samchain/econo-pairs-v1 huggingface dataset:
•  The first characteristic, which has set us apart from other supervisors, has been our strong role in accounting rule-making for the banking sector in Spain. This has meant that the accounting rules for the banking sector take into account supervisory sensitivities, whilst being also consistent with IFRS. One example of this is the socalled “dynamic provision”, which we introduced in 2000. This allowed Spanish banks to build up a significant provisioning buffer in a transparent manner, to be used in bad times, when problem loans increase. In 2005, the Bank of Spain reformed the dynamic provision when adopting International Financial Reporting Standards. Despite the reform, banks kept the strong provisioning level set by the former rules, and today they face the current situation with a sound buffer of loan loss provisions (1.3% of total assets at the end of 2007, and this despite bad loans being at historically low levels). •  The second characteristic that has proved useful is the Bank of Spain’s prudent approach to bank regulation. One example has been our stance on off-balance sheet investment vehicles. We have not prohibited the development of investment vehicles, but we told banks that if they set up Special Investment Vehicles, these should be consolidated with the group, and therefore be subject to capital requirements and provisions. Under these conditions, no such vehicles were set up. As a consequence, the Spanish banking system has not been so seriously hit by the de-leveraging process as other systems that have a freer attitude towards these vehicles.

It is a great honour to have this opportunity to contribute to the lecture series he created. Professor Beesley’s expertise lay in industrial and regulatory economics, whereas at the Bank of England my focus is – naturally enough – on monetary and macro economics. I had originally hoped to bridge this gap by discussing how the Bank’s Monetary Policy Committee (MPC) seeks to ‘regulate’ price developments by steering CPI inflation back to it 2% target. But, in an earlier lecture in this year’s series, Professor Sir John Vickers has already taken that route. While unfortunately I could not attend his presentation, I understand he spoke on the Bank’s largely successful experience of inflation targeting over the past twenty-five years, concluding with some remarks on the challenges for UK monetary policy posed by the current difficult environment.1 Even though that topic has already been covered, it would be remiss not to say a few words about the monetary policy outlook. The outlook for monetary policy Since I re-joined the Bank’s staff just over a year ago (and became a member of the MPC), we have been in the process of tightening monetary policy. Bank Rate has been raised at each of the past eight meetings, and now stands at 3%.
The COVID-19 pandemic and recent developments in Ukraine, events that successively hit sharply the equilibrium state in each field of life worldwide, including economy and finances, trigger challenges to: managers of public finances; families and personal finances; as well, to everybody. This “New reality” for the 21st century has shocked financial markets and the increasing geopolitical tensions are continuing to generate consequences that may vary from relatively contained to very serious ones. Nowadays, almost the entire global economy is facing unexpected shocks, which have driven to hard and complex crisis. After a two-year pandemic period and the extraordinary measures undertaken by governments and financial authorities, the war in Ukraine has caused a new shock. These events, coupled with the implemented sanctions, have hit the global production, supply chain and public confidence, driving to an immediate effect in the upsurge of commodities 1/3  BIS central bankers' speeches  prices, like oil, petrol and food. It caused a chain of consequences, leading to an immediate and strong increase of inflation in worldwide economies, including the Albanian economy as well. To this end, they will impact the direct and indirect economic and financial equilibriums which demand for time and crucial interventions from authorities. In response, policy makers, governments and central banks across the world have already activated a set of measures for mitigating the impact of these successive and robust shocks on the economy.

It is an international initiative organised by the OECD International Network on Financial Education (OECD/INFE) which aims at awareness-raising of the young generation, becoming responsible and financially capable citizens in the future. In this framework, central banks, public agencies, financial institutions and civil society organisations across the world held each year their own GMW events in the last week of March. Since its start, with an ever increasing participation, the Global Money Week is held in 176 countries across the world, and has involved over 53 million children and young people in various activities. The international theme for this year, selected by the organisers is: “Build your future, be smart about money.” The theme highlights the importance of a prudential and pro-active thinking about money, as a premise for a safe and prosperous future, empowering children and youth with the adequate know-how and skills for an evolving digitalised and innovative financial market. The Bank of Albania, through its commitment in the field of financial education, over this decade, has shown to consider financial education of public, an integral part of its duties. Financial education enables the resilient welfare and safeguards the financial soundness of everyone, even in critical situations. The unprecedented events in recent years have driven to the need for cultivating financial literacy, as part of the overall formation of everyone.
10  BIS Review 76/2009  Figure 7 Distribution of growth projection for 2009 (*) United States  -2.0 -1.5 -1.0 -0.5 Jan. 08 Jan. 09  0.0  Chile  0.5  -1.3  1.0  -0.8  -0.3  May 07/Aug.08 Jan./May 09  Sep. 08 May. 09  0.2  0.7  Sep./Dic.08  (*) For the United States, minimum (maximum) point of each curve shows the difference between the lowest (highest) projection and the median. For Chile, the difference between decile 1(9) and the median. Sources: Consensus Forecasts and Economic Expectations Survey of the Central Bank of Chile. Figure 8 Consumers' and entrepreneurs' perception indexes 90  140  70  70  70  120  60  60  50  100  50  50  30  80  40  40  10  60  30  30  86  92  IPEC (1)  98  02  04  06  08  U. de Chile (2)  04  05  06  Total IMCE(3)  07  08  09  Excl. mining (4)  (1) Values above (below) 50 points indicate optimism (pessimism). Before January 2003, the index was published quarterly. From then on, its publication is monthly. (2) Index, March 2001 = 100. (3) Values above (below) 50 points indicate positive (negative) expectations. (4) Weighted average of three sector confidence indicators: manufacturing Industry, retail and construction. Sources: Adimark, Universidad de Chile and ICARE/Universidad Adolfo Ibáñez.

