samchain/econo-pairs-v1 huggingface dataset:
If that is taken away or the access for those markets is taken away, that leaves a huge black hole for countries like Germany, for Ireland, for countries that actually feel that they could fill that gap. They can't necessarily, can they? Any such movement has to be decided by the industry. It has to be led by the market. What we want to see as a central bank, what we want to see as overseer, as supervisor is that effective supervision continues to be delivered wherever the financial industry is located. Location choices should be for the industry to make themselves. You have no doubt, regardless of the final status of the relationship between the United Kingdom and Europe, that your relationship with the regulators, with Mr Carney and what have you, will be exactly the same as it is now? What I can say at the current juncture is that our relationship with the Bank of England is one of the main assets we have. We have a trust relationship with the Bank of England and that will be a very strong asset for the future. 3/3  BIS central bankers' speeches

These measures include, for example, the Federal Council’s decision in 2012 to increase the capital requirements for mortgage loans with a high LTV ratio, i.e. a high ratio of the mortgage loan to the value of the pledged property. Furthermore, banks’ selfregulation rules were revised and tightened in the years 2012, 2014 and 2019, which, in particular, imposed more stringent requirements regarding the amortisation of mortgage loans and own funds brought in by borrowers. An important factor was also the activation of the CCyB in 2013 and its subsequent increase to 2% in 2014. The CCyB was deactivated last year. This decision was made against the backdrop of the coronavirus crisis in order to  Page 10/12  broaden the scope for banks to lend to companies in these exceptional circumstances – in spite of the existing vulnerabilities on the mortgage and real estate markets. The measures implemented between 2012 and 2019 were important to strengthen the banks’ resilience and curb the increase in vulnerabilities. 12 They could not, however, fully prevent the rise in risks. The current situation will therefore continue to demand our full attention. I would like to highlight two reasons: First, current price developments in the residential property sector show that there is no reason to sound the all-clear. As outlined in our Financial Stability Report published in June, the coronavirus pandemic has not slowed down price momentum. On the contrary, price growth in the residential real estate market has in fact increased.
Although so-called “soft-patches” are quite common during the early stages of an economic expansion, this soft patch is a bit different. First, it looks like it will last somewhat longer because the deleveraging process is not yet complete. Second, the current weakness is somewhat more concerning because it is occurring at a time that the central bank has already cut interest rates to near zero. In fact, this failure of the recovery to “catch fire” has occurred despite aggressive monetary and fiscal policy steps to stimulate the economy. On the monetary policy side, short-term interest rates have been nearly zero for a year and a half; the Fed purchased $ trillion of long-term assets, and the proceeds from maturing securities are being reinvested to keep the balance sheet from shrinking unduly. On the fiscal side, a series of measures has provided support to a broad range of activities. The sluggish nature of the recovery in the face of very substantial stimulus reflects the dynamics at work during the expansion that preceded it. Beginning around 2003,  BIS Review 127/2010  1  underwriting standards for residential mortgages were significantly relaxed, leading to a sharp rise in household borrowing and in home prices. The two trends were inextricably linked. The rise in home prices helped to support additional demand for credit as households used the collateral represented by their homes to borrow large sums of money via home equity lines of credit and second mortgages.

Turning to the first issue, clear communication about objectives and intent is an important element of effective monetary policy. For example, communicating clearly our intention to return inflation to more normal levels can help keep inflation expectations well anchored around levels consistent with our inflation goals. As the central bank, we and we alone can control inflation – if not precisely in the short run, then over the medium term. By clarifying our intentions, we can reduce the risk of further disinflation – or even an outright debtdeflation spiral that would make it still more difficult to accomplish the necessary balancesheet adjustments. Clear communication on the part of a central bank is important at all times, but it is even more critical when the federal funds rate is at or near its effective lower bound. In this environment, a decline in inflation expectations that drives up the real interest rate and thereby increases the real cost of credit cannot be offset by simply lowering the federal funds rate. Thus, in a very direct sense, a fall in inflation expectations when the target interest rate is at the zero bound represents a de facto tightening of monetary policy and of financial conditions. Such a tightening would clearly be highly undesirable at a moment when unemployment is too high, inflation is too low and the economy has only moderate forward momentum. In this situation, the FOMC must be clear and resolute in its commitment to its price stability objective.
BIS Review 32/2006  5  A conclusion may be drawn that opening of the low cost economies, especially of the Chinese economy, and the increasing international competition on the market of goods and services related thereto, changes the methods of setting prices by enterprises and determining wages on the labour market. Enterprises are increasingly becoming price-takers, and thus even in a situation of rising costs of manufacturing, they are unable to lift prices and shift the growing costs onto the customer. Similar is true for wages, whose level is determined on the increasingly global labour market. Research on the manufacturing sector in EU Members States (for the years 1988 - 2000) has shown that the increase in the openness of that sector (growing import) caused a fall of prices by 2.3%, a growth in productivity by 11% and a drop in margins by 1.6%. Altogether, it may explain the inflation fall by 0.14% in annual terms over that period 11 . When looking at the price processes from the microeconomic perspective, vital structural changes can be observed, which bring about lower inflation. Analysts also point out that the dynamically growing Chinese economy, which uses more and more commodities, contributes to a significant increase in their prices, and may potentially drive up inflation. However, considering the increased competitive pressure, the possibility of shifting higher cost of commodities (e.g. oil) onto the final prices is limited 12 .

