samchain/econo-pairs-v1 huggingface dataset:
This suggests that market participants’ misgivings about prevailing uncertainties have dissipated somewhat, which is likely not least of all a consequence of monetary policy measures by major central banks. In addition, some investors appear to expect that central banks will continue to pursue expansionary monetary policies for the foreseeable future, with low interest rates and an ample supply of liquidity. In Switzerland, interest rates remain at a very low level. The yield on ten-year Swiss Confederation bonds declined to a new low at the beginning of December, at 0.39%. No other government has ever recorded nominal ten-year financing costs at such a low level. BIS central bankers’ speeches  1  Money market rates also continue to be very low. Interest rates on the repo market are predominantly negative. At 1 basis point, the three-month Libor lies only just above zero. Based on Libor futures contracts, the interest rate expectations of market participants are that the low rate environment will continue for the foreseeable future. Management of foreign currency investments Our foreign currency purchases in early summer to enforce the minimum exchange rate have resulted in high inflows to the SNB’s foreign currency holdings. These holdings have increased by CHF 167 billion since the beginning of the year to CHF 425 billion at the end of November. This is a direct consequence of our monetary policy. In the event that foreign currency purchases are necessary to implement the minimum exchange rate, our foreign currency reserves increase, and the balance sheet expands.

In particular, they act out of self-interest or greed often at the expense of others. It is time to put this to rest. One can just take Islamic ethics as they are, and act as one say and as one mean. However, we should build on this, infuse it with a creed of professionalism that will provide its practitioners with not only a clear set of principles, but a sense of vocation to do what is right and to strive for the greater good and the betterment of the society to truly achieve the aspirations of maqasid al-Shariah. Let me share some further thoughts on this. In building such an ethos, we should always have in mind the basic or fundamental Islamic ethics that are also shared across many religions and societies. Such prescriptions lay out the fundamental basis of decency and behaviour. We cannot steal, cheat, lie, and act dishonourably. Principles that essentially guide us to be decent and in fact socially acceptable and responsible members of society. A natural component of this is ‘amanah’ or trust. As professionals, we should act as it is entrusted upon us, protecting the interests that we serve; our customers, shareholders, institutions, and sometimes this comes at personal expense. Trust is often called a valuable commodity. Indeed, it is even larger than that. Trust is a foundation or pillar of many relationships, including that of business and finance.
But regulation is there to serve the British public, and that should guide us as we aim to strike the right balance in this important set of reforms. Chart A: Comparison of MA and FS for different asset classes as at YE20  Source: MA Asset & Liability Data submissions by firms as at YE20. The chart on the left is ranked by spread in bps (lowest to highest); the chart on the right is ranked by MA as a percentage (%) of spread (lowest to highest). Assets classified as ‘quasi government’ and ‘other’ have been excluded as these contain derivative exposures which distort the comparison. Asset classes – agricultural mortgages and sale and leaseback - where firms have reported limited holdings are also excluded. 1. Like other bits of financial regulation, Solvency II was imported into the UK upon Brexit – parts of it into legislation which is the domain of government and Parliament, and parts of it into the regulator’s rulebook. Because of this structure the review is led by HM Treasury on behalf of government but with strong involvement from the PRA. 2. In more technical terms: the MA reduces firms’ exposure to interest rate and reinvestment risk. It also allows a buy-andhold investment strategy which enables a firm to access the liquidity premium which has historically been observed in spreads on fixed interest assets. 3. Estimate based on regulatory data on annuity contracts collected by the PRA.

