samchain/econo-pairs-v1 huggingface dataset:
For example, by the 1770s, London bankers had begun to settle in notes issued by the Bank of England, a highly-regarded, but at that time, private bank. BIS Review 130/2007  1  10 A low-risk settlement asset was particularly important in the unregulated world of the goldsmiths, in which credit risk was acute and liquidity shocks – like the one we have experienced of late − were common and dangerous. In a sorry letter to an associate 1 , one goldsmith wrote to another in the 1660s: “I have beene by many accidents much postpon’d…ye money due to mee is soe farre off that I can not make it useful to mee. All Credit in London is much Shortened of late.” 11 Showing all the optimism which continues to characterise bankers today, he added: “ I am attempting a way to enlarge my owne (credit) and doubt not to effect it to his Maties. [Majesties] advantage as well as my owne, if I am (like ye lame dogg) but helpt over this style.” 12 Further efficiency gains were then obtained by settling interbank obligations over the accounts of a single institution. This innovation was sometimes put in place by the public authorities; in other cases it developed naturally, such as when the London bankers adopted Bank of England deposits as the ultimate settlement asset in 1854. 3.

Indeed, the major global custodians each posted growth in assets held in custody in excess of 20% in just the past year. 31 And differences between the regulatory regimes for incumbent providers of infrastructure and those for either commercial bank providers or smaller new entrants could tilt the playing field. For example, CLS is subject to close central bank scrutiny, operates as a narrow bank, and has to meet exacting – and costly – resilience standards. New clearing arrangements and bilateral netting schemes are now penetrating the foreign exchange markets, threatening the volumes passing through CLS. In messaging, too, SWIFT – which submits voluntarily to central bank oversight – is beginning to face competition in certain markets from new entrants not subject to oversight. Authorities must be alert to the challenges these competitive developments provide. 32 Other regulatory initiatives are contributing to a reshaping of the landscape. MiFID, in the EU, and RegNMS, in the US, have sought to encourage increased competition in trading; and the Code of Conduct, recently signed in the European Union, establishes terms under which infrastructures operating in one member state can clear and settle (initially equity) trades in another. More than 20 applications have now been made under the terms of the Code. 4  BIS Review 130/2007  33 Whether trading, clearing and settlement infrastructure markets can support a wide range of providers in the long-term remains an open question.
Third, on the insurance side we have been putting a lot of effort into making sure that equity-release mortgage holdings are treated appropriately on insurance companies’ regulatory balance sheets. We think it likely that this product will grow in the UK for reasons unrelated to financial regulation, and that it makes sense for annuity-writers to be an important part of the picture. But this has been a classic example of a weak spot in the regulatory regime, which was simply not designed with this product strongly in mind. The result of this has been an excessively wide variation of approaches for these assets at insurance companies, with practices at the more aggressive end of the market presenting a risk in our view to policyholders and to our competition objective. We have therefore shored up this part of our framework and put in place a much more solid basis for this asset class going forward. I know that some building societies have exposures to this asset class as well, and would urge them to proceed with caution given the complexities involved. So even within the important but relatively straightforward asset class of UK residential mortgages there are several juicy topics for our horizon-scanning enthusiasts to get their teeth into. Fortunately, or unfortunately depending on your approach to life, there are further targets available if we move onto other asset classes – asset classes which I very much hope are much more remote to building societies!

Nor is this a complete assessment, focusing as it does on the prudential angle as opposed to market liquidity considerations. I make them to illustrate the point that it is sensible for us to maintain a spirit of active enquiry about these sorts of issues, and to track developments so that we can intervene if we are concerned that the regulatory system is being arbitraged or simply encouraging the wrong behaviour at firms. Conclusion  We, together with many others, have done a huge amount to make the financial system safer over the last 10 years. But the lesson of financial history is that unless we are absolutely vigilant, and keep questioning both firms and ourselves about evolving and emerging developments in the markets we oversee, then this safety can easily slip through our hands. So our horizon-scanning will be an important part of our effort in the coming period. And as the PRA is holding itself to a flat nominal budget this year I would like to finish by asking any birdspotters present here today to lend us their binoculars, in the national interest.
This growth rate, in turn, would still not be sufficient to ensure convergence with the average per capita GDP of the EU twenty years from now. For this latter objective to be achieved, a real growth rate of some 4 per cent would be required. The way forward: a concerted push for faster growth These scenarios underline the urgency of achieving more rapid, sustainable growth. The longer it takes to expand the productive base of the economy, the more onerous the challenge will be. The prospects for a significant recovery in the short term, moreover, are doubtful since oil prices are expected to remain at their current high level, and the dynamic benefits of fiscal consolidation and EU membership are unlikely to exercise a marked impact on growth in the coming months. Growth forecasts for 2006 vary between 1% and 2%. The current economic situation, therefore, requires decisive action designed to produce early results. I, therefore, feel obliged once again to make a strong appeal to all the social partners not to underestimate the threat which today’s realities represent for the wellbeing of their own members, and to cooperate in the search for real, long-term solutions in the national interest. The alternative is a slow, but depressing process of stagnation.