Despite falling premium rates, general insurer profits in the past few years have been sustained by both benign catastrophe experience and levels of prior year reserve releases that are now the highest for thirty years (Chart 2). Natural catastrophes are a major component of many GI firms’ risk profiles. Catastrophe losses returned to more normal levels by historical standards in the first half of this year. But the low incidence of catastrophic events in recent years may have given support to the idea that this component has in some way diminished, whether due to trends in nature or more effective management of risks by policyholders and insurers. I have also heard speculation that some man-made risks may have decreased: for example, if planes and ships are built better than previously, or if companies are better at managing their risks. Mindful of both the impact and the uncertainty involved in considering this, we would expect firms to seek the BIS central bankers’ speeches  1  best available evidence and to take a prudent and comprehensive view to the assessment of risks. Put simply, we would not expect a handful of recent data points to lead to a marked reduction in a firm’s assessment of its best estimate of liabilities nor its “1 in 200” risk.
Abstracting from credit and liquidity risk, the most prevalent source of risk for longterm debt is duration risk: that is, the sensitivity of the bond price to changes in the yield curve. I will come back to this when discussing the duration channel of large-scale central bank asset purchases. [11] Monetary policy exerts its effects on the yield curve not only through pure rate expectations but also through term premia. Chart 4 shows a model-based estimate of the yield curve response to a change in policy rates for the euro area. [12] The surprise used here is a combination of what I previously described as a pure rate surprise and a forward guidance surprise. It therefore affects yields across all maturities. While Chart 4 shows that changes in rate expectations explain the bulk of the yield curve response, part of it is attributable to changes in term premia. Chart 4 Instantaneous impact of conventional policy surprise on expectations and term premia (basis points)  Source: ECB calculations. Notes: The chart depicts the instantaneous impact of a conventional monetary policy surprise on the yield curve and its components. The policy surprise is identified through high-frequency changes in the common component of a set of euro area short-term interest rates of maturities up to one year. The surprise (normalised so that the one-month rate is reduced by 10 basis points) thus captures effects beyond a pure target rate surprise. These effects may be interpreted as a signalling element of conventional monetary policy.

Not only the Riksbank, but also several other central banks have in recent years faced a situation where the economy has grown strongly, while inflation has been below target, despite very expansionary monetary policy. Let me therefore go on to discuss an important issue that has arisen due to developments in recent years, namely how to deal with a situation where structural changes contribute to inflation remaining low over a long period of time. In Sweden, the upswing in world trade has contributed to strong growth in Swedish exports. Over the past year, domestic demand has also developed strongly, partly due to stimulation from expansionary monetary policy. At the same time, inflation has been kept down by high productivity growth and weak growth in import prices. This is partly related to developments in economic activity. However, there also appear to be factors of a more structural nature behind the low inflationary pressure. This is probably to some extent connected to the fairly comprehensive investment in new technology. However, it is clearly also largely concerned with the effects of increased global competition. Our analyses thus indicate that the low inflation rate has in many cases been the result of a number of changes in the supply side of the economy. Our forecast is that growth in the Swedish economy will remain high over the coming years. We also envisage inflation rising as capacity utilisation increases.
Ben Broadbent: The Monetary Policy Committee’s forecasts and the yield curve – predictions versus promises Speech by Mr Ben Broadbent, Deputy Governor for Monetary Policy of the Bank of England, at Reuters, London, 18 November 2015. *  *  *  I would like to thank Clare Macallan for research assistance and I am grateful for helpful comments from other colleagues. The views expressed are my own and do not necessarily reflect those of the Bank of England or other members of the Monetary Policy Committee. Good morning! The previous Governor of the Bank, Mervyn King, once referred to what he called the “rich seam” of MPC communication. Rich or not, it’s certainly a wide seam: MPC members each give several speeches a year; we publish minutes of every meeting, now supplemented with a Monetary Policy Summary; every quarter we publish a 50-page Inflation Report that summarises the MPC’s collective view of the economic outlook and includes our latest forecasts; every Report is followed by a session in front of parliament’s Treasury Committee. Yet, from all this, the outside world seems increasingly interested in only one particular nugget: the MPC’s central inflation forecast two years ahead. This forecast is derived assuming that interest rates follow the path priced into financial markets. Comparing the two, commentators often make very precise inferences from the MPC’s projections about future policy.

