samchain/econo-pairs-v1 huggingface dataset:
The empirical evidence that has been produced by the Committee indicates that, in fact, banks with less capital headroom, and here the key word is “headroom”, tended to lend less during the pandemic. There was also a relatively larger decline in average risk weights at banks with less capital headroom, perhaps because of an attempt to defend capital ratios, and importantly also, the buffer threshold appears to have been the constraint, forcing banks to adjust their behaviour as lower capital ratios alone did not drive the results. Finally, another interesting finding is that the issue was not only one of quantity but also about prices. Banks’ proximity to buffers appears to have affected the cost of lending. The reasons behind this problem are unclear. It may have occurred because the level of uncertainty was very high for banks, and they were foreseeing that there might be losses in the future, and thus wanted to keep these buffers so they could be used to cover those losses. That is one possibility. The lack of formal guidance by supervisors on the rebuilding of these buffers might be another issue. Low profitability may also be a reason for this result or market stigma. We are now in the process of trying to understand precisely the origin of this problem. Closely related to this and a very important issue is the question of releasable buffers.

This is central banks should, in parallel, incorporate this evaluation into their own decision making, investing in research, which is something that we have done traditionally. There is an additional element that I think is important. We know that citizens very often do not understand what we are doing. It will also be very difficult for them to understand the results of our evaluation. This is why we should also invest in financial literacy and financial education. This is something that we are doing more and more. 1  So let me focus just for a few minutes on what the Basel Committee is doing. As you know, the Basel Committee is the global standard setter for the prudential regulation of banks and our main objective is to enhance global financial stability. When I was appointed chair of the Basel Committee three years ago, I was very positively surprised to find that the Basel Committee has a permanent evaluation programme of its own activities. In fact, now, we have two branches of this evaluation that are running in parallel. The first one is on whether the whole of the regulatory reform agenda that was approved after the global financial crisis is working as intended. The second, a decision that we took in 2020, is basically to see whether the COVID-19 crisis has also taught us anything in terms of whether the standards that we had approved are working as intended. So, let me share with you some of the results of this evaluation.
In the first year or so of the crisis, in order to maintain the relatively scarce level of reserves necessary to maintain interest rate control, the Desk offset balance sheet growth associated with the Fed’s credit and liquidity facilities by reducing other assets on the Fed’s balance sheet, notably holdings of short-term U.S. Treasury securities. By September 2008, amid a deepening crisis and widening policy response, the Fed lacked a sufficient volume of unencumbered Treasury securities to sell. Some additional reserve-draining capacity came from the Supplementary Financing Program (SFP), used from September 2008 through July 2011, through which the U.S. Treasury issued bills (separate from its regular borrowing program) and maintained the proceeds in an account at the New York Fed. Even with this program, the Fed’s sterilization capacity was limited. 5 The FOMC’s September 2014 Policy Normalization Principles and Plans indicate that the Fed plans to use an  ON RRP facility only to the extent necessary and will phase it out when it is no longer needed to help control the federal funds rate. The FOMC’s current directive for open market operations instructs the New York Fed’s Open Market Trading Desk to undertake ON RRPs in amounts limited only by the value of Treasury securities held outright in the System Open Market Account (SOMA) that are available for such operations and by a percounterparty limit of $ billion per day.

