samchain/econo-pairs-v1 huggingface dataset:
These cover, in particular, monetary and financial statistics, namely MFI balance sheet data, MFI interest rate statistics, investment funds statistics and statistics on securitisation, as well as consolidated banking data. Information from market data providers, available via the ECB’s Market Database, as well as from international institutions such as the Bank for International Settlements (BIS), Eurostat or the International Monetary Fund (IMF), which is part of the datasets collected by the ECB, complements the set of information to support the ESRB’s analysis and deliberations. Cooperation is under way to ensure that the new legislative initiatives of the three ESAs incorporate ESRB requirements to the extent that they can be addressed by using supervisory data. Extensive work has already been carried out with the EBA and EIOPA on the new supervisory templates to be introduced in the next few years. Given the need for agility in responding to new data to cover ESRB requests for information, work on procedures to conduct ad hoc surveys has been carried out, ensuring that the confidentiality issues are duly resolved. All this work requires a very close and ongoing cooperation not only within the ESCB, but also with the ESAs and national supervisory authorities, within other collaboration fora and with many other stakeholders, in particular in the industries concerned, as well as with international organisations in the context of the G20 initiatives. This cooperation is ensured through a Contact Group recently appointed by the ESRB Steering Committee at my request, and it has already proved to be very useful.

That would be a mistake if we want to take collective control of our destiny in this new world – a world marked by direct criticism and unilateral action on the part of the new President of the United States. What we need is not necessarily more Europe, but rather a “better” Europe: a Europe that is less caught up in the detail, more focused on a few key priorities, and more efficient. A Europe that talks less and acts more: “Little, well, until the end.” Of course, there are some non-economic areas: youth training – like Enrico Letta, I believe in the benefits of an Erasmus-pro programme for apprenticeships – climate change, defence and the protection of our borders, for example. On the economic level, we should be proud of our successes – our single currency, our single market and our shared social model. But to complete the success of our monetary union, it is vital that we make progress on our economic union. There are two concrete levers for achieving this . A “Financing Union for Investment and Innovation” The first immediate step is a “Financing Union for Investment and Innovation” (FUII). Why? In those economies that are close to the so-called technological frontier, as is the case with France and Italy, innovation is the key to economic growth, and not just for start-ups. The problem is that, today in Europe, there are companies that want to invest and innovate, but that cannot find the right financing, notably equity capital.
The resulting dispersal of risk allows banks to diversify their risk profile as well as their sources of revenue. Providing that the gain from diversification outweighs the increased cost of credit assessment, as banks take on exposure to entities where they have no banking relationship, and that risks are priced fully and appropriately, such innovation should improve market efficiency and lower the cost of intermediation and of capital. These changes in the financial environment, however, resulted in banks increasing their exposure to liquidity risk. Banks originated large volumes of long-term loans in the expectation that they could be quickly and readily sold on, but leaving them with additional funding risks if they could not. Contingent liquidity lines to securitisation conduits and special purpose vehicles rose rapidly with little expectation that they would be drawn. Exposures to higher yielding complex structured products rose, with market participants failing to recognise sufficiently that the high yields offered by such products were in part compensation for higher liquidity and market risk and that prospective risk-adjusted returns were much lower than might first appear from their short historic track record. Moreover, in buoyant market conditions, the compensation for liquidity risk itself was bid down to negligible levels by early 2007 (Chart 2). By that stage, many market participants recognised that compensation for risk-taking was too low, but judged that the business risks of exiting lines outweighed the financial risks of continuing to write new business.

While liquidity risk metrics remain complex and challenging, I believe that there is scope over time to achieve some degree of enhanced, consistent disclosure across institutions. The final lesson is the need for stronger oversight of banks’ liquidity risk management practices. The authorities’ role is to preserve financial stability by lowering the probability and impact of bank failures that could threaten the functioning of the financial system more broadly through contagion, spillover and damage to financial networks. There is no incentive  6  Senior Supervisors Group: “Observations on Risk Management Practices during the Recent Market Turbulence” March 2008. 6  BIS Review 50/2008  for private banks to bear this cost spontaneously, as their responsibility is to their shareholders rather than to users of the financial system more broadly. The objective of prudential supervision is to correct this misalignment between private incentives and public policy goals, by forcing banks to deliver higher standards of liquidity risk management and to build stronger defences than they would naturally provide of their own volition. That leaves open the formidably difficult question of the level of resilience to liquidity stress that the authorities should seek from individual banks. An answer to this question requires a balance to be struck between the risks to financial stability if resilience is set too low, and the risks of inefficiency of financial intermediation if buffers are set too high.
Moreover, that base has contracted further in recent years, due to many factors, including regulatory reform and the quantitative easing programs initiated by central banks in many of the major advanced economies. Relative to the vast sums of U.S.-dollar LIBOR contracts I mentioned earlier, the median daily volume of unsecured three-month U.S.-dollar wholesale borrowing is minuscule, at around $ billion, and many days see less than $ million in volume.7 This lack of market liquidity means that these rates cannot be sufficiently transactionbased to be truly representative, and rates that are not transaction-based are more at risk to be manipulated. So, despite efforts to improve LIBOR in recent years—and there undoubtedly have been important changes that have strengthened its administration and governance—the lack of underlying market liquidity for nearly all currencies and maturities remains a problem, and there is no obvious solution.8 The setting of LIBOR still depends heavily on expert judgment. Even for U.S.-dollar LIBOR, actual transactions are the basis for only about one-third of the rate submissions for tenors of one and three months.

