samchain/econo-pairs-v1 huggingface dataset:
The new rules contain sufficient flexibility to deal with exceptional situations where public money may be required to ensure financial stability. Second, public risk sharing. A certain level of public risk sharing is necessary to create confidence in the overall financial system. Even wellcapitalised banks can fall victim to runs and contagion. This is why central banks act as lender of last resort and fiscal backstops should be in place to ensure trust in the stability of the financial sector. In the Banking Union, both supervisory responsibility and the fiscal backstop need to be at European level, to underpin durably confidence in the area-wide financial system. Just as necessary is the establishment of a European Deposit Insurance System (EDIS). The current situation, where supervision is common, but the consequences of potential bank failures are still predominantly national, should not last. In such an incomplete framework, national considerations inevitably continue to affect supervisory decisions. This is not without consequences for the incentives for banks to become more European. Concrete examples include a lack of fungibility of liquidity or capital. The fact that the euro area is not considered as a single jurisdiction may result in applying higher capital buffers to euro area G-SIBs. While the institutional underpinnings of the Banking Union do not yet meet the requirements of a genuine single financial market, the creation of the SSM has been a leap forward in the establishment of a coherent regulatory framework.

Peter Praet: It is urgent to agree on an ambitious timetable for completing the Banking Union Contribution of Mr Peter Praet, Member of the Executive Board of the European Central Bank, for the magazine of the Eurofi conference in Malta (5-7 April 2017), 4 April 2017. * * * In less than half a decade, the EU moved from decentralized banking supervision and resolution to the Single Supervisory Mechanism and the Single Resolution Mechanism, based on the Single Rulebook. This is part of an overarching effort to create a sound institutional framework for financial integration in Europe. There still are a number of legal, institutional and political problems to overcome before a European bank can operate in the Banking Union as it operates in its domestic market. Several dimensions need to be taken into account in institutional design. First, private risksharing. The financial system is a private risk sharing device, but we have learned the lessons from the financial crisis in terms of budgetary costs, when excessive risk-taking by the private sector was eventually borne by the public sector. Not to revert to the old world of implicit government guarantees for risky behaviour of financial institutions entails making banks equally liable across countries for the amount of risk they want to take into their respective balance sheet. The general principle of the new European rules such as the Bank Recovery and Resolution Directive is to absorb bank losses by bailing-in shareholders and uninsured creditors.
One of the problems in Europe now is low productivity, which is caused by the fact that we are not investing enough in education, R&D and public infrastructure. But public infrastructure is not a stabilisation instrument. When you start building a road, for instance, the project is delivered much later, when the business cycle may have already turned. But education and R&D are levers that have to be used. And at the same time I think it’s important that we look at the composition of taxation and its impact on long-term growth and productivity. Do you mean it would be better to have lower taxation on labour, compensated by other areas of the tax base? It depends; there is no single recipe. But you can’t take the tax structure that we have now as a fait accompli. You should use a combination that takes into account new elements, such as climate change. All these aspects have to be taken into consideration. That is why fiscal policy is very relevant; it’s not only the nominal deficit that matters. So when you and President Draghi go to Eurogroup and Ecofin meetings, you might have concepts to share with the ministers in this respect? Sure, when we go to Eurogroup and Ecofin meetings we are fully coordinated, also on fiscal policy matters. Italy and Spain were trading at very similar levels during the crisis. Today the BonosBTP spread on 10-year maturities is over 180 basis points.

