samchain/econo-pairs-v1 huggingface dataset:
The 1960s were a time of hope and promise for New York City, with the World’s Fair, the opening of the Verrazano Bridge, and the beginning of construction of the World Trade Center. The city benefited from a booming stock market and strong overall job growth. My memories of New York City during that period were very glowing. Visiting from Massachusetts, I remember going to the World’s Fair and to a Mets game at the new Shea Stadium—heady stuff for an 11-year-old. As a boy who planned to be a nuclear physicist when he grew up, I particularly recall the General Electric exhibit at the World’s Fair that highlighted the potential of hydrogen fusion as a future power source. Although that turned out to be like flying cars—always somewhere just over the horizon—it was exciting to contemplate as an aspiring scientist. Unbeknownst to me,there were also some ominous signs for the city. The city’s manufacturing sector was losing jobs at a worrisome pace, population growth had slowed to a crawl, crime was on the rise and racial tensions were growing. As the sixties unfolded, there were also a number of major strikes affecting public services, most notably the 1968 teachers’ strike. Perhaps most importantly, the city’s finances were on a reckless path. Despite growth in the economy and the tax base, the city was taking on more short-term debt, relying increasingly on state aid and grossly underfunding its pensions.

They think that pushing down the interest rates to near zero and pumping large amounts of money into the banking system will give rise to the following positive chain effects – (a)  the interest expenses of borrowers, including individuals, corporations and governments, will be reduced;  (b)  with lower interest rates and central banks scooping up low-risk sovereign bonds, investors can only resort to equities, properties and other assets in search of higher yields;  (c)  asset prices will rise as a result, creating a positive wealth effect which will spur consumption and investment; and  (d)  consumption and investment will, in turn, stimulate employment. 9. Since the consensus was that in a zero interest rate environment QE was the right prescription, when the recovery proved weaker than expected, the natural diagnosis was that the treatment was too short and the dosage was insufficient, which led to expansion of QE and for a longer period. Indeed, in the case of the European Central Bank, the treatment went as far as introducing negative interest rates. Is QE a panacea with no side effects? 10. While there are benefits, there is a flip side to QE. I share the view of some economists that the effectiveness of QE is partly offset by the adverse side effects of zero interest rates and its prolongation. Here are six side effects that may possibly arise. 11.
I would like to take this opportunity to congratulate the citizens of Slovakia on having joined the euro area at the beginning of this year. The continuing enlargement of the euro area shows that Monetary Union is not a “closed shop”; it remains open to newcomers. However, even if the reasons for celebration are manifold, there is no room for complacency, as the challenging economic situation and outlook amply demonstrate. Economic developments and monetary policy For the euro area, 2008 was an exceptional year characterised by severe and increasing financial market tensions as well as by significant and abrupt changes in the economy. Following strong economic growth in the first quarter, economic conditions worsened progressively, especially after the extraordinary intensification of the financial turmoil in September. For the year as a whole, real GDP in the euro area grew modestly, by 0.8%. The latest available information suggests that in the first quarter of 2009 aggregate output recorded a further sizeable decline. We expect economic activity in the euro area to remain weak for the remainder of 2009 and to gradually recover in 2010. Taking into account the effects of the substantial macroeconomic stimulus in progress and the measures taken to restore the functioning of the financial system, the risks to this outlook are assessed to be broadly balanced over the medium term, but uncertainty remains unusually high.

