samchain/econo-pairs-v1 huggingface dataset:
The international economic scene has been marked throughout 2006 by the continuing robust growth in global trade and activity seen in recent years. Such growth has been particularly notable in that it has come about against a background of considerably high oil prices which have only eased in recent months. It is very likely that in the coming quarters this dynamism will be maintained in most of the main geographical areas. Nonetheless, signs have emerged lately of growth easing in certain areas, most notably in the United States, meaning that the pace of expansion of global activity as a whole should be somewhat more contained in the immediate future. Thanks to this global framework, the euro area's economic situation has improved substantially. On most available forecasts, GDP in the area could grow by around 2.5% this year, marking a significant acceleration on 2005. Accompanying this greater dynamism has been the recovery in internal demand, which should contribute to extending the length of this upturn. Prominent among the internal expenditure components is the robustness of investment, both in capital goods and in construction. The persistence of highly favourable financial conditions, companies' improved financial position and their higher earnings have contributed to buoyant corporate investment, in a setting in which capacity utilisation has reached the highest levels of the past five years and unit labour costs remain moderate. Household spending has recently gained some momentum and the course of the determinants of this variable paint a favourable picture.

That is due in particular to the property market boom, on which the recent structural changes in the economy, including immigration, have had a bearing. Consequently, the financial position of the sector as a whole is fairly sound. The trend of indebtedness in the past ten years has been sufficiently significant as to identify it as one of the risks to consider in the essentially favourable scenario of the Spanish economy. The Banco de España should signal this fact, particularly in a setting in which credit continues to show signs of being very buoyant. But, at the same time, we cannot ignore the fact that the financial position of households and firms is healthy and provides a sound basis for adaptation to the interest rate levels in keeping with the recovery in economic growth in the euro area. The solvency of the Spanish financial system is a further guarantee for the maintenance of stability in the economy as a whole. In sum, the outlook for growth in the Spanish economy in the coming quarters is, in my view, relatively healthy. And economic policies can contribute to providing continuity to this expansion in the medium term, defusing some of the risks highlighted. In that connection, it will be essential to restrain demand impulses and improve supply-side functioning.
Looking at the wider prudential framework let me mention two specific areas where the European Commission is currently reviewing the existing EU regulation. The first area relates to deposit guarantee schemes. Although the deposit guarantee directive of 1994 was useful in setting common minimum requirements for national schemes, the current level of harmonisation is low, with different levels of protection and different structures in place across the EU. This is not only inefficient but may hinder further integration. As many of you will already be aware, the European Commission is currently undertaking a wide-ranging review of Deposit insurance arrangements, and I would encourage it to be ambitious in this respect. The second relates to the work being carried out by the Commission with the aim of ensuring that EU financial services legislation and supervisory practices do not pose barriers to cross-border mergers and acquisitions. Consolidation processes should be market-driven phenomena that respond to market needs, such as economies of scale, IT synergies, the benefits of diversification, access to a larger client base, etc. I think that supervisors do have a crucial but limited role to play in fulfilling their responsibility to ensure that banks are not taken over by shareholders that are not suitable on prudential grounds. But this is as far as we should go. The Supervisory framework Let me now turn to the supervisory framework. I believe that we need to think in terms of a European system of banking supervision. I am not talking about a single European supervisory authority.

Thomas Jordan: Challenging economic and financial conditions for the Swiss banking sector Introductory remarks by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the media news conference of the Swiss National Bank, Berne, 20 June 2013. *  *  *  The Swiss National Bank (SNB) is maintaining its minimum exchange rate of CHF 1.20 per euro. The Swiss franc is still high. An appreciation of the Swiss franc would compromise price stability and would have serious consequences for the Swiss economy. In the current environment, the minimum exchange rate remains important in order to avoid an undesirable tightening of monetary conditions for Switzerland in the event of sudden upward pressure on the Swiss franc. We stand ready to enforce the minimum exchange rate, if necessary, by buying foreign currency in unlimited quantities, and to take further measures, as required. The target range for the three-month Libor will be left unchanged at 0.0–0.25%. Since March, the SNB’s conditional inflation forecast has remained almost unchanged, apart from inflation for the current year, which is slightly lower due to a reduction in the oil price. The forecast is again based on an unchanged three-month Libor of 0.0% over the next three years. For 2013, we now anticipate slightly lower inflation of –0.3%. For 2014, the inflation forecast is unchanged at 0.2% and for 2015 at 0.7%. Consequently, inflation in Switzerland will remain very low in the foreseeable future.
For example, during the financial crisis, foreign exchange markets continued to function relatively well following the bankruptcy of Lehman Brothers – despite being under extraordinary pressures.1 Although there were signs of dislocation, the market did not seize up as others did, aided perhaps in part by that multipolar structure seen in Chart 1. More recently, focus has turned to the increased incidence of so-called ‘flash episodes’, in which prices move suddenly and sharply, often without any obvious fundamental driver. The jury is out on how seriously these events highlight weaknesses in market resilience. So far, the price effects, in FX and elsewhere, have tended to unwind in minutes (Table 1), with few consequences for financial stability. That’s encouraging. But liquidity has sometimes taken longer to rebound than prices – and global authorities, including the Bank of England’s Financial Policy Committee, are on the alert for signs of more sizeable contagion.2 Overall therefore, I’d score FX market resilience as ‘good, but with some things to keep an eye on’.

