samchain/econo-pairs-v1 huggingface dataset:
This will involve a number of important considerations for financial institutions, including the rethinking of business models in the light of a re-assessment of risk and return expectations, a reflection on fundamental value systems that ultimately shape individual actions, with greater premium placed on responsible and ethical behaviour, and the regulatory changes taking place. New imperatives for talent development in the financial sector Having the required talent will be a key pillar in managing the challenges confronting the Asian financial sector moving forward. The increased demand and competition for highly-skilled financial professionals in the financial sector continues to be fierce. In Malaysia, demand is expected to be particularly pronounced for specialised skills in risk management and high growth and niche areas. At the same time, the new financial landscape also raises critical leadership and organisational challenges, particularly as banks in Asia become larger and more complex with increasingly diverse geographical and product markets. This underscores the need for financial institutions to be helmed by world-class leaders, with critical strategic and leadership capabilities to build institutions that are dynamic, resilient and agile in the face of a more challenging operating environment. In line with the increasing regional character of the financial sector, there will also be a greater emphasis on talent that better appreciates national and cultural differences. Meanwhile, boards of directors are also be expected to have a more effective role in providing independent oversight and strategic guidance that promotes the long-term resilience and continued viability of financial institutions.

Finance will complement - and potentially amplify these initiatives– but it will never substitute for climate policy action. The policy frameworks with the greatest impact will be: time consistent; transparent; target-based; and committed, through treaties, nationally determined contributions (NDCs), domestic legislation and consensus. The 20 countries – including the UK – that have plans to legislate for net zero show what can be done. 9  All speeches are available online at www.bankofengland.co.uk/news/speeches  9  If countries build their track records, their credibility will grow, and the market will allocate capital to deliver the necessary innovation and growth and pull forward the adjustment to a low carbon future. The more prolific the reporting, the more robust the risk management and the more widespread the return optimisation, the more rapidly the insurance sector can build resilience while promoting the transition that our citizens demand. 10  All speeches are available online at www.bankofengland.co.uk/news/speeches  10
Banque de France and especially our supervisory arm, the ACPR, have been playing an active role in helping to consolidate the future European regulatory framework for AI. ACPR also conducted this summer its first Tech Sprint on Explainability of AI, which enabled tech providers, Fintechs and larger actors to showcase the potential and limits of explanatory methods on credit risk predictive models: its results are to be published on our website. II. CBDC is a key area of our work to foster innovation Central bank digital currencies is a key area – if not the key area – where the stakes are especially high: central banks are responsible for preserving the soundness of money, whatever its forms! This is a domain where Banque de France is convinced of the benefits of “learning by doing”. This is why we launched in 2020 a programme to carry out experiments on wholesale CBDC with Fintechs, public and private market participants and other central banks. Our objectives have been multi-fold, testing: several use cases (securities settlement, cross-border transactions), on different types of financial instruments (listed and unlisted tokenized assets, sovereign issuances, payments), with various technologies (public or private blockchains, open-source or proprietary protocols), and as proof of concept but also in real-life conditions. A report on the key takeaways from this experimentation programme is being published today on the Banque de France website.

Thomas Jordan: Monetary policy in times of crisis. Why central banks talk to one another Summary of a speech by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the Energie-Apéro Etavis, Zurich, 14 May 2012. The complete speech can be found in German on the Swiss National Bank’s website  *  *  *  Mandates differ from one central bank to another. So, too, do the economic structures and business cycles of different central bank territories. These factors speak in favour of an autonomous monetary policy for each currency area. This monetary policy autonomy has proved its value for Switzerland – also in the latest crisis. Nevertheless, central banks do work with one another in a number of different ways. They exchange knowledge on a continual basis, thereby helping to improve the foundations upon which their own monetary policy decisions are made. Central banks are also able to access foreign currencies by concluding swap agreements, allowing them to better counteract liquidity shortages on the international money market in times of crisis. Finally, joint measures can have a strong psychological impact since they signal to financial markets and economic agents that the central banks are speaking with a single voice. Autonomy and cooperation are not mutually exclusive. On the contrary. In a crisis, good cooperation supports and reinforces the effects of autonomous monetary policy measures.
The powers with which the BCCH is endowed also have a clear relation to financial stability. The BCCH can provide the system with liquidity under normal terms and conditions and, although forming part of the management of monetary policy, this simultaneously fulfills functions related to financial stability. Liquidity can also be provided in extraordinary circumstances and the BCCH is empowered to make emergency loans to banks suffering temporary liquidity problems. Moreover, if a bank is forced into liquidation, the BCCH must provide the funds to pay deposits guaranteed by the State, which include all sight deposits and those of small savers. In addition, the BCCH has powers to regulate the money market and the system of payments. It establishes norms for deposits and bank borrowing and regulates the working of large-value clearing houses and payment systems and also has some powers of prudential regulation. It regulates market risks and relations between banks’ active and passive operations as well as the operations of saving and loan cooperatives and bank and non-bank credit card systems. On these same lines, it sets some norms with systemic implications that refer to pension fund investments such as, for example, the percentage of their portfolio that they may invest abroad. In addition, it participates in some decisions in the sphere of prudential regulation for banks, issuing a prior opinion or giving its agreement. For prudential reasons, the BCCH can impose restrictions on foreign exchange operations.

