samchain/econo-pairs-v1 huggingface dataset:
Of course, the Committee hopes that, over time, more and more countries will adopt the framework. We do not want them to do so before they are ready. And, when they are ready, we want them to adopt the options and approaches that are most appropriate for their circumstances. For a country that wishes to adopt Basel II but may not yet be ready, I would suggest a three-stage approach to the transition to Basel II. These stages could be categorised as (1) strengthening the supervisory infrastructure; (2) introducing or reinforcing the three pillars; and then (3) making the transition from the 1988 Accord to Basel II. This three-stage process recognises that Basel II is not intended simply to ensure compliance with a new set of capital rules. Rather, Basel II is intended to enhance the quality of risk management. To achieve this goal, Basel II must be built on the foundation of a sound supervisory system. Such a foundation includes having successfully implemented the Basel Committee’s “Core Principles for Effective Banking Supervision,” including the provisions on operational autonomy of the supervisory authority, adequate supervisory resources, regulatory and remedial powers, and a sufficient legal framework. Likewise, sound accounting and provisioning standards are critical to ensuring that the capital ratios - however calculated - reflect meaningfully the bank’s ability to absorb losses. Establishing a solid foundation of sound supervisory, legal, and accounting systems constitute the essential first stage of the process of moving to the new supervisory framework.

It must be frequently adjusted in response to various changes and new information so as to enable the stability goal to be reached. Against the background of our knowledge of the monetary policy transmission process and its lag structure, it is obvious that it is hardly the level of money market rates that is decisive, but rather the interest rate path optimised over time in uncertain circumstances. The condition for success of the policy is not that the three-month Libor rate is exactly right today; rather, it must be possible to constantly optimise the interest rate path - which leads to the set goal - in a way that the deviations of the ideal line, which can only be defined ex post, will be as small as possible and easy to correct. Interest rate steering will therefore often follow a fairly gradualistic pattern. This has nothing to do with macroeconomic activism, quite the contrary. The macroeconomic fine-tuning activists have lost their case because they have assumed totally unrealistic information conditions and underestimated the uncertainty of political decision-making. With interest rate steering, the situation is exactly the opposite. Precisely where there is considerable uncertainty and false steps are liable to occur, there are good reasons for implementing a policy of small steps. The danger of slipping is smaller, and a false step is easier to correct. But there are also valid grounds for fairly substantial interest rate adjustments.
From that discussion of LOLR as Bagehot would have recognised it 2 , I shall go on to air some developing thinking about two other instruments available to the authorities to address financial system distress: Market Maker of Last Resort, and Capital of Last Resort. The implementation of monetary policy in stressed conditions Most of the time, central bank operations revolve around the implementation of monetary policy. For the Bank of England, in routine circumstances that means, of course, establishing overnight money market interest rates in line with the Monetary Policy Committee’s policy rate (Bank Rate). It is vital that we should be able to achieve that primary rate-setting Objective in stressed conditions, as well as in peacetime. Since mid-decade, the reserves part of the Bank of England’s operational framework has, accordingly, made explicit provision for three broad types of contingency: a bank finding itself temporarily short of reserves at the end of the banking day due to technical problems or frictions in the money markets; a widespread shock to the sector’s demand for reserves; and, thirdly, a pronounced shift in the degree to which banks collectively find themselves needing to manage their reserves directly with the Bank rather than via the money markets. To cater for those eventualities, banks can, first, borrow unlimited amounts overnight against the highest-quality collateral, for a modest premium of 25 basis points, designed to leave intact incentives to manage liquidity in the markets rather than with us.

