samchain/econo-pairs-v1 huggingface dataset:
This would have a positive impact on the prestige of our institution, on the trust we inspire in society and on the performance of our functions. In addition, making the Banco de España’s senior management selection process more visible should contribute to fulfilling the legal requirements whereby the Governor and the Deputy Governor must have “recognised competence in monetary or banking matters” and the Council Members “recognised competence in economics or law”. Participation of the legislature in the Banco de España’s senior management selection processes would be consistent with the procedures followed by the European Parliament to appoint the ECB’s senior management, with the opinion of the Parliament now being binding in the case of the Chair and Vice-Chair of the Supervisory Board. In addition, although it is not the predominant model in the main European countries, the parliaments of some countries, such as Finland, Slovakia, Latvia and Lithuania, play an important role in the appointment of their central bank governors. Beyond Europe, in the United States the appointment of the Chair of the Federal Reserve has to be confirmed by the Senate. Although not usual practice, some countries have also introduced certain transparency standards in the procedure for pre-selecting candidates. The Bank of England is one of the most striking examples, as there is an open pre-selection process for appointment of the Governor and Deputy Governors.

It has also been entrusted with other basic functions, such as conducting foreign-exchange operations consistent with the exchange rate policy established, holding and managing the official foreign-exchange reserves of the Member States, and promoting the smooth operation of payment systems. Since 2014, under Article 127(6) of the TFEU and Council Regulation (EU) No 1024/2013 (the “SSM regulation”), the ECB is responsible for specific tasks relating to the prudential supervision of banks located in the participating Member States. The ECB performs these functions within the framework of a Single Supervisory Mechanism made up of the ECB and the national competent authorities, as explained in Part 2 of this Annex. Finally, the ECB has the exclusive right to authorise the issue of banknotes in the euro area, to compile and produce statistics in collaboration with the NCBs in the performance of their functions, and to issue reports on consultations on legislative initiatives of the EU or of the national authorities concerning its sphere of competence. The organisation of the Eurosystem is based on the principle of decentralisation. Decision-making is centralised, while the implementation of decisions is decentralised. In practice, the NCBs perform almost all operational tasks of the Eurosystem: they conduct the monetary policy operations and, as agents of the ECB, manage its foreign reserve holdings, provide payment and securities settlement facilities and ensure the manufacture, issue and post-issue handling of euro banknotes. They also collect statistics for the ECB, collaborate with the ECB on translation and the production of publications and contribute to economic analysis and research.
7 Securitisation played a role in creating cheaper and abundant credit, providing banks with additional funding sources. 8 These developments posed unprecedented and significant challenges for supervisory and regulatory authorities. Although, in some cases, the growing risks and vulnerabilities were identified at the aggregate level, there was insufficient information to understand the interconnections that had been created in the financial system. Furthermore, risk assessments mainly targeted market participants’ behaviour rather than formulating concrete ways to intervene. This reflected the micro-prudential approach of existing legislation, which mainly focused on individual financial institutions, without taking account of interconnections. Let me also briefly mention monetary policy. A wide-ranging discussion is currently under way about the role that keeping interest rates at low levels for a prolonged period has played in fostering the supply of bank credit. According to some research, there is no correlation between the level of interest rates and bank credit, in particular real estate lending. 9 Other recent studies suggest the opposite, providing evidence of several transmission channels. First, the low level of interest rates may affect valuations, incomes and cash flows, which, in turn, can modify the way in which banks measure the expected risks associated with lending. 10 Second, low returns on comparable so-called risk-free securities, such as government bonds, prompt banks, asset managers and insurance companies to take on more risk and invest in assets offering higher returns, particularly if the performance of managers is measured on the basis of nominal yields. 11 Finally, low interest rates facilitate leverage.

