samchain/econo-pairs-v1 huggingface dataset:
It is clear that the developments taking place in the financial sector now could impact how the Bank of England meets our mission to promote the good of the people by maintaining monetary and financial stability. But to assess this properly, we cannot operate in isolation. We welcome the Government’s Fintech 8  Sector Strategy, including the announcement of a Treasury/FCA/Bank of England taskforce – a key element of this Strategy, which will explore further the risks of crypto-assets and the potential benefits of the underlying distributed ledger technology. The Bank of England also needs to make sure its door remains open to engagement with the experts and innovators in the private sector too. Open doors 9  We have been doing this. Over the past two years the Bank of England’s award-winning Fintech Accelerator has worked with industry, experimenting with new technology and developing our understanding  4  Ramsden, D (2018) HM Treasury (2017) 6 Bank of England (2018) 7 Carney, M (2018) 8 HM Treasury (2018 ) 9 Central Banking Magazine ‘s Initiative of the Year (2018) 5  3  All speeches are available online at www.bankofengland.co.uk/speeches  3  in the process. We have carried out a number of proofs of concepts including those using distributed ledger 10  technology, RegTech, machine learning and cyber security .

The Bank of England – Open to Fintech Remarks given by Dave Ramsden, Deputy Governor for Markets and Banking, Bank of England  HMT’s International Fintech Conference, London 22 March 2018  1  All speeches are available online at www.bankofengland.co.uk/speeches  Thank you for the opportunity to be here this afternoon at this important conference, speaking on behalf of 1  the Bank of England as Deputy Governor with responsibility for the UK’s RTGS and the CHAPS high value payment systems. We are discussing the latest stage in the evolution of the UK’s financial services sector and London’s role as a global financial centre. Different infrastructures supported this evolution at different stages. My focus will be on the technological infrastructure to support fintech, where both private and public sectors have a role to play. These are not new themes. At the time of the Big Bang, new technology was required to support electronic trading. The Bank of England contributed to the infrastructure development, setting up the Central Gilts 2  Office in 1986 - which permitted delivery versus payment for Gilts . In 1996 the same was enabled for equities and corporate bonds via CREST, and later that year the launch of RTGS eliminated intraday settlement risk between banks, delivering real time settlement finality of sterling transactions. The need for the Bank of England to continue to play its part in contributing to the infrastructure of the financial sector is more relevant today than ever.
In my view, the role is quite straightforward: it is to sustain a monetary and banking environment that is conducive to resolving the economic and fiscal problems that face our community - not just in the public sector, but also in businesses and households. This is not the passive, static role that it may seem, as the maintenance of a rule-based monetary system in the form of the Link misleadingly suggests. Indeed, there is the scope - and often the need - for an active and imaginative use of financial, supervisory, communication and other skills. The degree of openness and the relatively small size of Hong Kong's financial system, against the background of globalisation, mean that the maintenance of monetary and banking stability is a particularly difficult task. There is also the requirement, implicit in the Basic Law, to look ahead, and in particular, to develop the financial infrastructure that will secure Hong Kong's position as an international financial centre and provide it with the means to build on that position. And there are other important tasks, such as seeking to help the Government in its efforts to contain the fiscal deficit by achieving a favourable return on the fiscal reserves deposited with the Exchange Fund - subject always to meeting the other investment objectives of the Fund. All of these tasks present challenges to keep me and my colleagues busy enough. But there have also been suggestions that the HKMA should take further steps to help stimulate growth.