However, the recommendation that a capital component of a countercyclical nature be introduced raises a number of questions. What does seem interesting, although it is not explicitly included in the recent Basel proposal, is the idea of having some component of contingent capital. This could be established by issuing bonds that would, under certain circumstances or conditions, become capital as, for example, if an institution’s capital falls below 8% of its risk-weighted assets. Another point on which there is a considerable agreement is the need to review norms and practices on liquidity management and bank funding. These had become quite lax in many jurisdictions. Liquidity and refinancing risks were underestimated, particularly in the environment that preceded the crisis. The recommendations that have subsequently been put forward include a redefinition of liquid assets, the establishment of a minimum global liquidity standard, norms using time bands for the match of assets and liabilities, and higher requirements for liabilities that show greater volatility. In all these cases, there is much that central banks can contribute. The Basel Committee has recently undertaken to advance in defining a global liquidity standard and has fixed a calendar for this process. A robust system of provisions, based on a forward-looking rather than a backward-looking approach, can make a significant difference to the stability of the banking system. This is illustrated by the experience of emerging economies where this policy instrument is used most often and with the greatest intensity.
Since bottoming out in late 2009, employment here on the island has rebounded by almost 2 1/2 percent. So we’ve come a bit more than halfway back to the early 2008 peak. Moreover, these job gains have come despite ongoing job cuts in local government. While other parts of the region sustained job losses in local government starting in 2010, Long Island’s just started in the spring of last year, creating a drag on the labor market overall. Nevertheless, the private sector has picked up the slack. This is most pronounced in professional and business services, finance, leisure and hospitality, and health care. Even the island’s manufacturing sector has added jobs over the past year. Another sign that a recovery is taking hold on Long Island is that banks that were created just before or just after the financial crisis – while only a small portion of the local market – are starting to show signs of growth. Long Island’s labor market has also been aided by its proximity to New York City. With a large portion of the island’s workforce commuting to New York City, especially from Nassau County, the brisk job creation we’ve seen in the city has helped matters here as well. Unemployment here on the island topped out at 7.6 percent back in late 2009, and it has hovered around 7 percent for most of the past year – a high rate to be sure, but well below both the national and state levels.

2  Second, the original design was not well-equipped to prevent the build-up of domestic macroeconomic imbalances with the potential to generate serious economic and financial instability for the euro area as a whole. The European Semester and the Macroeconomic Imbalances Procedure were established after 2010 to address this issue, but the experience so far seems to be mixed.1 Third, beyond what was stipulated in the no-bail-out clause, the Treaty did not envisage the creation of a crisis management framework. This was partly addressed later through the creation of the ESM in 2012 amid a very serious sovereign debt crisis affecting some of the largest economies of the European Union. Finally, and quite importantly, the Treaty had not envisaged the need for significant aggregate fiscal action to smooth the cycle and assist the common monetary policy. This was evident, for example, during the low inflation period after the euro area sovereign debt crisis, when the degree of coordination of fiscal policies provided for by the fiscal framework fell short of the aggregate stimulus that was needed to complement monetary policy. And, also as a consequence of this lack of pre-established aggregate fiscal tools, during the COVID crisis, an ad-hoc response had to be adopted, in the form of temporary, centralised fiscal instruments. First of all, the general escape clause in the SGP2 was activated, permitting a very expansionary fiscal stance at the country level.
For example, Greece’s structural primary balance (that is, the fiscal balance adjusted for cyclical developments, interest payments and one-off factors) is estimated by the Commission to have improved by more than 13 percentage points. I acknowledge that the concept of cyclical adjustment is surrounded by large uncertainty in real time, but there is no doubt that quite a lot of progress has been made. At the same time it is positive to see that the general upward trend in private sector indebtedness has been halted, both in the household and the corporate sector. Last but not least, the structural reforms have gathered pace, possibly under the imperative of the crisis. The programme countries have taken many initiatives to make their economies more flexible and market-oriented, thus sowing the seeds for better performance in the future. These efforts include pension reforms, the fight against tax evasion, simpler and better tax revenue services, optimisation of tax structures and – not to be underestimated – politically difficult labour market reforms. All of these developments give reasons to be cautiously optimistic about the prospect for crisis-ridden countries’ return to a path of sustainable growth, productive investments and creation of new jobs with more social security than has been experienced in the past few years. The severe recessions and increases in unemployment in some euro area countries were caused by many years of misguided policies and lack of reforms that could have strengthened the growth potential.

