samchain/econo-pairs-v1 huggingface dataset:
Seamless integration with these new trading processes is essential for CCPs to contribute to financial stability. The financial crisis also highlighted the significant gaps that existed between the data collected and the data necessary to adequately monitor developments in the global financial system. In addition, the crisis underscored an important limitation of the current data structure: the inability to combine data effectively across jurisdictions in order to develop a comprehensive view. As a consequence, policymakers often did not have timely access to  3  See Basel Committee on Banking Supervision and the Board of International Organization of Securities Commissions (2013) Margin Requirements for Non-Centrally Cleared Derivatives. 4  See Committee on Payment and Settlement Systems and the International Organization of Securities Commissions (2012) Principles for Financial Market Infrastructure. 6  BIS central bankers’ speeches  key information that would have informed both the diagnosis of emerging problems as well as the likely efficacy of proposed interventions. As we all know, it is difficult to safely steer a fast-moving car if outward vision is impaired by a windshield that is largely obscured. In response, the G20 in April 2009 instructed the Financial Stability Board (FSB) and the International Monetary Fund (IMF) to detail these information gaps and to develop proposals for resolving them. The Data Gaps Initiative (DGI) was the response to carry out this important work.

As an example, an increasing number of trade repositories are collecting valuable transaction data. However, the full benefit of these data can only be realized if we can aggregate this information across the trade repositories, and if regulators have access to the data needed to support their respective mandates.7 The Committee on Payment and Settlement Systems (CPSS) and the International Organization of Securities Commissions (IOSCO) have produced an analysis of some of the foundational steps that need to be taken.8 Again, implementing these steps will take time and will need our continued attention. 5  See FSB and IMF (2009) The Financial Crisis and Information Gaps. Report to the G-20 Finance Ministers and Central Bank Governors. 6  FSB and IMF (2009), recommendation no. 9: “The FSB, in close consultation with the IMF, to convene relevant central banks, national supervisors, and other international financial institutions, to develop by end 2010 a common draft template for systemically important global financial institutions for the purpose of better understanding the exposures of these institutions to different financial sectors and national markets. This work should be undertaken in concert with related work on the systemic importance of financial institutions.
Taking this high road could help solve the problem of persistent trade imbalances. Bank of England research suggests that reducing restrictions on services trade, to the same extent as those on goods have been lowered over the past couple of decades, could reduce excess global imbalances by close to one half. Global partnerships also mean taking care of the global commons. In Paris in 2015, 195 global leaders committed to curbing carbon emissions to limit the rise in global average temperatures to 2 degrees, and now many governments, including the UK with its new Clean Growth Strategy, are taking the necessary policy actions. In response, the private sector is recognising that financing the transition to a low carbon economy will be a major opportunity. On some estimates, this transition could require investments in infrastructure, equivalent to $ trillion per year through to 2030. Investment on this scale cannot be financed in niche markets. It must be mainstream and global. The City is showing the way by driving better disclosure of climate-related risks and opportunities and leading the underwriting of green bonds. The City is showing the way. UK firms, including all of the largest banks, are driving better disclosure of climate-related financial risks and opportunities. They join global financial institutions responsible for managing $ trillion of assets – equivalent to annual global GDP – that are now publicly supporting the  8  All speeches are available online at www.bankofengland.co.uk/speeches  8  G20’s Task Force for Climate-related Disclosures (TCFD).

