samchain/econo-pairs-v1 huggingface dataset:
Similarly, although algorithmic traders have become a more important source of market liquidity in many important financial markets, they tend to be more active during periods of low volatility giving an illusion of plentiful liquidity that may subsequently be withdrawn during periods of market disruption when it is needed most. FinTech innovations, such as distributed ledgers, are being trialled for use within, or as a substitute to, existing wholesale payment, clearing and settlement infrastructure, will need to meet the highest standards of resilience, reliability, privacy and scalability. 11  All speeches are available online at www.bankofengland.co.uk/speeches  11  For all financial firms, the advent of FinTech materially changes operational and cyber risks. Regulators need to be alert to new single point of failure risks such as if banks come to rely on common hosts of online banking or providers of cloud computing services. In recent years, the cyber threat to the system has grown as financial institutions have become more reliant on interconnected IT systems. As the FinTech future envisages the sharing of data across a wider set of parties, coupled with greater speed and automaticity in executing transactions, the challenges around protecting data and the integrity of the system are likely to increase. One sign of this is a growing preoccupation in the insurance industry with how best to underwrite such risks.

Recognising the vital importance of learning from international experience, in late 2016 the G20 called upon the FSB to stock-take existing cyber security regulation, as a basis for developing best practices in the 19  medium-term. 5. Conclusion In conclusion, FinTech appears to be everywhere. Media citations – and conferences – are through the roof. But where are we along the cycle from the technology trigger to the “peak of inflated expectations” and the trough of disillusionment? Will FinTech change the world as we know it? Is there something new under the sun? The “FinTech” Phenomenon  The “Hype Cycle” Index Nov 2016=100  120  100  80  60  40  20  0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017  Source: Google Analytics, Chart shows an index of the number of google searches for the term ‘FinTech’  Source: Hype Cycle research methodology © Gartner, Inc. The achievements thus far are impressive, with enormous increases in financial inclusion due to the advent of digital finance. Moreover, there are clear prospects for new financial technologies to make the financial system more efficient, effective and resilient. 19  In 2015, the G7 published a set of cyber principles. See: https://www.gov.uk/government/publications/g7-fundamental-elements-forcyber-security 12  All speeches are available online at www.bankofengland.co.uk/speeches  12  But the biggest prize arises from FinTech’s potential to combine seamless, real-time payments, distributed commerce, more sophisticated client targeting and more accurate credit scoring.
Overall, substantial risks remain, with the focus on issues relating to the economic outlook for Greece and the Ukraine conflict. Assessment of the exchange rate situation I would now like to look at the exchange rate situation. In recent quarters, this was mainly driven by diverging developments in the US and the euro area. The direction of monetary policy in the major currency areas is drifting ever further apart. While in the US a start to monetary policy normalisation is in sight, the European Central Bank (ECB) has now launched a further substantial easing of its monetary policy – its quantitative easing programme. Since the first indications of quantitative easing by the ECB in spring last year, the euro has depreciated sharply against the US dollar. In May 2014, a euro still cost almost USD 1.40. At our monetary policy assessment in December, the EUR/USD exchange rate was at 1.25. When we discontinued the minimum exchange rate on 15 January, the euro had already fallen to USD 1.18; now, in March, it is trading at USD 1.05. In other words, in the short period since our monetary policy assessment in December, the euro has lost around 15% against the US dollar; and since May 2014, as much as 25%. Given this situation, it is clear that a minimum exchange rate of CHF 1.20 against the euro was no longer sustainable.