As I mentioned before, experience has shown, that in the long run, it is very difficult to maintain soft exchange rate pegs with the free movement of capital across borders. Iceland shares this experience with many other countries during the post-liberalisation face. The response to this has been the observed tendency to adopt hard pegs in the form of monetary unions or currency boards or to go in the direction of floating. As so many other countries, Iceland adopted the second route. This was done in March 2001 by a joint declaration by the government and the Central Bank. The principal objective as stated in the declaration, is to keep inflation as close as possible to 2½ per cent. Should inflation deviate from this target by more than 1½ percentage points in either direction, the Bank is to provide the government with a written public account explaining what caused this deviation, how the Bank intends to respond and how long it expects that it will take for inflation to return to within the targeted inflation limits. In the wake of this declaration, the Icelandic Parliament adopted a new legislation on the Central Bank, giving it one overriding goal, i.e. price stability, and full independence to use its instruments to achieve it. The new framework was immediately subjected to a baptism of fire. Overheating in the economy and the fall of the króna had rekindled inflation.
Therefore, the Eurosystem, as a major provider of critical wholesale clearing and  settlement services in euro, should be open to experimenting these innovations in 3/4  BIS central bankers' speeches  order to revisit and possibly improve the conditions under which we make available central bank money as a settlement asset. We, at the Banque de France, have started gaining exposure and experience with those innovations and in particular DLT. We were the first central bank to develop, regarding the specific use of SEPA creditor credentials, a decentralised register system based on a blockchain infrastructure, the “MADRE” register. Of course, this is only a first step, which does not exhaust an extremely vast and diversified field of experimentation. One possibility often mentioned would be for us to issue a central bank digital currency to support wholesale clearing and settlement services on a decentralised basis using DLT. We, at the Banque de France, are therefore quite open for experiments in that  direction, together with the ECB and other central banks of the Eurosystem, in particular with regard to a wholesale Central Bank Digital Currency. Another operational contribution, which could be worth considering – and experimenting – by central banks, is related to one of the major failings of the current payment systems, which is cross-border retail payments. One solution to the weaknesses of private initiatives in the field of cross-border payments could be to interconnect these systems. It is technically and legally feasible for a given area, for example, in the euro zone.

I will return to these questions a little later when I put forward what I believe to be the main fiscal challenges facing our economy in the medium term. The last question I wish to address in this section relates to the risks underlying the revenue projection. In particular, the Draft Budget assumes that revenue from taxes and social security contributions will rise by 9% in 2021 in budgetary terms. This figure reflects the entry into force of the measures described above and also the projected behaviour of tax bases, which will essentially depend on the macroeconomic environment. In this respect, there are three main factors that condition the feasibility of this forecast, and all three are subject to significant uncertainty. First, the revenue-raising capacity of the new taxes, for which there are very few historical or international benchmarks. Second, the sensitivity of tax revenue to tax bases, which is an elasticity that is very difficult to assess accurately in circumstances such as the present ones for which there are no comparable historical benchmarks. And third, the macroeconomic situation in Spain and worldwide  22  which, as I have said, is subject to major uncertainty and risks which, overall, could result in lower economic growth for 2021. In accordance with the Banco de España’s preliminary analyses, the most significant risks of deviation from the revenue projection in the Draft Budget are concentrated on the last of the three factors mentioned, that is, on the level of momentum of activity in 2021.
Of course, the leverage ratio will play an important as a simple backstop against overreliance on models and past statistical relationships. Open Trust is also needed in a wider context: trust between countries in their supervisory and regulatory frameworks so as to support an open and stable financial system. To achieve its full potential, the financial system must remain global. Fragmentation will reduce the efficiency with which savings are allocated to investments, and potentially lead to misallocation of capital on a global scale. All economies would be harmed by this, whether advanced, emerging or developing. This is a real risk. Since the crisis, measures of capital market integration have declined notably.24 A clear home bias remains in investment. The crisis was a vivid reminder that openness must be built on the foundation of stability and trust in the foundations of the global financial system. For an open system, trust between authorities is therefore fundamental. Although markets and many financial institutions are global, regulation remains national or regional and concerns about spillovers from failures of foreign institutions, or market contagion starting elsewhere, can prompt jurisdictions to safeguard themselves unilaterally. A national regulator’s first responsibility is to do its utmost to ensure the safety and soundness of its own jurisdiction. To avoid the Balkanisation of finance, each regulator must trust others to implement agreed common standards. In this regard, Singapore is a world leader.