In a hyper-connected, capital-light world, the future may increasingly belong to small and medium-sized firms, with platforms (such as taskrabbit, Amazon, Etsy, Shopify, and SamaHub) giving them direct stakes in local and global markets. The financial implications of these developments are only beginning to be realised, but they are likely to be immense. In anticipation, the Bank is already creating the new hard and soft infrastructure that the new finance will require. For example, the Bank of England is in the midst of an ambitious rebuild of the Real Time Gross Settlement (RTGS) system – the backbone of every payment in the UK. There are three ways the Bank’s new RTGS will provide a platform for private innovation. Each will make it easier for people to plug in and pay, even across borders. First, RTGS is being re-built so that new private payment systems, including those using distributed ledger, can simply plug into our system. Our new, hard infrastructure will be future-proofed to your imaginations, opening up a range of potential innovations in wholesale markets, and corporate banking and retail services. We have just opened up direct access to RTGS to a new generation of non-bank payment service providers (PSPs). No longer will access to central bank money be the exclusive preserve of banks. Several non-bank PSPs, focused on retail and corporate services, are applying currently. The electronic money flowing through their systems will become more like its physical relative. Electronic payments are becoming instantaneous by using QR codes or mobile phone numbers.
In 1996, both agencies raised Iceland’s rating by one notch and in 1997 Moody’s raised Iceland’s rating again and that time into the double A category, to Aa3. The short-term rating is A-1+ and P-1. Both agencies have assigned ratings to the long-term obligations of the Republic of Iceland in domestic currency, Aaa and AA+. The improved rating demonstrated a welcomed recognition of the progress made in Icelandic economic management in recent years. In our own view, the rating improvements were overdue, first because our economic performance was in quantitative terms fully compatible with that of countries with a higher rating than Iceland, and, secondly, because it seemed obvious that the reception of Icelandic borrowing operations in the markets indicated that financial institutions have consistently assessed Icelandic risk differently from, or one might say more favourably than, the rating agencies. Structural changes Other speakers at this conference will touch on structural changes in the economy, particularly in the financial sector. I only wish to emphasise that it is not an overstatement to say that the Icelandic financial system has undergone radical changes since the middle of the 1980s. The market was deregulated, a stock exchange was established, and new institutions and financial services flourished. Last but not least, all restrictions on the movement of portfolio capital between Iceland and other countries were removed as alluded to earlier. The market is now similar to that in other developed countries, except for volume of course, while the role of the government through ownership of financial institutions stands out.

Quoting from his paper: “the future policy that one wishes for people to anticipate is one that the central bank will not have a motive to implement later, if it makes its decisions then in a purely forward-looking way, on the basis of its usual stabilization objectives.” (end  BIS central bankers’ speeches  1  quote) This does seem like a hard conundrum to get away from, and probably limits the traction of this type of tool as a strong driver of longer-term rates. Partly due to these limitations, Central banks have also directly tackled the term premium by purchasing large quantities of long-term assets. The idea is that by removing some duration from the fixed income markets, private investors’ aggregate exposure to interest rate risk is diminished, leading to a lower required compensation for bearing such risk. Of course, this logic relies on some form of imperfections and/or market segmentation, but there is by now significant evidence, including some excellent papers to be presented in this conference, that QE has had a measurable impact on long-term rates through this channel. A similar logic applies to the default risk-premium: to the extent that returns on safer debt are compressed by central bank purchases, investors are tempted to reach for yield into other fixed-income markets, such as mortgages, corporate bonds, and emerging market instruments.
Losses increase in downturns, and the supply of equity capital can dry up, compelling banks to restrict their lending. The impact is stronger since the value of property used as collateral fluctuates in step with cyclical developments. At the same time, counterparties and rating agencies may require higher capital levels. When credit is rationed by banks with large market shares, in regional or national terms, sound investment projects are also postponed. This results in an adverse feedback loop, with banks incurring higher loan losses and weaker earnings – as economic activity stalls. Banks operate with very low levels of equity capital. A manufacturing enterprise or a firm in the service sector should preferably have an equity ratio of between 30 and 70 per cent, depending on the level of risk involved. Banks can operate with a far lower level of equity capital because they are supposed to diversify risk, have sound management systems and be well regulated and under supervision. In Norway, banks’ equity capital makes up six per cent of their assets. Before the Second World War, the ratio was over 10 per cent, falling to five per cent in the postwar period. Government capital injections resulted in a rise in equity capital at the beginning of the 1990s, but the ratio has fallen again in recent years. Equity capital in investment banks in the US and Europe was very low, as low as 2-3 per cent of total assets. Many of these banks have now collapsed.

