samchain/econo-pairs-v1 huggingface dataset:
When making a comparison with the measures of other central banks, people often forget that monetary policy measures, including unconventional ones, have to be adapted to the institutional conditions, economic specifics and financing structure which make up a currency area. Measures which are appropriate in one currency area can be ineffective elsewhere. What seems like the first option in one place can be the very last resort elsewhere, without the actual aim of the measures having to differ much from one another. Instead, we should ask: would such purchases have the desired effect on the rate of inflation? What “quantities” would need to be purchased to have an effect? How long would such effects last? The euro area is characterised by a bank-based financial system which makes it considerably different from more strongly market-based financial systems, particularly in the United Kingdom and the United States. This explains our focus on refinancing operations, which have enabled the banking system to overcome liquidity bottlenecks, maintain credit relationships and enter new credit arrangements. Our measures from June and September 2014 also serve to support the credit channel. In essence, it is about improving funding  BIS central bankers’ speeches  3  conditions for borrowers in the real economy. The same logic can also be applied to the selective purchase programmes for covered bonds and asset-backed securities. The Eurosystem is currently faced with 18, soon to be 19, issuers of government securities.

G20 Leaders and Finance Minsters need to keep our We may not be able to abolish the occasional waves of optimism that grip humanity and the tendency to excess they set off. But we can and must dampen their effects on the financial system and economy. This must include changing the incentives that bankers face. It will include a simplification of the capital markets; and constraints on the effects of exuberance through policies on leverage, capital and liquidity – applied beyond banking where warranted. And it must include macroprudential regimes that help us to refresh the microregulatory regimes and enable the authorities to take away the punchbowl when the party threatens to get out of control. Markets will, in time, forget about the risks, but the system will be safer if we succeed in building official institutions that do not forget. Parliament can underpin that by holding us to account in this endeavour, as it does on monetary policy – incentives matter in the official sector too. That will make for a safer and sounder financial system that can meet the abiding needs of the economy as a whole. And, to those of you here today, I would say that the Bank believes what it always believed: that sound and honest finance is not only essential for the economy, it will be good for the City too. 8  BIS central bankers’ speeches
Recently, a raft of measures has been approved to help the business sector and the selfemployed, which may prove a useful tool precisely for reducing this risk. In this connection, its swift and consistent implementation is crucial. And the distribution mechanisms must selectively target the assistance on firms that are viable but have solvency problems. Flexibility is also needed in the volume and use of committed funds, so as to adapt to the course the pandemic takes and to the potential materialisation of risks. 5  In parallel, we must promptly identify the structural transformations caused by the pandemic. There may be firms that have ceased to be viable and it would be counterproductive for them to be sustained indefinitely by budgetary policy. For these firms, it would be desirable to make insolvency procedures more flexible. The proper functioning of the flexibility mechanisms available to firms must also be ensured. Their role is crucial for allowing potential structural adjustments derived from the crisis. And, of course, there should be an emphasis on active employment and training policies to smooth the reallocation of workers to sectors with a future. All these actions would help, jointly and complementarily, to prevent the crisis from taking on an additional financial component. The banking sector could thus continue to be part of the solution to the crisis by granting credit to households and firms, and contributing to the recovery of the economy.

In banking, and given the crucial role this sector has still to play, we supervisory authorities have continued to stress that the use of capital buffers by banks is appropriate for recognising credit impairment and to continue providing solvent credit to households and firms. Banks will have sufficient time to comply once more with their capital requirements, and the start of the process will never be before the main effects of the pandemic have dissipated. In parallel, given the uncertainty still in place, and the fact that the impact of the pandemic has not been fully manifest on bank balance sheets and that they continue to benefit from various public support measures, we have recommended that banks act with extreme prudence in dividend distribution policies. In tandem, banks must pursue a policy of early recognition of impairment losses, ensuring that this is appropriate and timely, as stipulated in supervisory guidelines. Fiscal policy support in this phase should focus on the firms and population groups most affected. One particularly important aspect is the support to viable firms which, in light of the scale and duration of the crisis, have seen their solvency worsen. Should such solvency problems materialise, they would not only prompt destruction of the productive system and employment, in firms that could be viable in the post-pandemic scenario; they might also ultimately affect the financial position of the banking sector, which might respond with lending restrictions that would feed back negatively into the prospect of recovery and economic growth in the medium term.
The actions we expect firms to take will be based on those judgements; Secondly, it is forward looking – assessing firms not just against the current risk environment but, as I have just outlined, on how existing risks may evolve and new risks emerge; and Thirdly, it is focused on the key risks – and that is where we’ll primarily dedicate our focus and attention. Across those three principles we will continue to apply proportionality. This means the supervisory focus on your firm will reflect your size and complexity. Bank of England  Page 6  Although the key elements of our supervisory approach remain, we have made some enhancements, which we communicated to you in our January Priorities letter13. These include revising the way we categorise the ‘potential impact’ of firms and refining our schedule of ongoing core assurance work. We are communicating what this means to individual firms over the next year, through the supervisory communications we send. We also have some significant change taking place on the regulatory front. The Financial Services and Markets Bill, which is currently making its way through Parliament will – if passed into law – introduce a new secondary competitiveness and growth objective for the PRA. This would sit below our primary objective, to promote the safety and soundness of firms, and alongside our existing secondary objective to facilitate effective competition in the market for services provided by PRA-authorised firms.