It has been severely tested by: taxpayer bail-outs of systemic institutions; rewards perceived as undeserved; a perception that clients have become counterparties; and egregious examples of misconduct and rigging of markets. Without that licence, the door will be opened to a level of regulation that constrains the ability of finance to innovate and support growth and trade efficiently. The licence will require consistent exemplary behaviour, and finance to have a clear sense of its purpose not as an end in itself, but as a means to promote investment, innovation, growth and prosperity. It is not merely that we should want to follow Churchill’s wish to see “finance less proud and industry more content”. We want to see industry content and finance taking justifiable pride in its contribution to society. That is far from straightforward when, even six years on from the crisis and public bailouts, triggers for public opprobrium are plentiful. Last week, the UK’s Financial Conduct Authority, US CFTC and Swiss FINMA fined six banks $ for misconduct in FX markets: misconduct that went on long after banks had already been fined for abusing interbank interest rate benchmarks. The repeated nature of these fines demonstrates that financial penalties alone are not sufficient to address the issues raised. Fundamental change is needed to institutional culture, to compensation arrangements and to markets.19 As Bill Dudley and my colleague Minouche Shafik have argued, the succession of scandals mean it is simply untenable now to argue that the problem is one of a few bad apples.
In the short and medium term, economies subject to protectionist measures suffer reductions in exports and investment, with resulting adverse effects on their activity. Also, the effects on economies that adopt protectionist measures are far from positive, owing to the increase in the price of their imports, which, in turn, leads to an increase in production costs for their businesses and lower purchasing power for households, which leads to adverse effects on private consumption and investment. In addition, the uncertainty associated with trade tensions and the possible tightening of financial conditions may discourage investment further and worsen the negative impact on activity and potential growth. The estimates of the main international organisations in relation to the recent trade tensions between the United States and China suggest that the measures currently in force will have a relatively moderate impact (less than 0.5 pp of GDP in China and the United States, with an even smaller effect on global GDP). However, the application of tariffs and additional non-tariff measures, such as those announced by these two major powers, along with the foreseeable deterioration in confidence and in the financial markets to which this scenario could give rise, would involve much higher costs. According to the International Monetary Fund (IMF), it could, over three years, subtract nearly one percentage point from world GDP, with a more pronounced impact on China (-1.5 pp) and on the United States (-1 pp) than on other areas, such as the euro area, where the losses would be somewhat less than 0.5 pp.

In particular, since 2011, the large international banks have almost doubled their highest quality capital, from $ trillion to $ trillion in 2017. Moreover, since the start of the crisis, they have halved their leverage and improved their liquidity profiles, mainly thanks to an increase in high-quality liquid assets. Progress has also been made in other areas, such as simplifying and boosting transparency in the OTC derivative markets, including through the use of central clearinghouses, and measures have been taken to reduce some of the risks arising from non-bank financial intermediation. Nonetheless, we cannot ignore the persistence of certain risks and vulnerabilities. First, although large banks are now less leveraged, overall debt levels remain very high. Global public-sector and non-financial private-sector debt has increased by some 40 percentage points (pp) since the financial crisis to reach 250% of global gross domestic product (GDP); public-sector debt has increased significantly in the advanced economies and privatesector debt in the emerging economies, especially in China. Second, there has been an increase in the weight of non-bank financing. The weight of other financial intermediaries (OFIs)1 in the global financial system has been growing in recent years, and reached 30% in December 2016, according to the latest data available. This trend is confirmed by the growth in non-bank financial intermediation, which generates similar risks to banking; its weight in the global financial industry increased from 11.6% in 2010 to 13.4% in 2016.
Dimitar Radev: The Bulgarian banking sector – opportunities and challenges Publication by Mr Dimitar Radev, Governor of the Bulgarian National Bank, in the Bulletin of the Association of Banks in Bulgaria, issue 69, January 2022. * * * It is a tradition to start a calendar year by reviewing the achievements of the banking sector in the previous year and outlining the opportunities and challenges in the new one. In 2021 the Covid crisis continued to put the banking sector to a serious test. Unlike the stress tests in 2016 and 2019, the results of this test were not hypothetical, but provided a real assessment of the state of the sector and its capacity to operate under highly adverse conditions. This assessment can be summarised as follows: not only were Bulgarian banks not weakened during the pandemic, but they enter 2022 with performance better than, or at worst consistent with, that at the start of the pandemic, including in terms of capital, liquidity, asset quality and profitability. According to the latest data for 2021, the overall capital adequacy ratio is 22.4% and the liquidity coverage ratio is 325.4%, i.e. above the EU average. At the same time, the gross amount of non-performing loans and advances continued to decline, and profits approached their historically high levels of 2019. The short explanation for these results is that the banking sector was well prepared to operate in a complex and challenging macroeconomic environment, as has been the environment over the past two years.