2/4  BIS - Central bankers' speeches  There is also uncertainty surrounding geopolitical developments and the impact on the supply side if events on the ground worsen and they create further energy and commodity price shocks and disruptions. In such case, inflation and output would be worse than projected in 2023 and 2024. On the other hand, if there is an improvement in geopolitics, energy prices may fall as rapidly as they rose. Therefore monetary policy has to act in the middle of a lot of uncertainty in a number of areas, hence monitoring and pacing is still very important. Domestic economic developments Let me now turn to domestic economic developments. The Cyprus economy, continued to record noteworthy GDP growth, despite the outbreak of the war. Real GDP growth in Cyprus expanded by about 6 percent during the first half of 2022, mainly driven by a faster than expected recovery in tourism-related activities and, to a lesser extent, by growth in information and communication activities and in professional services. At the same time, weakness in the Cyprus GDP performance could be expected to become visible towards the end of 2022 and the first half of 2023, primarily owing to the anticipated worsening in the international economic outlook, which also has an impact on the domestic developments. For 2023, GDP growth is expected to reach 2.5 per cent. In terms of inflation, the Harmonised Index of Consumer Prices (HICP) reached 9 percent in September 2022 compared with 3.6 percent in September 2021.
Let me reiterate the commitment of the Board of the Central Bank of Chile with a monetary policy oriented at keeping inflation low and stable. This is certainly the best contribution we can make to the prosperity of our country. Thank you. BIS central bankers’ speeches  5  Table 1 International baseline scenario assumptions 2010  2011 (e)  2012 (f) Sep.11 Dec.11 Report Report  Mar.12 Report  2013 (f) Sep.11 Dec.11 Report Report  Mar.12 Report  (annual change, percent) Terms of trade (*)  19.4  0.5  -5.3  -6.7  -5.3  -2.6  -3.5  -0.1  Trading partners World at PPP  6.1 5.1  4.1 3.7  4.3 4.0  3.8 3.5  3.8 3.3  4.6 4.5  4.2 4.1  4.2 3.9  United States Eurozone China Rest of Asia Latin America (excl. Chile)  3.0 1.9 10.4 7.7 6.3  1.7 1.4 9.2 4.3 4.2  2.0 1.2 8.3 4.5 3.9  1.8 -0.1 8.2 4.4 3.6  2.1 -0.3 8.1 4.3 3.6  2.8 2.1 8.7 5.0 4.2  2.2 1.0 8.5 4.8 4.0  2.3 1.0 8.5 4.8 4.0  LME copper price $ Brent oil price $  342 80  400 111  370 108  (levels) 350 107  370 121  350 106  340 102  360 115  (e) Estimate. (f) Forecast. (*) September and December forecasts were done with national accounts with 2003 as the base year.

Third, wage increases of the past three quarters affect current wages with a summed coefficient of less than 0.5, implying that lagged impulses fade within a few quarters. Fourth, the effect of price pressures on wage increases is empirically weak; wages respond less than proportionately to prices during the year. Combined, these estimates suggest that the pass through from costs to domestic prices is subject to relatively contained momentum and feedback effects. But the entire course of the pass-through process is still characterised by a degree of persistence. Accordingly, in the absence of further major global price shocks, domestic inflation should not accelerate further in Q4, but could remain elevated relative to the historical average. A key upside risk factor influencing the ongoing pass-through to consumer prices is the behaviour of cost mark-up by businesses. Profit margins might have been impaired in the earlier period when global costs shocks were intensifying, and businesses might be inclined to restore them at least partially in the period ahead. Monetary policy stance has progressively tightened Singapore’s short-term AS curve is gradually shifting to the right as global costs subside and non-resident worker inflows pick up. Wages in the first half of the year traced out a temporarily steeper portion of the Phillips Curve but are expected to revert to their historical configuration in the period ahead. The external components of the IS curve could moderate in the quarters ahead. These represent pro-equilibrating movements, but we are alert to unexpected developments and fresh shocks.
Chart 7: EONIA forward curves around June 2018 Governing Council (percentage per annum)  9 / 12  BIS central bankers' speeches  Chart 8: Standard deviation of three-month EURIBOR option-implied density in one year’s time (percent)  10 / 12  BIS central bankers' speeches  But let me turn to the next steps for monetary policy in the euro area. The latest surveys of market participants’ expectations regarding the most likely date for a first rate increase indicate that the “at least through the summer of 2019” formulation has been solidly internalised by market participants. Looking ahead, the rotation implies that our key policy rates and forward guidance about their evolution will become an anchor for monetary policy as the end of our net asset purchases is nearing. Our communication, and the rate path itself, will be calibrated to ensure that inflation remains on a sustained adjustment path. Our policy will remain predictable, and we will proceed at a gradual pace that is most appropriate for inflation convergence to consolidate. In addition, as proved in the past, our forward guidance remains an effective firewall to insulate the euro area from unwarranted tightening pressures originating elsewhere. This protection will be crucial to ensure that, as we move along the normalisation path, euro area financial conditions remain consistent with continued progress towards our policy objective. Finally, our APP portfolio and our unconstrained provision of liquidity will continue, for the time being, to provide an accommodative environment.