5  Bloom (2009) presents evidence where the use of this indicator helps to understand the US economic cycle, precisely because firms temporarily put their decisions on hold regarding investment and new hirings. BIS Review 76/2009  5  At the world level, the situation wasn’t so different. Expectations of both individuals and firms suffered a severe decline (Figure 10). Stock prices around the world dropped dramatically, reflecting the worsened expectations (Figure 11). The prices of commodities also fell because of the reduction in demand expected for the future. The exception was gold, commonly used as a store of value at times when perceived risks increase (Figure 12). The drop in demand was particularly steep in the manufacturing sector. This explains the severity of the corrections to growth forecasts in countries that export manufactured products such as Japan and Germany and the recently industrialized Asian economies, among others. These countries are expected to experience an average fall in GDP of around 5 percent during this year. The main effect of the reduction in world demand on the Chilean economy has been the drop in the prices of our exports, and those of many other countries. This pulled down the terms of trade and debilitated the national income prospects. However, as I have said a number of times before, the impact of reduced demand is milder in countries that export natural resource related goods, like Chile.
The absorption of higher capital for the country’s development is another opportunity the global crisis provides us. It is a well-known fact now that technology and financial capital tend to move towards sectors, branches and countries that offer higher return on investment. In my personal opinion, but also based on a thorough analysis of the Albanian economy, Albania is a great destination in this respect. There is undoubtedly a high perceived risk in the global markets, not only for Albania but also for all the countries in the region. We should, however, make our competitive advantages clear to the global markets and continue to work on the structural reform in order to release more development potentials and energy. Another lesson drawn from the crisis is that consumption should be re-oriented from imported goods to domestic production. I have addressed it before too that the list of imports should get shorter through their substitution with domestic products, which has to be the priority of the new economic growth model in Albania. To this purpose, time is ripe perhaps to give priority to the organization of financing schemes to support the traded sector. In more concrete terms, I refer to development financial institutions that support the agriculture sector, agro-business industry, extracting and processing industry, where the Albanian economy offers competitive advantages. The  BIS central bankers’ speeches  3  economic benefits provided by these financial institutions to domestic production go beyond the low financing cost.

**  1 – A year of stabilisation Last year, I had talked about the three challenges for growth: uncertainty, isolationism – particularly the United States – and impatience, which is hampering sustainable reform efforts. None of these has disappeared. But French growth is holding up at 1.3% in 2019 despite a slowdown at the end of the year, and we are expecting 1.1% in 2020. And we can practically rule out a US or European recession in 2020, which was often feared last year. These initial signs of economic stabilisation, highlighted in our latest December Eurosystem Staff projections, reflect a relative decline in trade uncertainties. If this stabilisation materialises, it should result in a stabilisation of monetary policy. This means two things: Seen from today’s perspective, like the markets do, it is [therefore] reasonable to expect that over the coming months our policies and interest rates will remain stable. The year 2020 will be all the more conducive to conducting the strategic review of our monetary policy under Christine Lagarde, focusing particularly on the key issue of our inflation target. Stabilisation of regulations too, for banks and insurers. This is important for you, as it is for me, even though we do not always understand it in exactly the same way. We mustn’t get carried away – there will not be a Basel IV –, or backtrack: we must transpose in Europe the Basel III international agreement concluded in December 2017.
First, they do not have to hold capital against the full risk that credit spreads will move against them in the market; Second, they are allowed to discount their annuity liabilities at higher than risk-free rates, reducing their liabilities and therefore boosting their current available capital. For UK insurers, the Matching Adjustment currently amounts to a capital benefit of some £ billion, split roughly evenly between lower capital requirements and higher capital resources. The Bank of England supports the Matching Adjustment framework. Properly implemented, it does appropriately reflect the risks to which annuity writers are exposed. As the Financial Policy Committee 7  concluded , it also has important financial stability benefits. It allows insurers to ‘look through’ short-term  volatility in credit spreads, avoiding any undesirable incentives to act procyclically by selling risky assets as market prices fall. Under Solvency II, Matching Adjustment assets have to meet strict criteria. For example, they must match the liabilities and have fixed cashflows. Insurers are seeking illiquid assets that both offer attractive yields and qualify for the Matching Adjustment. The PRA has allowed insurers some scope to restructure assets in order to meet the requirements. For example, equity release mortgage portfolios may be a good maturity match for an annuity book as part of a diversified portfolio. But they do not have fixed cashflows. So  4  Housing Affordability in England and Wales: 2016, Office for National Statistics, 17 March 2017 Miles, D and J Sefton (2017), “Houses Across Time and Space”, CEPR Discussion Paper No.