Jean-Pierre Roth: Ten years’ experience in steering interest rates – taking stock of the Swiss National Bank’s monetary policy strategy Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the University of Fribourg, Fribourg, 20 November 2009. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  The Swiss National Bank’s monetary policy strategy has proved successful over the ten years since its introduction. Throughout this period, the SNB fulfilled its mandate of ensuring price stability while taking into account economic developments. The inflation forecasts, produced quarterly on the basis of various indicators, have proved especially useful. It has always been possible to successfully manage the Libor – the operational objective of the SNB’s monetary policy – despite an international environment which, at times, has been extremely turbulent. The Libor was maintained within a range intended to provide the bestpossible conditions for a favourable development of the Swiss economy.
Employees and businesses have at times looked backwards – and may not recognise that the outlook has changed – when determining wages and conditions that influence employment and profitability. This was the case in 1974 and 1975 and again in 1986 and 1987. It was the case in 1998 and also in 2002. In each case, the result was high interest rates, stagnating production and rising unemployment. Should the recent sharp rise in employment result in unexpectedly high wage growth, the interest rate will again have to be set at a high level to keep inflation subdued. We may again experience a high interest rate level in Norway relative to other countries over a longer period. This could translate into a pronounced setback in production and employment. The Norwegian business sector has become increasingly efficient, inducing companies to increase their workforces. During the recovery after the turn of the millennium, productivity growth jumped up again. This resulted in strong growth and low inflation. Rising imports from low-cost countries and high prices for many of our export goods resulted in a substantial improvement in Norway’s terms of trade from the end of the 1990s. Norway’s situation differs from that of our neighbouring Nordic countries in that both Sweden and Finland have recorded a deterioration in their terms of trade. They sell large volumes of hightech products but at falling prices. Productivity and terms-of-trade gains have provided the Norwegian economy with a historically strong income boost.

In any case, the fact that bail-in is now on the table and can be used by the supervisor will probably be one of the reasons why the banks will be tempted to increase their capital base regularly over time, to demonstrate to the buyers of senior debt that they are sufficiently protected. It will also be a strong incentive for banks to limit and control their risks and clearly communicate to the market how they do so. EUROWEEK: Has all this done enough to break the pernicious and highly damaging loop between sovereign and bank risk that was so central to the crisis? Or is that loop one that is simply impossible to break? Noyer: I think we have reduced that risk. The work is not totally finished. We need to continue in the direction we have taken. But to my mind there were three decisive moves that have addressed the problem of this feedback loop. One was the action that was taken on the consolidation of public finances, because if you have stronger government finances then of course the risk for banks is reduced. The second was moving decisively on the banks’ capital bases, because clearly if you have stronger banks then the risk for governments is lower. And finally, the decision to move to a banking union starts with supervision and then allows us to advance to the second and third steps which will have to be a resolution scheme and a resolution authority and finally a euro area deposit guarantee scheme.
One clear lesson from recent research in urban and regional economics is that the collective skills of the people living in an area are a critical ingredient for its growth prospects. Improving the education available to residents can pay large dividends over time. I know that this list seems long, and none of issues I have raised are easy to address. Nonetheless, I am confident that Puerto Rico has started on the road to recovery. In the current environment, it’s hard to see beyond the immediate crisis to a brighter future for Puerto Rico, but that has been said of other places that have come back stronger than ever. Getting the fiscal situation in order is an important first step. The factors leading up to the crisis took many years to develop, and history shows that a successful recovery from a crisis also takes time. It is important to recognize that fact and to stay the course. Before I conclude, let me briefly discuss our new survey. Earlier this month, the New York Fed released the Puerto Rico Small Business Survey, which focuses on the business performance, financing needs and borrowing experiences of firms across the Island. The survey is intended to fill important knowledge gaps and flag potential economic growth opportunities for the Commonwealth. It was designed with input from partners here in Puerto Rico, and we are very grateful for their cooperation. Key findings reveal that firms are persevering through Puerto Rico’s economic crisis, though a majority reported declining revenues.