It must invest to develop talent. Remuneration that is competitive is one part of the solution. Sadly, the remuneration of employees of takaful operators is not competitive. Among highly skilled employees, we estimate that those in the takaful industry earn 15% less than those in insurers. So long as this difference exists, it will not be the employer of choice for the best talent. The other part of the solution is in building skills and competencies. The industry needs to take this seriously if it wants to break new ground in realising the potential of takaful. Takaful operators must set a clear vision and culture of continuous learning and development. Programmes such as the Chartered Professional in Islamic Finance, Certified Shariah Advisor and Certified Shariah Practitioner play an important role in elevating the technical and ethical standards of the takaful workforce. The industry needs to get behind these standards and invest in upskilling employees across all levels, starting with those in key senior roles. This can take the form of sponsorships for professional qualifications, alignment of incentive systems and development pathways for staff. Agents are also an important component of the takaful eco system. Many of the imperatives that I mentioned earlier are also applicable to them. In particular, professionalising the agency force is a priority. The life insurance industry association is already taking steps to require agents to be accredited by the Financial Accreditation Agency. I hope to see MTA doing the same, and being proactive in providing the support and resources for its implementation.
20.Let me be clear that this is not technology at any cost. We must fully understand the pros and cons of what these changes will mean to banks’ AML systems and controls. At the same time we cannot outsource this responsibility to technology firms. Some of you will know from our work with a Regtech firm specialising in testing screening systems that we expect banks to understand why a machine makes the recommendations it does. 21.Going forward, if we are going to address the challenges, we need to be ambitious. The HKMA plans to move in the coming months from a one-to-one type engagement in our Chatroom, to a many-to-many type engagement where banks, stored value facility (SVF) operators, technology specialists and the regulator come together to tackle AML pain points. This will initially target one or two challenges, but will aim to build momentum and turn the successes into mainstream AML solutions that contribute to effectiveness and efficiency. 22.But that perhaps is still not enough. New technology comes at the right time not only for the regulatees, but also for regulators. With the advice from technology experts, we will embark upon a study to enhance the timely retrieval and transmission of AML/CFT related information and data from banks and SVF operators in a digitalised and efficient way, as opposed to the old-fashioned way of regulatory returns and surveys.

I would nevertheless like to demonstrate how the Smart Banking initiatives are re-shaping the banking sector landscape. Industry responses to the Smart Banking initiatives 3.I have always looked at the Smart Banking Initiatives as a journey. And I am glad to say that we have made good progress with our relevant policy measures throughout this journey. I am particularly excited about the encouraging responses from the banking industry and tech community, which share a common goal of transforming Hong Kong’s financial ecosystem by creating better synergy between banking and technology. Let me highlight some of the positive responses we have observed in respect of these Smart Banking initiatives. 4.First, from the perspective of the banking industry, - We have seen the launch of more than 70 major digital banking and fintech initiatives from various banks since the announcement of the seven initiatives last year. There were more than 20 projects related to mobile payments; 12 biometric authentication initiatives using different biometric attributes, such as fingerprint, finger-vein, voiceprint and facial features; 7 software security tokens; and 30 others, including chatbots powered by artificial intelligence, and enhanced financial services leveraging distributed ledger technologies and social media platform integration. - In addition, we already had the successful launch of remote onboarding services in Hong Kong, and more than 10 banks are preparing to launch similar services. Also, around 10 banks plan to launch online personal lending services that leverage machine learning technologies and data analytics.
On the contrary, one of the most important tasks with regard to the financial system is to facilitate risk-taking; to manage and redistribute financial risks. Methods for this have developed at an incredible rate over the past decade. The new possibilities for risk management have strongly contributed to increasing the efficiency of the financial sector and thereby the economy as a whole. However, it is important that the risks are managed carefully and that they are reasonable in relation to the capital allocated to cover them. They must therefore be clear and transparent to all involved. In this respect, the financial institutions and society as a whole have no fundamentally difference of interests. No one wishes to be surprised by risks they knew nothing about. The Riksbank also works on financial risk issues in many international contexts, in the Basel Committee, the IMF and on committees within the EU and ECB. As the financial markets to a large degree operate across national borders, it is often necessary to establish joint regulations and principles at international level. Throughout, the important issue is to weigh stability concerns against efficiency aspects, to find regulations that make the risks transparent and limit them in relation to the available capital. This should also be achieved without excessively encroaching upon the efficiency and development of the markets. My overall theme today is how the Riksbank views developments in the risk management field from the perspective of financial stability and efficiency.