Given that the livelihoods of millions of pensioners depend on getting this right, we think we need to recognise this uncertainty – by deducting a bit more from what can be counted as capital up-front to allow for it. I should be clear that this isn’t just the view of a prudential regulator – any sensible financial market participant will demand some buffer of safety (or ‘credit risk premium’) when potential losses are uncertain, and it is odd that the EU’s MA construct does not explicitly address this. [5] Second: wrong asset, wrong risk. Under the rules we have inherited from the EU, the amount of future losses firms are required to expect on their assets is based on the historical performance of corporate and government bonds. At the time the rules were negotiated these assets accounted  Page 6  for the very large bulk of insurers’ investments, so this made sense – but as insurers invest more in other sorts of assets, there is an obvious risk that those assets’ future performance will diverge from the benchmarks used in the rules. For example, it is reasonable to question whether the losses which might arise from investments in a commercial real estate loan today will be the same as those experienced on corporate bonds in the past – even if they have the same credit rating.
Thanks to this culture of stability, Switzerland was able to combat the financial and economic crisis with sound finances and a credible and effective monetary policy. The automatic stabilisers were able to take full effect. Moreover, targeted measures could be financed without generating a destabilising increase in debt. Monetary policy authorities were able to deploy the full range of tools at their disposal, thereby helping to stabilise the economy and the financial markets. The high level of credibility enjoyed by monetary policy was also a major factor in the successful implementation of the unconventional measures. The tension between monetary and fiscal policy that is now observable in other countries does not currently exist in Switzerland. Conclusions We have seen that, in normal times, there is no tension between monetary and fiscal policy, but that instead fiscal and monetary policy are pursuing higher, closely related goals, namely ensuring macroeconomic stability, exploiting economic growth potential to the fullest extent, and thereby creating prosperity. A prerequisite for macroeconomic stability – especially in times of crisis – is the sustainability of both economic policy areas, i.e. price stability and a balance between public receipts and expenditure. For this to happen, there need to be good rules on the one hand, and a culture of stability on the other. In crisis situations – as the recent financial and economic crisis has amply demonstrated – tension can arise between monetary and fiscal policy.

They can set the level of both taxes and expenditure, although there are, a priori, no clear guidelines on the optimal levels. In order to ensure that fiscal and monetary policy authorities do not exploit their discretionary freedom, but instead use their instruments in a targeted way with the aim of achieving sustainable economic policy, there need to be clear and binding rules. In the monetary policy domain, the “rules versus discretion” debate started early. Its origins can be traced back to the beginning of the 19th century. At that time, disciples of the so-called currency school were demanding that the issuance of paper money be closely tied to the central bank’s gold reserves, whereas advocates of the banking school took the view that a stability-fostering expansion in the money supply would also come about without such a rule. The first arguments in favour of rules appeared early on in the literature on monetary policy. 2 Today, there is a consensus that a rules-based monetary policy is more successful in ensuring price stability. The lack of clarity in past rules had led to monetary policy being more exposed to political pressure. As a result, monetary policy authorities were tempted to focus more on short-term growth stimulus than on the long-term repercussions of such stimulus on price stability. This is why monetary policy needs to be conducted by a rules-based, independent central bank, with the main focus on the assessment of the future path of inflation.
Forecasts of UND1X at different times and actual outcome Annual percentage change  4  4  UND1X, outcome Inflation Report 2004:4 Inflation Report 2003:1 Inflation Report 2002:1  3  3  2  2  1  1  0 2000  0 2001  2002  2003  2004  2005  2006  Sources: Statistics Sweden and the Riksbank  2. Productivity growth in the business sector since 1980 and HP trend Annual percentage change 8  8 Business sector Forecast HP-trend  7 6  7 6  5  5  4  4  3  3  2  2  1  1  0  0  -1  -1  -2  -2  -3 -4 1981  1981-1990: 1.7%  1984  1987  1991-1994: 2.8%  1990  1993  1995-2000: 3.2%  1996  1999  -3  2001-2004: 3.0%  2002  -4 2005  Sources: Statistics Sweden and the Riksbank  BIS Review 18/2005  7  3. Forecasts of CPI inflation in 2004 at various times: the Riksbank and an average of other forecasters Annual average  3.0  3.0  Riksbank Average of other forecasters Outcome (0.5) Lowest forecast Highest forecast  2.5  2.5  2.0  2.0  1.5  1.5  1.0  1.0  0.5  0.5  0.0 Dec-02  Jun-03  Dec-03  0.0 Dec-04  Jun-04  Sources: Consensus Inc., Statistics Sweden and the Riksbank  4.