Gabaix Xavier 2012, “Variable rare disasters: an exactly solved framework for ten puzzles in macro-finance”, Quarterly Journal of Economics, Volume 127, Issue 2, Pp. 645–700. Joyce M. and A. Meldrum, 2008, “Market expectations of future Bank rate”, Bank of England Quarterly Bulletin. Macaulay Frederick, 1938, “Some Theoretical Problems Suggested by the Movements of Interest Rates, Bond Yields, and Stock Prices in the United States Since 1856”, National Bureau of Economic Research, pp. 33. Mankiw G., and L. Summers, 1984, “Do long-term interest rates overreact to short-term interest rates?”, Brookings Papers on Economic Activity. Shiller Robert, 1979, “The volatility of long-term interest rates and expectations models of the term structure”, The Journal of Political Economy, Vol. 87, No. 6, pp 1190–1219. BIS central bankers’ speeches  9  Sutton Gregory, 1997, “Is there excess comovement of bond of bond yields between countries”, Bank for International Settlements, Working Paper No. 44. 10  BIS central bankers’ speeches
That is not a requirement on funds but is a material hurdle to one fund breaking from the pack to make longer-term investments that cannot be priced daily. That hurdle has been highlighted by multiple industry bodies. 19 We will need to consider how this convention could be overturned. Conclusion  These details of the financial system may seem academic when many businesses and families are struggling to cope, grappling with uncertainty and worrying about the future. But finance is needed now to help you – the muscle of the economy – to finance cash-flow deficits to preserve employment and productive capacity. While the financial system has been given every assistance to meet the needs of the wider economy and has made a good start, it needs to do even more if scarring of the economy is to be minimised. And more equity will be needed: to help some companies through the disruption; to build new economic muscle to grow to replace that which is lost, and to help others restructure once the disruption is over and avoid the burden of debt hanging over investment and employment. The pools of capital managed by our insurance companies, pension and investment funds are huge. When combined their assets amount to £ trillion20. If just 1% more of that pool was allocated to unlisted equity, demand for £ of new issuance could be created.

The future of augmenting protection with prevention can be distilled through three pillars: First, by creating awareness of current risk levels Second, by suggesting a change in behaviour And third, by offering incentives for changes in behaviour The first two pillars are closely linked and is typically in the form of real-time risk mitigation as well as early warning systems. For instance, prevention triggers such as missed safety task notifications and water leakage alerts to activate emergency repair services can help prevent accidents. Telematics can also connect insurers and farmers to data from weather systems for potential safety warnings. However, raising awareness of risky behaviour and how to address them are not enough. It is also fundamental to encourage people to instigate real and sustainable changes in behaviour. Jonas Salk, one of the first successful medical researchers to develop polio vaccines once said that "the reward for work well done is the opportunity to do more". Insurers and takaful operators can leverage consumers' perception of the value of rewards by nudging them to adopt safer and healthier behaviours. Elements of  4/6  BIS - Central bankers' speeches  gamification and behavioural economics can also be integrated – for example, a driving score leader board can motivate drivers to collect higher scores by adopting safer driving behaviours. We recognise that many of these successful models require tie ups and expertise beyond traditional business lines. To cater to these new digital realities, the Bank has been proactive in ensuring our regulations are adapted regularly.
Malaysia has entered into a number of collaborative arrangements in the areas of talent development and expertise, business linkages, and infrastructure development. To date, Malaysia has signed Memorandums of Understanding in the area of Islamic finance with the UK, France and Luxembourg. The now well-developed existing Islamic financial markets, including the sukuk and Islamic money markets, have been particularly instrumental in intermediating funds in the Islamic financial system. It is fast becoming an important platform for international fund raising and investment activities that are generating increased cross-border flows. From an outstanding amount of USD33 billion in 2006, the sukuk market has expanded to USD180 billion as at end-2011. The sukuk market brings with it many attractive value propositions for both issuers and investors. A central merit of the sukuk structure is that it is based on underlying assets that have an income stream. This therefore discourages over-exposure of the financing facility beyond the value of the underlying asset, given that the issuer cannot leverage in excess of the asset value. In addition, with the requirement that the financing must be channelled towards productive purposes, the risk exposure in sukuk is therefore to the project and not to  2  BIS central bankers’ speeches  the uncertainties or activities that have no economic benefits. This element not only contributes towards financial stability, but also offers investors another asset class for investment. The demand for sukuk currently exceeds the supply, as the high level of surplus savings in Asia and the Gulf region spurs the strong demand.