Svein Gjedrem: Monetary policy and the economic outlook Speech by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), at SR-banken, Stavanger, 19 March 2004. The text below may differ slightly from the actual presentation. The address is based on the assessments presented at Norges Bank’s press conference following the Executive Board’s monetary policy meeting on 11 March, Inflation Report 1/04 and on previous speeches. The Charts in pdf-format can be found on the Norges Bank’s website. *  *  *  The operational target of monetary policy as defined by the Government is inflation of close to 2.5 per cent over time. The target is symmetrical - it is just as important to avoid an inflation rate that is too low as an inflation rate that is too high. The inflation target provides economic agents with an anchor for inflation expectations. It therefore influences their decisions concerning saving, investment, budgets and wages. History shows that there is no long-term trade-off between lower unemployment or stronger economic growth and higher inflation. We witnessed this in the 1980s when growth was low and inflation high. The task of monetary policy is to provide a nominal anchor. Low and stable inflation is such an anchor. There are several reasons why it is an advantage for inflation to be higher than zero: •  The structure of the economy is in flux. Demand for labour with different qualifications is changing. This requires changes in relative wages. There are rigidities in nominal wage growth.
It is key because it will permit the clean-up of the banks requiring State aid to be completed and will provide a suitable horizon for the management and sale of the mass of assets to be transferred. Conclusions The Budget for 2013 involves a considerable drive in respect of fiscal adjustment. It attempts to bring about a correction in the primary deficit, net of interest on public debt of almost 2.5 pp of GDP. In the depth of a recession, that is very difficult, but necessary in order to meet the targets to which Spain is committed within the framework of the European Union and the euro area. We have some data which, although not warranting excessive optimism, do indicate that an adjustment is being achieved. We are going to end 2012 with a current account almost in balance, and in 2013 it will probably run a surplus. The recession has a contributing factor, but not the only one. We also have a clear improvement in competitiveness based on changes in our labour costs and in productivity. The most pressing problem facing the Spanish economy is to restore market confidence. There is no other way to achieve this than meeting the fiscal consolidation targets, completing the clean-up and restructuring of our banking system, continuing with the process of private and public deleveraging and moving ahead with the reforms undertaken to improve our competitiveness.

A key part of this test will be to examine the resilience of banks to a housing market shock and a snap back in interest rates. Let me therefore finish by drawing seven important messages for the future from this example of UK housing conditions and how the new system of financial regulation will operate: •  first, an effective macro-economic framework needs the credibility to influence people’s expectations of future conditions and how our policy actions will influence them. Our actions, and therefore the expectations of them, have to be credible and therefore consistent over time. The FPC has taken steps to lay out the future actions it would take if it judged the momentum of the housing market to be too strong;  •  second, in doing this “laying-out” of future actions, we are signalling that we will act to prevent the pro-cyclical tendencies of the past – whereby lending and underwriting standards weakened in the good times and then suffered a knee-jerk reaction back when conditions deteriorated;  •  third, the FPC and PRA are going to be very explicit in their use of forward-looking judgemental tools of prudential supervision, of which stress tests are a prime example;  •  fourth, our policy-making tools in the Bank of England will be joined up, consistent with our single-mission directed at the public good. A clear example of this is that our three statutory bodies, the MPC, FPC and PRA Board will work together closely.
In these cases, flexibility in the use of the labour input factor takes precedence over the desire to retain workers, as the human capital acquired in their job is relatively low. However, even once these differences in the productive structure have been taken into account, the proportion of temporary contracts is found to be greater in each sector taken individually. Turning to R&D, the experience of previous crises shows that, as with productive public investment, firms’ investments in innovation tend to be cut in times of uncertainty and financial difficulties, with the subsequent adverse impact on long-term growth.15 One of the factors behind this is that innovative firms encounter comparatively greater difficulties when accessing bank financing, as they tend to have a lower volume of tangible assets to secure their loans. As in the case of education, future public spending should pay special attention to this item because, far from worsening public debt, it contributes to improving it in the long term by raising potential growth, and the current crisis will also likely boost the ongoing digitalisation of the economy. 15  See P. López-García, J. M. Montero and E. Moral-Benito (2013), "Business Cycles and Investment in ProductivityEnhancing Activities: Evidence from Spanish Firms", Industry and Innovation, 20:7, pp. 611-636, and S. Baker, N. Bloom, S. Davis and S. Terry (2020), "COVID-induced economic uncertainty and its consequences", Voxeu. 39  Conclusion To conclude, we are facing a shock on an unprecedented scale.