We are also considering what a layer of the framework for ‘mid-tier’ firms might look like, and are currently undertaking some engagement with relevant firms to understand where they see scope for simplification of the prudential regime. Other Priorities Before I close, I did want to note our ongoing focus on Diversity & Inclusion in the sector. This is an important area which helps enhance governance, decision-making and risk management in firms, as well as the services you provide your members. We plan a consultation paper later this year, building upon the joint 2021 PRA/FCA discussion paper18, setting out proposals to introduce a new regulatory framework on diversity, equity and inclusion in the financial sector. I strongly encourage you to engage with those proposals once they are published. In Conclusion Let me briefly sum up. I’ve stressed today the important role that mutuals play in providing your services to a diverse range of households and business right across the UK. It’s vital those services are 16 CP4/23 - The Strong and Simple Framework: Liquidity and Disclosure requirements for Simpler-  regime Firms | Bank of England 17 FS1/21 – ‘Responses to DP1/21 ‘A strong and simple prudential framework for non-systemic banks and building societies’ | Bank of England 18 DP2/21 – Diversity and inclusion in the financial sector – working together to drive change | Bank of England  Bank of England  Page 9  underpinned by resilient firms.
As for the price stability component of our dual mandate, the majority of FOMC participants – including me – judge our objective for overall inflation to average 2 percent over the medium term. With my own view that inflation is likely to run below this rate over the next few years, I believe we run the risk of missing on our inflation objective as well. Two different perspectives on the economy Central bankers must formulate monetary policy with the understanding that our knowledge is imperfect. We may have incomplete and sometimes competing views of the forces that generate current economic conditions. This is especially true in the difficult circumstances we face today. In my view, we should try to formulate a monetary policy strategy that carefully balances the risks associated with the reasonable alternative economic scenarios that we face and is as robust as possible to miscalculations as to which of these scenarios is predominantly true. Let me now discuss two quite different perspectives that could account for the disappointing slow growth and continued high unemployment that we confront today. These two conditions are important to consider in that they have markedly different monetary policy prescriptions. The first storyline I will refer to as the “structural impediments scenario”. In this scenario, the recent period, which has been referred to as the Great Recession, was accompanied by an acute period of structural change, skills mismatch, job-killing uncertainties and excessive  2  BIS central bankers’ speeches  regulatory burdens.

These challenges exist for all participants in these markets: for the institutions that underwrite, structure and distribute these risks; for those who trade or hold them; and for third parties, like the rating agencies. These challenges of complexity are significant as well because they can exacerbate the problem of dealing with classic principal-agent problems. You can see this in the subprime mortgage market where, for example, a person may be rewarded for generating new mortgages on the basis of volume, without being directly exposed to the consequences of default; but these problems exist wherever incentives diverge and contracting is imperfect. Financial institutions typically maintain a range of different checks and balances to deal with the risk of misaligned incentives: for example, between a trader and the principal whose resources are at risk, or between the mortgage broker or underwriter and the firm that ultimately ends up holding the risk. But these checks and balances depend in part on the capacity of risk managers to observe and understand the underlying economic risk in these instruments. Where that is harder because of this combination of complexity, imbedded leverage, and short loss history, then market discipline will be weaker. A third issue relates to the dynamics of failure and the infrastructure that supports these markets. The dramatic growth in the volume of over-the-counter derivatives and the growth in the number and size of leveraged funds inevitably complicate the resolution of the failure of a large financial institution that is active in these markets.
In April 2020, as the global economy was still reckoning with the many consequences of  Page 5  prolonged lockdowns, West Texas Intermediate (WTI) oil future contracts close to their expiry date went from positive to negative – people were willing to pay for you to take oil off their hands. Last year, in February 2021, the Great Texas Freeze hit as a result of several severe winter storms; we saw the coldest weather there for generations. This overwhelmed much of the state’s power infrastructure, leading to extraordinary spikes in natural gas and electricity prices – multiplied several hundred times in some markets. Earlier in March this year, the 3-month Nickel contract price rose $ per tonne in two days, and then rose a further $ per tonne in overnight trading, prompting the London Metal Exchange to suspend trading in nickel futures and cancel the overnight trades. These are absolutely extraordinary price moves – the previous historical record two-day increase was $ per tonne (September 2007). There are numerous lessons to be learned from this incident and we have announced an independent review into LME Clear’s governance and risk management framework. [9] CCP’s models and regulation are designed based on history. Initial margin covers price moves with at least 99 percent confidence. CCPs design stress scenarios to prepare for extreme but plausible events. We need more work on what to do about the implausible. [10]  (3) Ignore structural factors at your peril A basic lesson in science and ecology is that population structures matter.