Concluding remarks In closing, I would like to return to our decision of 15 January. Discontinuing the minimum exchange rate and reducing interest rates further are monetary policy measures for which there are no better alternatives. As I outlined previously, since the introduction of the minimum exchange rate in September 2011, the international currency relationships have changed fundamentally. In view of this development, a minimum exchange rate of CHF 1.20 per euro was no longer sustainable. Over the long term, adhering to the minimum exchange rate would have jeopardised the SNB’s ability to conduct monetary policy and fulfil its mandate in future. This would have saddled the Swiss economy with longer-term costs that would have been out of all proportion to the benefits of continuing to enforce the minimum exchange rate of CHF 1.20 per euro. With the international low interest rate environment, monetary policy faces big challenges. Overall, the Swiss franc is significantly overvalued. Negative interest helps to make investments in Swiss francs less attractive and thereby correct this overvaluation over time. The SNB will continue to take account of the exchange rate situation, and its impact on inflation and economic developments, in formulating its monetary policy. It will therefore remain active in the foreign exchange market, as necessary, in order to influence monetary conditions. Ladies and gentlemen, thank you for your attention. 4  BIS central bankers’ speeches
Experiences from previous deep recessions in Sweden in recent decades indicate that such steep declines in GDP have long-lasting consequences. During the recessions of the second half of the 1970s and the early 1990s, the GDP level did not return to the previous trend during the ten-year period following the decline in GDP. (Figure 2. Historical GDP trends). In connection with financial crises, it is normal for GDP growth to be significantly lower and unemployment higher for an extended period after the crisis, as compared to a period of equivalent length before the crisis. Reinhart and Reinhart have described this in a paper recently presented at a conference at Jackson Hole. 7 This is partially because credit expansion and increasing real property prices prior to a crisis tend to be followed by tightening and falling prices after the crisis. They also note that dampened growth and higher unemployment after a financial crisis may result in lower investment and the depreciation of human capital, which, in turn, may lower both the level and the rate of increase of potential production. Also in connection with the current crisis, the Riksbank expects lower GDP in the long term than we did before the crisis. We are now expecting GDP to be approximately 4 per cent  3  UC models (UC = Unobserved Components) involve using economic theory to identify which development of the non-observed potential variables is compatible with the development of observed variables, such as GDP, employment, unemployment and inflation.

This assurance should also facilitate the further development of the financial sector in these countries, as foreign banks and other financial services providers seek to tap what is soon to become an enlarged market of almost 500 million people, either directly by setting up shop in these countries or indirectly through the cross-border provision of financial services. The advantages for financial stability of a diversified financial structure are well-documented. Suffice it to recall that because different financial market segments react differently to economic shocks, the presence of different types of intermediaries and markets functioning alongside each other should strengthen the financial system’s capacity to absorb liquidity shocks emanating from specific institutions or market segments. For accession countries, the scope for diversification presented by EU membership is significant, not only because the financial sector tends to be small relative to their economic size, but more so because intermediation in these countries is dominated by the banks. In fact, a recent ECB report concludes that the financial sectors of accession countries could assimilate a fifteen-fold increase in absolute 3 terms. Financial integration in the euro area, moreover, may also promote financial stability in the accession countries through the advantages inherent in a single currency area. For a start, the disruption arising from currency risk is eliminated, domestic economies become immune to currency misalignment episodes that disturb trade and currency risk premiums disappear from interest rates.
The important ones have been the Asian Bond Market Initiatives under ASEAN+3, the launching of the Asia Bond Funds I and II under EMEAP, and the Roadmap for Monetary and Financial Integration undertaken by ASEAN. The key rationale underlining this cooperation is the desire to develop resilient and robust regional financial markets, especially the capital markets. Such markets will allow the private sector in East Asia to better manage risk, as well as to reduce the dependency of the region on its banking sector. Moreover, better financial integration means saving surpluses of Asia will be better mobilized to support investment activities in Asia, thereby increasing the efficiency of resource use. And more importantly, greater cross-border financial flows will help sustain and expand intra-regional trade and investment onto the next higher levels. But despite the recent progress, many observers have noted that, while the progress is well and good, financial integration in East Asia seems to lag behind that of trade integration. As a result, East Asia as a region continues to be more integrated financially with markets outside the region than within the region. I think this is a valid and fair observation, but such observation needs not mean that financial integration in East Asia, going forward, will continue to be a slow process. In my view, specific factors have come into play in limiting the pace of integration in its initial stage, but as these factors become less binding, one will begin to see a more solid and faster pace of financial integration.

The key policy has been the implementation of financial sector reform which has resulted in a much improved financial system, especially the banking sector. Policies have also been directed at developing the region’s capital markets, especially the bond market. And as I noted, policy cooperation has also been strengthened to support regional financial integration. But while policies have been important, financial integration in East Asia has essentially been left to the market, in the sense that the process is basically a market-driven one. My view is that, going forward, the process of integration should continue to be market-driven and not policy-driven. But policy can do more by focusing on developing robust, efficient, and resilient local markets. This is because well-developed local markets will make the process of regional financial integration much easier. As for policy cooperation, there are definitely areas that government policies can do more collectively, especially on issues that involve efforts on a region-wide basis. In this context, future efforts at policy cooperation should focus on few but concrete and specific issues to be addressed or projects to be executed. A case in point is the development of a shared regional financial infrastructure such as linking the clearing and settlement systems, harmonizing regulations on cross-border investment flows, and developing a shared facility to promote greater flows of investment information. This type of specific efforts and projects would be easier to win region-wide commitment and support.
Paris Europlace International Financial Forum – Paris, Wednesday 12th July 2017 Roundtable 3: capitalizing on the new G20 regulatory steps  Introductory remarks by François Villeroy de Galhau, Governor of the Banque de France  Ladies and Gentlemen, It is a pleasure to be with you today to introduce this roundtable, which could not be more topical, just a few days after the leaders of the G20 met in Hamburg. From London in 2009 to Hamburg last week, there is only 450 miles as the crow flies; but there has been considerable progress in terms of financial regulation. Thanks to international cooperation between the 20 major economies, the resilience of the global financial system has significantly improved in eight years, without impeding the financing of the economy or global economic growth. We can all be proud of these achievements, but there is no room for complacency today. Let me elaborate on what I see as the three priorities for further work, and the two requirements to consolidate what we have achieved so far. ** 1. Three priority areas where further work is needed. First, we have to finalise the Basel III framework, “without further significantly increasing overall capital requirements across the banking sector, while promoting a level playing field”.