Our policy-making has been in a “nonstandard mode” for a considerable period of time. In October last year, we adopted a fixed rate tender procedure with full allotment for all main refinancing operations and longer-term refinancing operations with maturities of up to six months. In addition, the ECB expanded its list of assets eligible for use as collateral in Eurosystem credit operations. As a result, the size of the Eurosystem balance sheet has increased substantially during the financial turmoil, by around € billion between June 2007 and March 2009, mainly reflecting the expansion of liquidity provision to the banking system since last autumn. This is of particular significance for the euro area because the banking system plays a more important role in the financing of the private sector than in other major economies. At the same time, owing to the ECB’s liquidity management, overnight money market rates have fallen even more steeply than the key ECB interest rates since last October. Money market rates in the euro area are now very low, also in an international comparison. Overall, the provision and management of liquidity by the ECB have played a crucial role in the implementation of the ECB’s monetary policy. They have ensured that banks have adequate access to central bank funding so as to continue financing the economy and that liquidity constraints and perceived risks have not triggered a systemic crisis.
We need to catalyse thinking on new approaches towards policies that have assumed greater importance since the crisis from macroprudential policy to bank resolution. 2  See Bagehot, W (1873), Lombard Street: A Description of the Money Market; and Boyle, A (1976), Montagu Norman: A Biography, London: Cassell. 3  See Woodford, M (2005), “Central bank communication and policy effectiveness”, NBER Working Paper No. 11898, December. 2  BIS central bankers’ speeches  At the Bank of England, our enhanced research function, including a new Research Hub, will bring together staff and thinking from across the institution creating a two-way flow between research and policy. It will seek to foster a shared understanding of the frontier of policy possibilities amongst colleagues and ensure that the insights gained in one policy arena can benefit others. But these efforts will not succeed if they are confined to the corridors of Threadneedle and Moorgate. The Bank recognises that we need to do more to reach out to the wider research community. Policymaking can benefit tremendously from advances in all fields of economics and finance; from psychology to epidemiology; from computer science to law. That is why I am pleased to see such a diverse range of discussants and attendees at the conference today. In order to focus the conversations we are being clear about the key questions that interest us, as policymakers, the most. Let me now turn to those. Our One Bank Research Agenda is structured around five themes which span all aspects of central banking.

The regulation of financial services created in the wake of the digital wave must be tailored to its specific risks. To this end, we must adhere to two principles of action. The first principle is an absolute guarantee of payment and transaction security. In the framework of its mandate to oversee the security of payment instruments, the Banque de France strives to promote innovative, effective and safe payment solutions. In this respect, it ensures that the emergence of new players and new solutions does not reduce security. Central banks are also trying to take a proactive approach towards the digital transition, to avoid being left behind by the highly technical nature of certain innovations. For instance, discussions are underway at the Banque de France over how to monitor the development of initiatives concerning blockchain technology, both in terms of the possibilities it offers and the issues it raises notably in terms of security. The second principle is a proportionate adaptation of regulations and supervision to address the development of fintechs. The regulation applied to these new players should avoid stifling innovations that may be beneficial to consumers and, more generally, to the economy and society; but at the same time it should also guarantee consumer protection and address issues of financial stability. Specific regulations, allowing for a gradual adjustment of regulatory intensity, might be better suited to preventing the risks generated by fintech firms.
And that is how we will continue to manage the Bank’s balance sheet in the years to come. Thank you  16  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  16

In 2013 we overhauled the information compiled by the Central Credit Register, switching more towards a very complete granular database in order to strengthen our micro- and macro-prudential supervisory mechanisms. We are also fortunate to have, since the eighties, an exhaustive database of the annual balance sheets and the profit and loss accounts of Spanish firms (the so-called Central de Balances), whose inception was one of the landmarks as far as the set of statistics produced by Banco de España is concerned. The database also contains a very valuable sample of firms voluntarily providing quarterly information. Moreover, the balance of payments and the international investment position have been historically produced by relying on mainly micro information. And from the outset of this century we have conducted every three years (which will be every two years in the future) a wave of the Survey of Household Finances, which offers a very rich picture of some of the key economic and financial decisions taken by Spanish households. All this micro information helps the Banco de España perform our functions and allows us to address flexibly both analytical work and statistical compilation, under our multi-purpose remit. Moving towards a statistical landscape broadly relying on micro data requires deep changes in a number of processes. As automation is of the essence, new techniques need to be used to manage these data (including the necessary quality checks) and staff skills have to be upgraded accordingly.
Banks were essentially incentivised to focus on aggressively originating loans which were of compromised quality due to lowered underwriting standards. Investors of such bundled risks had then become far removed from their origins. Information was no longer transparent and risks could no longer be fully understood. Economic agents seeking larger returns were in turn encouraged to achieve them through greater leverage, thereby amplifying the vulnerabilities of the financial system and wider economy. 2  BIS central bankers’ speeches  Much attention has also focused on the misaligned incentives of financial services professionals as reflected by the compensation structures that rewarded short-term performance and inadequate reprimand for overzealous risk-taking. This, I believe, was also symptomatic of the growing disembodiment of finance from its consumers and the wider economy. When social bonds are reduced to just profit measures, it provides a weak foundation for sustainable finance. Outcomes for finance need to be measured based on end services to the real economy, reflected for example, by an entrepreneur’s successes or the financial well-being of retail clients. The detachment of finance from its function in serving the economy, results in clients being viewed as opportunities for extracting value and transactions as bets on financial outcomes. The prevalence of mis-selling of complex financial products exemplifies this shift in trend. Future finance: re-anchoring finance to the real economy Allow me now turn to some of the imperatives for re-anchoring finance to the real economy.