It could grow and have a very clear purpose – countercyclical stabilisation. Now it’s more like a sort of competiveness instrument. We have to share more risk, for sure, if we want to improve the performance of the euro area and reduce the burden of monetary policy because, as I said, monetary policy is not almighty. And there is one element that is going to be key to achieving these steps: trust. You have to trust other countries to behave. But when a country misbehaves, as seems to be the case with Italy now, are you concerned that this may hamper trust? In the case of Italy, if you look at the fundamentals there are pros and cons. Italy is not a very vulnerable economy on financial grounds, if you take into account the net investment position and other factors. If you want an example of a vulnerable economy, look at Spain in 2010. It had an external deficit of 10% of GDP and a net investment position of 90% of GDP in the red. That’s not the situation Italy is in now. My point is that trust sometimes depends on the political intentions of the government. You mean the Italian government must provide some clearly stated objectives that are acceptable to the rest of the club. Yes, on both sides. This is a bilateral game, so it’s from both sides. And I think it’s very difficult to make progress if we can’t build trust.
The five richest households in the UK have greater wealth than the bottom fifth of the population (Oxfam (2014)). Even among the 1% there has been a striking polarisation. In 1990, a similarly-skilled banker, lawyer and accountant were paid roughly the same. By 2006, the banker was earning between three and four times as much (Philippon and Reshef (2009)).   The global financial crisis. On standard metrics, the crisis probably reduced wealth inequalities because the collapse of asset values hit hardest existing asset-owners. But the global financial crisis also shrunk the global income and wealth pie, in some countries materially so. This added momentum to the squeeze on real incomes at the very bottom end of the income scale experienced in a number of Western countries (Economic Policy Institute (2012), Joyce et al (2010)). Financial crises are known to disadvantage disproportionately the poor because they are least able to absorb income shocks (Honohan (2005)). This crisis appears to have been no different. Meanwhile, the crisis-induced narrowing of wealth inequalities has been at least partially reversed as asset prices have reflated rapidly over recent years.   The Occupy movement. They took up the baton for the 99% in 2011. At least at first, Occupy were treated with all of the seriousness of a local student protest. But rather remarkably Occupy became a global outfit, albeit a rather loosely-fitting one. Occupy touched a moral nerve among the many. The 1%ers in Davos had inequality as their main theme this year.

The world now has a unique opportunity – an opportunity to galvanise a deeper appreciation and understanding of the issues that affect us all – globally and simultaneously. Policymakers tackling the health crisis have been encouraged to pursue policies that can alleviate the economic shocks caused by the pandemic and in the same instant help address climate issues and challenges. We can leverage the opportunity presented by the current crisis to put the world on a new trajectory with a lower risk of future climate calamities. 1/3  BIS central bankers' speeches  Collective responsibility This brings me to my second C that is “collective responsibility”. The former Managing Director of IMF, Madam Lagarde once remarked that “Tackling climate change is a collective endeavour, it means collective accountability and it’s not too late”. Malaysia, together with its ASEAN counterparts, has been responding to climate change by developing national sustainable roadmaps, principles and guidelines. Such actions are even more relevant now. Despite a more pressing public health crisis at the moment, the World Health Organization has warned that “climate change is a gradually increasing stress that may be the defining public health threat of the 21st century”. Now why is this? That’s because temperature and weather extremes, floods, and pollutants can impact human health, directly and indirectly. The pandemic thus stresses the need to progressively continue collective global climate change actions to reduce risk of future epidemics. Commitment This brings me to my third C, which is “commitment”.
In this setting, monetary policy needs to avoid deviations from our target becoming entrenched and return inflation to 2% in the medium term. Two considerations are important here. The first is the destination of monetary policy: we need to normalise policy, and be ready to adjust rates by as much as necessary to reach our inflation target in the medium term. The second consideration is the pace of rate increases: since interest rates are rising from very low levels, the pace of rate increases can mobilise the signalling channel of monetary policy directly. Let me address each of these points in turn. The destination of monetary policy First, when inflation is high and growth is constrained by inelastic supply, monetary policy cannot remain expansionary and add to inflationary pressures by pushing up demand. It is therefore appropriate to pursue a strategy of monetary policy normalisation. As I explained in a blog post earlier this year,[11] normalisation implies ending net asset purchases and then raising rates to neutral levels – so levels that are neither expansionary nor restrictive. That is why the ECB has not only started raising interest rates, but also communicated that we expect to raise interest rates further over the next several meetings. And to ensure that these changes in our policy stance are effective, we have taken several decisions over the last few months to preserve the orderly transmission of our stance throughout the euro area.