This will make the UK financial system safer. And we are already practicing what we preach. As a home supervisor for UK CCPs throughout the recent stress events I mentioned earlier, cooperation with host authorities has always been at the front of our mind. We held 10 colleges over the past two years. Where necessary, we shared daily updates on developments we were seeing. Together – and working with all of you in industry, I hope that global CCP regulators can find ways to begin to address the lessons I have just laid out: tackling the side effects without sacrificing the cure; dealing with situations in which history is not a good guide to the future; and understanding the structural factors that can lead to big price moves. Addressing the issues we have seen in March 2020 and again in 2022 is both urgent and important. Cooperation will give us a strong foundation on which to enhance the crucial role CCPs play in supporting global financial stability as we address vulnerabilities that have become evident in recent stress. I am grateful to Sarah Crowley, Chandima Wijerathna, Dan Wright, Don Payagala, Michael Wood, Pavel Chichkanov and Shriya Mrug for their help in preparing these remarks. I am also grateful to  Page 7  Jon Cunliffe, Andrew Hauser, David Bailey, Nathanael Benjamin, Sarah Breeden, Andrea Rosen, Imane Bakkar, Martin Arrowsmith, Simon Morley, Justin Jacobs, Barry King and Jaynika Patel for their helpful comments. 1.
With hindsight, one can wonder how so many people could be so sure that we had left the whole story behind us and entered a new world. However, we will probably make the same mistake again. Let me  BIS Review 79/2001  1  just remind you of the first “IT bubble” at the beginning of the last century, which concerned wireless telegraphy. 150 companies were introduced onto the New York stock exchange in 1901 and early 1902. In 1907, only one of these still showed a profit and paid dividends, and even that company had halved its market value since its introduction. Similar development in Sweden The development I have outlined applies first and foremost to the USA until the end of last year, but many parts of the description also fit the Swedish economy. Here, our GDP growth had exceeded 3.5 per cent for three years at the start of the year. The IT and telecom sectors’ large share of Swedish business contributed to a more rapid economic growth in Sweden than in many other European countries. Many people claimed that Sweden also had one foot in the “new economy”. However, the economic upturn here in Sweden started later than that in the USA, and from a situation with a higher level of financial saving in the private sector. The imbalances in saving and foreign trade that distinguished - and still distinguish - the USA thus had no counterpart in Sweden.