Older workers tend to suffer larger earnings losses, and often face more difficult transitions. Displaced workers may not have the appropriate skills to find good jobs in other areas of the economy, including in growing export sectors. When the affected industry represents a large share of the local economy, the damage is often magnified. In this case, the burden can become more widespread as the level of wages across the community is negatively affected. And, this doesn’t begin to capture the full human toll— 3/8  BIS central bankers' speeches  including the impact on workers who have lost confidence in the future and the poorer health outcomes that occur because of increased stress. Research on Brazil has found that workers employed in regions facing larger tariff cuts experienced declines in formal sector employment.6 They also generally did not migrate to more favorable regions. Instead, they either became unemployed, moved into the informal sector of the economy, or—when more fortunate—moved into another sector within the same region. We should find better ways to help communities that are struggling because of the effects of free trade. In the United States, we have historically experienced a high degree of geographic labor mobility—much higher than in other advanced economies. The ability to move in search of better opportunities, when possible, has helped to mitigate some of the adverse effects of trade. But, mobility has declined in the United States in recent years, implying that the adjustment costs to trade may have increased.
Ideas and Institutions – A Growth Story Speech given by  Andrew G Haldane Chief Economist Bank of England  The Guild Society University of Oxford 23 May 2018  The views expressed here are not necessarily those of the Bank of England or the Monetary Policy Committee. I would like to thank Shiv Chowla and David Ronicle for their help in preparing the text. I would like to thank Will Abel, Sandra Batten, Sarah Kinson and Patrick Schneider for their comments and contributions. 1  All speeches are available online at www.bankofengland.co.uk/speeches  Economic growth has been among the greatest gifts given to us, as individuals and societies. It may no longer be fashionable to say so. Measures of economic growth, like Gross Domestic Product (GDP), can be highly imperfect metrics of how well individuals and societies are faring, their subjective sense of well-being. 1  And growth in income and output is not, of course, an end in itself. Nonetheless, it is now pretty well-established that growth is a vital ingredient, indeed pre-requisite, for meeting many of the broader societal objectives many would view as important to our longer-term health, 2  wealth and happiness. While not an end in itself, economic growth appears to be a vitally important means of achieving those societal ends. Economic growth is the main reason why global levels of poverty and rates of infant mortality have fallen spectacularly over recent centuries. It is why longevity and educational standards have risen secularly over the same period.

It was only by acquiring these skills that workers could transition to where new jobs were being created. By keeping one step ahead of the machine, technological unemployment could be avoided. A shorter, more seamless skills transition reduced the hit to workers’ incomes and lowered the risk of skills atrophy, which might otherwise cause lasting damage to employment. This social infrastructure might be called “enabling” institutions. Another set of institutions provided workers with support to cushion the hit to their finances and well-being during the painful and lengthy period of job transition. This might be financial support, in income or loans. It might be housing or shelter. Or it might be social or emotional support. This social insurance ensured that lives were underpinned, inequalities held in check and the social fabric held together. It reduced recession risk, for individuals and for societies. These might be called “insuring” institutions. 32  29  Allen (2005) documents the stagnation of real wages in Britain from 1800 to 1840. IMF (2017). 31 Allen (2009) discusses Engels’ pause in the context of the British economy from 1760 to 1913. 32 Of course, many other institutions played a role in the labour market beyond the “enabling” and “insuring” ones mentioned here. For example, the ‘Poor Laws’ in the 1800s meant that the poor had to enter workhouses with terrible conditions to receive help in the form of clothes and food.
This hurt bank holding  3  One final factor that was important in exacerbating the funding crises was the novation of over-the-counter (OTC) derivative exposures away from a troubled dealer. In a novation, a customer asks a different dealer to stand in between the customer and the distressed dealer. This process results in the outflow of cash collateral from the distressed dealer. The novation of OTC derivatives was an important factor behind the liquidity crises at both Bear Stearns and Lehman Brothers. 4  There were funding strains prior to the Lehman Brothers failure and these were most apparent in the elevated spreads evident in term LIBOR funding compared with the federal funds rate. BIS Review 143/2009  3  companies and other large financial firms that depended on the commercial paper market for short-term funding. The result was a widespread loss of confidence throughout the money market and interbank funding market. Investors became unwilling to lend even to institutions that they perceived to be solvent because of worries that others might not share the same opinion. Rollover risk – the risk that an investor’s funds might not be repaid in a timely way – became extremely high. The extreme market illiquidity did not abate until a number of extraordinary actions were taken by the Federal Reserve and others.