Mario Draghi: ECB press conference - introductory statement Introductory statement by Mr Mario Draghi, President of the European Central Bank, and Mr Luis de Guindos, Vice-President of the European Central Bank, Frankfurt am Main, 25 October 2018. * * * Ladies and gentlemen, the Vice-President and I are very pleased to welcome you to our press conference. We will now report on the outcome of today’s meeting of the Governing Council, which was also attended by the Commission Vice-President, Mr Dombrovskis. Based on our regular economic and monetary analyses, we decided to keep the key ECB interest rates unchanged. We continue to expect them to remain at their present levels at least through the summer of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term. Regarding non-standard monetary policy measures, we will continue to make net purchases under the asset purchase programme (APP) at the new monthly pace of € billion until the end of December 2018. We anticipate that, subject to incoming data confirming our medium-term inflation outlook, we will then end net purchases. We intend to reinvest the principal payments from maturing securities purchased under the APP for an extended period of time after the end of our net asset purchases, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation.
Slide 3  Commercial bank balance sheet Banking sector balance sheet (percent of GDP) ASSETS Loan Portfolio Commercial Consumer Mortgage Comex Cash Other liquid Derivatives  88 48 10 24 5 7 12 5  Other  9  LIABILITIES Demand deposits Time deposits External credit Debt instruments Derivatives Other  22 46 5 23 5 11  EQUITY AND RESERVES 10  All figures as of December 2016, based on individual balance sheet. Source: Central Bank of Chile based on SBIF data. [SLIDE 4] Hence, a key concern of a central bank is risk. Risk from external shocks that may threaten price stability; risk of misjudging the macroeconomic scenario and make wrong policy decisions; risk of changes in the behaviour of banks that may compromise the transmission of monetary policy to market rates; risk of liquidity excess or shortage in the banking sector; risk of bank insolvency; risk  3  Central Bank of Chile 29 June, 2017  of disruptions in the flow of funds at the interbank or retail level; risk of risk misjudgement, and, ultimately, risk of compromising trust. Slide 4  What do central banks worry about?

Lending and borrowing: closely related to financial intermediation 3. Risk management: closely related to the insurance sector (“InsurTech”) 4. Market support: the “tech” part of FinTech can make simpler or more efficient processes 5. Investment management: E-trading, smart contracts; robo advice  Payments, transfers, clearing, and settlement. Mobile payments (either by banks or non-bank institutions), digital wallets, digital currencies and the use of distributed ledgers for payments infrastructures. These can contribute to the management of massive numbers of transactions as well as to the transfer and settlement of large sums among financial institutions. Lending and borrowing. The most common FinTech innovations in this area are crowdfunding and online P2P lending platforms. These applications are closely related to financial intermediation, a core and heavily regulated element of financial institutions. FinTech applications in this field are still a small fraction of overall credit but in some jurisdictions are growing very rapidly. Risk management. FinTech companies participating in the insurance sector (“InsurTech”) are getting traction in many jurisdictions. They have the potential to affect not only marketing and distribution of insurance, but also underwriting, pricing of risks and settlement claims3. Risk management also concerns the commitment and registration of guarantees and collateral in credit operations. Market support. The “tech” part of FinTech can provide simpler or more efficient processes such as ID verification, data storage and processing (cloud computing), or the execution of orders through smart contracts. The access and contestability of information is an important issue here. Investment management.
To create greater international awareness on these new initiatives, financial ambassadors are being appointed to meet with potential players and investors and road shows will be conducted as part of the promotional plan. In addition, the MIFC Executive Committee is formulating the supporting immigration policies with the Immigration Department where long-term employment pass, multiple entry permits, dependent pass and professional visit pass would be offered to expatriates identified as professionals and experts in Islamic finance. To attract specialist and high level expertise, a Permanent Resident status may also be offered based on the recommendation of the relevant financial regulators. A mechanism is also being put in place to ensure the efficient processing of these measures. This is aimed at addressing the acute current shortage of such talent and expertise in the global financial system. While the education infrastructure has already been put in place to address this shortage, Malaysia also needs to be competitive in attracting and retaining the talent. The Executive Committee will therefore look into customised incentives to attract best talents to Malaysia in addition to the entry of international legal firms that are able to provide services for the international currency business in Islamic finance. Role to be played by financial institutions One of the key success factors for a vibrant financial hub is having the critical mass of reputable and diversified range of financial institutions. With extensive incentives and measures in place, it is a priority for those already based in Malaysia to be encouraged to be the players in the MIFC.