Chart 3: Share of bank and non-bank financing in total non-financial corporation debt financing in the euro area and the United States (outstanding amounts; percentages)  3 / 12  BIS central bankers' speeches  Chart 4: Total debt financing of NFCs and MFI loans to NFCs in the euro area (annual changes in percent)  4 / 12  BIS central bankers' speeches  Such diversification in financing sources is good for the economy, making business investment more resilient throughout business cycles. The underlying strength of the euro area economy continues to support our confidence that the sustained convergence of inflation to our aim will proceed. Euro area annual HICP inflation has continued to increase and stood at 2.2% in October 2018, mainly reflecting higher energy price inflation. On the basis of current futures prices for oil, headline inflation is likely to hover around current levels in coming months. While measures of underlying inflation remain generally muted, they have been increasing from earlier lows, amid high levels of capacity utilisation and tightening labour markets. Looking ahead, underlying inflation is expected to increase further over the medium term, supported by our monetary policy measures, the ongoing economic expansion 5 / 12  BIS central bankers' speeches  and rising wage growth. Overall, though, significant monetary policy stimulus is still needed to support the build-up of domestic price pressures and headline inflation developments over the medium term.
Fiscal and monetary policies are but tools to achieve these goals. Government policies can play a vital role in providing a stable and predictable macroeconomic environment for investors, which is why the policy horizon is long-term. Monetary policy is anchored on the pegged exchange rate to the Dollar, so interest rate risk premia over the Dollar can be kept low and investors have confidence to commit long-term funds. The result of this long-term success is that Riyal financing is available with no currency risk and at attractive interest rates. Saudi Arabia’s fiscal policy provides a stable background for investment. It works on countercyclical basis, so that it runs budget surpluses when times are good, as at present, so as to allow for deficit spending to keep the economy on a steady growth track when global demand for oil weakens. The result is that Saudi Arabia currently has a very low debt/GDP ratio (less than 10%). Saudi Arabia also has favourable tax rates for businesses (such as a maximum 20% rate on foreign enterprises) with no capital controls on remittances abroad. The government provides support for investment projects besides developing a supportive legal and arbitration structure. In summary, Saudi Arabia’s economic policy remains cautious and long-term and provides global investors with an ideal backdrop for allocating their capital to the different sectors of the Saudi economy. 2. Financial stability  A sound financial system is the backbone of an economy. Indeed, banking crises tend to be very costly to the exchequer and taxpayers.

As for the G20 agenda, the challenge is to transform its broad vision into detailed rules that prevent regulatory arbitrage of which banks took advantage of in the run up to the crisis. In closing, I am reminded of an old saying: “Money is a good servant but a bad master.” In the last crisis, excesses in the financial system came close to driving the world economy into the abyss and a repeat of the Depression of the 1930s; and it is my belief that nobody wants to see that happen again. I wish you a productive and successful conference. Thank you. 4  BIS central bankers’ speeches
The fact that the effects of monetary policy are surrounded by major uncertainty and cannot be calculated with good precision is something we probably need to remind people of more or less constantly, and in that case an interval can be useful. The most obvious approach in this case would perhaps be to reintroduce a tolerance band around the inflation target. If this route is chosen, it is important of course that it is given a practical significance and fulfils some kind of function, in contrast to the interval removed in 2010. One possibility could be that the Riksbank undertakes to explain in a special report why inflation has ended up outside the interval whenever this occurs – in roughly the same way as the Bank of England writes an open letter to the Chancellor of the Exchequer. On the one hand, this could lead to deviations outside the band being seen as slightly dramatic, but on the other hand it could also make deviations within the interval less dramatic. I believe the latter would be an advantage seen against the background of what I have just said about monetary policy not being able to fine-tune inflation. Naturally it is also important that the breadth of any band matches the variations in inflation in a meaningful way. It could be questioned whether this was the case for the previous tolerance  17  One possibility could be that long-term inflation expectations would have been anchored better if there had been an interval.

This will preserve the public’s trust in the sustainability of public finances and will support both the recovery and long-term economic growth. The credibility of fiscal consolidation commitments will be strengthened if they are part of national policy frameworks oriented to the medium term. BIS Review 56/2009  3  Turning to structural policies, it is crucial that the focus is now on strengthening the adjustment capacity and flexibility of the euro area economy in line with the principle of an open market economy. This calls for an accelerated implementation of labour market reforms to facilitate appropriate wage-setting and labour mobility across sectors and regions as well as product market reforms to foster competition and speed up restructuring. We are now at your disposal for questions. 4  BIS Review 56/2009
In that case, as in any other business, but all the more so in an industry as competitive as Spanish banking is, it would be of paramount importance to have flexible cost structures capable of adapting to new scenarios. Indeed, once the property market has moved onto a more moderate path, institutions will not only be confronted with a volume challenge, but also one of type of business. Specifically, they will progressively have to limit the importance accounted for by the property sector in their lending portfolios in recent years, moving towards other activities. In the design of these strategies it is to be hoped that easy, short-termist decisions, but which have highly negative potential in the medium term, will not be adopted. Entities should not succumb to the temptation of offsetting the slowdown in demand with a decline in credit quality standards. Recently, some concern was detected in this connection in the US mortgage market, especially in relation to subprime lending to the least creditworthy segments of the population. Such lending in the United States is usually to borrowers with a poor credit history or with little documentation of income that makes it difficult to properly assess their creditworthiness. In Spain, if we identified as subprime those operations with individuals who at some point in the past have failed to meet their credit obligations, the amounts extended to such individuals would stand at around 1.27% of the overall mortgage funds lent, compared with levels for the US subprime market of around 14% of mortgage loans.