Administering a systemically important benchmark is a new departure for the Bank – but it is a role we accept given our statutory ability to collect the underlying data. We will administer SONIA as a utility, for the benefit of the market, on a cost-recovery basis. I know François will say more about how the Sterling Working Group made its decision. For my part, I would like to take this opportunity to thank François, members of the Working Group, and their institutions, for their commitment and hard work in getting to this point. However the task is not yet finished. Attention now turns to the adoption of SONIA as an alternative to sterling Libor. The Working Group has an important ongoing coordination role to play. The main focus so far has been on the derivatives markets. Indeed we invited dealers to form the Working Group in the first place because our experience of derivatives reform suggests they can be most influential in catalysing a transition. But it is stating the obvious to say that demand for derivatives stems partly from the desire to hedge underlying cash market instruments. That reinforces the need, ultimately, for a broadly-based transition. 5  All speeches are available online at www.bankofengland.co.uk/speeches  5  That can be to the benefit of any user of Libor who bears exposure to bank credit risk not through preference but through lack of established alternatives. I personally suspect that many users would be in this category.
What was worse was that there was almost a sense of acceptance of such performance among many officials of both the MoF and CB, who harboured the internal view that it may be our country’s “karma” to have low growth, large fiscal deficits and high inflation! In fact, many Central Bank officials were often heard to lament that the continuous high fiscal deficits of the Government was pushing inflation up and grumble that the Government will never stop doing that. In turn, MoF officials used to complain that the tight and in-sensitive monetary policies of the CB was the root cause for the fiscal deficit always being out of control! BIS central bankers’ speeches  9  It was therefore clear that a change in attitude and a change in action was vital. It was also necessary to make some effective interventions to change the equilibrium of this vicious cycle, so that a fresh equilibrium could be created. Le Chatelier, the famous French Scientist who introduced the “Equilibrium Law” to the world in 1898, had taught us that, in order to disturb an equilibrium, you only need to disturb one component of the equilibrium. Then, the entire system will move into a new equilibrium. So, a key decision had to be made, as to which of the offending components of our vicious equilibrium should be disturbed and dealt with first. Towards that end, I remember, having several “one-on-one” discussions with the Secretary to the Treasury, Dr. P.B.

Another example of product innovation is in the growth of investment products such as property securities unit trusts and listed property securities funds. A potentially exciting area for innovation is in the property derivatives market. Property derivatives offer the potential for property companies, asset managers, banks and investors to hedge or rebalance their property exposure according to their views on the market. A key criterion to develop the property derivative market in Singapore would be the existence of transparent, reliable and wellfollowed direct property indices, which serve as reference points or benchmarks for structuring of property derivative products. Given the prospects of the Singapore property market, industry players are currently studying the construction of property indices based on the Singapore property market. We are excited to see the introduction of these property indices which would enhance information on Singapore’s property market and provide benchmarks for structuring property derivatives and other innovative investment products. These developments will add to the breadth and depth of Singapore’s markets by providing investing and hedging tools for market participants in a cost-effective and flexible manner. Moreover, they would lead to development of expertise in product structuring as well as real estate portfolio analysis and performance measurement. 2  BIS Review 38/2007  Conclusion So ladies and gentlemen, general positive sentiments suggest that 2007 and the years ahead will be exciting for Asia and its property sector. I am certain that with judicious planning and sound execution, the sector will see strong growth, sustained by liquidity from the capital markets.
In the absence of almost total retrenchment in international banking – except in cases involving countries issuing reserve currencies and with strong fiscal capacity – the problem these swap lines were meant to address will not go away. The past few years have seen lively discussion of whether it is desirable and feasible to anchor the swaps more firmly in the international monetary system, through clearer and more transparent access criteria and a multilateral governance mechanism. Clearly, there are arguments for such institutionalisation, but I sense that this might be premature and that we should allow the discussion to evolve further. Those who oppose constraining central bank discretion in this area present important arguments. The most compelling are those based on the analogy with liquidity provision and LOLR in a national setting, where flexibility, speed, and large scale can be essential. This argues in favour of giving central banks a major role in the arrangements. Less compelling are arguments based on moral hazard, which would apply equally to domestic arrangements. What seems clear is that even greatly enhanced IMF facilities are not close substitutes for swap lines among central banks. First, the swap lines are there to provide short-term collateralised FX liquidity to banks, whereas IMF facilities are uncollateralised longer-term lending to sovereigns and are intended primarily to mitigate balance of payments problems. Norway and the euro area were offered USD swaps without prior balance of payments disequilibrium and the euro area, at least, badly needed it.