Either because temperatures continue to rise as the transition is eluded; or because we face a disorderly transition - a so-called climate Minsky moment – as a significant number of otherwise productive assets have to be abandoned; or as asset prices adjust whilst risk and return are repriced. To avoid such outcomes, financial firms need to manage these risks not as they materialise but instead by looking ahead over much longer time horizons than they are used to. And, as our supervisory expectations of banks and insurers make clear, they need to act strategically and pre-emptively, taking different decisions today, well before the consequences of inaction become clear.3  Climate scenario analysis  Climate scenario analysis provides us with the toolkit for doing just that. To look forwards not backwards, with a horizon of decades not years. In recognition of the uncertainty we face about what might happen to our planet and our economy, some scenarios show the most efficient pathway to net zero, while others highlight the risks of fragmented policies or insufficient action. They can all help guide actions today. 3  See PRA supervisory expectations on the financial risks from climate change. Plotting the transmission channels of climate risks into economic and financial risks is a fiendishly complicated task [figure 2]. The channels from climate to financial risk are numerous, with significant interdependencies. The data and methodologies to translate climate outcomes into macroeconomic and financial risks are incomplete and inadequate.
Then, I will address resource utilisation’s significance for monetary policy, give an account of the Riksbank’s calculations of potential GDP, discuss the impact of the financial crisis on potential GDP, give an account of different measures of resource utilisation and what they say about resource utilisation at present, and conclude by addressing the need for continued analyses. GDP grows over time, but the rate of growth varies GDP growth since 1950 is illustrated in Figures 1 and 2. What is known as an HP trend is also included in the figures. I will return to these HP trends later. Seen over the entire period from 1950 to 2010, GDP has increased by an average of 2.7 per cent per year. Growth was significantly stronger in the 1950s and 1960s compared with the 1970s and 1980s. There then followed a ten-year period from the mid-1990s with relatively rapid GDP growth and associated relatively rapid productivity growth. In earlier seminars, we have discussed the reasons for the strong productivity growth during this later period. I myself have pointed out a number of possible explanations.1 Globalisation through the expansion of the EU, the opening up of the economies of eastern Europe and China’s rapidly-growing international trade have increased competition, which has been particularly significant for Sweden, with our substantial foreign trade and high proportion of international companies. Furthermore, a number of product markets were deregulated in the 1990s (taxis, domestic flights, postal services, telecommunications, electricity etc.). Sweden also has high proportions of IT production and IT use in production.

Svante Öberg: GDP growth and resource utilisation Speech by Mr Svante Öberg, First Deputy Governor of the Sveriges Riksbank, at Statistics Sweden’s annual conference, Saltsjöbaden, 6 October 2011. *  *  *  It’s a pleasure to be back here in Saltsjöbaden again. It has now been ten years since I was involved in starting these annual conferences as the head of Statistics Sweden. In those days, this was a matter of improving economic statistics. What several of the proposals we discussed had in common was that they were important for our efforts to elucidate and understand productivity growth. These proposals included a better price index in the private service sector, better capital stock calculations, better input-output statistics and better IT statistics. I also considered that Statistics Sweden should do more to describe and analyse productivity growth. I am therefore very pleased to see that the conferences have come to focus on the important area of productivity growth and its causes. My speech today can be summed up in the following three points:   Resource utilisation can be measured in several different ways, among others as actual GDP in relation to potential GDP (the GDP gap).   The financial crisis has lowered the growth rate of potential GDP.   Resource utilisation is thus largely normal, even though GDP is only slightly higher than before the crisis. I will start by describing GDP growth over the longer term.
To briefly illustrate the current state of play of our supervisory practices, I would like to mention the “suptech” approach underway at the ACPR: the supervisory authority’s aim is to take advantage of innovation to better carry out its missions at the best cost for the community and thus prepare the supervision methods for tomorrow’s financial processes. To date, four tools developed in intrapreneurship with the support of the Banque de France’s Lab, our space dedicated to innovation, have been created and should concretely increase the efficiency of our supervisors. But I would like to focus for a moment on the contribution that we can make, as a central bank and supervisory authority, to the development of the regulatory framework. In this area, I think it is important to recall a few principles that underpin our vision as a supervisor and central banker with regard to the changes in the regulatory framework of the financial system. First of all, I would like to stress that no regulatory framework is set in stone. We must keep an open mind, and have the necessary understanding and lucidity to adapt frameworks to technological evolutions - or even revolutions -, as well as to their challenges and associated risks. Secondly, this adaptation must, in my view, preserve and consolidate two fundamentals of financial sector regulation: the financial stability objective and the principle of monetary sovereignty.