I think the gradual and predictable approach the FOMC has adopted has been successful so far, but we will learn more as we proceed and as other central banks reach those milestones as well. 1 My discussion here focuses on the Federal Reserve’s actions to adjust the stance and conduct of monetary  policy in pursuit of its statutory mandate of full employment and price stability. However, the Fed’s response to the crisis also included numerous temporary programs and facilities aimed at supporting the liquidity of financial institutions and fostering improved conditions in key financial markets. 2 The Fed’s outright purchases of securities did not raise any credit risk exposure. 3 The FOMC also undertook a program to extend the maturity profile of its Treasury holdings. This Maturity  Extension Program (MEP) did not affect the portfolio’s overall size, yet still increased the portfolio’s duration risk —an important characteristic of all asset purchase programs. A common metric for communicating about the dollar value of duration risk held in the portfolio is in terms of ten-year Treasury equivalents. 4 9 / 13  BIS central bankers' speeches  4 Even before asset purchases were launched, the reserve-adding effects of the Fed’s crisis-related lending  programs highlighted shortcomings of its pre-crisis monetary policy implementation framework.
BIS Review 139/2009  15  Chart 5: Bank of England’s balance sheet as % of GDP 20  (a)  (c)  (b)  (f)  (e)  (d)  (g)  (h)  (i)  (k)  (j)  18 16 14 12 10 8 6 4 2  (a) Famine / End of railroad boom (1847) (b) Overextension of credit from 1855-1866 (c) Failure of Overend Gurney (1866) (d) Failure of City of Glasgow Bank (1878)  (e) Support for Barings (1890) (f) W W I (1914) (g) Currency and Bank Note Act (1928) (h) W orld W ar II (1941)  2004  1998  1992  1986  1980  1974  1968  1962  1956  1950  1944  1938  1932  1926  1920  1914  1908  1902  1896  1890  1884  1878  1872  1866  1860  1854  1848  1842  1836  1830  0  (i) Secondary Banking Crisis (1973) (j) Small Banks Crisis (1991) (k) Current Crisis (2007)  Source: Bank of England.

Thus, over time, a central bank like the SNB can usually rebuild its equity level all on its own after a loss. Nevertheless, even for a central bank, a long period of negative equity is not without its problems, as it can undermine the bank’s credibility and its independence in the longer term. For these reasons, it is important for the SNB to maintain a sufficient level of equity. To ensure that the SNB can carry out its monetary policy mandate without restriction, also in the long term, in the interests of the country as a whole it is essential that its capital base be adequately rebuilt. This means that the necessary profits must be earned, and retained. In the long run, the entire economy will benefit. BIS central bankers’ speeches  1
In the first quarter, Gross Fixed Capital Formation (GFCF) posted slight annual growth, driven by the recovery of its Machinery & Equipment component, which grew 21.5 percent annually. The Construction & Works item, on the other hand, fell by 10 percent year-on-year, due to works being slowed down and/or postponed because of the pandemic (Figure 2). The labor market has shown a noticeable, albeit heterogeneous, improvement with respect to its worst levels of last year. The measured magnitude of this improvement varies depending on the source of information: while National Statistics Institute (INE) data show the recovery of more than half of the jobs lost since the beginning of the pandemic, the number of pension fund and unemployment insurance contributors —which can be associated with formal salaried employment— has returned to pre-pandemic levels (Figure 3). At the same time, inactivity has declined, although it remains high by historical standards, and vacancies have increased, with the result that the unemployment rate remains at around 10 percent. In any case, there are different indicators showing the fragility and heterogeneity of the labor market’s recovery, even though it still has a long way to go. On the one hand, the recent extension of quarantines had a greater impact on self-employment and informal salaried work, and there was also an increase in unemployment insurance applications, although still below their 2020 levels. Low-skilled workers and women continue to be the segments that lagged the most in the recovery of employment (Figure 4).

All of this has important implications both from a historical perspective and for the future evolution of the labor market and the women’s place in it. For example, the female participation rate has fallen back ten years in terms of the progress women had attained in the labor market. It is possible that this historical setback and the burden of household work may largely explain women’s perceptions of the economic situation, which surveys have shown to be more negative than men’s: in May of this year, 73 percent of women had a perception of a stagnant or deteriorated economy, compared to 68 percent of men.3 Finally, the impact of the crisis on the insertion of women in the labor market may have significant implications not only for the evolution of social variables, but also for the economic recovery process itself. From a social standpoint, three elements stand out:   First, the high proportion of extremely poor households headed by women—52 percent of all households in extreme poverty, according to the 2017 CASEN Survey—means that a deterioration in the economic situation of the latter could have a major impact on the country’s poverty and inequality.
Converting the ‘wicked problem’ into a ‘puzzle’ appears to make resolution more achievable and likely, but potentially at the risk of missing a key aspect of what makes the underlying problem so challenging. On the MPC, we are focused on returning CPI inflation to the 2% target in line with our remit. Given our mandate, that is what we should, have to and are doing. In parallel, we need to recognise that returning inflation to target is not the end of the story. We have to keep it there on a lasting and sustained basis. Even if we return to more benign times in the coming years, the Bank of England will still need to make investments in human, analytical, technological and institutional capital to ensure it has the capacity and capability to meet its price stability mandate. And on the basis of those investments, it will need to ensure that shocks that create either inflationary or disinflationary pressures in the future are met with policy responses that support price stability. Many of you are studying economics (or related disciplines) here at Warwick. At the Bank, we are always seeking smart and dedicated recruits that want to contribute to our work. Even after the MPC has brought CPI inflation back to 2% – as I am sure it will – you can be sure that there will still be plenty of interesting and important work for you to do at the Bank if we succeed in attracting you to Threadneedle Street.