Allow me to thank you once again for the work and devotion you exhibited over the course of this year. I strongly believe that the truthfulness and objectivity in reporting economic and financial news will continue to accompany you in fulfilling your duty in the coming year. I reaffirm that the Bank of Albania will continue be a transparent institution, ready to provide opinions and assessments as necessary in all public debates related to the performance of our economy and financial markets. A certificate of this commitment and achievement of the Bank of Albania in the communication with the public is the ranking first of the Bank of Albania among all the banks of Central, Eastern and South-eastern countries, for very active pubic communication, 1/2  BIS central bankers' speeches  in the last report: “Focus on the European Economic Integration” for the second quarter of 2021, published by the National Bank of Austria. Dear guests, The Bank of Albania continues to focus scrupulously on financial education and research considering it a crucial pillar of its activity. They are seen as the foundations for increasing the social-economic development and welfare of the citizens of Albania. From this point of view, I kindly invite you to share together a special moment of this meeting: the traditional ceremony for the Governor’s Award for the Best Diploma. The Bank of Albania for this 15th year ceremony in a raw has selected and valued three scientific works amid all the presented researches by students graduated in Albanian and abroad.
Mr Tarullo added that “I would not apply the presumption in the case of certain de minimis acquisitions or in cases where asset dispositions were judged to offset any increase in systemic risk from the proposed new acquisiton”. 6  Earlier this year, the Board of Governors issued an order approving Capital One Financial Corporation’s acquisition of a federal savings bank, ING Bank. In that order, the Board set forth two principles that are relevant to this particular issue. First, the Board stated that it would generally find a significant adverse effect if the failure of the firm resulting from a merger or acquisition “would likely impair financial intermediation or financial market functioning so as to inflict material damage on the broader economy”. Second, the Board observed that there are some small acquisitions or mergers that would not raise a financial stability concern, such as “a proposal that involves an acquisition of less than $ billion in assets, [or] results in a firm with less than $ billion in total assets……”  6  BIS central bankers’ speeches  banks submitted their “living wills” to the Federal Reserve and the FDIC this summer. We have reviewed the first iterations of their plans and are currently drafting feedback for the firms to incorporate in their next submissions. Through such “living wills”, regulators are gaining a better understanding of the impediments to an orderly bankruptcy. This is the necessary first phase in the process of determining how to ameliorate these impediments over time and then doing so.

But it would be difficult to counter the public’s assumption that this would be a surreptitious mutualisation of sovereign debt. The political desire to introduce ESBies in the near future is likely to be very limited. I therefore don’t see this proposal as being part of the operational agenda but rather as a subject for long-term study. Outlook Let me conclude. Weakening global growth and a generally lower natural interest rate are demanding very low, sometimes negative, market rates so that investment and consumption become more attractive. In the medium term we are thereby aiming to get inflation back to a level in line with our mandate to ensure price stability of below, but close to, 2%. Without our measures, the euro area economy would probably have slipped back into recession, with the risk of fully fledged deflation. We had to act and have prevented things from getting worse. Our measures have proved effective. Our mandate is clear. It says that in the medium term we have to achieve an inflation rate of below, but close to, 2%. This is the only goal that our unconventional measures are also bound by. And price stability is an exclusively internal objective – the ECB does not pursue an exchange rate policy. Nevertheless, the longer it takes to achieve this goal, the greater the risk that the side effects of our measures become stronger, especially of the negative rates.