Greater consumer activism and  BIS central bankers’ speeches  3  demands for more consumer-focused corporate information reflects the increased demand by consumers for institutions to account for their behaviour and values. In terms of the demand for ethical and responsible finance, greater awareness among consumers and investors on the availability and viability of such positive finance is also needed, including among governments, corporates and the retail market. Education, engagement, incentives and the alignment of legal and regulatory frameworks on the utilisation of such finance will be important to achieve this. Finally, is the need to foster strong leadership at the global level that can have an advocacy and facilitative role in resolving barriers and bringing together different stakeholders to work together in a coordinated and cohesive manner. The Responsible Finance Institute, initiated as a think tank based in the United Kingdom, that brings together responsible finance experts from around the world and has a unique role for this endeavour. The focus on collaboration and convergence between the diverse fields of ethical and responsible finance has great potential to harness the best practices of positive finance in its various forms to collectively wield a powerful force in shaping future finance. Moving forward, stable and sustainable development can be best served by re-connecting the current gulf between finance and value creation that is reinforced by bringing benefit to society.
Another important aspect is the identification and division of the population according to their demographic, geographic and cultural characteristics. For us, financial education is a public  BIS central bankers’ speeches  3  good intended for all. In compliance with the best international experiences, we identified financial education for young people as highly important, targeting not only students but also their educators. Its practical realisation has been a complex process requiring adequate human and financial resources. For that purpose, the slogan adopted by us is very meaningful: “Education may be costly, but it is priceless”. The implementation methodology is widely known: meeting face-to-face, interactive games that intrigue children’s imagination, a series of publication with a flexible level of difficulties, training of teachers of economy, and a tour in various schools of the country. In this regard, I would like to point out to the recent contribution of the Bank of Albania to high-school students for the book on: “Personal finance in your hands”, which is conceptualised as an elective subject for high schools. Honourable participants, Education is a never-ending process. Learning is lifelong. It is deep, immense, and comprehensive. Therefore, I have to say that in spite of what we have done so far, we still have a long way to go. The Bank of Albania deems as imperative the drafting and implementation of a national strategy on contemporary financial education. The Bank of Albania stands ready to join any initiative at national level, which aims at promoting literacy across the country. Thank you!

By presenting our handiwork, we started a debate. It has brought us criticism and comment on all sides. Uncomfortable though that may be, the debate is positive. Over time it is important in establishing a consensus behind our targets. 8  All speeches are available online at www.bankofengland.co.uk/speeches  8  And in its annual public letter to us regarding our financial stability objectives, the Government has welcomed the level of resilience we have built in the banking system.8 With clear preferences in law, a requirement to show our handiwork to establish our goals, and a framework to debate those goals, there is little danger of us following something other than the mandate we’ve been given. The first condition for being citizens in service is met. However, a second challenge remains. Challenge 2: monitoring that the intent is being delivered Having established a target for resilience in some part of the system, how can we be held to account for then meeting it? There’s no financial stability equivalent of measuring inflation each month to see if it’s close to 2%. The real test comes only when a bad shock happens and the resilience of the system is tested. It will be clear then whether we had built in too little, or too much, resilience. But such events are rare. So we have a duty to give Parliament the means to check in real time that we’re delivering the levels of resilience that we’ve said we’re targeting.
BRRD is explicit on this requiring, under Article 55, all third country unsecured liabilities to carry contractural terms that provide for bail-in. Most existing debt instruments do not. As part of the resolution planning process, we will ensure that they do and that our statutory powers in resolution are enforceable. These examples illustrate the basic idea that there is much to be done through the resolution planning process to make existing liability structures compatible with resolution. This won’t be a matter of grandfathering. Indeed even if a particular liability meets the definition of MREL, on the face of the directive it does not mean it does not represent a barrier to resolvability. As resolution authorities we will address these barriers as part of our resolution planning work and find ways to remove them. Or else we will adjust MREL requirements for  BIS central bankers’ speeches  3  firms. In the FSB proposal this is the placeholder for a Pillar 2 element alongside the Pillar 1 minimum requirements set out in the term sheet. My third theme is why then a standard – if we are going to be preparing resolution plans and setting MREL for individual firms why have a standard at all? There is an obvious level playing field consideration, especially among the G-SIBs that compete with each other and operate internationally. But there is a deeper reason that goes to making resolution – and indeed international banking – work.