As we revisit this dramatic moment in monetary history, we need to remember that it occurred against the backdrop of nearly 15 years of disillusion regarding the ability of activist “Keynesian” economic policies to guarantee low inflation and full employment. From 1965 onwards, inflation had been on the rise and unemployment surged in the 70’s, following the first oil shock. In the beginning of the 80’s, it appeared that fiat money was inherently prone to cause periodic bouts of inflation and that there was little one could do about it. (see annex for graph 1) Since 1979, the global monetary environment has evolved dramatically. Achieving and maintaining price stability has become the undisputed guiding principle of a vast majority of the world’s central banks. Price stability ensures the signalling power of prices, thus bolstering the efficiency of the market mechanism. By preserving purchasing power, it facilitates long-term planning and induces long-term investments. Price stability also prevents social injustices from emerging between debtors, workers and retirees. Finally, price stability minimizes tax related distortions linked to the interaction of inflation and the tax code.1  1  see Martin Feldstein (1983): “Inflation, tax rules, and capital formation”, Chicago: University of Chicago Press. BIS Review 44/2003  1  The determined focus of monetary policy on price stability has contributed to anchoring the public’s inflation expectations at low levels.
In the long run, it is monetary policy that determine the rate of inflation in the economy and “rational” long-term inflation expectations should therefore still be in line with the central bank's target for price stability. If the public makes this presumption, the negative consequences of taking longer to attain the inflation target will be much less serious. 11 [20]  Concluding comments Let me round off. My purpose here has been to do two things. Firstly, I have tried to put the recent debate on monetary policy into perspective. I have discussed the criticism raised against our policy in general and against the negative repo rate in particular. As I hope I have made clear, there are some gaps in the criticism. I noted earlier that the main argument is often merely that monetary policy for various reasons is wrong. What I feel is often missing is a discussion of why the advantages of the inflation target should no longer apply and what the consequences would be if the Riksbank abandoned it. It is no new phenomenon that the debate fails to answer important questions. In the mid-1990s, when the inflation-targeting regime was relatively new, Lars E.O. Svensson, who was then scientific adviser to the Riksbank and later a member of the Executive Board, argued that the debate often lacked structure.

The banks have also increased their capital levels over the past few years. As a result, the financial system in Norway is now more resilient to shocks. An accountable and credible macroprudential policy must be based on an understanding of how systemic risk arises. The academic research on macroprudential policy issues is growing, but is still at an early stage. Some conclusions seem, however, to be robust. Many studies single out rapid credit growth in particular as a symptom of rising systemic risk. This is in line with the recommendations from the Basel Committee and the EU, which state that decisions on the countercyclical capital buffer should be based on the credit gap. Chart: Basis for advice on the countercyclical capital buffer: key indicators In preparing its advice on the buffer decision, Norges Bank adds three other variables as key indicators. The three variables are, as shown in the chart: house prices, commercial property prices and banks’ wholesale funding ratio. Together, the four indicators contain a considerable amount of information about how cyclical systemic risk evolves. Chart: Early warning models for financial crises A number of studies have indicated that credit growth, real estate prices and banks’ wholesale funding ratio show a systematic pattern ahead of financial crises. At Norges Bank, we have examined data from 16 OECD countries to see whether such a systematic pattern exists. 2 We have developed empirical models for estimating the probability of a crisis.