When inflation is high for a long period of time, an important role for monetary policy is to ensure that inflation expectations remain anchored as the shocks work their way through the economy. If expectations become de-anchored and trigger a wage-price spiral, it can lead to inflation becoming persistent even after the shocks disappear. Raising interest rates has a mechanical effect on demand and inflation, and thereby on inflation expectations. But when interest rates are starting from unusually low levels, rate hikes are more powerful if they also create signalling effects that influence expectations directly. In this context, especially compared with the traditional focus on 25 basis-point increments, adjusting the pace of rate hikes is a key tool to signal our determination to fulfil our mandate and keep inflation expectations contained. And moving faster at the start of the hiking cycle clearly conveys our commitment to bring down inflation to our medium-term target. At present, inflation expectations remain relatively well anchored across a range of measures. But there are two reasons why it would be unwise to take this for granted. First, the shock is severely affecting the prices of those consumption items, such as groceries and petrol, that have the greatest influence on households’ inflation expectations. [15] The ECB’s Consumer Expectations Survey shows that, since February this year, both mean and median expectations for inflation three years ahead have risen by around 1 percentage point.
Andrew Gracie: Cyber resilience – a financial stability perspective Speech given by Mr Andrew Gracie, Executive Director of Resolution of the Bank of England, at the Cyber Defence and Network Security conference, London, 23 January 2015. *  *  *  In the last few weeks in mainstream media cyber has been to the fore. The hacking of Sony 1 and related reports of attacks on nuclear reactors in South Korea 2 provide a salutary reminder of what we are up against. The threat is there not only to steal data but to disrupt or destroy the functions of a firm. Detecting threats, being ready to respond to attacks and the capability to recover all pose new challenges for firms in every sector. In the finance sector, we have to contemplate the possibility that core functions in firms, the financial market infrastructure that links them together or the supply chains that support them, may be damaged in a cyber attack, either through the corruption or loss of data or outright loss of systems. These are issues we already think about in the context of other types of major operational disruption. But the risks around cyber are different. Detection of a problem may be more difficult. There is not the same symmetry of information that there might be in the event of bomb, flood or fire. And the mechanisms we have put in place to manage these risks may not protect against a cyber attack.

SPEECH  Measuring the Natural Rate of Interest: Past, Present, and Future May 19, 2023 John C. Williams, President and Chief Executive Officer Remarks at the Thomas Laubach Research Conference, Board of Governors of the Federal Reserve System, Washington, DC As prepared for delivery  Thank you, Trevor. And good morning, everyone. It is a special privilege to participate in this conference honoring my dear friend, colleague, and co-author, Thomas Laubach. Many of you knew Thomas personally, and all of you knew him through his work. He was a brilliant economist, trusted colleague, and an inspiring leader. We miss Thomas' dedication, good cheer, and sense of humor, and his impact on everyone he touched endures. Our collaboration started in the fall of 2000 with a shared interest in figuring out how to measure the elusive natural rate of interest, otherwise known as r-star. At the time, neither of us had any idea that our research on this topic would continue for 20 years. Kathryn Holston and I are carrying on this work. It's one of the many ways we can honor Thomas and his memory. Because of the unprecedented, pandemic-related shocks to the economy, we paused our regular publication of r-star estimates in late 2020. This conference is the perfect venue to announce that we are resuming them. But first, I want to take some time to share r-star's origin story, which is how I came to know Thomas.
This partly reflected lowered market expectations concerning an interest rate increase abroad and expectations that interest rates might rise earlier in Norway than in other countries. Changes in the krone resulted in unintended tightening of monetary policy. This trend was reversed, however, by low inflation figures and reductions in the interest rate. The interest rate reduction was probably of considerable importance as it eliminated the excess return on NOK investments. The krone, measured by a broad index (I-44), appreciated again markedly from mid-February 2004 to the first half of May. After that, the krone depreciated through June. The publication of lower-than-expected consumer price figures for May contributed to weakening market expectations of an increase in interest rates in the near future, and the krone depreciated. After the monetary policy meeting on 1 July, the krone was stable for a long period, but since then it has fluctuated in line with changes in oil prices. Past experience shows that the krone is at times heavily influenced by developments in the interest rate differential between Norway and other countries. This is given weight in interest-rate setting. However, as mentioned, themes in foreign exchange markets shift, and Norges Bank does not have instruments to fine-tune the exchange rate. Normally, Norges Bank will not intervene in the foreign exchange market in order to influence the exchange rate. Exchange market interventions, either buying or selling foreign currency, are not suitable as an instrument for influencing the krone exchange rate over a somewhat longer period.

