samchain/econo-pairs-v1 huggingface dataset:
And that is the reason why it is so important, so decisive that we draw all the lessons from the present episode, across the board, without any prejudices, without giving any privilege of untouchability to any part and parcel of global finance. From that standpoint I think the work of the Financial Stability Forum – scrutinizing liquidity risk management as well as credit rating agencies, analysing without complacency the weakness in the structure of incentives of the “originate to distribute” model as well as the monitoring of the off-balance sheet vehicles, examining the implementation of the Basel II agreement as well as the arrangement for dealing with in particular weak cross-border financial institutions – is of the essence. Third, even with a right and pertinent diagnosis, and appropriate significant improvements in benchmark voluntary principles and codes of conduct for the private sector as well as substantial progress in rules and regulations, in cooperation and coordination between authorities where needed, my understanding is that we could not be ensured that the “unavoidable and necessary market corrections” of the future will be reasonably “smooth and orderly”. For a higher likelihood of that to happen we need probably simultaneously what I would call a further significant change of culture at national as well as at global level. I would sum up this change in our overall approach with these words: Transparency, Holism and Anti cyclicality.

Jean-Claude Trichet: Financial integration in Europe and important financial sector issues Keynote speech by Mr Jean-Claude Trichet, President of the European Central Bank, at the Second Symposium of the ECB-CFS research network on “Capital Markets and Financial Integration in Europe”, Frankfurt am Main, 13 February 2008. *  *  *  Ladies and Gentlemen, It is a great pleasure for me to address such a distinguished audience of researchers, market participants and policy makers here at the Second Symposium of the ECB-CFS research network on “Capital Markets and Financial Integration in Europe”. As you will probably all appreciate, we are living in challenging times right now. And many, although not all, of the main challenges relate to financial sectors. So, for my remarks today I have made a selection of important financial sector issues, some more structural and others more related to recent developments. My presentation is divided into two broad parts. In the first part, I would like to broadly address the importance of financial integration in Europe, review the current state of integration and tell you about our activities in this area. In the second part I would like to look at one specific part of the European regulatory set-up that has been less often discussed in the past in relation to financial integration, namely the structure of deposit insurance schemes. I will conclude by some remarks on the present very significant market corrections and financial turbulences that we experienced in the international financial system since the summer last year.
With returns sky-high, there was then a great sucking sound as both people and monies were drawn into banking, in particular the high-risk/high return, sharp-suited parts such as investment banking. A generation of scientists’ and mathematicians’ heads were turned towards finance. Funds flowed into the bank money machine, with balance sheets rising fivefold in less than 20 years, much of it to support short-term trading activities rather than long-term investment. Yet even while it was still inflating, this bubble was already having silent costs – costs to the economy and indeed costs to other parts of banking. Many of the best people and the best financial resources were drawn away from other sectors, including the retail banking sector. Industries outside of finance were starved of sunlight. The costs of this great sucking sound are only now being properly understood. Recent research by the Bank for International Settlements suggests that, once bank assets exceed annual GDP in size, they begin to act as a drag on growth.3  1  Philippon and Reshef (2009). 2  Haldane (2011). 3  Cecchetti and Kharroubi (2012). 2  BIS central bankers’ speeches  Why? Because human and financial resources are drained from elsewhere in the economy. The sectors hardest-hit by this financial vacuum-cleaner effect are R&D-intensive businesses (who might otherwise have attracted the scarce, skilled labour that flowed into finance) and businesses reliant on external funds (whose financial cake was instead being eaten by the banking system). These are the very businesses that today we are seeking to re-nurture.