Lars Heikensten: Risk management and financial stability Speech by Mr Lars Heikensten, Governor of the Sveriges Riksbank, at the Risk Management Forum, Stockholm, 17 February 2004. *  *  *  Why is the Riksbank interested in risk issues? Firstly, I should like to thank you for the invitation to come and speak at the Risk Management Forum. The Riksbank’s objectives are not limited to price stability; the Sveriges Riksbank Act also requires that we promote a safe and efficient payment system. We therefore have a natural interest in monitoring risks in the financial sector and that these are handled in a responsible, but also efficient, manner. As you know, this has not always been the case. At the end of the 1980s, risks built up in the Swedish banking system that were much greater than most people realised. The Riksbank was as unaware of the situation as others. However, when the crisis was over, we decided that we needed to improve our knowledge of the risks in the financial system and to closely follow their development. Later, we began to publish a twice-yearly report on financial stability, which focuses on the development of risks in the financial system. We were actually pioneers in this work and several central banks have since followed our example. Naturally, our endeavour has not been to ensure that the risks are as small as possible in every aspect.
Although the U.S. economy is currently expanding at a moderate pace, we face significant downside risks, mostly relating to the sovereign debt crisis in Europe. Because developments in Europe will have an important bearing on the prospects for growth and jobs here in the U.S., the Federal Reserve is monitoring the situation there closely. This is also why we have taken special steps, in cooperation with other central banks, to support the flow of credit to households and businesses. I welcome the opportunity to testify on these matters today. II. Europe  Within the European Union, seventeen countries share a common currency, the euro. The situation in the euro area is very unsettled, with pressure on sovereign debt markets and local banking systems. The euro area has the capacity, including the fiscal capacity, to overcome its challenges. However, the politics are very difficult, both because the problem has many dimensions, and because many different countries and institutions in the euro area have to coordinate their actions in order to achieve a coherent and effective policy response. Europe’s leadership has affirmed its commitment to the European Union and its single currency monetary union on numerous occasions. And the leadership is working to achieve greater policy coordination in areas such as fiscal policy. Putting all the countries using the euro on a clearly sustainable fiscal path would help restore market confidence. Assuming that Europe ultimately succeeds in managing this situation, a stronger union will emerge that will be viewed as more robust and resilient.

Finally, we turn to the layer at the base of the system – the Instruments, or forms of money that should confer the properties of a public good. 2/4  BIS central bankers' speeches  The decentralisation of instruments is most clearly associated with the emergence of alternative currencies to those issued by central banks. Technology firms with large ecosystems, or technology itself can create new non-fiat currencies. While today’s crypto instruments (e.g. Bitcoin) have failed to become money, we should not discount the possibility of better algorithms leading to viable cryptocurrencies as a global medium of exchange in the future. But the widespread use of private cryptocurrencies could lead to an erosion of the nation state’s monetary sovereignty. This will in turn have implications for central banks’ ability to safeguard financial stability. As Mark points out, the continued centrality of public money in the financial system is key to safeguarding the soundness and stability of all money in the economy. A pre-condition for this is that state-issued currency remains the domestic economy’s predominant unit of account. The currencies of small, open economies may be particularly vulnerable to loss of monetary sovereignty. They do not have the global network effects that currencies of larger nations enjoy. Markus Brunnermeier and others have highlighted the possibility of “digital currency areas” that transcend national borders with even larger and more powerful network effects. Currency competition is not a challenge that we are unfamiliar with.
The mutual or building society sector’s roots in Yorkshire are just as deep.4 Although the first societies appeared in the Midlands in around 1775, within a decade Yorkshire had established its first society, the Hill House Bank Building Club in 1785. By the end of the century, numbers had swelled to around 50, mostly in the Midlands, Lancashire and Yorkshire. The early mutuals pooled savings to buy property for members and terminated once all members’ housing needs were satisfied – so-called “terminating societies”. In 1844, “permanent societies” were permitted, which allowed for a revolving set of both savers and borrowers. But the mutuality principle remained – “to enable a working man to secure himself in the course of a few years a dwelling-house as his own freehold property, as a home for himself and family.”5 Numbers of mutuals grew rapidly during the 19th century, reaching around 850 by 1850 and over 1500 by 1875, with almost 100 in Yorkshire alone. Here in Leeds, the Leeds and Holbeck Permanent Building Society was founded in 1875 and, having been renamed Leeds Building Society in 2005, it remains in the top 10 building societies by size nationally. Consolidation and, latterly, demutualization have reduced numbers over the past few decades. Today, there are only a handful of independent, indigenous mutuals in the region. But they remain some of the strongest in the country. The success of Yorkshire’s financial sector over this lengthy period is no fluke. A reading of history reveals the same successful recipe being repeated.

