samchain/econo-pairs-v1 huggingface dataset:
For example, when we look at how the capital ratio has changed since the financial crisis, we should bear in mind that the comparison is not like-for-like; today this ratio is constructed on the basis of much stricter definitions and criteria than those in 2009. Likewise, when we assess our ability to pre-empt and respond to a crisis, we should consider the European supervisory institutional framework we have today, which did not exist just 10 years back. Resilience of the sector in the face of crisis Though oft-repeated, allow me to reiterate a message: the point of departure of the European and Spanish banking sectors is much sounder than it was when the financial crisis burst, enabling it to be part of the solution instead of part of the problem. Although we should view the results with all due prudence, the recent SSM and Banco de España stress tests evidence, overall, the system’s resilience in the face of a shock such as that we are experiencing, despite the natural dispersion in individual results. 2  In conclusion, we have a stronger and more resilient banking system, subject to more rigorous regulations and to pan-European centralised supervision. Macroprudential framework The elements I have just described give shape to what we know as microprudential supervision, and which, until recently, we simply called supervision.

Coordinated application of these tools will clearly pose a challenge to the new Spanish macroprudential authority (AMCESFI), which published its first annual report on 31 July. I think it may be inferred from what I have said that the definition of macroprudential policy is currently evolving. In the present decade, we are moving from the drawing board to implementation, that is to say from the theoretical framework to practical application, while attempting to learn from experience in other jurisdictions. 4  One of the issues currently under debate is the usability of these buffers and the possible constraints that may limit it. As I have already mentioned, the amendments to the Basel III microprudential framework also include specific capital buffers, for example, to cover the systemic dimension of some institutions or to conserve capital. Clearly these liquidity and capital buffers are helping in the present situation, but banks are reluctant to use them, given the implications that a reduction in the capital ratio would have on the markets and the fact that it could potentially affect the coupon payments on certain issuances. In this respect, the macro and microprudential authorities need to collaborate to coordinate the measures to be adopted in this context. Evidently, many of the actions taken in response to the crisis have implications for both types of supervision. Some examples would include the recommendations on the use of liquidity and capital buffers, supervisory expectations regarding the timeline and conditions for replenishing buffers and, more recently, recommendations on dividend distributions and variable remuneration payments.
In practice it is often interpreted as stabilising resource utilisation around its normal level. I think that is a fairly reasonable interpretation and it is not easy to argue for anything entirely different. At the Riksbank we approach the concept of a well-balanced monetary policy by forecasting such things as inflation and resource utilisation for different monetary policy actions. After this we try to select the course of action associated with the best possible forecast outcome; in other words the forecasts where inflation is best stabilised around the inflation target and resource utilisation around a normal level. This may sound simple and obvious but in practice is not that easy. In the first place, the best measure of resource utilisation is far from obvious and we Executive Board members may have slightly different opinions on this. 9 We are constantly working to improve the measures of resource utilisation and this is important. But as I see it  Implications, Wiley 2003. Lars Nyberg discusses the balance sheet channel in more detail in the speech “After the crisis – new thoughts on monetary policy” published on 6 December 2010. 9  For a more detailed discussion of how resource utilisation can be measured, see the speech “Potential GDP, resource utilisation and monetary policy” by Svante Öberg held on 7 October 2010, and the article “The driving force behind trends in the economy can be analysed using a production function” in the Monetary Policy Report of October 2010.