At the end of last year, however, resource utilisation in the Swedish economy was beginning to be strained and inflation was estimated to rise to the extent that it would exceed the target level two years’ ahead. The Riksbank therefore raised the repo rate by a quarter of a percentage point to 4.25 per cent. The assessment of the risk spectrum indicated at the same time that a weaker economy in the USA could dampen growth in Sweden. As we now know, this is what happened. Developments during the spring During the first half of the year, the economic climate continued to weaken both in Sweden and other countries, but the signals regarding the strength of the downturn were mixed. The weakening in the economic climate was concentrated to the manufacturing industry, while household confidence remained strong, despite an undermining of household wealth in the form of falling share prices. Property prices were not affected in the same way as share prices, which probably contributed to keeping household’s confidence in the future strong. This applied both to the Swedish economy and the US economy. In the USA the Federal Reserve lowered interest rates gradually by 2.75 percentage points during the first half of the year, while tax reductions provided stimulation for households. For the Riksbank the picture was complicated by the fact that import prices rose unexpectedly rapidly in May. Later, the statistics showed that consumer prices had also risen more rapidly than expected.
Ravi Menon: Data and technology for climate action Keynote remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at COP26 Investor Action on Climate Webinar, 29 June 2021. * * * Distinguished guests, ladies and gentlemen, good morning. Why are we here? Three reasons: First, climate change is the defining crisis of our time – it is already happening, the worst is yet to come, and there is much at stake globally for lives and livelihoods. Second, finance has a key role to play in supporting the world’s transition to a greener and more sustainable trajectory. Third, to enable green finance flows and address climate related risks, we need trusted, timely, and relevant data. I take it we are all on the same page on the fact of climate change and the role of green finance, so let me focus on issues relating to data – which is a critical foundation for the green economy architecture the world needs to build. Financial institutions need accurate, granular data to assess and manage the environmental risks in their portfolios. What kind of data? For example: geographical, climate and weather-related data on their assets as well as along the supply chain; data on firms’ carbon footprint, historical carbon emissions, and pathways to reduce emissions over time; data on energy use and efficiency of physical assets, such as real estate; and data to monitor customers’ compliance to ESG standards and to measure the impact of transition activities on the climate.

To conclude I would like to stress more particularly five points. First, on the economic underpinnings, the main strategic goal of the Eurozone as well as of the European Union as a whole should be to increase substantially our growth potential. This is crucial and calls upon increasing very significantly in particular our rate of employment, our labour productivity progress and our technological and scientific basis. Second, as regards methodology, it is clear that we have to work out an appropriate concept for the actual, precise, to the point implementation of the reforms. The Lisbon agenda is excellent in terms of diagnosis. It is not associated with a precise and efficient decision making process, with a powerful delivery concept, which is absolutely indispensable. I was very encouraged to hear clearly Mr Mc Creevy stressing to the Governing Council of the ECB that the Irish Presidency will put the Lisbon agenda implementation on top of its priorities. The ECB will very warmly back initiatives of the Presidency in that domain. It is urgent. Third, as regards prioritization of structural reforms, I would personally particularly mention four points which seem to me of utmost importance in the Eurozone: Youth unemployment which is attaining unacceptable levels in some economies; unsatisfactory functioning of the Single Market in the service sector; insufficient labour productivity progress in the economy as a whole; and, lastly, consequences to be drawn from ageing in the management of the social protection schemes.
We may be aided by our understanding of the common factors shared by past financial crises, and how lessons from the past have helped to shape the current policy. But always, there will be other or new challenges that will be difficult for us to anticipate or be aware of. With these in mind, let me share with you my thoughts on some of these issues. First, on the causes of financial crisis. According to a well-known study by Reinhart and Rogoff in 2008, financial crises in the past, dated back to the 1800s, shared many common causes. Chief among these are macroeconomic imbalances and the roles played by large and persistent capital flows, asset price bubbles, and credit boom. Although, compared with the Asian financial crisis, the current crisis does differ in terms of the impact, the scale, and the role played by financial innovation, but the two crises, nonetheless, do share many of the common factors mentioned above. For example, in the case of asset price and credit boom, the real house price in the U.S. increased by more than 40 percent between 2002 and 2006, while U.S. loan growth, particularly mortgage loans, accelerated during the same period. These signs were also present in East Asia before the 1997 crisis.

Bandid Nijathaworn: The current financial crisis, lessons learned, and future implications Keynote address by Dr Bandid Nijathaworn, Deputy Governor of the Bank of Thailand, at the 11th SEACEN Conference of Directors of Supervision of Asia-Pacific Economies, Bangkok, 29 July 2009. *  *  *  Distinguished Speakers, Participants, Colleagues, Ladies and Gentlemen, It is my pleasure to be giving this morning’s keynote address for the opening of the eleventh SEACEN Conference of Directors of Supervision of Asia-Pacific Economies under the theme: “The Current Financial Crisis, Lessons Learned, and Future Implications.” This forum gives us an excellent opportunity, at this crucial juncture, to discuss the recent global financial crisis and to share amongst ourselves the experience as well as the lessons learned, so that we can further strengthen and improve our financial systems and supervision. Looking at the agenda, it is certain that the discussion in the next two days will be a most valuable one. So far, the SEACEN economies, one way or another, have all been affected by the current global financial turmoil. As central bankers and regulators, we are faced with the important task of putting in place future regulation, and the obvious place to start is to ask the questions whether the crisis could have been prevented or mitigated in the first place, and how the lessons learned from the current crisis can be used to prevent the next crisis. These are not easy questions to answer.