The supermarket model potentially does offer some risk benefits – the benefits of diversification. Profitable business lines can compensate for temporarily non-profitable ones. What is lost on the swings may be regained on the roundabouts. This is a story about which we have heard much over the past few months, especially among the biggest global banks. In the first half of this year, big losses on the banking book swings have been more than offset by big gains on the trading book roundabouts. Diversification, we were told, was paying dividends – and, indeed, bonuses. But memories can be deceptively short. Rewind the clock one year. Then, it was trading book losses that were eroding confidence in the banks. This in turn prompted fears about some banks’ solvency, aggravating the very recession which is now generating banking book losses. Trading book gains may well be acting as a hedge today. But they are hedging a risk they helped create. All of this implies that business line diversification can be a double-edged sword. During the upswing, banks enjoyed windfall gains from bets at the race-track. This boosted their buffers. But when those bets turned sour, these same activities put at risk banks’ day job – the provision of loan and deposit services to the real economy. 9500 sub-prime mortgage products at the height of the boom might well have been too many. But zero is surely too few. There is a second important downside to diversification.
2  A banking crisis every thirty years With this historical retrospective, I would like to remind you that as long as there have been banks, there have also been financial crises. And when financial crises have arisen, the state has often had to rush to the rescue in one way or another. In Sweden alone, severe banking crises have occurred no less than nine times in the past 250 years. 3 This entails, on average, one crisis every thirty years. 1 Thank you to Johan Molin, who has helped me write this speech. Valuable comments were received from Mats  Anderson, Christina Nordh Berntsson, Sara Edholm, David Forsman, Mattias Hector, Martin W. Johansson, Gabriel Söderberg and Anders Vredin. 2 See Wetterberg (2009). 3 See, for example, Hagberg (2007). 1 [14]  This speech is about how Sweden can counteract and mitigate the effect of such crises, and not least the significance of having an appropriately-designed foreign currency reserve to succeed in this. Johan Palmstruch’s banknotes were an innovation in their day, but now, 350 years later, we in Sweden are heading towards a cashless society, primarily due to new financial technology in the payments field. What this and some other development trends may entail for society and for the Riksbank is the subject of my speech today. The banks’ business models entail risks What is so special about banks that the government sometimes intervenes to counteract banking crises? Nothing like this happens when, for instance, a manufacturing or construction company collapses.

Economic outlook: tug of war between improving fundamentals and fiscal restraint The U.S. economy remains on the slow growth track that has persisted since the recession ended in mid-2009. In fact, in 2012 real GDP grew just 1.6 percent, below the 2.2 percent rate of the preceding two years. This lackluster and disappointing performance masks the fact that the underlying conditions that support growth are gradually improving. However, in the near-term, this improvement in fundamentals is being offset by increased fiscal drag. Let’s first examine the fundamentals, which have improved in at least six ways. First, household deleveraging is now well advanced. Household debt has declined significantly relative to income (Exhibit 1). In the same vein, the household financial obligations ratio has fallen to levels last seen in the early 1980s (Exhibit 2).1 Second, the structural adjustment in housing has largely run its course. Activity and prices are firming, supported by low interest rates. Over the past four quarters, housing starts rose by 33 percent, existing home sales climbed by 12 percent (Exhibit 3), and home prices, as measured by the CoreLogic national home price index, were up over 7 percent (Exhibit 4). Although the pace of recovery varies regionally, the U.S. housing sector as a whole is now clearly rebounding. I see the recovery in home prices as particularly important. Houses are a significant component of household wealth. In addition, as home prices begin to rise we are likely to see more transactions and more building activity.