samchain/econo-pairs-v1 huggingface dataset:
Regarding incomes policies, based on the findings of the assessments required by law, further adjustments must be made to the conditions governing eligibility for Spain’s minimum income scheme (MIS), to ensure that this instrument can effectively fulfil its mission of eradicating extreme poverty while avoiding undesired effects. To that effect, social security authorities have recently signed agreements with several research institutions in order to evaluate social inclusion itineraries linked to the MIS. Housing affordability has tightened in recent years. According to Eurostat data, 48.7% of Spaniards living in market-price rented accommodation in 2020 were at risk of poverty or social exclusion, the highest rate in the European Union (where the average stands at 32.3%), while 35.9% devoted more than 40% of their disposable income to housing, versus the EU average of 25.8%. The Draft Law on the right to housing seeks to ease such difficulties, which hit the young and lower-income households particularly hard. However, some of the measures envisaged, such as rent control, may not have the desired effect or may even have adverse effects in the medium term. Conversely, certain measures that could give a significant structural boost to the supply of rented housing, such as offering greater effective legal certainty to landlords, are absent. 17  (iv) The challenge of increasing firm size, facilitating cross-sector reallocation and fostering innovation Another major challenge is the small size of businesses, which results in less innovation and low productivity.

Naturally, the financial system and central banks – within the scope of their mandates – must also contribute to the green transition. In this respect, from the standpoint of the Eurosystem in general, and of the Banco de España in particular, one priority at present and in the more immediate future is to make headway, in conjunction with the financial system, in incorporating climate considerations into the operating frameworks of monetary policy, financial stability, supervision and regulation. Banking sector challenges Complementary to this Annual Report, our Financial Stability Report (FSR) published in May analyses the situation of the Spanish banking sector in depth. The sector is facing the shock caused by the Russian invasion of Ukraine, in a setting in which its resilience remains generally high, returns have recovered their pre-pandemic levels and lending has normalised. Yet the war in Ukraine entails new risks to financial stability. Although Spanish banks have very little direct financial exposure to Russia and Ukraine, the indirect effects of the war may be significant. In particular, the macroeconomic deterioration could impact households’ and firms’ ability to pay, above all those experiencing a slower or tardier recovery from the pandemic and whose solvency may now have worsened. Against this backdrop, lending in Spain fell slightly in 2021. Firms’ demand for credit was lower, as they faced lower liquidity needs than in 2020, but this was largely offset by stronger lending to households, especially in the loans for house purchase segment.
2  BIS central bankers’ speeches  Chart: Developments around financial crises First, let us examine how the indicators develop in the last four years preceding a financial crisis and the first four years following the crisis. The charts show developments in the four indicators in these periods compared with developments in normal periods. As shown, all the indicators rose markedly prior to financial crises in the 16 countries. We have used the data set to develop an empirical model for estimating crisis probabilities. The key indicators are included as explanatory variables in the model. The model – a logittype model – predicts a binary outcome. The binary variable takes a value of one when the economy is in a pre-crisis period and the value zero otherwise. The model-based prediction can be interpreted as the probability that the economy is in a pre-crisis period. We have defined this period as one to three years prior to the crisis. A large number of model specifications using various combinations of the explanatory variables have been tested. The indicators are incorporated in growth form or as deviations from estimated long-term trends. The empirical results as a whole support our choice of key indicators of financial imbalances. Household and corporate credit, house prices and banks’ wholesale funding ratio are statistically significant in the models and contribute to raising the estimated probability of a crisis. In addition, the results indicate that a low equity ratio in the banking sector can be an early warning of future instability.