Denis Beau: For a contribution from our FinTech ecosystem to a more efficient and stable financial system Speech by Mr Denis Beau, First Deputy Governor of the Bank of France, at the FINTECH R:EVOLUTION 2020, Paris, 15 October 2020. * * * I would particularly like to thank Olivier Fliche for his contribution in preparing this speech. Ladies and Gentlemen, I am delighted to take part in this 5th edition of Fintech R:evolution and I would like to warmly thank the France Fintech association and its chairman Alain Clot for their invitation to speak today. This event, organised against the backdrop of the ongoing health crisis, is proof of the drive, determination and adaptability not only of the organising association, France FinTech, but also of the entire innovative French ecosystem of the financial sector, which is now represented here as widely as possible. The French FinTech ecosystem, like any ecosystem made up of start-ups, is fragile but it is promising and, I believe, vital to the financial sector. The economic crisis associated with the health crisis highlights these contrasting characteristics: on the one hand, start-ups may be weakened or innovative projects delayed by the economic situation; and on the other hand, the health crisis has accelerated the adoption of new digital habits by the entire population. More generally, 2020 has only served to underscore the challenges facing the financial ecosystem as a whole as a result of the digitisation of our economy.
9  Following the post-crisis adjustment, private sector debt to GDP ratio stands very heterogeneous across CESEE countries ranging from about 28% of GDP to 129% of GDP in 2017. In most CESEE countries, debt levels are below the European average which corresponds to the level of economic and financial development. Private sector debt ratios in most of the countries are below the threshold in the Macroeconomic Imbalance Procedure (133% of GDP for total private debt) and MIP based reference values for households and non-financial corporate debt. Favorable financing conditions and solid economic growth recently have alleviated debt sustainability concerns in the region. Yet, there are important differences across countries. In Albania, Romania and the Czech Republic, debt levels are well below MIP based vulnerability benchmarks with private debt having stabilized or decreasing in recent years. In other countries, such as Slovakia, North Macedonia and to some extent Poland, private debt remains moderate by international standards, but is growing post-crisis urging for close vigilance by authorities. There are also countries such as Bulgaria and Croatia where private sector is still highly leveraged and therefore is source of concern for macro-financial stability. European Commission5 notes high corporate debt in Bulgaria as potential drag on investment and growth over the medium term. Deficiencies in the insolvency framework are identified as important factor that slows down the reduction in private sector debt and the workout of nonperforming loans in the country.

Such a step would be a natural development of the Single Market and would benefit all EU Member States. We believe that one area that deserves particular attention is the development of a wellfunctioning market for simple, transparent and real asset-backed securities (ABS). This would allow banks to still originate loans – notably to small and medium-sized enterprises (SMEs) – while preserving their balance sheet capacity. In order to achieve a well-functioning ABS market, it is important that the regulatory treatment of securitisation is proportional to the risk of ABS. In this respect, the ECB welcomes efforts to have a differentiated regulatory treatment of simple, transparent ABS built on real assets. Moreover, the provision of public guarantees should be considered to support lending to SMEs, as other countries do, such as the US. A further integration of corporate bond and equities markets is also essential to overcome the present fragmentation in the euro area and to ensure more robust cross-border lending and investment flows. To achieve this, we will have to streamline differences between countries, for instance, in the legal protection of borrowers’ and lenders’ rights as well as in national taxation and insolvency procedures. To sum up, structural policies are more multifaceted than they are often perceived to be in the political debate and can have a very significant impact on investment in a variety of ways. Growth-friendly fiscal policy Yet this is not the only area where governments can make a difference.