One of his great themes was that the Bank of England should acknowledge its role in stemming panics, and set out its principles for doing so: “The Bank has never laid down any clear or sound policy on the subject.” 8 Over the past fifteen years or so, including during the current crisis, the Bank of England has taken steps to make the Bank’s principles clearer. 9 Most recently, we have also addressed  6  For example, see Brunnermeier M K and Pedersen L H (2008), “Market Liquidity and Funding Liquidity”, The Society for Financial Studies, Oxford University Press. 7  Bank supervision has its origins not in consumer protection but in preserving stability (and protecting the central bank against risks incurred through its open market operations and discount window lending). This was evident in the remarks, just over twenty years ago, of George Blunden, the Bank’s then Deputy Governor and, a decade earlier, the founding Chairman of the Basel Committee: “Supervisory standards are set not only with an eye to what is required to protect depositors with individual institutions, looked at in the narrow context of their own operations, but also with an eye to protecting them from problems which could be created by wider, systemic, developments. A bank may consider a course of action it wishes to take to be acceptable – as it may well be in a limited context. But the same course might, if widely copied by other banks, have unfortunate effects on the banking system as a whole.
Much progress has been made, but there is still much to do. The ARRC transition plan is well underway, but we need to see certain developments in the U.S. financial industry for a smooth transition. Milestones for the future include deeper liquidity in SOFR derivatives markets, greater issuance of SOFR-linked cash products, a reduction in the issuance of LIBOR-linked cash products, and the closing out of legacy positions on cash products, to name a few. These all require the partnership and perseverance of the market. 2022 Is Just Around the Corner 2022 feels like it’s a long way away, but believe it or not 901 days can disappear, almost in an instant. And I don’t always sense urgency among market participants on this issue. Tellingly, contracts referencing U.S. dollar LIBOR, without robust fallback language, continue to be written. My message: don’t wait for term rates to get your house in order. Engage with this issue now and understand what it means for your operations. Recognize where your exposure lies and deal with the contracts that mature after 2021 that lack robust fallback language. This is a problem you have the opportunity to get ahead of now. Don’t wait until January 1, 2022 to manage your business’ transition away from LIBOR, because it’s going to be too late. Conclusion I’ll conclude with this: Reference rates are a complex issue, with numerous countries, a wide range of public and private entities, and trillions of dollars involved. Progress has been made, and the way forward is clear.

In the process, the private sector gets to mitigate the climate risks of its own assets while at the same time seeking reasonable returns. By doing well, we also aim to do good. As an international financial centre and a green finance hub, our vision is to play a big role in harnessing the power of finance to support the transition efforts in the region. The vision is underpinned by our strong commitment and concrete actions that help create a conducive ecosystem where climate financing can scale, and bring about desirable opportunities and outcomes for the financial sector. A vibrant and competitive climate finance ecosystem needs to be underpinned by a few other critical elements: standards, data and, above all, talent. The work requires leadership from the public sector and partnership with the private sector. In all these areas, the HKMA is joining hands with Government agencies, fellow regulators as well as stakeholders from the financial sector, academia and business community. Much of our joint effort is coordinated through the Cross-Agency Steering Group on Green and Sustainable Finance co-founded by the HKMA and the SFC. 1/4  BIS - Central bankers' speeches  First, on standards. A common set of green standards, to the extent possible, is important to enhance the transparency, comparability and efficiency of climate finance. Hong Kong is a front runner in setting regulatory requirements for the financial sector.
On the one hand, over the past two years total output, or GDP, has been much weaker than expected. In fact, output has been broadly flat over that period. And the zig-zag pattern of quarterly growth rates of GDP that we have seen this year is likely to continue, as we may see on Thursday when figures for the third quarter are released. On the other hand, there are other more encouraging signs. First, the labour market gives a very different picture to that conveyed by the output data. In the private sector, more new jobs have been created than over any other two-year period since the mid-1990s. And in the past year, unemployment has been falling, and falling faster in Wales than in the United Kingdom as a whole. Second, inflation has now fallen back to 2.2%, close to our 2% target. Although recent increases in domestic energy and food prices are likely to leave it a little above target well into next year, the fall in inflation means that the squeeze on real takehome pay, which accounted for much of the weakness in consumer spending over the past two years, has eased somewhat. And retail sales figures are consistent with a pickup in consumer spending. The disparity between weak output growth and a buoyant labour market is not easy to explain. It is not the product of a switch from full-time to part-time jobs because total hours worked have risen at the same rate as employment.

In the long run, we will need to rebalance our economy away from domestic spending and towards exports, to reduce our trade deficit, to repay our debts, and to raise the rate of national saving and investment. So you are probably puzzled by the fact that we seem to be doing exactly the opposite of that today. Almost four years ago now, I called this the “paradox of policy” – policy measures that are desirable in the short term appear diametrically opposite to those needed in the long term. Although we cannot avoid the long-term adjustment to our economy, we can try to slow the pace of the adjustment in order to limit the immediate damage to output and employment. Loose monetary policy today will eventually give way to a tighter stance of policy as the economy recovers. In confronting the paradox of policy, the Bank has had to show some of the same fleetness of foot and ability to feint as my Cambridge contemporary, Gerald Davies. So let me try to explain this evening what monetary policy can do and what it can’t. BIS central bankers’ speeches  1  In doing this I am not going to pretend that I shall be entertaining. But these are serious times and you deserve a serious explanation of what we at the Bank can do and what we can’t, or shouldn’t. Let me start with what monetary policy can do. When banks extend loans to their customers, they create money by crediting their customers’ accounts.
Chart 10: Distribution of offered wage by occupation, with and without the term ‘flexible hours’ in the job advert  Sources: Reed and Bank of England calculations. Notes: ‘SOC code’ refers to standard occupational classification code. The area labelled ‘True’ shows distribution of offered wages for job adverts which include the term ‘flexible hours’, and the area labelled ‘False’ shows the distribution for adverts which do not. The data are drawn from a cross-section of online job vacancies. Distributions are constructed using data covering the period 2008-2016. 21  All speeches are available online at www.bankofengland.co.uk/speeches  21  Chart 11: Long-run UK Phillips curves  Sources: Thomas and Dimsdale (2017) and Bank of England calculations. Note: Output gap is estimated using a HP-filter technique. Wage series used is a composite based on English and Great Britain estimates. Chart 12: Measures of domestically generated inflation Percentage change on a year earlier  7 6 5 4 3 2 1 0 -1  Average of measures 1997  1999  2001  2003  2005  2007  First principal component 2009  2011  2013  -2 -3  2015  Sources: ONS and Bank of England calculations. Notes: Swathe includes core CPI services, inverse import-weighted CPIX, inverse import-weighted core inflation excl. education, unit labour costs, whole economy and private unit wage costs, GDP deflator (unadjusted, as well as versions excl. exports, oil & gas), services GVA deflator, GVA deflator (unadjusted, as well as excl. government) and services PPI.