Europe is particularly badly affected, as temperatures here continue to rise above the mean and, despite our efforts to reduce CO2 emissions, we lag far behind in terms of what we need to do to adapt to some of the inevitable consequences. It is time we face the facts. As citizens, as institutions, and as all actors in the economy – including of course banks. It is essential that banks share with their stakeholders detailed information on their exposures to C&E – risks. Only then can we all effectively work together to address the consequences of climate change. This is why today I would like to draw your attention to another important landmark in the ECB’s supervision of C&E risks: the publication of our second stocktake on the transparency of banks’ disclosures of their C&E risk profiles. The European and international agenda on climate Publishing this update is part of our supervisory agenda on climate. As you know, C&E risks have been one of our supervisory priorities for some years now and we have started treating them just like any other prudential risk. In this context, we have been rolling out a series of corresponding supervisory activities. In 2020 we published our guide on climate-related and environmental risks, which outlined our supervisory expectations relating to the management and disclosure of C&E risks. In 2021 we published a self-assessment benchmarking report.
The first important criterion is whether the measures that are taken can reduce the social costs that can arise as a result of systemic risk. Ultimately, what is needed is an internalisation of the negative externalities, so that market discipline and market order are restored. The TBTF issue, in particular, is an illustration of the fact that the market’s power to impose sanctions is not fully functioning at present, since systemically important banks  1  For instance, information contagion, interdependences (interbank market) non-substitutability of systemically important functions, etc. 2  BIS Review 146/2010  cannot currently fail. On the contrary, they benefit from a government rescue guarantee for the very reason that, because of their systemic importance, their failure costs would be so high. Thus, at present, TBTF financial institutions are not obliged to bear the full extent of the risk they assume. In the event of problems they can pass on the risk to the general public. This is a fundamental contradiction to the basic principles of a properly functioning market economy. In order to contain these market imperfections the guiding principle should be – do what is necessary, but no more than is necessary! Consequently, the measures to be taken need to contribute to stability without obstructing key welfare-enhancing functions of the financial system.

In today’s markets, there is a large premium on ex ante clarity and certainty, as opposed to ex post negotiation amongst bankers who know and trust each other. The work required is detailed and largely out of the limelight. But getting clarity around things like “close out netting” may make all the difference when the music stops. 11 The official community therefore needs to maintain its encouragement and support for private sector initiatives to standardise and improve documentation. To take just a few examples from what could be a long list, this includes the work of New York’s Global Documentation Steering Group; of various market trade associations; and of London’s Securities Lending and Repo Committee, which helps co-ordinate the work of different parts of the collateral-financing markets. 12  Summary I have travelled from macro to micro. To maintain the two elements of monetary stability – price stability, and financial stability – we need credible and effective institutions. 11  Close-out netting is a process by which, following a default, open transactions between two parties are terminated, each transaction is valued and, together with any outstanding payments, these are reduced to a single net amount owed by one of the parties to the other. Obtaining legal certainty over recognition of netting across different products and, in particular, with different legal entities with a common group is very important.
This cautiousness, which is rational for each bank and counterparty individually, is bad for the system because it constrains the supply of credit and results in tighter financial conditions. This, in turn, makes the bad economic outcome more likely. The stress assessment regime that is being implemented should help to break this dynamic. Banking institutions will end up with sufficient capital to withstand even an adverse environment. This should reassure banks and investors that the banking system will remain resilient. With more capital in place, more lending should take place. This, in turn, should reduce the likelihood that the bad economic scenario will, in fact, be realized. The result: a virtuous rather than a vicious circle! BIS Review 28/2009  5  The point of the stress assessment is not to pick winners or losers, but instead to ensure that the banking system and all the major banks have sufficient capital to withstand a very adverse environment. Following the conclusion of the stress assessment process, the government is committed to supplying whatever amount of capital is needed to ensure that all the major banks will remain viable. The second major initiative that deserves mention is the PPIF or Public-Private Investment Fund. This facility, which would be underpinned by TARP capital and private capital, would purchase illiquid, legacy assets.