As a result, they have been, and probably still are, able to increase production to a fairly large extent without any substantial increase in real capital and employment. There are prospects of solid growth in productivity in 2004. Nevertheless, our regional network reports that companies in a number of industries are now considering an increase in employment. After rising sharply for several quarters, economic growth in the US slowed in the second quarter and employment growth appears to have stalled this summer. Economic growth has picked up from a low level in the euro area. Economic growth has also gained momentum in Sweden and the UK. Strong growth in the US and China exerted upward pressure on commodity prices in 2003 and the beginning of 2004. Since then, price inflation has been dampened. Oil prices have risen considerably during the summer. Interest rate expectations indicate interest rate increases in a number of countries. The effects of oil price developments on the Norwegian economy are mixed. Persistently higher oil prices may eventually contribute to higher petroleum investment and increased activity in sectors affected by petroleum activities. A sharp rise in oil prices, however, restrains global economic growth and affects demand for our other export products. The analyses in Norges Bank’s last Inflation Report in July 2004 are based on the technical assumption that interest rates will move in line with forward interest rates.
This hampered the monetary policy transmission mechanism and the effective conduct of monetary policy. At the same time, fears about the implications of growing fiscal imbalances in some euro area countries and the potentially adverse impact on banks’ exposures to higher sovereign credit risk – including their funding costs and portfolio exposures – led to an increase in perceived  1  The cut-off date for data included in the June 2010 FSR was 19 May 2010. BIS Review 75/2010  1  systemic risk for large banking groups in the euro area to the highest levels seen since the collapse of Lehman Brothers. To help improve the market functioning and the transmission of monetary policy, the Governing Council decided on 9 May 2010 on several remedial actions. In parallel, at an extraordinary meeting on 9/10 May, the Ecofin Council agreed to establish a European Financial Stabilisation Mechanism. This back-stop financing arrangement will be subject to strong conditionality. The mechanism will have up to € billion of funds to be provided by euro area Member States at its disposal. The IMF will participate in the financing arrangements and is expected to provide at least half as much as the euro area countries’ contributions. Following the implementation of these measures, market volatility was significantly contained. A second main risk is the possibility of adverse feedback between the financial sector and public finances continuing. The review summarises various contagion channels through which persistently large fiscal imbalances could pose risks to financial stability.

William C Dudley: Road to recovery – Hudson Valley Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the State University of New York at New Paltz, New Paltz, New York, 19 May 2011. *  *  *  Good morning. I am pleased to be in New Paltz to speak to you and meet with the business, community and academic leaders of the Hudson Valley. I particularly want to thank the Ulster County Chamber of Commerce and Community Capital Resources of the Hudson Valley, the Dutchess County Regional Chamber of Commerce, the Dutchess County Economic Development Corporation and the Orange County Chamber of Commerce who assisted us with our recent survey of small business finances. More than 100 businesses responded from the mid-Hudson region. The survey results will be published early this summer and, of course, we will share the results with you and post them on our website. Each visit to this area gives me a chance to deepen the Bank’s relationship with the people whom I represent as head of the Federal Reserve Bank of New York. Last summer I travelled through central and western New York and met with community leaders, business people, academics, bankers and government officials.
Second, one would also like to ascertain whether the presence of an implicit subsidy does lead to higher risk taking, and the quantitative importance of this effect. The third question has to do with regulation, i.e. : “what can be done to address this issue?” It seems that there are three main approaches: •  Some regulatory measures try to eliminate possible symptoms of the implicit subsidy. For instance, proposals on restrictions on bank market activities have been justified by the objective of limiting the implicit subsidy to non-traditional banking activities. •  Another approach is to directly target the underlying cause of the problem, for instance by making easier the resolution of problems at large banks without resorting to taxpayer money. Some progress has been achieved in the US (through the Orderly Liquidation Authority), and in Europe (through the Recovery and Resolution Directive). •  A third approach, illustrated by the G-SIBs framework, is to offset the implicit subsidy with additional capital and bailinable debt requirements the so called TLAC or other regulatory measures. Concluding remarks To conclude, I would offer two remarks which you may want to keep in mind. The first remark has to do with the comparative advantage of too-systemic-to-fail institutions, and in particular of global systemically important banks. In reaction to the crisis, many regulatory reforms have been put in place on capital and liquidity, credit exposure to counterparties, supervision, and trading activities.

The assets managed by Singaporebased fund managers grew by 24% to almost $ in 2006. 4  BIS Review 76/2007  Second, the sources of funds flowing into or through Singapore continue to diversify. The Middle East has becoming increasingly important, along with South Asia. Funds sourced from the Middle East and South Asia grew by 21% and 36% respectively year-on-year. One of our local banks, DBS Bank, recently formed a joint venture with a group of Arab investors to set up Singapore’s first Islamic bank. This will spur the development of Islamic financial products in Singapore. I understand that Japan is also moving into Islamic finance. We can learn from each other and work together. Third, the critical mass of asset management activity in Singapore is continuing to grow. In 2006, 57% of the total AUM in Singapore was invested in the Asian region. Fund managers continue to use Singapore as their regional headquarters because they see Singapore as a prime location to service clients, raise capital from the region, as well as invest into the region and beyond. Singapore has also grown as a centre for hedge fund managers. Not only have these alternative investment managers contributed to the growth of our asset management industry, they have also added to its breadth and depth. Why has Singapore seen such strong growth as a financial centre? I think much of it has to do with our continuous efforts to enhance Singapore’s position as a gateway to Asia by transforming Singapore into a global city.