Chart 11 plots UK Phillips curves over three periods: 1500-1700 (pre-Industrial Revolution); 1860-1950 (post-Industrial Revolution); 1950-1977 and 1977 to date (post-war period). In each case, wage inflation is measured on the y-axis and an estimate of the output gap on the x-axis. In the post-war period, the Phillips curve conforms to type. Since 1950, it has a clearly positive slope (less slack in the economy is associated with higher wage inflation) and an intercept which is positive (reflecting positive trend inflation). The Phillips curves covering the periods either side of the Industrial Revolution are more interesting. They share one important similarly and have one important difference. The similarity is that both are associated with an average inflation rate of around zero. This is consistent with the price level being broadly stable over these periods. The striking difference is in the slope of the Phillips curve. The post-Industrial Revolution Phillips curve has a conventional upward slope, similar to that operating after 1950. Higher growth or lower unemployment is associated with higher rates of wage and price inflation. The pre-Industrial Revolution Phillips curve is altogether different; it is as flat as a pancake. Indeed, it bears a close resemblance to the Phillips curves which have operated, in the UK and globally, since 2008. There are many potential explanations of this flatness in the pre-Industrial Revolution Phillips curve, including noisy data. And its similarity with the present-day Phillips curve may be purely coincidental.
As Romania’s financial literacy is the lowest among EU Member States, the National Bank of Romania has devoted special energy to promoting financial knowledge across the country via educational projects in cooperation with the Ministry of Education, universities, academia or other authorities. As regards the forward guidance, I have to say it was not among the preferred options given the specifics of monetary transmission mechanism in Romania, where the struggle was to cope with high currency substitution amid harsh transition from a controlled economy to functional markets and with large capital inflows on the eve of EU accession. Our policy statements such as the Inflation Report, the Financial Stability Report, the Annual Report, besides our regular briefings, conferences or interviews have always offered clear perspectives. Nevertheless, as negative inflation numbers, short lived in our case, popped up, I believe it is important to deepen our understanding and address the causes of the public misperceptions regarding the divergence between actual inflation and that perceived by the public in order to build and strengthen confidence. 3/5  BIS central bankers' speeches  With inflation tamed in the single-digit zone and the Romanian leu fully convertible, the National Bank of Romania’s increased transparency helped to boost the positive perception, strengthening our reputation. On the flipside however, oversized expectations have also emerged, with people demanding answers and solutions from us to all the problems in the economy, hoping that the National Bank of Romania, like all central banks, could make up for the policies that naturally belong to other institutions.