Inclusion – expanding the reach of microfinance One of the key challenges for microfinance has been providing access to financial services where it is unavailable, but needed the most. Expanding the reach of financial services, and finding new ways to do so cost efficiently, lie at the very heart of efforts to increase inclusion. The right channels can also create emotional connections, not just geographical ones. Making it easier for borrowers to connect with financial institutions in ways that they feel comfortable with, can build affinities with financial institutions which in turn, encourages participation and timely repayments. Mobile banking is an excellent example. The portability, affordability and ubiquity of mobile gadgets effectively put a bank in everyone’s pockets today. The numbers are telling. Half the global population use mobile internet. We spend 4 hours on the phone and use 12 apps in a single day. The tremendous success of mobile banking in Africa has been hailed as a transformative platform for greater financial inclusion. If providers leverage digital platforms well, finance can literally be at the fingertips of the unbanked. Leveraging on digital platforms can also create a virtuous cycle. Over time, such platform providers will accumulate a wealth of data on customer preferences and behaviour. This can in turn drive drive analysis for new product offerings in the future. This is of course, highly contextual and an effective delivery strategy will likely differ across countries, communities and cultures.
On one hand are the governments of the countries that show the biggest divergences, and whose conduct is key to exiting the crisis. And on the other are the governments of the countries which, given their importance in the area, are central to euro area and EU decision-making, since overcoming the crisis will only be possible if the European institutions’ complex decision-making process works well. But we will better understand what each of these players must do to emerge from the crisis if we reflect firstly on the mistakes they have made over the 11 years that a monetary union has been in place without a political union. Let’s begin on that point. You will all recall that when the euro was created, many academics, especially from Anglo-Saxon circles, warned that the monetary union was doomed to fail, since it did not meet the essential conditions of what is known as an “optimal currency area”. BIS central bankers’ speeches  1  Among other aspects, it was stated that a monetary union could hardly be successful if there were no fiscal transfer mechanism allowing asymmetrical shocks affecting a specific part of the monetary union to be accommodated. In this connection, critics of the euro project said – and still say – that a monetary union should not be maintained if there is no political union. They argued that the potential divergences between different areas could only be offset or resolved if there were a single budget for the entire area.

There’s always room for improvement and, at the ECB, we have called on Heads of State to strengthen governance procedures further, for instance by making sanctions more automatic in cases of non-compliance so as to prevent governments succumbing to the temptation of being excessively lax. This was seen in 2005 when the core countries failed to meet their deficit commitments and the Commission and the European Council agreed to change the rules so as not to sanction these countries. But the lesson whereby maintaining a monetary union is only possible if divergences remain within a moderate range must also be taken into  2  BIS central bankers’ speeches  account by the national governments of each of the euro Member States, because the policies that may prevent the emergence of these imbalances or help to correct them are, for the most part, the responsibility of national governments. Many tasks lie ahead for all the euro area countries in contributing to reducing divergences. But it is our duty to pay more attention to what Spain should do. Our country reacted a year back when the sovereign debt crisis broke, and it showed resolve in adopting far-reaching measures to correct our economy’s imbalances without resorting to aid from its fellow members. It was able to do so, firstly, because its divergences were not overall as great as those of the countries that have had to apply for external financial assistance.
The gap between actual and potential growth does not appear to be completely closed, while the Riksbank and others perceive that this gap is well and truly closed in the USA. 5  BIS Review 89/2000  There are thus a few pieces of the puzzle remaining before we can feel convinced that Sweden is moving towards a US development: how large is the IT sector in the Swedish economy? How important is the IT sector to the rest of the Swedish economy? What does IT mean to productivity in Sweden? Unfortunately I have to say now that we know too little about this. We know that productivity in Sweden has developed unevenly during the 1990s - a disjointed period disturbed by a bank crisis, currency crisis and problems with public finances. Investment has developed more weakly than in the USA, although it has picked up in recent years. Capital intensity does not, therefore, explain the growth in productivity. What does become more evident, on the other hand, is a break in trend in that part of productivity attributed to technology and more efficient organisation, ie total factor productivity TFP (slide 5). This showed a weak and tentative development up to the mid-1990s, but has really picked up over the last five years. 5.

This means that we have seen good improvements in the quality of compliance and operations. Companies that continue to receive shorter-term licences need to take stronger measures to address the issues that we have raised. Third, we should expect that financial markets will continue to remain volatile in the period ahead. It is therefore important for the industry to improve market arrangements to ensure that MSB companies will be able to respond efficiently to changes in demand for currencies by consumers and businesses. Such arrangements have to include better planning and management of currency stocks as well as sourcing strategies to ensure the ready supply of currencies at efficient market rates. Tonight’s MSB customer experience awards reflects an industry that aspires to place the customer first. A price advantage can be lost easily to your competitors, but a strong customer service culture is much harder to copy. Those of you that voluntarily took part in this process are sending a clear signal that your company and this industry takes customer service excellence seriously. The idea of customer service excellence is not only about the quality of service; it is also about the industry conducting itself in a way that builds trust in the industry. The Association therefore is to be commended for undertaking this initiative, as should all MSB companies that have supported it.
5 These last four days of the FinTech Festival, there has been much discussion about technology, regulation, infrastructure, markets, funding. 6 Tonight, I would like to speak briefly on the critical people factor – not just for success in FinTech but more broadly in the innovation-driven economy of tomorrow: people having that spirit of enterprise and a willingness to be different; and people developing deep skills, skills relevant to the market, and a keenness to learn continuously. 7 That’s at the heart of what it takes for us to sustain and grow the FinTech movement – the entrepreneurial desire to find new ways, even disruptive ways, and the deep skills and continuous learning that we need to power innovation. Enterprise and innovation 8 We are already seeing successes, and we want to provide a fertile ground for more new ideas and solutions to keep cropping up. MAS has a regulatory sandbox framework to make it easier for FinTech start-ups to test their business models. There are also various sources of government funding available for start-ups: 1/4  BIS central bankers' speeches  MAS will provide strong support for ‘proof of concept’ trials. We will fund 50% of the costs, up to a maximum of $ per project, for Singapore-based trials of promising FinTech ideas. The grant scheme is aimed at ideas that can benefit not just an individual financial institution or start-up, but the financial system at large, in Singapore or abroad.