William C Dudley: More lessons from the crisis Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Center for Economic Policy Studies (CEPS) Symposium, Princeton, New Jersey, 13 November 2009. *  *  *  Thank you for having me here to speak today. It is a real pleasure to have this opportunity to speak at CEPS again – this is a great forum to talk about policy issues. Tonight I want to discuss some of the challenges we face in making our financial system more robust. We have learned a great deal over the past two years about our financial system and its vulnerabilities. The task ahead is to put these lessons to good use. Our goal must be to make the financial system more resilient to shocks. If we can do that successfully, we should be able to reduce the risk of financial crises. In assessing the causes of this crisis, one clear culprit was the failure of regulators and market participants alike to fully appreciate the strength of the amplifying mechanisms that were built into our financial system. These mechanics exacerbated the boom on the way up and the bust on the way down. Only by better understanding the sources of these damaging dynamics can we construct solutions that will strengthen our financial system and make it more robust. Today, I am going to focus mainly on the extraordinary liquidity events that played out during this crisis.
11  Mervyn King, the former governor of the Bank of England, has used a closely-related means of illustrating why monetary policy should give consideration to financial imbalances, where he instead uses the so-called Taylor curve – a curve that illustrates a central bank’s trade-off between stabilising inflation around an inflation target and stabilising the real economy (GDP, unemployment, employment and so on) around a long-run sustainable level. See King (2012). 12  This reasoning is thus based on the notion that risks linked to financial imbalances can be taken into consideration in monetary policy by incorporating their effects in the longer-run forecasts for inflation and the real economy (for instance, measured in terms of GDP). There are also arguments in favour of the central bank having the stabilisation of financial imbalances as an explicit objective for monetary policy. The financial frictions that give rise to the imbalances could, for instance, entail welfare costs for society, over and above the effects on inflation and GDP, which the central bank may have reason to counteract directly, see for instance, Cúrdia and Woodford (2009). Monetary policy would then have three factors to weigh against one another: stabilisation of inflation around the target, stabilisation of GDP around a sustainable level and stabilisation of some relevant measure of financial imbalances. Regardless of the theoretical argument, this way of including financial imbalances in the deliberations could have practical benefits, for instance by reducing the need to incorporate the risks in the forecasts for inflation and GDP.

“Modified Jackson-Hole consensus” The first view is in principle based on the same monetary policy strategy as I have described earlier and called the standard prior to the crisis, but with a few small additions. Smets calls this view a “modified Jackson-Hole consensus”. According to this view, there is indeed a need to prevent financial imbalances, that is, it is not enough to wait until afterwards and deal with the problems caused by the imbalances. But the preventive work should be entirely done by macroprudential policy, while monetary policy should have the same role as before.7 The monetary policy strategy as such thus does not need to be changed very much. The most common argument in favour of this view, according to Smets, is that monetary policy is a blunt instrument and has limited effects on the financial risks one wishes to counteract. The macroprudential policy tools, on the other hand, are regarded as much more effective for this purpose. The interaction between macroprudential policy and monetary policy can thus be kept to a minimum, and it is perfectly simple to keep the objectives and tools separate from one another. “Leaning against the wind vindicated” Characteristic of the second view is that one is more doubtful that macroprudential policy will always manage to prevent financial imbalances on its own. It could, for instance, be because the macroprudential policy tools are not as effective in practice as many people believe and hope. If this were the case, macroprudential policy would need support.