We cannot exclude a temporary recession next year, especially in case of even more severe developments in the gas and electricity markets: but a short-lived – and limited – recession would be less detrimental than a protracted stagflation. II. No Forward Guidance but some milestones on the monetary path  3  Page 4 sur 14  At its meeting in July, the ECB Governing Council formally ended its forward guidance on policy rates and switched to meeting-by-meeting decision-making. This move is appropriate, as we live through especially uncertain times and must not have our hands tied. That said, since we know that medium to long term interest rates are an important part of the transmission mechanism of monetary policy, having a yield curve that roughly corresponds to the policymakers’ own intentions is important: this is why we central bankers still want to provide some predictability about our reaction function. Of course, central bankers don’t actually follow a mechanical function; nevertheless, in normal times, simple feedback rules do a reasonable job in summarising what we expect to do. But we do not live in normal times and decision-making is more difficult than usual. What are the possible approaches to summarise our monetary policy framework, or narrative? I will first mention two opposite and extreme ones, before proposing useful milestones along the way. 1. Two polar approaches The first, which I will call the “empiricist approach” would conduct policy looking only at currently observable data.
But the social costs of the crisis were – and still are – enormous, and the main lesson that central banks need to take away from it is the necessity of reinterpreting their financial stability mandate, away from managing crises and towards a more prominent role in preventing them. This means that systemic risk has to be addressed directly and effectively, a job for which central banks are well placed. If we succeed, the need for extensive crisis management measures will be reduced. In other words, one should expect to see more of central banks on one front so as to see less of them on another. Let me conclude by reiterating the answer I gave right at the very beginning: in responding to the crisis and in implementing new regulatory measures to prevent another one, central banks did not do too much; they did what was and is necessary. References Christensen, Jens H.E. and Signe Krogstrup (2014). Swiss unconventional monetary policy: lessons for the transmission of quantitative easing. Working Paper Series 2014-18, Federal Reserve Bank of San Francisco. ideas.repec.org/p/fip/fedfwp/2014-18.html Crockett, Andrew (2000). Marrying the Micro- and Macro-prudential Dimensions of Financial Stability. Speech at the Eleventh International Conference of Banking Supervisors, Basel. Chodorow-Reich, Gabriel (2014). Effects of Unconventional Monetary Policy on Financial Institutions. Forthcoming in Brookings Papers on Economic Activity. Eichengreen, Barry and Kevin H. O’Rourke (2010). A tale of two depressions: What do the new data tell us? www.voxeu.org/article/tale-two-depressions-what-do-new-data-tell-usfebruary-2010-update Filardo, Andrew and Boris Hofmann (2014). Forward guidance at the zero lower bound.

It does not make sense to call for an increase in emergency reserves – gold holdings – and simultaneously prohibit the use of these reserves even in emergencies. The SNB’s overriding objection to the gold initiative stems from the danger it poses to the conduct of a successful monetary policy. It would severely impair the SNB’s ability to fulfil its constitutional and legal mandate to ensure price stability while taking due account of economic developments, in the interests of the country as a whole. Drawing the lessons: reinterpreting the financial stability mandate Let me close this digression and return to my main theme. Once the initial shock of the crisis waned, policymakers began to address the root causes. The crisis has revealed two deficiencies of the existing regulatory framework. And because central banks are well placed to address these deficiencies, it has led to a reinterpretation of their financial stability mandate away from managing financial crises and towards preventing them. In this final section of my speech, I will explain in more detail what the deficiencies of the precrisis regulatory framework were, and why central banks are well placed to address them. The first deficiency of the framework was the focus on crisis management. Before the crisis, it was thought best for central banks to act decisively once financial crises had occurred, rather than to try and prevent these crises from happening.
I am fully confident that in our next monetary meetings, in the coming months, we will decide, in a pragmatic approach, about the best evolution after March of all our available tools: QE, TLTRO and forward guidance on interest rates. And we have many options open regarding the size and length of instruments like our APP, excluding either a sudden stop of its contribution to our accommodative policy in March, or the continuation of the same contribution forever. Second, we in Europe share a large single market. It is a tremendous asset which belongs to us all, the 27. It is no coincidence that access to the single market lies at the heart of the Brexit debate. We cannot prejudge the outcome of the future negotiations, but we can be sure of one consistency principle: access to the single market must continue to go hand-in-hand with strict acceptance of all its rules. There can be no cherry-picking or free-riding. And we must obviously preserve the single European trade policy, if we want to exist in the trade negotiations to come worldwide. Third, we share a common social model (slide 2) which combines high standards of public service and relatively low levels of inequality – much lower than in American society. And this has been achieved in a market economy.