12 We are working to build up the skills and competencies in needed in the new world of finance, starting with the curriculum in our tertiary educational institutions, work placement programmes, and extending through to mid-career retraining and life-long learning. 13 First, getting our students to be ready for FinTech. 14 MAS is working with the five local polytechnics to review and enhance their curricula, for example to develop skillsets in agile software development, mobile application development, cloud application deployment, and data analytics. 15 We are also working with the polytechnics to increase the number of FinTech internships and joint projects with the FinTech community so that students can apply their skills and gain hands-on experience. In October, we embarked on the “PolyFinTech 100” initiative to secure 100 FinTech mentors and 100 FinTech internships for 2017. I am pleased to announce that we have secured these targets in the short span of a month. More than 2,500 students in the banking and IT-related courses in the polytechnics each year are expected to benefit from these initiatives. 16 MAS is also partnering with the universities and polytechnics to expose students to perspectives from industry practitioners 2/4  BIS central bankers' speeches  Next year, we will launch the MAS Tech Talks, a series of talks by FinTech professionals to share about their experiences in the industry. This will give students to better understand job opportunities available in FinTech and define their career aspirations.
To the extent that participants are responding about the mode of the joint distribution, as opposed to the mode of each marginal distribution, this would not be surprising.45 The striking feature of Slide 10 is the contrast between the steadiness of modal point forecasts and the dramatic changes in density forecasts. Modal forecasts for the policy rate in both year-end 2017 and 2018 barely moved from December to January, and edged slightly down in March. Had we just elicited point forecasts, we would have concluded that survey respondents’ views had not changed very much. In contrast, the pdf-implied mean forecast decreased substantially from December to January, and then increased slightly from January to March. More importantly, density forecasts shifted from being slightly skewed toward higher rates in December to being skewed toward lower rates in January. In fact, density forecasts became bimodal in January, and in March, the “low rate” mode became the dominant one for 2018. I should stress that the change in the density forecasts from December to January occurred following substantial changes in how the survey questions elicited respondents’ probabilityweighted expectations. In December, and in many preceding surveys, both the SPD and SMP asked respondents for the unconditional probabilities that they assigned to various rate outcomes.

At the SNB, we are aware of these benefits and have been using FX EAs for our reserve management. In our view, EAs can be useful execution tools in order to reduce market impact and help minimise our footprint in the FX market. But the increased use of execution algorithms may also change the dynamics of FX markets. EAs make it easier to shift trading activity away from public trading venues to proprietary platforms. And this so-called ‘internalisation’ of FX trading creates new challenges. Too many internalised trades could reduce the trading volume at primary venues to a point where the price discovery process is jeopardised. More research is needed to ascertain whether – and to what extent – the growing use of EAs could trigger or amplify flash events in the markets. These changes complicate market monitoring for central banks, which need to be alert to market dislocation, liquidity issues and volatility – as the market turmoil in March last year once again illustrated. To guard against risks arising from these changing dynamics, central banks must step up their efforts to monitor and analyse these markets. This is no small feat. Besides developing new market functioning indicators, it involves accessing a whole new generation of data – possibly at sub-millisecond frequency. For this, we need to set up a new data architecture, new tools and new expertise. In order to address such challenges the SNB and the BIS Innovation Hub’s Swiss Centre have launched a big data project called ‘Project Rio’.