Islamic finance is an established industry in Malaysia. Islamic banking assets stood at RM874 billion or 30.4% of total banking assets as at end September last year, with an annual growth of 10% over the past three decades. The end of Q3 last year also saw takaful contributions amounting to RM1.7 billion with market penetration at 15%. Growth of Islamic finance in Malaysia has been resilient and supportive of social and economic developments. What underlies this growth is the robust foundation and building blocks that the government and Bank Negara Malaysia, together with the industry, have worked towards, namely in infrastructure development, institution building, robust regulatory framework and product development. We are now at a stage where we view that the foundations are solid and the industry is ready to deliver solutions to meet your needs. Islamic finance as an enabler of growth There is now a wide ranging spectrum of Islamic financial products to meet the needs of businesses.
About 10 per cent of Norwegian municipalities are currently in this position and are on the Norwegian ROBEK list. 14 A firm hand such as this is lacking in the euro area. 5. The Norwegian government’s long-term obligations  The Norwegian government’s financial position contrasts sharply with developments abroad. While government debt in Europe is approaching 100 per cent of GDP, the Norwegian government has net financial assets exceeding 100 per cent of GDP. We have been lucky because we discovered oil and gas. The Norwegian state with its large territory – or should we say territorial waters – has been adept at reaping the economic rent from petroleum activities and managed to set aside a large portion of our petroleum revenues. Although the Norwegian government is not in a net debt position, it does have obligations under welfare schemes. These are not liabilities in the same legal sense as debt, but nor are they schemes that can easily be changed. The Supreme Court has established that future national insurance entitlements are protected, in principle, by Article 97 of the Norwegian Constitution prohibiting legislation with retroactive effect, but that changes to national insurance entitlements will only be in contravention of the Constitution if they are “clearly unreasonable or unjust”. 15 This gives the political authorities the freedom to adjust their obligations.

The first task for the Group is to identify the most appropriate near riskfree reference rate for sterling markets. Alongside that you will consider how contracts referencing the rate can be made robust to changes in market structure. We expect these discussions to reach a conclusion during the third quarter of this year. The Group will then develop an adoption and transition plan over the remainder of 2015, considering the factors that could facilitate adoption of the chosen RFR, as well as metrics of success and a timeline for the transition process. It is anticipated that firms participating in the Working Group will sign letters of agreement to support adoption of the chosen RFR, referencing these metrics. Implementation is expected to begin in 2016. We believe that this needs to be a market-driven process and that the choice of RFR is yours to make. However, this is not an academic exercise. A “choice” means that you will be prepared to make meaningful transition commitments over a 12 to 24 month horizon. Bank of England data collection initiative Before I hand over to you all to begin the important work of this Group, I want to make you aware of a new initiative the Bank is embarking on, aimed at enhancing our measures of overnight interest rates in sterling markets. The Bank has a special interest in monitoring the overnight money market because it is a key aim of monetary policy to influence conditions in that market.
So, one may suspect, if and when banks feel ready to charge for the use of cash, this is likely to give a big kick to the card market. On the supply side, costs are obviously important. Clearly, the technological development of IT and telecommunications has helped in cutting costs. Economies of scale and network effects are other important supply factors. Economies of scale imply that cost per transaction fall when the number of transactions increases. Network effects imply that the number of terminals that accept a particular card greatly affect the utility of the user. The larger the number of payment terminals that a bank can install, the happier will be the users and the larger the share of the card payment market the bank will have. Economies of scale and network effects both increase the incentives for co-operation between card issuers in establishing common standards and communication between systems. In Sweden and in the other Nordic countries as well, banks have a long tradition of cooperation in using common infrastructure and implementing common standards, perhaps more so than in many other regions. This is likely to have contributed to the rapid expansion of the card payment market in the Nordic countries. There are some country specific differences, though. As should be expected, the number of payments per capita increases with the number of terminals installed (fig 8). At least for Sweden, there seems to be remaining positive network effects that may further expand the market.