David Clementi: Recent developments in securities markets and the implications for financial stability Speech by David Clementi, Deputy Governor of the Bank of England, to the Euromoney International Bond Congress, London, 21 February 2001. *  *  *  Introduction Let me begin by saying how pleased I am to be giving the closing address at this Conference. I know, in previous years, the Governor has done the honours. While he is engaged elsewhere today, I am glad to keep up the association with the Bank. Especially now we have joined the ranks of issuers in the Euro markets in our own name. If you did not have a chance to subscribe to our euronotes in January, the issue - the 4.5% of 2004 - will reopen in April, July and October. But I have not come to plug our paper. Nor have I come to talk about monetary policy. The minutes of the February meeting, published this morning, are designed to set out the MPC's considered view as well as the vote itself. On the voting front, you will find there was a rare outbreak of unanimity in the Committee with a nine to nothing vote for the recent ¼% cut in rates. But there is little on this front that I can add that is not already in the minutes or in the Inflation Report we published last week. I want to talk instead about recent developments in bond markets that impinge on the Bank's role in relation to financial stability.
Mr. Chairman, in good times, we normally take the stability and integrity of our systems for granted. Perhaps one of the key lessons from the current crisis is that we should never, ever, take stability and integrity as being “given” conditions, in the future. But, let’s remember that memories are short. This global crisis will almost certainly be forgotten in a few years time. It is also likely that if we enjoy a strong run of growth and prosperity for a few years, our minds too will probably dismiss thoughts of destability. Today’s grim discussions would then be relegated to the drab background, and in its place, the glitz and glamour of fast growth, handsome profits, stunning incentives, and fabulous wealth would reign supreme. Unfortunately, Mr. Chairman, if and when that happens, the world would unconsciously drift into the danger zone yet again. Needless to say, if we do not want such an eventuality to take place, the price would be intense vigilance on the part of the regulators, governments, media and the academia. I know that is going to be tough, but in the interest of all stakeholders, I sincerely hope it works and that the academia, governments, media and regulators would face up to that challenge.

The embarrassing summersaults that various governments had to perform by unceremoniously ditching some of their most sacred and fundamental policies, have also been better understood, by many communities. Now, what is needed is to move forward decisively within this new paradigm. To do so effectively, we have to essentially place some barriers to deal with unsustainable risk taking. The freedom of the wild ass that supported unfettered and reckless economic actions to create things out of nothing has to be dealt with. At the same time, we need to revisit some of the fallacies that developed over the last decade or so, including those that indirectly said: “Don’t worry too much about a few bubbles”; “markets are always right”, “innovation should not be discouraged”; “state intervention is dangerous”, etc. In a way, some of these positions perhaps prompted a kind of an unconscious regulatory anarchy! The resulting subdued regulatory reactions were of course exploited by the greedy market and the rest is history! This time round therefore, the wisdom of such concepts and absolute reliance on them, would need to be critically reviewed. What then should we do? Maybe, we could start by making a “Wish-list”, and then moving towards making a “To-do list” to realize such wishes. What could we wish for? First, perhaps we should wish for effective “immunization” mechanisms to safeguard national financial systems from the contagion effects of globalized viruses and cross border toxic elements.
For emerging economies, capital flow volatility is a fact of life and something that policy makers have to deal with; and we have to acknowledge that the size and volatility of capital flows will only intensify. While the transmission of global shocks to the domestic economy through the real economy channel – that is through trade and investment – is something that we have been dealing with for decades, policy makers today are confronted with the increasingly dominant channel of 1/3  BIS central bankers' speeches  transmission of shocks through the financial markets, at least in the immediate term. All of us have experienced how spillovers from external developments that were manifested through capital flow volatility have adversely affected domestic financial markets, asset prices, liquidity conditions and importantly, exchange rates. All these challenges make for a complicated policy environment for ASEAN central banks. Gone are the days when keeping our own house in order is enough. Sure, good fundamentals matter as they have no substitute. They are, however, no longer sufficient. As Keynes rightly pointed out a long time ago, “the market can stay irrational longer than you can remain solvent.” Often, we have seen how external developments that are beyond our control, such as the unprecedented quantitative easing by the advanced economies and the subsequent Taper Tantrum, triggered periods of large inflows followed by sharp reversals in emerging economies with severe consequences. For small open economies, these flows can easily overwhelm the domestic financial markets and lead to build-up of vulnerabilities in the economy.