Managing cash flow is a top concern, ranking above concerns about rising business costs. There is significant demand for credit, with the most common reason being the need to meet operating expenses. For about half of all small firms, credit needs were under $ Lastly, about 80 percent of firms do not sell online or export their wares or services. Firms see this as a growth opportunity, ranking programs in support of increasing sales—to the federal government, via online commerce and through exports—as their top training need. We hope that the survey will provide useful insights into a key economic sector and help inform policy to support Puerto Rico’s recovery. Thank you for your kind attention. I would be happy to take a few questions. 4/4  BIS central bankers' speeches
It is particularly difficult in instances where fluctuations in the exchange rate are amplified as a result of speculation, hedging and portfolio shifts in financial markets. 7) The Exchange Rate Regulation Norges Bank’s use of instruments in 1998 was in keeping with the Exchange Rate Regulation of 6 May 1994: “Section 1 The international value of the Norwegian krone is determined on the basis of exchange rates in the foreign exchange market. Section 2 The monetary policy to be conducted by Norges Bank shall be aimed at maintaining a stable krone exchange rate against European currencies, based on the range of the exchange rate BIS Review 10/1999  –7–  maintained since the krone was floated on 10 December 1992. In the event of significant changes in the exchange rate, monetary policy instruments will be oriented with a view to returning the exchange rate over time to its initial range. No fluctuation margins are established, nor is there an appurtenant obligation on Norges Bank to intervene in the foreign exchange market.” (My underlining) Pursuant to these guidelines, Norges Bank raised the deposit and overnight lending rate by 1 percentage point on 25 August. In connection with the increase in interest rates the Bank stated that instruments were subsequently to be oriented “with a view to returning the exchange rate over time to its initial range”. In the opinion of Norges Bank, the situation in the financial market was such that it would not be appropriate to make further use of its instruments.

So there is a limit to the scope of the Bank’s activities in this area. The success of the policy is not to be judged by the increase in bank lending. Its aim is to increase the money supply. There are already tentative signs that the programme is beginning to have beneficial effects with the growth rate of broad money picking up. So there are certainly grounds for believing that the rapid falls in activity are coming to an end. But there are some equally solid reasons for believing that the path to full recovery could be protracted. The most obvious is that the supply of bank lending to companies and  BIS Review 76/2009  1  households remains constrained. The stock of bank lending to non-financial companies has been falling in recent months, and household lending has been flat. Part of this undoubtedly reflects weak demand in the face of the recession. But the evidence from prospective borrowers, and the terms on which lenders are willing to extend credit, suggest that banks’ ability to finance a sustained recovery remains impaired by low levels of equity capital. Stress tests designed to assess the viability of banks are very different from tests of the capacity of the banking system to finance a recovery. Investors continue to demand high returns to finance banks. Put bluntly, market data on credit spreads imply that some banks are viewed as a worse credit risk than some of their customers.
The Bank of England realised long ago that banks had been woefully undercapitalised in the run-up to the crisis and needed to build significant resources in order to serve the real economy in a risky and uncertain world. The reforms have been enormous, with the capital requirements of our largest banks now ten times higher than before the crisis. Moreover, the Bank has stress tested our major banks and building societies against scenarios far more severe than the country currently faces. In fact, our 2015 stress test entailed losses twice those experienced during the financial crisis. At its last meeting in March, the Financial Policy Committee (FPC) “assessed the risks around the referendum [were] the most significant near-term domestic risks to financial stability.” 14 Because we took the risks seriously in advance, the Bank could draw upon its supervisory expertise, its market operations, and its macroeconomic analysis to put in place a range of effective contingency plans. 14  10  The Record of this meeting is available at: http://www.bankofengland.co.uk/publications/Documents/records/fpc/pdf/2016/record1604.pdf  BIS central bankers’ speeches  These measures reinforce the significant steps we have taken over the past several years to enhance the resilience of the financial system. As a result of all these actions, UK banks have raised over £ of capital, and now have more than £ of high quality liquid assets. And as a backstop, in order to support market functioning, the Bank of England continues to stand ready to provide more than £ of additional funds through its normal facilities.

What remains is for financial institutions to internalise the impact of the transition for businesses, customers, and stakeholders, and drive transformation in pragmatic and meaningful ways. With that, I wish all of you an insightful and productive programme. Thank you. 3/3  BIS - Central bankers' speeches