Furthermore, it should be stressed that many of the reasons for the low level of the natural interest rate in our economies originate in structural phenomena, such as population ageing and low productivity, which are also responsible for lowering potential growth. Thus, the structural reforms to address these problems will not only raise future growth and well-being, but also the natural interest rate, thereby making the design and implementation of monetary policy easier. All these issues will be analysed in our review of the ECB’s monetary policy strategy. I have no doubt that this review will increase the effectiveness of monetary policy in the euro area and its ability to achieve its objectives in the macroeconomic environment of the coming decade. Thank you very much. 18  References  Aguilar, P., Ó. Arce, S. Hurtado, J. Martínez-Martín, G. Nuño and C. Thomas (2020). The ECB monetary policy response to the COVID-19 crisis, Documentos Ocasionales, No 2026, Banco de España. Altavilla, C., F. Barbiero, M. Boucinha and L. Burlon (2020). The Great Lockdown: Pandemic Response Policies and Bank Lending Conditions, Working Paper 2465, European Central Bank. Alves, P., F. Arrizabalaga, J. Delgado, J. Galán, E. Pérez Asenjo, C. Pérez Montes and C. Trucharte (2021). “Recent developments in financing and bank lending to the nonfinancial private sector”, Analytical Articles, Banco de España. Alves, P., R. Blanco, S. Mayordomo, F. Arrizabalaga, J. Delgado, G. Jiménez, E. Pérez Asenjo, C. Pérez Montes and C. Trucharte (2020).
Both make high demands on banks’ risk management and their value may react sharply to market movements because of leverage. Investments in HLIs are thus comparable to other risky investments. Let us now have a look at the collapse of LTCM – by far the largest hedge fund to date – in order to obtain some idea of the potential disruptive capacity of HLIs. Almost all of the fund's capital was destroyed in the collapse. Losses amounted to USD 4.4 billion, of which USD 1.9 billion were incurred by the manager of the hedge fund, USD 0.7 billion by UBS and USD 1.8 billion by other investors. Moreover, if the Federal Reserve Bank of New York had not intervened to organise a bailout, the hedge fund's counterparties would have incurred estimated losses of about USD 5 billion. 7 Although these amounts seem high, they are in fact modest in relation to the involved banks' capital and to the size of the financial markets. Second transmission channel: banks as price takers on financial markets HLIs act as buyers and sellers on the financial markets. Their actions have an impact on prices, liquidity and volatility in just the same way as any other market participant's action. However, there are two reasons why the impact of HLI trading could be stronger. First, in certain market segments they have an above-average share in trading volume.

2  Kohn (2007), Svensson (2011b), and Woodford (2007) explain why forecast targeting is both a better way of conducting policy and a better description of actual policy than following an instrument rule such as the Taylor rule. 3  See Assenmascher-Wesche and Gerlach (2010), Bean (2009), Bean, Paustian, Penalver and Taylor (2010), Bernanke (2010), Dokko, Doyle, Kiley, Kim, Sherlund, Sim, and Van den Heuvel (2009), IMF (2009), and Kohn (2008, 2009). BIS central bankers’ speeches  3  is relevant for the forecast of inflation and resource utilisation, including the conduct of financial-stability policy when appropriate – remains in my view the best-practice monetary policy before, during, and after the financial crisis. Monetary policy and financial-stability policy are different This leads me to the more general question of what the relation between monetary policy and financial stability should be. For instance, it is sometimes said that the objectives of monetary policy should be expanded to include financial stability (Eichengreen, Rajan, and Prasad 2011, and Eichengreen et al. 2011). Such suggestions give the impression that monetary policy and financial stability are the same thing. But they are not. It is important to conceptually distinguish financial-stability policy from monetary policy and avoid conceptual and practical confusion between the two policies. Confusion risks leading to a poorer outcome for both policies and makes it more difficult to hold the policymakers accountable. Trying to use monetary policy to achieve financial stability leads to poorer outcomes for monetary policy and is an ineffective way to achieve and maintain financial stability.