As put by José Ortega y Gasset, the famous Madrid-born philosopher: “Life is a series of collisions with the future; it is not the sum of what we have been, but what we yearn to be”. Thank you for your attention. i  European Commission, Standard Eurobarometer 85, July 2016. European Commission, European economic forecast, Autumn 2016. iii Matthieu Bussière, Laurent Ferrara and Juliana Milovich, ‘Explaining the recent slump in investment: the role of expected demand and uncertainty’, Banque de France WP No. 571, September 2015. iv World Bank, Doing business 2017 report. ii
“Indebted to nature Exploring biodiversity risks for the Dutch financial sector”. De Nederlandsche Bank (DNB) and Planbureau voor de Leefomgeving (PBL). https://www.pbl.nl/en/publications/indebted-to-nature ii  12  Page 13 sur 12 xviii  Calice, P., Diaz Kalan, F. A., & Miguel Liriano, F. (2021). “Nature-Related Financial Risks in Brazil”. Policy Research Working Paper no. WPS 9759. World Bank Group, Washington, D.C. http://documents.worldbank.org/curated/en/105041629893776228/Nature-Related-Financial-RisksinBrazil ; World Bank and Bank Negara Malaysia (2022). “An Exploration of Nature-Related Financial Risks in Malaysia”. xix Svartzman et al. (2021). “A “Silent Spring” for the Financial System? Exploring Biodiversity-Related Financial Risks in France”. Banque de France Working Paper 826. https://publications.banquefrance.fr/en/silent-spring-financial-system-exploring-biodiversity-related-financial-risks-france xx The title of the study, of course, pays tribute to Rachel Carson’s famous book “Silent Spring” published sixty years ago, in 1962. xxi Namely the French development agency (AFD), the French office for biodiversity (OFB) and CDC Biodiversité. xxii See mandate of the task force: task_force_nature_related_risks_mandate.pdf (ngfs.net) xxiii Herweijer, C., Evison, W., Mariam, S., Khatri, A., Albani, M., et al. (2020). “Nature Risk Rising: Why the Crisis Engulfing Nature Matters for Business and the Economy”, World Economic Forum. xxiv Costanza, R., De Groot, R., Sutton, P., Van der Ploeg, S., Anderson, S. J., Kubiszewski, I., ... & Turner, R. K. (2014), Changes in the global value of ecosystem services. Global environmental change, 26, 152158. xxv IPBES (2022). Summary for Policymakers of the Methodological Assessment Report on the Diverse Values and Valuation of Nature of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services.

I wish more people had dared to work on disruptions of energy supply (or global value chains) a few years ago. Likewise, the latest report of the Working Group III of the IPCC (dedicated to climate mitigation) contains a chapter (#5) that places great emphasis on the need for sufficiency and behavioral changes, and it discusses the literature exploring how we could thrive as societies and individuals without depending so much on GDP growth. Professor Dasgupta also invites us not only to acknowledge that GDP growth will be limited at some point even if you are a techno-optimist, but also to think about new approaches to economic value and social well-being that do not rely on GDP. All this begs us, and especially the young scholars present today, to ask what will be essential in 5 to 10 years from now. In addition to this need to promote new approaches, it is urgent to act. 9  Page 10 sur 12 We cannot afford to lose time or to wait until we have elaborated “perfect” tools. We need to seek how transformative changes can be implemented as soon as possible and if needed, develop and revise our scenarios, metrics, approaches. The responsibility to revert nature loss falls first and foremost with governments, and no central bank – above all in a democracy - can replace them.
William C Dudley: Transcript of Fireside Chat at York College in Queens Transcript of a discussion between Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, and Dr Olajide Oladipo, Professor and Chair of the Business and Economics Department, during the Fireside Chat at York College in Queens, New York City, 24 March 2017. * * * Dr. Olajide Oladipo: President Dudley, can you please share with us the purpose of your trip here today to Queens? President Dudley: So, there are 12 Federal Reserve Banks around the United States, and one of them is the Federal Reserve Bank in New York that sits downtown in Manhattan, and near Wall Street. Our Second District consists of New York, Northern New Jersey, Fairfield County, Connecticut, Puerto Rico, and the Virgin Islands. Haven’t gotten to the Virgin Islands yet. As part of our Mission, we want to represent the communities in our District, and so four times a year, I get on the road, and I go out to visit people, to find out what’s really happening on the ground. It’s meeting with businesses, meeting with people from educational institutions, going to visit manufacturing facilities, community development organizations. It’s really designed to do two things. One, explain sort of a little bit of what we do – like for example there, in the introduction, talking about this BIS. What the heck is the BIS? Well, BIS is a bank for central banks that sits in Basel, Switzerland.