Már Guðmundsson: Rebuilding after the financial crisis Statement by Mr Már Guðmundsson, Governor of the Central Bank of Iceland, for experts and journalists on the occasion of publishing of the Central Bank of Iceland’s Financial Stability Report, Reykjavik, 30 October 2009. *  *  *  Early in October 2008, nearly nine-tenths of Iceland’s banking system collapsed when its three large commercial banks – Glitnir, Landsbanki, and Kaupthing – were taken into special resolution regimes on the basis of the emergency legislation that had just been passed by Parliament. This collapse has caused the entire Icelandic nation economic hardships, which came on top of those caused by the difficult but inevitable adjustment already underway after the overheating and macroeconomic imbalances that characterised the period from 20052007. The crash amplified the contraction in production and employment and aggravated households’ and businesses’ debt problems. The failed banks had their headquarters in Iceland and were majority-owned by Icelanders. But in order to better understand the chain of events, it is important to bear in mind that the banks were only partly Icelandic, in that a large share of their activities took place overseas. For example, about 60% of their lending was to non-residents and about 2/3 of their deposits denominated in foreign currency. It was these international operations and the size of the banks relative to Iceland’s GDP that ultimately proved to be their Achilles heel.
Moreover, the negotiating position of those in employment becomes gradually stronger and this may affect the outcome of wage negotiations. There have already been some wage demands that represent growing tensions. The Riksbank obviously has to keep a close eye on all this and take any steps that may be necessary in good time. And, as I said, the longer the upward phase lasts, the greater is the probability of coming close to the capacity ceiling, even though this cannot be identified exactly. Another question concerns the speed at which it is healthy for the economy to approach this ceiling. Today’s repo rate cannot hold over a complete cycle It follows that, over a complete business cycle, the monetary stance cannot remain as expansionary as it is at present. With a repo rate at the current low level of 3.25%, the economy would expand too rapidly and reach a point where overheating occurs, leading to shortages and rising rates of wage and price inflation. Our Executive Board expressed such ideas unanimously as recently as last month. The economic advantage of looking ahead and raising the interest rate in good time is evident from what has happened in the US economy since the beginning of 1994. In February that year the Federal Reserve initiated interest rate increases and since then the rate has fluctuated between 4.5% and 6%, which are more normal levels. This succeeded in preventing - let me repeat, in preventing - an increase in inflation without causing the economy to enter a recession.

Thus, one of the central factors behind the notion of a break with earlier economic patterns is the development of productivity. In the United States it does look as though productivity growth has improved in recent years. An important reason for this is the investment boom in the 1990s. Corporate investment has almost doubled since 1990 and a very large share has gone into new information technology. In that computer prices have fallen so much, in real terms the level of investment in information technology has risen by a factor of almost twelve. The productivity gains have sustained corporate profits and kept price increases down. The massive investment has resulted in what is known as capital deepening, which amounts to an increased capital input per employee. Many observers therefore consider that the US economy is now capable of expanding at an annual rate of as much as 3% to 3.5% without encountering shortages and an acceleration of inflation. In other words, the speed limit over there has been raised. A similar change could well occur in other countries that utilise the new information technology’s potential benefits. But as far as Sweden is concerned, it cannot yet be said that productivity growth has improved to the same extent. According to the statistics, the productivity trend for Sweden has moved up by around 0.5 percentage points in the 1990s compared with the 1980s.
While the number of POS terminals in Malaysia at about 9 per thousand inhabitants is still relatively low compared to about 22 to 33 per thousand inhabitants in other advanced countries,4 the POS network is anticipated to grow with the introduction of the Payment Card Reform framework. Key focus areas to drive financial inclusion via e-payments While there are success stories globally where e-payments have helped advance financial inclusion, such success stories must be the norm rather than an exception. In this respect, the public and private sector collaboration goes to the heart of any successful policy and developmental agenda. We also need to take a longer term view rather than focusing on short term and narrow self-interests. In this regard, I wish to highlight four (4) areas that could drive financial inclusion to the next level, via the use of e-payments. These areas are: 1. Correcting price distortions and promoting competition;  2. Development and sharing of infrastructure investments;  3. Strengthening transaction security; and  4. Consumer protection and education. 1. Correcting price distortions and promoting competition  We need to address price distortions and promote competitive practices. A market driven environment would ensure that the correct price signals are provided to promote the usage of the more cost-effective payment instruments whilst injecting competition. The idea is for market players to lower cost and widen the access channels to make financial services more affordable and accessible to the general public.