Chart 11 provides an assessment, drawing on IMF analysis, of the evolution of structural deficits and surpluses for two alternative scenarios, with the red dashed line corresponding to an assumption that supply impairment in the advanced economies as a result of the crisis is minimal (and therefore output gaps are correspondingly large), whereas the blue dashed line – which corresponds to the IMF’s central case – assumes a relatively high degree of supply impairment (and therefore substantially smaller output gaps). In the former case, the bulk of the post-crisis narrowing in imbalances is attributed to cyclical factors, whereas in the latter they are attributed to structural factors. Clearly, depending how one reads the data, one can arrive at a different conclusion. An alternative way into this is to look at what has happened to relative prices, rather than quantities. A natural counterpart of a rotation in demand from the advanced to the emerging world should be a fall in the real exchange rates of the former and a rise in those of the latter. By increasing the profitability in deficit countries of producing internationally tradable goods and services relative to that of non-tradables, that should facilitate the necessary shift of resources between sectors. The opposite is true for the emerging economies. Chart 12 shows such a shift has taken place since before the crisis, with both sterling and the dollar depreciating in real terms, and the renminbi appreciating.
Dear Ladies and Gentlemen, The financial system and the banking sector at the heart of it play a unique role for economic development and welfare in Albania. This system provides payment instruments, contributing to the free circulation of products and services. It also offers savings and credit instruments for households and enterprises, promoting therefore development and enhancing welfare. The financial system helps households, enterprises and the economy to withstand shocks, by undertaking risks on its balance sheets and offering products to insure life, business activities and against natural disasters. Therefore, the efficiency, stability and sophistication of the financial system are essential preconditions for rapid, stable and comprehensive growth. The development level of an economy is inter-related and inter-dependent on the development level of its financial system. This has been extensively illustrated by the Albanian experience over the last three decades. The progress marked in the first decade of transition was conditioned by, among other things, embryonic developments in the banking and financial sectors. In the second decade, the activity of the banking sector expanded and competitiveness in this sector increased, setting the stage for crediting and economic growth to gather speed. This performance was disrupted by the global financial crisis effects spilled over to Albanian economy. However, unlike in many countries of the region, the crisis did not trigger recession or a proper financial crisis in Albania. Yet, indirect effects were present both in the economy and in the financial system.

Its successful realisation will enable our economy to grow at a fast and steady pace, and will mark a step forward in our journey towards EU integration. On behalf of the Bank of Albania, let me affirm our readiness to rise to the challenge. I am also confident that today’s conference will provide a significant contribution to finding optimal solutions. Hoping that you will find the Conference and your stay in Tirana both valuable and enjoyable, I wish the conference a great success! Thank you for your attention! 4/4  BIS central bankers' speeches
Mario Draghi: ECB press conference – introductory statement Introductory statement by Mr Mario Draghi, President of the European Central Bank, Frankfurt am Main, 4 December 2014. *  *  *  Ladies and gentlemen, the Vice-President and I are very pleased to welcome you to the first press conference in our new premises. 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, and in line with our forward guidance, we decided to keep the key ECB interest rates unchanged. As regards our nonstandard monetary policy measures, we have started purchasing covered bonds and asset-backed securities. These purchase programmes will last for at least two years. Next week, we will conduct the second targeted longer-term refinancing operation, to be followed by six further operations until June 2016. Taken together, our measures will have a sizeable impact on our balance sheet, which is intended to move towards the dimensions it had at the beginning of 2012. In the coming months, our measures will further ease the monetary policy stance more broadly, support our forward guidance on the key ECB interest rates and reinforce the fact that there are significant and increasing differences in the monetary policy cycle between major advanced economies. However, the latest euro area macroeconomic projections indicate lower inflation, accompanied by weaker real GDP growth and subdued monetary dynamics.

Out of 48 countries considered in the study, 35 adopted some of the macroprudential policies identified. This amounts to 73%, a significant fraction. However, there is large concentration in few policies. In effect, the most commonly adopted policies are those aimed at reducing the vulnerability of borrowers. For instance, the most widely used measure across countries is caps on Loanto-value. They have been present in 24 out of 48 countries studied in the period that ranges from 2000 to 2010. Two more countries should be added that adopted similar policies (Debtto-income caps). Overall, 54% of countries applied this type of measure. The second most common objective of macroprudential policies adopted is reducing credit growth, with 14 out of 48 advanced and emerging countries (29% of the sample) having used one or more of the instruments in this group. Six countries opted for direct caps on credit growth, five for reserve requirements, nine for dynamic-loan loss provisioning, among which two also applied countercyclical capital requirements. Finally, limiting foreign currency exposure was adopted by eight countries, while restrictions on profit distribution by six. 2  BIS central bankers’ speeches  As mentioned before, there have been several studies assessing the impact of macroprudential policies in cross-country settings. 1 For the sake of brevity, I will focus on the results of variables that have been tested in at least five studies.
In this case, the additional revenues will not influence the economy, but be invested abroad via the Government Petroleum Fund. On the other hand, if the additional revenues are absorbed in the domestic economy through increased government budget expenditure, total domestic demand is influenced. Increased expenditure requires an increase in the public sector’s use of resources, primarily labour. In this case, 1% of GDP is substantial. If such an increase in oil revenues is used domestically, it corresponds, for example, to around half of average annual growth in the economy. If the private sector of the economy also expands while the economy is nearing capacity limits, such a policy will heighten the pressures on resources in the economy, which in turn fuels inflationary pressures. Unfortunately there was a clear tendency of such a policy in 1996, 1997 and 1998. The non-oil government budget deficit was indeed reduced, but the division of responsibility in economic policy required a more active tightening. Rather than conducting a tight policy and countering the higher  9  BIS Review 20/1999  growth in the business sector, the increase in budget expenditure entailed that the public sector also contributed to fuelling pressures in the labour market. As a result, a small change in oil prices had the effect it was not intended to have: it was accompanied by an increase in public sector demand. Foreign exchange market participants observed that economic policy was not oriented towards containing pressures in the labour market.