Ensuring Stability in Turbulent Times1  Your Excellencies, Distinguished Guests, Sabah-al-khair and a very good morning. I am very delighted to be here today and I am grateful to H.E. Dr. Abdulrahman A. Al Hamidy for inviting me to speak before this august gathering. Thanks to the active collaboration of the Basel Committee on Banking Supervision, Financial Stability Institute, and the Arab Monetary Fund, these high-level meetings provide a valuable forum for exchange of views for the regulators and supervisors in the region. The agenda of this conference adequately captures key developments, issues, and challenges that we need to focus our attention on. Today, I would like to touch upon two major forces that have swept across the financial world. First is the tech-driven revolution, which has brought its own set of risks and rewards. Second is the wide range of measures that have been introduced to strengthen the resilience of our banking systems. Let me start with innovations first. Innovation; opportunities and risks Tech-driven innovations have unleashed drastic changes in the way we conduct business, interact with each other, or consume various products and services. Financial sector, essentially an ‘information industry’, is experiencing a major transformation, fueled by advances in technology. Though the imprint of modern technologies is now ubiquitous, let me briefly highlight a few areas of finance where the developments are particularly significant.
Without such analysis and assessment, the actual status of KTB’s capital position could not be determined and, respectively, the BNB Governing Council could not have the legal grounds to adopt the necessary decisions. On 12 December, CB Victoria will also open for business and its depositors will have access to all their deposits there. The very scale and power of manifestation of the problems in 2014 were unprecedented and unpredictable. The banking sector in Bulgaria, however, had the huge advantage of meeting the critical times prepared and in excellent condition – just as it coped to meet the global crisis several years before. Our banks had managed to accumulate high liquidity and capital buffers owing to their sound governance and the BNB’s focused conservative policy over the years. The available buffers plus the measures taken since June by both the BNB and the government, as well as by the banks, helped safeguard the banking and the overall financial stability in the country. This way, the KTB crisis remained an isolated case and did not affect the operation of the rest of the banking sector. A proof of this is the depositors’ behaviour who continued to entrust their savings to the banks despite the occasionally irresponsible public speaking against the banking sector and the incessant public attacks on the BNB. Only household deposits picked up by BGN 2.8 billion (7.8%) annually to October, exceeding the stock of deposits in May (the last month before placing KTB and CB Victoria under special supervision).

More than 40 European bank groups have a substantial part of their operations in more than three European countries. Names such as Unicredit, Barclays, Fortis and ING are all examples of banks in the forefront of this development. The internationally-active banks are moreover increasingly offering services to households and smaller companies. The integration process has been particularly evident in our own neighbourhood. Nordea and Danske Bank have substantial market shares outside of their respective home countries. With the exception of Iceland, it is in Nordea’s case a question of market shares of more than 10 per cent in all of the Nordic countries. Swedbank and SEB are dominant actors in the Baltic region. But financial integration is now also increasing rapidly in other parts of Europe. The timing of my speech could hardly be more appropriate. Only in recent weeks the media has reported on farreaching plans for a merger between British Barclays and Dutch ABN Amro, two banks which together would become one of the world's largest players in this sector. Parallel to this cross-border integration process there is also another type of integration within the banks. It is becoming increasingly common for these groups to organise themselves so that they in practice function as one bank instead of a number of independent bank companies. What drives the banks to change their organisation is the efficiency gains obtained through greater centralisation and specialisation.
This strategy aims to make the European Union the world’s most dynamic knowledge economy by 2010. It has since been amended so as to include social issues (at the Council of Nice in late 2000) and environmental issues (at the Council of Gothenburg in mid 2001). What has been achieved to date in the field of structural reforms is quite encouraging. Noticeable successes have already been registered with regard to policies, such as new rules in telecommunications, electricity and gas markets. The current 2002 Broad Economic Policy Guidelines evaluation exercise is an opportunity to check on the progress accomplished in reforms that were agreed in Lisbon and recently reasserted in Barcelona. Before reviewing the priority areas where fresh impetus is required, I wish to briefly make two remarks: First, the responsibility for structural reforms in the European Union rests with the individual Member States. Consequently, there is a wide variety of institutional solutions and regulatory arrangements across countries and sectors. I nevertheless consider that such a decentralised approach should be considered as an opportunity, rather than a disadvantage. It encourages “cross fertilisation” of best practices through increased co-ordination of Member States’ structural policies. My second remark relates to the changeover to the euro. This event has been a major structural reform in itself, i.e. a powerful drive towards restructuring the European economy.