While regulators can act as the catalyst in prescribing interoperability standards and garnering industry efforts to facilitate infrastructure development and sharing of infrastructure costs, the industry must also play its role by adopting new standards quickly. In Malaysia, there is currently an industry initiative to migrate the ATM cards to the EMV standard with the objective to widen the acceptance of the ATM cards for retail payments. There is also an on-going project to establish the National Bill Payments Scheme (NBPS), a common bill payment platform where billers only need to connect to one bank in order to 4  BIS central bankers’ speeches  receive payments from customers across all banks. All these efforts are intended to make epayments for the public seamless and reduce duplication of resources in infrastructure investment. 3. Strengthening transaction security  Let me now turn to the third focus area which is the importance of strengthening transaction security to minimise fraud and instil greater confidence in the use of e-payments. Fraud and risk management measures must not only be effective, it must also be proportionate to the level of risk. Otherwise, it may be too costly to implement or too cumbersome to use, and people might revert to using cash. Equally important is the presence of effective payment system rules so that all parties in the payment value chain are held accountable for ensuring a minimal standard of security and service level. It is of paramount importance to sustain consumers’ perception and confidence in the safety of payment instruments.
Meat prices rose sharply as a result of livestock diseases, electricity prices rose considerably, partly the result of a normalisation following on from the extreme price falls during the previous year when the electricity market was deregulated, but also because of an unusually low level of snow during the winter season 1999-2000, which led to a shortage of water in the power station dams. There were also production problems at the oil refineries, which led to sharp rises in petrol prices. We noted as early as spring 2001 that even when an adjustment was made for these transitory factors, inflation had risen more than expected and we estimated that there was a risk that resource utilisation, which affects inflationary pressure primarily during the following year, could have been higher in 2000 than we had earlier believed. The krona weakened considerably during spring 2001, which added to the concern over inflation. A majority of the Executive Board decided to raise the repo rate in summer 2001. However, the downward revisions to the growth forecasts continued during the autumn and following the acts of  2  BIS Review 32/2002  terrorism in September, there was considerable insecurity. The terrorist attacks came during a sensitive time for the US economy, which was already in a downturn phase, albeit with a relatively good growth in consumption. It was estimated that the attacks would entail a deeper and more prolonged economic downturn with repercussions for the entire global economy.

In other words, banks with a large share of their deposits in a country with high coverage may have different incentives and access to deposit finance compared to banks in lower coverage countries. A related point could be made about the different types of deposits that are covered by the respective schemes. A second important parameter of a deposit insurance scheme is the funding structure. In the EU some schemes are pre-funded, i.e. they collect the means for being able to pay out in case of a bank failure beforehand, others are only funded ex post, i.e. in case of a bank failure the necessary amounts are collected from other banks, and again other schemes use a combination of the two. For the pre-funded schemes the premium structure is of relevance. Some schemes use flat rates in proportion to banks’ deposits and others take some aspects of bank risk in the pricing into account. All this leads to greatly varying “coverage ratios” across the EU, defined as the size of funds divided by the total amount of deposits covered. The differences in funding structures can lead to differences in the costs of deposit insurance for banks headquartered in different countries. As the views of stakeholders tend to be divided, an important issue for further analysis and research is whether differences in coverage and funding structures have a significant impact on the competition among banks originating from different countries.
– Let me start with bank profitability It is true that low interest rates may affect the interest margins of banks since the latter cannot generally pass negative rates on to depositors. Also, because these institutions engage in maturity transformation, both the slope and level of the yield curve matter for their profitability. But let me comment on what I see as the predominant effects of interest rate cuts since 2014. Our monetary policy is driving up real asset prices and lowering debt-servicing costs. Indebted 1/4  BIS central bankers' speeches  corporations, households and governments can improve their balance sheets and yet maintain a steady spending trajectory with improved growth prospects. As a matter of fact, the ongoing recovery in the euro area has been synonymous with lower unemployment (7 million jobs have been created since 2013), resulting in higher disposable income [SLIDE 2]. In turn, this has significantly lowered the risk of default borne by the banking sector. Banks have also benefited from very low interest rates through cheaper funding and significant capital gains on their longterm assets. So far, these effects seem to have compensated for the reduction in the bank interest margins. In a recent ECB working paper by Altavilla, Boucinha and Peydró, 1 the authors even argue that there is no causal relationship between low interest rates and reduced bank margins. The latter effect is due more to the past deterioration in macroeconomic conditions than to active monetary policy.

First, the 120 banks considered to be significant, 15 of which are Spanish (although their number will drop to 14 when the acquisition of Catalunya Banc by BBVA is completed). They will be directly supervised by the ECB through so-called Joint Supervisory Teams made up of staff from the ECB and the national supervisors. Second, the more than 3,000 less significant banks will continue to be the direct responsibility of national authorities, although the ECB will indirectly monitor their situation and the supervisory actions to which they are subject. As a prior step to the creation of the SSM, a comprehensive assessment of the euro area’s significant banks was conducted and the results were made public on 26 October. This exercise consisted of two parts: an asset quality review and a stress test. The assessment of asset quality involved an in-depth review of bank balance sheets as at end-2013. It was carried out with the assistance of the top audit firms. The stress tests assessed the capacity of banks, in a three-year period from 2014 to 2016, to absorb losses under two hypothetical macroeconomic scenarios: a baseline, more likely one; and an adverse one, less likely but not impossible. This second phase of the exercise was basically carried out by the banks themselves. Both phases were subject to strict quality assurance in which the national supervisory authorities, in our case the Banco de España, played a key role.