These changes, and others, seem likely to have made the financial system both more effective in moving capital to its most productive use and more stable and resilient over time. But they do not, of course, mean the end of systemic risk in financial markets. They could in some circumstances work to magnify rather than mitigate stress. Central banks, supervisors and those running the major private financial institutions need to continue to work to ensure that what Jerry Corrigan calls the “shock absorbers” in the financial system - capital and liquidity and the operational infrastructure - are sufficiently strong and robust to withstand economic and financial conditions more adverse than we have seen in the recent past. Thank you. BIS Review 2/2007  3
that monetary union was a political endeavour, and that the final goal was political union, albeit a different union from those we are used to studying in textbooks. Creating the euro, adopting it or not adopting it, are not mere technical decisions but key political choices, and have profound political implications, which are quite different from being a member of the European Union. This might not have been fully realised by all. Let me give an example. No opt-out clause was offered to the Member States which joined in 2004, even though some of them might have been less enthusiastic about joining the euro area than joining the EU itself. A formalistic reading of the Treaty reveals that all countries except the UK and Denmark are committed to converging as soon as possible to the single currency, even in those countries where popular support for it seems to be still limited. A strict interpretation of the Treaty indicates that Sweden should not have had a referendum on the euro in 2003. Indeed, by ratifying the Maastricht Treaty, Sweden committed itself to joining the euro as soon as possible. In practice, nobody complains that the letter of the Treaty is being ignored, because a country cannot be forced into the euro if it is politically unready to join. Being part of a monetary union binds its members at different political levels, not all of which are easily visible. Take fiscal policy.

The first, main objective of the euro was to create an area of monetary stability in Europe. This has been achieved. The average inflation rate between 1999 and 2008 was 2.2%, about 1 percentage point less than in the 1990s. It is also lower than the best performing countries, like Germany, before the euro. Monetary stability has been reflected also in the low level of interest rates, which is also an improvement compared with the previous decade. This suggests that monetary stability is now well entrenched in expectations. A second objective was to ensure that this monetary stability was not attained at the expense of economic growth and stability. This too has been achieved. The GDP growth rate of the euro area over the last decade has been similar, by and large, to that of the previous decade,  BIS Review 20/2009  1  both in absolute and in per capita terms. Unemployment has been lower on average and employment growth stronger. All this has been achieved in spite of the more rigorous budgetary policies of the Member States, at least compared with the previous decade. This suggests that the Stability and Growth Pact has not imposed a straightjacket on our economies. You could argue that other countries, in particular EU countries which do not have the euro, have performed even better than the euro area. The UK has had a higher average inflation rate than the euro area but also a higher growth rate; Sweden has a comparable inflation rate and higher growth.
Indeed, last week we approved a reform whereby, under our Directorate General Operations, Markets and Payment Systems, a new Associate Directorate General Financial Innovation and Market Infrastructures was created to assume the competencies in these areas, centralising in this new structure the functions previously assigned to different units in the Bank. This Associate Directorate General will have to face two families of problems. First, the questions that arise with the emergence of new agents and new operators in the financial markets, providing services that already existed (but in a different way), or services that did not exist, namely new types of financial services. As regards these new market players, two groups of problems are posed: on one hand, those referring to matters of competencies, i.e. all agents and operators should be subject to the same demands or regulations; on the other, investors and consumers should be protected and alerted as to the new risks, just as they are in respect of the former operators and their products. The second family of matters which the new Associate Directorate General of the Banco de España must face concerns new technology and its application in financial markets, something which, in these times of continuous innovation, is obviously of great importance. Thank you for your attention. 7/7