Annual food inflation, which makes up around 25 percent of the consumption basket, fell to 9.28 percent in June. Similarly, annual inflation in food and catering services posted a significant decline in this period. Also in this period, consumer inflation excluding food and catering services increased by 1 point to 5.82 percent in the inter-reporting period due to these cost pressures (Chart 15). To sum up, food prices pulled inflation down in the second quarter, yet the depreciation in the Turkish lira restricted this decline, inhibiting the desired improvement in the inflation outlook. Owing to the expected partial recovery in food prices accompanied by the cautious monetary policy, we project the deterioration in the inflation outlook to remain limited and inflation to reach the target in the medium term. According to the GDP data of the first quarter of 2015, economic activity proved more robust compared to the outlook presented in the April Inflation Report, and the GDP rose by 1.3 and 2.3 percent on a quarterly and annual basis, respectively (Chart 16). An analysis of national income components on the production side indicates that all sectors excluding construction exhibited increases in the first quarter compared to the previous-quarter averages. In this period, agriculture and net tax items regarding the GDP growth stood out, while industry and BIS central bankers’ speeches  3  services maintained their mild trend of increase (Chart 17). Seasonally-adjusted data on the expenditures side reveal that final domestic demand increased owing to the rise in consumption expenditures in the first quarter.
Our recently created visual summary of the Financial Stability Report, explained how risks in both the UK and the global environment may affect financial stability without the need for dense text. Conclusion  Our staff survey last year showed that almost 80% of staff felt that the Bank takes diversity seriously, and 90% of people felt respected. Our direction of travel is encouraging, but we are far from satisfied. To take this to the next level, we have two priorities. First, we need to do more to change the way that we work. To maximise the potential of our people, the Bank needs to embrace fully collaborative working in diverse teams. We have an incredible endowment of skills and experience. We maximise our impact when we get together - across disciplines and across  8  All speeches are available online at www.bankofengland.co.uk/speeches  8  areas. Everyone in the Bank should be able to devote some proportion of their time to such cross-cutting work. Second, we need to make our communications more inclusive. Everyone, every day in the Bank will benefit if our thinking tailored to its audience. This also means making the Bank more permeable, so that internal analysis can be more readily lifted and shared with others. And it means considering what we communicate, through which channels and to whom. Just as having a diverse and talented workforce has been a central pillar of our current strategic plan these priorities will be platforms of our next one.

Not everyone wants to be steeped in fan charts; modelling and stress testing. Yet the decisions we take impact every UK citizen. How can they rely on us – the dreaded experts? Of course, trust can be built through a track record, but it can also be grounded in familiarity. People trust vi  individuals, places and things that they know. Reflecting the diversity of the people we serve can reduce misperceptions that we are experts making esoteric decisions in an ivory tower for the benefit of others. Moreover, diverse decision-making bodies typically have greater political support and enjoy greater public trust. vii  They also tend to achieve better policy outcomes through better understanding of community needs  and more effective dialogue with the wider population. viii  Better decision making, innovation and adaptability  Homogenous groups that pay insufficient attention to minority views are vulnerable to biases, groupthink and over optimism. They are more likely to be influenced by the way information is presented (framing); and to stick with under-performing projects because of prior investments. ix  3  All speeches are available online at www.bankofengland.co.uk/speeches  3  Diverse groups can overcome these ills as they are more inclined to consider novel ideas and challenge each other, enabling them to infer cause and effect and to solve problems better. Diverse teams are also better able to adapt to changes and are more resilient.