Is the market not better handled by the private sector without public intervention? According to the law, the Riksbank is to promote a safe and efficient payment system. Like most central banks, the Riksbank is heavily involved in large value payments, running and providing credit to the RIX-system, where payments can be made in central bank money. Here the central bank role is simple to explain. But why should we be involved in the small value payments handled in the card market? Safety problems, although they may be important, are usually not systemic in nature. And in a well-functioning market, economic efficiency should be attained by the market itself, without public intervention. In my view, central bank involvement is appropriate only in the cases of market failure, coordination problems of some magnitude or the presence of obstacles outside the market itself. Usually, they 2 relate to efficiency rather than safety. Typically, we would ask questions such as 1. Are there legal and regulatory impediments to market development and innovation? 2. Are market conditions competitive? 3. Are security and operating standards and infrastructure arrangements efficient? 4. Are settlement services, however provided, safe and efficient? To answer these questions, we follow the market for retail payments and we try to exchange information and cooperate with other relevant public and private bodies. In the card payment market, issues of competition, pricing and security are of particular importance. I shall comment shortly on the first two of these.
Specifically it leads us to think about whether the financial system is providing the right sort of funding to support business investment and so growth. There are a few reasons to think that finance supporting productive investment by businesses is particularly important now. The first is that UK business investment is low and has grown slowly since 2016 compared with similar countries. Chart 4: UK business investment has been weak Private sector gross fixed capital formation (percent of GDP) (a)  (a) Sources: OECD and Bank calculations. This matters because investment determines the future productive capacity of the economy. Missed investment makes individual firms less productive, and reduces productivity and potential growth across the economy as a whole. The drivers of business investment are varied and complex. Clearly many are not in the FPC’s remit or expertise. But we do have an interest in whether the financial system is making the right  Page 10  amount and types of financing available for businesses to invest. There is some evidence that the financial system could do more to help businesses invest. In a survey of businesses finance and investment decisions we published in 2017, a third of underinvesting companies cited availability and/or cost of external finance as a major barrier to investment. Indeed recent conversations I have had with businesses underline that access to finance is more difficult for small and young companies, particularly in new and growing sectors where business models are less well understood and security less easily available.

Chart 2: The increase in corporate insolvencies has been driven by micro firms Monthly business insolvencies by size over time (number of insolvencies) (a) (b)  (a) Sources: The Gazette and Bank calculations. (b) An insolvency is recognised at the point a liquidator is appointed. Micro firms have less than £ in assets, small firms between £ and £ medium firms between £ and £ and large firms above £  Page 6  Chart 3: The debt-weighted share of low-ICR firms has increased but remains below the GFC peak Debt-weighted share of companies with interest coverage ratios below 2.5 (a) (b)  (a) Sources: Moody’s BvD, S&P Global Market Intelligence and Bank calculations. (b) These data refer to UK PNFCs only. The projected number for end-2023 is based on the February Monetary Policy Report. We use 2.5 as a threshold as companies with interest coverage ratios below 2.5 are materially more likely to experience repayment difficulties. We are also alert to risks not directly visible on balance sheets (relating to off-balance sheet instruments like derivatives for instance). Energy firms for example have relied extensively on derivatives to hedge against price movements. And the rise in energy prices last year triggered margin calls on those derivatives that put some firms in immediate liquidity stress. The Bank and HM Treasury’s Energy Markets Financing Scheme was initiated to ensure that liquidity stress did not turn needlessly into insolvency. We can also see some evidence of the borrower resilience channel at play, with investment intentions distributed unevenly across firms.