to the entry level and the fluctuation band will be up for discussion. If the Maltese lira were to join ERM II with the normal fluctuation band of ±15%, this would inject more flexibility into the system.
For instance, it confirmed the rather worrisome result that financial knowledge amongst young persons of age 18-29 years in general is rather low. In particular, they score 4.4 out of 7 compared to 5.3 out of 7 for the 40-49 age group. Econometric evidence also shows they are 3.2 times less likely to achieve the minimum score of 5 out 7 in knowledge questions than the 40-49 age group. According to the international literature, it is crucial for policymakers to intervene and ensure that financial literacy is taught as a course in the school curriculum early on when children are active, keen learners and more willing to get educated about new concepts. Therefore, schools as an environment conducive to learning, play an essential, if not the most important role, in the formulation of a National Strategy in order to address the problem of financial illiteracy early on in an individual's life. Further to the analysis undertaken by CBC staff in support of the work of the Committee, online meetings and regular contacts have taken place between the Committee and a team of distinguished scientific collaborators, who have specialised and international expertise in the field. Namely, Dr Adele Atkinson (Atkinson Financial Research and Policy, formerly from the OECD), Dr Maria Demertzis (Deputy Director at Bruegel), Prof. Michalis Haliassos (Goethe University Frankfurt), Prof. Alexandros Michaelides (Imperial College London), and Prof. Dennis Philip (University of Durham) whom I have already mentioned.

Through the CBC's  3/4  BIS - Central bankers' speeches  actions over the past years and its coordinating role in the Committee, we have shown that we consider the issue of utmost importance. Moreover, in line with recommendations by international bodies such as the World Bank, I would also like to express the willingness of the CBC to have a leading role in the implementation stage of the National Strategy. I am positive that both the State and the private stakeholders share my belief that investing in financial literacy undoubtedly means investing in a sound financial future for our country and its people. It is now time for Cyprus to take the bold step in this direction. I would like to wish you all a fruitful seminar and discussion. 1 Panayiotis C. Andreou & Dennis Philip, 2018. "Financial knowledge among university  students and implications for personal debt and fraudulent investments," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 12(2), pages 3-23, December. 2 Financial Education Programs and Strategies Approaches and Available Resources,  January 2014, https://www.worldbank.org  4/4  BIS - Central bankers' speeches
This has been consistently confirmed by the Central Bank’s latest stress tests aimed at assessing the resilience of domestic banks to the adverse effects of the pandemic. Such tests featured extensively in our Financial Stability Report and in the Interim Report. The resilience of our banks, as the current spread of the pandemic continues to unfold, is truly a testimony that prudence is the best response to the high level of uncertainty created by this shock. As a result of the pandemic, the ECB, national central banks, and the regulatory authorities have all launched a number of measures aimed not only at supporting the economy, but also in part directed at encouraging banks to utilise the capital and liquidity buffers built up in recent years to deal with crisis situations that arise.

On one hand, the United States, central and eastern Europe and - until the recent SARS epidemic - East Asia have been showing greater vigour. On the other hand, there has been economic stagnation in Japan, very modest growth in the euro-zone and a very disappointing performance in Latin America. Second, in contrast with the usual pattern in recovery phases, certain variables are showing no signs of improvement. Let me mention two: first, investment, despite the low level of interest rates, perhaps because of overcapacity in certain sectors, but mainly because of an overall lack of confidence in the recovery; and second, employment, which, particularly in the case of the US, continues showing signs of weakness. Third, macroeconomic policies have generally been more expansionary. Interest rates are at historically low levels, both in nominal and real terms, in most countries, and this applies also to the longer segments of the yield curve. Overall, fiscal policies are clearly expansionary, although the room for manoeuvre available to different countries in this regard varies greatly. Fourth, the current-account imbalances among the largest economies were exacerbated during the recession and the early stages of the recovery and their geographical distribution does not bode well for their correction. One particular reason for concern is that the huge US current-account deficit coincides with the role of the US as the only locomotive of the world economy in recent years.