The resolution naysayers point to the events of the crisis and the Lehman failure in particular and say that cross-border resolution will never work, national interest will always win out. Clearly the whole enterprise of resolution planning is to face up to this challenge ex ante. The Key Attributes envisaged Cooperation Agreements (CoAgs) among the authorities to describe a common resolution plan for an individual G-SIB. But to work CoAgs need underpinning and this is where TLAC comes in. Not only does TLAC provide countries with confidence that G-SIBs are operating with sufficient resources to be resolved safely. But that confidence is provided in a concrete form. This is the internal TLAC downstreamed in SPE groups from the parent entity to material subsidiaries. This is intended to provide hosts with comfort that in the event of a resolution they will not be exposed as losses would be upstreamed to the holdco, enabling the hosted legal entity to continue to operate. Hosts would therefore not need to take the sort of unilateral actions to ring-fence assets that were so damaging during the crisis and have tended to fragment the international financial system since. In short we need cross border resolution to work through structural changes like TLAC for international banking to work. And we need this to be internalised by the market as well. I mentioned before disclosure for investors. But it is as important for liability holders that are unlikely to be bailed in to understand that too.
Macroeconomic Assessment Group on Derivatives (2013), An assessment of the longterm economic impacts of stronger capital and liquidity requirements, www.bis.org/publ/bcbs173.pdf. Menon, R (2013), Global Regulatory Reform: What’s done, what to watch for, (Speech at the 4th Pan-Asian Regulatory Summit 25/09/2013). Sapir, A, Wolff, G (2013), The neglected side of banking union: reshaping Europe’s financial system, www.bruegel.org/publications/publication-detail/publication/792-the-neglected-sideof-banking-union-reshaping-europes-financial-system/. Shafik, M (2014), Making markets fair and effective, www.bankofengland.co.uk/publications/Documents/speeches/2014/speech771.pdf. Shanmugaratnam, T (2013), Effective Regulation, (Interview with Reuters, July 2013) Shin, H, Feroli, M, Kashyap, A and Schoenholtz, K & Shin, H (2014) Market tantrums and monetary policy, (Chicago Booth Research Paper 14–09). 22  BIS central bankers’ speeches

Its work should be completed within one year in order to rapidly ensure the effective disclosure on climate risk. It will formulate recommendations for voluntary disclosure, according to harmonised and therefore comparable methods. This should enable stakeholders and the public to find out about the share of financial sector assets linked to carbon emissions and the sector’s exposure to climate risk. 3. The time horizon challenge: the gradual implementation of stress tests  Stress testing is an integral part of risk management by financial institutions. It is particularly developed in the insurance and reinsurance sectors. Modelling disaster risk and capital levels – as set out in Solvency II – takes into account some of the climate risks. But the current regulatory framework for banks somehow overlooks climate change as a source of risk. Yet this would be the way to handle the question of the time horizon. In this respect, the Act on energy transition provides for the submission by end-2016 of a report on the implementation of a scenario of stress tests representative of the climate risks for banks. However, achieving this raises serious questions. Two approaches are possible. Either comprehensive stress testing, covering all risks and associated asset classes for financial institutions, which would allow supervisors to monitor the total exposure to climate risk. Or granular stress testing, focusing on assets that are more specifically exposed to climate risk, which would be more appropriate for analysing specific sectors and financing needs, such as the financing of the oil sector.