The situation in Sweden’s financial markets then improved as the measures for consolidating government finances began to bite, prospects for Sweden’s economy brightened and international developments became more stable. During 1995 the Swedish krona became markedly stronger and long-term interest rates declined. This trend continued during 1996, when the Riksbank rapidly lowered the repo rate. At the end of 1996 the level of the TCW exchange rate index was 114, which was inside the Riksbank’s estimated interval for long-term equilibrium. For about two years, from the summer of 1996 to the summer of 1998, the krona stayed inside a relatively narrow interval in relation to the German mark, about 3 per cent around a mean level of 4,40. In effective TCW terms, however, the krona weakened. There are good reasons for supposing that this was due to other factors than problems with credibility. The link between exchange rate movements and the long-term interest rate differential was no longer discernible, which indicates that the krona’s path now had less to do with aspects of credibility. The main explanation for the weaker exchange rate in this period lay rather in cyclical differences. Stronger economic growth in the UK and the United States caused the dollar and sterling to appreciate against the krona. Turbulent autumn In the autumn of 1998 the krona weakened again, mainly, in the Riksbank’s opinion, on account of international turbulence.
Regulation of SGX as a self-listed entity When the SGX was listed on itself (on its Securities Trading subsidiary), MAS assumed the role of frontline regulator for the listing and trading of SGX's shares. MAS was the approving authority for SGX's listing, and was directly responsible for vetting SGX's prospectus. We are also conducting surveillance of trading in SGX's shares, and monitoring the continuous disclosure of material information by SGX. MAS has powers under the Exchanges (Demutualisation and Merger) Act to issue directives to SGX to resolve any conflicts of interest arising from its self-listing. Such conflicts are also addressed in a Deed of Undertaking to the MAS. In keeping with the Deed, SGX has appointed a Conflicts Committee to deal with such issues, and MAS is the approving authority for the composition of the Committee. Revisiting the regulatory structure will be necessary The relationship between the regulator and the exchange is evolving internationally. Regulators are monitoring the effectiveness of self-regulation by the exchanges, and the division of responsibilities between regulators and exchanges. No single model has gained universal acceptance, and no model is regarded as good for all time in any jurisdiction. The present MAS-SGX regulatory arrangement has major elements in common with that in the major jurisdictions which have seen the exchanges demutualised, and in particular with arrangements in Australia. The UK approach is also similar, except that the Financial Services Authority (FSA) has taken over the listing authority from the London Stock Exchange (LSE).

The SSM is the fruit of all these lessons… and, under your responsibility, the best guarantee for the future. Thank you for your attention. 3/3  BIS central bankers' speeches
Quoting from his paper: “the future policy that one wishes for people to anticipate is one that the central bank will not have a motive to implement later, if it makes its decisions then in a purely forward-looking way, on the basis of its usual stabilization objectives.” (end  BIS central bankers’ speeches  1  quote) This does seem like a hard conundrum to get away from, and probably limits the traction of this type of tool as a strong driver of longer-term rates. Partly due to these limitations, Central banks have also directly tackled the term premium by purchasing large quantities of long-term assets. The idea is that by removing some duration from the fixed income markets, private investors’ aggregate exposure to interest rate risk is diminished, leading to a lower required compensation for bearing such risk. Of course, this logic relies on some form of imperfections and/or market segmentation, but there is by now significant evidence, including some excellent papers to be presented in this conference, that QE has had a measurable impact on long-term rates through this channel. A similar logic applies to the default risk-premium: to the extent that returns on safer debt are compressed by central bank purchases, investors are tempted to reach for yield into other fixed-income markets, such as mortgages, corporate bonds, and emerging market instruments.

If confidence in economic policy deteriorates, for example because Norges Bank sets interest rates so low that inflation and unstable exchange rates are expected, long-term interest rates will rise. The cost of low confidence is thus high risk  5  http://www.statistics.gov.uk/pdfdir/cpi0501.pdf  BIS Review51/2001  5  premiums and unnecessarily high long-term interest rates. Transparency in our intentions, strategies and implementation of monetary policy may contribute to reducing uncertainty among economic agents. If monetary policy is predictable, an important source of risk is diminished. Thus, all else being equal, the interest rate that is necessary to achieve the inflation target will be lower. There will then be a better chance of achieving the inflation target without frequent and abrupt changes in the key rate. Predictability may contribute to ensuring more stable developments in demand and output. Thus, a predictable monetary policy may contribute to improving the efficiency and impact of monetary policy. Predictability and transparency are often equated. However, increased transparency does not necessarily imply a higher degree of predictability. Many cite the Bank of England as a very transparent central bank, because it presents its assessments of the economic outlook in its inflation 6 reports and publishes the minutes of the Monetary Policy Committee meetings.