Approximation with best EU central bank standards and practices is a crucial process for a central bank not only for the effective discharge of the duties, but also for the efficient and stable functioning of the financial system, and benefit of the economy, overall. I am confident that the implementation of this project will be characterised by the cooperative spirit between the Bank of Albania and central banks in the region, on the one hand, and the European Central Bank and Eurosystem, on the other. I would like to conclude with a heart-felt appreciation and gratitude for all the stakeholders having an active role in the launching of this project: •  the European Central Bank for coordinating all the activities;  •  member central banks for providing a large number of experts to assist us with the project implementation;  •  Delegation of the European Union in Tirana for funding it. 2  BIS central bankers’ speeches  We highly appreciate the Commission’s assistance with regard to adopting the implementation of the European Union legislation and are seriously committed to continuing with the successful cooperation, established with the Delegation in the last twinning project. In this context, I would like to reiterate my message that the road to European Union integration passes through regional integration. The financial system and central banks spearhead this process. We expect that public and private economic agents will determinedly follow this step we are taking.
Examples include the extrapolation of past growth rates of incomes or asset prices into the future when in fact they reflect an adjustment of the level of income or asset price to a new equilibrium. At the time, the MPC argued that the rise in the ratio of house prices to incomes in the years leading up to 2007 reflected a fall in long-term real interest rates – in other words, an adjustment to a new equilibrium house price to income ratio. But if households extrapolated past increases in house prices into the future, then they may have mistakenly inferred that future incomes too would be higher, and so spending and borrowing more than could be sustained. Similar arguments could be made about the reaction of businesses and households to the rise in the sterling effective exchange rate in the late 1990s, and I shall return to this later. Since long-term interest rates in financial markets are, if anything, even lower today the question of sustainability has not yet been resolved. Misperceptions mean that unsustainable levels of spending, and associated levels of debt, can build up over many years. When those misperceptions are eventually corrected, they lead to sudden large changes in asset values, a synchronised de-leveraging of balance sheets, a large downward correction to spending and  14  Caballero (2010). BIS central bankers’ speeches  5  output, and defaults.

Interest rates that are high enough to have a noticeable effect on credit growth and asset prices may have strong negative effects on inflation and resource utilization, and a central bank will probably rarely have sufficient information about the likely beneficial longer-horizon effects on inflation and resource utilization for the trade-off to be worthwhile and motivated. 18  16  Walsh (2009) points out that when financial factors cause distortions, these distortions will in general introduce corresponding terms in a loss function for monetary policy that is a second-order approximation to household welfare. Curdia and Woodford (2009) present a model where the second-order welfare approximation is a standard quadratic loss function of inflation and the output gap between output and potential output, but where potential output is affected by financial factors. Then inflation and the output gap remain the target variables, with and without financial factors. The neutral rate in the model, that is, the real rate consistent with output equal to potential output, is then also affected by financial factors. 17  Adrian and Shin (2007, 2009) argue, in a model with a risk-taking channel as in Borio and Zhu (2008), that short interest-rate movements may have considerable effects on the leverage of securities broker-dealers in the market-based financial sector outside the commercial-banking sector. However, new regulation may affect the magnitude of these affects, and the size of the market-based financial sector may end up being smaller after the crisis. In Europe, the commercial banks dominate the financial sector.
Efficient Multi Currency Payments and Settlements – Project Ubin Next, making cross-border payments and settlements cheaper and faster for SMEs. This has been MAS’ clarion call since five years ago, when we embarked on Project Ubin to explore the use of blockchain technology to solve one of the biggest pain points for SMEs. The industry consortium and MAS completed the final phase of experimentation in July this year, when we successfully tested a blockchain-based prototype for multi-currency settlement. We have also integrated commercial applications, such as trade and supply chain financing, with blockchain-based payment functionalities. Industry players are now moving from experimentation towards commercialisation. DBS Bank, JP Morgan, and Temasek are leading the development of a digital multi-currency payments network aimed at enhancing commercial cross-border clearing and settlements globally. Pilot trials will commence next year. The goal of cheaper cross-border payments that settle round-the-clock and in realtime is drawing closer. SMEs will greatly benefit when this becomes a reality. FINTECH FOR A SUSTAINABLE PLANET Let me move on to my second big theme: ensuring a sustainable planet FinTech can play an influential role in helping to advance the sustainability agenda. Finance fuels the economy, shapes investment decisions, and drives action. Technology provides solutions to channel finance towards the cause of sustainability. Singapore is deeply committed to global efforts to mitigate climate risk. We contribute in two ways: making Singapore more sustainable; and helping Asia become more sustainable.

Such a situation would no doubt lead in time to the public authorities also encountering a demand for euro services, perhaps ultimately leading to the euro being accepted to a greater extent than desired at present. If so, the "wait-and-see" alternative would finally amount in practice to the adoption of the euro. We can only speculate about the practical consequences of a gradual transition but it would probably entail increased costs as well as greater uncertainty for firms as well as society. If we intend to join the euro area in a not too distant future after 1999, the recommendation therefore seems to be: participate from the start and avoid unnecessary and costly solutions for firms as well society. Still a large need of information When talking about the monetary union we should be clear that in Sweden the debate about Europe and EMU is relatively new. Elsewhere in Europe the issue of integration has been discussed much more and for far longer. The debate in Sweden has been rather low key and not particularly widespread. So it is hardly surprising that people here are hesitant and want more information. That the discussion has now got going is all to the good. I was therefore pleasantly surprised by the submissions to the Ministry of Finance on the EMU report. Of 56 submissions, only 4 were negative about EMU.