2  Source: “Trade Transformed: The Emerging New Corridors of Trade Power”, Citibank (Oct 2011) & McKinsey. 3  Source: “Under Pressure: Funding in an Uncertain World”, Allen & Overy (Oct 2011). BIS central bankers’ speeches  1  arising from revised Basel capital rules. Nevertheless, we are unlikely to see sudden dislocation in the Asian financing landscape because of the following: 6.1. First, Asian banks remain well-capitalised, and notwithstanding cost/deleveraging pressures, international banks will want to preserve their Asian franchises given Asia’s stronger growth potential relative to other regions. 6.2. Second, bank financing in Asia will adapt. Some banks have already begun to explore certain risk-transfer mechanisms (e.g. credit insurance) to continue extending credit, while complying with stricter capital rules. Other banks have shifted to “originate and distribute” models which allows them to play a role in long-term financing even as they scale back their provision of long-term loans. We expect banks in Asia to continually explore new models to remain relevant and constantly develop its expertise to meet Asia’s financing demands. 6.3. Third, growing role of non-bank capital to complement bank financing: The signs are very promising. From 2007-2011, the proportion of aggregate capital raised by private equity growth funds in Asia Pacific has almost doubled from 32% to 62%. On debt markets, we have seen strong issuance activity in Asia Pacific ex-Japan.
The economic distress and the extraordinary uncertainty about the future course of the pandemic have set off a tidal wave of flows of money away from riskier investments to the safety of cash. This sudden shift led to an evaporation of liquidity and breakdowns in the functioning of key 1/4  BIS central bankers' speeches  financial markets. This includes the market for U.S. Treasury securities, the cornerstone of the global financial system. These developments, if left unchecked, threaten to starve our economy of the credit that it badly needs during this difficult time. The Response Last month, as the risks posed by the coronavirus became increasingly apparent, the Federal Reserve took swift and decisive action to support the economy and stabilize financial markets. In two unscheduled meetings in the first half of March, the Federal Open Market Committee (FOMC) quickly brought the target range for the federal funds rate to near zero.1 The FOMC also signaled that it expects to keep interest rates at this level until it is confident that the economy has weathered recent events and is on track to achieve the Fed’s maximum employment and price stability goals.2 These monetary policy actions serve two purposes. First, low interest rates make it easier for households and businesses to meet their borrowing needs during this time of economic stress. Second, they foster broader financial conditions that will help promote the rebound in spending and investment needed to return the economy to full strength.

I want to emphasize that this is first and foremost a public health crisis, and a human tragedy. It’s our doctors, nurses, and healthcare professionals who are on the front lines, fighting this disease and caring for those who are suffering. We owe them a great debt of gratitude. My sincere thanks is also with the grocery store workers, those in law enforcement and transportation, and everyone who continues to carry out essential work each day. The Scale of the Challenge The necessary actions taken to slow and contain the spread of the coronavirus are not only changing how we live our lives, but are also having a profound effect on the economy and financial markets, both here and abroad. Although many people have drawn comparisons with the financial crisis of 2008, the current turmoil is fundamentally different from recessions of the past. The challenges before us do not stem from vulnerabilities at banks or the bursting of a bubble—I can only liken them to a natural disaster of global proportions. If we look back to February, the American economy was strong, with unemployment at historical lows. But, now, social distancing and other restrictions imposed in response to the pandemic are causing severe, rapid declines in jobs and income. Unprecedented numbers have filed for unemployment insurance in the past several weeks alone, and we know that more economic pain is still to come. The reality is that the full scale of the economic consequences is still unknown.