In national settings we learnt through trial and error over long periods how to design a safety net around the banking system in order to mitigate it´s inherent instability. The Bank of England was at the forefront in learning how bank runs could be contained through lending against collateral to banks that were presumed to be solvent.1 Deposit insurance was introduced later, both as an additional mitigating device against runs and as a consumer protection device. In order to operate this system, it was necessary to have an assessment of the state of health of the banks. It was also necessary to mitigate the moral hazard introduced by the safety net. Thus banking supervision initially emerged mostly as part of central banking, although the legal powers were initially often on a weak foundation.2 Finally, bank resolution schemes were needed to efficiently clean up any mess that might occasionally be made and limit contagion from individual bank failures to the system as whole. In many advanced countries, this system worked so well that the memory of bank runs had faded. Perhaps this is why, when I last saw the musical about Mary Poppins in a theatre, the scene with the bank run was omitted! Banks could still fail, of course, because of capital erosion, and even entire banking systems could do so, as in the Nordic banking crises in the late 1980s and early 1990s. But the liquidity risks inherent in fractional banking were mostly contained.
Fiscal adjustment The Spanish economy has made visible progress in the redressing of fiscal balances towards levels that are compatible with the sustainability of public finances. The adjustment has required strong measures both on the revenue and the expenditure sides. From near double digit deficits in the early years of the current decade, the deficit was reduced to 5.9% of GDP in 2014. The commitments with the European authorities involve a further reduction of fiscal imbalances in 2015 and 2016. In this respect, public deficit targets are set to 4.2% and 2.8% for 2015 and 2016, respectively. Despite the additional efforts shown in the most recent budgetary information (up to November 2015), the fulfilment of these targets is not without risks. To tackle these risks it will be important to ensure a strict implementation of the budget, both at the national and the regional levels and, if the need arises, to be ready to take the appropriate corrective measures within the framework of European Union fiscal governance. But the challenges should not cloud the fiscal consolidation effort already made. This can be easily seen in the structural primary balance’s evolution, which turned around from a deficit of 5.2% of GDP in 2010 to an estimated surplus of 0.6% of GDP for 2015, according to the latest European Commission figures. It is worth remembering that the bulk of this adjustment was made through a severe economic recession and under very stressed conditions in a fragmented Eurozone financial market.

These reforms can be summed up along three significant lines: an  BIS central bankers’ speeches  3  intense restructuring process in terms of size and capacity; the sanitisation of bank balance sheets (recognition and treatment of bad assets); and the recapitalization of individual institutions and the entire system. The levels of solvency of the Spanish banking system are currently well above regulatory minimums. The top quality capital ratio, namely Common Equity Tier 1 or CET1, of Spanish banking institutions stood last June at 12.4%; and the overall capital ratio was 14.3%, far exceeding the regulatory minimum levels. Regarding domestic business, since early 2014, non-performing loans (NPLs) have continued to decline, in line with the pick-up in economic activity. The refinanced or restructured credit to the resident private sector has also been declining. This has enabled the NPL ratio to fall to 11.2%. Even so, for historical standards, the volume of NPLs and foreclosed assets on institutions’ balance sheets still remains high. Total consolidated profits of Spanish banks have continued the recovery initiated in 2013, with the return on equity (ROE) standing at 9.2% and the return on assets (ROA) at 0.63% in June 2015. The improvement was due both to an increase in net interest income – driven by positive developments in business earnings outside Spain from internationally diversified banks – and to the containment of certain costs which pushed down profits.