The longer we conduct these policies, the longer the rates will remain low and these risks will exist. That shows how urgent it is to have growth policies which do not rely mainly on monetary policy. A full mix of policies would be healthier from this point of view, since they would not create financial stability risks. We are closely following this and at the moment we see no financial bubbles at euro area level. There are some small, worrying signs in some countries. In France, for example, corporate debt is rising very quickly. But there is nothing that would justify the ECB withdrawing its support for growth. Monetary policy supports growth and job creation. For that reason we won’t be withdrawing support now. Let’s talk about Europe, about its construction. It’s the issue that’s stirring up anger. Jean-Baptiste Duval of the Huffington Post would like to ask a question on that. “Europe was a great success”, you said in [your interview with] Le Journal du Dimanche, but what exactly are you talking about? About the “no” in the 2005 referendum, wonderfully ignored? About the support for Greece, just like a hangman’s rope? Or the return of nationalist flames in the United Kingdom and in eastern Europe? Joking aside, Benoît Cœuré, do you live in an ivory tower in Frankfurt, or do you know things that Europeans are unaware of? Do you know things that Europeans are unaware of? No, we don’t know things that Europeans are unaware of.
This will support the banking sector’s ability to make long term sustainable business plans into the future. In fact, central bank governors and heads of supervision indicated that they are committed to not significantly increase overall capital requirements across the banking sector. In the euro area, the situation in the banking sector now is very different from what it was in 2012. Perhaps most importantly, euro area banks have significantly strengthened their capital positions over the past few years, notably as a consequence of the Comprehensive Assessment conducted in 2014. For significant institutions, the CET1 ratio has increased from around 9 to 13%, making them more resilient to adverse shocks. In addition, the quality of the banks’ capital has also been substantially improved. With the 2015 Supervisory Review and Evaluation Process (SREP), the ECB has outlined the steady-state Pillar 2 supervisory capital requirements. This means that, all things equal, capital requirements will not be increased further. Hence, the banking sector can now conduct much better capital planning. Moreover, in 2015, the banks under ECB supervision further increased profits relative to 2014. This allows banks to have appropriate distribution policies while still meeting regulatory capital requirements and buffers, and to support lending to the economy. In addition, the ECB’s monetary policy actions continue to support banks’ financing conditions and, more broadly, economic activity. Clearly, some parts of the banking sector in the euro area still face a number of challenges.

As we announced at the end of our last monetary policy 2  BIS central bankers’ speeches  meeting in January, the Governing Council will review and possibly reconsider the monetary policy stance in early March. The focus of our deliberations will be twofold. First, we will examine the strength of the pass-through of low imported inflation to domestic wage and price formation and to inflation expectations. This will depend on the size and the persistence of the fall in oil and commodity prices and the incidence of second-round effects on domestic wages and prices. Second, in the light of the recent financial turmoil, we will analyse the state of transmission of our monetary impulses by the financial system and in particular by banks. If either of these two factors entail downward risks to price stability, we will not hesitate to act. In parallel, other policies should help to put the euro area economy on firmer grounds. It is becoming clearer and clearer that fiscal policies should support the economic recovery through public investment and lower taxation. In addition, the ongoing cyclical recovery should be supported by effective structural policies. In particular, actions to improve the business environment, including the provision of an adequate public infrastructure, are vital to increase productive investment, boost job creations and raise productivity. Compliance with the rules of the Stability and Growth Pact remains essential to maintain confidence in the fiscal framework.
In order to avoid investor and ratings agency opprobrium, banks will consider a range of actions, including cutting lending, rather than go beyond their capital risk appetite – which is typically well above regulatory buffers. Conversations with investors and rating agencies were largely consistent with this view. Banks also face internal risk appetite constraints which may be higher than regulatory requirements and buffers, especially given that capital is often managed on a forward looking, rather than a ‘spot’, basis. 8  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  8  Together, this suggests that banks may be unwilling to use all of their capital headroom, let alone dip into regulatory buffers. This underlines the point I made earlier about even management buffers not necessarily being fully usable. Approach 2 – the impact of countercyclical buffer releases The second approach looks at whether there’s any empirical evidence that releasable regulatory buffers provided effective support for firms to support lending, as intended. Reducing CCyB rates lowers the level at which distribution restrictions and requirements for capital conservation kick in. The release effectively increases the management buffer while reducing the regulatory buffer by the same amount. At the onset of the pandemic, eight of the 27 Basel member jurisdictions had a CCyB rate above zero; during the pandemic, six of these fully released it, and one partially released.

Some reporting and disclosure requirements were extended, reducing the operational burden on banks; and some market risk-based capital requirements that were deemed to have moved excessively during the episode were offset.1 At the same time, fiscal authorities began to provide support to economies entering lockdown. In the UK, that included government guarantees for lending to the corporate sector as well as income support schemes for employees furloughed as businesses shut or scaled back their activities. The size of the policy response was huge. Across the US, Euro Area, UK and Japan, central bank assets increased by around $ trillion in 2020, more than twice their increase in the year following the collapse of Lehman Brothers. And, according to the IMF, by mid-March 2021, global pandemic-related fiscal support measures totalled $ trillion (around 19% of world GDP).2 This is at least twice as large as the fiscal response observed during the Global Financial Crisis. In 2020 alone, average overall fiscal deficits reached 11.7% of GDP for advanced economies, the largest measure the IMF has recorded since they began gathering data. As a result of all of these interventions, conditions stabilised. There was no credit crunch: credit provision to businesses increased by more than 10% during 2020.